<PAGE> 1
Pursuant to Rule 424(b)5
Registration No. 333-14297
333-52485
PROSPECTUS SUPPLEMENT
(To Prospectus dated May 21, 1998)
FORD MOTOR COMPANY
$500,000,000
6 1/2% Debentures due August 1, 2018
Interest payable February 1 and August 1
ISSUE PRICE: 99.479%
Interest on the 6 1/2% Debentures due August 1, 2018 (the "Debentures") is
payable semiannually on February 1 and August 1 of each year, commencing on
February 1, 1999. The Debentures may not be redeemed by Ford prior to maturity
and are not subject to any sinking fund.
The Debentures will be represented by one or more Global Debentures registered
in the name of the Depository's nominee. Beneficial interests in the Global
Debentures will be shown on, and transfers thereof will be effected only
through, records maintained by the Depository and its participants. Except as
described herein, Debentures in definitive form will not be issued. The
Debentures will trade in the Depository's Same-Day Funds Settlement System until
maturity, and secondary market trading activity for the Debentures will,
therefore, settle in immediately available funds. All payments of principal and
interest will be made by Ford in immediately available funds. See "Description
of Debentures -- Same-Day Settlement and Payment".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture 99.479% .875% 98.604%
- ------------------------------------------------------------------------------------------------------------
Total $497,395,000 $4,375,000 $493,020,000
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from July 27, 1998.
(2) Ford has agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $321,135 to be paid by Ford.
The Debentures are offered, subject to prior sale, when, as and if delivered to
and accepted by the Underwriters, and subject to approval of certain legal
matters by Shearman & Sterling, counsel for the Underwriters. It is expected
that delivery of the Global Debentures will be made in book-entry form only on
or about July 27, 1998 through the facilities of the Depository, against payment
therefor in immediately available funds.
GOLDMAN, SACHS & CO. J.P. MORGAN & CO.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
July 22, 1998
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, DEBENTURES IN THE OPEN MARKET. FOR A DESCRIPTION
OF THESE ACTIVITIES, SEE "UNDERWRITING".
No person is authorized to give any information or to make any representations
other than those contained in this Prospectus Supplement or the accompanying
Prospectus, and, if given or made, such information or representation must not
be relied upon as having been authorized. This Prospectus Supplement and the
accompanying Prospectus do not constitute an offer to sell or a solicitation of
an offer to buy any securities other than the securities offered by this
Prospectus Supplement and the accompanying Prospectus or an offer to sell or a
solicitation of an offer to buy such securities in any jurisdiction to any
person to whom it is unlawful to make such offer or solicitation in such
jurisdiction. Neither the delivery of this Prospectus Supplement and the
accompanying Prospectus nor any sale made hereunder or thereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of Ford Motor Company since the date of this Prospectus Supplement or
the accompanying Prospectus, or that the information herein or therein is
correct as of any time since such date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Description of Debentures................................... S-3
Underwriting................................................ S-5
PROSPECTUS
Available Information....................................... 2
Incorporation of Certain Documents by Reference............. 2
Ford Motor Company.......................................... 3
Ratio of Earnings to Fixed Charges.......................... 4
Use of Proceeds............................................. 4
Description of Debt Securities.............................. 4
Plan of Distribution........................................ 9
Legal Opinions.............................................. 10
Experts..................................................... 10
</TABLE>
S-2
<PAGE> 3
DESCRIPTION OF DEBENTURES
The following description of the particular terms of the Debentures offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of Debt Securities set forth in
the Prospectus. The Debentures are part of the $3,000,000,000 aggregate
principal amount of Debt Securities of Ford, $700,000,000 of which was
registered in October 1996 and $2,300,000,000 of which was registered in May
1998, to be issued on terms to be determined at the time of sale.
GENERAL
The Debentures will be limited to $500,000,000 aggregate principal amount. The
Debentures will be unsecured obligations of Ford and will mature on August 1,
2018.
The Debentures will bear interest from July 27, 1998 at the rate per annum set
forth on the cover page of this Prospectus Supplement, payable on February 1 and
August 1 of each year, commencing February 1, 1999, to the persons in whose
names the Debentures are registered at the close of business on the preceding
January 15 and July 15, respectively, subject to certain exceptions.
BOOK-ENTRY, DELIVERY AND FORM
The Debentures will be issued in the form of one or more fully registered global
debentures (the "Global Debentures") which will be deposited with, or on behalf
of, The Depository Trust Company, New York, New York (the "Depository") and
registered in the name of Cede & Co., the Depository's nominee. Beneficial
interests in the Global Debentures will be represented through book-entry
accounts of financial institutions acting on behalf of beneficial owners as
direct and indirect participants in the Depository. Except as set forth below,
the Global Debentures may be transferred, in whole and not in part, only to
another nominee of the Depository or to a successor of the Depository or its
nominee.
The Depository has advised as follows: It is a limited-purpose trust company
which holds securities for its participating organizations (the "Participants")
and facilitates the settlement among Participants of securities transactions in
such securities through electronic book-entry changes in its Participants'
accounts. Participants include securities brokers and dealers (including the
Underwriters), banks and trust companies, clearing corporations and certain
other organizations. Access to the Depository's system is also available to
others such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("indirect participants"). Persons who are not Participants may
beneficially own securities held by the Depository only through Participants or
indirect participants.
The Depository advises that its established procedures provide that (i) upon
issuance of the Debentures by Ford, the Depository will credit the accounts of
Participants designated by the Underwriters with the principal amounts of the
Debentures purchased by the Underwriters, and (ii) ownership of interests in the
Global Debentures will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Depository, the Participants
and the indirect participants. The laws of some states require that certain
persons take physical delivery in definitive form of securities which they own.
Consequently, the ability to transfer beneficial interests in the Global
Debentures is limited to such extent.
So long as a nominee of the Depository is the registered owner of the Global
Debentures, such nominee for all purposes will be considered the sole owner or
holder of the Debentures under the Indenture. Except as provided below, owners
of beneficial interests in the Global Debentures will not be entitled to have
Debentures registered in their names, will not receive or be entitled to receive
physical delivery of Debentures in definitive form, and will not be considered
the owners or holders thereof under the Indenture.
Neither Ford, the Trustee, any Paying Agent nor the Security Registrar will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership
S-3
<PAGE> 4
interests in the Global Debentures, or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
Principal and interest payments on the Debentures registered in the name of the
Depository's nominee will be made by the Trustee to the Depository. Under the
terms of the Indenture, Ford and the Trustee will treat the persons in whose
names the Debentures are registered as the owners of such Debentures for the
purpose of receiving payment of principal and interest on such Debentures and
for all other purposes whatsoever. Therefore, neither Ford, the Trustee nor any
Paying Agent has any direct responsibility or liability for the payment of
principal or interest on the Debentures to owners of beneficial interests in the
Global Debentures. The Depository has advised Ford and the Trustee that its
present practice is to credit the accounts of the Participants on the
appropriate payment date in accordance with their respective holdings in
principal amount of beneficial interests in the Global Debentures as shown on
the records of the Depository, unless the Depository has reason to believe that
it will not receive payment on such payment date. Payments by Participants and
indirect participants to owners of beneficial interests in the Global Debentures
will be governed by standing instructions and customary practices, as is now the
case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of the Participants
or indirect participants.
If the Depository is at any time unwilling or unable to continue as depository
and a successor depository is not appointed by Ford within 90 days, Ford will
issue Debentures in definitive form in exchange for the Global Debentures. In
addition, Ford may at any time determine not to have the Debentures represented
by Global Debentures and, in such event, will issue Debentures in definitive
form in exchange for the Global Debentures. In either instance, an owner of a
beneficial interest in the Global Debentures will be entitled to have Debentures
equal in principal amount to such beneficial interest registered in its name and
will be entitled to physical delivery of such Debentures in definitive form.
Debentures so issued in definitive form will be issued in denominations of
$5,000 and integral multiples thereof and will be issued in registered form
only, without coupons.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by Ford in
immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the
Debentures will trade in the Depository's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Debentures will therefore
be required by the Depository to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Debentures.
S-4
<PAGE> 5
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement and
the Pricing Agreement relating to the Debentures, Ford has agreed to sell to
each of the Underwriters named below (the "Underwriters"), and each of the
Underwriters has severally agreed to purchase, the principal amount of the
Debentures set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF DEBENTURES
----------- ----------------
<S> <C>
Goldman, Sachs & Co. ....................................... $150,000,000
J.P. Morgan Securities Inc. ................................ 150,000,000
Bear, Stearns & Co. Inc. ................................... 50,000,000
Lehman Brothers Inc. ....................................... 50,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................... 50,000,000
Salomon Brothers Inc........................................ 50,000,000
------------
Total.................................................. $500,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement and the Pricing
Agreement, the Underwriters are committed to take and pay for all of the
Debentures, if any are taken.
The Underwriters have advised Ford that they propose to offer all or part of the
Debentures directly to purchasers at the initial public offering price set forth
on the cover page of this Prospectus Supplement, and to certain securities
dealers at such price less a concession not in excess of .50% of the principal
amount of the Debentures. The Underwriters may allow, and such dealers may
reallow, to certain brokers and dealers a concession not in excess of .25% of
the principal amount of the Debentures. After the Debentures are released for
sale to the public, the offering price and other selling terms may from time to
time be varied by the Underwriters.
The Debentures are a new issue of securities with no established trading market.
Ford has been advised by the Underwriters that they intend to make a market in
the Debentures, but they are not obligated to do so and may discontinue such
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Debentures.
In connection with the offering, the Underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of the Debentures.
Specifically, the Underwriters may over-allot in connection with the offering,
creating a syndicate short position. In addition, the Underwriters may bid for,
and purchase, Debentures in the open market to cover syndicate shorts or to
stabilize the price of the Debentures. Finally, the underwriting syndicate may
reclaim selling concessions allowed for distributing the Debentures in the
offering if the syndicate repurchases previously distributed Debentures in
syndicate covering transactions, stabilization transactions or otherwise. Any of
these activities may stabilize or maintain the market price of the Debentures
above independent market levels. The Underwriters are not required to engage in
any of these activities, and may end any of them at any time.
All secondary trading in the Debentures will settle in immediately available
funds. See "Description of Debentures -- Same-Day Settlement and Payment".
Ford has agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
In the ordinary course of their respective businesses, J.P. Morgan Securities
Inc. and its affiliates have engaged, and may in the future engage, in
commercial banking and investment banking transactions with Ford and certain of
its affiliates. In addition, a partner of Goldman, Sachs & Co. is a director of
Ford.
S-5
<PAGE> 6
FORD MOTOR COMPANY
DEBT SECURITIES
Ford Motor Company has registered with the Securities and Exchange Commission
$3,000,000,000 aggregate principal amount of its Debt Securities consisting of
notes and/or debentures, denominated in United States dollars or any other
currency, to be offered from time to time in one or more series, on terms to be
determined at or prior to the time of sale. The Prospectus Supplement
accompanying this Prospectus sets forth, with respect to the particular series
of Debt Securities for which this Prospectus and the Prospectus Supplement are
being delivered, the specific title, the aggregate principal amount, the
authorized denominations, the currencies of issue and payment, the initial
public offering price, the maturity, the interest rate or rates (which may be
either fixed or variable), if any, and/or method of determination thereof, the
time of payment of any interest, any redemption, extension or early repayment
terms, any provision for sinking fund payments, the net proceeds to Ford and
other specific terms relating to such series of Debt Securities.
Ford will sell the Debt Securities to or through underwriters, and may also sell
the Debt Securities directly to other purchasers or through agents. See "Plan of
Distribution". In addition, the Debt Securities may be sold to dealers at the
applicable price to the public set forth in the Prospectus Supplement relating
to a particular series of Debt Securities who later resell to investors. Such
dealers may be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"). If any agents of Ford or any
underwriters are involved in the sale of any Debt Securities, the names of such
agents or underwriters and any applicable commissions or discounts are set forth
in the accompanying Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
The date of this Prospectus is May 21, 1998.
<PAGE> 7
AVAILABLE INFORMATION
Ford is subject to the informational requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission"). As used herein, "Ford" or
the "Company" refers to Ford Motor Company and its subsidiaries unless the
context otherwise requires. Such reports, proxy and information statements and
other information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
and at the following Regional Offices of the Commission: 7 World Trade Center,
Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison St.,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically,
such as Ford. The address of the Commission's Web site is http://www.sec.gov.
Such reports, proxy and information statements and other information of or
concerning Ford also can be inspected and copied at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
Ford has filed with the Commission two Registration Statements (Registration
Nos. 333-14297 and 333-52485) under the Securities Act with respect to the
securities offered hereby (the "Registration Statements"). This Prospectus does
not contain all the information set forth in the Registration Statements and the
exhibits and schedules thereto, certain portions of which have been omitted
pursuant to the rules and regulations of the Commission. The information so
omitted may be obtained from the Commission's principal office in Washington,
D.C. upon payment of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Ford's Annual Report on Form 10-K for the year ended December 31, 1997 ("Ford's
1997 10-K Report"), Ford's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998 ("Ford's 1998 10-Q Report"), and Ford's Current Reports on Form
8-K dated January 27, 1998, February 2, 1998, March 2, 1998, March 13, 1998,
April 7, 1998, April 8, 1998 and April 16, 1998 have been filed with the
Commission and are incorporated in this Prospectus by reference. All documents
filed by Ford pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Prospectus and prior to the termination of the offering
of the Debt Securities shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
herein by reference shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified and
superseded, to constitute a part of this Prospectus.
Ford undertakes to provide without charge to each person to whom a copy of this
Prospectus has been delivered, on the written or oral request of any such
person, a copy of any or all of the documents referred to above which have been
or may be incorporated by reference in this Prospectus, other than exhibits to
such documents. Written or telephonic requests for such documents should be
directed to Ford Motor Company, The American Road, Dearborn, Michigan 48121
Attention: Shareholder Relations Department (telephone number 800-555-5259 (in
the U.S. and Canada) or 313-845-8540).
------------------------
THIS PROSPECTUS CONTAINS BRIEF SUMMARIES OF CERTAIN MORE DETAILED INFORMATION
CONTAINED IN DOCUMENTS INCORPORATED HEREIN BY REFERENCE. SUCH SUMMARIES ARE
QUALIFIED IN THEIR ENTIRETY BY THE DETAILED INFORMATION CONTAINED IN THE
INCORPORATED DOCUMENTS.
2
<PAGE> 8
FORD MOTOR COMPANY
Ford was incorporated in Delaware in 1919 and acquired the business of a
Michigan company, also known as Ford Motor Company, incorporated in 1903 to
produce automobiles designed and engineered by Henry Ford. Ford is the world's
largest producer of trucks and the second largest producer of cars and trucks
combined. Ford and its subsidiaries also engage in automotive-related
businesses, such as, financing and renting vehicles and manufacturing automotive
components and systems.
Ford's two principal business segments are Automotive and Financial Services.
The activities of the Automotive segment consist of the design, manufacture,
assembly and sale of cars and trucks and related parts and accessories.
Substantially all of Ford's automotive products are marketed through retail
dealerships, most of which are privately owned and financed.
The primary activities of the Financial Services segment consist of financing
operations, vehicle and equipment leasing and rental operations, and insurance
operations. These activities are conducted primarily through the following
subsidiaries: Ford Motor Credit Company and The Hertz Corporation.
The principal executive offices of Ford are located at The American Road,
Dearborn, Michigan 48121, telephone number 313-322-3000.
3
<PAGE> 9
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of "earnings" to "fixed charges" for Ford was as follows for the first
three months of 1998 and each of the years 1993-1997:
<TABLE>
<CAPTION>
THREE MONTHS YEARS ENDED DECEMBER 31
ENDED --------------------------------
MARCH 31, 1998 1997 1996 1995 1994 1993
- -------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
8.0* 2.0 1.6 1.6 2.0 1.5
</TABLE>
- -------------------------
* Earnings used in calculation of this ratio include the $15,955 million gain on
the spin-off of Ford's interest in Associates First Capital Corporation.
Excluding this gain, the ratio would have been 2.0.
For purposes of the ratio, "earnings" include the income before income taxes of
Ford and its majority-owned subsidiaries and trusts, whether or not
consolidated, its proportionate share of any fifty-percent-owned companies, and
any income received from less-than-fifty-percent-owned companies and fixed
charges. "Fixed charges" consist of interest on borrowed funds, preferred stock
dividend requirements of majority-owned subsidiaries and trusts, amortization of
debt discount, premium, and issuance expense, and one-third of all rental
expense (the proportion deemed representative of the interest factor).
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement which accompanies this
Prospectus, the net proceeds from the sale of the Debt Securities will be used
for general corporate purposes of Ford or its affiliates. In the event the net
proceeds of any series of Debt Securities are intended to be used to repay
outstanding indebtedness of Ford or its affiliates, the Prospectus Supplement
which accompanies this Prospectus will specify the interest rate and maturity
date of such indebtedness to be repaid and, if such indebtedness was incurred
within one year, such Prospectus Supplement also will describe the use of the
proceeds of such indebtedness if other than short-term borrowings used for
working capital.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued in one or more series under an Indenture
dated as of February 15, 1992, as supplemented by a First Supplemental Indenture
dated as of December 5, 1996 and as may be further supplemented from time to
time (the "Indenture"), between Ford and The Bank of New York, Trustee. The term
"Trustee", as used herein, shall mean The Bank of New York and, if at any time
there is more than one Trustee acting under the Indenture, the term "Trustee" as
used herein with respect to Indenture Securities (as defined below) of any
particular series shall mean the Trustee with respect to the Indenture
Securities of such series. The following statements with respect to the Debt
Securities are subject to the detailed provisions of the Indenture, which is
filed as an exhibit to the Registration Statements, and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). Parenthetical references below
are to the Indenture or the Form of Security contained therein and, whenever any
particular provision of the Indenture or any term used therein is referred to,
such provision or term is incorporated by reference as a part of the statement
in connection with which such reference is made, and the statement in connection
with which such reference is made is qualified in its entirety by such
reference.
The particular terms of each series of Debt Securities, as well as any
modification or addition to the general terms of the Debt Securities as herein
described, which may be applicable to a particular series of Debt Securities,
are described in the Prospectus Supplement relating to such series of Debt
Securities and will be set forth in a filing with the Commission. Accordingly,
for a description of the terms of a particular series of Debt Securities,
reference must be made to both the Prospectus Supplement relating to such series
and to the description of Debt Securities set forth in this Prospectus.
4
<PAGE> 10
GENERAL
The Debt Securities offered hereby will be limited to $3,000,000,000 aggregate
principal amount or the equivalent thereof in any currency, although the
Indenture provides that additional debt securities may be issued thereunder up
to the aggregate principal amount, which is not limited by the Indenture,
authorized from time to time by the Board of Directors of Ford. So long as a
single Trustee is acting for the benefit of the holders of all the Debt
Securities offered hereby and any such additional debt securities issued under
the Indenture, the Debt Securities and any such additional debt securities are
herein collectively referred to as the "Indenture Securities". The Indenture
also provides that there may be more than one Trustee under the Indenture, each
with respect to one or more different series of Indenture Securities. See also
"Trustee" herein. At any time when two or more Trustees are acting, each with
respect to only certain series, the term "Indenture Securities" as used herein
shall mean the one or more series with respect to which each respective Trustee
is acting, and the powers and trust obligations of each such Trustee as
described herein shall extend only to the one or more series of Indenture
Securities for which it is acting as Trustee. The effect of the provisions
contemplating that there might be more than one Trustee acting for different
series of Indenture Securities is that, in that event, those Indenture
Securities (whether of one or more than one series) for which each Trustee is
acting would be treated as if issued under a separate indenture.
The Prospectus Supplement which accompanies this Prospectus sets forth a
description of the particular series of Debt Securities being offered thereby,
including: (1) the designation or title of such Debt Securities; (2) the
aggregate principal amount of such Debt Securities; (3) the percentage of their
principal amount at which such Debt Securities will be offered; (4) the date or
dates on which the principal of such Debt Securities will be payable; (5) the
rate or rates (which may be either fixed or variable) and/or the method of
determination of such rate or rates at which such Debt Securities shall bear
interest, if any; (6) the date or dates from which any such interest shall
accrue, or the method of determination of such date or dates, and the date or
dates on which any such interest shall be payable; (7) the terms for redemption,
extension or early repayment of such Debt Securities, if any; (8) the
denominations in which such Debt Securities are authorized to be issued; (9) the
currencies in which such Debt Securities are issued or payable; (10) the
provisions for a sinking fund, if any; (11) any additional restrictive covenants
of Ford included for the benefit of the holders of such Debt Securities; (12)
any additional Event of Default with respect to such Debt Securities; (13)
whether such Debt Securities are issuable as a Global Security (as defined in
the Indenture); (14) any provisions in modification of, in addition to or in
lieu of the defeasance and covenant defeasance provisions in respect of the Debt
Securities and (15) any other term or provision relating to such Debt Securities
which is not inconsistent with the provisions of the Indenture.
One or more series of Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. Federal income tax
consequences and special considerations applicable thereto will be described in
the Prospectus Supplement relating to any such series of Debt Securities.
The Debt Securities will be unsecured obligations of Ford and will rank pari
passu with all other unsecured and unsubordinated indebtedness of Ford (parent
company only).
Except as otherwise provided in the Prospectus Supplement, principal (and
premium, if any) and interest, if any, will be payable at an office or agency to
be maintained by Ford in New York City, except that at the option of Ford
interest may be paid by check mailed to, or by wire transfer to the account of,
the person entitled thereto. (Form of Security and Sections 10.01 and 10.02.)
Except as otherwise provided in the Prospectus Supplement, the Debt Securities
will be issued only in fully registered form without coupons and may be
presented for registration of transfer or exchange at the corporate trust office
of the Trustee. No service charge will be made for any transfer or exchange of
the Debt Securities, but Ford may require payment of a sum to cover any tax or
other governmental charge payable in connection therewith. (Section 3.05.)
5
<PAGE> 11
The Indenture contains no provisions that would afford holders of Debt
Securities protection in the event of a highly leveraged transaction or a change
in control of Ford.
SUBSIDIARIES
The term "subsidiary of Ford" is defined in the Indenture as a corporation a
majority of the outstanding voting stock of which is owned, directly or
indirectly, by Ford and/or one or more subsidiaries of Ford. The term
"Manufacturing Subsidiary" is defined in the Indenture as a subsidiary of Ford
which owns or leases a Principal Domestic Manufacturing Property (as defined
below). (Section 1.01.)
LIMITATION ON LIENS
If Ford or any Manufacturing Subsidiary shall incur, suffer to exist or
guarantee any Debt (as defined in the Indenture) secured by a Mortgage (as
defined in the Indenture) on any Principal Domestic Manufacturing Property of
Ford or any Manufacturing Subsidiary or on any shares of stock of or Debt of any
Manufacturing Subsidiary, Ford will secure or cause such Manufacturing
Subsidiary to secure the Indenture Securities equally and ratably with (or prior
to) such secured Debt, unless, after giving effect thereto, the aggregate amount
of all such Debt so secured, together with all Attributable Debt (as defined
below) in respect of sale and leaseback transactions involving Principal
Domestic Manufacturing Properties, would not exceed 5% of the Consolidated Net
Tangible Automotive Assets of Ford and its consolidated subsidiaries. This
restriction will not apply to Debt secured by (a) Mortgages on property of, or
on any shares of stock of or Debt of, any corporation existing at the time such
corporation becomes a Manufacturing Subsidiary, (b) Mortgages in favor of Ford
or a Manufacturing Subsidiary, (c) Mortgages in favor of governmental bodies to
secure progress or certain advance payments, (d) Mortgages on property, shares
of stock or Debt existing at the time of acquisition thereof (including
acquisition through merger or consolidation) and certain purchase money
Mortgages, and (e) any extension, renewal or replacement of any Mortgage
referred to in the foregoing clauses (a) through (d), inclusive. (Section
10.04.) "Principal Domestic Manufacturing Property" is defined in the Indenture
to include principal automotive and related manufacturing or assembly plants
owned or leased by Ford or a subsidiary of Ford and located within the United
States. "Attributable Debt" is defined in the Indenture to mean the total net
amount of rent (discounted at the rate of 9.5% per annum compounded annually)
required to be paid during the remaining term of any lease. "Consolidated Net
Tangible Automotive Assets" is defined in the Indenture to mean the aggregate
amount of Ford's automotive assets after deducting current liabilities and
certain intangibles plus Ford's equity in the net assets of its financial
services subsidiaries after deducting certain intangibles. (Section 1.01.)
MERGER AND CONSOLIDATION
The Indenture provides that no consolidation or merger of Ford with or into any
other corporation shall be permitted and no sale or conveyance of its property
as an entirety, or substantially as an entirety, may be made to another
corporation if, as a result thereof, any Principal Domestic Manufacturing
Property of Ford or any Manufacturing Subsidiary or any shares of stock or Debt
of any Manufacturing Subsidiary would thereupon become subject to a Mortgage,
unless the Indenture Securities shall be equally and ratably secured with (or
prior to) the Debt secured by such Mortgage, or unless such Mortgage could be
created pursuant to Section 10.04 (see "Limitation on Liens" above) without
equally and ratably securing the Indenture Securities. (Section 8.03.)
LIMITATION ON SALES AND LEASEBACKS
Neither Ford nor any Manufacturing Subsidiary may enter into any sale and
leaseback transaction involving any Principal Domestic Manufacturing Property
unless (a) Ford or such Manufacturing Subsidiary could create Debt secured by a
mortgage pursuant to Section 10.04 (see "Limitation on Liens" above) on the
Principal Domestic Manufacturing Property to be leased in an amount equal to the
Attributable Debt with respect to the sale and leaseback transaction without
equally and ratably securing the Indenture Securities, or (b) Ford, within 120
days after the sale or transfer shall have been made,
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applies to the retirement of its Funded Debt (as defined in the Indenture) an
amount (subject to credits for certain voluntary retirements of Funded Debt of
Ford) equal to the greater of (i) the net proceeds of the sale of the Principal
Domestic Manufacturing Property leased pursuant to such arrangement or (ii) the
fair market value of the Principal Domestic Manufacturing Property so leased.
This restriction will not apply to any sale and leaseback transaction (a)
between Ford and a Manufacturing Subsidiary or between Manufacturing
Subsidiaries or (b) involving the taking back of a lease for a period of three
years or less. (Section 10.05.)
EVENTS OF DEFAULT AND NOTICE THEREOF
The Indenture defines an Event of Default with respect to any series of
Indenture Securities as being any one of the following events: (a) failure to
pay interest for 30 days after becoming due; (b) failure to pay principal or
premium, if any, for five business days after becoming due at maturity, upon
redemption or otherwise; (c) failure to make a sinking fund payment for five
days after becoming due; (d) failure to perform any other covenant of Ford
(other than a covenant included in the Indenture solely for the benefit of one
or more series of Indenture Securities other than such series or a covenant a
default in the performance of which would be covered by clause (f) below) for 90
days after notice; (e) certain events of bankruptcy, insolvency or
reorganization of Ford; and (f) any other Event of Default provided with respect
to Indenture Securities of such series. No Event of Default provided with
respect to a particular series of Indenture Securities (except as to events
described in clauses (d) and (e)) necessarily constitutes an Event of Default
with respect to any other series of Indenture Securities. (Section 5.01.)
If an Event of Default in respect of a particular series of Indenture Securities
outstanding occurs and is continuing, either the Trustee or the holders of at
least 25% in aggregate principal amount of the Indenture Securities outstanding
of such series may declare the principal amount (or, if the Indenture Securities
of such series are Original Issue Discount Securities (as defined in the
Indenture), such portion of the principal amount as may be specified in the
terms of such series) of all of the Indenture Securities of such series to be
due and payable immediately. At any time after such a declaration of
acceleration in respect of a particular series of Indenture Securities has been
made, but before a judgment or decree for the payment of money due upon
acceleration has been obtained by the Trustee, the holders of a majority in
aggregate principal amount of the Indenture Securities outstanding of such
series may, under certain circumstances, waive all defaults and rescind and
annul such declaration and its consequences if all Events of Default in respect
of the Indenture Securities of such series, other than the non-payment of
principal due solely by such declaration of acceleration, have been cured or
waived as provided in the Indenture. (Section 5.02.)
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default in respect of a particular series of Indenture
Securities, give the holders of such series notice of all uncured defaults known
to it (the term "default" to include the events specified above without grace
periods); provided that, except in the case of default in the payment of the
principal of, or any premium, interest or mandatory sinking fund payment, with
respect to, any of the Indenture Securities of such series, the Trustee shall be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interests of the holders of such series.
(Section 6.01.)
Pursuant to the terms of the Indenture, Ford is required to furnish to the
Trustee annually a brief certificate of the principal executive, financial or
accounting officer of Ford as to his knowledge of Ford's compliance (determined
without regard to any period of grace or requirement of notice) with all
conditions and covenants under the Indenture and, if a default exists
thereunder, specifying the nature of such default. (Section 10.06.)
The Indenture provides that the holders of a majority in aggregate principal
amount of all Indenture Securities of a particular series then outstanding will
have the right to waive certain defaults in respect of such series and, subject
to certain limitations, to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. (Sections 5.12 and 5.13.) The Indenture is
deemed under the Trust Indenture Act to provide
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that, in case an Event of Default in respect of a particular series of Indenture
Securities shall occur (which shall not have been cured or waived), the Trustee
will be required to exercise such of its rights and powers under the Indenture,
and to use the degree of care and skill in their exercise, that a prudent man
would exercise or use in the conduct of his own affairs, but otherwise need only
perform such duties as are specifically set forth in the Indenture. Subject to
such provisions, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request of any of the holders of
such series unless they shall have offered to the Trustee reasonable security or
indemnity. (Section 6.02.)
DEFEASANCE AND COVENANT DEFEASANCE
Except as otherwise provided in the Prospectus Supplement, Ford may elect (a) to
defease a series of Indenture Securities with the effect that Ford will be
discharged from any and all obligations with respect to such series of Indenture
Securities (except for the obligation to issue Indenture Securities of such
series in definitive registered form in exchange for a global security under
certain circumstances, to register the transfer or exchange of such Indenture
Securities, to replace temporary or mutilated, destroyed, lost or stolen
Indenture Securities, to maintain an office or agency in respect of the
Indenture Securities and to hold moneys for payment in trust) ("defeasance")
and/or (b) to be released from its obligations with respect to such series of
Indenture Securities under Sections 8.03, 10.04 and 10.05 of the Indenture
(being the obligations described under "Merger and Consolidation", "Limitation
on Liens", and "Limitation on Sales and Leasebacks", respectively) and, if
provided pursuant to Section 3.01 of the Indenture, the obligations of Ford with
respect to any other covenant, and any omission to comply with such obligations
shall not constitute a default or an Event of Default with respect to Indenture
Securities of such series ("covenant defeasance"), in either case upon the
irrevocable deposit with the Trustee, in trust, of money and/or U.S. Government
Obligations (as defined in the Indenture) which through the payment of principal
and interest in accordance with their terms will provide money in an amount
sufficient to pay the principal of, and premium, interest and mandatory sinking
fund payments, if any, with respect to, such Indenture Securities, on the
scheduled due dates therefor. Such a trust may only be established if, among
other things, Ford has delivered to the Trustee an Opinion of Counsel (as
specified in the Indenture) to the effect that the holders of such Indenture
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance or covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance or covenant defeasance
had not occurred. Such opinion, in the case of defeasance under clause (a)
above, must refer to and be based on a ruling of the Internal Revenue Service or
a change in applicable Federal income tax law occurring after the date of the
first issuance of Indenture Securities. (Article Fourteen.)
In the event Ford effects covenant defeasance with respect to Indenture
Securities of any series and the Indenture Securities of such series are
declared due and payable because of the occurrence of any Event of Default other
than the Event of Default described in clause (d) under "Events of Default and
Notice Thereof" with respect to sections 8.03, 10.04 and 10.05 of the Indenture
(which Sections would no longer be applicable to Indenture Securities of that
series) or described in clause (d) or (f) under "Events of Default and Notice
Thereof" with respect to any other covenant with respect to which there has been
defeasance, the amount of money and U.S. Government Obligations on deposit with
the Trustee will be sufficient to pay amounts due on the Indenture Securities of
such series when they become due but may not be sufficient to pay amounts due on
the Indenture Securities of such series at the time of the acceleration
resulting from such Event of Default. However, the Company and Ford would remain
liable to make payment of such amount due at the time of acceleration.
The Prospectus Supplement may further describe any provision in modification of,
in addition to or in lieu of the provisions described under this caption
"Defeasance and Covenant Defeasance".
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MODIFICATION OF THE INDENTURE
With certain exceptions, the Indenture, the rights and obligations of Ford and
the rights of the holders of a particular series thereunder may be modified by
Ford with the consent of the holders of not less than 66 2/3% in aggregate
principal amount of the Indenture Securities of such series then outstanding of
each series affected by such modification; but no such modification may be made
which would (i) extend the fixed maturity of any Indenture Security of such
series, or reduce the principal amount thereof, or reduce the rate or extend the
time of payment of interest thereon, without the consent of the holder of each
Indenture Security of such series so affected; or (ii) reduce the above-stated
percentage of Indenture Securities of such series, the consent of the holders of
which is required to modify or alter the Indenture, without the consent of the
holders of all Indenture Securities of such series then outstanding. (Section
9.02.)
TRUSTEE
The Trustee may resign or be removed with respect to one or more series of
Indenture Securities and a successor Trustee may be appointed to act with
respect to such one or more series. (Section 6.08.) In the event that there
shall be two or more persons acting as Trustee with respect to different series
of Indenture Securities, each such Trustee shall be a trustee of a trust or
trusts under the Indenture separate and apart from the trust or trusts
administered by any other such Trustee, and any action described herein to be
taken by the "Trustee" may then be taken by each such Trustee with respect to,
and only with respect to, the one or more series of Indenture Securities for
which it is acting as Trustee. (Section 6.09.)
CONCERNING THE BANK OF NEW YORK
The Bank of New York, Trustee under the Indenture, is also the trustee under
indentures covering a number of outstanding issues of notes and debentures of
certain of Ford's subsidiaries, is a depositary of Ford and certain of its
subsidiaries, has from time to time made loans to Ford and certain of its
subsidiaries, has from time to time purchased receivables from Ford and certain
of its subsidiaries, and has performed other services for such companies in the
normal course of its business. The Bank of New York's principal corporate trust
office is located at 101 Barclay Street, New York, New York 10286 and its
telephone number is 800-524-4458.
PLAN OF DISTRIBUTION
Ford may sell the Debt Securities to or through underwriters and also may sell
the Debt Securities directly to one or more other purchasers or through agents.
The Prospectus Supplement sets forth the terms of the offering of the particular
series of Debt Securities to which such Prospectus Supplement relates, including
(i) the name or names of any underwriters or agents with whom Ford has entered
into arrangements with respect to the sale of such series of Debt Securities,
(ii) the initial public offering or purchase price of such series of Debt
Securities, (iii) any underwriting discounts, commissions and other items
constituting underwriters' compensation from Ford and any other discounts,
concessions or commissions allowed or reallowed or paid by any underwriters to
other dealers, (iv) any commissions paid to any agents, (v) the net proceeds to
Ford, and (vi) the securities exchanges, if any, on which such series of Debt
Securities will be listed. The Debt Securities of each series will be
consecutively numbered, beginning with the number one.
If underwriters are used in a sale of any Debt Securities, such Debt Securities
will be acquired for their own account and may be resold from time to time in
one or more transactions including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. Unless
otherwise set forth in the Prospectus Supplement relating to a particular series
of Debt Securities, the obligations of the underwriters to purchase such series
of Debt Securities will be subject to certain conditions precedent and each of
the underwriters with respect to such series of Debt Securities will be
obligated to purchase all of the Debt Securities of such series allocated to it
if any such Debt Securities
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are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
The Debt Securities may also be offered and sold by Ford directly or through
agents designated by Ford from time to time. Unless otherwise indicated in the
Prospectus Supplement, any such agent or agents will be acting on a best efforts
basis for the period of its or their appointment. Any agent participating in the
distribution of the Debt Securities may be deemed to be an "underwriter", as
that term is defined in the Securities Act, of the Debt Securities so offered
and sold. The Debt Securities may also be sold to dealers at the applicable
price to the public set forth in the Prospectus Supplement relating to a
particular series of Debt Securities who later resell to investors. Such dealers
may be deemed to be "underwriters" within the meaning of the Securities Act.
If so indicated in the Prospectus Supplement relating to a particular series of
Debt Securities, Ford will authorize underwriters or agents to solicit offers by
certain institutions to purchase Debt Securities of such series from Ford
pursuant to delayed delivery contracts providing for payment and delivery at a
future date. Such contracts will be subject only to those conditions set forth
in the Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Underwriters and agents may be entitled, under agreements entered into with
Ford, to indemnification by Ford against certain civil liabilities, including
liabilities under the Securities Act.
LEGAL OPINIONS
The legality of the Debt Securities will be passed on for Ford by J. M.
Rintamaki, Esq., Secretary and an Assistant General Counsel of Ford or other
counsel satisfactory to any underwriters or agents, and for any underwriters or
agents by Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022.
Mr. Rintamaki is a full-time employee of Ford and owns, and holds options to
purchase, shares of Common Stock of Ford. Shearman & Sterling have in the past
provided, and may continue to provide, legal services to Ford and its
subsidiaries.
EXPERTS
The financial statements which are incorporated in this Prospectus by reference
to Ford's 1997 10-K Report have been audited by Coopers & Lybrand L.L.P.,
independent certified public accountants, to the extent indicated in their
report therein, and have been so incorporated in reliance on the report of that
firm given on their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information of the Company for
the period ending March 31, 1998, incorporated in this Prospectus by reference
to Ford's 1998 10-Q Report, Coopers & Lybrand L.L.P. have reported that they
have applied limited procedures in accordance with professional standards for a
review of such information. However, their report, included in Ford's 1998 10-Q
Report, states that they did not audit and they do not express an opinion on
that interim financial information. Accordingly, the degree of reliance on their
report on such information should be restricted in light of the limited nature
of the review procedures applied. The accountants are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
report on the unaudited interim financial information because such report does
not constitute a "report" or a "part" of the registration statement prepared or
certified by the accountants within the meaning of Sections 7 and 11 of such
Act.
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