Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FORD MOTOR COMPANY
(Exact name of registrant as specified in its charter)
Delaware 38-0549190
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
The American Road
Dearborn, Michigan 48121-1899
(Address of principal executive offices) (Zip Code)
PRIMUS AUTOMOTIVE FINANCIAL SERVICES, INC. PRIME ACCOUNT
(Full title of the Plan)
J. M. Rintamaki, Esq.
Ford Motor Company
P. O. Box 1899
The American Road
Dearborn, Michigan 48121-1899
(313) 323-2260
(Name, address and telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
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Tile of Each
Class of Proposed Proposed Maximum
Securities to be Amount to be Maximum Offering Aggregate Offering Amount of
Registered Registered (a) Price Per Share (b) Price Registration Fee
- ------------------------- ------------------------ ----------------------- ------------------------ ------------------------
<S> <C> <C> <C> <C>
Series C Participating 34
Stock, $1.00 par value shares $56,562.50 $1,923,125 $567.33
- ------------------------- ------------------------ ----------------------- ------------------------ ------------------------
34,000
Depositary Shares shares ___ ___ ___
(c)
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Common Stock, 34,000 ___ ___ ___
$1.00 par value shares (d)
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(a) The number of shares being registered represents the maximum number of
shares that may be acquired by Fidelity Management Trust Company, as trustee
under the Trust Agreement established as of December 29, 1995, as amended, and
as trustee under the Plan, during 1998 and during subsequent years until a new
Registration Statement becomes effective.
(b) Based on the market price of 1,000 shares of Common Stock of the
Company on March 2, 1998 in accordance with Rule 457(c) under the Securities Act
of 1933.
(c) Each Depositary Share will represent 1/1,000 of a share of Series C
Participating Stock and will be evidenced by a Depositary Receipt issued
pursuant to a Deposit Agreement.
(d) The number of shares being registered represents the maximum number of
shares of Common Stock as are issuable upon conversion of the Series C
Participating Stock registered hereby.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement covers an indeterminate amount of interests to be offered
or sold pursuant to the Plan described herein.
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PRIMUS AUTOMOTIVE FINANCIAL SERVICES, INC. PRIME ACCOUNT
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INCORPORATION OF CONTENTS OF PRIOR REGISTRATION STATEMENTS
The contents of Registration Statement No. 33-58861 is incorporated herein
by reference.
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INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed or to be filed with the Securities and
Exchange Commission are incorporated by reference in this Registration
Statement:
(a) The latest annual report of Ford Motor Company ("Ford") filed
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(the "1934 Act") which contains, either directly or indirectly by
incorporation by reference, certified financial statements for Ford's
latest fiscal year for which such statements have been filed.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
1934 Act since the end of the fiscal year covered by the annual report
referred to in paragraph (a) above.
(c) The description of Ford's Common Stock contained in registration
statement no. 33-43085 filed by Ford under the Securities Act of 1933.
All documents subsequently filed by Ford pursuant to Sections 13(a),
13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing such documents.
Item 4. Description of Securities
For a description of Ford's Series C Participating Stock and
Depositary Shares, each representing 1/1,000 of a share of such Series C
Participating Stock, see Exhibits 4.D, 4.E, 4.F and 4.G to this
Registration Statement. For a description of Ford's Common Stock, see Item
3 above.
Item 8. Exhibits.
Exhibit 4.A - Primus Automotive Financial Services, Inc. Prime Account.
Filed with this Registration Statement.
Exhibit 4.B - Copy of Amendment effective as of March 2, 1998 to the
Primus Automotive Financial Services, Inc. Prime Account.
Filed with this Registration Statement.
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Exhibit 4.C - Copy of Trust Agreement dated as of December 29, 1995
between Primus Automotive Financial Services, Inc. and
Fidelity Management Trust Company, as Trustee. Filed as
Exhibit 4.2 to Amendment No. 1 to Registration Statement No.
33-58861 and incorporated herein by reference.
Exhibit 4.D - Form of Certificate of Designations designating Series C
Participating Stock. Filed as Exhibit 4.G to Registration
Statement No. 333-47443 and incorporated herein by
reference.
Exhibit 4.E - Form of certificate for shares of Series C Participating
Stock. Filed as Exhibit 4.H to Registration Statement No.
333-47443 and incorporated herein by reference.
Exhibit 4.F - Form of Deposit Agreement. Filed as Exhibit 4.I to
Registration Statement No. 333-47443 and incorporated
herein by reference.
Exhibit 4.G - Form of Depositary Receipt is included in Exhibit 4.F.
Filed as Exhibit 4.J to Registration Statement No.
333-47443 and incorporated herein by reference.
Exhibit 5.A - Opinion of Peter Sherry, Jr., an Assistant Secretary
and Counsel of Ford Motor Company, with respect to the
legality of the securities being registered hereunder. Filed
with this Registration Statement.
Exhibit 5.B - Opinion of J. Gordon Christy, an Attorney of Ford
Motor Company, with respect to compliance requirements of
the Employee Retirement Income Security Act of 1974. Filed
with this Registration Statement.
Exhibit 15 - Letter from Independent Certified Public Accountants
regarding unaudited interim financial information. Filed
with this Registration Statement.
Exhibit 23 - Consent of Independent Certified Public Accountants. Filed
with this Registration Statement.
Exhibit 24.A - Powers of Attorney authorizing signature. Filed as Exhibit
24.A to Registration Statement No. 333-47443 and
incorporated herein by reference.
Exhibit 24.B - Certified resolutions of Board of Directors authorizing
signature pursuant to a power of attorney. Filed as Exhibit
24.B to Registration Statement No. 333-47443 and
incorporated herein by reference.
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
Plan has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Franklin, State of
Tennessee, on this 6th day of March, 1998.
PRIMUS AUTOMOTIVE FINANCIAL SERVICES, INC.
PRIME ACCOUNT
By:/s/Toby N. Hynes
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Toby N. Hynes, Committee Member
Primus Automotive Financial Services, Inc.
Prime Account Committee
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The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dearborn, State of Michigan, on this 6th day of
March, 1998.
FORD MOTOR COMPANY
By: Alex Trotman*
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(Alex Trotman)
Chairman of the Board of Directors
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
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Signature Title Date
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<S> <C> <C>
Director and Chairman of the
Board of Directors, President
and Chief Executive Officer
Alex Trotman* (principal executive officer) March 6, 1998
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(Alex Trotman)
Michael D. Dingman* Director March 6, 1998
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(Michael D. Dingman)
Director, Vice President-Ford
and President and Chief
Operating Officer,
Edsel B. Ford II* Ford Motor Credit Company March 6, 1998
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(Edsel B. Ford II)
William Clay Ford* Director March 6, 1998
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(William Clay Ford)
Director and Chairman
William Clay Ford, Jr.* of the Finance Committee March 6, 1998
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(William Clay Ford, Jr.)
</TABLE>
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Signature Title Date
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<S> <C> <C>
Irvine O. Hockaday, Jr.* Director March 6, 1998
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(Irvine O. Hockaday, Jr.)
Marie-Josee Kravis* Director March 6, 1998
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Marie-Josee Kravis)
Ellen R. Marram* Director March 6, 1998
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(Ellen R. Marram)
Homer A. Neal Director March 6, 1998
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(Homer A. Neal)
Carl E. Reichardt* Director March 6, 1998
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(Carl E. Reichardt)
John L. Thornton Director March 6, 1998
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(John L. Thornton)
Executive Vice President
and Chief Financial Officer
John M. Devine* (principal financial officer) March 6, 1998
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(John M. Devine)
Corporate Controller
William J. Cosgrove* (principal accounting officer) March 6, 1998
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(William J. Cosgrove)
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*By:/s/ K. S. Lamping
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(K. S. Lamping,
Attorney-in-Fact)
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EXHIBIT INDEX
Sequential Page
at Which Found
(or Incorporated
by Reference)
Exhibit 4.A - Primus Automotive Financial Services, Inc.
Prime Account. Filed with this Registration
Statement.
Exhibit 4.B - Copy of Amendment effective as of March 2,
1998 to the Primus Automotive Financial Services,
Inc. Prime Account. Filed with this Registration
Statement.
Exhibit 4.C - Copy of Trust Agreement dated as of December
29, 1995 between Primus Automotive Financial
Services, Inc. and Fidelity Management Trust
Company, as Trustee. Filed as Exhibit 4.2 to
Amendment No. 1 to Registration Statement No.
33-58861 and incorporated herein by reference.
Exhibit 4.D - Form of Certificate of Designations designating
Series C Participating Stock. Filed as
Exhibit 4.G to Registration Statement No.
333-47443 and incorporated herein by reference.
Exhibit 4.E - Form of certificate for shares of Series C
Participating Stock. Filed as Exhibit 4.H to
Registration Statement No. 333-47443 and
incorporated herein by reference.
Exhibit 4.F - Form of Deposit Agreement. Filed as Exhibit
4.I to Registration Statement No. 333-47443
and incorporated herein by reference.
Exhibit 4.G - Form of Depositary Receipt is included in
Exhibit 4.F. Filed as Exhibit 4.J to
Registration Statement No. 333-47443 and
incorporated herein by reference.
Exhibit 5.A - Opinion of Peter Sherry, Jr., an Assistant
Secretary and Counsel of Ford Motor Company,
with respect to the legality of the securities
being registered hereunder. Filed with this
Registration Statement.
Exhibit 5.B - Opinion of J. Gordon Christy, an Attorney of
Ford Motor Company, with respect to compliance
requirements of the Employee Retirement
Income Security Act of 1974. Filed with this
Registration Statement.
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Exhibit 15 - Letter from Independent Certified Public
Accountants regarding unaudited interim
financial information. Filed with this
Registration Statement.
Exhibit 23 - Consent of Independent Certified Public
Accountants. Filed with this Registration
Statement.
Exhibit 24.A - Powers of Attorney authorizing signature.
Filed as Exhibit 24.A to Registration
Statement No. 333-47443 and incorporated
herein by reference.
Exhibit 24.B - Certified resolutions of Board of Directors
authorizing signature pursuant to a power of
attorney. Filed as Exhibit 24.B to Registration
Statement No. 333-47443 and incorporated
herein by reference.
PRIMUS AUTOMOTIVE FINANCIAL SERVICES, INC.
PRIME ACCOUNT
Effective April 1, 1992
Restated January 1, 1996
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CONTENTS
PAGE
PREAMBLE ................................................................... 1
ARTICLE I - DEFINITIONS
1.01 After-Tax Account..................................2
1.02 Break In Service...................................2
1.03 Company......................................... ..2
1.04 Company Match Account..............................2
1.05 Company Matching Contributions.....................2
1.06 Compensation.......................................2
1.07 Current Balance....................................3
1.08 Designated Beneficiary.............................4
1.09 Effective Date.....................................4
1.10 Eligibility Dates..................................4
1.11 Employee...........................................4
1.12 Employee After-Tax Contributions...................5
1.13 Employee Pre-Tax Contributions.....................5
1.14 Employee Rollover Contributions....................5
1.15 Forfeiture Account.................................5
1.16 Fund(s)............................................5
1.17 Highly Compensated Employee........................5
1.18 Hour of Service....................................7
1.19 Individual Account.................................9
1.20 Leased Employee....................................9
1.21 Normal Retirement Rate.............................9
1.22 Participant........................................9
1.23 Plan...............................................9
1.24 Plan Year..........................................10
1.25 Pre-Tax Account....................................10
1.26 Related Employer...................................10
1.27 Rollover Account...................................10
1.28 Total Disability...................................10
1.29 Trust..............................................10
1.30 Trustee............................................10
1.31 Valuation Date.....................................10
1.32 Vesting............................................10
1.33 Vesting Service Year...............................10
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ARTICLE II - ELIGIBILITY AND PARTICIPATION
2.01 Eligibility........................................11
2.02 Excluded Employees.................................11
2.03 Rehired Employees..................................12
2.04 Enrollment in the Plan.............................12
2.05 Transfers..........................................12
2.06 Service With Related Employers/Participating
Employers........................................13
2.07 Beneficiary Designation............................13
ARTICLE III - CONTRIBUTIONS
3.01 Employee Pre-Tax Contributions.....................14
3.02 After-Tax Contributions............................14
3.03 Modifying/Revoking Elections.......................14
3.04 Company Matching Contributions.....................15
3.05 Employee Rollover Contributions....................15
3.06 Deduction Limit....................................16
3.07 Calendar Year Limit on Employee Pre-Tax
Contributions....................................16
3.08 Limit on Employee Pre-Tax Contributions of
the Highly Compensated Group.....................17
3.09 Limit on Company Matching Contributions and
Employee After-Tax Contributions of the
Highly Compensated Group.........................18
3.10 Aggregating Plans..................................19
3.11 Payment of Contributions to Trustee................20
ARTICLE IV - VESTING
4.01 Vesting Defined....................................21
4.02 Vesting/Employee Contributions.....................21
4.03 Vesting/Matching Contributions.....................21
4.04 Forfeiture of Contributions........................21
4.05 Use of Forfeitures.................................22
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4.06 Vesting Service Year...............................22
4.07 Employment Commencement Date.......................22
4.08 Separation From Service Date......................23
4.09 Break in Service Defined...........................23
4.10 Break in Service Exceptions........................23
4.11 Service with Related Employers.....................25
ARTICLE V - ALLOCATIONS TO ACCOUNTS
5.01 Individual Accounts................................26
5.02 Employee Pre-Tax Contributions.....................26
5.02 Employee After-Tax Contributions...................26
5.04 Company Match Account..............................26
5.05 Rollover Account...................................26
5.06 Forfeiture Account.................................26
5.07 Allocation of Adjustment...........................27
5.08 Maximum Annual Allocations.........................27
5.09 Multiple Plan Participation........................28
ARTICLE VI - DISTRIBUTIONS
6.01 Termination of Employment at Normal
Retirement Date..................................30
6.02 Employment After Age 70/Mandatory
Distributions....................................30
6.03 Termination of Employment Before Retirement........30
6.04 Disability Retirement..............................31
6.05 Death..............................................32
6.06 Form of Distributions..............................32
6.07 Application For Benefits...........................33
6.08 Time of Distribution...............................33
6.09 Amount of Distribution.............................33
6.10 Direct Rollovers...................................33
6.11 Participants That Cannot Be Located................35
ARTICLE VII - IN-SERVICE WITHDRAWALS AND LOANS
7.01 In-Service Withdrawals.............................36
7.02 Hardship Withdrawals...............................36
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7.03 Minimum In-service Withdrawals.....................38
7.04 Annual Limit on Withdrawals........................38
7.05 Loans..............................................38
7.06 Amount Available...................................41
7.07 Source of Withdrawals/Loans........................41
7.08 Form of Withdrawals/Loans..........................41
ARTICLE VIII - FUNDING
8.01 Contributions......................................42
8.02 Return of Contributions............................42
8.03 Trustee............................................42
8.04 Investment Funds...................................43
8.05 Direction of Investments...........................43
8.06 Vesting Rights/Ford Stock..........................44
ARTICLE IX - TOP HEAVY RULES
9.01 Top Heavy Determination............................45
9.02 Minimum Contribution...............................46
9.03 Multi Plan Limits..................................46
9.04 Key Employees......................................46
ARTICLE X - ADMINISTRATION
10.01 Company............................................48
10.02 Delegation of Authority............................48
10.03 Fiduciary..........................................48
10.04 Actions Taken in Good Faith........................49
10.05 Claims Procedure...................................49
10.06 Records and Reports................................50
ARTICLE XI - AMENDMENT AND TERMINATION
11.01 Amendment..........................................51
11.02 Termination........................................51
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ARTICLE XII - ALIENATION OF BENEFITS AND QUALIFIED DOMESTIC RELATIONS ORDERS
12.01 Alienation of Benefits.............................52
12.02 Qualified Domestic Relations Order.................52
12.03 Alternate Payee....................................53
12.04 Procedures.........................................53
ARTICLE XIII - MISCELLANEOUS
13.01 Construction.......................................55
13.02 Plan Expenses......................................55
13.03 Employment Rights..................................55
13.04 Merger, Consolidation or Transfer..................55
13.05 Guaranty of Benefits...............................56
13.06 Facility of Payment................................56
13.07 Errors in Payment..................................56
13.08 Severability.......................................56
EXECUTION....................................................................57
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<PAGE>
PREAMBLE
PRIMUS Automotive Financial Services, Inc. established this Plan effective April
1, 1992 to allow employees the opportunity to accumulate capital for their
future economic security. This is accomplished by allowing employees to make
pre-tax contributions which are matched by PRIMUS Automotive Financial Services,
Inc.
From April 1, 1992 through December 1, 1995, Comerica served as the plan
trustee. Effective January 1, 1996, the Fidelity Management Trust Company was
appointed trustee and all plan assets (except those invested in Ford Motor
Company stock) were transferred to the Fidelity funds.
At the time the Plan was established, PRIMUS Automotive Financial Services, Inc.
adopted the Comerica prototype cash or deferred profit sharing plan by executing
a nonstandardized adoption agreement. After Fidelity Management Trust Company
was appointed trustee it was no longer feasible to continue using Comerica's
prototype plan document. Therefore, the Plan was restated in its entirety
effective January 1, 1996. The restated Plan reflects the existing plan design
that was in effect on December 31, 1995. The restated Plan governs all issues
that arise after December 31, 1995, all contributions made after December 31,
1995 and all distributions made after December 31, 1995.
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ARTICLE I
DEFINITIONS
1.01 After-Tax Account -The portion of a Participant's Individual Account
to which Employee After-Tax Contributions are allocated.
1.02 Break In Service - Defined in section 4.09.
1.03 Company - PRIMUS Automotive Financial Services, Inc.
1.04 Company Match Account - The portion of a Participant's Individual
Account to which Company Matching Contributions are allocated.
1.05 Company Matching Contributions - Defined in section 3.04.
1.06 Compensation - All wages reported on the Employee's Federal Wage and
Tax Statement (Form W-2) with the following modifications:
(a) Contributions - For purposes of determining contributions under
Article III, Compensation includes all pre-tax contributions to
this Plan and any other plan, including a cafeteria plan, but does
not include the following non-wage items: reimbursements for
expenses, nonqualified stock options, disqualifying dispositions
of a qualified stock option, amounts realized from the sale or
exchange of stock acquired under a qualified option, taxable
group-term life insurance, distributions from any plan of deferred
compensation, long term disability benefits, trustee and director
fees, automobile lease fees, travel allowances, employment
contract buyouts, signing bonus at the time of hire, transitional
bonus, management incentive pay, cost differential pay, severance
pay (including pay continuation and signing consideration) and
other taxable fringe benefits and welfare benefits.
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(b) Limits on Contributions - For purposes of the limits on the
contributions of Highly Compensated Employees in Article III,
Compensation includes pre-tax contributions to this Plan and
any other plan, including a cafeteria plan.
(c) Annual Limit on Allocations - For purposes of the annual limit
on allocations in Article V, Compensation is all compensation
subject to withholding for federal income taxes. This is the
amount reported on the Federal Wage and Tax Statement (Form
W-2) except for the following: taxable benefits under a
discriminatory health care plan, a disqualifying disposition of
a qualified stock option and taxable group term life insurance.
(d) $150,000 Limit For each Plan Year, Compensation is limited to
the first $150,000 earned. This dollar limit is adjusted
annually by the Commissioner of Internal Revenue in increments
of $10,000 or such other increments as determined by the
Commissioner to reflect increases in the cost of living.
Increases in this limit do not apply retroactively to prior
Plan Years. For purposes of this dollar limit, an Employee's
Compensation includes a family member's compensation if the
Employee is a five percent owner or a Highly Compensated
Employee who is one of the 10 highest paid Employees. Family
members include the Employee's spouse, and lineal
descendants who are less than 19 years of age who are also
Employees.
1.07 Current Balance The value of a Participant's Individual Account at
any given point in time, plus any contributions and minus any
distributions not yet credited or debited to the Individual
Account. The value of a Participant's Individual Account is equal
to the sum total of all the allocations to the Participant's
Individual Account as described in Article V, minus all
distributions.
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1.08 Designated Beneficiary
----------------------
The person (including a Participant's estate) or trust designated in
writing by the Participant to receive any undistributed portion of the
Participant's Individual Account upon the Participant's death.
If a married Participant dies without designating a beneficiary, the
undistributed portion of the Participant's account will be paid to the
surviving spouse. A married Participant may designate a beneficiary
other than the spouse only if the spouse consents in writing to such
designation. Spousal consent is effective only if it acknowledges the
effect of the designation and is witnessed by a notary public. Any
change in a beneficiary designation by a married Participant is
effective only if the spouse consents in writing to the change.
Spousal consent is not required if the Participant establishes that
the spouse cannot be located. A spouse is an individual who was
legally married to the Participant for at least one year on the date
the Participant died.
A beneficiary designation is effective only if received by PRIMUS
prior to the date of death. In the absence of an effective designation
of Beneficiary, or if the Beneficiary does not survive the
Participant, the death benefit is paid to the spouse or, if there is
no surviving spouse, then to the Participant's estate. Distributions
will not be made until PRIMUS receives a copy of the Participant's
death certificate
1.09 Effective Date - April 1, 1992.
1.10 Eligibility Dates - First day of each calendar quarter. Effective
January 1, 1997, the Eligibility Date shall mean the first day of each
calendar month.
1.11 Employee - An individual who performs services for PRIMUS subject to
PRIMUS' supervision and direction who is considered a common law
employee.
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1.12 Employee After-Tax Contributions - Amounts Participants elect to
contribute to the Plan through payroll deduction after income and
employment taxes were withheld.
1.13 Employee Pre-Tax Contributions - Amounts Participants elect to
contribute to the Plan through payroll deduction before income taxes
are withheld. Such amounts are subject to the Federal Insurance
Contributions Act (FICA) and unemployment compensation taxes.
1.14 Employee Rollover Contributions - Amounts Participants elect to roll
over to the Plan.
1.15 Forfeiture Account - An account within the Plan to which forfeitures
are allocated.
1.16 Fund(s) - The investment funds described in Article VI.
1.17 Highly Compensated Employee - An Employee who during the preceding
Plan Year:
(a) Owner - Was at any time a five percent owner; or
(b) Highest Paid - Received Compensation in excess of $75,000; or
(c) Top Paid - Received Compensation in excess of $50,000 and was
among the top 20 percent of Employees ranked on the basis of
Compensation; or
(d) Officers - Was at any time an officer whose Compensation exceeded
50 percent of the $90,000 annual limit on benefits which Employees
may accrue under a defined benefit pension plan.
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(e) Cost of Living Adjustment - The dollar figures in (b), (c) and (d)
above shall be increased annually in accordance with adjustments
by the Commissioner of Internal Revenue to reflect increases in the
cost of living.
(f) Certain Rules - The following rules apply in determining which
Employees are highly compensated:
(1) Officers - The number of officers is limited to the
greater of three officers or 10 percent of the
Employees up to a maximum of 50 officers.
(2) Special Rule For Current Year - An Employee who was
not a Highly Compensated Employee in the prior Plan
Year, will nevertheless be treated as highly
compensated in the current Plan Year if he/she is
either:
(A) a five percent owner, or
(B) both a Highly Compensated Employee and one
of the 100 highest paid Employees.
(3) Family Members - Family members of Employees who are
either five percent owners or who are Highly
Compensated Employees and one of the 10 highest paid
Employees are not treated as separate Employees.
Compensation paid to such family members or
Contributions made to the Plan on behalf of such
family members shall be treated as paid to or made
on behalf of the Highly Compensated Employee. Family
members are the Employee's spouse, lineal
descendants and ascendants, and their spouses.
(4) Former Employees - A former Employee is treated as
highly compensated if the Employee was either a
Highly Compensated Employee at the time of
separation from service or was a Highly Compensated
Employee at any time after attaining age 55.
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(5) Excluded Employees - To determine the top 20 percent
of Employees in terms of Compensation and the number
of officers who are Highly Compensated Employees,
the following Employees are excluded:
(A) Employees who have not completed six months of
service;
(B) Employees who normally work less than 17 1/2
hours per week;
(C) Employees who normally work less than six
months during a year;
(D) Employees who have not attained age 21; and
(E) Employees covered by a collective bargaining
agreement.
(6) Controlled Group - Before identifying the highly
compensated group, PRIMUS is combined with all
Related Employers.
(7) Compensation - For purposes of identifying the
highly compensated group, Compensation means
compensation as defined in section 415(c)(3) of the
Internal Revenue Code, including pre-tax
contributions to a 401(k) plan or a cafeteria plan.
1.18 Hour of Service
---------------
(a) Actual Service - Each hour for which an Employee is paid or
is entitled to payment for the performance of duties for
PRIMUS.
(b) No Duties Performed - Each hour for which an Employee is
paid or entitled to payment from the Company on account of a
period of time during which no duties are performed
(irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity,
layoff, jury duty, military duty (to the extent required by
law) or leave of absence. No more than 501 Hours of Service
will be credited to an Employee on account of a single
continuous period during which the Employee performs no
duties.
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(c) Approved Leave of Absence - Each hour an Employee is on an
approved leave of absence. The hours credited to an Employee
shall be 40 hours per week or, if less, the weekly number of
hours the Employee was most recently regularly scheduled to
work.
(d) Back Pay - Each hour for which back pay is either awarded
against or agreed to by PRIMUS (irrespective of mitigation
of damages). The Employee can be credited with no more than
501 Hours of Service under this paragraph for each period
during which the Employee performs no duties.
(e) Workers' Compensation/Unemployment Compensation - Hours of
Service do not include hours during which no duties are
performed and the only payments received by the Employee are
due under a plan maintained for the purpose of complying
with either workers' compensation, unemployment compensation
or disability insurance laws.
(f) Medical Payments - Hours of Service do not include hours
during which the Employee performs no services and any
payments are limited to reimbursement of the Employee's
medical expenses.
(g) Determining Number of Hours - If a payment is based on units
of time, the number of hours credited is the number of hours
the Employee regularly works during this period. If payments
are not calculated on the basis of units of time, the number
of hours credited to the Employee is determined by dividing
the amount of the payment by the Employee's most recent
hourly rate.
(h) DOL Regulations - The number of Hours of Service credited to
an Employee is done in a manner consistent with Department
of Labor Regulation 29 CFR ss.2530.200b-2.
-8-
<PAGE>
1.19 Individual Account - A detailed record for each Participan of all
amounts credited to or charged against the Participant. Each
Individual Account is comprised of up to four subaccounts: After-Tax
Account, Pre-Tax Account, Rollover Account, and Company Match Account.
1.20 Leased Employee - Leased Employees must be treated as Employees solely
for the purposes of applying the coverage rules for tax qualified
plans. A leased Employee is an individual who, pursuant to an
agreement between PRIMUS and a leasing organization, performs services
for PRIMUS on a substantially full time basis during a 12 month period
of a type historically performed by Employees in PRIMUS' field of
business. Effective January 1, 1997, such Employee must be under the
primary direction or control of PRIMUS to be considered a Leased
Employee. However, Leased Employees are not treated as Employees if
Leased Employees do not constitute more than 20 percent of PRIMUS'
non-highly compensated work force and the Leased Employees are covered
by a money purchase pension plan sponsored by the leasing
organization(s). The money purchase pension plan must provide:
(a) Contribution - A non-integrated employer contribution at a
rate of at least 10 percent of Compensation,
(b) Participation - Immediate participation, and
(c) Vesting - Full and immediate vesting.
1.21 Normal Retirement Rate - Defined in section 6.01.
1.22 Participant - A person with an Individual Account.
1.23 Plan - The PRIMUS Automotive Financial Services, Inc. Prime Account.
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<PAGE>
1.24 Plan Year - The 12 month period beginning on January 1.
1.25 Pre-Tax Account - The portion of a Participant's Individual Account
to which Employee Pre-Tax Contributions are allocated.
1.26 Related Employer - A member of the same controlled group of
corporations or businesses that includes PRIMUS. The term
"controlled group" is defined in sections 414(b) and (c) of the
Internal Revenue Code.
1.27 Rollover Account - The portion of a Participant's Individual Account
to which Employee Rollover Contributions and plan to plan transfers
are allocated.
1.28 Total Disability - Defined in section 6.04.
1.29 Trust - The tax exempt trust maintained in connection with the Plan.
1.30 Trustee - Fidelity Management Trust Company or such other entity
designated in the trust agreement to hold in trust the assets of the
Plan.
1.31 Valuation Date - Each business day of the calendar year. At any time,
PRIMUS may, in its discretion, establish different Valuation Dates.
1.32 Vesting - Defined in section 4.01.
1.33 Vesting Service Year - Defined in section 4.06.
-10-
<PAGE>
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 Eligibility
-----------
An Employee is eligible to participate in the Plan on the first
Eligibility Date the Employee satisfies both the following
requirements:
(a) Age - The Employee has attained the age of 21 years.
(b) Service - The Employee has completed one year of service. An
Employee is credited with a year of service if the Employee
is credited with at least 1,000 Hours of Service in the 12
month period following the Employee's date of hire or in any
Plan Year commencing after the date of hire.
Effective January 1, 1997, there shall be no service
requirement for eligibility purposes under the Plan.
2.02 Excluded Employees
------------------
The following groups are not eligible to participate in the Plan:
(a) Lay off - Employees who are laid off.
(b) Leave of Absence - Employees who are on an unpaid leave of
absence unless such leave of absence is approved or the
employee is serving in the armed forces of the United
States. An approved absence means a paid leave of absence
approved by PRIMUS in accordance with a policy based upon
uniform and nondiscriminatory rules.
(c) Union Employees - Employees covered by collective bargaining
agreement.
(d) Leased Employees
-11-
<PAGE>
2.03 Rehired Employees
-----------------
(a) Former Participants - An Employee who is rehired and who
satisfied the one year service requirement prior to
separating from service and who is at least 21 years of age
is immediately eligible to participate in the Plan whether
or not he/she had reached an Eligibility Date prior to
his/her termination date. Upon rehire, the Employee's salary
reduction agreement will bw processed as quickly as is
administratively feasible.
(b) Other Employees - An Employee who is rehired and who never
participated in the Plan must satisfy the eligibility
requirements in section 2.01.
2.04 Enrollment in the Plan
----------------------
An Employee who has satisfied the eligibility requirements cannot
participate in the Plan until the Employee enrolls in the Plan through
the voice response system designated and communicated to all Employees
by PRIMUS. Participation in the Plan is effective as soon as
administratively possible. Participants must provide PRIMUS with any
information necessary to administer the Plan, including the
Participant's current mailing address.
2.05 Transfers
---------
(a) Transfers In - An Employee who is transferred to PRIMUS from
a Related Employer that is not a Participating Employer is
subject to the same eligibility requirements as other new
Employees.
(b) Transfers Out - An Employee who is permanently transferred
from PRIMUS to a Related Employer that is not a
Participating Employer is no longer eligible to make
contributions to the Plan.
(c) Plan to Plan Transfers - The Company may direct the Trustee
to accept an Employee's funds transferred from a similar
qualified plan and may direct the Trustee to transfer a
Participant's funds to a similar qualified plan, provided
such other qualified plan (1) is maintained by a Related
Employer and (2) permits such transfers. Any funds
transferred to the current employer's qualified plan shall
be in cash, accompanied by written instructions from the
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<PAGE>
Trustee setting forth the Employee for whose benefit such
assets are being transferred, and identifying the source of
such accumulated funds. No such transfers may be executed
until all outstanding loan amounts have been repaid.
Notwithstanding the foregoing, the Plan may not receive a
transfer from another qualified plan if such other plan
provides, or at any time had provided, benefits through
alternative forms of distribution, including annuities,
which are not available under this Plan.
2.06 Service With Related Employers/Participating Employers
------------------------------------------------------
Service with an entity that is a Related Employer from the date the
entity became a Related Employer must be included in calculating
eligibility service.
2.07 Beneficiary Designation
-----------------------
An Employee who has enrolled in the Plan shall be furnished with a
beneficiary designation form. Such form must be completed and
submitted to PRIMUS within the time frame indicated on the form.
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<PAGE>
ARTICLE III
CONTRIBUTIONS
-------------
3.01 Employee Pre-Tax Contributions
------------------------------
(a) Contributions -Participants may make Employee Pre-Tax Contributions to
the Plan in percentages from a minimum of one percent of Compensation
to a maximum of 11 percent of Compensation. A Participant shall elect
the percentage of pre-tax contribution to be made through the voice
response system during initial enrollment pursuant to Section 2.04.
(b) Special Limit for Highly Compensated Employees - Employee Pre-Tax
Contributions of Highly Compensated Employees may be limited to an
amount that is less than 11 percent of Compensation as determined by
PRIMUS in order to pass certain discrimination tests.
3.02 After-Tax Contributions
-----------------------
Participants may make Employee After-Tax Contributions in percentages
from one percent to four percent of Compensation. A Participant can
make Employee After-Tax Contributions only after the Participant
contributes the maximum permitted amount of Employee Pretax
Contributions. A Participant can elect to make Employee After-Tax
Contributions through the voice response system during initial
enrollment or at any time thereafter.
3.03 Modifying/Revoking Elections
----------------------------
A Participant may revoke or modify a contribution election at any
time. A Participant who revokes his/her Employee Pre-Tax and After-Tax
Contributions is suspended from the Plan for one month following the
effective date of the revocation. A revocation of only Employee
After-Tax Contributions will not result in a Plan suspension. The
complete revocation of an agreement is effective as soon as
administratively feasible following the date the Participant informs
PRIMUS, or its designated administrator, in writing, of the intent to
revoke the agreement. The modification of an agreement is effective as
soon as is administratively feasible after PRIMUS, or its designated
administrator, is notified in writing of the modification.
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<PAGE>
3.04 Company Matching Contributions
------------------------------
In its discretion, PRIMUS matches Employee Pre-Tax Contributions. The
match is equal to 100 percent of Employee contributions not in excess
of two percent of each Participant's Compensation and 50 percent of
Employee contributions in excess of two percent but not in excess of
six percent of each Participant's Compensation. Company Matching
Contributions are contributed to the Plan at the same time as Employee
contributions.
3.05 Employee Rollover Contributions
-------------------------------
(a) Permitted Rollovers - A Participant or an Employee may
rollover or a trustee may transfer to the Plan a
distribution from a tax qualified Plan or IRA (source was a
qualified plan), and which is eligible for rollover
treatment. PRIMUS will refuse to accept the rollover or
transfer of any amount that may adversely affect the Plan's
tax qualification. In this regard, PRIMUS can request that
the source of such rollover verify that such amount is
eligible for rollover treatment.
(b) Amount of Rollover - A Participant may rollover any portion
of a distribution from a tax qualified plan or an IRA,
except that part of a distribution which represents Employee
After-Tax Contributions.
(c) Form of Rollovers - Rollovers are accepted only in the form
of cash.
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<PAGE>
ARTICLE IV
VESTING
-------
4.01 Vesting Defined
---------------
A Participant has a nonforfeitable right to the portions of the
Participant's Individual Account in which the Participant has vested.
4.02 Vesting/Employee Contributions
------------------------------
Participants are 100 percent vested at all times in the Employee
Pre-Tax Account, Employee After-Tax Account and Employee Rollover
Account.
4.03 Vesting/Matching Contributions
------------------------------
A Participant who has reached age 65 is vested in the Company Match
Account. A Participant under age 65 is vested in the Company Match
Account in accordance with the following schedule.
Vesting Service Years Vested Percentage
--------------------- -----------------
1 0%
1 but less than 2 20%
2 but less than 3 50%
3 or more 100%
4.04 Forfeiture of Contributions
---------------------------
(a) Termination of Employmen - Upon termination of employment
for a reason other than death or Total Disability, a
Participant who has not reached the Normal Retirement Date
and who elects a distribution of his/her Current Balance, or
who receives an automatic distribution of the Current
Balance, forfeits the nonvested percentage of the Company
Match Account. A Participant whose vested percentage is zero
is deemed to receive a distribution of zero dollars. If no
distribution is made to a Participant upon termination of
employment, a Participant forfeits the nonvested portion of
the Company Match Account after experiencing a Break in
Service.
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<PAGE>
(b) Restoring Forfeited Amounts - If a former Participant who
received a distribution under the Plan is reemployed before
experiencing a Break in Service, and the Participant repays
the amount previously distributed to the Participant within
five years from the date of reemployment, PRIMUS must
restore any forfeited amount. A Participant who was deemed
to have received a distribution of zero dollars on
termination of employment, is deemed to have repaid this
distribution at the time the Participant is reemployed.
4.05 Use of Forfeitures
------------------
The forfeited portion of a Participant's Company Match Account is used
to reduce Company Matching Contributions.
4.06 Vesting Service Year
--------------------
Vesting service years are based upon the period of time that elapses
while an employment relationship exists between PRIMUS and an
individual. Vesting Service Years are the number of whole years of an
Employee's periods of service including any period prior to a
Break-in-Service. Each period of service runs from the Employment
Commencement Date to the Separation From Service Date.
4.07 Employment Commencement Date
----------------------------
The Employment Commencement Date is the first date the Employee
performs an Hour of Service for PRIMUS.
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<PAGE>
4.08 Separation From Service Date
----------------------------
The Separation From Service Date is earlier of the following dates.
(a) Discharge/Quit/Retire/Death - The date the Employee is
discharged, quits, retires or dies.
(b) Anniversary Date - The first anniversary of the date the
Employee is absent from work for any other reason.
(c) Service Spanning Rules - The following periods of severance
of less than 12 months must be counted in determining
vesting service.
(1) Discharge/Quits/Retires - If an Employee is
discharged, quits or retires but returns to service
within 12 months, the period the Employee was absent
from work must be included in the Employee's period
of service.
(2) Other Absences - If an Employee is absent from work
for any reason other than as a result of a
discharge, quit or retirement and during the absence
the Employee is discharged, quits or retires, the
period following the discharge, quit or retirement
must be included in the Employee's period of service
if the Employee returns to work on or before the
first anniversary of the date of his/her absence.
4.09 Break in Service Defined
------------------------
An Employee experiences a Break in Service after five consecutive
one-year periods of separation. A one-year period of separation is a
period of 12 consecutive months during which the Employee is absent
from work.
4.10 Break in Service Exceptions
---------------------------
(a) Maternity/Paternity Leave - Solely for the purpose of
determining when an Employee has experienced a Break in
Service, an Employee who is on maternity/paternity leave is
not treated as absent from work until 24 months after the
Employee actually left PRIMUS. The following reasons qualify
as maternity/paternity leave.
-23-
<PAGE>
(1) Pregnancy - Pregnancy of the Employee.
(2) Child Birth - Birth of the Employee's child.
(3) Adoption - Placement of a child with the Employee as
the result of the Employee's adoption of the child.
(4) Child Care - Caring for the Employee's child
immediately following a birth or adoption.
(b) Family and Medical Leave - A Break in Service cannot result
from a leave of absence mandated by the Family and Medical
Leave Act.
(c) Approved Leave of Absence - A Break in Service shall not
occur if an Employee is on a paid, approved leave of absence
and the Employee returns to employment with PRIMUS at the
end of such leave. If the employee fails to return to the
employ of PRIMUS at the end of such leave, the Employee's
Separation From Service Date shall be deemed to be the date
such leave began.
(d) Military Service - Participants who leave PRIMUS to serve in
the Armed Forces of the United States are treated as active
Employees with respect to their rights under the Plan. Such
Participants are deemed to have separated from service with
PRIMUS if they do not return to active employment with
PRIMUS before their rights to reemployment under federal law
expire. Participants who are serving in the Armed Forces of
the United States are afforded all rights with respect to
the Plan as required by federal law.
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<PAGE>
4.11 Service with Related Employers
------------------------------
Service with an entity that is a Related Employer from the date the
entity became a Related Employer is included in calculating Vesting
Service Years.
-25-
<PAGE>
ARTICLE V
ALLOCATIONS TO ACCOUNTS
-----------------------
5.01 Individual Accounts
-------------------
An Individual Account is established for each Participant. All
contributions to the Plan and forfeitures are allocated to one of the
subaccounts in the Individual Accounts described in this Article.
5.02 Employee Pre-Tax Contributions
------------------------------
Employee Pre-Tax Contributions are allocated to Participants' Pre-Tax
Accounts.
5.03 Employee After-Tax Contributions
--------------------------------
Employee After-Tax Contributions are allocated to Participants'
After-Tax Accounts.
5.04 Company Match Account
---------------------
Company Matching Contributions, are allocated to Participants' Company
Match Accounts.
5.05 Rollover Account
----------------
Employee Rollover Contributions are allocated to Participants'
Rollover Accounts.
5.06 Forfeiture Account
------------------
All forfeitures are allocated to the Forfeiture Account.
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<PAGE>
5.07 Allocation of Adjustment
------------------------
An allocation is made to each Participant's Individual Account of a
share of the Trust's investment return. Investment return includes
realized and unrealized investment gains and losses, dividends, other
investment income, less investment fees and other expenses. The
allocation of these adjustments will be performed separately for each
Fund. The amount of the adjustments allocated to each Participant will
be equal to the ratio of the portion of the Current Balance of the
Participant's Individual Account allocated to the Fund as of date of
the allocation, to the sum of the portion of the Current Balances of
all Participants' Individual Accounts allocated to the Fund as of the
date of the allocation. Allocations are made as of the Valuation Dates
selected by PRIMUS. At least one allocation is made in each Plan Year.
5.08 Maximum Annual Allocations
--------------------------
(a) Annual Limit - The total annual allocations for a Plan Year
to each Participant's Individual Account cannot exceed 25
percent of the Participant's Compensation up to a maximum of
$30,000 (or if greater, one quarter of the annual limit on
benefits which can accrue under a defined benefit plan, as
adjusted by the Commissioner of Internal Revenue to reflect
increases in the cost of living).
(b) Reduction in Contributions - If the total allocations to a
Participant's Individual Account exceed the limits imposed
by this section, Employee After-Tax Contributions will first
be reduced, followed by Employee Pre-Tax Contributions,
followed by Company Matching Contributions. Contributions
distributed under this section will not be included in
applying the discrimination tests in Article III.
(c) Suspense Account - Employee contributions taken from a
Participant's Individual Account in order to comply with the
limits in this section will be returned to the Participant.
If Company Matching Contributions exceed the limits in this
section because of a reasonable error in estimating
Compensation, such contributions are held in a suspense
account in the Trust. Amounts will be held in this suspense
account and will be applied in future Plan Years to reduce
future Company Matching Contributions.
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<PAGE>
(d) Allocations - The following contributions to the Plan and
all other defined contribution plans sponsored by PRIMUS are
subject to the limits imposed by this section:
(1) Company Contributions,
(2) Employee Contributions - Employee contributions
(excluding Employee Rollover Contributions), and
(3) Forfeitures.
5.09 Multiple Plan Participation
---------------------------
(a) Annual Limit - If a Participant also participates in a
defined benefit plan sponsored by PRIMUS or a Related
Employer, the amount of the Participant's contributions and
benefits must be limited so that the sum of the defined
benefit fraction and the defined contribution fraction for a
Plan Year does not exceed 1.0.
(b) Defined Benefit Fraction - The defined benefit fraction is:
The Participant's projected annual benefit under the
defined benefit plan determined as of the close of the Plan
Year.
The lesser of 1.25 multiplied by the current annual dollar
limit on benefits which can accrue under a defined benefit
plan or 1.4 times the Participant's Compensation for the
Plan Year.
(c) Defined Contribution Fraction - The defined contribution
fraction is:
The sum of the total allocations to the Participant's
Individual Account for all Plan Years through the current
Plan Year.
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<PAGE>
The sum of the maximum annual allocations which could have
been made during all years of the Participant's employment
(the maximum allocation is the lesser of 1.25 times the
annual dollar limit on contributions or 1.4 times 25 percent
of the Participant's Compensation).
(d) Combining Plans - For purposes of the limits on
contributions and benefits in this section, all defined
contribution plans are treated as a single plan and all
defined benefit plans are treated as a single plan.
(e) Reduction in Benefits - If a Participant's contributions
exceed the limits in this section, a reduction will be made
in the Participant's benefit under the defined benefit plan.
(f) Grandfather Rule - If an Employee was a Participant on
January 1, 1987, in a defined benefit plan(s) sponsored by
PRIMUS which was in existence on May 6, 1986, the
denominator of the defined benefit fraction will not be less
than 125% of the sum of the annual benefit under such plan
which the Participant had accrued as of December 31, 1986,
disregarding any changes in the terms and conditions of the
plan after May 5, 1986. This sentence applies only if the
defined benefit plan(s) satisfied the requirements of
section 415 for all plan years beginning before January 1,
1987. If an Employee was a participant in one or more
defined contribution plan(s) maintained by PRIMUS or a
Related Employer which was in existence on May 6, 1986, the
numerator of the defined contribution fraction is adjusted
if the sum of this fraction and the defined benefit fraction
would otherwise exceed 1.0 under the terms of the plan(s).
Under this adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 times (2)
the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would
be computed as of the end of the Plan Year ending December
31, 1986 and disregarding any changes in the terms and
conditions of the plan(s) made after May 5, 1986, but using
the section 415 limits that apply to the Plan Year beginning
January 1, 1987.
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ARTICLE VI
DISTRIBUTIONS
-------------
6.01 Termination of Employment at Normal Retirement Date
---------------------------------------------------
A Participant's Normal Retirement Date is the first day of the month
coinciding with or immediately following the date the Participant
reaches age 65 and separates from service with PRIMUS. At the time a
Participant reaches the Normal Retirement Date, the Current Balance in
the Participant's Individual Account will be distributed.
A Participant may elect to receive distribution of his Current Balance
upon the attainment of age 65 regardless of whether such Participant
terminates employment.
A Participant may elect to defer distributions to any date on or
before April 1 of the calendar year following the calendar year in
which the Participant attains age 70 1/2.
6.02 Employment After Age 70/Mandatory Distributions
-----------------------------------------------
A Participant who continues in active employment with PRIMUS after age
70 must receive a minimum distribution in each calendar year beginning
with the calendar year in which the Participant reaches age 70 1/2.
The minimum distribution is the quotient obtained by dividing the
Current Balance in the Participant's Individual Account on December 31
of the prior calendar year by the Participant's life expectancy. The
minimum distribution must be made no later than December 31, except
that the minimum distribution for the calendar year in which the
Participant reaches age 70 1/2 may be postponed until April 1 of the
following calendar year.
6.03 Termination of Employment Before Retirement
-------------------------------------------
(a) Benefit Exceeds $3,500 - Upon termination of employment
before the Participant reaches the Normal Retirement Date
for any reason other than death or Total Disability, if the
vested portion of the Current Balance in the Participant's
Individual Account exceeds $3,500, the Participant may elect
immediate distribution of the vested portion of the Current
Balance. A Participant who does not elect a distribution
upon termination of employment may elect distribution of
his/her Individual Account anytime up to April 1 of the
calendar year following the calendar year in which the
Participant reaches age 70 1/2. On this date, the Individual
Account is automatically distributed to the Participant.
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<PAGE>
(b) Benefit Does Not Exceed $3,500 - Upon termination of
employment before the Participant reaches the Normal
Retirement Date for any reason other than death or Total
Disability, if the vested portion of the Current Balance in
the Participant's Individual Account has never exceeded
$3,500, the vested portion of the Current Balance is
automatically distributed to the Participant.
(c) Forfeitures - The nonvested portion of a Participant's
Individual Account is forfeited at the time a distribution
is made under this section. The rules governing forfeitures
are described in Article IV.
(d) Transfers to Related Employer - For purposes of this
section, a transfer to a Related Employer will not
constitute a termination of employment. A transferred
Employee will not be considered as terminated unless the
Employee separates from service with the Related Company or
such Employee's Current Balance is transferred to such
Related Employer pursuant to section 2.05(c).
(e) Rehires - A Participant who is entitled to a distribution
under this section but who is rehired before the
distribution is made, is not eligible for such distribution.
6.04 Disability Retirement
---------------------
A Participant may elect the distribution at any time of the Current
Balance in his/her Individual Account if the Participant separates
from service due to a Total Disability. If PRIMUS determines that a
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Participant suffers from a Total Disability, the Participant will be
deemed to be fully vested in the Current Balance in his/her Individual
Account as of the first Valuation Date preceding the date the
Participant becomes disabled. If the Participant returns to work and
rejoins the Plan, any future allocations to his/her Individual Account
shall vest in accordance with the vesting rules of the Plan. Total
Disability means a permanent mental or physical incapacity as a result
of bodily injury or disease which prevents the Participant from
performing his/her customary duties with PRIMUS. PRIMUS will determine
if a Participant is suffering from a permanent and total disability
based upon uniform principles and competent medical evidence. Where a
Participant is covered by a long term disability plan sponsored by
PRIMUS, the Participant is deemed to be disabled if the Participant is
considered totally disabled under that plan. PRIMUS may rely upon the
opinion of a qualified physician selected by PRIMUS to decide that a
Participant is disabled. Under no circumstances, is an active Employee
eligible for a distribution under this section.
6.05 Death
-----
Upon a Participant's death before the Participant has received the
vested portion of the Current Balance, if any, in the Participant's
Individual Account, such portion will be paid to the Designated
Beneficiary. Upon the death of a Participant who was an active
Employee at the time of death, the Participant will be deemed to be
fully vested in his/her Individual Account. The Current Balance in the
Participant's Individual Account is distributed to the Designated
Beneficiary as soon as administratively possible after the
Participant's death.
6.06 Form of Distributions
---------------------
(a) Lump Sums - All distributions are made in a single lump sum.
(b) Cash and Ford Stock - Distributions are paid in cash except,
to the extent a Participant may elect to receive
certificates representing that portion of his/her Individual
Account invested in shares of Ford Motor Company stock.
Fractional shares are paid in cash.
-32-
<PAGE>
6.07 Application For Benefits
------------------------
Except where a Participant's Individual Account is automatically
distributed on termination because the Current Balance is less than
$3,500 or in the case of required distributions after age 70, the
Participant or the Designated Beneficiary must complete an application
for benefits furnished by PRIMUS before receiving any distributions.
No distribution can be made until the Participant or the Beneficiary
has provided all information necessary for the proper administration
of the Plan. If a Participant fails to complete an application, PRIMUS
will process the distribution in the manner it deems to be reasonable.
6.08 Time of Distribution
--------------------
Distributions are made as soon as is administratively feasible, after
the submission of a complete application.
6.09 Amount of Distribution
----------------------
Where a Participant's Individual Account is automatically distributed
on termination because the Current Balance has never exceeded $3,500,
the Current Balance is determined as of the Valuation Date following
the date of the Participant's termination. Under all other
circumstances, the Current Balance will be determined as of the
Valuation Date following the date the Participant or Designated
Beneficiary completes an application for benefits. PRIMUS may, in its
discretion, select a different date to determine the Current Balance
available for distribution that is consistent with administrative
procedures established to process distributions.
6.10 Direct Rollovers
----------------
This paragraph applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that
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would otherwise limit a distributee's election under this paragraph, a
distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover. For purposes of this paragraph,
the following definitions shall apply:
(a) Eligible Rollover - Distribution An eligible rollover
distribution is any distribution of all or any portion of
the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the distributee
and the distributee's designated beneficiary, of for a
specified period of ten years of more; and distribution to
the extent such distribution is required under section
401(a)(9) of the Code; and the portion of any distribution
that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with
respect to employer securities).
(b) Eligible Retirement Plan - An eligible retirement plan is an
individual retirement account described in section 408(a) of
the Code, an individual retirement annuity described in
section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code or a qualified trust described in
section 401(a) of the Code that accepts the distributee's
eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account
or individual retirement annuity.
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<PAGE>
(c) Distributee - A distributee includes an employee or former
employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section
414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(d) Direct Rollover - A direct rollover is a payment by the plan
to the eligible retirement plan specified by the
distributee.
6.11 Participants That Cannot Be Located
-----------------------------------
If a Participant with a vested right to contributions allocated to the
Participant's Individual Account cannot be located at the
Participant's Normal Retirement Date, the Current Balance in the
Participant's Individual Account is forfeited. The forfeited amount is
used to reduce Company contributions. If the Participant's whereabouts
become known, the Participant's Current Balance (unadjusted for any
investment gain or loss) will be fully restored.
-35-
<PAGE>
ARTICLE VII
IN-SERVICE WITHDRAWALS AND LOANS
--------------------------------
7.01 In-Service Withdrawals
----------------------
(a) Age 59 1/2 Withdrawals - A Participant who has attained age
59 1/2 may elect to withdraw all or a portion of the balance
in the Participant's Pre-Tax Account.
(b) Employee Rollover Account - A Participant may elect to
withdraw all or a portion of the Participant's Rollover
Account.
(c) Employee After-Tax Account - A Participant may elect to
withdraw all or a portion of the balance in the
Participant's After-Tax Account.
(d) Company Match Account - A Participant may withdraw all or a
portion of the vested balance in the Participant's Company
Match Account, exclusive of any Company Matching
Contributions allocated to the Participant's Individual
Account during the preceding 24 months, plus any income
thereon.
(e) Time of Withdrawal - Withdrawals are processed as quickly as
administratively possible after the Participant completes an
application form provided by PRIMUS.
7.02 Hardship Withdrawals
--------------------
(a) Withdrawal - If a Participant experiences a hardship, the
Participant may withdraw, to the extent vested, all or a
portion of his/her Pre-Tax Account.
(b) Immediate and Heavy Financial Need - A hardship exists only
where the Participant has an immediate and heavy financial
need which cannot be satisfied from other sources and which
results from one of the following:
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<PAGE>
(1) Medical expenses incurred, or which will be
incurred, described in Section 213 of the Internal
Revenue Code incurred by the Employee, the
Employee's spouse or dependents of the Employee as
defined in Section 152 of the Internal Revenue Code,
(2) Purchase of a principal residence for the
Participant (excluding mortgage payments),
(3) Tuition payments for post-secondary education for
the next semester or quarter for the Participant,
the Participant's spouse or dependents,
(4) Rent or mortgage payments if necessary to prevent
eviction of the Participant from his/her principal
residence or to prevent foreclosure on the mortgage
of the Participant's principal residence, or
(5) Such other conditions which Company determines
constitute an immediate and heavy financial need
under rules published from time to time by the
Internal Revenue Service.
(c) Use of Other Resources - A hardship exists only if the
Participant lacks other resources to meet the immediate and
heavy financial need. PRIMUS will determine if other
resources are available. A Participant is deemed to lack
other resources to meet the hardship if:
(1) The withdrawal does not exceed the amount needed, and
(2) The Participant has withdrawn all other amounts
available under the Plan and obtained the maximum
loan available under the Plan.
(d) Taxes - If a Participant so elects, the amount of a hardship
withdrawal may be increased to include federal, state and
local income taxes, plus any penalties.
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<PAGE>
(e) Earnings on Employee Pre-Tax Contributions - The amount
withdrawn in the event of hardship cannot include any
investment income earned on Employee Pre-Tax Contributions.
(f) Proof of Hardship - The existence of a hardship is
established through the participant's statements. PRIMUS
will accept such statements in the absence of contrary
evidence of which it has knowledge.
(g) Time of Withdrawal - Requests for a hardship withdrawal are
processed as quickly as administratively possible.
(h) Suspension - A Participant who receives a hardship
withdrawal is suspended from making Employee Pre-Tax
Contributions for the 12 month period following the date
he/she receives the hardship distribution.
7.03 Minimum In-Service Withdrawal
-----------------------------
The minimum withdrawal permitted is $1,000 or, if less, the amount
available with respect to the type of withdrawal requested.
7.04 Annual Limit on Withdrawals
---------------------------
A Participant is limited to two withdrawals in any Plan Year.
7.05 Loans
-----
(a) Application - A Participant may request a loan by completing
the application form furnished by PRIMUS. An approved loan
is distributed to a Participant within 30 days from the end
of the payroll period in which PRIMUS receives the loan
application. In granting or refusing loan applications,
PRIMUS will apply uniform standards that do not discriminate
in favor of stockholders, officers or Highly Compensated
Employees.
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<PAGE>
(b) Limits - A Participant may receive a maximum of two loans
during a Plan Year. No more than one loan can be outstanding
at any time. Loans are available from a minimum of $1,000 to
a maximum of $50,000 (reduced by the highest outstanding
balance of a loan during the one year period ending on the
date the loan is made). A loan cannot exceed 50 percent of
the vested portion of the Current Balance in the
Participant's Individual Account at the time the application
for a loan is processed.
(c) Repayment - Unless PRIMUS agrees to a different arrangement,
loans are repaid through payroll deduction. The amount
necessary to repay the loan over its term in equal payments
is deducted from the Participant's paycheck each payroll
period. The Participant may pay off the outstanding balance
of a loan at any time by direct payment without penalty. All
loans must be amortized over a period not exceeding 60
months and payments must be made at least quarterly. The
term of a loan may be up to 10 years if the loan is used to
acquire a dwelling which the Participant intends to use as a
principal residence within a reasonable time after receiving
the loan.
(d) Leave of Absence/Former Employee - An Employee who is on an
unpaid leave of absence must repay an outstanding loan by
making monthly loan payments equal to the aggregate monthly
payroll deductions made before cessation of employment. If
any loan payment is more than 90 days in arrears, the loan
is in default. The outstanding balance of a loan in default
is due immediately and is deducted from the vested portion
of the Employee's Individual Account.
(e) Former Employee - For a former Employee, the outstanding
balance of a loan is due in full 90 days after the date of
termination.
(f) Interest Rate - The prime rate as quoted in the Wall Street
Journal for the last business day of the month preceding the
month in which the loan is approved.
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<PAGE>
(g) Collateral - The vested portion of the Participant's
Individual Account, in an amount equal to the face amount of
the loan, serves as collateral for a loan. All loans must be
evidenced by a promissory note as specified by PRIMUS. On
the date the loan is approved, the amount of collateral
cannot exceed 50 percent of the vested portion of the
Participant's Individual Account.
(h) Payment of Interest - The Trustee will hold all promissory
notes as an asset of the Trust in a separate Fund. The
investment income consists of the interest payments
Participants make. A Participant who has an outstanding loan
will have a portion of the investment income allocated to
his/her Individual Account. The amount allocated to the
Participant is an amount equal to the interest paid on the
Participant's loan.
(i) Withdrawals - A Participant who has received a loan cannot
make a withdrawal under this Article if, after the
withdrawal, 50 percent of the vested portion of the
Participant's Individual Account is less than the
outstanding balance of the loan.
(j) Order of Accounts - Loans will be debited to the
sub-accounts of the Participants Individual Account in the
order designated by the Participant.
(k) Investment of Loan Payments - Loan payments are invested in
accordance with the Participant's current investment
election.
(l) Truth in Lending - For Plan Years during which at least 25
loans are made to Participants during the Plan Year or the
previous Plan Year, PRIMUS must comply with the Truth in
Lending Act. To comply with this law, PRIMUS will disclose
to a Participant the terms of a loan including the rate of
interest charged with respect to a loan and the total dollar
amount of interest which must be paid over the life of the
loan.
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<PAGE>
7.06 Amount Available
----------------
(a) Withdrawals - The amount available for a withdrawal is based on
the vested percentage of the Participant's Current Balance, minus
the amount invested in Ford Motor Company stock.
(b) Loans - The amount available for a loan is based on the vested
percentage of the Current Balance at the time the application for
a loan is processed. In PRIMUS' discretion, the amount available
for a loan may be based on the vested percentage of the Current
Balance as of a Valuation Date following the date a Participant
requests the loan.
(c) Different Valuation Date - PRIMUS may in its discretion select a
Valuation Date for determining the Current Balance available for
a withdrawal or a loan that is consistent with the administrative
procedures established to process requests for withdrawals and
loans.
7.07 Source of Withdrawals/Loans
---------------------------
Withdrawals and loans are taken pro rata from each Fund in which the
Participant's Individual Account is invested (except that portion of
the Participant's Individual Account invested in shares of Ford Motor
Company stock), unless the Participant elects otherwise.
7.08 Form of Withdrawals/Loans
-------------------------
Withdrawals and loans are paid in cash in single lump sums.
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<PAGE>
ARTICLE VIII
FUNDING
-------
8.01 Contributions
-------------
A Trust is maintained in connection with the Plan. All contributions
to the Plan are paid over to the Trustee. Contributions placed in the
Trust are used exclusively to provide benefits to Participants and
their beneficiaries and to defray the reasonable costs of
administering the Plan. All contributions are contingent on their
deductibility and upon the qualification of the Plan under Section
401(a) of the Internal Revenue Code.
8.02 Return of Contributions
-----------------------
(a) Mistake of Fact - A contribution to the Trust made on account of
a mistake of fact should be returned to PRIMUS, but this must be
accomplished within one year after the date the contribution is
made.
(b) Nondeductible Contributions - A contribution which is not
deductible should be returned to PRIMUS, but this must be
accomplished within one year after the date the deduction is
disallowed.
8.03 Trustee
-------
(a) Trust Agreement - PRIMUS will enter into a trust agreement with
the Trustee. Under this trust agreement, the Trustee administers
the Trust to which contributions are made. The trust agreement
must provide, among other things, for the investment and
management of trust assets, the responsibilities and immunities
of the Trustee, the removal of the Trustee, the appointment of a
successor Trustee, accounting by the Trustee and the disbursement
of trust assets.
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<PAGE>
(b) Investment Manager - The Trustee has the exclusive authority and
responsibility to manage the Trust subject to the trust
agreement, except PRIMUS may retain an investment manager to
direct the Trustee as how to invest Trust assets. Any investment
manager must satisfy the following criteria.
(1) Registered - The investment manager must be registered as an
investment advisor under the Investment Advisors Act of
1940, a bank as defined in that act, or an insurance
company qualified to perform investment services under the
laws of more than one state.
(2) Acknowledgment - The investment advisor must acknowledge in
writing that it is a fiduciary under the Employee
Retirement Income Security Act of 1974.
8.04 Investment Funds
----------------
The Trustee must establish two or more Funds within the Trust as
directed by PRIMUS for the purpose of investing trust assets. One of
these Funds is invested exclusively in shares of Ford common stock.
PRIMUS may from time to time direct the Trustee to establish
additional investment funds or close out existing funds.
8.05 Direction of Investments
------------------------
(a) Investment Choices - A Participant has the right to decide how
his/her Individual Account and future contributions to his/her
Individual Account will be allocated among the Funds.
(b) Investment of Future Contributions - A Participant must make
investment choices when first applying for participation by
completing an election form furnished by PRIMUS. A Participant
may elect to allocate future contributions among the available
Funds in increments of one percent, with a minimum of five
percent allocated to any one Fund.
-43-
<PAGE>
(c) Change of Investments - A Participant may change how future
contributions are allocated among the Funds and/or how his/her
Individual Account is allocated among the Funds at any time. To
modify investment elections, a Participant must complete a
written form provided by PRIMUS. The modification of existing
investment elections will be put into effect as soon as
administratively feasible, but not later than the first business
day of the calendar quarter which is at least 15 days after
PRIMUS receives the participant's completed election form.
(d) Failure to Elect - If a Participant does not make investment
choices, the Current Balance in the Participant's Individual
Account will be invested by the Trustee in a fixed income fund,
money market fund or some other conservative investment vehicle
providing for conservation of principal.
8.06 Voting Rights/Ford Stock
------------------------
PRIMUS may, in its discretion, permit Participants to direct the
Trustee with respect to how to vote shares of Ford Motor Company stock
with respect to any matter brought before a shareholders meeting or
how to respond to a tender offer or any other offer to purchase shares
of Ford Motor Company stock. Participants may vote shares representing
undividend interests that are allocated to their Individual Accounts
as of the record date for the shareholders' meeting. Participants who
are not active Employees of PRIMUS or a Related Employer as of the
record date may vote shares only in proportion to the vested
percentage of their Individual Accounts. The Trustee must solicit and
tabulate Participants' votes as directed by the Company. The Trustee
must hold in confidence the instructions of individual Participants.
The instructions of Participants notwithstanding, the Trustee will not
dispose of stock in a manner that violates section (e)(i) of Rule 144
of the Securities Act of 1933 or any other federal or state securities
laws.
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<PAGE>
ARTICLE IX
TOP HEAVY RULES
---------------
9.01 Top Heavy Determination
-----------------------
(a) Top Heavy Defined - The Plan is Top Heavy in any Plan Year that
the sum of the Current Balances of the Individual Accounts of Key
Employees exceeds 60 percent of the sum of the Current Balances
of all Individual Accounts.
(b) Determination Date - The Top Heavy determination for the current
Plan Year is made on the last date of the preceding Plan Year.
(c) Five Year Rule - In determining if the Plan is Top Heavy, all
distributions during the five year period ending on the
Determination Date must be taken into account. The Individual
Account of a former Employee is disregarded if the individual has
not performed services for PRIMUS during this five year period.
(d) Rollover Contributions - Employee Rollover Contribution Accounts
are disregarded in determining if the Plan is Top Heavy.
(e) Former Key Employees -The Individual Account of a Participant is
disregarded in determining if the Plan is Top Heavy if the
Participant is not currently a Key Employee, but was a Key
Employee in any prior Plan Year.
(f) Aggregation of Plans - Before determining if the Plan is Top
Heavy, the Plan must be aggregated with any of the following
plans including a plan that was terminated in the current Plan
Year or any of the preceding four Plan Years:
(1) Plans with Key Employees - If the Plan has at least
one Key Employee, any other planin which a Key
Employee is a Participant or was a Participant
during any of the four preceding years.
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<PAGE>
(2) Aggregation/Coverage - Other plans which must be
aggregated with the Plan in order to satisfy the
coverage rules or the non-discrimination rules in
sections 401(a)(4) and 410(b) of the Internal
Revenue Code.
(3) Permissive Aggregation - The Plan may be
permissively aggregated with other plans if the
plans together can satisfy the coverage rules and
nondiscrimination rules in sections 410(b) and
401(a)(4)of the Internal Revenue Code.
9.02 Minimum Contribution
--------------------
In a Plan Year in which the Plan is Top Heavy, PRIMUS contributions
and forfeitures allocated to each non-Key Employee must equal three
percent of the non-Key Employee's Compensation, or if less, the
highest contribution percentage for a Key Employee. If a non-Key
Employee participates in other defined contribution plans, the minimum
contribution required under this section must be made only to one
plan. If a non-Key Employee participates in a Top Heavy defined
benefit plan, the minimum contribution percentage for the non-Key
Employee is increased to five percent.
9.03 Multi Plan Limits
-----------------
For any Plan Year in which the Plan is Top Heavy, the multi-plan
limits in Article V must be read by substituting the number "1.00" for
the number "1.25" wherever it appears.
9.04 Key Employees
-------------
The following officers and owners are Key Employees. Any Employee who
does not fall within the definition of Key Employee is a non-Key
Employee.
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<PAGE>
(a) Officers - All officers of PRIMUS whose annual Compensation
exceeds 50 percent of the $90,000 annual limit on benefits which
may accrue under a defined benefit plan, as adjusted by the
Commissioner of Internal Revenue to reflect increases in the cost
of living. No more than three officers are treated as Key
Employees, or if greater, 10 percent of the employees up to a
maximum of 50.
(b) Five Percent Owners - All Employees who own five percent or more
of Ford Motor Company's stock.
(c) 10 Largest Owners - The 10 Employees owning the largest interests
in Ford Motor Company, if their Compensation exceeds the $30,000
(or if greater, 1/4 of the annual limit on benefits that can
accrue under a defined benefit plan) annual limit on
contributions to a defined contribution plan.
(d) High Paid Owners - Any Employee who owns at least one percent of
Ford Motor Company's stock and whose annual Compensation exceeds
$150,000.
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<PAGE>
ARTICLE X
ADMINISTRATION
--------------
10.01 Company
-------
PRIMUS is the named fiduciary and it has sole authority to administer
the Plan. This authority includes construing the language of the Plan
and determining eligibility for benefits.
10.02 Delegation of Authority
-----------------------
(a) Delegation to Others - PRIMUS may delegate administrative
responsibilities to officers or Employees or a committee and such
individuals or committee have the authority to further delegate
such responsibilities to others. The responsibilities that may be
delegated include, but are not limited to, construing the
language of the Plan, determining eligibility for benefits,
retaining the services of third parties as are necessary,
authorizing payment of benefits, authorizing or accepting a
transfer of assets to or from the Plan and routine administrative
duties.
(b) Matters Affecting Employees - An Employee may not act in any
matter directly affecting the Employee's rights under the Plan.
10.03 Fiduciary
---------
Each person, to the extent that they have discretionary authority with
respect to either the administration of the Plan or the management and
disposition of trust assets, may be a fiduciary with respect to the
Plan under the Employee Retirement Income Security Act of 1974. Each
fiduciary must discharge his/her duties solely in the interest of the
Participants and their beneficiaries and in accordance with the terms
of the plan document and the trust instrument. Any fiduciary charged
with managing plan assets must diversify the investment of those
assets in such a manner as to minimize the risk of large losses,
unless it is clearly imprudent to do so. A fiduciary will be in breach
of his/her fiduciary duties if the fiduciary fails to carry out these
duties with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
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<PAGE>
10.04 Actions Taken in Good Faith
---------------------------
Each person who carries out responsibilities under the Plan is acting
on behalf of PRIMUS. Such persons may rely upon the information and
opinions provided by actuaries, legal counsel and other professionals.
Such persons are not responsible for actions taken in good faith.
PRIMUS will indemnify responsible persons for all costs incurred while
acting on behalf of the Plan and in good faith.
10.05 Claims Procedure
----------------
(a) Denying Claims - PRIMUS decides the right of individuals to
receive benefits under the Plan. All denials of claims for
benefits must be in writing and must set forth specific reasons
for the denial, including reference to the relevant plan
provisions. The denial of a claim must describe any additional
material or information which is necessary in order for the
claimant to perfect a claim, with an explanation of why the
additional material or information is necessary. A claimant must
be provided with written notice of a decision denying a claim
within 90 days of the date PRIMUS receives the claimant's written
application for benefits. If PRIMUS needs additional time to
reach a decision concerning a claim, this 90 day period may be
extended for up to 90 additional days. The claimant must be
provided written notice of such an extension within the original
90 day period.
(b) Appeals - An individual whose claim for benefits is denied, in
whole or in part, may request a review in writing within 60 days
following the individual's receipt of the denial. PRIMUS must
render a decision concerning an appeal not later than 60 days
after the date PRIMUS receives the written request for an appeal.
If PRIMUS needs additional time to reach a decision, the claimant
must be provided written notice of such extension within the
original 60 day period.
-49-
<PAGE>
10.06 Records and Reports
-------------------
PRIMUS is responsible for ensuring that the Plan complies with all
recordkeeping, reporting and filing requirements.
-50-
<PAGE>
ARTICLE XI
AMENDMENT AND TERMINATION
-------------------------
11.01 Amendment
---------
PRIMUS reserves the right to amend the Plan at any time. No amendment
can reduce the amount of a Participant's Individual Account as of the
date PRIMUS adopts the amendment. A Plan amendment must be approved by
PRIMUS at a meeting of the Board of Directors or by their unanimous
written consent. The Board of Directors may delegate the authority to
amend the Plan.
11.02 Termination
-----------
PRIMUS intends to maintain the Plan for an indefinite period of time,
but it reserves the right to terminate the Plan at any time. If the
Plan is terminated, all Participants who are current Employees or who
separated from service with PRIMUS and have not received a
distribution and have not experienced a Break in Service as defined in
Article IV will become 100 percent vested in their Individual
Accounts. On termination, the Trustee will distribute all assets to
the Participants as soon as administratively feasible.
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<PAGE>
ARTICLE XII
ALIENATION OF BENEFITS AND
QUALIFIED DOMESTIC RELATIONS ORDERS
-----------------------------------
12.01 Alienation of Benefits
----------------------
Except for a Qualified Domestic Relations Order which requires
distributions to an Alternate Payee, no distribution to any
Participant or Designated Beneficiary is subject to anticipation,
alienation, sale, liens, assignment, hypothecation, pledge, or
encumbrance, whether voluntary or involuntary. PRIMUS will not
recognize any attempt to alienate or encumber in any fashion a
Participant's interest in the Plan.
12.02 Qualified Domestic Relations Order
----------------------------------
(a) Defined - A Qualified Domestic Relations Order is a decree or
court order (including approval of a property settlement) that:
(1) Relates to Marital Rights - Relates to the provision
of child support, alimony payments or marital
property rights to a spouse, former spouse, child or
other dependent of a Participant,
(2) Rendered Under State Law - Is rendered pursuant to
the domestic relations laws of a state, and
(3) Alternate Payee - Gives an Alternate Payee the right
to receive all or a portion of a Participant's
benefit.
(b) Contents - A Qualified Domestic Relations Order must contain all
of the following information:
(1) Name and Address - The name and last known mailing
address of the Participant and each Alternate Payee
covered by the order, unless PRIMUS has reason to
know the address(es) independent of the order,
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<PAGE>
(2) Assign Portion of Benefits - The portion of the
Participant's benefit assigned to the Alternate
Payee,
(3) Form of Payment - The form in which the
Participant's benefit must be paid to the Alternate
Payee,
(4) Period of Payment - The number of payments or the
period of time to which the order applies, and
(5) Identify Plans - The plans to which the order
applies.
(c) Different Form of Payment - A Qualified Domestic Relations Order
cannot require distributions in a form or at a time not otherwise
permitted under the Plan. However, a Qualified Domestic Relations
Order may require distribution of an active Participant's benefit
to an Alternate Payee any time after the Participant attains age
50.
12.03 Alternate Payee
---------------
An Alternate Payee is a spouse, former spouse, child or other
dependent of a Participant who has the right to receive all or a
portion of the Participant's benefits under a Qualified Domestic
Relations Order.
12.04 Procedures
----------
(a) Procedures - PRIMUS will establish reasonable procedures to
determine if a court decree or order is a Qualified Domestic
Relations Order and to administer such orders.
(b) Payment Pending Determination - If during the 18 month period
beginning on the date that the first payment is required under a
domestic relations order, PRIMUS or a court of competent
jurisdiction is considering whether the order is a Qualified
Domestic Relations Order, PRIMUS will separately account for
amounts that are payable to the Alternate Payee under the order.
If it is determined during this 18 month period that the order in
question is a Qualified Domestic Relations Order, PRIMUS will pay
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<PAGE>
the segregated amounts to the Alternate Payee. If it is
determined that the order is not a Qualified Domestic Relations
Order or if this question is not resolved during this 18 month
period, PRIMUS will pay the segregated amounts to the
Participant.
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<PAGE>
ARTICLE XIII
MISCELLANEOUS
-------------
13.01 Construction
------------
PRIMUS has the discretion to construe the language of the Plan and to
determine an Employee's rights under the Plan. Where federal law does
not control, the Plan must be construed under the laws of the State of
Tennessee, without the application of the principles of conflict of
laws.
13.02 Plan Expenses
-------------
Expenses incurred in the operation of the Plan are paid from the Trust
unless paid by PRIMUS. No expense is paid from the Trust unless such
payment is permitted by law. Expenses are charged against the
investment return on Trust assets or may be paid from forfeitures
within PRIMUS' discretion.
13.03 Employment Rights
-----------------
The Plan is not an employment contract and it does not bestow upon any
Employee the right to continued employment.
13.04 Merger, Consolidation or Transfer
---------------------------------
PRIMUS may in its discretion merge the Plan with another tax qualified
plan or transfer to or accept from another tax qualified plan assets
and liabilities. If the Plan is merged or consolidated with another
plan, or if assets and liabilities are transferred from or to this
Plan, the Current Balance in each Participant's Individual Account
immediately after such transaction must be at least equal to the
Current Balance in the Participant's Individual Account immediately
before such transaction.
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<PAGE>
13.05 Guaranty of Benefits
--------------------
PRIMUS does not guarantee the benefits under the Plan. The Current
Balance in any Participant's Individual Account is solely contingent
on contributions to the Individual Account and the investment
performance of the Funds.
13.06 Facility of Payment
-------------------
If a person entitled to receive a payment under the Plan is incapable
of managing his/her financial affairs because that person is under a
legal disability or is incapacitated, PRIMUS may direct the Trustee to
pay benefits in a manner PRIMUS considers advisable. Any such payment
of a benefit is a complete discharge of liability for the benefit.
13.07 Errors in Payment
-----------------
Where there is an error in the payment of benefits, PRIMUS will
correct the error in a reasonable manner.
13.08 Severability
------------
The invalidity or unenforceability of any section of the Plan does not
affect the validity or enforceability of any other sections of the
Plan. If any section of the Plan is declared invalid by a count of law
or other authority, PRIMUS may in its discretion construe the section
in such a manner that it's valid.
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<PAGE>
EXECUTION
---------
IN WITNESS WHEREOF, this Plan has been executed, as of this _______ day of
________________, 1997.
PRIMUS AUTOMOTIVE
FINANCIAL SERVICES, INC.
By:
Its:
Attest:
- --------------------------------
-57-
Exhibit 4.B
PRIMUS Automotive Financial Services, Inc.
"Prime Account"
AMENDMENT
I recommend, pursuant to the authority granted to you as the PRIMUS Board of
Directors, that you approve the amendment of the PRIMUS Automotive Financial
Services, Inc., Prime Account. The Prime Account will be amended as set forth
below, consistent with the amendment that will be made to the Savings and Stock
Investment Plan ("SSIP") for salaried employees of Ford Motor Company. As in the
case for the Prime Account, the participant's assets under the SSIP are held in
a Master Trust administered by Fidelity. The amendments will be effective upon
the declaration by the Board of Directors of Ford of a cash distribution in lieu
of The Associates stock for the Ford savings plan in the Master Trust.
1. The Ford Stock Fund under the Prime Account shall be invested in Ford
Series C Participating Stock ("Participating Stock") during the same times
and on the same terms as the Ford Stock Fund under the SSIP is invested in
such stock. The Ford Stock Fund under the Prime Account shall participate
in a cash dividend on such stock in lieu of a dividend in the form of The
Associates common stock that will be payable on Ford common stock.
2. The restrictions on the transfer of funds by members of the SSIP into the
Ford Stock Fund during the time that the Ford Stock under the SSIP is
invested in Participating Stock shall apply to members of the Prime Account
with respect to the Ford Stock Fund under the Prime Account.
3. The cash distribution paid on the Participating Stock held in the Ford
Stock Fund under the Prime Account will be invested in member's accounts
based on the assets allocation of the member's account on the record date
of the special cash distribution.
4. The amendments to the Ford Stock Fund under the SSIP to allow the
investment of that Fund in the Participating Stock and the receipt of a
cash distribution by the Prime Account on such stock shall apply to the
Ford Stock Fund under the Prime Account.
5. The amendments to the SSIP allowing members to receive all or a portion of
the special cash dividend out of the SSIP are not applicable to the Prime
Account.
6. The amendments related to the Associates Stock Fund are not applicable to
the Prime Account.
7. In all other respects, the amendments made to the SSIP in connection with
the above, shall apply to the Prime Account except to the extent such
amendments alter provisions of the SSIP for which there is no corresponding
or similar provision under the Prime Account.
Approve:/s/T. N. Hynes 2/27/98
-----------------------
T. N. Hynes Date
<PAGE>
AMENDMENT TO SAVINGS AND
STOCK INVESTMENT PLAN FOR
SALARIED EMPLOYEES
------------------
The following Paragraphs and Subparagraphs of the Ford Motor Company Savings and
Stock Investment Plan for Salaried Employees ("SSIP") are hereby amended in
their entireties to read as follows effective as of the date the Board of
Directors of the Company declares a dividend on common stock and Class B Stock
of the Company payable in shares of Class A Common Stock of Associates First
Capital Corporation.
Paragraph I, Subparagraph 12
"Company Stock" shall mean common stock of the Company; provided, however, that
during the Participating Stock Investment Period, such term shall include, to
the extent directed by the Secretary or Vice President and Treasurer of the
Company, Participating Stock.
Paragraph I, Subparagraph 13
"Current market value" shall mean, with reference to Company Stock that is
common stock, the closing market price on the New York Stock Exchange on the day
in question or, if no sales were made on that date, the closing market price on
the next preceding day on which sales were made. With reference to Participating
Stock, the term "current market value" shall mean the value, as of the close of
trading on the New York Stock Exchange on the date in question, as determined in
accordance with procedures determined by the Company based on the advice of an
independent party designated by the Secretary or Vice President and Treasurer of
the Company.
Paragraph I, Subparagraph 40
"The Associates" shall mean Associates First Capital Corporation.
Paragraph I, Subparagraph 41
"Participating Stock" shall mean either Series C Participating Stock of the
Company or depositary shares representing a fractional interest in such stock.
Paragraph I, Subparagraph 42
"Participating Stock Investment Period" shall mean the period during which the
Ford Stock Fund holds Participating Stock pursuant to directions to the Trustee
from the Secretary or Vice President and Treasurer of the Company, which period
shall commence by the second business day preceding the record date with respect
to a dividend on common and Class B Stock of the Company in shares of Associates
<PAGE>
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Stock and shall end on the date the Ford Stock Fund no longer holds
Participating Stock, whether pursuant to conversion of such stock by its own
terms or pursuant to conversion upon direction from the Secretary or Vice
President and Treasurer of the Company, which period shall not exceed fourteen
(14) days.
Paragraph I, Subparagraph 43
"Restricted Period" shall mean the period commencing immediately following the
public announcement by the Company of a decision by the Board of Directors of
the Company to declare a dividend on Company Stock that is common stock in
shares of Associates Stock (but not before 7:00 am Eastern time on the day of
such announcement, except that such period may begin as of such earlier time as
the Company has reason to believe that information regarding the timing of same
has become public knowledge prior to a public announcement by the Company) and
ending at 4:00 pm Eastern time on the second business day immediately following
the record date for such dividend or as soon as reasonably practicable
thereafter (as determined by the Secretary or Vice President and Treasurer of
the Company).
Paragraph I, Subparagraph 44
"Reinvestment Period" shall mean the period beginning with the payment of a
Special Cash Dividend and extending throughout such period as is necessary to
allow such cash dividend to be reinvested in Company Stock in accordance with
subparagraph 1 of Paragraph XVIII and consistent with directions from the
Company, which directions may be given by the Secretary or Vice President and
Treasurer of the Company.
Paragraph I, Subparagraph 45
"Special Cash Dividend" shall mean a special cash dividend in lieu of a dividend
in Associates Stock payable on Participating Stock held in the Ford Stock Fund.
Paragraph VII
Member's Election As to Investment of Funds. A member's regular savings
contributions and tax-efficient savings contributions each shall be invested as
the member shall elect with respect to each in one or more of the Ford Stock
Fund, the Associates Stock Fund (until, but not after the beginning of the
Restricted Period), the Common Stock Fund, the Bond Fund, the Interest Income
Fund, the Income Fund (for contributions made prior to January 1, 1996), the
Fidelity Magellan Fund, the Fidelity Contrafund, the Fidelity Overseas Fund,
Fidelity Asset Manager: Income, Fidelity Asset Manager, Fidelity Asset Manager:
Growth and any of the Additional Mutual Funds listed in Appendix A, provided
that the amount contributed to any investment election shall be at least five
<PAGE>
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percent of the amount contributed; contributions in excess of five percent shall
be made in increments of one percent.
A prospectus for the Fidelity Magellan Fund, the Fidelity Contrafund, the
Fidelity Overseas Fund, the Fidelity Asset Manager: Income, the Fidelity Asset
Manager, the Fidelity Asset Manager: Growth, all of which are mutual funds, or
for any of the Additional Mutual Funds listed in Appendix A shall be delivered
promptly to any employee upon request of such employee.
The Committee may in its discretion make additions to or deletions from the
Additional Mutual Funds listed in Appendix A.
A member's initial investment election hereunder shall be stated in his or her
notice of election to participate or Salary Reduction agreement. Each investment
election hereunder shall remain in effect until changed by the member, and may
be changed effective for any pay period in respect of regular savings
contributions or tax-efficient savings contributions made after delivering a
notice in such form and in such manner and at such time as the Committee shall
specify. Profit sharing distributions and FCA Dollars and Bonus Flexdollars from
the Flexible Benefits Plan that members elect to have contributed to the Plan
shall be invested in accordance with a member's election in effect with respect
to tax-efficient savings contributions at the time profit sharing distributions
are contributed to the Plan or, if the member does not have in effect such an
election with respect to tax-efficient savings contributions, in accordance with
the member's latest tax-efficient savings election or, in the absence of any
such election, in the Interest Income Fund. Company matching contributions shall
be invested in the Ford Stock Fund. Notwithstanding the foregoing provisions of
this Paragraph VII, during and at any time following the Restricted Period,
members shall not be allowed to invest additional contributions of any type in
the Associates Stock Fund, and elections to invest in the Associates Stock Fund
shall be deemed elections to invest in the Ford Stock Fund. Further, beginning
with the Restricted Period, members' rights to change investment elections for
future contributions under this Paragraph VII shall be temporarily suspended
whenever and to the extent administratively required to obtain and implement
member elections with respect to a Special Cash Dividend and to process and
allocate such a Special Cash Dividend to members' accounts.
Paragraph VIII
Transfer of Assets to Other Investment Elections. Except as is provided in
subparagraph (e) of this Paragraph VIII, any member may elect, at such times, in
such manner, to such extent and with respect to such assets as the Committee
from time to time may determine, to have the value of all or part of the assets
invested in any investment election under the Plan in such member's regular
savings account, tax-efficient savings account or matching contributions account
transferred by being invested in such other of the ways in which a member's
regular savings contributions or tax-efficient savings contributions may be
invested; provided, however, that:
<PAGE>
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a) a member may not transfer the value of amounts credited to his or
her Income Fund subaccount except at such times as the Committee
may determine,
b) a member may make one or more such transfer elections with respect
to his or her regular savings account, one or more such transfer
elections with respect to his or her tax-efficient savings
account, and one or more such transfer elections with respect to
his or her matching contributions account during each business day
and, in addition, a member may elect to transfer the value of
amounts credited to his or her Income Fund subaccount at any such
time as the Committee may determine,
c) a member may make transfer elections in either a dollar amount or
a percentage of the amount invested in such investment election
from which such transfer is elected, in increments of one percent,
provided that the amount transferred is at least the greater of
five percent of the value of the assets in the investment election
from which transfer is elected or $250.00, or, if the amount
invested in the investment election from which transfer is elected
is less than $250.00, the entire value of the assets invested in
the investment election from which transfer is elected,
d) all such transfer elections shall be subject to such other
regulations as the Committee may prescribe, which may specify,
among other things, application procedures, minimum and maximum
amounts that may be transferred, procedures for determining the
value of assets the subject of a transfer election and other
matters which may include conditions or restrictions applicable to
transfer elections; and
e) a member shall not be allowed to have the value of any assets
invested in any investment election under the Plan transferred to
the Ford Stock Fund during the Restricted Period; provided that,
except as is provided in the immediately following sentence, a
member may during the Restricted Period transfer all or a portion
of the value of the member's investment in the Ford Stock Fund to
other investment elections allowed under the Plan. During the
period beginning with the close of the New York Stock Exchange on
the last business day preceding the record date for a Special Cash
Dividend and extending through 8:30 am Eastern time of the day
immediately following such record date or, if such record date is
not a day on which the New York Stock Exchange is open, 8:30 am
Eastern time of the day immediately following the next day on
which the New York Stock Exchange is open, members shall not be
allowed to have the value of any assets transferred into or out of
the Ford Stock Fund, and all other transactions, including loans
and withdrawals, involving the Ford Stock Fund shall also be
suspended. In addition, for such time as is required
administratively to implement member elections with respect to a
Special Cash Dividend, the rights of members to transfer assets
between investment elections otherwise permitted under this
Paragraph VIII may be limited or suspended. Further, during the
Reinvestment Period the Trustee shall, upon written directions
from the Secretary or Vice President and Treasurer of the Company
or such party's delegate, at any time and from time to time limit
<PAGE>
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transfers from other investment elections to the Ford Stock Fund
if such parties determine that it is necessary to limit such
transfers to effect the investment of the Special Cash Dividend
in Company Stock as provided in subparagraph 1(a) of Paragraph
XVIII. In addition, during and at any time following the
Restricted Period, members shall not be allowed to invest any
additional assets in the Associates Stock Fund.
Paragraph XI
Investment of Dividends, Interest, Etc. Except as is provided in the following
sentences of this Paragraph XI and Paragraph XV (with respect to a Special Cash
Dividend), cash dividends, interest, and cash proceeds of any other distribution
in respect of the Ford Stock Fund, the Associates Stock Fund, the Common Stock
Fund, the Bond Fund, the Interest Income Fund, and the Income Fund shall be
invested in the respective Funds, except that, commencing with the dividend on
Company Stock payable in the third quarter of 1996, and commencing with the
establishment of the Associates Stock Fund (and ceasing on the date The
Associates ceases to be a member of a controlled group of corporations (within
the meaning of Section 414(b) of the Code) that includes the Company), all or a
portion of cash dividends paid on Company Stock held in the Ford Stock Fund that
have not been in the Plan continuously since January 1, 1989 and all of the cash
dividends on the Associates Stock in the Associates Stock Fund shall be
distributed in accordance with the provisions of Paragraph XV to members who
have elected to invest in the Ford Stock Fund and/or Associates Stock Fund,
unless such members elect not to receive such dividends.
Cash dividends on Company Stock in the Ford Stock Fund that are not attributable
to a Special Cash Dividend and that are not distributed to members shall be
invested on behalf of the members entitled thereto in the Ford Stock Fund
through the purchase of additional Ford Stock Fund Units. Until March 3, 1998,
cash dividends on Associates Stock in the Associates Stock Fund that are not
distributed to members shall be invested on behalf of the members entitled
thereto in the Associates Stock Fund through the purchase of additional
Associates Stock Fund Units. Cash dividends paid on Associates Stock in the
Associates Stock Fund after March 2, 1998, shall be invested on behalf of
members who have investments in the Associates Stock Fund in the Ford Stock Fund
through the purchase of additional Ford Stock Fund Units. That portion of a
Special Cash Dividend that is attributable to a member's investment in the Ford
Stock Fund and that is not distributed to a member shall be invested on behalf
of such member in the same funds in which such member's assets are invested and
in the same proportions as such assets are invested at the close of the New York
Stock Exchange on the day immediately preceding the record date for such Special
Cash Dividend, with investment in the Ford Stock Fund being accomplished through
the purchase of additional Ford Stock Fund Units, except that any investments in
the Associates Stock Fund shall be treated, for this purpose, as an investment
in the Ford Stock Fund, and any investment in the 1995 Income Fund shall be
treated, for this purpose, as an investment in the Interest Income Fund, unless
such member shall have made a different election pursuant to a special election
applicable to the Special Cash Dividend, which special election shall be
communicated to members in writing and offered to members prior to the payment
of the Special Cash Dividend. For purposes of the immediately preceding
<PAGE>
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sentence, such special election shall not permit a member to elect to have his
or her portion of the Special Cash Dividend invested in the Associates Stock
Fund or the 1995 Income Fund.
Paragraph XV (Subparagraph 3, only)
Cash Dividends on Stock in the Ford Stock Fund and Associates Stock Fund.
Except in the case of a Special Cash Dividend, commencing, in the case of the
Ford Stock Fund, with the dividend payable for the third quarter of 1996, all or
a portion of cash dividends paid on shares of Company Stock in the Ford Stock
Fund that have not been in the Plan continuously since January 1, 1989, shall be
distributed proportionately to members who have assets in the Ford Stock Fund on
the dividend record date and do not reject such distribution. Commencing, in the
case of the Associates Stock Fund, with the first dividend after April 1, 1997,
and ceasing on the date that The Associates ceases to be a member of a
controlled group of corporations (within the meaning of section 414(b) of the
Code) that includes the Company, all or a portion of cash dividends paid on
shares of Associates Stock in the Associates Stock Fund shall be distributed
proportionately to members who have assets invested in the Associates Stock Fund
on the dividend record date and do not reject such distribution. Except in the
case of a Special Cash Dividend, the amount of such cash dividends that shall be
distributed to members who do not reject distribution shall equal the lesser of
(i) the total of such cash dividends, or (ii) the total amount of cash dividends
paid on all shares held in the Ford Stock Fund or Associates Stock Fund, as
appropriate, multiplied by the ratio of the number of Ford Stock Fund Units or
Associates Stock Fund Units, as appropriate, in the accounts of members who do
not reject such distribution or to the number of Ford Stock Fund Units or
Associates Stock Fund Units, as appropriate, in the accounts of all members,
such determination to be made as of the dividend record date. The amount of such
cash dividends that shall be distributed to each member who has not rejected
such distribution shall be equal to the total amount of cash dividends to be
distributed multiplied by the ratio of the number of Ford Stock Fund Units or
Associates Stock Fund Units, as appropriate, in the account of such member to
the total number of Ford Stock Fund Units or Associates Stock Fund Units, as
appropriate, in the accounts of all members who have not rejected such
distribution, all determined as of the close of the New York Stock Exchange on
the record date for the dividend. With respect to a Special Cash Dividend, each
member shall receive a distribution of the portion, if any, of such dividend
allocable to the member's account, based on the member's proportionate interest
in the Ford Stock Fund, that the member has elected be distributed, with both a
member's proportionate interest in the Ford Stock Fund and the portion of the
Special Cash Dividend to be distributed to the member to be determined as of the
close of the New York Stock Exchange on the record date for the Special Cash
Dividend.
The Company, through the Secretary or Vice President and Treasurer, shall
determine the time during which and the manner in which members may elect to
receive a distribution of all or a portion of a Special Cash Dividend and, with
respect to other cash dividends, shall from time to time determine the times
during which and the manner in which members shall be provided an opportunity to
reject distribution of cash dividends on Company Stock and Associates Stock or
to change a prior election with respect to distribution. For administrative
<PAGE>
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efficiency, the Committee may require members who elect to reject a distribution
of cash dividends on either Company Stock or Associates Stock to reject a
distribution of cash dividends on both Company Stock and Associates Stock.
Distribution of such dividends shall be made as soon as practicable after
receipt of such dividends by the Trustee.
Paragraph XVIII (Subparagraph 1)
Ford Stock Fund, Common Stock Fund, Bond Fund, Interest Income Fund, Income Fund
and Mutual Funds.
1. Ford Stock Fund.
The Trustee shall establish and administer the Ford Stock Fund in
accordance with the following:
(a) Investments.
For each member who elects pursuant to paragraph VII to have
Contributions invested in the Ford Stock Fund or for whom a
transfer is made to the Ford Stock Fund as provided in paragraph
VIII hereof, the Trustee shall invest the sums so to be invested
or transferred in accordance with instructions of a person,
company, corporation or other organization appointed by the
Company. The Trustee may be appointed for such purpose.
Except as is provided below in this subparagraph, investments
shall be made primarily in shares of Company Stock that is common
stock; a small portion shall be invested in cash or cash
equivalent or other short-term investments to provide liquidity
for daily activity. The Secretary or Vice President and Treasurer
of the Company shall direct the Trustee to invest such portion of
the Ford Stock Fund that is not to be held in cash or cash
equivalent or other short-term investments in Participating Stock
during the Participating Stock Investment Period. Investment in
Participating Stock required to initiate the Participating Stock
Investment Period shall be accomplished by direct exchange with
the Company of shares of Company Stock that is common stock for
shares of Participating Stock at an exchange rate that constitutes
adequate consideration within the meaning Section 3(18) of ERISA.
The Secretary or Vice President and Treasurer of the Company may
also during the Participating Stock Investment Period direct the
Trustee to invest some or all of the cash or cash equivalent or
other short-term investments in the Ford Stock Fund in Company
Stock that is common stock and to exchange such common stock for
Participating Stock directly with the Company at an exchange rate
that constitutes adequate consideration within the meaning of
Section 3(18) of ERISA. During the Participating Stock Investment
Period, the Trustee may convert shares of Participating Stock into
shares of Company Stock that is common stock to the extent
necessary to permit members to transfer amounts out of the Ford
<PAGE>
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Stock Fund into other investment elections under the Plan, as
provided in Paragraph VIII, and to effect distributions. It is
expected that, except (i) at such times as the Ford Stock Fund is
invested in Participating Stock and (ii) during the Reinvestment
Period, about one to two percent of the total assets in the Fund
will be held in cash or cash equivalent or other short-term
investments, but the percentage may be higher or lower, depending
upon the expected liquidity requirements of the Fund. The
Secretary or Vice President and Treasurer of the Company may
establish different percentages at such times as the Ford Stock
Fund is to any extent invested in Participating Stock. During the
Reinvestment Period, the Ford Stock Fund may hold in cash or cash
equivalent or other short-term investments such portion of the
Special Cash Dividend that as of any given time cannot be invested
in Company Stock in an orderly fashion. Notwithstanding the
immediately preceding sentence, the Trustee shall, pursuant to
directions from the Secretary or Vice President and Treasurer of
the Company, invest cash attributable to the Special Cash Dividend
in Company Stock and thereafter shall invest the Ford Stock Fund
in accordance with the third sentence immediately above.
The determination that any exchange, purchase or transaction that
the provisions of this subparagraph 1 of paragraph XVIII or
paragraph XXII require be for adequate consideration (within the
meaning of Section 3(18) of ERISA) is in fact for adequate
consideration shall be made by the Company acting through either
its Secretary or its Vice President and Treasurer, who may rely on
the report of an appraiser who is independent of all parties to
any such transaction (other than the plan). For this purpose, the
Company shall be a fiduciary of the Plan and shall act through its
Secretary or Vice President and Treasurer, whichever party makes
such determination. Investments of all or a portion of Ford Stock
Fund assets may be made in any common, collective or commingled
fund when, in the opinion of the Trustee, such investments are
consistent with the objective of the Ford Stock Fund.
(b) Ford Stock Fund Units.
Members shall have no ownership in any particular asset of the
Ford Stock Fund. The Trustee shall be the sole owner of all Ford
Stock Fund assets. Proportionate interests in the Ford Stock Fund
shall be expressed in Ford Stock Fund Units. All Ford Stock Fund
Units shall be of equal value and no Ford Stock Fund Unit shall
have priority or preference over any other. Ford Stock Fund Units
shall be credited by the Trustee to accounts of members as of each
valuation date.
(c) Ford Stock Fund Unit Prices.
The term "Ford Stock Fund Unit Price," as used herein, shall mean
the value in money of an individual Ford Stock Fund Unit expressed
to the nearest cent. The Ford Stock Fund Unit Price as of October
1, 1995 was $10.00, as determined by the Committee. The number of
Ford Stock Fund Units as of October 1, 1995 was determined by
dividing the market value of shares of Company Stock and cash
<PAGE>
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received by the Trustee for investment in the Ford Stock Fund by
such Ford Stock Fund Unit Price. Thereafter, the Ford Stock Fund
Unit Price shall be redetermined as of the close of the New York
Stock Exchange on each business day that is a trading day of the
New York Stock Exchange. The Ford Stock Fund Unit Price for each
such business day shall be determined by dividing the net asset
value of the Ford Stock Fund on such business day by the number of
Ford Stock Fund Units outstanding on such business day. Ford Stock
Fund Unit Prices shall be determined before giving effect to any
distribution or withdrawal and before crediting contributions to
members' accounts effective as of any such business day. Net asset
value of the Ford Stock Fund shall be computed as follows:
(i) Company Stock shall be valued at the closing price on
the New York Stock Exchange on such business day, or,
if no sales were made on that date, at the closing
price on the next preceding day on which sales were
made. Notwithstanding the foregoing, the value of
Participating Stock, if such stock is not publicly
and actively traded on a recognized securities
market, shall be determined as of the close of the
New York Stock Exchange on each day that is a trading
day of the New York Stock Exchange in accordance
with procedures determined by the Company.
(ii) All other assets of the Ford Stock Fund, including any
interest in a common, collective or commingled fund,
shall be valued at the fair market value as of the
close of business on the valuation date. Fair market
value shall be determined by the Trustee in the
reasonable exercise of its discretion, taking into
account values supplied by a generally accepted
pricing or quotation service or quotations furnished
by one or more reputable sources, such as securities
dealers, brokers, or investment bankers, values of
comparable property, appraisals or other relevant
information and, in the case of a common, collective
or commingled fund, fair market value shall be the
unit value of such fund for a date the same as the
valuation date, or as close thereto as practicable.
(iii) Ford Stock Fund Units credited to members' accounts
with respect to Tax-Efficient Savings contributions
made during any month shall be credited at the Ford
Stock Fund Unit Price determined as of the close of
business on the day that such contributions are
received by the Trustee. Ford Stock Fund Units
withdrawn or distributed shall be valued at the Ford
Stock Fund Unit Price at the close of business on the
day coinciding with the effective date of such
withdrawal or distribution.
<PAGE>
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(iv) Except as is otherwise provided in directions from the
Company, or dictated by the Trustees' trust accounting
conventions, investment transactions, income and any
expenses chargeable to the Ford Stock Fund will be
accounted for on an accrual basis.
(d) Distribution and Withdrawal from Ford Stock Fund.
The cash value of assets in the Ford Stock Fund shall be
distributed to members or may be withdrawn by members only in
accordance with paragraphs XIII, XIV, and XV hereof. All
distributions and withdrawals shall be in cash, except that a
member making a withdrawal or receiving a distribution may
direct the Trustee to make such withdrawal or distribution in
the form of whole shares of Company Stock that is common
stock, based on the current market value thereof on the
effective date of such withdrawal or distribution.
(e) Registered Name.
Securities held in the Ford Stock Fund may be registered in
the name of the Trustee or its nominee.
(f) No Commission.
No commission shall be charged to the Plan or any trust under
the Plan in connection with any acquisition by the Plan of
Company Stock from the Company, whether by cash purchase,
exchange, conversion or otherwise.
Paragraph XVIII (paragraph (f) of Subparagraph 6)
(f) The Associates Stock Fund shall cease to operate and shall cease to
be an investment election under the Plan at the close of the New York
Stock Exchange on December 31, 1999, and all assets remaining in the
Associates Stock Fund as of the close of the Exchange on such day shall
be transferred to and converted into investments in the Ford Stock Fund
as soon thereafter as is practicable. The Trustee, upon written
directions from the Secretary or Vice President and Treasurer of the
Company, shall convert the assets in the Associates Stock Fund into
cash or cash equivalent or other short-term investments in an orderly
manner, in anticipation of such transfer to the Ford Stock Fund.
Paragraph XXII
Acquisition of Securities by the Trustee. Employee regular savings
contributions, tax-efficient contributions and Company matching contributions
<PAGE>
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and earnings thereon in the accounts of members shall be invested by the Trustee
as soon as practicable after receipt thereof by the Trustee.
The shares of Company Stock from time to time required for purposes of the Plan
shall be acquired by the Trustee from the Company, or from such other person or
corporation, on such stock exchange or in such other manner, as the Company by
action of its Board of Directors or any committee or person designated by the
Board of Directors, from time to time in its sole discretion may designate or
prescribe, provided, however, that except as required by any such designation by
the Board of Directors, such shares shall be purchased by the Trustee from such
source and in such manner as the Trustee from time to time in its sole
discretion may determine. Except as hereinafter provided, any share so acquired
from the Company may be either treasury stock or newly-issued stock, and, except
as is provided in the immediately following sentence, shall be purchased at a
price per share equal to the current market value on the date of purchase.
During the Participating Stock Investment Period, the Trustee shall acquire
shares of Participating Stock from the Company by exchange of shares of Company
Stock that is common stock acquired by the Trustee with contributions and
earnings or otherwise held by the Trustee under the Plan for shares of
Participating Stock, any such exchange or purchase to be for adequate
consideration within the meaning of Section 3(18) of ERISA and to comply with
the requirements of the fourth paragraph of subparagraph 1(a) of Paragraph
XVIII.
Anything herein to the contrary notwithstanding, the Trustee shall not invest
any of the funds in the Ford Stock Fund in any shares of Company Stock, other
than Participating Stock, unless at the time of purchase thereof by the Trustee
such shares shall be listed on the New York Stock Exchange.
The shares of Company Stock held by the Trustee under the Plan shall be
registered in the name of the Trustee or its nominee, but shall not be voted by
the Trustee or such nominee except as provided in paragraph XXIV hereof.
In the event that any option, right or warrant shall be received by the Trustee
on Company Stock, the Trustee shall sell the same, at public or private sale and
at such price and upon such other terms as it may determine, unless the
Committee shall determine that such option, right or warrant should be
exercised, in which case the Trustee shall exercise the same upon such terms and
conditions as the Committee may prescribe.
Paragraph XXVI (first paragraph)
Operation and Administration. Pursuant to ERISA the Company shall be the sole
named fiduciary with respect to the Plan and shall have authority to control or
manage the operation and administration of the Plan. The Secretary and Vice
President and Treasurer of the Company are named in subparagraphs 12, 13, 42, 43
and 44 of Paragraph 1, subparagraph (e) of Paragraph VIII, paragraphs (a), (c)
and (d) of subparagraph 1 of Paragraph XVIII, paragraph (f) of subparagraph 6 of
Paragraph XVIII, and Paragraph XXII and in connection with the acquisition,
conversion and valuation of Participating Stock. Such parties shall act in
connection with such matters as agents of the Company in its capacity as named
fiduciary of the Plan. Whenever, in connection with such matters, the Secretary
<PAGE>
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or Vice President and Treasurer deem it appropriate to give directions or
provide valuations of Participating Stock that are not otherwise expressly
required by the above provisions of the Plan, the Secretary and Vice President
and Treasurer of the Company are authorized to give such directions and provide
such valuations on behalf of the Company.
Exhibit 5.A
Ford Motor Company
The American Road
P.O. Box 1899
Dearborn, Michigan 48121-1899
March 6, 1998
Ford Motor Company
The American Road
Dearborn, Michigan 48121
Ladies and Gentlemen:
This will refer to the Registration Statement on Form S-8 (the
"Registration Statement") that is being filed by Ford Motor Company (the
"Company") with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), with
respect to (i) up to 34 shares of Series C Participating Stock, par value
$1.00 per share, of the Company (the "Participating Stock"), (ii) up to
34,000 depositary shares, each representing 1/1,000 of a share of the
Participating Stock (the "Depositary Shares") to be evidenced by depositary
receipts relating to the Depositary Shares (the "Depositary Receipts") issued
pursuant to a Deposit Agreement among the Company, First Chicago Trust Company
of New York, as depositary (the "Depositary"), and the holders from time to time
of the Depositary Receipts (the "Deposit Agreement"), and (iii) up to
34,000 shares of the Common Stock, par value $1.00 per share, of the
Company ("Common Stock"), which shall be issued upon conversion of the
Participating Stock, relating to the Primus Automotive Financial Services, Inc.
Prime Account (the "Plan") of Primus Automotive Financial Services, Inc.
As an Assistant Secretary and Counsel of the Company, I am familiar with
the Registration Statement and with the Certificate of Incorporation, the
By-Laws and with the affairs of the Company. In connection with the Registration
Statement, I have examined, or caused to be examined, (i) a form of the
Certificate of Designations relating to the Participating Stock, (ii) a form of
the Deposit Agreement, which I have assumed will be duly executed and delivered
by the Depositary and the Company, and (iii) a copy of the Registration
Statement. I also have examined such other documents and instruments and have
made such further investigation as I have deemed necessary or appropriate in
connection with this opinion.
Based upon the foregoing, it is my opinion that:
(1) The Company is duly incorporated and validly existing as a corporation
under the laws of the State of Delaware.
(2) All necessary corporate proceedings have been taken to authorize the
issuance of the shares of the Participating Stock and the Depositary Shares
being registered under the Registration Statement, and when (a) all such shares
of Participating Stock and Depositary Shares acquired by Fidelity Management
Trust Company, as trustee under the Trust Agreement dated as of December 29,
1995, as amended, relating to the Plan (the "Trust Agreement") and as trustee
under the Plan, in accordance with the Trust Agreement and the Plan, have been
<PAGE>
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duly issued and sold in the manner contemplated by the Registration Statement,
(b) with respect to the Depositary Shares only, the Depositary has duly executed
the Depositary Receipts in accordance with the terms of the Deposit Agreement
(the Company having deposited the Participating Stock with the Depositary
pursuant to the Deposit Agreement), and (c) the Registration Statement has
become effective and the Company has received therefor the consideration
provided in the Plan and the Certificate of Incorporation (but not less than the
par value thereof), the Participating Stock will be validly issued, fully paid
and nonassessable and the Depositary Shares will represent legal and valid
interests in the shares of Participating Stock.
(3) All necessary corporate proceedings have been taken to authorize the
issuance of the shares of Common Stock being registered under the Registration
Statement, and all such shares of Common Stock acquired by Fidelity Management
Trust Company, as trustee under the Trust Agreement and as trustee under the
Plan, in accordance with the Trust Agreement and the Plan, upon conversion of
the Participating Stock, will be legally issued, fully paid and non-assessable
when the Registration Statement shall have become effective and the Company
shall have received therefor the consideration provided in the Plan, the
Company's Certificate of Incorporation, and the Deposit Agreement, if applicable
(but not less than the par value thereof).
I hereby consent to the use of this opinion as Exhibit 5.A to the
Registration Statement. In giving this consent, I do not admit that I am in the
category of persons whose consent is required under Section 7 of the Securities
Act or the Rules and Regulations of the Commission issued thereunder.
Very truly yours,
/s/Peter Sherry, Jr.
Peter Sherry, Jr.
Assistant Secretary and
Counsel
Exhibit 5.B
Ford Motor Company
The American Road
P.O. Box 1899
Dearborn, Michigan 48121-1899
March 6, 1998
Ford Motor Company
The American Road
Dearborn, Michigan 48121
Ladies and Gentlemen:
This will refer to the Registration Statement on Form S-8, as amended (the
"Registration Statement") filed by Ford Motor Company (the "Company") with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act of 1933, as amended (the "Securities Act"), relating to the Primus
Automotive Financial Services, Inc. Prime Account (the "Plan") of Primus
Automotive Financial Services, Inc.
As an Attorney of the Company, I am familiar with the affairs of the
Company, including the action taken by the Company in connection with the Plan.
I have examined, or caused to be examined, the provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and the provisions
of the Plan. I also have examined or caused to be examined such other documents
and instruments and have made such further investigation as I have deemed
appropriate in connection with this opinion.
Based upon the foregoing, it is my opinion that the provisions of the Plan,
as amended and subsequently modified if necessary to obtain a favorable
determination letter from the Internal Revenue Service, will comply with the
requirements of ERISA pertaining to such provisions.
I hereby consent to the use of this opinion as Exhibit 5.B to the
Registration Statement. In giving this consent, I do not admit that I am in the
category of persons whose consent is required under Section 7 of the Securities
Act or the Rules and Regulations of the Commission issued thereunder.
Very truly yours,
/s/J. Gordon Christy
J. Gordon Christy
Attorney
Exhibit 15
Coopers & Lybrand L.L.P.
Ford Motor Company
The American Road
Dearborn, Michigan
Re: Ford Motor Company Registration Statement on Form S-8
We are aware that our reports dated April 16, 1997, July 14, 1997 and October
13, 1997 accompanying the unaudited interim financial information of Ford Motor
Company and Subsidiaries for the periods ended March 31, 1997 and 1996, June 30,
1997 and 1996 and September 30, 1997 and 1996, and included in the Ford Motor
Company Quarterly Report on Form 10-Q for the quarters ended March 31, 1997,
June 30, 1997 and September 30, 1997, respectively, are incorporated by
reference in this Registration Statement. Pursuant to Rule 436(c) under the
Securities Act of 1933, this report should not be considered a part of the
Registration Statement prepared or certified by us within the meaning of
Sections 7 and 11 of the Act.
/s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
400 Renaissance Center
Detroit, Michigan 48243
March 6, 1998
Exhibit 23
Coopers & Lybrand L.L.P.
Ford Motor Company
The American Road
Dearborn, Michigan
CONSENT OF COOPERS & LYBRAND L.L.P.
Re: Ford Motor Company Registration Statement on Form S-8
We consent to the incorporation by reference in this Registration Statement of
our report dated January 27, 1997 on our audits of the consolidated financial
statements of Ford Motor Company at December 31, 1996 and 1995, and for the
years ended December 31, 1996, 1995 and 1994, which report is included in the
Company's 1996 Annual Report on Form 10-K and of our report dated January 26,
1998 of our audits of the consolidated financial statements of Ford Motor
Company at December 31, 1997 and 1996 and for the years ended December 31, 1997,
1996 and 1995, which report is included in the Company's 1997 Current Report on
Form 8-K.
/s/Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
400 Renaissance Center
Detroit, Michigan 48243
March 6, 1998
