<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240-14a.11(c) or
Section 240.14a-12
Ford Motor Company
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(Name of Registrant as Specified in Its Charter)
Ford Motor Company
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
[FORD LOGO]
Ford Motor Company The American Road
Dearborn, Michigan 48121-1899
April 9, 1996
TO OUR STOCKHOLDERS:
Our 1996 Annual Meeting will be held at the Kansas City Marriott Downtown Hotel,
Kansas City, Missouri, on Thursday, May 9, 1996.
The host city for this year's Annual Meeting is home to our Kansas City Assembly
Plant, which is celebrating its 45th anniversary this year. The plant is a
state-of-the-art facility that builds Ford Contour and Mercury Mystique cars as
well as the all new 1997 F-Series pickup truck. With about 5,000 employees, the
plant is one of the largest employers in the Kansas City area.
Contour and Mystique are world cars in the truest sense, drawing upon the best
of the Company's global engineering, manufacturing and technical resources.
Together with the Mondeo, their European counterpart, they combine advanced
technologies with excellent value for our customers. The Ford F-Series pickup
truck continues to be the best-selling vehicle in the United States -- a
distinction it has now held each year for the last 14 years.
In selecting Kansas City for this year's Annual Meeting, the Board wanted to
express the Company's appreciation to our Kansas City employees for the
commitment and contributions they have made to the Company's success.
We urge you to read the Notice of Meeting and Proxy Statement so you may be
informed about the business to come before the meeting. At your earliest
convenience, please sign and return the accompanying Proxy Card in the
postage-paid envelope. To make sure that your shares will be represented, you
should sign and return the Proxy Card whether or not you plan to attend the
meeting.
The Annual Meeting will start promptly at 10 A.M., Central Daylight Time. If you
would like to attend, please see the instructions on page 42.
ALEX TROTMAN
ALEX TROTMAN
Chairman of the Board
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PLEASE FILL IN, DATE, SIGN AND MAIL PROMPTLY THE ACCOMPANYING PROXY
CARD IN THE RETURN ENVELOPE FURNISHED FOR THAT PURPOSE, WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING.
<PAGE> 3
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Ford Motor Company, a Delaware
corporation, will be held at the Kansas City Marriott Downtown Hotel, 200 W.
12th Street, Kansas City, Missouri, on Thursday, May 9, 1996, at 10:00 A.M.,
Central Daylight Time, for the election of directors and for the following
purposes:
1. To consider and take action upon a proposal to ratify the selection, by the
Audit Committee of the Board of Directors, of Coopers & Lybrand L.L.P. as
independent public accountants to audit the books of account and other corporate
records of the Company for 1996 (designated as Proposal 1 in the accompanying
Proxy Statement).
2. To consider and take action upon a proposal of certain stockholders relating
to the establishment of term limits for outside directors, if such proposal
should be presented at the meeting (designated as Proposal 2 in the accompanying
Proxy Statement).
3. To consider and take action upon a proposal of a certain stockholder relating
to the discontinuance of stock options, rights and stock appreciation rights for
management and the Board of Directors, if such proposal should be presented at
the meeting (designated as Proposal 3 in the accompanying Proxy Statement).
4. To consider and take action upon a proposal of a certain stockholder relating
to salary increases and stock option grants for executive officers and directors
in the event the dividend is cut, if such proposal should be presented at the
meeting (designated as Proposal 4 in the accompanying Proxy Statement).
5. To consider and take action upon a proposal by certain stockholders relating
to a report on the Company's standards for its international operations, if such
proposal should be presented at the meeting (designated as Proposal 5 in the
accompanying Proxy Statement).
6. To consider and take action upon a proposal by certain stockholders relating
to the MacBride Principles for employment in Northern Ireland, if such proposal
should be presented at the meeting (designated as Proposal 6 in the accompanying
Proxy Statement).
The determination of stockholders entitled to notice of and to vote at the
meeting shall be made as of the close of business on March 11, 1996, the record
date fixed by the Board of Directors for such purpose. The place and time of the
meeting, set forth above, have been determined by the Board of Directors in
accordance with the By-Laws of the Company.
By Order of the Board of Directors,
JOHN M. RINTAMAKI
JOHN M. RINTAMAKI
Secretary
April 9, 1996
<PAGE> 4
FORD MOTOR COMPANY
THE AMERICAN ROAD
PROXY STATEMENT April 9, 1996 DEARBORN, MICHIGAN 48121-1899
This Proxy Statement is furnished in connection with the solicitation, at the
direction of the Board of Directors of the Company, of proxies to be used at the
Annual Meeting of Stockholders to be held on May 9, 1996. It is expected that
this Proxy Statement and the accompanying form of proxy will be mailed to
stockholders beginning April 9, 1996.
Holders of record of Common Stock and holders of record of Class B Stock at the
close of business on March 11, 1996 will be entitled to vote at the meeting. On
that date 1,098,791,350 shares of Common Stock and 70,852,076 shares of Class B
Stock were issued and outstanding. Each stockholder is entitled to one vote for
each share of Common Stock, and 10.339 votes for each share of Class B Stock,
held by such stockholder. Under the Company's Certificate of Incorporation,
holders of Common Stock in the aggregate presently have 60% of the general
voting power and holders of Class B Stock in the aggregate have the remaining
40% of the general voting power. Holders of Common Stock and holders of Class B
Stock will vote together without regard to class upon the matters to come before
the meeting. Holders of the Company's Series A Cumulative Convertible Preferred
Stock ("Series A Preferred Stock") and Series B Cumulative Preferred Stock
("Series B Preferred Stock") have no voting rights at this meeting.
Under the provisions of the Company's Savings and Stock Investment Plan for
Salaried Employees, 121,782,001 shares of Common Stock of the Company held by
the Trustee may be voted at the meeting pursuant to confidential instructions
from participating employees.
Shares represented by a proxy in the accompanying form, unless previously
revoked, will be voted at the meeting if the proxy is returned to the Company
properly executed and in sufficient time to permit the necessary examination and
tabulation of the proxy before a vote is taken. The form of proxy permits a
specification as to whether or not shares represented by the proxy are to be
voted for the election of all nominees for director or are to be withheld from
certain nominees for director. The form of proxy also permits the specification
of approval, disapproval or abstention as to each of six proposals, designated
as Proposal 1, Proposal 2, Proposal 3, Proposal 4, Proposal 5 and Proposal 6,
set forth in full and commented upon in this Proxy Statement.
Proposal 1 will be presented at the meeting by management, and Proposals 2
through 6 may be presented by stockholders. Where a choice has been specified in
the proxy, the shares represented by the proxy will be voted or the votes
withheld in accordance with the specification. IF NO SPECIFICATION IS INDICATED,
THE SHARES WILL BE VOTED "FOR" THE ELECTION OF ALL NOMINEES FOR DIRECTOR AS SET
FORTH UNDER "ELECTION OF DIRECTORS" BELOW AND "FOR" PROPOSAL 1 AND "AGAINST"
PROPOSALS 2, 3, 4, 5 AND 6. Proxies may be revoked, at any time before they are
exercised, by written notice to the Secretary, by timely submission of a
properly executed later-dated proxy or by voting in person at the meeting.
The vote required for the election of directors and the approval of each of
Proposals 1 through 6 is a majority of the votes that could be cast in the
election or on such Proposal by stockholders who are present in person or
represented by proxy at the meeting, computed in the case of each share as
described in the second paragraph on this page.
1
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The total number of votes that could be cast at the meeting is the sum of votes
cast and abstentions. Abstentions are counted as "shares present" at the meeting
for purposes of determining the presence of a quorum and have the effect of a
vote "against" any matter as to which they are specified. Broker nonvotes with
respect to any matter are not considered "shares present" and will not affect
the outcome of the vote on such matter.
Any stockholder proposal intended for inclusion in the proxy material for the
1997 Annual Meeting of Stockholders must be received by the Company by December
11, 1996.
The management knows of no other matter to be presented at the meeting which
would be a proper subject for action by the stockholders of the Company. The
By-Laws of the Company provide that no business other than that stated in the
notice of meeting shall be transacted at any meeting of stockholders. If any
other matter should be presented at the meeting upon which a vote properly may
be taken, it is intended that shares represented by proxies in the accompanying
form will be voted with respect thereto in accordance with the judgment of the
person or persons voting such shares.
ELECTION OF DIRECTORS
Thirteen directors are to be elected at the meeting, each to serve until the
next annual meeting of stockholders and until the director's successor shall
have been elected and shall have qualified. Two of the current directors, Colby
H. Chandler and Kenneth H. Olsen, reached age 70 prior to the date of this
year's Annual Meeting and, in accordance with the Company's By-Laws, are not
standing for re-election. It is intended that shares represented by proxies in
the accompanying form will be voted FOR THE ELECTION OF ALL OF THE NOMINEES
NAMED IN THE FOLLOWING PAGES, UNLESS A CONTRARY DIRECTION IS INDICATED.
The Board of Directors met nine times during 1995. Each of the nominees is a
member of the present Board of Directors.
If some unexpected occurrence should make necessary, in the judgment of the
Board of Directors, the substitution of some other person for any of the
nominees, shares represented by proxies in the accompanying form will be voted
FOR SUCH OTHER PERSON AS THE BOARD OF DIRECTORS MAY SELECT. Information
concerning the nominees for election as directors is set forth below. Each
nominee has furnished to the Company the information included with respect to
beneficial ownership of equity securities of the Company and its subsidiaries as
of March 1, 1996 (except as otherwise noted), and, if not employed by the
Company, the nominee's principal occupation. No nominee (including nominees who
are named executive officers in the Summary Compensation Table on page 22)
beneficially owned more than 0.2% of the total outstanding Common Stock, Series
A Preferred Stock or Series B Preferred Stock of the Company. Present directors
and executive officers as a group, including the named executives listed in the
Summary Compensation Table on page 22, beneficially owned 4,477,764 shares
(0.4%) of Common Stock and 1,000 depositary shares representing Series A
Preferred Stock (less than 0.1%). In addition, they held stock options
exercisable within 60 days after March 1, 1996 for the acquisition of 3,740,150
shares of Common Stock under the Company's stock option plans. See pages 24-26
for additional information on stock options. See pages 3, 4 and 10 for
information on ownership of Class B Stock.
2
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NOMINEES
Age, Principal Occupation and
Year First Became a Director
Other Information
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<TABLE>
<S> <C>
MICHAEL D. DINGMAN Committee Memberships: Compensation and Option; Finance; Organization Review and
[PHOTO] Nominating. Mr. Dingman is a director and Chief Executive Officer of Stratton
Investments Company, Limited, a holding company with investments in the Czech
Michael D. Dingman, 64 Republic and Russia, and President and Chief Executive Officer of Shipston Group
President and Chief Ltd., a diversified international holding company. In addition, he became Chairman
Executive Officer, of Fisher Scientific International Inc. and Chairman and Chief Executive Officer
Shipston Group Ltd., of Abex Inc. when they became public companies in 1991 and 1992, respectively, and
Nassau, Bahamas had been Chairman or President of their predecessor companies since 1970. He also
1981 served as Chairman of the Board and Chief Executive Officer of The General
Chemical Group Inc., a major manufacturer of industrial products, from 1989 to
1994. Mr. Dingman was educated at the University of Maryland, where he received an
honorary degree of Doctor of Science in Business and Management in 1989 and
endowed the Michael D. Dingman Center for Entrepreneurship. He is a trustee of The
John A. Hartford Foundation.
SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 12,400(1)(3); Common
Stock Units, 45,094.(2)
</TABLE>
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<TABLE>
<S> <C>
EDSEL B. FORD II [PHOTO] Committee Membership: Finance. Mr. Ford joined Ford Motor Company in January 1974
after graduation from Babson College in 1973 with a bachelor's degree in business
Edsel B. Ford II, 47 administration. He has held a number of positions in Ford Motor Company and, in
Vice President, Ford 1983, became the Advertising Manager of Ford Division. In 1985, he became General
Motor Company and Marketing Manager, Lincoln-Mercury Division and in 1987 was appointed General
President and Chief Sales Manager of Lincoln-Mercury Division. He became Executive Director, Marketing
Operating Officer, Staff on July 1, 1989 and President and Chief Operating Officer, Ford Motor Credit
Ford Motor Credit Company, on May 1, 1991. Mr. Ford was elected a Vice President of the Company on
Company December 9, 1993. Mr. Ford completed the management development program at the
1988 Harvard Business School in 1981. He is Chairman of the Edsel and Eleanor Ford
House and CATCH (Caring Athletes Team for Children's and Henry Ford Hospitals);
Vice Chairman of the Salvation Army National Advisory Board; and a Trustee of the
Henry Ford Museum and Greenfield Village.
SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 139,557(3)(4); Ford
Motor Company Class B Stock, 5,436,256 (7.7% of the outstanding Class B Stock)(5).
</TABLE>
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3
<PAGE> 7
Age, Principal Occupation and
Year First Became a Director
Other Information
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<TABLE>
<S> <C>
WILLIAM CLAY FORD Committee Memberships: Finance; Organization Review and Nominating. Mr. Ford
[PHOTO] served as Vice Chairman of the Board of Directors from April 1980 until he retired
in 1989, and as Chairman of the Finance Committee of the Board of Directors from
William Clay Ford, 71 November 1987 until January 1, 1995. Mr. Ford was employed by the Company since
Retired Chairman of the his graduation from Yale University in 1949. He was a Vice President from 1953 and
Finance Committee had the overall staff supervision of the Company's product design programs from
1948 1956 until April 10, 1980, when he was elected Vice Chairman of the Board of
Directors. He was a member of the Policy and Strategy Committee and Chairman of
the Design Committee. Prior to 1956, Mr. Ford served in the following positions:
1954 -- General Manager, Continental Division; and 1955 -- Group Director, Lincoln
and Continental Divisions. On June 8, 1978, he became Chairman of the Executive
Committee of the Board of Directors and was named a member of the Office of the
Chief Executive. Mr. Ford is Chairman Emeritus of The Edison Institute, which
operates Henry Ford Museum and Greenfield Village in Dearborn, Michigan. He is an
honorary life trustee of the Eisenhower Medical Center, Palm Desert, California,
and owner and President of The Detroit Lions, Inc.
SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 1,684,833(1)(4)(6)
Ford Motor Company Class B Stock, 16,626,660 (23.5% of the outstanding Class B
Stock)(5).
</TABLE>
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<TABLE>
<S> <C>
WILLIAM CLAY FORD, JR. Committee Memberships: Finance; Organization Review and Nominating. Mr. Ford
[PHOTO] joined Ford Motor Company in 1979. He graduated from Princeton University with a
bachelor's degree in history and earned a master's degree in management as an
William Clay Ford, Jr., Alfred P. Sloan Fellow at the Massachusetts Institute of Technology. He began as a
38 Product Planning Analyst in Advanced Vehicles Development. In 1982 he became Zone
Chairman of the Manager, New York-New Jersey area, Ford Division District Sales. In 1984 he became
Finance Committee an International Finance Division Specialist, Finance Staff; in 1985, Planning
1988 Manager, Car Product Development; in 1986, Director, Commercial Vehicle Marketing,
Ford of Europe; in 1987, Chairman and Managing Director, Ford Switzerland; and in
1989, he became Manager, Heavy Truck Engineering and Manufacturing. In March 1990,
he became Director, and in March 1991, Executive Director, Business Strategy --
Ford Automotive Group. He became General Manager, Climate Control Division in
August 1992. Mr. Ford was elected Vice President -- Commercial Truck Vehicle
Center on May 1, 1994, and served in that capacity until January 1, 1995, when he
resigned from active management of the Company. He was elected Chairman of the
Finance Committee of the Board of Directors effective January 1, 1995. Mr. Ford is
Vice Chairman of The Detroit Lions, Inc. and a trustee of The Edison Institute,
which operates Henry Ford Museum and Greenfield Village. He also is a trustee of
the Henry Ford Health System, a member of the World Economic Forum's Global
Leaders for Tomorrow, Vice Chair of the Greater Downtown Partnership, Inc. Board
of Directors, and a member of the Finance Committee and other committees of the
National Football League.
SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 83,884(1)(4); Ford
Motor Company Class B Stock, 3,169,450 (4.5% of the outstanding Class B Stock)(5).
</TABLE>
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4
<PAGE> 8
Age, Principal Occupation and
Year First Became a Director
Other Information
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<TABLE>
<S> <C>
ROBERTO C. GOIZUETA Committee Memberships: Compensation and Option; Organization Review and Nominat-
[PHOTO] ing. Mr. Goizueta has been Chairman of the Board and Chief Executive Officer of
The Coca-Cola Company since 1981. He has been associated with The Coca-Cola
Roberto C. Goizueta, 64 Company since 1954 and was elected to the following positions there: Vice
Chairman of the Board President, in 1966, Senior Vice President, Technical Division, in 1974, Executive
and Chief Executive Vice President, in 1975, Vice Chairman, in 1979, President, Chief Operating
Officer, Officer and Director, in 1980. Mr. Goizueta received a bachelor's degree in
The Coca-Cola Company, chemical engineering from Yale University. He is a director of Eastman Kodak
Atlanta, Georgia Company, SONAT Inc., SunTrust Banks, Inc., SunTrust Banks of Georgia, Inc. and
1983 SunTrust Bank, Atlanta. He is a trustee of Emory University and The American
Assembly and a member of The Business Council.
SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 8,500.(1)
</TABLE>
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<TABLE>
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IRVINE O. HOCKADAY, JR. Committee Memberships: Audit; Organization Review and Nominating. Mr. Hockaday has
[PHOTO] been President and Chief Executive Officer of Hallmark Cards, Inc. since January
1, 1986, and a director since 1978. He had been the Executive Vice President of
Irvine O. Hockaday, Jr., Hallmark Cards, Inc. since July 1, 1983. Prior to that date, he had held a number
59 of executive positions with Kansas City Southern Industries, Inc., and became its
President and Chief President and Chief Executive Officer in 1981. Mr. Hockaday earned his bachelor of
Executive Officer, arts degree from Princeton in 1958 and his law degree from the University of
Hallmark Cards, Inc., Michigan in 1961. Mr. Hockaday is a director of Dow Jones, Inc. and UtiliCorp
Kansas City, Missouri United, Inc. He also is a trustee of the Hall Family Foundations.
1987 SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 6,000(1); Common Stock
Units, 2,094.(2)
</TABLE>
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5
<PAGE> 9
Age, Principal Occupation and
Year First Became a Director
Other Information
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<TABLE>
<S> <C>
MARIE-JOSEE KRAVIS Committee Memberships: Finance; Organization Review and Nominating. Mrs. Kravis
[PHOTO] was appointed a senior fellow of the Hudson Institute Inc. in 1994. Prior to that
time, and since 1978, she served as the Executive Director of the Hudson Institute
Marie-Josee Kravis, 46 of Canada. She was a financial analyst for the Power Corporation of Canada from
Senior Fellow, Hudson 1969 to 1971, and served as Special Assistant to the Minister of Supply and
Institute Inc., Services of Canada from 1971 to 1973. From 1973 to 1976 she was an economist with
Indianapolis, Indiana the Hudson Institute (U.S.A.). Mrs. Kravis was Vice Chair of the Canadian Royal
1995 Commission on National Passenger Transportation, a member of the Quebec
government's Consultative Committee on Financial Institutions and of the Board of
Trustees of the Hudson Institute. She is a member of the bi-national Dispute
Settlement Panel established under the Canada-U.S. Free Trade Accord, and
currently is an adjunct fellow of the Council on Foreign Relations in New York
City. Mrs. Kravis holds degrees in economics from the University of Quebec and the
University of Ottawa and honorary degrees from the University of Windsor and
Laurentian University. She is a director of Canadian Imperial Bank of Commerce,
Hasbro Inc., Hollinger International Inc., The Molson Companies Ltd., The Seagram
Co. Ltd. and Unimedia Inc.
SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 3,000(1); Common
Stock Units, 984.(2)
</TABLE>
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<TABLE>
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DREW LEWIS [PHOTO] Committee Memberships: Compensation and Option; Organization Review and Nominat-
ing. Mr. Lewis became Chairman and Chief Executive Officer of Union Pacific
Drew Lewis, 64 Corporation on October 1, 1987, after serving as President and Chief Operating
Chairman and Chief Officer since October 15, 1986. He has been a Director of Union Pacific
Executive Officer, Corporation since January 30, 1986 and was Chairman and Chief Executive Officer of
Union Pacific Union Pacific Railroad Company from April 1, 1986 to October 15, 1986. Prior to
Corporation, that date and since 1983, he had been Chairman of the Board and Chief Executive
Bethlehem, Pennsylvania Officer of Warner Amex Cable Communications Inc. He served as Secretary of
1986 Transportation between 1981 and 1983. Mr. Lewis is a director of American Express
Company, AT&T Co., FPL Group, Inc., Gannett Co., Inc. and Union Pacific Resources
Group.
SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 16,000.(1)
</TABLE>
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6
<PAGE> 10
Age, Principal Occupation and
Year First Became a Director
Other Information
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<TABLE>
<S> <C>
ELLEN R. MARRAM [PHOTO] Committee Memberships: Audit; Organization Review and Nominating. Ms. Marram
became President of The Seagram Beverage Group and Executive Vice President of The
Ellen R. Marram, 49 Seagram Company Ltd. and Joseph E. Seagram & Sons Inc. in May 1993. She served as
President, The Seagram Senior Vice President of the Nabisco Foods Group and President of Nabisco Biscuit
Beverage Group, Company from June 1988 until April 1993. She was President, Nabisco Grocery
New York, New York Division from 1987 to 1988. Prior to that time, she held a number of executive and
1988 marketing positions at Nabisco/Standard Brands, Johnson & Johnson and Lever
Brothers. Ms. Marram received a bachelor's degree from Wellesley College in 1968
and a master's degree in business administration from Harvard Business School in
1970. She is a director of the Advertising Council and Personalized Media
Communications, LLC, and a member of the GMA Industry Productivity Council and the
Associates of Harvard Business School.
SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 6,000(1); Common Stock
Units, 5,033.(2)
</TABLE>
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<TABLE>
<S> <C>
CARL E. REICHARDT Committee Memberships: Finance; Organization Review and Nominating. Mr. Reichardt
[PHOTO] served as Chairman of the Board and Chief Executive Officer of Wells Fargo &
Company from 1983 until his retirement on December 31, 1994. He became associated
Carl E. Reichardt, 64 with Wells Fargo & Company in 1970 and was elected President of Wells Fargo Bank,
Retired Chairman of N.A., in 1978. He was elected to the following positions with Wells Fargo &
the Board and Chief Company: Executive Vice President in 1973, President in 1979, and Chief Operating
Executive Officer, Officer in 1981. Mr. Reichardt received a bachelor's degree in economics from the
Wells Fargo & Company, University of Southern California. His directorships include Wells Fargo &
San Francisco, Company, Wells Fargo Bank, N.A., Columbia/HCA Healthcare Corporation, Con Agra,
California Inc., McKesson Corporation, Newhall Management Corporation, Pacific Gas and
1986 Electric Company and SunAmerica Inc.
SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 20,000.(1)
</TABLE>
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7
<PAGE> 11
Age, Principal Occupation and
Year First Became a Director
Other Information
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<TABLE>
<S> <C>
JOHN L. THORNTON [PHOTO] Committee Memberships: Audit; Organization Review and Nominating. Mr. Thornton has
been a general partner of Goldman, Sachs & Co. since 1988, having joined that firm
John L. Thornton, 42 in 1980. Mr. Thornton was educated at the Hotchkiss School, Harvard College,
Partner, Goldman, Sachs Oxford University and the Yale School of Organization and Management. He is a
& Co., London, England director of British Sky Broadcasting Group PLC, Laura Ashley PLC and Pacific
1996 Century Group.
SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 1,000(7)
</TABLE>
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<TABLE>
<S> <C>
ALEX TROTMAN [PHOTO] Committee Memberships: Finance; Organization Review and Nominating. Mr. Trotman
joined Ford of Britain in 1955 following service as a flying officer-navigator in
Alex Trotman, 62 the Royal Air Force. Following a three-year assignment in Purchasing, he was
Chairman of the Board of assigned in 1959 to the Light Car Product Planning Department. Subsequently, he
Directors, President and held managerial positions in Car and Truck Product Planning before being named
Chief Executive Officer director of Ford of Europe's Car Product Planning Office in 1967. Mr. Trotman
1993 moved to the United States in 1969 on special assignment to the Company's Advanced
Car Product Planning Operations. In 1970, he was appointed manager of
Lincoln-Mercury Division's Product Planning Department and then director of the
Marketing Sales Planning Office and, in 1972, executive director of product
planning for Product Planning and Research. Mr. Trotman was appointed chief car
planning manager for the Car Product Development Group in 1975, executive director
of operations planning in 1977 and assistant general manager of Truck and
Recreational Product Operations in 1978. He was elected a Vice President of the
Company and named Vice President of Truck Operations for Ford of Europe in 1979.
In 1983, he became President of Ford-Asia Pacific. He became President of Ford of
Europe in 1984 and Chairman in 1988. He returned to the United States in 1989 and
became Executive Vice President -- North American Automotive Operations on May 1
of that year. He became President and Chief Operating Officer, Ford Automotive
Group, and a Director on January 1, 1993. Mr. Trotman was elected Chairman of the
Board of Directors, President and Chief Executive Officer of the Company effective
November 1, 1993. Mr. Trotman graduated from the Boroughmuir School in Edinburgh,
Scotland and received an MBA from Michigan State University. He is a director of
IBM.
SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 357,281.(3)(4)(6)
</TABLE>
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8
<PAGE> 12
Age, Principal Occupation and
Year First Became a Director
Other Information
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
CLIFTON R. WHARTON, JR. Committee Memberships: Audit; Organization Review and Nominating. Dr. Wharton
[PHOTO] served as Deputy Secretary of State from January to November 1993 and was
re-elected a director of the Company in December 1993. He had been the Chairman
Clifton R. Wharton, Jr., and Chief Executive Officer, Teachers Insurance and Annuity Association-College
69 Retirement Equities Fund from 1987 to 1993, and served as the Chancellor of the
Retired Chairman and State University of New York System from 1978 to 1987. Prior to that position he
Chief Executive Officer, had been President of Michigan State University since 1970. Following completion
Teachers Insurance and of a B.A. degree cum laude at Harvard in 1947, and an M.A. in International
Annuity Association- Studies at Johns Hopkins University in 1948, he joined the Rockefeller family
College Retirement philanthropic activities in Latin America and then in Southeast Asia. He earned a
Equities Fund, Ph.D. degree in economics from the University of Chicago in 1958. He is a director
New York, New York of Harcourt General Inc., the New York Stock Exchange and Tenneco Inc. and an
1973 Overseer of Teachers Insurance and Annuity Association.
SHARES BENEFICIALLY OWNED: Ford Motor Company Common Stock, 2,000(1); Depositary
shares of Ford Motor Company Series A Preferred Stock, 1,000.
</TABLE>
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<PAGE> 13
NOTES
(1)Includes restricted shares of Common Stock issued under the Restricted Stock
Plan for Non-Employee Directors, as follows: William Clay Ford, Jr. and
Marie-Josee Kravis, 2,000 shares; other eligible non-employee directors, 1,600
shares (see page 12).
(2)Common Stock Units credited under a deferred compensation plan for
non-employee directors (see page 12).
(3)Nominees also have reported and disclaimed beneficial ownership of the
following numbers of shares of the Company's stock beneficially owned by members
of their immediate families: Michael D. Dingman, 2,436 shares of Common Stock.
Present directors and executive officers as a group have reported and disclaimed
beneficial ownership of an aggregate of 7,550 shares of the Company's Common
Stock. Also, on March 1, 1996, or within 60 days thereafter, nominees who also
are employees of the Company and the named executives listed in the Summary
Compensation Table on page 22, have rights to acquire shares of the Company's
Common Stock through the exercise of stock options under the Company's stock
option plans (see pages 24 and 25), as follows: W. Wayne Booker, 103,750 shares;
Edsel B. Ford II, 82,950 shares; Edward E. Hagenlocker, 117,250 shares; Louis R.
Ross, 200,000 shares; Alex Trotman, 292,500 shares; and Kenneth Whipple, 250,750
shares. W. Wayne Booker beneficially owned 104,524 shares of Common Stock,
Edward E. Hagenlocker beneficially owned 119,295 shares of Common Stock and
Kenneth Whipple beneficially owned 204,041 shares of Common Stock.
(4)Includes any shares of Common Stock credited under the Company's Savings and
Stock Investment Plan (see note 5, page 23) and the 1986 and 1990 Long-Term
Incentive Plans (see pages 22, 23 and 26-28).
(5)Shares of Class B Stock beneficially owned by Edsel B. Ford II, William Clay
Ford and William Clay Ford, Jr. are set forth in their biographical data. The
following persons beneficially owned more than 5% of the Class B Stock
outstanding as of March 1, 1996: Josephine F. Ford, c/o Ford Estates, Dearborn,
Michigan, beneficially owned 14,400,014 shares (20.3%), and Lynn F. Alandt, c/o
Ford Estates, Dearborn, Michigan, beneficially owned 7,833,044 shares (11.1%).
Of the outstanding Class B Stock, 45,580,997 shares are held in a voting trust
of which Edsel B. Ford II, William Clay Ford and William Clay Ford, Jr. are
among the trustees. The trust, which terminates in 1998, requires the trustees
to vote the shares as directed by a plurality of the shares in the trust.
(6)Includes shares of Common Stock contingently credited that may be delivered
after termination of employment if earned out in accordance with the Company's
Supplemental Compensation Plan.
(7)Shares reported as beneficially owned by Mr. Thornton were acquired on March
22, 1996, and exclude shares held by Goldman, Sachs & Co. in the ordinary course
of business.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers to file reports of holdings and transactions in the
Company's Class B Stock, Common Stock and Preferred Stock with the Securities
and Exchange Commission ("SEC") and the New York Stock Exchange. Based on
Company records and other information, the Company believes that all SEC filing
requirements applicable
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<PAGE> 14
to its directors and officers with respect to the Company's fiscal year ending
December 31, 1995 and prior fiscal years were complied with.
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COMMITTEES OF THE BOARD OF DIRECTORS
The Audit Committee consists of five directors: Colby H. Chandler (Chairman),
Irvine O. Hockaday, Jr., Ellen R. Marram, John L. Thornton, and Clifton R.
Wharton, Jr. The Committee is responsible for determining that management
fulfills its responsibilities in the preparation of financial statements and
financial control of operations. Its functions include the selection and
engagement, on behalf of the Company, and subject to ratification or rejection
by the stockholders, of independent public accountants to audit the books and
records of the Company and to perform other duties prescribed by the Committee.
The Committee confers with the independent public accountants and approves the
scope of and fees for the audit and other services. The Committee reviews the
internal controls, accounting practices, financial structure and financial
reporting of the Company, directs and supervises special investigations,
receives periodic reports on legal and tax matters and reports to the Board of
Directors as appropriate concerning these reviews, investigations and reports.
The Committee also performs other functions that may be delegated to it by the
Board of Directors. The Audit Committee met three times during 1995. (Additional
information concerning the Audit Committee and the independent public
accountants appears on pages 32-33.)
The Compensation and Option Committee consists of four directors: Michael D.
Dingman (Chairman), Roberto C. Goizueta, Drew Lewis and Kenneth H. Olsen. The
Committee's functions include fixing the salaries and determining the
supplemental compensation awards, if any, of members of the Board of Directors
who are officers or employees of the Company and of vice presidents and other
officers of the Company. The Committee also considers and makes recommendations
concerning any bonus, supplemental compensation, special compensation, long-term
incentive or stock option plan of the Company and performs any functions
delegated to it under the provisions of such plans, including making
recommendations concerning grants of stock options and making grants of
contingent stock rights and restricted stock units. The Compensation and Option
Committee met eight times during 1995.
The Finance Committee consists of seven directors: Michael D. Dingman, Edsel B.
Ford II, William Clay Ford, William Clay Ford, Jr. (Chairman), Marie-Josee
Kravis, Carl E. Reichardt and Alex Trotman. The Committee, between meetings of
the Board of Directors, has and may exercise, in such manner as it deems to be
in the best interests of the Company, all of the powers of the Board (except
with respect to matters within the powers of the Audit Committee or the
Compensation and Option Committee) concerning the determination of financial
policies of the Company and the management of its financial affairs, not
inconsistent, however, with Delaware law and such specific directions as to the
conduct of the Company's affairs as may be given by the Board of Directors. The
Committee also performs other functions that may be delegated to it by the Board
of Directors. The Finance Committee met seven times during 1995.
The Organization Review and Nominating Committee consists of fourteen directors:
Colby H. Chandler, Michael D. Dingman, William Clay Ford, William Clay Ford,
Jr., Roberto C. Goizueta, Irvine O. Hockaday, Jr., Drew Lewis, Marie-Josee
Kravis, Ellen R. Marram, Kenneth H. Olsen, Carl E. Reichardt, John L. Thornton,
Alex Trotman (Chairman) and Clifton R. Wharton, Jr. The Committee considers and
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<PAGE> 15
makes recommendations with respect to the management organization of the
Company, the nominations or elections of directors and officers of the Company,
the size and composition of the Board of Directors, and the appointments of such
other employees of the Company as shall be referred to the Committee. The
Committee will consider stockholder suggestions for nominees for director other
than self-nomination suggestions. Suggestions for Committee consideration may be
submitted to the Secretary of the Company, The American Road, Dearborn, Michigan
48121. Suggestions received by the Secretary's Office prior to December 31 will
be considered by the Committee at a regular meeting the following year,
preceding the mailing of proxy material to stockholders. The Organization Review
and Nominating Committee met eight times during 1995.
COMPENSATION OF DIRECTORS
The Company believes that the compensation of its directors should be aligned
with the interests of the Company's stockholders. In furtherance of this
philosophy, beginning in 1996, 25% of the directors' annual fee ($10,000) will
be paid in deferred Ford Common Stock Units. This change, together with the
restricted stock grants to directors and the recently-established director stock
ownership guidelines, is part of the Company's ongoing commitment to link
director and stockholder interests. Details of these programs are set forth
below.
Directors' fees, which are paid only to directors who are not Company employees,
are as follows: annual Board membership fee, $40,000; attendance fee for each
meeting, $1,000; annual committee membership fees -- Audit, $10,000;
Compensation and Option, $10,000; Finance, $10,000; Organization Review and
Nominating, $10,000. Under a deferred compensation plan, directors may make
irrevocable elections in advance to defer all or part of the annual Board
membership fee, attendance fees and committee membership fees in the form of
cash and/or Common Stock Units. Commencing January 1, 1996, $10,000 of the
annual fee will be mandatorily deferred in the form of Common Stock Units under
the plan. Each Common Stock Unit is equal in value to a share of Common Stock
and is ultimately distributed in cash only. Fees deferred in Common Stock Units
generate dividend equivalents in the form of additional Common Stock Units,
which are credited to the directors' accounts as of the date of payment of cash
dividends on Common Stock. Any fees deferred in cash are held in the general
funds of the Company. Interest on such fees is credited semi-annually at the
then-current United States Treasury Bill rate plus 3/4 of a percentage point. In
general, amounts accumulated in cash and/or Common Stock Units are not
distributed until after termination of service on the Board. Participants have
the option to receive payment in a lump sum or in annual installments over a
period of up to ten years.
Directors who are not Company employees also receive restricted shares of Common
Stock under the Restricted Stock Plan for Non-Employee Directors. Pursuant to
the plan, each non-employee director who has served in that capacity for at
least six months received a grant of 2,000 shares of Common Stock subject to
restrictions on transfer or other disposition. In general, the restrictions
expire as to 20% of the shares each year following the year of grant. Each
non-employee director will receive an additional 2,000-share grant on the same
terms when the restrictions have expired as to all shares covered by the
previous grant.
To further link the interests of the Company's directors with the interests of
stockholders, Ford stock ownership guidelines were established in 1995 for
directors who are not Company employees. Each such
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<PAGE> 16
director agreed to maintain Ford stock ownership at a level equivalent in value
to five times the sum of the director's annual Board and committee fees and, for
directors not as yet at that level, to achieve that level within five years.
Directors who are not Company employees are provided life insurance in the
amount of $200,000 and accidental death or dismemberment coverage in the amount
of $500,000. The life insurance coverage continues following retirement from the
Board after attaining age 55 and having served five years as a director. A
director retiring from the Board after attaining age 70 or, subject to Board
approval, after attaining age 55 and having served as a director for at least
five years, may elect to have the life insurance reduced to $100,000 and receive
an annuity of $15,000 a year for life. The accidental death or dismemberment
coverage may be supplemented at the director's own expense up to an additional
$500,000 and terminates at the conclusion of a director's service on the Board.
Directors who are not Company employees may contribute up to $25,000 per year to
certain tax-exempt organizations under the Ford Fund Matching Gift Program for
Non-Employee Directors. For each dollar within the $25,000 limit contributed by
the director, the Ford Motor Company Fund will contribute two dollars.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1993, the Company entered into an arrangement with William Clay Ford
whereby he agreed to be available for consultation, representation and other
duties. The agreement continues in effect until terminated by either party upon
thirty days' notice. The Company agreed to pay him compensation at the rate of
$100,000 per year and to provide facilities, including office space, a secretary
and security arrangements. During the term of the agreement, Mr. Ford agreed to
be available to serve as a director.
The spouse of Mrs. Lynn Ford Alandt acquired a Ford automobile dealership in
October 1994. During 1995, the dealership paid to the Company about $31.7
million for products and services in the ordinary course of business and the
Company paid to the dealership about $4.5 million for services in the ordinary
course of business. Also in 1995, Ford Motor Credit Company ("FMCC"), a
wholly-owned subsidiary of the Company, provided about $32.9 million of
financing to the dealership and made payments in the ordinary course of business
of about $282,000; the dealership paid FMCC about $31.8 million in the ordinary
course of business.
John L. Thornton, a Partner of Goldman, Sachs & Co., was elected a director of
the Company on March 14, 1996. Goldman, Sachs & Co. has provided investment
banking services to the Company for many years and is expected to continue to
provide such services during 1996.
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<PAGE> 17
COMPENSATION AND OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Ford Motor Company is the second-largest producer of cars and trucks in the
world, with about 347,000 employees worldwide and assets of over $243 billion.
The Company has manufacturing, assembly or sales affiliates in 36 countries, and
ranks among the largest providers of financial services in the United States.
Ford management is faced continually with major competitive and economic
challenges. The Committee believes that, if the Company is to be successful, its
compensation programs must be geared to attract and retain the highest quality
employees available around the world. Further, executive compensation programs
must provide incentives that will reward key managers for pursuing aggressively
the actions necessary to strengthen the Company's performance and enhance
stockholder value. Accordingly, the Company's compensation program for
executives is intended to:
- Align executives' performance objectives with the interests of
stockholders,
- Balance the elements of executive compensation to support
achievement of annual business plans and long-term strategic goals,
and
- Provide a strong linkage between executive compensation and Company
performance, as measured by quality products, customer satisfaction,
committed employees, affordable cost structures, and Company
profitability.
To achieve these objectives, the Company's executive compensation program
consists of two main elements:
Annual compensation, which is comprised of base salary and bonus. Bonus
awards are made only when profits for a year reach a threshold specified in
the stockholder-approved Supplemental Compensation Plan, and
Long-term incentives that provide a financial opportunity through grants of
stock options and other forms of stock-based awards. The compensation that
may be realized by executives through these incentive programs is tied
directly to Company performance and the value of Ford Common Stock in the
future.
Each of the components of compensation has an integral role in the total
executive compensation program.
The Committee reviews annually data developed by an outside consultant covering
the Company's total compensation program for executives. The report discusses
all elements of compensation, the interrelationships between each, and how the
Company's program compares to the executive compensation programs at other
leading corporations. At other times each year, the Committee considers specific
components of the total compensation program and makes decisions concerning the
compensation of Company officers.
The members of the Committee believe that executive compensation should be
competitive both within the worldwide automotive industry and when compared with
a cross-section of major U.S.-based corporations. Accordingly, the compensation
data prepared by the outside consultant are based on a survey of a number of
leading companies selected jointly by the consultant and the Company. The
automotive
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<PAGE> 18
companies identified on the performance graphs on pages 29 and 30 are included
in the survey. In addition to these automotive competitors, eighteen leading
corporations in several other industries also are included in the survey because
competition for highly qualified executives extends well beyond the automobile
industry. Companies are selected based on size, reputation, and business
complexity.
The size and financial performance of the comparator companies are considered as
are the level and scope of responsibility of the positions covered by the survey
in determining the appropriateness of compensation for the Company's executives.
After adjusting for these factors, the objective of the Committee is to provide
a competitive executive compensation program over the long term based on the
survey group average. In 1995, executive salaries generally were slightly above
this average, and long-term compensation generally was above this average also.
Comparative data with respect to bonus awards for 1995 are not yet available,
but, based on historical competitive practices, bonuses paid for 1995 are
expected to be generally comparable to the average of the survey companies.
The Committee strongly believes that its decisions about salaries, as well as
the size of bonuses and other incentive compensation awards for executives,
should not be based strictly on mechanical formulas and statistical data or the
like, but also must be based on judgments that may include more subjective
evaluations of individual skills, experience, and accomplishments. Accordingly,
within the framework of competitive compensation practices the Committee has an
obligation, as a part of its responsibility to the Company and its stockholders,
to recognize and reward, when appropriate, individual performance.
STOCK OWNERSHIP GUIDELINES -- To underscore the importance of relating the
interests of management and stockholders, in 1994 the Committee established
stock ownership targets for executives who are vice presidents and above. The
targets are expressed in terms of the value of Ford Common Stock held by the
executive as a multiple of base salary. The targets range from one times salary
up to five times salary for the Chief Executive Officer. The Chief Executive
Officer has extended the target of holding shares equal to at least one times
salary to about 30 other key executives. Many vice presidents and other
executives already hold a substantial amount of Common Stock, but those who do
not hold sufficient shares have five years to reach their personal targets. The
Chief Executive Officer has met his stock ownership target.
COMPENSATION DEDUCTIBILITY -- The Committee has taken into consideration Section
162(m) of the Internal Revenue Code and related regulations as they pertain to
the deductibility of compensation paid to the Chief Executive Officer and the
other four highest compensated officers required to be disclosed in the proxy
statement (the "Covered Executives"). In order to preserve the deductibility for
federal income tax purposes of certain compensation in excess of $1 million that
may be paid to the Covered Executives, certain amendments to the Company's
Supplemental Compensation Plan and 1990 Long-Term Incentive Plan were approved
by the stockholders at the Annual Meeting in 1995. These amendments provide
limits on the amount of supplemental compensation and stock options that may be
awarded to any individual in any one year under each of these plans.
ANNUAL COMPENSATION
Annual compensation for executives at Ford is comprised of base salary and
bonus, an approach consistent with the compensation programs of most leading
automotive and nonautomotive companies. For a number of years, base salaries for
Ford executives were low in relation to the comparator companies,
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<PAGE> 19
balanced by incentive compensation above competitive averages in years when
warranted by Company performance. This strategy placed somewhat more
compensation "at risk" than warranted based on survey data, and the Committee
has taken actions to bring base salaries to more competitive levels for
executives.
The Ford Supplemental Compensation Plan provides for bonus awards based on the
Company's annual worldwide profits. The maximum total amount of all awards may
not exceed the amount in the Reserve under the Plan. In general, a credit is
made to the Reserve by the Committee for each year up to a maximum of 6% of
"Income" for such year after deducting an amount equal to 10% of "Capital
Employed in the Business" (as such terms are defined in the Plan).
The bonus portion of annual pay reflects the Committee's view that, for senior
executives, a meaningful portion of compensation should be "at risk," providing
a direct link between pay and Company results for any year. Because of the
cyclical nature of the economy and the automotive industry, there can be a wide
variation in bonus awards from year-to-year. Awards can be substantial for years
when the Company is highly profitable. Conversely, there have been a number of
years, including 1990, 1991, and 1992, when no bonus awards have been made
because no amount was creditable to the Reserve for those years under the Plan
formula described above.
The Committee determines each year the maximum total amount of all bonus awards
that may be made for such year from the Reserve to all eligible employees and
makes individual awards to officers. While no "target" awards are provided for
under the Plan, the amount of bonus that may be paid to any individual for any
year under the Plan is limited to 2% of the maximum amount creditable to the
Reserve for that year. In general, the amount allocated for awards is the amount
credited to the Reserve by the Committee for that year. The Committee normally
does not carry over from year-to-year in the Reserve funds sufficient to make
awards for years when no accrual can be made under the Plan formula.
The aggregate amount allocated for any year is based on the Company's financial
performance and competitive compensation considerations. For 1995, the Committee
allocated $192 million. The proportion of the aggregate amount allocated for
officers, including the executives named in the Summary Compensation Table, was
based on historical practices. Individual awards are based on each participant's
level of responsibility. For persons other than the Covered Executives, the
Committee may increase or decrease awards from a mathematically derived pro
forma amount, which is based on salary band or grade and salary, in recognition
of individual or organizational performance. The maximum award to any Covered
Executive is determined by a stockholder-approved formula that limits individual
awards to 2% of the maximum amount creditable to the Reserve for that year. The
limit is not intended to represent a target award, and in all cases, the 1995
awards to Covered Executives were below the limit.
To further link executive compensation to the Company's longer-term performance,
the Committee determined that, with respect to the Chief Executive Officer, 60
percent of the bonus awarded for 1995 will be deferred until after he retires,
and, with respect to each of the other Covered Executives who was an active
employee on the date bonus awards were made, payment of 50 percent of the bonus
awarded for 1995 would be deferred until after retirement. In all cases, the
deferred amounts are in the form of contingent credits for Common Stock.
Contingent credits are entitled to dividend equivalents that are converted into
additional shares of contingently credited Common Stock based on the fair market
value of the shares at the date of payment of each dividend. Payment of deferred
bonuses in the form of Common
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Stock contingently credited is subject to the earning out conditions of the
Supplemental Compensation Plan.
LONG-TERM COMPENSATION
Long-term incentive compensation, rather than reflecting a single year's
results, is intended to focus management's attention on the Company's future.
The Committee believes strongly that executive pay should relate directly to
Company performance. In the complex, global, cyclical business of Ford,
performance cannot, and should not, be assessed considering only annual profits
or returns. The ten-year chart on page 30 provides helpful perspective in that
regard. Often, the results of major product program decisions cannot be measured
for several years. The long-term incentives are intended to provide financial
opportunities for executives based on the Company's performance over a number of
years. These programs are designed to span the business cycles and recognize
that current product and business decisions have implications for Company
results a number of years into the future. Some of the most difficult work must
be undertaken during periods of business downturn, when job demands are
exceedingly difficult, and the decisions that must be made are pivotal to the
Company's future success. Accordingly, long-term awards may not fluctuate from
year-to-year to the same extent as annual business results or short-term
incentive awards.
Each of the components of Ford's long-term incentive program is tied to the
value of Ford Common Stock and, thus, provides a strong link between management
and the interests of the Company's stockholders. Grants of stock options and
other stock-based long-term incentives also encourage and facilitate stock
ownership by executives.
Grants of stock options, which are valid for 10 years, are an important part of
the Company's long-term incentive strategy because executives can gain only when
stockholders also gain, through appreciation in the market price of Ford Common
Stock. Stock option grants were not made in 1993 to the executives named in the
Summary Compensation Table. Instead, in 1993 these executives received grants of
contingent stock rights ("CSRs") under the Company's long-term incentive ("LTI")
program that were larger than in prior years in order to focus their attention
on the achievement of specific targets, including cost reduction. CSRs are
discussed in greater detail below. In 1994 and 1995, stock options were granted
to the named executives and to other eligible employees at levels generally
comparable to stock option grants made in prior years. In determining the size
of individual option grants for 1995, the Committee considered both the number
of options granted to the recipient in prior years and the aggregate number of
options awarded to all recipients. The maximum number of stock options that may
be granted to any Covered Executive is determined by a stockholder-approved
formula that limits individual grants to 2.5% of the maximum number of shares
available in any year for grants under the 1990 Long-Term Incentive Plan. The
limit is not intended to represent a target grant, and, in all cases, the 1995
stock option grants to the Covered Executives were below the limit.
Under the second stock-based LTI program, awards are made in shares of stock
based on participants' performance against specific targets established by the
Committee for performance periods that cover a number of years. The stock that
is finally awarded based on Company and individual performance generally is
restricted from sale until eighteen months after retirement, emphasizing further
the long-term
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performance orientation of the program and the relationship between executive
compensation and the interests of the Company's stockholders.
In 1995, Company officers and other senior executives who generally are heads of
divisions or staffs received grants of CSRs under the LTI program. These grants
of CSRs cover a three-year performance period, 1995-1997. Up to 100% of the CSRs
granted in 1995 to any executive may be finally awarded after the end of the
performance period in the form of shares of Ford Common Stock if performance
targets relating to the following factors are met or exceeded: return on equity
in relation to the top 50 non-oil Fortune 500 companies, product programs,
product quality, customer acceptance of Ford products and services, and
relationships with employees. The size of the individual CSR grants was based on
competitive long-term compensation values determined by the outside consultant
for positions at various levels of responsibility and on each participant's
assignment and anticipated contribution to the Company's performance during the
multi-year performance period. In general, less than 100% of the shares covered
by the CSR grant will be awarded if one or more of the performance targets is
only partially achieved.
During a performance period, CSR grantees are entitled to receive dividend
equivalents with respect to the shares covered by CSRs, either in the form of
cash or Common Stock of equivalent value (subject to restrictions and earning
out conditions), or in a combination of the two, as determined by the Committee.
The Committee has determined that dividend equivalents in the form of cash would
be paid on outstanding CSRs covering up to an aggregate of 200,000 shares and
that dividend equivalents on any CSRs above that level would be paid in the form
of restricted stock.
The Final Awards of Ford Common Stock made in 1995 under the LTI program covered
the performance period 1990-1994. Using statistical and other business data, the
Committee evaluated the Company's performance during this five-year period
against targets relating to return on equity in relation to other top Fortune
500 companies (25%), achievement of major cost reduction objectives (25%),
improvements in product quality and customer acceptance worldwide (35%) and
relationships with employees (15%) in determining the portion of the initial
grants of CSRs to be finally awarded as restricted shares of Ford Common Stock.
It determined that the Company partially achieved the return on equity target,
exceeded the budget/cost reduction objectives, substantially achieved the
customer acceptance targets and exceeded the relationships with employees
objectives. On the basis of this performance, the Committee determined generally
to award 80% of the initial grants of CSRs and made adjustments based on
subjective evaluations of individual performance in determining the Final
Awards. For the Covered Executives, the adjusted awards ranged from 84% to 100%
of the initial grants. The Final Awards for the performance period that ended
December 31, 1995 will not be made until mid-1996, after worldwide data
pertinent to the Committee's deliberations become available. These amounts will
be shown in next year's proxy statement.
The Key Manager Incentive Program is a stock-based LTI retention and incentive
program within the Long-Term Incentive Plan. Under this program, grants were
made in the form of restricted stock units (RSUs) to five executives in 1995,
three of whom (Messrs. Trotman, Hagenlocker and Booker) are named in the Summary
Compensation Table. An RSU is equal in value to one share of Common Stock,
further linking the interests of the executive with those of stockholders. Each
RSU represents the right to receive,
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following expiration of the applicable restriction period and subject to the
achievement of specific objectives determined by the Committee, cash equal to
the value of a share of Common Stock at that time.
The Committee administers the Key Manager Incentive Program, makes the grants of
RSUs to the employees and establishes the objectives, restriction periods and
other terms of each RSU grant. It also determines the extent to which the
objectives have been achieved and decides the final number of RSUs (which may
not exceed the number covered by the grant) that will be awarded following
expiration of the restriction period.
In selecting five key Company executive officers to receive grants of RSUs, the
Committee wished to provide a special incentive for the successful
implementation of the Company's globalization program -- "Ford 2000" -- to the
senior executives who must provide the leadership for this major undertaking.
The success of the Ford 2000 initiative will be measured against the following
seven strategies using qualitative assessments of the Company's processes,
progress and results: achievement of worldwide product excellence; low-cost
producer; lead in customer satisfaction; empowered people; nimble through
process leadership; lead in corporate citizenship; and achievement of worldwide
growth. Each individual's personal contribution to achievement of the
performance objective also will be considered.
Restrictions on the RSUs generally lapse 18 months after retirement, emphasizing
the long-term nature of the LTI program. During the restriction period, RSUs may
not be sold or otherwise transferred and are subject to earning out and other
requirements under the 1990 Long-Term Incentive Plan. A holder of RSUs is
entitled to receive dividend equivalents payable in cash during the restriction
period. RSUs have no voting rights.
To accelerate the development of capable leaders to support the Company's
globalization program and to reduce senior management structure, the Committee
supported the establishment of the 1995 Select Retirement Program ("SRP"), a
voluntary retirement program in which participants were selected by the Company.
In general, the SRP added three years of age and contributory service to the
otherwise eligible employee's attained age and service for retirement benefits
purposes. Participants generally must have been at least age 55 with 10 or more
years of credited service under the Company's retirement plans. The Committee
has reviewed and approved SRP participation offers made to certain executive
officers. Further information with respect to the SRP is discussed at page 32.
CEO COMPENSATION
Alex Trotman was elected Chairman of the Board, President and Chief Executive
Officer effective as of November 1, 1993.
CEO ANNUAL COMPENSATION -- Mr. Trotman's base annual salary was not increased
during 1994 or 1995. His award of supplemental compensation for 1995 was below
the mathematical limit specified in the Supplemental Compensation Plan, in part
because of the award of a conditional annuity described below. In applying its
"negative discretion" permitted by Section 162(m) of the Internal Revenue Code
in determining Mr. Trotman's bonus award, the Committee considered his vision
and strong leadership in the transition to "Ford 2000" and the fact that he
operated as head of a re-structured, global organization, with a wide span of
control and a broader-than-normal range of duties. The members of the Committee,
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along with the Company's other non-employee directors, assessed his
accomplishments during 1995, and their collective judgments contributed to the
Committee's decisions on his compensation.
The Committee determined that payment of 60 percent of Mr. Trotman's bonus award
would be deferred in the form of contingent credits for Common Stock, as
discussed on page 16. This amount will remain "at risk" until after his
retirement from the Company, effectively converting the deferred amount from
short-term compensation to a longer-term incentive because the ultimate value of
the deferred amount to Mr. Trotman will depend on the market value of Ford
Common Stock at the time of distribution following retirement.
In addition, the Committee determined to award a conditional annuity to Mr.
Trotman in lieu of a portion of bonus for 1995 in order to convert an additional
portion of short-term compensation to a longer-term award by providing
supplemental retirement income. Conditional annuities are awarded under the
Supplemental Executive Retirement Plan (SERP) as described on page 31. Because
awards of conditional annuities recognize individual performance and replace a
portion of bonus, the present value of any conditional annuity is charged
against the Reserve under the Supplemental Compensation Plan. As provided in the
SERP, in determining the amount of the conditional annuity the Committee
considered individual and Company performance and the amount of Mr. Trotman's
bonus award in relation to the bonus awards of other executives in the context
of the historical relationship of the CEO's bonus award to the awards of other
executives. No other conditional annuities were awarded for 1995.
CEO LONG-TERM COMPENSATION -- The 1994 long-term incentive plan Final Award
shown for Mr. Trotman in column (h) of the Summary Compensation Table on page
22, under the heading "LTIP Payouts", was based on the Company's performance for
the years 1990 through 1994 using the same methodology described under
"Long-Term Compensation" above for determining the number of shares to be
awarded to other participants, including adjustments based on the individual
performance factors described above. The Final Award was made in the form of
Ford Common Stock, and the shares are restricted from disposition and subject to
forfeiture for a period that will extend, for the most part, beyond the date of
Mr. Trotman's retirement. Therefore, the actual "payout", or compensation value,
of the award to Mr. Trotman will depend on the market value of Ford Common Stock
in the future, further emphasizing the long-term focus of the plan in linking
the interests of management and the Company's stockholders.
The value of the stock options and CSRs granted to Mr. Trotman in 1995, as shown
on pages 24 and 26, will depend on the Company's success in future years and
whether that success is reflected in the market value of Ford Common Stock.
Further, in the case of the CSRs, the value of any Final Award will depend on
the extent to which the performance targets established by the Committee for a
three-year performance period ending in 1997 are achieved.
In applying its "negative discretion" permitted under Section 162(m) of the
Internal Revenue Code in determining the number of stock options granted to Mr.
Trotman, as shown in column (b) of the Options/SAR Grants Table on page 24, the
Committee considered the value of his other long-term incentive compensation in
relation to competitive long-term compensation values, and the complexity and
responsibility of his position. In determining the number of RSUs granted to Mr.
Trotman, as shown in the Long-Term Incentive Plan Awards Table (page 26), the
Committee also considered the importance of
20
<PAGE> 24
providing an additional incentive specifically oriented toward successful
achievement of the Company's globalization program.
The RSUs are restricted from disposition and subject to forfeiture for a period
that will extend beyond the date of Mr. Trotman's retirement, and the final
number of RSUs paid out in cash following expiration of the restriction period
will depend largely on the extent to which the Company's globalization program
is achieved. The actual compensation value of the RSUs, like that of the Final
Awards and the stock options, will depend on the market value of Ford Common
Stock in the future, providing an additional long-term focus and incentive tied
to the interests of stockholders.
The deductibility of Mr. Trotman's compensation under the new tax laws was
considered by the Committee. As discussed above, plan amendments approved by the
stockholders preserve the deductibility for federal income tax purposes of
certain elements of his compensation and the compensation of other Covered
Executives for tax years commencing with 1995.
The Compensation and Option Committee
Michael D. Dingman, Chairman
Roberto C. Goizueta
Drew Lewis
Kenneth H. Olsen
21
<PAGE> 25
COMPENSATION OF EXECUTIVE OFFICERS
Information is set forth below with respect to the compensation before tax for
the last three fiscal years of the person who served as Chief Executive Officer
during 1995 and the four other highest paid executive officers at year-end 1995.
As noted in the table, Mr. Ross retired at year-end 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
--------------------------------------- ----------------------- ---------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Other Restricted Underlying
Annual Stock Options/ LTIP All Other
Compensation Award(s) SARs Payouts Compensation
Name and Principal Position Year Salary($) Bonus($)(1) ($) ($)(2) (#)(3) ($)(4) ($)(5)
- --------------------------- ---- --------- ----------- ------------ ---------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alex Trotman(6) 1995 1,500,000 3,000,000 384,910 456,444 350,000 -- 90,000
Chairman, President and 1994 1,500,000 6,000,000 232,950 266,991 350,000 2,382,865 90,000
Chief Executive Officer 1993 716,667 1,000,000 118,127 229,462 0 1,228,983 17,915
W. Wayne Booker 1995 603,750 1,100,000 227,141 -- 90,000 -- 36,225
Executive Vice President 1994 600,000 2,200,000 142,546 -- 80,000 583,205 36,000
1993 325,000 700,000 88,099 16,734 0 413,445 8,750
Edward E. Hagenlocker(7) 1995 704,167 1,250,000 266,741 -- 175,000 -- 42,247
Executive Vice President 1994 675,000 2,500,000 160,773 -- 150,000 669,008 40,498
and President, Ford 1993 395,834 350,000 108,940 32,458 0 689,441 4,026
Automotive Operations
Louis R. Ross 1995 900,000 1,000,000 284,623 141,230 0 -- 54,000
Vice Chairman and Chief 1994 900,000 2,000,000 205,375 144,526 80,000 1,957,500 54,000
Technical Officer 1993 601,667 450,000 123,659 208,953 0 1,483,500 15,040
(ret. eff. 1/1/96)
Kenneth Whipple 1995 603,750 1,100,000 273,750 81,795 90,000 -- 36,225
Executive Vice President 1994 600,000 2,200,000 200,470 69,778 80,000 1,305,000 36,000
and President, Ford 1993 412,500 450,000 114,675 136,945 0 1,290,000 10,310
Financial Services Group
</TABLE>
NOTES TO SUMMARY COMPENSATION TABLE
(1)Payment of 60 percent of the bonus awarded to the Chief Executive Officer for
1995 and 50 percent of the bonus awarded to each of the other named executives
who was an active employee on the date of the award will be deferred until after
termination of employment.
(2)Amounts shown as "Restricted Stock Awards" represent dividend equivalent
payments made in the form of restricted stock under the Company's 1986 and 1990
Long-Term Incentive Plans (the "LTI Plans"). See note 1 to the Long-Term
Incentive Plan Awards Table (pages 26-27) for further details regarding the LTI
Plans. Restrictions on stock issued as dividend equivalents generally lapse 18
months after retirement.
22
<PAGE> 26
Holders of restricted stock receive cash dividends thereon in an amount per
share equal to the dividends payable on the Company's Common Stock. Cash
dividends paid to the named executives on restricted stock that has been awarded
are not included in this table.
Listed below are the total numbers of shares of restricted stock owned by the
named executives as of December 31, 1995, including shares reported as "LTIP
Payouts" in column (h) of this table and shares of Common Stock contingently
credited under the Supplemental Compensation Plan, and the total values thereof
based on the market value of the Company's Common Stock on December 29, 1995:
Alex Trotman, 338,129 shares ($9,805,741); W. Wayne Booker, 78,473 shares
($2,275,717); Edward E. Hagenlocker, 108,087 shares ($3,134,523); Louis R. Ross,
234,240 shares ($6,792,960); Kenneth Whipple, 171,873 shares ($4,984,317). The
closing price of the Company's Common Stock on the New York Stock Exchange on
December 29, 1995, the last trading day of the year, was used to determine
"market value."
The amount ultimately realized by any named executive in respect of restricted
stock will depend on compliance with certain earning out conditions and the
value of the Company's Common Stock when the restrictions lapse. Under the LTI
Plans generally, the Compensation and Option Committee determines the
restriction period, if any, with respect to shares included in each Final Award.
For each of the named executives, restrictions lapsed on January 1, 1996 as to
20,000 shares awarded with respect to the 1989-93 performance period, and
restrictions are scheduled to lapse on January 1, 1997 as to 18,000 of the
shares awarded with respect to the 1990-94 performance period. In addition, on
July 1, 1997, restrictions are scheduled to lapse as to all remaining shares
awarded to Mr. Ross.
(3)In general, under the 1985 Stock Option Plan and the 1990 LTI Plan, stock
appreciation rights ("SARs") may be granted in tandem with the grant of options
to executive officers. Exercise of an SAR cancels the related stock option and
vice versa.
(4)Amounts shown as "LTIP Payouts" represent Final Awards made under the LTI
Plans. The Final Awards were made in the form of restricted stock and were based
on the extent to which performance targets for the relevant performance period
were achieved and on the executive's performance. See note 2 above for further
details regarding restricted stock. Amounts shown represent Final Awards for
performance periods ended in 1994 and 1993. No amount is shown for the
performance period ended in 1995 as the awards will not be determined until
mid-year 1996. Those amounts will be shown in next year's proxy statement.
(5)Amounts reported as "All Other Compensation" include matching contributions
by the Company under the Savings and Stock Investment Plan ("SSIP"). Also
included under "All Other Compensation" is the value of certain credits
allocated to the named executives under the non-defined contribution plan
portion of the Company's Benefit Equalization Plan ("BEP"). Under the BEP, the
Company provides benefits to the named executives that substantially equal
benefits that otherwise could not be provided under the SSIP by reason of
certain limitations on employer and employee contributions under the Internal
Revenue Code. For 1995, the amounts included in column (i) as SSIP matching
contributions and BEP credits, respectively, are as follows: Alex Trotman,
$9,000 and $81,000; W. Wayne Booker, $9,000 and $27,225; Edward E. Hagenlocker,
$9,000 and $33,247; Louis R. Ross, $9,000 and $45,000; Kenneth Whipple, $9,000
and $27,225.
(6)All of Alex Trotman's compensation for 1994 and 1995 and 17% of his
compensation for 1993 were attributable to his service as Chairman, President
and Chief Executive Officer. The remainder of his
23
<PAGE> 27
compensation for 1993 was attributable to his service as President and Chief
Operating Officer, Ford Automotive Group.
(7)All of Mr. Hagenlocker's compensation for 1995 and 67% of his compensation
for 1994 was attributable to his service as President, Ford Automotive
Operations. The remainder of his compensation for 1994, and all of his
compensation for 1993, was attributable to his service as Executive Vice
President -- North American Automotive Operations.
STOCK OPTIONS
The 1990 Long-Term Incentive Plan approved by stockholders provides for the
granting of stock options and other rights with respect to Common Stock. The
following two tables and notes set forth further information relating to stock
options.
OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
Grant Date
Individual Grants Value(2)
- ------------------------------------------------------------------------------------------------- ----------
(a) (b) (c) (d) (e) (f)
% of Total
Number of Options/SARs
Securities Granted to Exercise
Underlying Employees or Base Grant Date
Options/SARs in Fiscal Price Expiration Present
Name Granted(#) Year ($/Sh) Date Value $
- ----------------------------------------- ------------ ------------ -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Alex Trotman............................ 350,000 3.6 32.00 10/13/2005 2,516,500
W. Wayne Booker......................... 90,000 0.9 32.00 10/13/2005 647,100
Edward E. Hagenlocker................... 175,000 1.8 32.00 10/13/2005 1,258,250
Louis R. Ross........................... 0 -- -- -- --
Kenneth Whipple......................... 90,000 0.9 32.00 10/13/2005 647,000
</TABLE>
- -------------------------------------------------------------
NOTES
(1)Stock options are granted at a price representing the average of the highest
and lowest prices at which Common Stock of the Company is sold on the New York
Stock Exchange on the date of grant. The Company did not grant any SARs in
connection with stock options granted in 1995.
Stock options are exercisable to the extent of 25% of the shares optioned after
one year from the date of grant, 50% after two years, 75% after three years and
in full after four years. Options are exercisable on a cumulative basis but may
not be exercised later than ten years from the date of grant.
In the case of an optionee whose employment terminates by reason of retirement,
disability or death, the option continues to accrue and be exercisable up to the
option expiration date, subject to fulfillment of certain conditions. In
general, in other instances of termination of employment, all rights to purchase
shares or exercise SARs cease upon termination.
Options are subject to certain specified earning out conditions, including not
engaging in competitive activity. Options are nontransferable except by will or
the laws of descent and distribution. In general,
24
<PAGE> 28
each optionee agrees to remain in the employ of the Company for one year from
the granting of the option.
(2)The values shown in column (f) were determined using a modified Black-Scholes
pricing model with the following assumptions and adjustments: stock price
volatility of 26.619%, calculated using daily stock prices of Common Stock for
the year prior to the grant date; a risk-free rate of return of 6.04%,
representing the interest rate on a 10-year U.S. Treasury security on the date
of grant; dividends at the rate of $1.24 a share, representing the annualized
dividends paid with respect to a share of Common Stock on the date of grant; a
10-year option term; reductions of approximately 9.61% to reflect the
probability of forfeiture due to termination prior to vesting, and of
approximately 8.16% to reflect the probability of a shortened option term due to
termination of employment prior to the option expiration date. The Company's use
of this model should not be construed as an endorsement of its accuracy. Whether
the model's assumptions will prove to be accurate cannot be known at the date of
grant. The ultimate value of the options, if any, will depend on the future
value of the Company's stock, which cannot be forecast with reasonable accuracy,
and the optionee's investment decisions.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs at FY-End In-the-Money Options/
(#) SARs at FY-End($)(2)
---------------------- ---------------------
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise(#) $ Unexercisable Unexercisable
- ------------------------------------- --------------- -------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
Alex Trotman........................ 0 0 292,500/ 1,788,028/
642,500 315,000
W. Wayne Booker..................... 0 0 103,750/ 1,025,203/
163,750 144,375
Edward E. Hagenlocker............... 0 0 117,250/ 460,999/
301,250 144,375
Louis R. Ross....................... 244,000(1) 945,996 200,000/ 2,250,000/
85,000 262,500
Kenneth Whipple..................... 0 0 250,750/ 1,927,208/
169,000 199,500
</TABLE>
- -------------------------------------------------------------
NOTES
(1)The number shown for Louis R. Ross in column (b) represents shares of Common
Stock with respect to which SARs were exercised for cash. No shares of Common
Stock were acquired in connection with the exercise of these SARs.
(2)The year-end values shown for unexercised "in-the-money" options/SARs
represent the difference between the fair market value of Common Stock subject
to the options, based on the closing price of the Company's Common Stock on the
New York Stock Exchange on December 29, 1995, and the exercise prices of the
options. "In-the-money" means that the fair market value of a share of stock
exceeds the option exercise price on the valuation date.
25
<PAGE> 29
As a general matter, whether or not financial benefit will be derived from the
exercise of stock options depends on the relationship between the market price
of the underlying securities and the exercise price of the options and on the
optionee's own investment decisions. Options "in-the-money" on a given date can
become "out-of-the-money" due to price fluctuations in the stock market. For
these reasons, the Company believes that placing a current value on outstanding
options is highly speculative and that such valuations may not represent the
true benefit, if any, that may be realized by an optionee.
CONTINGENT STOCK RIGHTS AND RESTRICTED STOCK UNITS
Under the LTI Plans, eligible employees may be granted nontransferable
Contingent Stock Rights ("CSRs"). In general, a CSR entitles the employee to
receive, following completion of a specified Performance Period, a Final Award
of up to the number of shares of Common Stock specified in the CSR ("Target
Award"). The number of shares constituting a Final Award will depend upon the
extent to which the Performance Target specified in the CSR is achieved or
exceeded over the Performance Period, the employee's performance and other
factors.
Under the 1990 Plan, eligible employees may be granted nontransferable
Restricted Stock Units ("RSUs"). In general, an RSU entitles the employee to
receive, following expiration of the restriction period and subject to the
achievement of specified objectives, cash equal to the value of a share of
Common Stock. The final number of RSUs which may be paid out in cash, which may
not exceed the number of RSUs covered by the related grant, depends on the
extent to which the performance objectives specified in the RSUs are achieved
and the employee's individual contribution thereto.
The following table sets forth information with respect to grants of CSRs and
RSUs made in 1995 to the named executives under the long-term incentive
provisions of the 1990 Plan.
LONG-TERM INCENTIVE PLAN-AWARDS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
Estimated Future Payouts
under Non-Stock Price-Based Plans
---------------------------------
(a) (b) (c) (d) (e) (f)
Performance
Number of or Other
Shares, Units Period Until
or Other Maturation Threshold Target(2) Maximum
Name Rights(#) or Payout (#) (#) (#)
- ----------------------------- -------------- -------------- ---------- ------- --------
<S> <C> <C> <C> <C> <C>
Alex Trotman................. CSRs 150,000 1995-97 0 120,000 150,000
RSUs 27,000 Ret. + 18 mos. 0 n/a 27,000
W. Wayne Booker.............. CSRs 30,000 1995-97 0 24,000 30,000
RSUs 10,000 Ret + 18 mos. n/a 10,000
Edward E. Hagenlocker........ CSRs 50,000 1995-97 0 40,000 50,000
RSUs 10,000 Ret + 18 mos. n/a 10,000
Louis R. Ross................ CSRs 28,000 1995-97 0 22,400 28,000
Kenneth Whipple.............. CSRs 30,000 1995-97 0 24,000 30,000
</TABLE>
- -------------------------------------------------------------
NOTES
(1) The entries in column (b) represent the number of shares specified in CSRs
or RSUs granted in 1995.
26
<PAGE> 30
CSRS
Performance Targets, the achievement of which determines the number of shares to
be included in a Final Award, are determined by the Compensation and Option
Committee (the "Committee"), which selects the persons who are eligible to
receive CSRs. In general, grants of CSRs are made annually. The Performance
Period ordinarily is five years for grants made prior to 1994 and three years
for 1994 and future grants. For 1995, Performance Targets with respect to the
CSRs reported in column (b) of this table cover the 1995-97 Performance Period
and include essentially the same performance measures for each of the named
executives.
Performance Targets with respect to the 1995-97 Performance Period include
return on equity relative to the top 50 non-oil companies in the Fortune 500
each year and achievement of specific objectives for major product programs.
Other Performance Targets for this Performance Period related to product
quality, customer acceptance and relationships with employees.
During the Performance Period, CSR grantees are entitled to receive dividend
equivalents with respect to the shares covered by the related Target Award,
either in cash or in shares of Common Stock of equivalent value (subject to
restrictions and earning out conditions) or in a combination of the two, as
determined by the Committee. Dividend equivalents paid to the named executives
in 1995 in cash are reported in column (e) of the Summary Compensation Table;
dividend equivalents paid in the form of restricted stock are reported in column
(f) of that table.
After the end of a Performance Period, the Committee considers the extent to
which the Company or a component has achieved or exceeded the Performance
Targets as well as the individual performance of each grantee and determines the
number of shares, if any, that will represent the Final Award for each grantee.
Final Awards in the form of Common Stock made to the named executives in respect
to the 1990-94 Performance Period are reported as "LTI Payouts" for 1994 under
column (h) of the Summary Compensation Table.
Upon expiration of the applicable "Restriction Period" determined by the
Committee, during which the shares representing Final Awards cannot be sold or
otherwise disposed of and are subject to earning out conditions discussed below,
shares of Common Stock or, if the Committee so determines, cash of equivalent
value, are distributed to the individual. Dividends or dividend equivalents are
paid on the number of shares represented by each Final Award.
The amount ultimately realized by an individual with respect to a Final Award
will depend on the earning out conditions, which are explained below, and upon
the value of the Company's Common Stock when the restrictions lapse.
Under the earning out conditions, if the employee's employment terminates by
reason of a voluntary quit, retirement without Company approval, release in the
best interest of the Company or discharge, or if the employee engages in
competitive activity following termination, all of the employee's undistributed
Final Awards, as well as outstanding CSRs, will be forfeited and cancelled
unless a waiver is granted by the Committee. In addition, all of the employee's
rights under any award will be forfeited if the Committee determines that the
employee has acted in a manner inimical to the Company's best interests. Shares
of
27
<PAGE> 31
Common Stock representing a Final Award are distributed to the employee free of
restrictions and conditions after the expiration of the Restriction Period.
RSUS
The Committee establishes the performance objectives for the RSUs and selects
the persons who are eligible to receive RSUs. For the 1995 grants reported in
column (b) of the table on page 26, the performance objective is the successful
implementation of the Company's globalization program. Achievement of this
objective will be measured against the seven strategies described in the
Compensation and Option Committee Report on Executive Compensation under
"Long-Term Compensation" (page 19).
During the applicable Restriction Period determined by the Committee, RSU
grantees are entitled to receive dividend equivalents payable in cash on the
number of shares covered by the related grant. Dividend equivalents paid to the
named executives in 1995 in cash are included in column (e) of the Summary
Compensation Table.
During the Restriction Period the RSUs cannot be sold or otherwise disposed of
and are subject to the same earning out conditions discussed above that are
applicable to CSRs.
The Committee considers the extent to which the performance objectives have been
accomplished and determines the number of RSUs, if any, that will be paid out in
cash for each grantee. Cash of equivalent value, based on the number of shares
covered by the RSUs finally determined, is paid to the individual after
expiration of the Restriction Period. No RSUs were paid out in 1995 to any of
the named executives.
Like CSRs, the amount ultimately realized by an individual with respect to an
RSU grant will depend on the achievement of performance objectives, compliance
with earning out conditions explained above and the value of the Company's
Common Stock when the restrictions lapse.
(2)No payout targets were established in connection with the grants of RSUs.
28
<PAGE> 32
PERFORMANCE GRAPHS
SEC proxy rules require a performance graph that compares the performance of the
Company's Common Stock against Standard & Poor's 500 Stock Index and a published
industry or line of business index or a group of "peer issuers," covering a
five-year period. The Company has selected the other two principal U.S.
automobile manufacturers as the "peer issuers" for the purposes of the line
graph. Such an approach is thought to be more informative since relevant "line
of business" indices merely combine the three U.S. automakers. A similar
performance graph covering a ten-year period also is set forth in order to show
the relative stock performance in the context of a period that more closely
represents a full business cycle in the industry. Both graphs assume an
investment of $100 at the beginning of the period and quarterly reinvestment of
dividends.
COMPARISON OF FIVE-YEAR CUMULATIVE SHAREHOLDER RETURN
FORD, GENERAL MOTORS, CHRYSLER AND S&P 500 STOCK INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD GENERAL
(FISCAL YEAR COVERED) FORD MOTORS CHRYSLER S&P 500
<S> <C> <C> <C> <C>
1990 100 100 100 100
1991 113 88 98 131
1992 179 102 273 140
1993 278 176 461 155
1994 247 138 434 157
1995 267 177 507 215
</TABLE>
29
<PAGE> 33
COMPARISON OF TEN-YEAR CUMULATIVE SHAREHOLDER RETURN
FORD, GENERAL MOTORS, CHRYSLER AND S&P 500 STOCK INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD GENERAL
(FISCAL YEAR COVERED) FORD MOTORS CHRYSLER S&P 500
<S> <C> <C> <C> <C>
1985 100 100 100 100
1986 152 100 123 119
1987 211 100 114 125
1988 297 145 138 146
1989 272 157 107 192
1990 180 137 78 186
1991 203 120 76 242
1992 322 139 213 261
1993 499 241 359 287
1994 444 188 337 291
1995 490 242 394 400
</TABLE>
30
<PAGE> 34
RETIREMENT PLANS
The General Retirement Plan (the "GRP") provides a non-contributory benefit for
each year of non-contributory participation, and added benefits associated with
contributory participation. The Company also has two additional plans: a
Supplemental Executive Retirement Plan (the "SERP"), under which certain
executives, including the persons named in the Summary Compensation Table on
page 22, may be entitled to an additional annual payment following retirement
based on years of credited service and final average base salary and/or
conditional annuities based on Company earnings, the executive's performance and
other factors; and a Benefit Equalization Plan (the "BEP"), under which eligible
employees, including the persons named in the table on page 22 receive benefits
substantially equal to those the GRP would have provided but for certain
Internal Revenue Code limitations.
For purposes of illustration, there are shown in the following table the amounts
of annual retirement benefits that would be payable at normal retirement (age 65
or later) on January 1, 1996. Benefits are shown for various rates of final
average base salary, assuming that employee contributions were made for the
periods indicated. Employees who have completed at least one year of service
(three months effective January 1, 1996) contribute at the rate of 1 1/2% of
base salary (3 1/2% of base salary over $1,150 a month prior to 1989). The table
shows total amounts payable under the GRP, SERP and BEP, including amounts
attributable to employee contributions.
ANNUAL CONTRIBUTORY PENSIONS
YEARS OF SERVICE
<TABLE>
<CAPTION>
Final Average
Base Salary 20 Years 25 Years 30 Years 35 Years 40 Years
- ------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 200,000 $ 83,850 $ 105,110 $ 126,380 $ 147,640 $ 167,090
400,000 194,530 243,840 293,160 342,470 387,690
600,000 305,210 382,570 459,940 537,300 608,290
800,000 423,890 531,300 638,720 746,130 844,890
1,000,000 530,570 665,030 799,500 933,960 1,057,490
1,200,000 637,250 798,760 960,280 1,121,790 1,270,090
1,400,000 743,930 932,490 1,121,060 1,309,620 1,482,690
1,600,000 850,610 1,066,220 1,281,840 1,497,450 1,695,290
1,800,000 957,290 1,199,950 1,442,620 1,685,280 1,907,890
2,000,000 1,063,970 1,333,680 1,603,400 1,873,110 2,120,490
</TABLE>
The compensation covered by the GRP, SERP and BEP is the employee's base salary
and is identical to the compensation disclosed as "Salary" in the Summary
Compensation Table. The GRP and BEP benefits generally are computed on the basis
of the average of the employee's highest five consecutive annual base salaries
in the ten years immediately preceding retirement. SERP benefits generally are
computed on the basis of the average of the employee's final five year-end
annual base salaries immediately preceding retirement. No conditional annuities
were awarded in 1993 or 1994. A conditional annuity was awarded to
31
<PAGE> 35
Mr. Trotman for 1995 and to Mr. Ross in prior years. Assuming retirement at age
65 and satisfaction of all earning out conditions, the estimated percentage of
total annual retirement benefits to be paid to Mr. Trotman under his annuity is
2%. Based on his retirement on January 1, 1996, the estimated percentage of
total annual retirement benefits to be paid to Mr. Ross under his annuity is
18%.
As of December 31, 1995, the credited years of service for each of the
executives named in the Summary Compensation Table on page 22 are as follows:
Alex Trotman, 40 years (including service in Britain); W. Wayne Booker, 37
years; Edward E. Hagenlocker, 31 years; Louis R. Ross, 41 years; and Kenneth
Whipple, 37 years.
The GRP and BEP benefits are computed as a joint and survivor annuity. The SERP
benefit is computed as a straight-life annuity. Benefits payable under the plans
are not reduced for Social Security or other offsets.
In 1995, the Company established the 1995 Select Retirement Plan ("SRP"), a
voluntary retirement program for certain U.S. supplemental compensation roll and
above employees selected by the Company to participate. The SRP adds three years
of age and contributory service to the otherwise eligible employee's attained
age and service for retirement benefits purposes, with a floor on the increase
of the employee's monthly benefits under any applicable retirement plans of 15%
and uses final pay for three of the five years for calculating average pay. SRP
benefits also include continuation of health and life insurance on the same
terms as other retiring employees and pre-decision counseling and reemployment
assistance. To participate in the SRP, an employee must be selected by
management and generally must be at least age 55 and have 10 or more years of
credited service under the Company's retirement plans.
Mr. Ross retired under the Company's Executive Separation Allowance Plan on
January 1, 1996. Because Mr. Ross is eligible for the SRP, his benefit under
this plan reflects the added three years of age and service. At age 65, Mr. Ross
will receive benefits under the Company's retirement plans that will reflect the
improvements provided by the SRP.
PROPOSAL 1
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The By-Laws of the Company provide that the Audit Committee of the Board of
Directors each year shall select and engage on behalf of the Company independent
public accountants to audit the books of account and other corporate records of
the Company for such year. The By-Laws of the Company also provide that the
Audit Committee's selection of independent public accountants for each fiscal
year shall be made in advance of the annual meeting of stockholders in such
fiscal year and shall be submitted for ratification or rejection at such
meeting. If the stockholders should reject the selection of the Audit Committee,
the Committee would reconsider the selection.
The Audit Committee has selected Coopers & Lybrand L.L.P. to audit the books of
account and other corporate records of the Company for the year 1996. This firm
has audited the Company's books since 1946 and is considered to be well
qualified. Representatives of Coopers & Lybrand L.L.P. are expected to be
present at the meeting with the opportunity to make a statement and to respond
to appropriate questions.
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For 1995, the Company paid Coopers & Lybrand L.L.P., its principal independent
public accountants, $25 million for world-wide audit and nonaudit services.
(Additional information concerning the Audit Committee appears on page 11.) The
Company will present to the meeting the following resolution:
"RESOLVED: That the selection, by the Audit Committee of the Board of Directors,
of Coopers & Lybrand L.L.P. as independent public accountants to audit the books
of account and other corporate records of the Company for 1996 be and hereby is
ratified."
Adoption of this proposal requires approval by a majority of the votes that
could be cast by stockholders who are present in person or by proxy at the
meeting, computed in the case of each share as described in the second paragraph
on page 1 of this Proxy Statement.
Spaces are provided in the accompanying form of proxy for specifying approval,
disapproval or abstention as to this proposal, which is identified as Proposal
1.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1.
PROPOSAL 2
RELATING TO THE ESTABLISHMENT OF TERM LIMITS FOR OUTSIDE DIRECTORS
Mrs. Evelyn Y. Davis, Suite 215, Watergate Office Building, 2600 Virginia Ave.,
NW, Washington, D.C. 20037, and Highlights and Lowlights, who state that they
are the owners of 200 shares and two shares, respectively, of Common Stock of
the Company, have informed the Company that they intend to present the following
proposal at the meeting:
"RESOLVED: That the stockholders of Ford Motor recommend that the Board take the
necessary steps so that future outside directors shall not serve for more than
six years.
"REASONS: The President of the U.S.A. has a term limit, so do Governors of many
states. Newer directors may bring in fresh outlooks and different approaches
with benefits to all shareholders. No director should be able to feel that his
or her directorship is until retirement. Term Limits for members of Congress was
part of the Contract with America.
"If you AGREE, please mark your proxy FOR this resolution."
Adoption of this proposal requires approval by a majority of the votes that
could be cast by stockholders who are present in person or by proxy at the
meeting, computed in the case of each share as described in the second paragraph
on page 1 of this Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 2.
The Board of Directors believes that adoption of this proposal would be contrary
to the interests of the Company and its stockholders. The Company's By-Laws
provide that a director may not be re-elected following age 70 (unless the Board
waives the limitation for single-year periods for specific persons). This has
resulted in an appropriate amount of turnover on the Board. For example, since
1986, eight outside directors have retired from the Board while six new outside
directors have joined the Board.
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A company as large and complex as Ford Motor Company, competing in diverse and
demanding markets worldwide, is well served by a combination of continuity of
service and the introduction of newer members on its Board. The Company's
present policy provides that combination. Imposing a further limitation on Board
service as proposed by this resolution would prematurely deprive the Company of
the experience and knowledge its outside directors have acquired. For example,
if the proposed resolution had been in effect this year, nine of the eleven
outside directors who are nominees for reelection would be ineligible to serve.
The Board opposes this resolution because it believes that term limits
unnecessarily curtail the useful tenure of directors while providing no
demonstrable benefit to the Company or its stockholders.
Spaces are provided in the accompanying form of proxy for specifying approval,
disapproval or abstention as to this proposal, which is identified as Proposal
2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 2.
PROPOSAL 3
RELATING TO THE DISCONTINUANCE OF OPTIONS, RIGHTS, AND STOCK APPRECIATION RIGHTS
FOR MANAGEMENT AND THE BOARD OF DIRECTORS
Robert D. Morse of 212 Highland Ave., Moorestown, New Jersey 80857, who states
that he is the owner of 400 shares of Common Stock of the Company, has informed
the Company that he intends to present the following proposal at the meeting:
"PROPOSAL: That the directors of the company consider the discontinuance of all
options, rights, SAR's, etc. after termination of existing agreements with
management and directors. This does not include programs for other employees of
the company.
"REASONS: The claim that such programs holds and retains qualified personnel
does not hold true. Many management persons have left for other positions by
being offered larger options to lure them.
"Shareholders equity is diminished when the stock or profits are distributed;
also the expenses of proxy pages printed to outline programs and unmentioned
cost of record keeping and distribution would be saved yearly.
"Management and directors are compensated enough to acquire stock on the open
market just as you and I, if we are so inclined. They also may have benefits of
bonuses, life insurance programs, retirement benefits and company perks. When is
ENOUGH? Please vote YES!
"If company directors fail to take this action the recommended nominees can be
voted down time after time until they see that salaries are sufficient
remuneration."
Adoption of this proposal requires approval by a majority of the votes that
could be cast by stockholders who are present in person or by proxy at the
meeting, computed in the case of each share as described in the second paragraph
on page 1 of this Proxy Statement.
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<PAGE> 38
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 3.
The use of stock-based awards as an element of total compensation is common to
most major corporations. These awards enable companies to transform a portion of
the cash compensation that otherwise would be immediately payable into a form of
risk compensation in which the recipient benefits only if the company is
successful -- an approach which aligns the interests of the executives and all
stockholders because all benefit from increases in the value of the company's
stock.
The proposal incorrectly characterizes stock-based awards as an added "perk" of
employment. In fact, such awards are an integral part of the Company's overall
compensation program (see the Compensation and Option Committee Report, pages
17-19). As indicated in the Committee's Report, such awards are made not only to
assure that the overall compensation of senior executives remains competitive,
but also to link directly senior executive compensation with the Company's
long-term performance. To that end, Common Stock that is finally awarded under
the long-term incentive program generally is restricted from sale until eighteen
months after the recipient's retirement, and stock options become exercisable
only to the extent of 25% of the grant each year following the grant, in both
cases emphasizing the long-term performance orientation of the program and the
linkage of executive compensation with the interests of stockholders.
If the proposal were implemented, stock-based incentives could no longer be
awarded to senior executives. The Company's compensation program would then be
uncompetitive, both within the automotive industry and when compared with other
major U.S. corporations, and alternative, potentially more costly, compensation
arrangements would have to be developed.
The Board opposes the proposal because it believes that the Company and its
stockholders are best served by a compensation program that includes a long-term
compensation component whose value is directly tied to the value of the
Company's Common Stock.
Spaces are provided in the accompanying form of proxy for specifying approval,
disapproval or abstention as to this proposal, which is identified as Proposal
3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 3.
PROPOSAL 4
RELATING TO SALARY INCREASES AND STOCK OPTION GRANTS IN THE EVENT THE DIVIDEND
IS CUT
Edward S. George of 89 Corning Hill, Glenmont, New York 12077, who states that
he is the owner of 9,000 shares of Common Stock of the Company, has informed the
Company that he intends to present the following proposal at the meeting:
"Whereas the dividend is the first casualty in any economic downturn and the
stockholder is the first casualty and the last to benefit from an upturn, be it
"RESOLVED: That when a dividend is cut, it is recommended that no salaries will
be increased or stock options allowed for executive officers or directors until
the dividend is restored to the original amount before the cut.
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<PAGE> 39
"The bullet must be large enough to enable the executives and directors as well
as the stockholders to get their teeth on it."
Adoption of this proposal requires approval by a majority of the votes that
could be cast by stockholders who are present in person or by proxy at the
meeting, computed in the case of each share as described in the second paragraph
on page 1 of this Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 4.
The proposal seeks to preempt the Board's discretion with respect to executive
compensation by barring salary increases and the granting of options to senior
executives in the event the dividend is reduced. The Board believes that
implementation of the proposal is unnecessary and unwarranted and not in the
Company's best interests.
In opposing this proposal, the Board wishes to note that since the first quarter
of 1994, the Common Stock dividend has been increased four times, representing a
cumulative increase of 75%. At year-end 1995, the dividend yield on the Common
Stock was the highest of any major automotive company in the world.
The Compensation and Option Committee Report on Executive Compensation (pp.
14-21) describes in detail the many factors the Committee takes into account in
determining the compensation to be paid to senior executives. Compensation
levels are determined based on Company performance over a wide range of criteria
(including product quality, customer satisfaction, affordable products and
Company profitability) and must be competitive in order to attract and retain
high quality executives. The proposal would make the size of the dividend the
single controlling factor in determining executive compensation levels and could
be counterproductive, particularly in a cyclical industry, in those periods when
earnings do not justify a particular dividend level and extra management effort
is necessary to maintain the Company's competitiveness. It is appropriate and
desirable, from a compensation standpoint, to incentivize management under these
circumstances. All shareholders, of course, share in the benefits of that
effort.
The Board believes that the Company's compensation determinations should not be
arbitrarily limited to a single factor -- dividends -- but rather that the
Company should be able to base its compensation decisions on a mix of factors
the goal of which is to provide a competitive compensation program that will
inure to the benefit of the Company and all shareholders.
Spaces are provided in the accompanying form of proxy for specifying approval,
disapproval or abstention as to this proposal, which is identified as Proposal
4.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 4.
PROPOSAL 5
RELATING TO A REPORT ON THE COMPANY'S STANDARDS FOR ITS INTERNATIONAL OPERATIONS
A number of stockholders have informed the Company that they intend to present
the following proposal at the meeting. The names, addresses and information as
to the number of shares owned by each of them will be provided by the Company
upon request.
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<PAGE> 40
"WHEREAS, our company, as a major global corporation, faces an increasing number
of complex problems which also affect our interests as shareholders. The
international context within which our company operates is becoming increasingly
diverse as we approach the year 2000.
"Companies operating in this global economy are faced with important concerns
arising from diverse cultures and political and economic contexts, some which
force management to address issues beyond the traditional business focus. These
concerns include human rights, just wages and safe working conditions, freedom
of association, non-discrimination, child and forced labor, the environment, and
sustainable community development.
"We believe global companies need to develop comprehensive codes of conduct to
guide the formulation of company policies, programs and practices to address the
new challenges they face in the global marketplace. In fact many companies are
recognizing these challenges and revising their traditional codes and guidelines
to meet these new realities.
"For example, our company needs to develop and implement clear guidelines for
its maquiladora operations in Mexico, where its employees are receiving marginal
survival wages. Our company should be in a position to assure shareholders that
its employees are paid a sustainable community wage which enables them to meet
basic needs, set aside money for future purchases and earn enough discretionary
income to participate in support of the development of small businesses in a
local community. Improving the quality of life for employees in Mexico and their
communities can lead to productivity and enhance the bottom line for the
company.
"RESOLVED, the shareholders request the Board of Directors to review or amend,
where applicable, its code or standards for its international operations and to
report a summary of this review to shareholders by September 1996.
SUPPORTING STATEMENT
"We recommend the review include the following areas:
1. A report of wages, with the intention of paying employees at a sustainable
community wage level, measured in terms of real purchasing power, and paying
equal salaries for equal work regardless of gender, age, race, religion,
class, or culture.
2. A report of how company employment practices are implemented in all
operations with respect to employees' rights to freedom of association, labor
organization, collective bargaining, right to strike, and hiring practices
(including child and forced labor).
3. A description of policies which are designed to protect human rights --
civil, political, social and economic -- consistent with respect for human
dignity and international human rights standards.
4. Establishment of consistent standards for workers' health and safety,
practices for handling hazardous wastes and protecting the environment, as
well as promoting a fair and dignified quality of life for workers and their
communities.
5. Plans for improving local infrastructure in communities where plants are
located, including housing, potable water, and sewage systems.
37
<PAGE> 41
6. Report on other categories (such as child care, training programs for
workers, upgrading management and mechanical skills of employees) that the
company believes are essential to its global operations."
Adoption of this proposal requires approval of a majority of the votes that
could be cast by stockholders who are present in person or by proxy at the
meeting, computed in the case of each share as described in the second paragraph
on page 1 of this Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 5.
The Board is opposed to this proposal on the grounds that it would be extremely
burdensome and costly to implement, and, in the Board's view, would not produce
any significant change in policy or practice or otherwise benefit the Company or
its stockholders.
The Board is fully aware of the Company's policies as they relate to employment
matters and is satisfied that these policies adequately protect employees at all
Company locations. While it is not practicable to set forth here all such
policies and related practices, a few examples that address matters raised by
the proposal are worth noting.
- - Ford policy prohibits discrimination in hiring or promotional opportunity
based on color, race, religion, gender or country of national origin.
- - Ford policy requires that all of its facilities comply with applicable laws,
including laws dealing with worker health, safety, welfare, wages and benefits
and the environment.
- - Ford provides wages and benefits that are fully competitive with, and in many
cases exceed, compensation that is paid in the local labor market.
- - Ford recognizes the right of workers to organize, to bargain collectively and
to join labor organizations.
- - Working conditions at Ford facilities generally exceed local law requirements.
- - Ford maintains extensive employee training programs at Company locations, and
training is offered without regard to color, race, religion, gender or country
of national origin.
- - Ford does not employ child labor (even where local law might otherwise permit
it), nor does it employ prison or forced labor.
The proposal refers to the Company's maquiladora operations in Mexico. A
proposal similar to the current proposal and addressing employment practices at
the Company's maquiladoras was included in last year's proxy statement. In
response to that proposal, the Board noted that Ford's maquiladoras meet very
high standards for responsible environmental, health, safety, personnel and
community relations policies; that these facilities generally follow the same
environmental, personnel and other policies and practices as do Ford operations
in the United States; that Ford provides wages and benefits to its maquiladora
employees that are equal to or better on average than does the typical
non-maquiladora or the facing labor market competition; and that working
conditions and benefits exceed those required by local or federal laws. A
comprehensive report on the Company's maquiladora operations was prepared and
made available to stockholders last year and remains available on request.
For the foregoing reasons, the Board believes that the proposal and the action
it calls for are unnecessary and not in the best interests of the Company or its
stockholders.
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<PAGE> 42
Spaces are provided in the accompanying form of proxy for specifying approval,
disapproval or abstention as to this proposal, which is identified as Proposal
5.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 5.
PROPOSAL 6
RELATING TO THE MACBRIDE PRINCIPLES
A number of stockholders have informed the Company that they intend to present
the following proposal at the meeting. The names, addresses and information as
to the number of shares owned by each of them will be provided by the Company
upon request.
"WHEREAS, Ford Motor Co. operates a wholly-owned subsidiary in Northern Ireland,
Ford Motor Co. Ltd.;
"WHEREAS, the on-going peace process in Northern Ireland encourages us to search
for non-violent means for establishing justice and equality;
"WHEREAS, employment discrimination in Northern Ireland has been cited by the
International Commission of Jurists as being one of the major causes of the
conflict in that country;
"WHEREAS, Dr. Sean MacBride, founder of Amnesty International and Nobel Peace
laureate, has proposed several equal opportunity employment principles to serve
as guidelines for corporations in Northern Ireland. These include:
1. Increasing the representation of individuals from underrepresented religious
groups in the workforce including managerial, supervisory, administrative,
clerical and technical jobs.
2. Adequate security for the protection of minority employees both at the
workplace and while traveling to and from work.
3. The banning of provocative religious or political emblems from the workplace.
4. All job openings should be publicly advertised and special recruitment
efforts should be made to attract applicants from underrepresented religious
groups.
5. Layoff, recall, and termination procedures should not, in practice, favor
particular religious groupings.
6. The abolition of job reservations, apprenticeship restrictions, and
differential employment criteria, which discriminate on the basis of religion
or ethnic origin.
7. The development of training programs that will prepare substantial numbers of
current minority employees for skilled jobs, including the expansion of
existing programs and the creation of new programs to train, upgrade, and
improve the skills of minority employees.
8. The establishment of procedures to assess, identify and actively recruit
minority employees with potential for further advancement.
9. The appointment of a senior management staff member to oversee the company's
affirmative action efforts and the setting up of timetables to carry out
affirmative action principles.
"RESOLVED, Shareholders request the Board of Directors to:
1. Make all possible lawful efforts to implement and/or increase activity on
each of the nine MacBride Principles.
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<PAGE> 43
SUPPORTING STATEMENT
"We believe that our company benefits by hiring from the widest available talent
pool. An employee's ability to do the job should be the primary consideration in
hiring and promotion decision. Continued discrimination and worsening employment
opportunities have been cited as contributing to support for a violent solution
to Northern Ireland's problems. Implementation of the MacBride Principles by
Ford Motor Co. will demonstrate its concern for human rights and equality of
opportunity in its international operations.
"Please vote your proxy FOR these concerns."
Adoption of this proposal requires approval by a majority of the votes that
could be cast by stockholders who are present in person or by proxy at the
meeting, computed in the case of each share as described in the second paragraph
on page 1 of this Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 6.
In 1987, Ford published a comprehensive study of fair employment practices at
the Belfast Plant of Ford Britain and adopted a fair employment policy for
Northern Ireland. Periodic updates of the policy have been published since that
time. The Ford policy closely follows the MacBride Principles and is virtually
indistinguishable from them in its fair employment guarantees.
The Company routinely permits investigation and assessment of the Belfast Plant
by the Investor Responsibility Research Center, a non-partisan, non-profit group
based in Washington, D.C. The Center has confirmed that the percentage of Ford
minority (Catholic) employees exceeds their proportion in the working age
population. The Center also has found Ford's policies to be consistent with the
fair employment intentions of the MacBride Principles.
There are a few differences between the Ford policy and the MacBride Principles.
For example, one of the MacBride Principles asks employers to be responsible for
physical security arrangements for employees while traveling to and from work.
Ford is unable to provide such arrangements outside of its facilities and
therefore has not implemented that principle. Another of the MacBride Principles
would make religion a criterion for layoffs, in violation of Ford's labor union
agreements.
Proposals similar to the present one were submitted for shareholder vote at the
1991 and 1992 Annual Meetings. The proposals were rejected each time by more
than 94% of the votes cast.
The Board reaffirms Ford's commitment to fair employment in Northern Ireland but
opposes the proposal because it is unnecessary and, insofar as it calls for
actions such as security arrangements outside of plant facilities, impractical
and not possible to implement at any reasonable cost.
Spaces are provided in the accompanying form of proxy for specifying approval,
disapproval or abstention as to this proposal, which is identified as Proposal
6.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 6.
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<PAGE> 44
ANNUAL REPORT AND OTHER MATTERS
The Annual Report of the Company for the year 1995, including financial
statements, was recently mailed to the Company's stockholders. A complete list
of the stockholders of record entitled to vote at the Annual Meeting will be
open and available for examination by any stockholder, for any purpose germane
to the meeting, between 9:00 A.M. and 5:00 P.M. at the Kansas City Marriott
Downtown Hotel, 200 W. 12th Street, Kansas City, Missouri, for ten days prior to
the meeting.
EXPENSES OF SOLICITATION
The cost of soliciting proxies in the accompanying form will be borne by the
Company. The Company does not expect to pay any compensation for the
solicitation of proxies, but may pay brokers, nominees, fiduciaries and other
custodians their reasonable fees and expenses for sending proxy material to
principals and obtaining their instructions. In addition to solicitation by
mail, proxies may be solicited in person, or by telephone, facsimile
transmission or other means of electronic communication, by directors and by
officers and other regular employees of the Company.
By Order of the Board of Directors,
JOHN M. RINTAMAKI
JOHN M. RINTAMAKI
Secretary
April 9, 1996
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<PAGE> 45
HOW TO ATTEND THE ANNUAL MEETING
STOCKHOLDERS OF RECORD: When you complete your proxy, check off the box to let
us know whether or not you plan to attend the meeting. If you answer yes, we
will mail you a ticket which will admit the stockholder(s) and one guest. If
your ticket does not arrive in time, we will be able to issue you a ticket at
the door.
"STREET NAME" HOLDERS: Since most brokers do not participate in our advance
ticket plan, tell your broker you are planning to attend the meeting and would
like a "proxy." Simply bring that form to the meeting and we will be able to
issue you a ticket at the door. If you cannot get a proxy in time, we will still
be able to issue you a ticket at the door if you bring a copy of your most
recent brokerage account statement showing that you own Ford stock in street
name.
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<PAGE> 46
NOTICE OF
1996
ANNUAL MEETING
OF STOCKHOLDERS
AND
PROXY STATEMENT
[RECYCLE LOGO] [PRINTED WITH SOYINK LOGO]
This Proxy Statement is printed
entirely on recycled and recyclable
paper. Soy ink, rather than
petroleum-based ink, is used
throughout.
[FORD LOGO]
<PAGE> 47
[FORD LOGO]
FORD MOTOR COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS
The undersigned hereby appoints CLIFTON R. WHARTON, JR., JOHN M.DEVINE AND
JOHN M.RINTAMAKI, or any of them, proxies with power of substitution, to vote
all the shares of Common Stock which the undersigned is entitled to vote on all
matters, unless the contrary is indicated on the reverse side hereof, which may
come before Ford Motor Company's Annual Meeting of Stockholders to be held at
the Kansas City Marriott Downtown Hotel, 200 W. 12th Street, Kansas City,
Missouri, at 10:00 A.M., Central Daylight Time, on May 9, 1996, and any
adjournments thereof.
THE PROXIES SHALL VOTE THE SHARES REPRESENTED BY THIS PROXY IN THE MANNER
INDICATED ON THE REVERSE SIDE HEREOF. UNLESS A CONTRARY DIRECTION IS INDICATED,
THE PROXIES SHALL VOTE THE SHARES (A) "FOR" THE ELECTION AS DIRECTORS OF ALL THE
NOMINEES NAMED IN THE PROXY STATEMENT AND LISTED ON THE REVERSE SIDE OR ANY
OTHER PERSON SELECTED BY THE BOARD OF DIRECTORS IN SUBSTITUTION FOR ANY OF THE
NOMINEES AND (B) "FOR" PROPOSAL 1 AND "AGAINST" PROPOSALS 2, 3, 4, 5 AND 6, EACH
OF WHICH IS SET FORTH IN THE PROXY STATEMENT.
<TABLE>
<S><C>
____________________________________________________________________
ADDRESS CHANGE: PLEASE NOTE CHANGE HERE AND MARK BOX ON REVERSE SIDE
(Continued and to be signed on reverse side)
____________________________________________________________________
Please mark
/X/ your votes
this way
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL MANAGEMENT
NOMINEES AND FOR PROPOSAL 1 AND AGAINST PROPOSALS 2, 3, 4, 5 AND 6.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Election of 13 directors: Proposal 1--Ratification / / / / / / Proposal 4--Relating to Salary / / / / / /
Michael D. Dingman; Edsel of Selection of Independent Increases and Stock Options in
B. Ford II; William Clay Public Accountants the Event the Dividend is Cut
Ford; William Clay Ford,
Jr.; Roberto C. Goizueta; Proposal 2--Relating to Term / / / / / / Proposal 5--Relating to a / / / / / /
Irvine O. Hockaday, Jr.; Limits for Outside Directors Report on Standards for
Marie-Josee Kravis; Drew International Operations
Lewis; Ellen R. Marram;
Carl E. Reichardt; John Proposal 3--Relating to / / / / / / Proposal 6--Relating to the / / / / / /
L. Thornton; Alex Trotman Discontinuance of Stock MacBride Principles
and Clifton R. Wharton, Options and Stock
Jr. Appreciation Rights
FOR WITHHELD WITHHELD for the following PLAN TO YES NO
all for all only, write name below: ATTEND / / / /
nominees nominees MEETING
/ / / / __________________________
ADDRESS / /
CHANGE
Signature(s)__________________________________________________________________________________ Date________________________
NOTE: Please sign exactly as name appears above. When shares are held by joint tenants, both
should sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
</TABLE>
