<PAGE>
AS FILED ELECTRONICALLY WITH
THE SECURITIES AND EXCHANGE COMMISSION ON February 26, 1997
Registration No. 333-
=================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ASSOCIATES FIRST CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
06-0876639
(I.R.S. Employer Identification No.)
250 East Carpenter Freeway
Irving, Texas
(Address of principal executive offices)
75062-2729
(Zip Code)
FORD MOTOR COMPANY SAVINGS AND STOCK
INVESTMENT PLAN FOR SALARIED EMPLOYEES
(Full title of the Plan)
Timothy M. Hayes, Esq.
Associates First Capital Corporation
250 East Carpenter Freeway
Irving, Texas
75062-2729
(972) 652-4000
(Name, address and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------
TITLE OF SECURITIES AMOUNT TO BE PROPOSED PROPOSED AMOUNT OF
TO BE REGISTERED REGISTERED <F1> MAXIMUM MAXIMUM REGISTRATION
OFFERING AGGREGATE FEE
PRICE OFFERING
PER SHARE PRICE
</TABLE>
- ---------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Class A Common Stock 2,000,000 $49.375 $98,750,000 $29,924.24
$.01 par value per Shares
share
- ---------------------------------------------------------------------
<FN>
<F1> The number of shares being registered represents the maximum number of
shares that may be acquired be Fidelity Management Trust Company, as trustee,
under the Ford Motor Company Savings and Stock Investment Plan for Salaried
Employees (the "Plan"), during 1997 and during subsequent years until a new
Registration Statement becomes effective.
<F2> Based on the market price of Class A Common Stock of the Company on February
21,1997 in accordance with rule 457(c) under the Securities Act of 1933.
</FN>
</TABLE>
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registraton Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the Plan described herein.
<PAGE>
FORD MOTOR COMPANY SAVINGS AND
STOCK INVESTMENT PLAN FOR SALARIED EMPLOYEES
______________________
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 Associate First Capital Corporation (the
"Company" or "Associates") 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 Associates' 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 Associates Class A Common Stock contained in
registration statement no. 333-817, as amended, filed by Associates under the
Securities Act of 1933 (the "1933 Act").
All documents subsequently filed by Associates 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 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
such corporation), by reason of the fact that such person was an officer or
director of such corporation, or is or was serving at the request of such
corporation as a director, officer employee or agent of another corporation or
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit, or proceeding,
provided that such officer or director acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the corporation's best
interests, and, for criminal proceedings, had no reasonable cause to believe
his or her conduct was illegal. A Delaware corporation may indemnify officers
and directors against expenses (including attorney's fees) in connection with
the defense or settlement of an action by or in the right of the corporation
under the same conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the
<PAGE>
corporation must indemnify him or her against the expenses which such officer
or director actually and reasonably incurred.
In accordance with the Delaware Law, the Restated Certificate of
Incorporation of the Company contains a provision to limit the personal
liability of the directors of the Company for violations of their fiduciary
duty. This provision eliminates each director's liability to the Company or
its stockholders for monetary damages except (i) for any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware Law
providing for liability of directors for unlawful payment of dividends or
unlawful stock purchases or redemptions, or (iv) for any transaction from
which a director derived an improper personal benefit. The effect of this
provision is to eliminate the personal liability of directors for monetary
damages for actions involving a breach of their fiduciary duty of care,
including any such actions involving gross negligence.
Pursuant to underwriting agreements filed as exhibits to registration
statements relating to underwritten offerings of securities, the underwriters
parties thereto have agreed to indemnify each officer and director of
Associates and each person, if any, who controls Associates within the meaning
of the 1933 Act, against certain liabilities, including liabilities under the
1933 Act.
The directors and officers of the Company are covered by directors' and
officers' insurance policies relating to Ford Motor Company and its
subsidiaries.
The Restated Certificate of Incorporation of the Company provides for
indemnification of the officers and directors of the Company to the full
extent permitted by applicable law.
Item 8. Exhibits.
Exhibit
Number
- -------
*4.A - Form of Ford Motor Company Savings and Stock Investment Plan for
Salaried Employees, as amended.
*4.B - Form of Master Trust Agreement between Ford Motor Company and
Fidelity Management Trust Company, as Trustee.
*5 - Copy of Internal Revenue Service determination letter that
the Plan is qualified under Section 401 of the Internal Revenue
Code. (An opinion of counsel as to the legality of the securities
is not being filed since the securities being registered are not
original issue securities.)
*23 - Consent of Coopers & Lybrand L.L.P.
*24 - Powers of Attorney.
* Filed with this Registration Statement
<PAGE>
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof)which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
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 Irving, State of Texas, on this
26th day of February, 1997.
ASSOCIATES FIRST CAPITAL CORPORATION
By: /s/ C. D. Longenecker
---------------------------------
C. D. Longenecker
Title: Executive Vice President
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.
<TABLE>
<CAPTION>
Signature Title Date
- ----------------- ------------------------------------------
<C> <S> <C>
KEITH W. HUGHES* Chairman of the Board,
(Keith W. Hughes) Principal Executive Officer
and Director
HAROLD D. MARSHALL* Director
(Harold D. Marshall)
</TABLE>
February 26, 1997
<TABLE>
<C> <S> <C>
JOSEPH M. MCQUILLAN* Director
(Joseph M. McQuillan)
J. Carter Bacot* Director
(J. Carter Bacot)
John M. Devine* Director
(John M. Devine)
Kenneth Whipple* Director
(Kenneth Whipple)
H. James Toffey, Jr.* Director
(H. James Toffey, Jr.)
ROY A. GUTHRIE* Executive Vice President and
(Roy A. Guthrie) Principal Financial Officer
Kevin P. Hegarty* Senior Vice President and
(Kevin P. Hegarty) Principal Accounting Officer
</TABLE>
- ---------------------
*By signing his name hereto, C. D. Longenecker signs this document on behalf
of each of the persons indicated above pursuant to powers of attorney duly
executed by such persons.
By: /s/ C. D. LONGENECKER
____________________
C. D. Longenecker
(Attorney-in-Fact)
<PAGE>
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 Dearborn, State of
Michigan, on this 26th day of February, 1997.
Ford Motor Company Savings and Stock
Investment Plan for Salaried Employees
By: /s/Lee Mezza
--------------------------
Lee Mezza, Chairman
Savings and Stock Investment Plan
<PAGE>
EXHIBIT INDEX
Exhibit
Number
- -------
*4.A - Form of Ford Motor Company Savings and Stock Investment Plan for
Salaried Employees, as amended.
*4.B - Form of Master Trust Agreement between Ford Motor Company and
Fidelity Management Trust Company, as Trustee.
*5 - Copy of Internal Revenue Service determination letter that
the Plan is qualified under Section 401 of the Internal Revenue
Code. (An opinion of counsel as to the legality of the securities
is not being filed since the securities being registered are not
original issue securities.)
*23 - Consent of Coopers & Lybrand L.L.P.
*24 - Powers of Attorney.
* Filed with this Registration Statement
<PAGE>
SAVINGS AND STOCK INVESTMENT PLAN
FOR SALARIED EMPLOYEES
(As amended effective October 1, 1995
with subsequent amendments effective through December 31, 1996)*
Table of Contents
Paragraph Page
I. Definitions 2
II. Eligibility 6
III. Membership 7
IV. Contributions 7
V. Limitations on Contributions 10
VI. Return of Contributions in Excess of Limitations 16
VII. Member's Election As to Investment of Funds 17
VIII. Transfer of Assets to Other Investment Elections 17
IX. Vesting of Assets Attributable to Company
Matching Contributions 18
X. Member's Account in Trust Fund 20
XI. Investment of Dividends, Interest, Etc. 20
XII. Borrowings with Respect to Assets Attributable to
Regular or Tax-Efficient Savings Contributions 21
XIII. Withdrawal by Member of Assets Prior to Termination
of Employment 21
XIV. Withdrawal by Member of Assets At or After Termination
of Employment 23
XV. Distribution by the Plan of Assets At or After Termi-
nation of Employment, Distribution upon Attainment
of Age 70 1/2, Distribution of Dividends on Company
Stock in the Ford Stock Fund 23
XVI. Conditions Applicable to Withdrawals and Distributions 25
XVII. Transfer of Assets to Savings Plan of a Subsidiary
by Which Member is Employed 29
XVIII. Ford Stock Fund, Common Stock Fund, Bond Fund,
Interest Income Fund, Income Fund, and Mutual Funds
29
XIX. Member's Quarterly Statement 39
XX. Notices 39
XXI. Trustee 39
XXII. Purchases of Securities by the Trustee 39
XXIII. Application of Forfeited Company Matching Contributions 41
XXIV. Voting of Company Stock 41
XXV. Cash Adjustments on Account of Fractional Interests
in Securities 41
XXVI. Operation and Administration 42
XXVII. Termination, Suspension and Modification 45
XXVIII. Conditions on Participation of Subsidiaries of the Company 46
XXIX. Member's Rights not Transferable 46
XXX. Designation of Beneficiaries 46
XXXI. Effect of Termination 47
XXXII. Top-Heavy Rules 47
XXXIII. Employee Stock Ownership Plan 50
<PAGE>
FORD MOTOR COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
FOR SALARIED EMPLOYEES
(As amended effective October 1, 1995
with subsequent amendments effective through December 31, 1996)
This Plan has been established by the Company to encourage
and facilitate systematic savings and investment by
eligible employees and to provide them with an opportunity
to become stockholders of the Company.
That portion of the Plan described in paragraph XXXIII is
intended to be an "Employee Stock Ownership Plan," as that
term is defined by the Code and, as such, is designed to
invest primarily in Company stock.
I. Definitions. As hereinafter used:
1. "Affiliated Corporation" shall mean (a) the Company, and (b) any
corporation not less than a majority of the voting stock of which is
owned directly or indirectly by the Company and that has been
approved by the Committee as an Affiliated Corporation for purposes
of the Plan.
2. "Bond Fund" shall mean that portion of the trust fund under the Plan
consisting of investments made by the Trustee in accordance with
subparagraph 3 of paragraph XVIII hereof.
3. "Bond Fund Units" shall mean the measure of a member's interest in
the Bond Fund as described in subparagraph 3 of paragraph XVIII
hereof.
4. "Cash value of assets" shall mean the value of the assets, expressed
in dollars, in a member's account under any investment election under
the Plan or the total thereof, as the case may be, at the close of
business on the date such cash value is to be determined.
5. "Code" shall mean the Internal Revenue Code of 1986, as amended.
6. "Committee" shall mean the Savings and Stock Investment Plan
Committee created by the Company pursuant to the provisions of
paragraph XXVI hereof.
7. "Common Stock Fund" shall mean that portion of the trust fund under
the Plan consisting of investments made by the Trustee in accordance
with subparagraph 2 of paragraph XVIII hereof and related cash.
8. "Common Stock Fund Units" shall mean the measure of a member's
interest in the Common Stock Fund as described in subparagraph 2 of
paragraph XVIII hereof.
9. "Company" shall mean Ford Motor Company.
10. "Company matching contributions" shall mean amounts contributed by
the Company to the Plan, as provided in subparagraph 3 of paragraph
IV hereof.
11. "Company matching contributions account" shall mean an account of an
employee under the Plan to which are credited Company matching
contributions in respect of employee regular savings contributions or
certain tax-efficient savings contributions and earnings thereon.
12. "Company stock" shall mean Common Stock of the Company.
13. "Current market value" shall mean, with reference to Company 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.
14. "Earnings," with reference to employee regular savings contributions,
Company matching contributions or tax-efficient savings
contributions, as the case may be, shall mean earnings resulting from
the investment and any reinvestment of such contributions and any
increment thereof and shall include interest, dividends and other
distributions on such investments.
15. "Employee" shall mean each person who is employed at a salary by a
Participating Company or by an Affiliated Corporation and is enrolled
on the active employment rolls of such Participating Company, or of
such Affiliated Corporation, maintained in the United States,
including without limitation any such person who also is an officer
or director of a Participating Company or of an Affiliated
Corporation.
16. "Employee regular savings contributions" shall mean amounts
contributed by an employee to the Plan from the employee's salary, as
provided in subparagraph 1 of paragraph IV hereof.
17. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
18. "Ford Stock Fund" shall mean that portion of the trust fund under the
Plan consisting of investments made by the Trustee in accordance with
subparagraph 1 of paragraph XVIII hereof.
19. "Ford Stock Fund Units" shall mean the measure of a member's interest
in the Ford Stock Fund as described in subparagraph 1 of paragraph
XVIII hereof.
20. "Income Fund" shall mean that portion of the trust fund under the
Plan consisting of investments made by the Trustee in accordance with
subparagraph 5 of paragraph XVIII hereof.
21. "Income Fund Contract" shall mean an arrangement under which (a) an
Income Fund Manager receives amounts of cash from the Trustee and
invests such amounts primarily in such fixed income securities as may
be selected by such Income Fund Manager in its discretion with the
objective of conservation of principal and the realization of a
reasonable rate of return consistent therewith, and (b) such Income
Fund Manager pays to the Trustee such amounts of principal and
accumulated earnings and gains as are to be distributed to or
transferred or withdrawn by members pursuant to the Plan and such
other amounts as to which the Trustee may be entitled under the
arrangement.
22. "Income Fund Manager" shall mean an insurance company or other
organization which has entered into an Income Fund Contract with the
Company pursuant to subparagraph 5 of paragraph XVIII hereof.
23. "Interest Income Fund" shall mean that portion of the trust fund
under the Plan consisting of investments made by the Trustee in
accordance with subparagraph 4 of paragraph XVIII hereof and related
cash.
24. "Interest Income Fund Advisor" shall mean one or more persons or
companies, corporations, or other organizations appointed by the
Company to provide investment advice to the Trustee concerning the
Interest Income Fund. The Trustee may be designated a Interest
Income Fund Advisor by the Company.
25. "Member" shall mean and include (a) an employee who shall have
elected to participate in the Plan and, in the case of an employee of
a Participating Company, shall have filed a payroll deduction
authorization or a Salary Reduction agreement then outstanding under
the Plan, or, in the case of an employee of an Affiliated
Corporation, shall have filed an undertaking then outstanding under
the Plan to make regular savings contributions or to have
tax-efficient savings contributions made to the Plan by such method
as the Committee may have designated, and (b) a person who has assets
in an account under the Plan.
26. "Participating Company" shall mean and include the Company and each
subsidiary of the Company that shall have elected to participate in
the Plan with the consent of the Company. "Subsidiary of the
Company" shall mean a domestic corporation not less than a majority
of the voting stock of which is owned directly or indirectly by the
Company.
27.
28. "Plan year" shall mean a calendar year.
29. "Regular savings account" shall mean an account of an employee under
the Plan to which are credited employee regular savings contributions
made by such employee and earnings thereon.
30. "Retirement Plan" means the General Retirement Plan of the Company at
the time in effect or any other pension or retirement plan or program
of a Participating Company or of an Affiliated Corporation.
31. "Retirement pursuant to the provisions of any Retirement Plan" means
retirement at or after normal retirement age, or early or disability
retirement prior to normal retirement, or termination of employment
after becoming eligible for retirement under the provisions of any
Retirement Plan.
32. "Salary" shall mean the regular base salary to which an employee of a
Participating Company is entitled prior to giving effect to any
Salary Reduction agreement except that "salary" shall not include any
amount subject to a Salary Reduction agreement to the extent such
amount cannot be contributed to the employee's account as a
tax-efficient savings contribution because of the applicable
limitations set forth in paragraph V hereof. In the case of an
employee of an Affiliated Corporation who is eligible to make regular
savings contributions to the Plan, as provided in paragraph II,
"salary" shall mean the employee's last such salary at the
Participating Company from which he or she is on leave of absence.
"Salary" shall not include any supplemental compensation, pension,
retirement or salaried income security plan payment, retainer,
commission, fee, overtime or shift premium, cost-of-living allowance,
or any other special remuneration.
33. "Salary Reduction agreement" shall mean an agreement between an
employee and the Participating Company to have the employee's salary
reduced by an amount specified by the employee and to have an amount
equal to the salary reduction contributed by the Participating
Company to the Plan on behalf of the employee, pursuant to section
401(k) of the Code and subparagraph 2 of paragraph IV hereof,
provided, however, that such amount shall be reduced as may be
determined as provided in paragraph V hereof.
34. "Tax-efficient savings account" shall mean an account of an employee
under the Plan to which are credited tax-efficient savings
contributions on behalf of such employee and earnings thereon.
35. "Tax-efficient savings contributions" shall mean amounts contributed
by the Company to the Plan on behalf of an employee, pursuant to a
Salary Reduction agreement, as provided in subparagraph 2 of
paragraph IV hereof or pursuant to an election with respect to
amounts from the Profit Sharing Plan for Salaried Employees of the
Company or FCA Dollars or Bonus Flexdollars under the Flexible
Benefits Plan of the Company.
36. "Trustee" shall mean the trustee or trustees appointed by the Company
pursuant to the provisions of paragraph XXI hereof.
II. Eligibility. Except as hereinafter provided, each employee of a
Participating Company shall be eligible for membership in, and to make employee
regular savings contributions and to have tax-efficient savings contributions
made to, the Plan twelve (12) months after such employee's original date of
hire.
The Company may in its discretion determine, in the event of the acquisition by
a Participating Company or Affiliated Corporation (by purchase, merger or
otherwise) of all or part of the assets of another corporation, that the
service of a person as an employee of such other corporation shall be included
in ascertaining whether he or she has had such service as required above for
eligibility, provided that he or she shall have become an employee of a
Participating Company or an Affiliated Corporation in connection with such
acquisition.
An employee of a Participating Company who shall have been granted a leave
of absence to become an employee of an Affiliated Corporation and who becomes
an employee of such Affiliated Corporation shall be eligible for membership in,
and to make regular savings contributions or to have tax-efficient savings
contributions made to, the Plan while he or she is on such leave of absence and
is so employed, provided that (a) he or she shall have such service as required
above for eligibility, including service with the Affiliated Corporation, (b)
he or she shall not be a participant in any profit sharing plan, or stock bonus
plan, and trust of the Affiliated Corporation qualifying for exemption from
taxation under Sections 401(a) and 501(a) of the Code, or any other applicable
section of the Federal tax laws, as at the time in effect, and (c) the
employee's eligibility, under the provisions of this sentence, to make regular
savings contributions or to have tax-efficient savings contributions made while
an employee of the Affiliated Corporation shall terminate at the end of the
two-year period commencing with the date the employee's leave of absence
commences, or at the termination of the employee's leave of absence, or upon
the date the Affiliated Corporation becomes a Participating Company, whichever
first shall occur.
An employee shall not be eligible to make regular savings contributions or
to have tax-efficient savings contributions made if such employee:
1. shall be within a collective bargaining unit for which a labor
organization is recognized as collective bargaining agent by any
Participating Company, except that, upon approval of the Company, the
foregoing provisions of this clause shall not affect the eligibility
of such employee to make regular savings contributions or to have
tax-efficient savings contributions made to the Plan if such
Participating Company shall have requested and received from such
labor organization a waiver, in terms acceptable to such
Participating Company, of all rights of and claims of right by such
labor organization to bargain collectively with respect to the Plan
or any substantially similar plan or program or to compel such
Participating Company to do so, but only so long as such waiver shall
remain in effect, or
2. shall be a leased employee. The term "leased employee" means any
person who is not an employee who provides services to the Company
if:
(a) such services are provided pursuant to an agreement
between the Company and any leasing organization;
(b) such person has performed services for the Company on a
substantially full-time basis for at least one year; and
(c) such services are of a type historically performed, in the
business field of the Company, by employees.
III. Membership. An eligible employee may elect membership in the Plan as of
the first payday following such employee's eligibility date with respect to
regular savings contributions and tax-efficient savings contributions by
delivering a notice of election to participate in such form and in such manner
and at such time as the Committee shall specify.
A newly-hired employee of a Participating Company may elect membership in
the Plan prior to the date on which such employee would otherwise become
eligible for membership in the Plan for the limited purpose of making a
rollover contribution to the Plan as hereinafter provided.
IV. Contributions.
1. Regular Savings Contributions. Subject to the limitations in
paragraph V, each eligible employee may make regular savings contributions to
the Plan from the employee's salary for each pay period by payroll deductions
in such amount as the employee may authorize not to exceed 10% of such salary
and to be in a full percentage amount of salary, the amount to be rounded down
to the nearest full dollar.
The payroll deduction for regular savings contributions authorized by an
employee may be increased, decreased or stopped by him or her only as of the
first day of any month by delivering in such form and in such manner and at
such time as the Committee shall specify a notice of such change. If an
employee shall become ineligible to make regular savings contributions to the
Plan, the employee's payroll deduction authorization shall terminate forthwith.
If the payroll deduction authorization of an employee shall terminate for any
reason, the employee thereafter may, subject to the eligibility provisions of
the Plan, resume contributing to the Plan, by delivering in such form and in
such manner and at such time as the Committee shall specify a payroll deduction
authorization hereunder. An employee shall not be entitled to make regular
savings contributions to the Plan, and no deduction shall be made pursuant to
the employee's payroll deduction authorization, in or for any period in which
the employee is not receiving a salary.
The Committee may require employees of an Affiliated Corporation who elect
to make regular savings contributions to the Plan to contribute by payroll
deductions or by such other method as the Committee may designate. If the
Committee shall designate a method other than payroll deductions, the Committee
shall adopt rules applying, as nearly as practicable, to such method of making
regular savings contributions the provisions of this paragraph IV relating to
payroll deductions.
Also, each eligible employee may elect to make regular savings adjustment
contributions to the Plan from his or her salary for each pay period by payroll
deductions in an amount equal to the percentage of tax-efficient savings
contributions elected pursuant to the provisions of subparagraph 2 of paragraph
IV hereof, up to 10% of salary, in the event that the employee's tax-efficient
savings contributions for any year exceed $7,000 multiplied by the
cost-of-living adjustment factor prescribed by the Secretary of the Treasury
under Section 415(d) of the Code for years after 1987.
2. Tax-Efficient Savings Contributions. Subject to the limitations in
paragraph V, each eligible employee, by filing a Salary Reduction agreement in
such form and in such manner and at such time as the Committee may prescribe,
may elect to have contributed to the Plan on his or her behalf for each pay
period a tax-efficient savings contribution in such amount as he or she may
authorize not in excess of 15% of his or her salary for such pay period. The
Salary Reduction agreement shall specify that such contributions are to be made
in a full percentage amount of salary, the amount to be rounded down to the
nearest full dollar.
Subject to the foregoing provisions of this subparagraph 2 of paragraph
IV, the rate of tax-efficient savings contribution authorized by the employee
may be decreased, increased or stopped by the employee by delivering in such
form and in such manner and at such time as the Committee shall specify a
notice of such change. If an employee shall become ineligible to make regular
savings contributions to the Plan, his or her Salary Reduction agreement shall
terminate forthwith. If the Salary Reduction agreement of an employee shall
terminate for any reason, the employee thereafter may, subject to the
eligibility provisions of the Plan, resume the making of tax-efficient savings
contributions to the Plan by delivering in such form and in such manner and at
such time as the Committee shall specify a Salary Reduction agreement
hereunder.
In addition, and subject to such regulations as the Committee from time to
time may prescribe, each eligible employee may elect to have contributed to the
Plan on his or her behalf, as tax-efficient savings contributions, amounts from
the Company's Profit Sharing Plan for Salaried Employees and the Company's
Flexible Benefits Plan that would otherwise be distributed to or allocated on
behalf of the employee, provided, however, that for purposes of this provision
an employee shall not be eligible unless such employee is enrolled on the
active employment rolls of a Participating Company or an Affiliated
Corporation, or is on short-term disability leave from a Participating Company
or an Affiliated Corporation, at the date of making such election.
3. Company Matching Contributions. Except as may be hereinafter provided
and subject to the limitations in paragraph V, the Company shall contribute to
the Plan for each pay period, out of current or accumulated earnings and
profits, but not otherwise, an amount equal to 60% of the aggregate amount of
employee regular savings contributions and tax-efficient savings contributions
(but excluding Profit-Sharing Plan contributions and Flexible Benefits Plan
contributions) for such pay period and an amount equal to the value of
forfeited assets attributable to Company matching contributions and earnings
thereon that are to be restored to the regular savings accounts of members for
such pay period pursuant to the provisions of paragraph XVI hereof, provided,
however, that for purposes of this subparagraph IV.3., any portion of the
aggregate of an employee's regular savings contributions and tax-efficient
savings contributions that exceeds 10% of such employee's salary shall not be
taken into account (or, if a Participating Company so elects, any portion that
exceeds 5%, or such other percentage as such Participating Company elects, of
that salary of an employee of such Participating Company shall not be taken
into account).
If the Commissioner of Internal Revenue determines that the trust fund
does not constitute an exempt trust, or refuses, in writing, to issue a
determination as to whether the trust fund is an exempt trust, the Company's
matching contributions made to the Plan on or after the date on which such
determination or refusal is applicable shall be returned to the Company without
interest within one year of such determination or refusal. If all or part of
the Company's deductions under Section 404 of the Code for matching
contributions to the Plan are disallowed by the Internal Revenue Service, the
portion of the contributions to which such disallowance applies shall be
returned to the Company without interest within one year of such disallowance.
The Company may recover, without interest, the amount of its matching
contributions to the Plan made on account of a mistake in fact, provided that
such recovery is made within one year after the date of such contribution. Any
recovery by the Company of its matching contributions to the Plan shall not
exceed the value at the time of recovery of assets acquired with the Company's
matching contributions and with earnings thereon.
4. Rollover Contributions. A newly-hired employee of a Participating
Company may make a rollover contribution, as permitted under Section 402(a)(5)
of the Code, to the Plan in cash in an amount not exceeding the total amount of
taxable proceeds distributed or distributable to such employee by a similar
qualified plan maintained by his or her immediately preceding former employer.
The rollover contribution may be made directly by such plan or by the employee
within 60 days following the receipt by the employee of such distribution from
such former employer's plan, subject to such regulations as the Committee shall
from time to time adopt. Rollover contributions shall be invested in
accordance with the member's election among investment elections available
under the Plan.
5. Transfer of Assets from Savings Plan of a Subsidiary by Which Member
Was Formerly Employed. Subject to such regulations as the Committee shall from
time to time establish and subject to transfer by the transferor plan, a member
may elect to have the Plan accept transfer to the Plan of any fully vested
amounts, either in the form of cash or Ford stock, in such member's accounts
under a savings plan of a subsidiary where such member was formerly employed
provided that such acceptance would not require the Plan to provide benefits in
an amount or form not otherwise provided under the Plan in order to preserve an
accrued benefit under the transferor plan. Any such transferred amounts shall
be invested in accordance with the member's election among investment elections
available under the Plan. Such an election may be made within a period of one
year following transfer of employment.
6. Contributions Following Qualified Military Service. A member of the
Plan who is reinstated following qualified military service, as defined in the
Uniformed Services Employment and Reemployment Rights Act, may elect to have
contributions made to the Plan from such member's salary paid following such
qualified military service that shall be attributable to the period
contributions were not otherwise permitted due to military service. Such
additional contributions shall be based on the amount of salary and profit
sharing that the member would have received but for military service and shall
be subject to the provisions of the Plan in effect during the applicable period
of military service. Such contributions shall be made during the period
beginning upon reemployment following military service and ending at the lesser
of (i) five years or (ii) the member's period of military service multiplied by
three. Such additional contributions shall not be taken into account in the
year in which they are made for purposes of any limitation or requirement
identified in Section 414(u)(1) of the Internal Revenue Code provided, however,
that such contributions, when added to contributions previously made, shall not
exceed the applicable limits in effect during the period of military service if
the member had continued to be employed by the Company during such period.
Further, payments on any loan or loans outstanding during the period of
military service shall be extended for a period of time equal to the period of
qualified military service.
V. Limitations on Contributions.
1. Limitation on Compensation Taken Into Account. The total amount of
compensation taken into account under the Plan for any employee for any year
shall not exceed $150,000 multiplied by the cost-of-living adjustment factor
prescribed by the Secretary of the Treasury under Section 415(d) of the Code
for such year. For purposes of applying this compensation limit, the family
unit of an employee who is either a 5% owner or one of the ten most highly
compensated employees will be treated as a single employee with one
compensation and the annual compensation limit will be allocated to the 5%
owner or the employee who is one of the ten most highly compensated employees.
For this purpose, a family unit is the employee who is a 5% owner or one of the
10 most highly compensated employees, the employee's spouse, and the employee's
lineal descendants who have not attained age 19 before the close of the
calendar year.
2. Annual Limit on Tax-Efficient Savings Contributions. The total amount
of tax-efficient savings contributions allowable for any employee for any year
shall not exceed $7,000 multiplied by the cost-of-living adjustment factor
prescribed by the Secretary of the Treasury under Section 415(d) of the Code
for such year.
3. Limitations on Contributions Applicable to Highly Compensated
Employees. The regular savings contribution percentage and the tax-efficient
savings contribution percentage for any eligible employee who is a
highly-compensated employee for the year shall be limited to the extent
required under the following tables:
Regular Savings Contribution Percentage Limitation
If the average regular savings
contribution percentage of The allowable average regular savings
eligible employees who are not contribution percentage for eligible
highly compensated employees for employees who are highly compensated
the year is: employees shall not exceed:
(a) 2% or less (a) 2.0 multiplied by the average
regular savings contribution
percentage for eligible employees
who are not highly compensated
employees
(b) over 2% but not more than 8% (b)2.0 percentage points added to the
average regular savings contri-
bution percentage for eligible
employees who are not highly
compensated employees
(c) more than 8% (c) 1.25 multiplied by the average
regular savings contribution
percentage for eligible employees
who are not highly compensated
employees
or, in any case, such lesser amount as
the Secretary of the Treasury shall
prescribe to prevent the multiple use of
parts (a) and (b) of this limitation
with respect to any highly compensated
employee.
Tax-Efficient Savings Contributions Percentage Limitation
If the average tax-efficient savings The allowable average tax-efficient
contribution percentage of savings contribution percentage for
eligible employees who are not eligible employees who are highly
highly compensated employees for compensated employees shall not
the year is: exceed:
(a) 2% or less (a) 2.0 multiplied by the average
tax-efficient savings contribution
percentage for eligible employees
who are not highly compensated
employees
(b) over 2% but not more than 8% (b) 2.0 percentage points added to the
average tax-efficient savings con-
tribution percentage for eligible
employees who are not highly com-
pensated employees
(c) more than 8% (c) 1.25 multiplied by the average
contribution percentage for eli-
gible employees who are not highly
compensated employees
or, in any case, such lesser amount as
the Secretary of the Treasury shall
prescribe under Treas. Reg. sections
1.401(m)-2(b) to prevent the multiple
use of parts (a) and (b) of this
limitation with respect to any highly
compensated employee.
The Committee shall, to the extent necessary to conform to the foregoing
limitations, reduce the amounts of allowable regular savings and Company
matching contributions, and tax-efficient savings contributions, respectively,
for the year with respect to any or all eligible highly compensated employees.
Any such reductions by the Committee shall be made in such manner as the
Committee from time to time may prescribe. For purposes of this section, the
Plan shall satisfy the requirements of Code sections 401(k)(3) and 401(m) and
Treas. Reg. sections 1.401(k)-1(b) and 1.401.(m)-1.
"Average regular savings contribution percentage" means the average of the
regular savings contribution percentages of the eligible employees in a group.
"Average tax-efficient savings contribution percentage" means the average
of the tax-efficient savings contribution percentages of the eligible employees
in a group.
"Regular savings contribution percentage" means the ratio (expressed as a
percentage) of the sum of employee regular savings and Company matching
contributions under the Plan on behalf of the eligible employee for the year to
the eligible employee's compensation for the year. "Compensation" for this
purpose means compensation paid by the Company to the employee during the year
which is required to be reported as wages on the employee's Form W-2, plus
tax-efficient savings contributions. The determination of the contribution
percentage and the treatment of employee regular savings and Company matching
contributions shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury pursuant to the Code.
"Tax-efficient savings contribution percentage" means the ratio (expressed
as percentage) of tax-efficient savings contributions under the Plan on behalf
of the eligible employee for the year to the eligible employee's compensation
for the year. "Compensation" for this purpose means compensation paid by the
Company to the employee during the year which is required to be reported as
wages on the employee's Form W-2, plus tax-efficient savings contributions.
The determination of the tax-efficient savings contribution percentage and the
treatment of tax-efficient savings contributions shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury pursuant to
the Code.
The regular savings contribution percentage and the tax-efficient savings
contribution percentage for any eligible employee who is a highly compensated
employee for the year and who is eligible to make regular savings
contributions, to receive Company matching contributions or to have
tax-efficient savings contributions allocated to his or her account under two
or more plans described in section 401(a) of the Code or arrangements described
in section 401(k) of the Code that are maintained by the Company or an
affiliated corporation shall be determined as if all such contributions were
made under a single plan.
"Highly compensated employee" is an employee who performs service during
the determination year and is described in one or more of the following groups:
(A) an employee who is a 5% owner, as defined in Code section
416(i)(1)(A)(iii), at any time during the determination year or the
look-back year;
(B) an employee who receives compensation in excess of $75,000 (indexed
in accordance with Code section 415(d) during the look-back year;
(C) an employee who receives compensation in excess of $50,000 (indexed
in accordance with Code section 415(d) during the look-back year and
is a member of the top-paid group for the look-back year;
(D) an employee who is an officer, within the meaning of Code section
416(i) during the look-back year and who receives compensation in
the look-back year greater than 50% of the dollar limitation in
effect under Code section 415(b)(1)(A) for the calendar year in
which the look-back year begins; or
(E) an employee who is both described in subparagraph 2, 3, or 4 above
when these paragraphs are modified to substitute the determination
year for the look-back year and one of the 100 employees who receive
the most compensation from the Company during the determination
year.
Compensation for this purpose means compensation as defined in subparagraph 4.D
of this paragraph V, plus tax-efficient savings contributions.
Any employee not described in (B), (C) or (D) in the prior year shall not
be treated as a highly compensated employee in the current year unless the
employee is a member of the group consisting of the 100 employees paid the
greatest compensation during the current year.
For purposes of determining which employees are highly compensated, the
following shall apply:
(1) The determination year is the 12 month period immediately preceding
the determination year, or if the employer elects, the calendar year
ending with or within the determination year.
(2) The top-paid group consists of the top 20% of compensation received
during the year. For purposes of determining the number of
employees in the top-paid group, employees described in Code section
414(q)(8) and Q&A 9(b) of Treas. Reg. section 1.414(q)-1T are
excluded.
(3) The number of officers is limited to 50 excluding those employees
who may be excluded in determining the top-paid group.
(4) When no officer has compensation in excess of 50% of the Code
section 415(b)(1)(A) limit, the highest paid officer is treated as
highly compensated.
(5) Compensation means compensation within the meaning of Code section
415(c)(3), including elective or salary reduction contributions to a
cafeteria plan or tax-efficient savings contributions.
(6) Employers aggregated under Code sections 414(b), (c), (m) or (o) are
treated as a single employer.
(7) The family aggregation rules of Code section 414(q)(6) apply to
determine who is highly compensated. For this purpose, family
member is the spouse and lineal ascendants or descendants (and
spouses of such ascendants and descendants) of any employee or
former employee who is a highly compensated employee and either a 5%
owner or one of the ten most highly compensated employees.
To the extent not described here, the rules contained in section 414(q) of
the Code shall apply in determining the number and identity of highly
compensated employees. In the case of a highly compensated employee who is
either a 5% owner or one of the ten most highly compensated employees and is
thereby subject to the family aggregation rules of Code section 414(q)(6), the
regular savings contribution percentage and the tax-efficient savings
contribution percentage for the family group (which is treated as one highly
compensated employee) is the regular savings contribution percentage and the
tax-efficient savings contribution percentage determined by combining the
contributions and compensation of all eligible family members. Except to the
extent taken into account in the preceding sentence, the contributions and
compensation of all family members are disregarded in determining the regular
savings contribution percentage and the tax-efficient saving contribution
percentage for the groups of highly compensated employees and non-highly
compensated employees. Notwithstanding any other provision of the Plan, for
purposes of determining the number or identity of highly compensated employees,
employees shall include leased employees as defined in section 414(n)(2) of the
Code.
4. Limitations on Contributions under Section 415 of the Internal Revenue
Code.
A. Limitation. Notwithstanding any other provision hereof, the sum of
the Annual Additions (as defined in subparagraph B of this
subparagraph 4) in respect of any employee for any Limitation Year
(as defined in subparagraph C of this subparagraph 4) shall not
exceed the lesser of
(a) 25% of the employee's Compensation (as defined in subparagraph D
of this subparagraph 4), or
(b) $30,000 (or, if greater, one-quarter of the dollar limitation in
effect under Code Section 415(b)(1)(A) as adjusted for inflation
by the Secretary of the Treasury pursuant to 415(d) of the
Code).
B. Annual Additions. The Annual Addition in respect of any employee for
any Limitation Year (as defined in subparagraph C of this
subparagraph 4) shall mean the sum for such year of
(a) Company matching contributions and tax-efficient savings
contributions in respect of the employee under this Plan, plus
(b) the sum of:
(i) the employee's contributions under the Company's General
Retirement Plan (or any similar plan of a subsidiary or
affiliate of the Company),
(ii) the employee's regular savings contributions that are
matched by Company matching contributions pursuant to
paragraph IV.3 hereof, and
(iii) the employee's regular savings contributions to this Plan
that are not matched by Company matching contributions.
C. Limitation Year. For purposes of this paragraph, Limitation Year
shall mean the calendar year.
D. Compensation. As used in subparagraph A(a) of this subparagraph 4,
Compensation shall mean the compensation (as defined by Section
415(c)(3) of the Code and Section 1.415-2(d) of the Income Tax
Regulations) paid or made available to an employee during the
Limitation Year in question.
E. Order of Application of Limitations. If the Annual Addition taken
into account under subparagraph B of this subparagraph shall exceed,
or shall be reasonably projected to exceed, the limitation of such
Annual Addition required by subparagraph A of this subparagraph, any
necessary or appropriate reduction in employee regular savings
contributions, Company matching contributions or tax-efficient
savings contributions shall be applied, first by reducing amounts
contributed as tax-efficient savings contributions pursuant to sub-
paragraph 2 of paragraph IV hereof from the Company's Profit Sharing
Plan for Salaried Employees and, if necessary, from the Company's
Flexible Benefits Plan, second by reducing the employee regular
savings contributions taken into account under subparagraph B(b)(iii)
of this subparagraph, third by reducing the employee regular savings
contributions taken into account under subparagraph B(b)(ii) of this
subparagraph, and related Company matching contributions (in the same
ratio as provided for Company matching contributions under
subparagraph 3 of paragraph IV hereof), fourth by reducing
tax-efficient savings contributions that are not matched by Company
matching contributions, and fifth by reducing tax-efficient savings
contributions that are matched by Company matching contributions
pursuant to subparagraph 3 of paragraph IV hereof and related Company
matching contributions (in the same ratio as provided for Company
matching contributions under subparagraph 3 of paragraph IV hereof).
Notwithstanding any other provision of the Plan, in conforming to the
limitations of this subparagraph 4 the aforementioned reductions in
employee regular savings contributions, Company matching
contributions and tax-efficient savings contributions may be made in
less than a full percentage amount and may be rounded down to the
nearest full dollar. Any reduction pursuant to this paragraph may be
effected (i) before the Annual Addition reaches the limitation
required by subparagraph A of this subparagraph 4 in order to carry
out the ordering rule of this subparagraph, or (ii) with respect to
employee regular savings contributions, retroactively as provided in
Section 1.415-6(b)(6)(iv) of the Income Tax Regulations by returning
to the employee such employee regular savings contributions as are
necessary to reduce the employee's Annual Addition to such
limitation, along with any earnings or gains attributable to such
returned contributions. This retroactive reduction shall be made by
a distribution by the Trustee to the employee of the cash value of
assets in the employee's regular savings account that are
attributable to the contributions to be returned, which contributions
shall be those for the most recent month and such immediately
preceding months as may be necessary to complete the return of
contributions, provided that if less than all of such contributions
for a month will complete such return, the cash value of assets to be
distributed shall be taken from the employee's account in proportion
to the way in which such contributions had been invested when made.
F. Participants in Plans of Subsidiaries or Affiliated Corporations. If
a member of this Plan, at any time during the calendar year, was a
participant under any defined contribution plan (as that term is used
in Section 415(c) of the Code) of a subsidiary of the Company or an
affiliated corporation (all such plans being referred to herein
collectively as "affiliate plans"), then the determination of the
Annual Addition in respect of such member for such calendar year as
described in subparagraph B hereof shall be modified as provided in
this subparagraph:
(i) any employer contributions (as that term is used in Section
415(c)(2)(A) of the Code) and any forfeitures allocated during
such year for the account of such member under all affiliate
plans in respect of services performed prior to the member's
commencement of participation under this Plan shall be added to
the amount determined under subparagraph B of this subparagraph
4; and
(ii) any employee contributions (as that term is used in Section
415(c)(2)(B) of the Code) by such member during such year under
all affiliate plans in respect of services performed prior to
the member's commencement of participation under this Plan
shall be taken into account for purposes of subparagraph B(b)
of this subparagraph 4.
G. Combined Limitation. If the member is, or was, covered under a
defined benefit plan and defined contribution plan maintained by the
Company, the sum of the member's defined contribution plan fraction
may not exceed 1.0 in any limitation year.
The defined benefit plan fraction is a fraction, the numerator of
which is the sum of the member's projected annual benefits under all
defined benefit plans (whether or not terminated) maintained by the
Company and the denominator of which is the lesser of (i) 1.25 times
the dollar limitation of Section 415(b)(1)(A) of the Code in effect
for the limitation year, or (ii) 1.4 times the member's average
compensation for the three consecutive years that produces the higher
average.
The defined contribution plan fraction is a fraction, the
numerator of which is the sum of the annual additions to the member's
account under all defined contribution plans maintained by the
Company (whether or not terminated) for the current and all prior
limitation years, and the denominator of which is the sum of the
lesser of the following amounts determined for such year and for each
prior year of service with the employer (i) 1.25 times the dollar
limitation in effect under Section 415(c)(1)(A) of the Code for such
year, or (ii) 1.4 times the amount which may be taken into account
under Section 415(c)(1)(B) of the Code.
Projected annual benefit means the annual benefit to which the
member would be entitled under the terms of the plan, if the
participant continued employment until normal retirement age (or
current age, if later) and the member's compensation for the
limitation year and all other relevant factors used to determine such
benefit remained constant until normal retirement age (or current
age, if later).
If, in any limitation year, the sum of the defined benefit plan
fraction and the defined contribution plan fraction will exceed 1.0,
the rate of benefit accruals under the defined benefit plan will be
reduced so that the sum of the fractions equals 1.0.
VI. Return of Contributions In Excess of Limitations. Subject to such
regulations as the Committee from time to time may prescribe, a member whose
tax-efficient savings contributions to this Plan and similar contributions to
all other plans in which the member is a participant exceed the limit of $7,000
multiplied by the cost-of-living adjustment factor prescribed by the Secretary
of the Treasury for any year may request and receive return of such excess
tax-efficient savings contributions to this Plan for such year and earnings
thereon by submitting a request for return of such excess in this Plan to the
Committee in such form as shall be acceptable to the Committee. Such amounts
contributed for an immediately preceding plan year shall be returned no later
than each April 15 to members who submit such requests to the Committee no
later than the immediately preceding March 1.
Tax-efficient savings contributions and earnings thereon in excess of the
limitations in subparagraph 3 of paragraph V applicable to such contributions
shall be returned to members on whose behalf such contributions were made for
the preceding plan year at such times and upon such terms as the Committee
shall prescribe.
Regular savings contributions and Company matching contributions and
earnings thereon in excess of the limitations in subparagraph 3 of paragraph V
applicable to such contributions shall be returned to members or to the
Company, as the case may be, at such times and upon such terms as the Committee
shall prescribe.
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 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 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.
VIII. Transfer of Assets to Other Investment Elections. 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:
(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; and
(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.
IX. Vesting of Assets Attributable to Company Matching Contributions. An
employee's right to the assets attributable to regular savings contributions
and tax-efficient savings contributions is immediately nonforfeitable
regardless of the employee's age and service. Assets attributable to Company
matching contributions shall vest in accordance with the following provisions
of this paragraph for employees on the active employment roll on or after
October 1, 1995.
Assets attributable to Company matching contributions shall become
non-forfeitable upon the occurrence of the earliest of the following:
(i) attainment by the member of the normal retirement age of 65 as an
active employee or, if earlier, five years after the member's
original date of hire;
(ii)retirement of the member pursuant to the provisions of any retirement
plan maintained by the Company or a subsidiary of the Company;
(iii) death of the member prior to termination of employment;
(iv) death or disability of a member who terminates employment with the
Company to enter military service and is therefore unable to return
to work with the Company within the applicable reinstatement period;
or
(v) election by a member in accordance with the provisions of paragraph
XVII to have the assets in such member's account transferred to the
savings plan of a subsidiary by which such member is currently
employed;
provided, however, that assets attributable to Company matching contributions
shall be forfeited upon the occurrence of, termination of employment of the
member prior to the fifth anniversary of the member's original date of hire
without a return to work for any reason other than death, retirement pursuant
to the provisions of any retirement plan maintained by the Company or a
subsidiary of the Company, layoff, medical leave or release due to continued
disability after expiration of medical leave, regular employment by an
Affiliated Corporation, or where the member shall be granted a military leave
of absence, and either (A) the member's employment subsequently is reinstated
under then applicable personnel policies of the employer or (B) within the
period so provided for reinstatement, the member either dies or becomes
eligible for a retirement benefit under the provisions of any Retirement Plan.
If a member is required to forfeit assets attributable to Company matching
contributions as a result of a withdrawal by the member, then such member may
subsequently elect to return such a withdrawal to the Plan and have the assets
attributable to Company matching contributions restored to his or her account
as provided in subparagraph 6 of paragraph XVI.
X. Member's Account in Trust Fund. As soon as practicable after each pay
period but in any event not later than 15 days after the month of payment of
salary for such period, the Company shall pay to the Trustee (a) the employee
regular savings contributions for such period, (b) the Company matching
contribution for such period less any amount then to be applied to reduce
Company matching contributions pursuant to the provisions of paragraph XXIII
hereof, (c) the tax-efficient savings contributions for such period, and (d)
the amounts of payments by members with respect to loans and interest thereon
pursuant to paragraph XII hereof. Upon receipt of such payments by the
Trustee, the aggregate amount of such payments (and earnings thereon, as from
time to time received by the Trustee) shall be credited to the respective
accounts of the members, and the Trustee shall hold, invest and dispose of the
same as provided in the Plan. Amounts credited to a member's Company matching
contributions account for a pay period shall be credited first in respect of
any such tax-efficient savings contributions as shall have been made for the
member for such month and then, to the extent that the amount so credited does
not equal the total amount to be credited to the member's Company matching
contributions account for such month, the remainder shall be credited in
respect of such employee's regular savings contributions as shall have been
made by the member for such pay period. A member shall not have any interest
in or right or power in respect of Company matching contributions or earnings
thereon, whether or not credited to his or her account, except as provided in
the Plan.
XI. Investment of Dividends, Interest, Etc. Cash dividends, interest, and the
cash proceeds of any other distribution in respect of the Ford 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, 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 shall be
distributed in accordance with the provisions of paragraph XV to members who
have elected to invest in the Ford Stock Fund unless such members elect not to
receive such dividends.
XII. Borrowings with Respect to Assets Attributable to Regular or
Tax-Efficient Savings Contributions. Subject to such regulations as the
Committee from time to time may prescribe, a member may apply for and receive a
loan from the Plan provided that the aggregate of all such loans does not
exceed the lesser of
(i) the cash value, at the time of any such loan, of the assets (except
any amount credited to such member's Income Fund subaccount) in his or her
tax-efficient savings account or regular savings account that are
attributable to tax-efficient savings contributions made on his or her
behalf or to regular savings contributions and that the member shall have
designated to be used to provide the amount of the loan;
(ii) fifty percent (50%) of the cash value of assets, at the time of any
such loan, in his or her account but not more than $50,000; or
(iii) $50,000 reduced by the difference between such member's highest loan
balance under all plans of the Company and its subsidiaries during the
previous 12 months (ending on the day before the effective date of such
loan from the Plan) and such member's loan balance on the effective date
of such loan.
All such loans shall (i) be available to all members on a reasonably
equivalent basis, (ii) be adequately secured and (iii) bear a reasonable rate
of interest and be subject to such other requirements, including repayment
terms (repayment of loans must be made not less frequently than quarterly), as
the Committee from time to time may prescribe, provided, however, that (a) the
entire amount of any such loan and all amounts of related interest must be
repaid not later than 60 months (or, when permitted by law, such later date as
the Committee may determine) after the month in which the loan is effective and
(b) repayments shall be made by a member from his or her salary by payroll
deductions or in such other manner as the Committee may prescribe. All such
requirements shall be applicable on a uniform and non-discriminatory basis to
all members who may apply for such loans.
Amounts paid by a member, including interest payments, with respect to any
such loan shall be credited to a loan subaccount in such member's tax-efficient
savings account.
Loan repayments, including interest, on loans made before October 1, 1995
shall be invested in the Interest Income Fund until the member elects to have
such assets transferred. Loan repayments, including interest, on loans made on
or after October 1, 1995 shall be invested in the latest investment elections
made on or after October 1, 1995 by the member with respect to contributions of
salary to regular savings or tax-efficient savings or, in the absence of such
election, in the Interest Income Fund until the member elects to have such
assets transferred. Loan repayments, including interest, on loans made on or
after October 1, 1995 will be allocated to regular or tax-efficient savings
accounts, or both, from which loans were made and in the same proportion.
In the event of a default on a loan, the member's accrued benefit under
the Plan shall not be reduced until an otherwise permissible distributable
event occurs (e.g., attaining age 59 1/2, termination of employment).
XIII. Withdrawal by Member of Assets Prior to Termination of Employment.
1. Tax-Efficient Savings. A member shall not be permitted to withdraw
prior to his or her termination of employment all or any portion of the assets
in the member's tax-efficient savings account attributable to tax-efficient
savings contributions, provided, however, that such withdrawal shall be
permitted subject to the conditions in paragraph XVI (i) at any time after the
member shall have attained age 59-1/2 or (ii) prior to attaining age 59-1/2, if
(a) the withdrawal is made on account of an immediate and heavy financial need
of the member and is necessary to satisfy such financial need or (b) the
requirements of safe harbors as provided in regulations promulgated by the
Internal Revenue Service are met provided, however, that any withdrawal on
account of financial hardship cannot exceed the value of tax-efficient savings
assets as of December 31, 1988 plus the dollar amount of tax-efficient savings
contributions made to the account of the member thereafter, exclusive of
earnings thereon, and provided, further, that in the event of any withdrawal by
a member prior to attaining age 59 1/2, such member shall not be permitted to
make contributions to the Plan for a period of 12 months succeeding the date of
any withdrawal of assets. The assets so withdrawn shall be delivered to the
member as soon as practicable after the effective date of the withdrawal.
The following are the only financial needs that are considered immediate
and heavy under the Internal Revenue Service safe harbors referred to above:
(1) expenses incurred or necessary for medical care described in Code section
213(d), of the member, the member's spouse, or dependents; (2) the purchase
(excluding mortgage payments) of a principal residence of the member; (3)
payment of tuition and related educational fees for the next 12 months of
post-secondary education for the member, the member's spouse, children or
dependents; or (4) the need to prevent the eviction of the member from or a
foreclosure on the mortgage of the member's principal residence.
A hardship withdrawal is not necessary to the extent it exceeds the amount
necessary (including taxes) to relieve the need or to the extent that the need
may be satisfied from other resources reasonably available to the member.
2. Regular Savings. Subject to the conditions in paragraph XVI, at any
time or from time to time prior to termination of employment, a member may
withdraw all or part of the cash value of assets in his or her regular savings
account that are attributable to his or her employee regular savings
contributions or earnings thereon provided, however, that such member shall not
be permitted to make contributions to the Plan for a period of 12 months
succeeding the date of any withdrawal of assets on which the Company match is
based if such withdrawal is made within two years following the end of the year
in which such contributions were made.
3. Company Matching. Subject to the conditions in paragraph XVI,a member
may withdraw all or part of the cash value of assets in his or her Company
matching account that are attributable to Company matching contributions or
earnings thereon at any time and from time to time prior to termination of
employment to the extent such assets shall have vested pursuant to the
provisions of paragraph IX provided, however, that no such withdrawal shall be
permitted for two years following the end of the year in which Company matching
contributions were made.
4. Tax-efficient Savings, Regular Savings and Company Matching After
Attainment of Age 59 1/2. After attainment of age 59 1/2, a member, regardless
of whether such member has terminated employment, may elect to make a
systematic withdrawal of the cash value of assets in such member's account in
monthly, quarterly, semi-annual or annual installments of such period of time
as the member shall specify, as provided in subparagraph (ii) of paragraph XIV
for members who have terminated employment.
5. Tax-efficient Savings, Regular Savings and Company Matching After
Attainment of Age 70 1/2. After attainment of age 70 1/2, a member, regardless
of whether such member has terminated employment, may elect to make a
withdrawal of the cash value of assets in the member's account over the life of
the member or the joint lives of the member and the member's beneficiary under
the Plan (including the member's spouse), as provided in subparagraph (iii) of
paragraph XIV for members who have terminated employment.
XIV. Withdrawal by Member of Assets at or After Termination of Employment.
Subject to the conditions in paragraph XVI, a member who has terminated
employment for any reason (whether voluntary or by discharge, with or without
cause), may elect to make a withdrawal in any of the following ways:
(i) A member who has terminated employment may elect to withdraw all or
part of the cash value of assets in his or her regular savings account and
tax-efficient savings account and the cash value of assets in his or her
Company matching account to the extent the same shall have vested as
provided in paragraph IX. Such assets shall be delivered to the member as
soon as practicable after receipt of a request for withdrawal made by the
member at or after termination of employment in such form and in such
manner as the Committee shall specify.
(ii) A member who has terminated employment may elect a systematic
withdrawal of the cash value of assets in such member's account in
monthly, quarterly, semi-annual or annual installments over such period of
time as the member shall specify. Each such installment shall be paid in
an amount equal to the cash value of assets in such member's account at
the effective date of each such installment multiplied by a fraction the
numerator of which is one and the denominator of which is the number of
installments remaining in the period specified by the member. The cash
value of each such installment in a systematic withdrawal shall be
withdrawn proportionately from each of the investments which the member
has elected under the Plan at the effective date of each such installment.
The effective date of each such installment shall be selected by the
Committee and communicated to members of the Plan. Such systematic
withdrawals shall be subject to such further requirements as the Committee
shall specify. In the event that the systematic withdrawals specified by
the member do not meet the minimum distribution requirements beginning at
age seventy and one half (70 1/2) under section 401(a)(9) of the Internal
Revenue Code as specified in paragraph XV, then such additional amounts
shall be distributed in accordance with the provisions of paragraph XV as
necessary to satisfy such minimum distribution requirements.
(iii) A member who has terminated employment and who has attained age
seventy and one-half (70 1/2) may elect withdrawal of the cash value of
assets in the member's account over the life of the member or the lives of
the member and the member's beneficiary under the Plan (including the
member's spouse) in accordance with section 401(a)(9) of the Internal
Revenue Code and with regulations prescribed by the Secretary of the
Treasury thereunder and subject to such regulations as the Committee may
prescribe. Such election may be made by members who have terminated
employment to have such distribution made in lieu of distribution over a
period of 15 years as provided in paragraph XV.
XV. Distribution by the Plan of Assets at or after Termination of Employment,
Distribution upon Attainment of Age 70 1/2, Distribution of Dividends on
Company Stock in the Ford Stock Fund. Distribution by the Plan of all assets
in a member's account, including assets attributable to Company matching
contributions to the extent such assets shall have vested, shall be governed by
the following provisions:
1. Termination of Employment. In the case of a member's termination of
employment for any reason (whether voluntary or by discharge, with or without
cause), the cash value of assets in his or her regular savings account and
tax-efficient savings account and the cash value of assets in his or her
Company
matching account to the extent the same shall have vested as provided in
paragraph IX shall be delivered to the member as soon as practicable after the
end of the year in which such member attains age sixty-five (65) or, if the
member shall have elected deferral beyond age 65 at such time and in such
manner and in such form as the Committee shall prescribe, distribution of such
assets in the account of a member who attains age 70 1/2 on or after January 1,
1988 shall begin not later than April 1 of the calendar year following the
calendar year in which the member attains age seventy and one-half (70-1/2) and
shall be made over a period of fifteen (15) years (15 years is a period certain
not extending beyond the joint life and last survivor expectancy of the member
and the member's designated beneficiary). Such distribution shall be made in
accordance with the regulations prescribed by the Secretary of the Treasury
under Code section 401(a)(9), including the minimum distribution incidental
benefit requirements of Prop. Reg. section 1.401(a)(9)-2, and subject to such
regulations as the Committee may prescribe. In the case of a distribution to
a member who has attained age sixty-five (65), distribution shall be made no
later than the 60th day after the close of the year in which the member attains
age sixty-five (65).
If the member's account was established on or after October 1, 1995 and the
value of the member's account is less than $3,500 (determined within 90 days
after termination of employment) and was less than $3,500 on the effective date
of any prior withdrawal or distribution from such member's account, the cash
value of assets in such member's account shall be distributed as soon as
practicable.
If any loan is in default as of the end of any year, the entire balance of such
loan shall be treated as a distribution under the Plan as of the end of such
year.
2. Attainment of Age 70-1/2 by an Employee Who Has Not Terminated
Employment. In the case of a member who has attained age seventy and one-half
(70-1/2) on or after January 1, 1988 and prior to January 1, 1997 and who has
not terminated employment, distribution of the cash value of assets in his or
her account shall begin not later than April 1 of the calendar year following
the calendar year in which the member attains age seventy and one-half (70-1/2)
and shall be made over a period of fifteen (15) years (15 years is a period
certain not extending beyond the joint life and last survivor expectancy of the
member and the member's designated beneficiary); upon termination of such
member's employment, the assets remaining in the member's account shall be
distributed. If a distribution commences under this paragraph XV while the
member is employed and the member dies while still employed, the assets
remaining in the member's account will be immediately distributed to the
member's beneficiary. Such distribution shall be made in accordance with the
regulations prescribed by the Secretary of the Treasury under Code section
401(a)(9), including the minimum distribution incidental benefit requirements
of Prop. Reg. section 1.401(a)(9)-2, and subject to such regulations as the
Committee may prescribe.
Distributions to active employees who attained age seventy and one half
(70 1/2) prior to January 1, 1997 may be discontinued by such employee
effective beginning with distributions that would otherwise be required to be
made for the 1997 plan year.
3. Dividends on Company Stock in the Ford Stock Fund.
Commencing 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 to members who have assets in the Ford Stock Fund and do not reject
such distribution. The amount of such dividends that shall be distributed to
members who do not reject distribution shall equal the lesser of (i) the total
of such dividends, or (ii) the total amount of dividends paid on all shares
held in the Ford Stock Fund multiplied by the ratio of the number of Ford Stock
Fund units in the accounts of members who do not reject such distribution to
the number of Ford Stock Fund units in the accounts of all members. The amount
of such dividends that shall be distributed to each member who has not rejected
such distribution shall be equal to the total amount of dividends to be
distributed multiplied by the ratio of the number of Ford Stock Fund units in
the account of such member to the total number of Ford Stock Fund units in the
accounts of all members who have not rejected such distribution.
Distribution of such dividends shall be made as soon as practicable after
receipt of such dividends by the Trustee.
A member to whom such dividends would otherwise be distributed may reject such
distribution in such manner and at such time as the Committee shall determine.
4. Death of a Member. In the event of death of a member, distribution shall be
made to such member's beneficiaries hereunder as soon as practicable after
notice of such member's death is received by the Company.
XVI. Conditions Applicable to Withdrawals and Distributions.
1. Each withdrawal shall be made as of any business day (the last
business day of any week if withdrawal includes assets from the
Income Fund), upon the member's request delivered in such form and
in such manner and at such time as the Committee shall specify. The
assets being withdrawn shall be delivered to the member as soon as
practicable after the effective date of the withdrawal.
2. Upon and in accordance with each such request for withdrawal, there
shall be delivered to the member the assets in his or her regular
savings account, which are attributable to his or her regular
savings contributions or earnings thereon or in his or her
tax-efficient savings account, which are attributable to his or her
tax-efficient savings or earnings thereon, or in his or her Company
matching contributions account. To the extent that any amounts of
assets in his or her Company matching contributions account were
credited in respect of such regular savings contributions or
tax-efficient savings contributions, the same not being vested shall be
forfeited and shall be applied as provided in paragraph XXIII
hereof.
3. Each distribution shall be made as of the close of a business day
(the last business day of any week if distribution includes assets
from the Income Fund) and the assets being distributed shall be
delivered to the member as soon as practicable after the effective
date of the distribution.
4. Subject to the provisions of paragraph XXII hereof, and subject to
such regulations as the Committee from time to time may prescribe, a
member requesting a withdrawal or required to receive a distribution
may direct the Trustee to make distribution of the cash value of
assets in such member's Ford Stock Fund account in the form of whole
shares of Company stock and cash for any fraction of a share, such
withdrawal or distribution to be at a price per share equal to the
market value of Company stock on the effective date of the
withdrawal or distribution. The member so directing the Trustee
shall pay all applicable transfer taxes incident to the withdrawal
or distribution of such shares by the Trustee, and the amount
thereof may be deducted from the payment made by the Trustee to the
member.
5. In the case of a distribution of assets pursuant to subparagraph 4E
of paragraph V hereof that is made from a member's regular savings
account or tax-efficient savings account, to the extent that any
amounts of assets in the member's Company matching contributions
account had been credited in respect of the employee's regular
savings or tax-efficient savings contributions to which such assets
are attributable, the same not being vested shall be forfeited and
shall be applied as provided in paragraph XXIII hereof.
6. Redeposits. If a withdrawal is made by a member from his or her
regular savings account or tax-efficient savings account pursuant to
the provisions of paragraph XIII or XIV and prior to the date on
which related Company matching contributions and earnings thereon
have vested as determined pursuant to the provisions of paragraph IX
hereof, such member may subsequently elect to return to the Plan in
a lump sum in cash the value as of the effective date of withdrawal
of the assets and cash delivered pursuant to paragraph XIII or XIV
and thereby have restored to his or her Company matching
contributions account assets and cash having a value equal to the
value, as of the effective date of withdrawal, of the assets
attributable to Company matching contributions or earnings thereon
that had been forfeited. Any such return shall be made not later
than the end of the five-year period beginning with the effective
date of withdrawal or, if the member ceases to be employed by a
Participating Company, not later than the end of a period of five
consecutive plan years, beginning with the plan year in which the
termination of employment occurred, during which the member is not
employed on the last day of each plan year. For purposes of
determining whether a member has not been employed for five
consecutive plan years, any year in which the member is absent on
the last day of the year by reason of pregnancy of the member, birth
of a child of the member, placement of a child with the member in
connection with the adoption of such child by such member, or for
purposes of child care immediately following such birth or placement
shall be disregarded. Termination of employment for purposes of
this subparagraph 6 shall mean, in the case of a member who is laid
off because of a reduction in force, the later of the date on which
such layoff begins or the effective date of withdrawal pursuant to
the provisions of paragraph XIII or XIV by such member.
If any such return is made on or before December 31 of the year in
which the effective date of withdrawal occurs, the cash value of
amount so returned or so restored shall be included in the plan year
from which the withdrawal was made and if made after such December
31, in the plan year which succeeds the plan year from which
withdrawal was made by one year for each December 31 that occurs on
or after the effective date of the withdrawal and prior to the date
of such return.
The amount of cash so returned and any assets acquired therewith
shall be treated as employee regular savings contributions for
purposes of determining the extent to which assets attributable to
Company matching contributions or earnings thereon have vested
pursuant to paragraph IX, subsequent distributions or withdrawals
pursuant to paragraph XIII or paragraph XIV, reporting to members
pursuant to paragraph XIX and voting of Company stock pursuant to
paragraph XXIV. The assets so restored shall be treated as
attributable to Company matching contributions for all purposes of
the Plan.
The cash so returned shall be invested in the Ford Stock Fund, the
Common Stock Fund, the Bond Fund, the Income Fund or the Interest
Income Fund according to the values of such investments at the
effective date of the withdrawal, at the same time that the Trustee
invests contributions made during the month in which such return is
made.
Upon such return, the restored assets shall vest and shall continue
to vest as provided in paragraph IX hereof.
7. Rollovers.
(A) This section applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a member's election under
this part, a member may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an eligible
rollover distribution that is equal to at least $500 paid
directly to an eligible retirement plan specified by the member
in a direct rollover.
(B) Eligible rollover distribution: An eligible rollover
distribution is any withdrawal or distribution of all or any
portion of the balance to the credit of the member, 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
distributee's designated beneficiary, or for a specified period
of ten years or more; any distribution to the extent such
distribution is required under Code section 401(a)(9); 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);
and any other distribution(s) that is reasonably expected to
total less than $200 during a year.
(C) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Code section 408(a),
an individual retirement annuity described in Code section
408(b), an annuity plan described in Code section 404(a), or a
qualified plan described in Code section 401(a), 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.
(D) Direct Rollover: A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
8. For purposes of any distribution of assets in a member's account
pursuant to paragraph XV, the cash value of assets in his or her
account shall be reduced by the balance of any loan made to such
member as provided in paragraph XII hereof and interest thereon that
is unpaid at the effective date of such distribution.
9. Assets held for the benefit of an alternate payee pursuant to a
qualified domestic relations order as defined by section 414(p) of
the Code and section 206(d) of ERISA shall be distributed prior to
the date on which assets would be distributed to a member if such
order so requires provided that such order requires distribution of
all assets held for the benefit of such alternate payee.
10. In the event that distribution to a member or his or her beneficiary
or beneficiaries cannot be made because the identity or location of
such member or such beneficiary or beneficiaries cannot be
determined after reasonable efforts and if the assets in such
member's account for that reason remain undistributed for a period
of one year, the Committee may direct that the assets in such
member's account and all further benefits with respect to such
person shall be forfeited and all liability for the payment thereof
shall terminate provided, however, that in the event that the
identity or location of the member or beneficiary is subsequently
determined, the value of the assets in such member's account at the
date of forfeiture shall be paid by the Company to such person in a
single sum. The value of the assets so forfeited shall be applied,
as soon as practicable, to reimburse the Company for its expense in
administering the Plan. For such purposes, the value of the assets
shall be determined as of the date of the forfeiture.
11. Termination of Employment.
For purposes of paragraphs XIII, XIV and XV, no termination of
employment by a member shall be deemed to have occurred in any
instance
(i) where, not later than 30 days after the occurrence of an event
which in the absence of this provision would constitute a
termination of his or her employment hereunder, he or she
becomes regularly employed by an Affiliated Corporation, or
(ii) where the member shall have been laid off due to a reduction in
force, or
(iii) where the member shall have been released due to the member's
continued disability, or
(iv) where the member shall have been granted a military leave of
absence, and either (A) the member's employment subsequently is
reinstated under then applicable personnel policies of the
employer or (B) within the period so provided for
reinstatement, the member either dies, becomes eligible for a
retirement benefit under the provisions of any Retirement Plan,
or
(v) where the member shall have become employed by a subsidiary of
the Company.
XVII. Transfer of Assets to Savings Plan of a Subsidiary by Which Member is
Employed. Subject to such administrative requirements as the Committee shall
from time to time establish and subject to acceptance by the transferee plan, a
member may elect to have transferred from the Plan all, but not less than all,
amounts, either in the form of cash or Ford stock, in such member's accounts
under the Plan to a savings plan of a subsidiary where such member is employed
at the time of transfer. Any unvested assets in the transferred employee's
account under the Plan would be fully vested upon transfer of a member to a
subsidiary and election by the employee to have amounts in the member's
accounts under the Plan transferred to a savings plan of such subsidiary. Such
an election may be made within a period of one year following transfer of
employment or, if later, September 30, 1995.
XVIII. 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.
Investments shall be made primarily in shares of Company stock;
a small portion shall be invested in short-term investments to
provide liquidity for daily activity. It is expected that
about one to two percent of the Fund will be held in short-term
investments, but the percentage may be higher or lower,
depending upon the expected liquidity requirements of the Fund.
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 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 at the end of 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.
(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.
(iv) 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, based on the closing
price on the New York Stock Exchange on the effective date of
such withdrawal or distribution.
<PAGE>
(e) Registered Name.
Securities held in the Ford Stock Fund may be registered in the
name of the Trustee or its nominee.
2. Common Stock Fund. The Trustee shall establish and administer the
Common Stock Fund in accordance with the following:
(a) Investments. For each member who elects pursuant to paragraph VII
to have Contributions invested in the Common Stock Fund or for whom
a transfer is made to the Common 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.
Investments shall be made with the objective of providing investment
results that closely correspond to the price and yield performance
of the publicly traded common stocks (i) of the 500 corporations
included in Standard and Poor's 500 Index and (ii) of the
corporations having capitalizations of at least $100 million as
publicly reported from time to time and not included in the Standard
and Poor's 500 Index. Assets shall be invested in the common stock
of each of such corporations in the same percentage weighting as
the capitalization of such corporation is as a percentage of the
total of the capitalizations of all of such corporations.
Investments of all or a portion of Common 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 Common Stock fund. A portion of the funds of the
Common Stock Fund may be held in cash or invested in short-term
obligations when deemed advisable by the Trustee. Securities may be
sold without regard to the length of time they have been held. A
different market index of publicly traded common stocks may be
selected by the Company for investments of Common Stock Fund assets
in the event Standard and Poor's Corporation discontinues its 500
Index or for other reasons.
(b) Common Stock Fund Units. Members shall have no ownership in any
particular asset of the Common Stock Fund. The Trustee shall be the
sole owner of all Common Stock Fund assets. Proportionate interests
in the Common Stock Fund shall be expressed in Common Stock Fund
Units. All Common Stock Fund Units shall be of equal value and no
Common Stock Fund Unit shall have priority or preference over any
other. Common Stock Fund Units shall be credited by the Trustee to
accounts of members as of each valuation date.
(c) Common Stock Fund Unit Prices. The term "Common Stock Fund Unit
Price," as used herein, shall mean the value in money of an
individual Common Stock Fund Unit expressed to the nearest cent.
The Common Stock Fund Unit Price as of March 31, 1986 was $10.
Thereafter, the Common Stock Fund Unit Price has been and shall be
redetermined each business day that is a trading day on the New York
Stock Exchange. The Common Stock Fund Unit Price for each such
business day shall be determined by dividing the net asset value of
the Common Stock Fund on such business day by the number of Common
Stock Fund Units outstanding on such business day. Common 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 Common Stock Fund shall be computed as follows:
(i) Securities listed on a national stock exchange shall be valued
at the closing price on the valuation date, or, if no sales
were made on that date, at the closing price on the next
preceding day on which sales were made, in either case as
reported on the primary exchange.
(ii) Securities traded only in over-the-counter markets shall be
valued at the mean of the closing bid and asked prices as
listed in a publication or publications selected by the
Trustee for the valuation date, or the next preceding day for
which such prices are available, if not available for the
valuation date.
(iii) All other assets of the Common 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.
(iv) Common Stock Fund Units credited to members' accounts with
respect to employee regular savings contributions, or
tax-efficient savings contributions made during any month
shall be credited at the Common Stock Fund Unit Price
determined as of the close of business on the day that
contributions are received by the Trustee. Common Stock Fund
Units withdrawn or distributed shall be valued at the Common
Stock Fund Unit Price at the close of business on the
effective date of such withdrawal or distribution.
(v) Investment transactions, income and any expenses chargeable to
the Common Stock Fund will be accounted for on an accrual
basis.
(d) Distribution and Withdrawal From Common Stock Fund. The cash value
of assets in the Common 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 only
in cash.
(e) Voting Stock. The Trustee shall be entitled, itself or by proxy, to
vote in its discretion all shares of voting stock in the Common Stock
Fund.
(f) Registered Name. Securities held in the Common Stock Fund may be
registered in the name of Trustee or its nominee.
3. Bond Fund. The Trustee shall establish and administer the Bond Fund
in accordance with the following:
(a) Investments. For each member who elects pursuant to paragraph VII to
have Contributions invested in the Bond Fund or for whom a transfer
is made to the Bond 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.
Investments shall be made with the objective of providing investment
results that closely correspond to the price and yield performance of
the Lehman Brothers Aggregate Bond Index (the "Lehman Aggregate
Index"). Assets shall be invested in a portfolio of Treasury notes
and bonds, corporate notes and bonds and mortgage-backed securities
and other securities that, in the aggregate, typify the securities
that are included in the Lehman Aggregate Index.
Investments of all or a portion of Bond Fund assets may be made in
any common, collective or commingled fund maintained by the Trustee
or the person, company, corporation or other organization appointed
by the Company to manage all or a portion of the Bond Fund when, in
the opinion of the Trustee or the person, company, corporation or
other organization appointed by the Company to manage all or a
portion of the Bond Fund, such investments are consistent with the
objective of the Bond Fund. To the extent that assets are so
invested, they shall be subject to the terms and conditions of the
Declaration of Trust of such common, collective or commingled fund,
as amended from time to time. A portion of the funds of the Bond
Fund may be0held in cash or invested in short-term obligations when
deemed advisable by the Trustee. Securities may be sold without
regard to the length of time they have been held. A different market
index of publicly traded fixed income securities may be selected by
the Company for investments of Bond Fund assets in the event the
Lehman Aggregate Index is discontinued or for other reasons.
(b) Bond Fund Units. Members shall have no ownership in any particular
asset of the Bond Fund. The Trustee shall be the sole owner of all
Bond Fund assets. Proportionate interests in the Bond Fund shall be
expressed in Bond Fund Units. All Bond Fund Units shall be of equal
value and no Bond Fund Unit shall have priority or preference over
any other. Bond Fund Units shall be credited by the Trustee to
accounts of members as of each valuation date.
(c) Bond Fund Unit Prices. The term "Bond Fund Unit Price," as used
herein, shall mean the value in money of an individual Bond Fund Unit
expressed to the nearest cent. The Bond Fund Unit Price as of
January 1, 1993 was $10. Thereafter, the Bond Fund Unit Price has
been and shall be redetermined each business day that is a trading
day on the New York Stock Exchange. The Bond Fund Unit Price for
each such business day shall be determined by dividing the net asset
value of the Bond Fund on such business day by the number of Bond
Fund Units outstanding on such business day. Bond 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 Bond
Fund shall be computed as follows:
(i) All assets of the Bond 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.
(ii) Bond Fund Units credited to members' accounts with respect to
employee regular savings contributions, or tax-efficient
savings contributions made during any month shall be credited
at the Bond Fund Unit Price determined as of the close of
business on the day that such contributions are received by
the Trustee. Bond Fund Units withdrawn or distributed shall
be valued at the Bond Fund Unit Price at the close of business
on the effective date of such withdrawal or distribution.
(iii) Investment transactions, income and any expenses chargeable
to the Bond Fund will be accounted for on an accrual basis.
(d) Distribution and Withdrawal From Bond Fund. The cash value of assets
in the Bond Fund shall be distributed to members or may be withdrawn
by members only in accordance with paragraphs XIII, XIV or XV hereof.
All distributions and withdrawals shall be only in cash.
(e) Registered Name. Securities held in the Bond Fund may be registered
in the name of the Trustee or its nominee.
4. Interest Income Fund.
The Trustee shall establish and manage the Interest Income Fund in
accordance with the following:
(a) Investments.
For each member who elects pursuant to paragraph VII to have
Contributions invested in the Interest Income Fund or for whom
a transfer is made as provided in paragraph VIII, the Trustee
shall invest the sums so to be invested or transferred in
accordance with instructions of one or more persons,
companies, corporations or other organizations appointed by
the Company. The Trustee may be appointed for such purpose.
Investments shall be made with the objective of providing a
broadly diversified, stable value investment in which the
value of the member's investment does not fluctuate except for
the addition of interest credited to the member's account.
The interest rate payable on assets in the Interest Income
Fund will be declared annually in advance and may be changed
each calendar year.
The Trustee shall invest the Contributions, and earnings
thereon, received for the accounts of members who elect to
invest in the Interest Income Fund according to the advice of
the Interest Income Fund Advisor. Assets in such Fund shall
be invested in a well diversified portfolio of fixed income
securities, including investment contracts with insurance
companies and other organizations, individual fixed income
securities, and units in fixed income collective funds.
Securities may be sold without regard to the length of time
they have been held. Investments shall be subject to such
additional restrictions as from time to time shall be provided
in the agreement designating or appointing the Interest Income
Fund Advisor. To the extent that the actual return on assets
in the Fund is more or less than the declared rate of interest
for the current year, the rate of interest declared and paid
for succeeding years will be adjusted upward or downward.
Investments of all or a portion of Interest Income Fund assets
may be made in any common, collective or commingled fund
maintained by the Trustee or any person, company, corporation
or other organization appointed by the Company to manage all
or a portion of the Interest Income Fund when, in the opinion
of the Trustee or the person, company, corporation or other
organization appointed by the Company to manage all or a
portion of the Interest Income Fund, such investments are
consistent with the objective of the Interest Income Fund. To
the extent that assets are so invested, they shall be subject
to the terms and conditions of the Declaration of Trust of
such common, collective or commingled fund, as amended from
time to time. A portion of the funds of the Interest Income
Fund may be held in cash or invested in short-term obligations
when deemed advisable by the Trustee or the person, company,
corporation or other organization appointed by the Company to
manage all or a portion of the Interest Income Fund.
(b) The Trustee periodically shall credit to the appropriate
Interest Income Fund accounts of members interest at the rate
declared prior to the commencement of each calendar year.
(c) In the event that the total value of the Interest Income Fund
is reduced for any reason (other than by reason of
distributions to or withdrawals or transfers by members
pursuant to the Plan), the Trustee shall reduce the total
amount credited to the Interest Income Fund account of each
member by a proportionate amount.
(d) Cash credited to members' accounts in the Interest Income 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 only in cash.
(e) Interest Income Fund Value.
The term "Value" as used herein shall mean the value in money
of the net assets in the Interest Income Fund. The Interest
Income Fund Value shall be determined each business day that
is a trading day on the New York Stock Exchange. Interest
Income Fund Values shall be determined before giving effect to
any distribution or withdrawal and before crediting
contributions or transfers to members' accounts effective as
of any such business day. The Value of the Interest Income
Fund shall be computed as follows:
(i) All assets of the Interest Income 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.
(ii) Investment transactions, income and any expenses
chargeable to the Interest Income Fund will be accounted
for on an accrual basis.
(f) Registered Name.
Securities held in the Interest Income Fund may be registered
in the name of the Trustee or its nominee.
5. Income Fund.
(a) For each member who elected prior to January 1, 1996 pursuant to
paragraph VII to have such employee regular savings contributions or
tax-efficient savings contributions invested in the Income Fund or
for whom a transfer was made prior to January 1, 1996 to the Income
Fund as provided in paragraph VIII hereof, the Trustee established an
Income Fund subaccount or subaccounts, which shall continue to be
parts of the member's accounts under the Plan, and credited to such
subaccounts the sums transferred or invested under such member's
election or elections.
(b) The Trustee periodically shall credit to the appropriate Income Fund
subaccount of such member proportionate amounts of any increases in
subaccount of such member proportionate amounts of any increases in
(iii)Investment transactions, income and any expenses chargeable to
the Bond Fund will be accounted for on an accrual basis.
(d) Distribution and Withdrawal From Bond Fund. The cash value of assets
in the Bond Fund shall be distributed to members or may be withdrawn
by members only in accordance with paragraphs XIII, XIV or XV hereof.
All distributions and withdrawals shall be only in cash.
(Pursuant to the Plan), the Trustee shall
reduce the total amount credited to the Income Fund subaccount or
subaccounts of each member by a proportionate amount.
(d) Cash credited to members' subaccounts in the Income Fund shall be
distributed to members or may be withdrawn by members only in
accordance with paragraphs XIII, XIV or XV hereof.
(e) The Company entered into one or more Income Fund Contracts with one
or more insurance companies or other organizations for members
electing the Income Fund option provided in this subparagraph 5 of
paragraph XVIII.
6. Mutual Funds.
Each of the Mutual Funds offered as an investment election under the
Plan shall be described in a prospectus for each such Mutual Fund and
each such prospectus shall be provided to each member of the Plan who
requests such prospectus.
XIX. Member's Quarterly Statement. As soon as practicable after the end of
each calendar quarter of each year, there shall be furnished to each member a
statement as of the end of each such quarter of such year of the cash value of
the investments in his or her account or accounts, the contributions made by or
on behalf of such member during the preceding calendar quarter, the investment
elections with respect to such contributions, and such additional information
as the Committee shall determine. Such statements shall be deemed to have been
accepted by the member and his or her beneficiaries designated hereunder as
correct unless written notice to the contrary shall be received as the Company
shall specify on such statement within 30 days after the mailing of such
statement to the member.
XX. Notices, etc. All notices, statements and other communications from the
Trustee or a Participating Company to an employee, member or designated
beneficiary required or permitted hereunder shall be deemed to have been duly
given, furnished, delivered or transmitted, as the case may be, when delivered
to (or when mailed by first-class mail, postage prepaid and addressed to) the
employee, member or beneficiary at his or her address last appearing on the
books of such Participating Company.
All notices, instructions and other communications from an employee or
member to the Company or Trustee required or permitted hereunder (including
without limitation payroll deduction authorizations, Salary Reduction
agreements and changes and terminations thereof, investment and other
elections, requests for withdrawal or loans and designations of beneficiaries
and revocations and changes thereof) shall be made in such form and in such
manner from time to time prescribed therefor by the Committee.
From time to time as necessary to facilitate the administration of the
Plan and the trust created thereunder, the Company, the Trustee and the
Committee shall deliver to each other copies or consolidations of such notices,
instructions or other communications in respect of the Plan or such trust as it
may receive from employees, members or beneficiaries.
XXI. Trustee. The Company, by action of its Vice President - Human Resources,
Treasurer and Vice President - General Counsel shall appoint one or more
individuals or corporations to act as Trustee under the Plan, and at any time
may remove the Trustee and appoint a successor Trustee. The Company may,
without reference to or action by any employee, member or beneficiary or any
other Participating Company, enter into such Trust Agreement with the Trustee
and from time to time enter into such further agreements with the Trustee or
other parties, make such amendments to such Trust Agreement or further
agreements and take such other steps and execute such other instruments as the
Company in its sole discretion may deem necessary or desirable to carry the
Plan into effect or to facilitate its administration.
The Trustee and the Company may by mutual agreement in writing arrange for
the delegation by the Trustee to the Committee of any of the functions of the
Trustee, except the custody of assets, the voting of Company stock held by the
Trustee and the purchase and sale or redemption of securities.
XXII. Purchases of Securities by the Trustee. Employee regular savings
contributions, tax-efficient contributions and Company matching contributions
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 purchased 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. Any shares so purchased from the
Company may be either treasury stock or newly-issued stock, and shall be
purchased at a price per share equal to the closing price on the New York Stock
Exchange on the date of purchase.
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,
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.
XXIII. Application of Forfeited Company Matching Contributions. Any of the
assets attributable to Company matching contributions or earnings thereon,
which shall be forfeited in a member's Company matching contributions account
pursuant to the provisions of paragraph IX, XIII or XIV hereof, shall be
appliet, as soon as practicable, first, to the payment of certain expenses of
the Plan incurred on or after July 1, 1981, as provided in the ninth paragraph
of paragraph XXVI hereof, and thereafter, to the extent available, to reduce
the amount of any Company matching contributions under the Plan or, if the Plan
shall be terminated, the cash value of any of such assets not so applied from
time to time shall be credited ratably to the respective Company matching
contributions accounts of the members in the Plan as of the day immediately
following the date of forfeiture. Notwithstanding the provisions of paragraph
IX hereof, any of the assets so credited to a member's Company matching
contributions account, and any increment thereof, shall, at the time of
distribution or withdrawal thereof, be deemed to have vested in such account.
The cash value of assets applied to reduce the amount of the Company matching
contribution for any month, or applied to the payment of certain expenses of
the Plan, pursuant to the provisions of this paragraph XXIII, shall be valued
as of the close of business on the relevant date.
XXIV. Voting of Company Stock. The Trustee, itself or by its nominee, shall
be entitled to vote, and shall vote, shares of Company stock represented by the
proportionate interests in the accounts of members in the Ford Stock Fund or
otherwise held by the Trustee under the Plan as follows:
1. The Company shall adopt reasonable measures to notify the member of
the date and purposes of each meeting of stockholders of the Company
at which holders of shares of Company stock shall be entitled to
vote, and to request instructions from the member to the Trustee as
to the voting at such meeting of full shares of Company stock and
fractions thereof represented by the proportionate interest in the
Ford Stock Fund account of the member.
2. In each case, the Trustee, itself or by proxy, shall vote full shares
of Company stock and fractions thereof represented by the
proportionate interest in the Ford Stock Fund account or accounts of
the member in accordance with the instructions of the member.
3. If prior to the time of such meeting of stockholders the Trustee
shall not have received instructions from the member in respect of
any shares of Company stock represented by the proportionate interest
in the Ford Stock Fund account or accounts of the member, the Trustee
shall vote thereat such shares proportionately in the same manner as
the Trustee votes thereat the aggregate of all shares of Company
stock with respect to which the Trustee has received instructions
from members.
XXV. Cash Adjustments on Account of Fractional Interests in Securities. Any
fractional interest in a share of Company stock shall not be subject to
distribution or withdrawal. Settlement for any fractional interest in such
security, upon distribution or withdrawal thereof, shall be made in cash based
on the current market value or any applicable current redemption value of such
security, as of the date of distribution or withdrawal, as the case may be.
XXVI. 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 and manage the operation and administration of the Plan.
The Vice President - Human Resources, the Treasurer and the Vice President
- General Counsel shall have the authority, on behalf of the Company, to
appoint and remove trustees and investment advisors under the Plan, to approve
policies relating to the allocation of contributions and the distribution of
assets among trustees and investment advisors, to approve Plan amendments and
to modify the Plan or suspend the operation of any provisions of the Plan
provided, however, only the Board of Directors shall have authority to amend
provisions relating to the extent of Company matching contributions within the
maximum rate set by stockholders and the offering of Company stock as an
investment election .
The Treasurer shall be authorized on behalf of the Company to contract
with the trustees and investment advisors under the Plan and to determine the
form and terms of the trust and investment advisor agreements, to allocate
contributions and distribute assets among trustees and investment advisors, and
to appoint an auditor under the Plan, and shall have authority to designate
other persons to carry out specific responsibilities in connection therewith,
provided, however, that such actions shall be consistent with ERISA, the policy
of the Board of Directors and the Plan.
Except as otherwise provided in this paragraph XXVI or elsewhere in the
Plan, the Vice President - Human Resources and the Treasurer are designated to
carry out the Company's responsibilities with respect to the Plan, including,
without limitation, appointment and removal of members of the Committee and
determination of prior service for eligibility purposes under the Plan in the
event of acquisition by a Participating Company or Affiliated Corporation (by
purchase, merger, or otherwise) of all or part of the assets of another
corporation. The Vice President - Human Resources and the Treasurer may
allocate responsibilities between themselves and may designate other persons to
carry out specific responsibilities on behalf of the Company.
Any Company director, officer or employee who shall have been expressly
designated pursuant to the Plan to carry out specific Company responsibilities
shall be acting on behalf of the Company. Any person or group of persons may
serve in more than one capacity with respect to the Plan and may employ one or
more persons to render advice with regard to any responsibilities such person
has under the Plan.
The Company, by action of its Vice President - Human Resources and its
Treasurer, shall create a Savings and Stock Investment Plan Committee
consisting of at least three members. The Company shall from time to time
designate the members of the Committee and an alternate for each of such
members, who shall have full power to act in the absence or inability to act of
such member. The Committee shall appoint its own Chairman and Secretary, and
shall act by a majority of its members, with or without a meeting. The
Secretary or an Assistant Secretary of the Company shall from time to time
notify the Trustee of the appointment of members of the Committee and
alternates and of the appointment of the Chairman and Secretary of the
Committee, upon which notices the Trustee shall be entitled to rely.
The Committee shall have full power and authority to administer the Plan
and to interpret its provisions. Any interpretation of the provisions of the
Plan by the Committee shall be final and conclusive, and shall bind and may be
relied upon by the several Participating Companies, each of their employees,
the Trustee and all other parties in interest.
No member of the Committee or alternate for a member or director, officer
or employee of any Participating Company shall be liable for any action or
failure to act under or in connection with the Plan, except for his or her own
lack of good faith provided, however, that nothing herein shall be deemed to
relieve any such person from responsibility or liability for any obligation or
duty under ERISA. Each director, officer, or employee of the Company who is or
shall have been designated to act on behalf of the Company and each person who
is or shall have been a member of the Committee or an alternate for a member or
a director, officer or employee of any Participating Company, as such, shall be
indemnified and held harmless by the Company against and from any and all loss,
cost, liability or expense that may be imposed upon or reasonably incurred by
him or her in connection with or resulting from any claim, action, suit or
proceeding to which he or she may be a party or in which he or she may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof
(with the Company's written0approval) or paid by him or her in satisfaction of
a judgment in any such action, suit or proceeding, except a judgment in favor
of the Company based upon a finding of his or her lack of good faith; subject,
however, to the condition that, upon the assertion or institution of any such
claim, action, suit or proceeding against him or her, he or she shall in
writing give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not be exclusive
of any other right to which such person may be entitled as a matter of law or
otherwise, or any power that a Participating Company may have to indemnify him
or her or hold him or her harmless.
Brokerage commissions and transfer taxes on the purchase and sale of
Common Stock Fund securities shall be paid from Common Stock Fund assets by the
Trustee. The expenses of any collective, common, or commingled fund in which
Common Stock Fund assets may be invested pursuant to subparagraph 1 of
paragraph XVIII hereof shall be paid from the assets in such collective, common
or commingled fund. Brokerage commissions and transfer taxes on the purchase
and sale of Bond Fund securities and investment management fees shall be paid
from Bond Fund assets by the Trustee. Earnings credited to the account of the
Trustee under any Accumulation Fund contract may be net of such charges by the
Accumulation Fund Manager as may be provided in such contract. Brokerage
commissions and transfer taxes on the purchase and sale of Interest Income Fund
securities shall be paid from Interest Income Fund assets by the Trustee and
the expenses of any collective, common, or commingled fund in which Interest
Income Fund assets may be invested pursuant to subparagraph 4 of paragraph
XVIII hereof shall be paid from the assets in such collective, common or
commingled fund. All management fees, redemption fees and all other expenses
of any mutual funds offered as an investment election under the Plan shall be
paid from assets in such mutual funds or charged to the accounts of members who
elect to invest in such mutual funds. Earnings credited to the accounts of
members who shall have elected to invest in the Bond Fund may be net of such
charges by the Bond Fund Advisor as shall be provided in the contract with the
Bond Fund Advisor. All other expenses of administration of the Plan, including
brokerage commissions, fees and transfer taxes incurred in connection with the
purchase or sale of Company stock, fees of Investment Advisors and other
expenses charged or incurred by the Trustee shall be borne by the Company and,
upon request from time to time, the Company shall reimburse the Trustee for
expenses incurred by it; provided, however, that with respect to any of such
other expenses of administration of the Plan, the Trustee first shall apply to
the payment of expenses the value of any of the assets that shall have been
forfeited at any time in accordance with the provisions of paragraph XXIII
hereof. Taxes, if any, on any Ford Stock Fund Units, Common Stock Fund Units
or Bond Fund Units held by the Trustee or income therefrom which are payable by
the Trustee shall be charged against the members' accounts as the Trustee and
the Committee shall determine. When Company stock is applied to the payment of
expenses of the Plan, the Trustee shall use for the payment of such expenses,
from the contributions made to the Plan during the month during which such
contributions are being paid, an amount equal to the value of such stock as
determined pursuant to the provisions of this paragraph XXVI.
The records of the Trustee, the Committee and the several Participating
Companies shall be conclusive in respect of all matters involved in the
administration of the Plan.
The Plan shall be governed by and construed in accordance with the laws of
the State of Michigan except to the extent such law is preempted by ERISA.
XXVII. Termination, Suspension and Modification. The Company, by action of
its Board of Directors, may terminate or modify the Plan or suspend the
operation of any provision of the Plan, and the Company, by action of the Vice
President - Human Resources, the Treasurer and the Vice President - General
Counsel, may modify the Plan or suspend the operation of any provision of the
Plan other than provisions relating to the extent of Company matching
contributions within the maximum rate set by stockholders and the offering of
Company stock as an investment election, as follows:
1. The Company may terminate the Plan at any time or may at any time or
from time to time modify the Plan, in its entirety or in respect of
the employees of one or more of the Participating Companies. The
Company may at any time or from time to time terminate or modify the
Plan or suspend for any period the operation of any provision
thereof, in respect of any employees located in one or more States or
countries, if in the judgment of the Committee compliance with the
laws of such State or country would involve disproportionate expense
and inconvenience to a Participating Company. Any such modification
that affects the rights or duties of the Trustee may be made only
with the consent of the Trustee. Any such termination, modification
or suspension of the Plan may affect members in the Plan at the time
thereof, as well as future members, but may not affect the rights of
a member as to (a) the continuance of investment, distribution or
withdrawal of the cash value of assets in the account or accounts of
the member as of the effective date of such termination, modification
or suspension or (b) the continuance of vesting of such assets
attributable to Company contributions or earnings thereon. Any
termination or modification of the Plan or suspension of any
provision thereof shall be effective as of such date as the Company
may determine, but not earlier than the date on which the Company
shall give notice of such termination, modification or suspension to
the Trustee and to the Participating Companies any of the employees
of which are affected thereby.
2. The provisions of the foregoing subparagraph 1 notwithstanding, the
Company, by action of its Board of Directors or by action of the Vice
President - Human Resources, the Treasurer and the Vice President -
General Counsel, at any time or from time to time may modify any of
the provisions of the Plan in any respect retroactively, if and to
the extent necessary or appropriate in the judgment of the Board of
Directors of the Company or the Vice President - Human Resources, the
Treasurer and the Vice President - General Counsel, to qualify or
maintain the Plan and the trust fund established thereunder as a plan
and trust meeting the requirements of Sections 401(a) and 501(a) of
the Code, as now in effect or hereafter amended, or any other
applicable provisions of Federal tax laws or other legislation, as
now in effect or hereafter amended or adopted, and the regulations
thereunder at the time in effect.
3. Anything herein to the contrary notwithstanding, no such termination
or modification of the Plan or suspension of any provision thereof
may diminish the cash value of assets in the account or accounts of a
member as of the effective date of such termination, modification or
suspension, and no such modification may increase the rate of Company
matching contributions in relation to employee contributions to more
than 60% of employee contributions.
4. In the event of any merger or consolidation with, or transfer of
assets or liabilities to, any other plan, each employee, member,
former employee, former member, beneficiary or estate eligible under
the Plan shall, if the Plan is then terminated, receive a benefit
immediately after the merger, consolidation or transfer, which is
equal to the benefit he or she would have been entitled to receive
immediately before the merger, consolidation or transfer if the Plan
had then terminated.
XXVIII. Conditions on Participation of Subsidiaries of the Company. The
consent of the Company to the participation in the Plan of any subsidiary of
the Company may be conditioned upon such provisions as the Company may pre-
scribe, including without limitation conditions as to (a) the instruments to be
executed and delivered by such Participating Company to the Trustee, (b) the
extent to which the Company shall act as representative of such Participating
Company under the Plan, (c) the rights of such Participating Company to
withdraw from participation in the Plan and the effect of such withdrawal upon
the memberships and accounts in the Plan of employees of such Participating
Company, and (d) reimbursement of the Company on account of Company matching
contributions.
XXIX. Member's Rights not Transferable. Except to the extent permitted by
Code section 401(a)(13) and Code section 414(p), no right or interest of any
member under the Plan or in his or her account shall be assignable or
transferable, in whole or in part, either directly or by operation of law or
otherwise, including without limitation by execution, levy, garnishment,
attachment, pledge or in any other manner except in accord with provisions of a
qualified domestic relations order as defined by Section 206(d) of ERISA and
further excluding devolution by death or mental incompetency; no attempted
assignment or transfer thereof shall be effective; and no right or interest of
any member under the Plan or in his or her account shall be liable for, or
subject to, any obligation or liability of such member.
XXX. Designation of Beneficiaries.
1. Except as provided in subparagraph 2 hereof for a married member, a
member shall be deemed to have designated as beneficiary or
beneficiaries under the Plan the person or persons who are entitled
in the event of the member's death to receive the proceeds under the
Company's Group Life Insurance Plan if the member is covered under
such Plan at the date of his or her death. A member may in any event
file in such manner and in such form and at such time as the
Committee shall specify a written designation of a beneficiary or
beneficiaries (subject to such limitations as to the classes and
numbers of beneficiaries and contingent beneficiaries as the
Committee from time to time may prescribe) to receive the cash value
of assets in the account or accounts of such member in the Plan. A
member may from time to time revoke or change any such designation of
beneficiary. Any designation of beneficiary under the Plan shall be
controlling over any testamentary or other disposition. In the event
of the death of a member, any of the cash value of assets in his or
her account or accounts under the Plan in respect of which the member
shall have designated or be deemed to have designated one or more
beneficiaries hereunder shall be delivered to such beneficiaries who
shall survive the member, in accordance with such designation (to the
extent effective and enforceable at the time of the member's death)
and the provisions of the Plan, subject to such regulations as the
Committee from time to time may prescribe in respect of distributions
to minors; provided, however, that if the Trustee or the Committee
shall be in doubt as to the right of any such beneficiary to receive
the cash value of any of such assets, the Trustee may deliver the
same to the estate of the member, in which case the Trustee, the
several Participating Companies and the Committee and the several
members thereof and alternates for members shall not be under any
further liability to anyone. Except as hereinabove provided, in the
event of the death of a member, the cash value of assets in his or
her account or accounts under the Plan shall be delivered to his or
her estate.
2. A married member shall be deemed to have designated as beneficiary to
receive the cash value of assets in such member's account or accounts
under the Plan his or her surviving spouse unless such member shall
have filed with the Company a written designation of a different
beneficiary pursuant to subparagraph 1 hereof together with the
written consent of the spouse to such designation, witnessed by a
Plan representative or a notary public.
XXXI. Effect of Termination. Upon any termination or partial termination of
the Plan or the complete discontinuance of contributions thereunder, within the
meaning of Section 411(d)(3)(A) and (B) of the Code, the cash value of assets
in the regular savings account of any affected employee within the meaning of
Section 411(d)(3) of the Code shall be deemed to have vested in his or her
account and shall be nonforfeitable as of the date of such termination, partial
termination or complete discontinuance of contributions.
For purposes of this paragraph, the determination as to whether there is a
termination or partial termination of the Plan or a complete discontinuance of
contributions thereunder and the date thereof and as to the employees affected
thereby shall be made by the Company provided, however, that such determination
shall be in accordance with the applicable provisions of the Code. In
determining the applicability of such Code provisions, the Company may rely
upon an opinion of counsel.
XXXII. Top-Heavy Rules. If the Plan is or becomes top-heavy in any plan year,
the provisions of this paragraph shall supersede for such plan year any
conflicting provision of the Plan. This Plan is top-heavy in any plan year if
the top-heavy ratio on the determination date for such year for the required
aggregation group of plans exceeds 60 percent.
1. Definitions.
(a) Top-heavy ratio:
(i) The top-heavy ratio is a fraction, the numerator of which
is the sum of account balances for all key employees
under the defined contribution plans of the Company and
affiliates and the present value of accrued benefits for
all key employees under the defined benefit plans of the
Company and affiliates, and the denominator of which is
the sum of the account balances for all participants
under the defined contribution plans of the Company and
affiliates and the present value of accrued benefits for
all participants under defined benefit plans of the
Company and affiliates. Both the numerator and
denominator of the top-heavy ratio are adjusted for any
distribution of an account balance or an accrued benefit
made in the five-year period ending on the determination
date and any contribution due but unpaid as of the
determination date.
(ii) For purposes of (i) above, the value of account balances
and the present value of accrued benefits will be
determined as of the most recent determination date. The
account balances and accrued benefits of a participant
(1) who is not a key employee but who was a key employee
in a prior year or (2) who has not been credited with at
least one hour of service at any time during the five-
year period ending on the determination date will be
disregarded. The calculation of the top-heavy ratio and
the extent to which distributions, rollovers, and
transfers are taken into account will be made in
accordance with section 416 of the Code and the
regulations thereunder.
(iii) Solely for the purpose of determining if the Plan, or any
other plan included in a required aggregation group of
which this Plan is a part, is top-heavy (within the
meaning of Section 416(g) of the Code) the accrued
benefit of an employee other than a key employee (within
the meaning of Section 416(i)(1) of the Code) shall be
determined under (a) the method, if any, that uniformly
applies for accrual purposes under all plans maintained
by the Company and affiliates, or (b) if there is no such
method, as if such benefit accrued not more rapidly than
the slowest accrual rate permitted under the fractional
accrual rate of Section 411(b)(1)(C) of the Code.
(b) Required aggregation group of plans: (i) each qualified plan
of the Company or an affiliate in which at least one key
employee participates, (ii) any other qualified plan of the
Company or an affiliate which enables a plan described in (i)
to meet the requirements of Sections 401(a)(4) or 410 of the
Code, and (iii) any qualified plan which may have been
terminated in the past 5 years.
(c) Key employee: A key employee as defined in Code section
416(i)(1) is any employee or former employee who at any time
during the plan year containing the determination date or the
four preceding plan years is or was:
(1) an officer of the Company having annual compensation
for such plan year in excess of 50% of the dollar
limit in effect under Code section 415(b)(1)(A) for
the calendar year in which such plan year ends;
(2) an owner for (or considered as owning within the
meaning of Code section 318) both more than a 1/2
percent interest as well as one of the ten largest
interests in the employer and having annual
compensation greater than the dollar limit in effect
under Code section 414(c)(1)(A) for the year;
(3) a five percent owner of the Company; or
(4) a one percent owner of the Company who has annual
compensation of more than $150,000.
For purposes of determining five-percent and one-percent
owners, neither the aggregation rules nor the rules of
subsections (b), (c) and (m) of Code section 414 apply.
Beneficiaries of an employee acquire the character of the
employee and inherited benefits retain the character of the
benefits of the employee.
(d) Present value: Present value shall be based on the interest
and mortality rates used to determine actuarial equivalence
under the defined benefit plans.
(e) Determination date: The determination date is the last day of
the preceding plan year.
(f) Valuation Date: The valuation date is the last day of the
preceding plan year.
2. Minimum allocation.
(a) Except as otherwise provided in (c) and (d) below, the
employer contributions and forfeitures allocated on behalf of
any member who is not a key employee shall not be less than
three percent of such member's compensation, or if less than
three percent, the percentage at which contributions are made
under the Plan for the year for the key employee for whom such
percentage is the highest for the year. The percentage at
which contributions are made for a key employee shall be
determined by dividing the contributions for and forfeitures
allocated on behalf of any such employee by so much of his or
her total compensation for the year as does not exceed
$150,000. The minimum allocation is determined without regard
to any Social Security contribution. This minimum allocation
shall be made even though, under other Plan provisions, the
participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the
year because of (i) the member's failure to complete 1,000
hours of service (or any equivalent provided in the Plan), or
(ii) the member's failure to make mandatory employee
contributions to the Plan, or (iii) compensation less than a
stated amount.
(b) For purposes of computing the minimum allocation, compensation
will equal the wages reported on the employee's Form W-2 from
the Company for the year.
(c) The provision in (a) above shall not apply to any participant
who was not employed by the Company or an affiliate on the
last day of the plan year.
(d) The provision in (a) above shall not apply to any member to
the extent the member is covered under any other plan or plans
of the Company or an affiliate and the Company or affiliate
has provided that the minimum benefit requirement applicable
to top-heavy plans will be met in the other plan or plans.
3. Nonforfeitability. The minimum allocation required (to the extent
required to be nonforfeitable under Section 416(b) of the Code) may
not be forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of the
Code.
4. Compensation limitation. For any plan year in which the Plan is
top-heavy, only the first $150,000 (or such larger amount as may be
prescribed by the Secretary or his or her delegate) of a member's
annual compensation shall be taken into account for purposes of
determining employer contributions under the Plan.
5. Vesting. For any plan year in which this Plan is top-heavy, an
employee who has completed at least three years of service with the
Company or a subsidiary or affiliate will have a nonforfeitable right
to 100% of his or her account balance attributable to Company
contributions. This minimum vesting schedule applies to all benefits
within the meaning of Section 411(a)(7) of the Code except those
attributable to employee contributions, including benefits accrued
before the effective date of Section 416 and benefits accrued before
the Plan became top-heavy. Further, no reduction in vested benefits
may occur in the event the Plan's status as top-heavy changes for any
plan year. However, this subparagraph does not apply to the account
balances of any employee who does not have an hour of service after
the Plan has initially become top-heavy and such employee's account
balance attributable to employer contributions and forfeitures will
be determined without regard to this subparagraph.
6. Combined Limitation. For any plan year in which this plan is
top-heavy, the limitation in subparagraph 4.G of paragraph V hereof
shall be computed by substituting the number 1.0 for the number 1.25
wherever the latter number appears in that subparagraph.
XXXIII. Employee Stock Ownership Plan.
1. The Employee Stock Ownership Plan ("ESOP") established in the Plan
effective January 1, 1989 shall consist of all the shares of Company stock in
the Plan at any time and from time to time including all the shares allocated
to members' accounts, forfeited shares and shares held in the suspense account
as hereinafter described and all assets attributable to contributions made
after December 31, 1988.
2. The trustee of the ESOP shall be the Trustee of the Plan or such
other qualified organization as the Company shall select (the "Trustee of the
ESOP"). The Trustee of the of the Plan and the Trustee of the ESOP shall hold,
invest, transfer and distribute the shares of Company stock and all other
assets in the ESOP in accordance with the provisions of this paragraph XXXIII
and the Plan. In the event the Company selects an organization other than the
Trustee of the Plan to be Trustee of the ESOP, their duties under the ESOP
shall be allocated between them as hereinafter provided or in accordance with
the provisions of the trust agreements appointing such Trustee of the Plan and
Trustee of the ESOP.
3. (i) The Trustee of the ESOP shall borrow on behalf of the ESOP an
amount not exceeding the amount of dividends estimated by the Trustee of the
ESOP, after consultation with the Trustee of the Plan and the Treasurer of the
Company, to be paid on Company stock held continuously since January 1, 1989 in
the ESOP in such period succeeding such borrowing by the Trustee as the Trustee
shall select, subject to a guarantee by the Company of payment of any such
loan. The loan shall provide for a reasonable rate of interest, shall be for a
definite period of time, and shall be without recourse against the Plan.
(ii) The Trustee of the ESOP is authorized to borrow such amount
from such persons, including the Company, as the Trustee of the ESOP shall
determine. The loan shall provide for repayment within such period succeeding
such loan as the Trustee of the ESOP shall have selected, and shall be payable
on such other terms as the Trustee of the ESOP in its sole discretion shall
determine.
(iii) The proceeds of any such loan shall be used by the Trustee of
the ESOP to purchase as soon as practicable shares of Company stock in
accordance with the provisions of paragraph XXII hereof. The Trustee of the
ESOP is authorized to pledge such stock as security for the payment of such
loan.
4. The Trustee of the ESOP shall hold the shares of Company stock so
purchased in the Plan in a suspense account unallocated until such time as all
or part of the related loan and interest thereon is paid as hereinafter
provided. The Trustee of the ESOP shall vote shares of Company stock in the
suspense account in its discretion, notwithstanding the provisions of paragraph
XXIV hereof.
5. The Trustee of the Plan and the Trustee of the ESOP shall apply
dividends paid on Company stock held in the ESOP with respect to which a loan
was taken, including shares held in the Ford Stock Fund, to payment of such
loan made in accordance with subparagraph 3 hereof and interest thereon.
In the event that such dividends paid on Company stock are not sufficient
to enable the Trustee of the ESOP to make any payment on such loan , the
Trustee of the ESOP shall sell shares of Company stock held in the suspense
account in an amount necessary to permit such payment provided, however, that
the Company may elect to make an additional contribution to the Plan in an
amount sufficient to enable the Trustee of the ESOP to make all or part of such
payment without selling shares of Company stock held in the suspense account.
In the event that such dividends paid on Company stock and the amount
realized from the sale of Company stock held in the suspense account are not
sufficient to enable the Trustee of the ESOP to make any payment on such loan,
the Company shall make an additional contribution to the Plan by making payment
to the Trustee of the ESOP in an amount sufficient to enable the Trustee of the
ESOP to make such payment or shall pay such amount to the lender.
6. The shares held in the suspense account shall be released from the
suspense account to the Trustee of the Plan in an amount that bears the same
ratio to the total number of shares in the suspense account as the amount of
principal and interest paid on the loan bears to the total amount of principal
and interest outstanding. The Trustee of the Plan shall allocate such shares
so released to the Ford Stock Fund and the accounts of members as if the
dividends paid on Company stock with respect to shares held in the Ford Stock
Fund had been used to acquire shares of Company stock in the open market on the
last day of the month preceding the date such shares are released from the
suspense account.
To the extent that the number of shares released from the suspense account
at any time is less than the number that would be required for allocation to
the Ford Stock Fund if the dividends paid on Company stock had been used to
acquire shares of Company stock in the open market at the closing price on the
New York Stock Exchange on the dividend payment date, the Company shall make an
additional contribution to the Plan in an amount sufficient to permit the
Trustee of the ESOP to acquire additional shares so that the value at the
closing price on the dividend payment date of the shares released to the
Trustee of the Plan plus cash, if any, shall equal the dividends paid by the
Trustee of the Plan with respect to Company stock to the Trustee of the ESOP.
To the extent that the number of shares released from the suspense account
at any time is greater than the number that would be required if the dividends
paid on Company stock had been used to acquire shares of Company stock in the
open market , the excess shall be held by the Trustee of the ESOP and released
at the end of the calendar year to the Trustee of the Plan for an addition to
the Ford Stock Fund and allocation of additional units in the Ford Stock Fund
to the accounts of members in an amount proportional to the number of Ford
Stock Fund units in their accounts.
7. Contributions to the ESOP for any eligible employee who is a highly
compensated employee shall be limited to the extent required under the
principles described in paragraph V with respect to regular savings
contributions and tax-efficient savings contributions.
8. The Committee is authorized to make such adjustments in the
administration of the Plan and the ESOP as it deems necessary, appropriate or
desirable to carry out the purposes and intents of this paragraph XXXIII.
9. In the event that any or all of the tax benefits available under the
tax laws on the effective date hereof are restricted or eliminated, as
determined by the Company, the Trustee of the ESOP is authorized upon direction
by the Company to sell upon such terms, at such times and to such persons, as
the Trustee of the ESOP in its sole discretion shall determine, any or all of
the shares of Company stock in the suspense account and to use the proceeds of
such sale to pay all or part of the loan balance outstanding, together with
interest thereon. Any excess shares in the suspense account at such time shall
be allocated as provided in subparagraph 6 hereof.<PAGE>
FORD MOTOR COMPANY SAVINGS AND STOCK INVESTMENT PLAN
FOR
SALARIED EMPLOYEES
Appendix A
Additional Mutual Funds
Income Funds:
Fidelity Global Bond Fund
Fidelity Government Securities Fund
Fidelity Investment-Grade Bond Fund
Fidelity New Markets Income Fund
Scudder Income Fund
Scudder International Bond Fund
T. Rowe Price High Yield Fund
T. Rowe Price Spectrum Income Fund
Growth and Income Funds:
Fidelity Balanced Fund
Fidelity Equity-Income Fund
Fidelity Fund
Fidelity Global Balanced Fund
Fidelity Growth & Income Portfolio
Fidelity Puritan Fund
Fidelity Real Estate Investment
Portfolio
Fidelity Utilities Fund
Scudder Growth & Income Fund
T. Rowe Price Spectrum Growth Fund
Vanguard Trust - 500 Portfolio
Vanguard Index Trust - Value
Portfolio
Growth Funds:
Fidelity Capital Appreciation Fund
Fidelity Dividend Growth Fund
Fidelity Growth Company Fund
Fidelity Retirement Growth Fund
Fidelity Small Cap Stock Fund
Fidelity Stock Selector
Fidelity Trend Fund
Fidelity Value Fund
Scudder Global Fund
Scudder Global Small Company Fund
T. Rowe Price New Era Fund
T. Rowe Price New Horizons Fund
Vanguard Explorer Fund
Vanguard Index Trust - Growth
Portfolio
International Funds:
Fidelity Canada Fund
Fidelity Europe Fund
Fidelity International Growth &
Income Fund
Fidelity Pacific Basin Fund
Fidelity Worldwide Fund
Scudder Greater Europe Growth Fund
Scudder International Fund
Scudder Japan Fund
T. Rowe Price International
Discovery Fund
T. Rowe Price International Stock Fund
T. Rowe Price Latin America Fund
T. Rowe Price New Asia Fund
Vanguard Trustees Equity - International
Asset Allocation Funds:
Vanguard LIFEStrategy - Conservative Growth
Vanguard LIFEStrategy - Moderate Growth
Vanguard LIFEStrategy - Growth
<PAGE>
Exhibit 4.B
MASTER TRUST AGREEMENT
Between
_________________________________________________
FORD MOTOR COMPANY
And
FIDELITY MANAGEMENT TRUST COMPANY
_________________________________________________
FORD DEFINED CONTRIBUTION PLANS
MASTER TRUST
Dated as of September 30, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- - ------- ----
<S> <C>
1 Definitions ................................................. 2
2 Trust ....................................................... 4
(a) Establishment of Trust
(b) Trust Property
3 Exclusive Benefit and Reversion of Company Contributions .... 4
4 Investment of Master Trust .................................. 5
(a) Selection of Investment Options
(b) Available Investment Options
(1) Fidelity Mutual Funds
(2) Outside Mutual Funds
(3) Ford Stock Fund
(4) Loans to Participants
(5) Commingled Pools
(6) Separately Managed Portfolios
(7) Investment Contracts
(c) Master Trustee Powers
(d) Investment Authority
5 Participant Directions ...................................... 14
(a) Investments
(b) Disbursements
6 Recordkeeping and Administrative Services to Be Performed ... 15
(a) General
(b) Accounts
(c) Inspection and Audit
(d) Effect of Plan Amendment
(e) Returns, Reports and Information
(f) Allocation of Plan Interests
7 Compensation and Expenses ................................... 16
8 Directions and Indemnification .............................. 17
(a) Directions from Company or Administrator
(b) Conduct
(c) Co-Fiduciary Liability
(d) Responsibility
(e) Survival
9 Resignation or Removal of Master Trustee .................... 18
(a) Resignation
(b) Removal
</TABLE>
-i-
<PAGE>
TABLE OF CONTENTS
(Continued)
<TABLE>
<CAPTION>
Section Page
- - ------- ----
<S> <C>
10 Successor Master Trustee...................................... 18
(a) Appointment
(b) Acceptance
(c) Corporate Action
11 Termination................................................... 19
12 Resignation, Removal, and Termination Notices................. 19
13 Duration...................................................... 19
14 Amendment or Modification..................................... 19
15 General....................................................... 20
(a) Performance by Master Trustee, its Agents or Affiliates
(b) Entire Agreement
(c) Waiver
(d) Successors and Assigns
(e) Partial Invalidity
(f) Section Headings
16 Governing Law................................................. 20
(a) Massachusetts Law Controls
(b) Which Agreement Controls
17 Plan Qualification............................................ 21
Schedules
- - ---------
A. Recordkeeping and Administrative Services
B. Fee Schedule
C. Investment Options
D. IRS Determination Letter or Opinion of Counsel
E. Existing GICs
F. Telephone Exchange Procedures
G. Investment Guidelines for Interest Income Fund
</TABLE>
-ii-
<PAGE>
TRUST AGREEMENT, dated as of the 30th day of September, 1995, between
FORD MOTOR COMPANY, a Michigan corporation, having an office at The American
Road, Dearborn, Michigan 48121 (the "Company"), and FIDELITY MANAGEMENT TRUST
COMPANY, a Massachusetts trust company, having an office at 82 Devonshire
Street, Boston, Massachusetts 02109 (the "Master Trustee").
WITNESSETH:
WHEREAS, the Company is the sponsor of the Ford Motor Company Savings
and Stock Investment Plan for Salaried Employees (the "SSIP") and the Ford
Motor Company Tax-Efficient Savings Plan for Hourly Employees (the "TESPHE")
and the Company is the named fiduciary (within the meaning of Section 402(a)
of ERISA), for the SSIP and the TESPHE; and
WHEREAS, the Master Trustee has been appointed as Trustee by the
Company under the SSIP and the TESPHE; and
WHEREAS, the Company desires to establish a Master Trust for the purpose
of commingling for investment and administrative purposes some or all of the
assets in the trusts established under the SSIP and the TESPHE; and
WHEREAS, the Company may in the future adopt savings plans and
subsidiaries and affiliates of the Company may have adopted or may adopt
in the future savings plans under which assets may appropriately be
included in the Master Trust with the consent of the Company and the Master
Trustee; and
WHEREAS, the Master Trustee is willing to hold and invest such assets
of the SSIP and TESPHE and of other such plans in the future; and
WHEREAS, Comerica Bank has been appointed by the Company as trustee
for a separate trust under the ESOP to hold the unallocated shares of
Ford Motor Company Common Stock and to borrow such funds as shall be deemed
necessary to purchase such shares on behalf of the ESOP.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth below, the Company and the
Master Trustee agree as follows:
<PAGE>
Section 1. Definitions. The following terms as used in this Master Trust
Agreement have the meaning indicated unless the context clearly requires
otherwise:
(a) "Administrator" shall mean, with respect to the SSIP and TESPHE, Ford
Motor Company and, with respect to plans whose assets may be included in
the future, the sponsor of such plans.
(b) "Agreement" shall mean this Master Trust Agreement, as the same may be
amended and in effect from time to time.
(c) "Code" shall mean the Internal Revenue Code of 1986, as it has been or
may be amended from time to time.
(d) "Commingled Pool" shall mean a group trust collective investment fund
maintained by a bank or trust company for plans qualified under Section
401(a) of the Code which is exempt from tax under Section 501(a) of the
Code.
(e) "Company" shall mean Ford Motor Company, or any successor to all or
substantially all of its businesses which, by agreement, operation of
law or otherwise, assumes the responsibility of the Company under this
Agreement.
(f) "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it has been or may be amended from time to time.
(g) "ESOP Trustee" shall mean Comerica Bank or such successor trustee for
unallocated shares of Ford Stock under the Employee Stock Ownership Plan
("ESOP"), as appointed by Ford Motor Company.
(h) "Existing GICs" shall mean each class year guaranteed investment
contract heretofore entered into by the Company or predecessor trustee
and specifically identified on Schedule "E" attached hereto.
(i) "FBSI" shall mean Fidelity Brokerage Services, Inc., an affiliate of the
Trustee.
(j) "Fidelity Mutual Fund" shall mean any investment company advised by
Fidelity Management & Research Company (or any of its affiliates) which
is listed on Schedule "A".
(k) "Ford Stock" shall mean the publicly-traded common stock of the Company
which meets the requirements of section 407(d)(5) of ERISA with respect
to the Plans.
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<PAGE>
(l) "Ford Stock Fund" shall mean the investment option in which
investments of Ford Stock are made.
(m) "GICs" shall mean guaranteed investment contracts.
(n) "Group Trust" shall mean The Fidelity Group Trust for Employee
Benefit Plans, a group trust maintained by the Trustee for
qualified plans.
(o) "Investment Manager" shall mean (i) an investment adviser
registered under the Investment Advisers Act of 1940 (ii) a bank,
as defined in that Act or (iii) an insurance company qualified to
perform investment management service under the laws of more than
one state.
(p) "Master Trust" shall mean the Ford Defined Contribution Plan Master
Trust, being the trust established by the Company and the Master
Trustee pursuant to the provisions of this Agreement.
(q) "Master Trustee" shall mean Fidelity Management Trust Company, a
Massachusetts trust company and any successor to all or
substantially all of its trust business as described in Section
10(c). The term Master Trustee shall also include any successor
trustee appointed pursuant to Section 10 to the extent such
successor agrees to serve as Master Trustee under this Agreement.
(r) "NAV" shall mean the net asset value of a single unit or share held
by a Participant in any investment option.
(s) "Outside Mutual Fund" shall mean any investment company not advised
by Fidelity Management & Research Company (or any of its
affiliates) which is listed on Schedule "A".
(t) "Participant" shall mean, with respect to the Plans, any employee
(or former employee) with an account under the Plan, which has not
yet been fully distributed and/or forfeited, and shall include the
designated beneficiary(ies) with respect to the account of any
deceased employee (or deceased former employee) until such account
has been fully distributed and/or forfeited, or any other person
entitled to benefits with respect to the Plans.
(u) "Participant Recordkeeping Reconciliation Period" shall mean the
period beginning on the date of the initial transfer of assets to
the Master Trust and ending on the date of the completion of the
reconciliation of participant records.
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(v) "Plans" shall mean the Ford Motor Company qualified plans designated
in the recitals and shall include such other qualified defined
contribution plans which are maintained by the Company or any of its
subsidiaries or affiliates for the benefit of their eligible
employees as may be designated by the Company in writing to the
Trustee as Plans hereunder. Each reference to "a Plan" or "the
Plans" in this Agreement shall mean and include the Plan or Plans
to which the particular provision of this Agreement
is being applied or all Plans, as the context may require.
(w) "Reporting Date" shall mean the last day of each calendar quarter, the
date as of which the Trustee resigns or is removed pursuant to
Section 9 hereof and the date as of which this Agreement terminates
pursuant to Section 11 hereof.
Section 2. Trust.
(a) Establishment of Trust. The Company hereby appoints the
Master Trustee as trustee and the Master Trustee hereby accepts the trust on
the terms and conditions hereinafter set forth.
(b) Trust Property. The Master Trust shall consist of money or
other property acceptable to the Master Trustee, in its sole discretion, that
(i) are transferred to it by Comerica Bank, predecessor trustee under the SSIP
and the TESPHE, on behalf of separate trusts established under each such plan
concurrently with the establishment of this Master Trust, or by the trustee of
such trusts, (ii) are paid to it by the Company or transferred to it from the
trustee of a separate trust under each plan permitted by the Company and the
Master Trustee to participate in the Master Trust, (iii) are paid to it by the
Company or other subsidiaries with respect to such plans in the forms of
additional sums of money or Ford Stock or other property acceptable to the
Master Trustee, (iv) are paid to it by the Company or by participants to the
Plan as contributions to the Plan or that may be rolled over in cash by an
eligible employee from the plan of such employee's prior employer or from a
"conduit IRA", pursuant to the provisions of any plan participating in the
Master Trust and the provisions of the Summary Plan Description applicable to
such plan, and (v) are transferred to it in the form of shares of Ford Stock by
the ESOP Trustee.
Section 3. Exclusive Benefit and Reversion of Company Contributions. Except as
provided under applicable law and the provisions of each of the plans
participating in the Master Trust, no part of the Master Trust allocable to any
plan participating in the Master Trust may be used for, or diverted to,
purposes other than the exclusive benefit of the participants in such
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Plans or their beneficiaries or other person entitled thereto prior to the
satisfaction of all liabilities with respect to the participants and their
beneficiaries.
Section 4. Investment of Master Trust.
(a) Selection of Investment Options. The Master Trustee shall
have no responsibility for the selection of investment options under the Master
Trust, and shall not render investment advice to any person in connection with
the selection of such options.
(b) Available Investment Options. The Company shall direct the
Master Trustee as to what investment options: (i) the Master Trust shall be
invested during the Participant Recordkeeping Reconciliation Period, and (ii)
the investment options in which Participants may invest in following such
period, subject to the limitations described in this Section 4.
The Company may determine to offer as investment options: (i) Fidelity
Mutual Funds, (ii) Outside Mutual Funds, (iii) Separately Managed Portfolios,
(iv) Ford Stock, (v) Notes evidencing loans to Participants in accordance with
the terms of the Plans, (vi) Existing GICs, and (vii) Commingled Pools. The
investment options selected by the Company are identified on Schedule "A"
attached hereto and in the Summary Plan Description provided to plan
participants. The Company may add, delete or substitute additional
investment options upon mutual amendment of this Master Trust Agreement and the
Schedules thereto to reflect such additions.
(1) Fidelity Mutual Funds. The Company hereby acknowledges that
it has received from the Master Trustee a copy of the prospectus for each
Fidelity Mutual Fund selected by the Company as a Plan investment option.
Master Trust investments in Fidelity Mutual Funds shall be subject to the
following limitations
(i) Execution of Purchases and Sales. Purchases of Fidelity
Mutual Funds with contributions made by the Company or participants (other than
for exchanges) shall be made on the date on which the Master Trustee receives
from the Company in good order the information and documentation necessary to
accurately effect such purchases or, if later, the date on which the Master
Trustee has received a wire transfer of funds necessary to make such purchase.
Exchanges or sales of Fidelity Mutual Funds shall be made at the direction of
Participants in accordance with the Telephone Exchange Guidelines attached
hereto as Schedule "F".
(ii) Voting. At the time of mailing of notice of each
annual or special stockholders' meeting of any Fidelity Mutual Fund, the Master
Trustee shall send a copy of the notice and all proxy solicitation materials
to each Participant who has shares of the
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Fidelity Mutual Fund credited to the Participant's accounts, together with a
voting direction form for return to the Master Trustee or its designee. The
Participant shall have the right to direct the Master Trustee as to the manner
in which the Master Trustee is to vote the shares credited to the Participant's
accounts (both vested and unvested). The Master Trustee shall vote the shares
only as directed by the Participant. With respect to all rights other than the
right to vote, the Master Trustee shall follow the directions of the
Participant.
(2) Outside Mutual Funds: Master Trust investments in Outside
Mutual Funds, shall be subject to the following limitations:
(i) Execution of Purchases and Sales. Purchases, sales and
exchanges of the Outside Mutual Funds shall be made in accordance with
the operating procedures established for each fund.
(ii) Voting. The Master Trustee shall provide each
Participant with the right to direct the manner in which Outside Mutual Fund
shares credited to the Participant's account shall be voted. The Master
Trustee may retain at its expense the services of a third-party vendor to
handle proxy solicitation mailings and tabulation for Outside Mutual Funds.
The Master Trustee or third party vender shall send the notice of stockholders'
meeting and all proxy solicitation materials to each Participant who has
shares of the Outside Mutual Fund credited to the Participant's account,
together with a voting direction form for return to the Master Trustee or the
third-party vendor acting as its designee, Outside Mutual Fund shares shall be
voted as directed by the Participant. The Master Trustee shall not vote
shares of Outside Mutual Funds for which it has received no directions from
the Company or from Participants.
(3) Ford Stock Fund. Master Trust investments in Ford Stock shall
be made via the Ford Stock Fund. While investments in the Ford Stock Fund
shall consist primarily of shares of Ford Stock, in order to satisfy daily
participant requests for transfers and payments, the Ford Stock Fund shall also
hold cash or other short-term liquid investments. Such holdings may include
investments in (i) Fidelity Institutional Cash Portfolios: Money Market: Class
A "FICAP", or (ii) such other Mutual Fund or commingled pool as agreed to by
the Company and Master Trustee. A target percentage and drift allowance for
short-term liquid investments shall be agreed to in writing by the Company and
Master Trustee, and the Master Trustee shall be responsible for ensuring that
the percentage of these investments falls within the agreed upon range over
time. The Company shall have the right to direct the Master Trustee as to the
manner in which the Master Trustee is to vote the shares of a mutual fund used
as the liquidity reserve.
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Each participant's proportional interest in the Ford Stock Fund shall
be measured in units of participation, rather than shares of Ford Stock. Such
units shall represent a proportionate interest in all of the assets of the Ford
Stock Fund, which includes shares of Ford Stock, short-term, liquid investments
and at times, receivables for dividends, interest or Ford Stock sold and
payables for Ford Stock purchased.
Each day, the Master Trustee shall determine a NAV for each unit
outstanding of the Ford Stock Fund. The NAV will fluctuate daily and shall be
adjusted by dividends paid on the shares of Ford Stock held by the Ford Stock
Fund, gains or losses realized on sales of Ford Stock, appreciation or
depreciation in the market price of shares owned, and interest on the
short-term investments held by the Ford Stock Fund. Dividends received by the
Ford Stock Fund shall be reinvested in additional units of the Ford Stock Fund.
The Master Trustee shall act in accordance with the directions of the
ESOP Trustee as to the proper amount of cash dividends payable on Company Stock
from time to time to be transferred to the ESOP Trustee for the repayment of
the ESOP loan(s) and the number of shares of Company Stock to be transferred
from the ESOP Trustee to the Master Trustee to be allocated to the accounts of
plan participants in the Ford Stock Fund.
Investments in Ford Stock shall be subject to the following
limitations:
(i) Acquisition Limit. Pursuant to the applicable provisions of
Plans, the Master Trust may be invested in Ford Stock to the extent necessary
to comply with investment directions under Section 4(b)(3) of this Agreement.
(ii) Fiduciary Duty of Company. The Company shall continually
monitor the suitability under the fiduciary duty rules of section 404(a)(1) of
ERISA (as modified by section 404(a)(2) of ERISA) of acquiring and holding Ford
Stock. The Master Trustee shall not be liable for any loss, or by reason of
any breach, which arises from the provisions of the Plans with respect to the
acquisition and holding of Ford Stock, unless it is clear on their face that
the actions to be taken would be prohibited by the foregoing fiduciary duty
rules or would be contrary to the terms of the Plans or this Agreement. It
shall be the responsibility of the Company to determine and assure that any
securities which are issued by the Company and which are to be held in the
Master Trust satisfy the definition of Ford Stock. At the request of the Master
Trustee, the Company shall provide a legal opinion reasonably satisfactory to
the Master Trustee that any such securities meet the definition of Ford Stock.
(iii) Execution of Purchases and Sales. (A) Purchases and sales of
Ford Stock shall be made on the open market, or in such other manner as the
Master Trustee shall determine, or if mutually agreed upon between the Company
and the Master Trustee, purchases from the Company shall be transacted at a
price to be mutually agreed upon, and no commission fees shall be charged to
the Ford Stock Fund for such trades. Exchanges of
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Ford Stock Fund units by participants shall be made in accordance with the
Telephone Exchange Guidelines attached hereto as Schedule "F".
(iv) Use of an Affiliated Broker. The Company hereby directs the
Master Trustee to use FBSI to provide brokerage services in connection with any
purchase or sale of Ford Stock in accordance with directions from Participants.
FBSI shall execute such directions directly or through its affiliate, National
Financial Services Company ("NFSC"), on a best execution basis. The provision
of brokerage services shall be subject to the following:
(a) As consideration for such brokerage services, the
Company agrees that FBSI shall be entitled to remuneration under this
authorization provision in the amount of 3.5 cents commission from the Company
on each share of Ford Stock, provided that no purchases shall be payable on
transactions with the Company. Any change in such remuneration may be made
only by a signed agreement between Company and Master Trustee.
(b) Following the procedures set forth in Department of
Labor Prohibited Transaction Class Exemption 86-128, the Master Trustee will
provide the Company with the following documents: (1) a description of FBSI's
brokerage placement practices; (2) a copy of PTCE 86-128; and (3) a form by
which the Company may terminate this authorization to use a broker affiliated
with the Master Trustee. The Master Trustee will provide the Company with this
termination form annually, as well as an annual report which summarizes all
securities transaction-related charges incurred by the Plans, and the Plans'
annualized turnover rate.
(c) Any successor organization of FBSI, through
reorganization, consolidation, merger or similar transactions, shall, upon
consummation of such transaction, become the successor broker in accordance
with the terms of this authorization provision.
(d) The Master Trustee and FBSI shall continue to rely on
this authorization provision until notified to the contrary. The Company
reserves the right to terminate this authorization upon sixty (60) days prior
written notice to FBSI (or its successor) and the Master Trustee.
(v) Securities Law Reports. The Company shall be
responsible for filing all reports required under Federal or state securities
laws with respect to the Master Trust's ownership of Ford Stock, including,
without limitation, any reports required under section 13 or 16 of the
Securities Exchange Act of 1934, except for any such reports which the Master
Trustee is required to file, and shall immediately notify the Master Trustee in
writing of any
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requirement to stop purchases or sales of Ford Stock pending the filing of any
report. The Master Trustee shall provide to the Company such information on
the Master Trust's ownership of Ford Stock as the Company may reasonably
request in order to comply with Federal or state securities laws.
(vi) Voting. Notwithstanding any other provision of this
Agreement the provisions of this Section shall govern the voting of Ford Stock.
The Company, after consultation with the Master Trustee, shall provide and pay
for all printing, mailing, tabulation and other costs associated with the
voting of Ford Stock.
(a) When the Company prepares for any annual meeting, the
Company shall notify the Master Trustee thirty (30) days in advance of
the intended record date and shall cause a copy of all proxy solicitation
materials to be sent to the Master Trustee. Based on these materials the
Master Trustee shall prepare a voting instruction form. At the time of
mailing of notice of each annual or special stockholders' meeting of the
issuer of the Ford Stock, the Master Trustee shall cause a copy of the notice
and all proxy solicitation materials to be sent to each Participant, together
with the foregoing voting instruction form to be returned to the Master
Trustee or its designee. The form shall show the number of full and fractional
shares of Ford Stock attributable to the Participant's interest in the Ford
Stock Fund.
(b) Each Participant shall have the right to direct the Master
Trustee as to the manner in which the Master Trustee is to vote that number of
shares of Ford Stock attributable to the Participant's interest in the Ford
Stock Fund. Directions from a Participant to the Master Trustee concerning the
voting of Ford Stock shall be communicated in writing, or by mailgram or
similar means as determined by the Master Trustee. These directions shall be
held in confidence by the Master Trustee and shall not be divulged to the
Company, or any officer or employee thereof, or any other person. Upon its
receipt of the directions, the Master Trustee shall vote the shares of Ford
Stock as directed by the Participant. The Master Trustee shall vote shares of
Ford Stock credited to a Participant's accounts for which it has received no
directions from the Participant in the same proportion on each issue as it
votes those shares credited to Participants' accounts for which it received
voting directions from Participants.
(vii) General. With respect to all rights other than the
right to vote, in the case of Ford Stock credited to a Participant's accounts,
the Trustee shall follow the directions of the Participant.
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(viii) Conversion. All provisions in this Section 4(b)(3)
shall also apply to any securities received as a result of a conversion of Ford
Stock.
(4) Loans to Participants
(i) To originate a participant loan, the Plans participant
shall direct the Master Trustee as to the term and amount of the loan to be
made from the participant's individual account. Such directions shall be made
by Plans participants by use of the telephone exchange system maintained for
such purpose by the Master Trustee or its agent. The Master Trustee shall
determine, based on the current value of the participant's account on the date
of the request and any guidelines provided by the Company, the amount available
for the loan. Based on the interest rate supplied by the Company in accordance
with the terms of the Plans, the Master Trustee shall advise the participant of
such interest rate, as well as the installment payment amounts. In the case of
participant residential loans, the Master Trustee shall forward the loan
document to the participant for execution and submission for approval to the
Master Trustee. The Master Trustee shall distribute the loan note with the
proceeds check to the participant. The Master Trustee also shall distribute
truth-in-lending disclosure to the participant. To facilitate recordkeeping,
the Master Trustee may destroy the original of any promissory note made in
connection with a loan to a participant under the Plans, provided that the
Master Trustee first creates a duplicate by a photographic or optical scanning
or other process yielding a reasonable facsimile of the promissory note and the
Plans participant's signature thereon, which duplicate may be reduced or
enlarged in size from the actual size of the original promissory note.
(ii) Principal and interest payments on parcipant loans shall
be remitted to the Master Trustee (1) by the Company in the case of active
employees, (2) by Comerica Bank in the case of amounts deducted from pension
payments on loans made prior to October 1, 1995, and (3) directly from former
employees in other cases.
(iii) The Administrator shall continue to hold participant
loan notes issued before the effective date of this Agreement as agent for the
Master Trustee.
(5) Commingled Pools. Master Trust investments in Commingled Pools
shall be subject to the following:
(i) The Company hereby agrees to the Plans' participation in
the Group Trust and adopts the terms of the Group Trust as a part of this
Agreement. Additionally, the Company acknowledges that it has received from
the Master Trustee a copy of the terms of the Group Trust
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and the terms of the Declaration of Separate Fund for each separate fund of the
Group Trust selected by the Company.
(ii) The Master Trustee shall at the direction of the
Investment Manager transfer all or any specified assets of a Separately Managed
Portfolio to any Commingled Pool which is maintained by such Investment
Manager, an affiliate thereof or any other entity which is a bank, and
whereupon the instrument establishing such Commingled Pool, as amended from
time to time shall constitute a part of the Master Trust, provided, however,
that following the transfer of funds to the bank, the Master Trustee shall have
no responsibility with respect to the holding, investment or administration of
such funds.
(iii) At the direction of the Company, the Master Trustee
shall transfer all or any portion of the Master Trust assets to any Commingled
Pool which is maintained by a bank as defined by the Investment Advisers Act of
1940, as amended, and whereupon the instrument establishing such Commingled
Pool shall constitute a part of the Master Trust, provided, however, that
following the transfer of funds to the bank, the Master Trustee shall have no
responsibility with respect to the holding, investment or administration of
such funds.
(iv) Purchases, sales, and exchanges of Commingled Pools other
than the Group Master Trust shall be made in accordance with Operational
Procedures to be established.
(6) Separately Managed Portfolios: At the Company's direction the
Master Trustee shall separate all or a portion of the Master Trust into one or
more Separately Managed Portfolios. Each Separately Managed Portfolio may be
invested in individual equity and debt securities, whether domestic or foreign,
mutual funds, commingled pools, and any other property or investments, in the
sole judgment of the person who is directing the investments of such Separately
Managed Portfolio.
The Company shall from time to time specify by written notice to the
Master Trustee whether the investment of the Separately Managed Portfolio shall
be managed by the Master Trustee, or shall be directed by one or more
Investment Managers, or whether both the Master Trustee and one or more
Investment Managers are to participate in the investment management of the
Separately Managed Portfolio. The Company shall be responsible for
ascertaining that while each Investment Manager is acting in such capacity
hereunder, such Investment Manager acknowledges that it is a fiduciary within
the meaning of Section 3(21)(A) of ERISA, with respect to the Plans.
The Master Trustee shall follow the directions of an Investment Manager
regarding the investment and reinvestment of the Master Trust, or such portion
thereof as shall be under management by the Investment Manager, and shall be
under no duty or obligation to review any investment to be acquired, held or
disposed of pursuant to such directions nor to make any recommendations with
respect to the disposition or continued retention of any such
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investment. The Master Trustee shall have no liability or responsibility for
acting without question on the direction of, or failing to act in the absence
of any direction from an Investment Manager, unless the Master Trustee has
knowledge that by such action or failure to act it will be participating in or
undertaking to conceal a breach of fiduciary duty by that Investment Manager.
The Investment Manager at any time and from time to time may issue
orders for the purchase or sale of securities or investments directly to a
broker. In order to facilitate such transactions, the Master Trustee, upon
direction by the Investment Manager, shall execute and deliver appropriate
trading authorizations, provided, however, that the Master Trustee may require
evidence that all risks associated with such purchase or sale of securities or
other investments by the Investment Manager are acknowledged by the Company and
the Investment Manager. Written notification of the issuance of each such order
shall be given promptly to the Master Trustee by the Investment Manager and the
execution of each such order shall be confirmed to the Master Trustee by the
broker. Such notification shall be authority for the Master Trustee to pay for
securities purchased against receipt thereof and to deliver securities sold
against payment therefor, as the case may be. The Master Trustee is also
authorized to execute and deliver appropriate trading authorizations when
notified by the Investment Manager by other means of communication mutually
agreed upon by the Master Trustee and the Investment Manager.
The Master Trustee shall, upon receiving written notice of the
resignation or removal of the Investment Manager, manage, pursuant to this
Section, the investment of the portion of the Master Trust under management
by such Investment Manager at the time of its resignation or removal, unless
and until the Master Trustee shall be notified of the appointment of another
Investment Manager, as provided in this Section, for such portion of such fund.
An Investment Manager shall certify, at the request of the Master
Trustee, the value of any securities or other property held in any Manager Fund
managed by such Investment Manager, and such certification shall be regarded as
a direction with regard to such valuation. The Master Trustee shall be
entitled to conclusively rely upon such valuation for all purposes under this
Agreement.
(7) Investment Contracts. Master Trust investments in GICs shall
be subject to the following limitations:
(i) In accordance with Section 403(a) of ERISA the Company
hereby directs the Master Trustee to continue to hold Existing GICs until
contract maturity or until directed otherwise by the Company. Contract proceeds
payable upon the maturity of an Existing GIC shall be allocated to the
Separately Managed Portfolio described in (ii) below.
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(ii) The Company hereby appoints the Master Trustee to
exercise investment management authority for a Separately Managed Portfolio
which invests primarily in a well-diversified portfolio of fixed-income
investments, including GICs, individual fixed income securities, and units in
a fixed-income Commingled Pool. The Company directs the Master Trustee to
choose such investments in accordance with the Investment Guidelines for the
Interest Income Fund attached hereto as Schedule "G".
(iii) The Company may appoint one or more Investment Managers
to manage a portion of the Separately Managed Portfolio described in (ii) above
pursuant to a written agreement by the Company with the Investment Manager.
(iv) In order to provide the necessary monies for exchanges
or redemption from the Separately Managed Portfolio described in (ii) above, the
Company agrees that the Master Trustee shall maintain a liquidity reserve
allocated to such investment option in (i) FICAP or (ii) such other Mutual Fund
or commingled pool as agreed to by the Company and the Master Trustee. The
target percentage and drift allowance to be held in the liquidity reserve shall
be set forth in Schedule "G" or otherwise agreed upon by the Master Trustee and
Company in writing and the Master Trustee shall be responsible for ensuring
that this target percentage falls within the agreed upon range, over time.
(c) Master Trustee Powers. The Master Trustee shall have the
following powers and authority:
(i) Subject to the limitations imposed by this Section 4,
to sell, exchange, convey, transfer, or otherwise dispose of any property held
in the Master Trust, by private contract or at public auction. No person
dealing with the Master Trustee shall be bound to see to the application of the
purchase money or other property delivered to the Master Trustee or to inquire
into the validity, expediency, or propriety of any such sale or other
disposition.
(ii) Subject to the limitations of this Section 4, to invest
in GICs and short term investments (including interest bearing accounts with
the Master Trustee or money market mutual funds advised by affiliates of the
Master Trustee) and in collective investment funds maintained by the Master
Trustee for qualified plans, in which case the provisions of each collective
investment fund in which the Master Trust is invested shall be deemed adopted
by the Company and the provisions thereof incorported as a part of this Master
Trust as long as the fund remains exempt from taxation under Sections 401(a)
and 501(a) of the Internal Revenue Code of 1986, as amended.
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(iii) To cause any securities or other property held as part
of the Master Trust to be registered in the Master Trustee's own name, in the
name of one or more of its nominees, or in the Master Trustee's account with
the Depository Trust Company of New York and to hold any investments in bearer
form, but the books and records of the Master Trustee shall at all times show
that all such investments are part of the Master Trust.
(iv) To borrow funds from a bank not affiliated with the
Master Trustee in order to provide sufficient liquidity to process Plans
transactions in a timely fashion, provided that the cost of such borrowing
shall be allocated in a reasonable fashion to the investment fund(s) in need of
liquidity;
(v) To make, execute, acknowledge, and deliver any and
all documents of transfer or conveyance and to carry out the powers herein
granted.
(vi) Subject to consultation with and approval by the
Company, to settle, compromise, or submit to arbitration any claims, debts, or
damages due to or arising from the Master Trust; to commence or defend suits or
legal or administrative proceedings; to represent the Master Trust in all suits
and legal and administrative hearings; and to pay all reasonable expenses
arising from any such action, from the Master Trust if not paid by the Company.
(vii) To do all other acts although not specifically
mentioned herein, as the Master Trustee may deem necessary to carry out any of
the foregoing powers and the purposes of the Master Trust.
(d) Investment Authority. The Master Trustee shall be considered a
fiduciary with discretionary investment authority only with respect to Plans
assets invested in the Group Master Trust or in a Separately Managed Portfolio
for which the Master Trustee has been appointed to exercise management
authority.
Section 5. Participant Directions.
(a) Investments. Each Participant shall be responsible for
directing the Master Trustee in which investment option(s) to invest the assets
in the participant's individual accounts. Such directions may be made by
Participants by use of the telephone exchange system maintained for such
purposes by the Master Trustee or its agent, in accordance with written
Telephone Exchange Guidelines attached hereto as Schedule "F". In the event that
the Master Trustee fails to receive a proper direction, the assets shall be
invested in the Interest Income Fund while the Master Trustee seeks a proper
direction. The Master Trustee
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shall not be liable for any loss, or by reason of any breach, which arises from
the Participant's exercise or non-exercise of rights under this Agreement over
the assets in the Participant's accounts.
(b) Disbursements. Each Participant shall be responsible for
directing the Master Trustee to make benefit payments or Participant loans in
accordance with the procedures set forth on Schedule "A". The Master Trustee
shall not be responsible for any disbursement properly made in accordance with
such procedures (other than tax withholding and reporting obligations assumed
under this Agreement).
Section 6. Recordkeeping and Administrative Services to Be Performed.
(a) General. The Master Trustee or Fidelity Investments Retirement
Services Company, an affiliate of the Master Trustee, shall perform those
recordkeeping and administrative functions described in Schedule "A" attached
hereto. These recordkeeping and administrative functions shall be performed
within the framework of the Company's written directions regarding the Plans'
provisions, guidelines and interpretations.
(b) Accounts. The Master Trustee shall keep accurate accounts of
all investments, receipts, disbursements, and other transactions hereunder, and
shall report the value of the assets held in the Master Trust as of each
Reporting Date. Within thirty (30) days following each Reporting Date or
within sixty (60) days in the case of a Reporting Date caused by the
resignation or removal of the Master Trustee, or the termination of this
Agreement, the Master Trustee shall file with the Company a written account
setting forth all investments, receipts, disbursements, and other transactions
effected by the Master Trustee between the Reporting Date and the prior
Reporting Date, and setting forth the value of the Master Trust as of the
Reporting Date. Except as otherwise required under ERISA, upon the expiration
of eight (8) months from the date of filing such account with the Company, the
Master Trustee shall have no liability or further accountabiltiy to anyone with
respect to the propriety of its acts or transactions shown in such account,
except with respect to such acts or transactions as to which the Company shall
within such eight (8) month period file with the Master Trustee written
objections.
(c) Inspection and Audit. All records generated by the Master
Trustee in accordance with paragraphs (a) and (b) shall be open to inspection
and audit, during the Master Trustee's regular business hours prior to the
termination of this Agreement, by the Company or any person designated by the
Company. Upon the resignation or removal of the Master Trustee or the
termination of this Agreement, the Master Trustee shall provide to the Company,
at no expense to the Company, in the format regularly provided to the Company,
a
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statement of each Participant's accounts as of the registration, removal, or
termination, and the Master Trustee shall provide to the Company or the Plans'
new recordkeeper such further records as are reasonable, at the Company's
expense.
(d) Effect of Plan Amendment. A confirmation of the current
qualified status of each Plan is attached hereto as Schedule "D". The
Master Trustee's provision of the recordkeeping and administrative services set
forth in this Section 6 shall be conditioned on the Company delivering to the
Master Trustee a copy of any amendment to the Plans as soon as administratively
feasible following the amendment's adoption, with, if requested, an IRS
determination letter or an opinion of counsel substantially in the form of
Schedule "D" covering such amendment, and on the Company providing the Master
Trustee on a timely basis with all the information the Company deems necessary
for the Master Trustee to perform the recordkeeping and administrative services
and such other information as the Master Trustee may reasonably request.
(e) Returns, Reports and Information. The Company shall be
responsible for the preparation and filing of all returns, reports, and
information required of the Master Trust or Plans by law. The Master Trustee
shall provide the Company with such information as the Company may reasonably
request to make these filings.
(f) Allocation of Plan Interests. All transfers to, withdrawals
from, or other transactions regarding the Master Trust shall be conducted
in such a way that the proportionate interest in the Master Trust of
each Plan and the fair market value of that interest may be determined at any
time. Whenever the assets of more than one Plan are commingled in the Master
Trust or in any investment option, the undivided interest therein of each such
Plans shall be debited or credited (as the case may be) (i) for the entire
amount of every contribution received on behalf of such Plans, every benefit
payment, or other expense attributable solely to such Plans, and every other
transaction relating only to such Plans; and (ii) for its proportionate share
of every item of collected or accrued income, gain or loss, and general
expense, and of any other transactions attributable to the Master Trust or that
investment option as a whole.
Section 7. Compensation and Expenses. Within thirty (30) days of receipt of the
Master Trustee's bill, which shall be computed and billed in accordance with
Schedule "B" attached hereto and made a part hereof, as amended from time to
time, the Company shall send to the Master Trustee a payment in such amount or,
to the extent that the Plan may permit, the Company may direct the Master
Trustee to deduct such amount from Participants' account. All expenses of the
Master Trustee relating directly to the acquisition and disposition of
investments constituting part of the Master Trust, and all taxes of any kind
whatsoever that
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may be levied or assessed under existing or future laws upon or in respect of
the Master Trust or the income thereof, shall be a charge against and paid from
the appropriate investment option.
Section 8. Directions and Responsibility.
(a) Directions from Company or Administrator. The Company shall from
time to time designate the persons authorized to act on its behalf under the
provisions of this Agreement. Such designation shall be made in a
communication signed by the Vice President-Finance, the Secretary, or an
Assistant Secretary of the Company and shall include the signature of the
persons so designated. Whenever the Company or Administrator provides a
direction to the Master Trustee, the Master Trustee shall not be liable for any
loss, or by reason of any breach, arising from the direction if the direction
is contained in a writing (or is oral and immediately confirmed in a writing)
signed by any individual whose name and signature have been submitted (and not
withdrawn) in writing to the Master Trustee by the Company, provided the Master
Trustee reasonably believes the signature of the individual to be genuine.
Such direction may also be made via electronic data transfer in accordance with
procedures agreed to by the Company and the Master Trustee; provided, however,
that the Master Trustee shall be fully protected in relying on such direction
as if it were a direction made in writing by the Company. The Master Trustee
shall have no responsibility to ascertain any direction's (i) accuracy, (ii)
compliance with applicable law, or (iii) effect for tax purposes (other than
tax withholding and reporting obligations assumed under this Agreement).
(b) Conduct. The Master Trustee hereby agrees not to take any action
contrary to the Plans (as communicated to the Master Trustee) or the Summary
Plan Description provided to participants (as communicated to the Master
Trustee). The Master Trustee hereby acknowledges that it has received from
the Company a draft of the Summary Plan Description.
(c) Co-Fiduciary Liability. In any other case, the Master Trustee
shall not be liable for any loss, or by reason of any breach, arising from any
act or omission of another fiduciary under the Plans except as provided in
section 405(a) of ERISA. Without limiting the foregoing, the Master Trustee
shall have no liability for the acts or omissions of any predecessor or
successor trustee.
(d) Responsibility. The Company and the Master Trustee agree that they
will cooperate with each other in the event of litigation or other dispute to
determine the response that is appropriate to any claim made against the
Company or the Master Trustee or both
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and the apportionment of the resulting expenses (including reasonable
attorneys' fees) and liability, if any, in connection with such claim. The
Company and the Master Trustee acknowledge that some claims may be made against
either or both parties even though only one of the parties would be responsible
under the Plans and the Agreement for the action, or inaction, that gives rise
to the claim and that the identity of the party whose action, or inaction,
gives rise to the claim may not always be clear. The parties agree that, in
general, claims arising by reason of interpretation of the Plan provisions or
by reason of Company directions or the directions of an Investment Manager will
be defended by the Company and the Company will be responsible forhe Company a
draft of the Summary Plan Description.
(c) Co-Fiduciary Liability. In any other case, the Master Trustee
shall not be liable for any loss, or by reason of any breach, arising from any
act or omission of another fiduciary under the Plill give notice to the other of
any controversy and each will
cooperate with the other to resolve such controversy.
(e) Survival. The provisions of this Section 8 shall survive the
termination of this Agreement.
Section 9. Resignation or Removal of Master Trustee.
(a) Resignation. The Master Trustee may resign at any time upon sixty
(60) days' notice in writing to the Company, unless a shorter period of notice
is agreed upon by the Company.
(b) Removal. The Company may remove the Master Trustee at any time upon
sixty (60) days' notice in writing to the Master Trustee, unless a shorter
period of notice is agreed upon by the Master Trustee.
Section 10. Successor Master Trustee.
(a) Appointment. If the office of Master Trustee becomes vacant for any
reason, the Company may in writing appoint a successor trustee under this
Agreement. The successor trustee shall have all of the rights, powers,
privileges, obligations, duties, liabilities, and immunities granted to the
Master Trustee under this Agreement. The successor trustee and predecessor
trustee shall not be liable for the acts or omissions of the other with respect
to the Master Trust.
(b) Acceptance. When the successor trustee accepts its appointment
under this Agreement, title to and possession of the Master Trust assets shall
immediately vest in the successor trustee without any further action on the
part of the predecessor trustee. The
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predecessor trustee shall execute all instruments and do all acts that
reasonably may be necessary or reasonably may be requested in writing by the
Company or the successor trustee to vest title to all Master Trust assets in
the successor trustee or to deliver all Master Trust assets to the successor
trustee.
(c) Corporate Action. Any successor of the Master Trustee or successor
trustee, through sale or transfer of the business or trust department of the
Master Trustee or successor trustee, or through reorganization, consolidation,
or merger, or any similar transaction, shall, upon consummation of the
transaction, become the successor trustee under this Agreement.
Section 11. Termination. This Agreement may be terminated at any time by the
Company upon sixty (60) days' notice in writing to the Master Trustee. On the
date of the termination of this Agreement, the Master Trustee shall forthwith
transfer and deliver to such individual or entity as the Company shall
designate, all cash and assets then constituting the Master Trust. If, by the
termination date, the Company has not notified the Master Trustee in writing as
to whom the assets and cash are to be transferred and delivered, the Master
Trustee may bring an appropriate action or proceeding for leave to deposit the
assets and cash in a court of competent jurisdiction. The Master Trustee shall
be reimbursed by the Company for all costs and expenses of the action or
proceeding including, without limitation, reasonable attorneys' fees and
disbursements.
Section 12. Resignation, Removal, and Termination Notices. All notices of
resignation, removal, or termination under this Agreement must be in writing
and mailed to the party to which the notice is being given by certified or
registered mail, return receipt requested, to the Company c/o Mr. D.N.
McCammon, Vice President-Finance, Ford Motor Company, The American Road,
Dearborn, MI 48121-1899, and to the Master Trustee c/o John M. Kimpel,
Fidelity Investments, 82 Devonshire Street, C8A, Boston, Massachusetts 02109,
or to such other addresses as the parties have notified each other of in the
foregoing manner.
Section 13. Duration. This Master Trust shall continue in effect without limit
as to time, subject, however, to the provisions of this Agreement relating to
amendment, modification, and termination thereof.
Section 14. Amendment or Modification. This Agreement may be amended or
modified at any time and from time to time only by an instrument executed by
both the Company and the Master Trustee. The Master Trustee and the Company may
negotiate in good faith amendments to Schedule "B" effective beginning five (5)
years after the effective date of this Agreement.
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Section 15. General.
(a) Performance by Master Trustee, its Agents or Affiliates. The
Company acknowledges and authorizes that the services to be provided under
this Agreement shall be provided by the Master Trustee, its agents or
affiliates, including Fidelity Investments Institutional Operations Company or
its successor, and that certain of such services may be provided pursuant to
one or more other contractual agreements or relationships. The Master Trustee
acknowledges and agrees that it shall remain fully responsible for the
performance of all services or duties performed under this Agreement by its
affiliates.
(b) Entire Agreement. This Agreement contains all of the terms agreed
upon between the parties with respect to the subject matter hereof.
(c) Waiver. No waiver by either party of any failure or refusal to
comply with an obligation hereunder shall be deemed a waiver of any other or
subsequent failure or refusal to so comply.
(d) Successors and Assigns. The stipulations in this Agreement shall
inure to the benefit of, and shall bind, the successors and assigns of the
respective parties.
(e) Partial Invalidity. If any term or provision of this Agreement or
the application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
(f) Section Headings. The headings of the various sections and
subsections of this Agreement have been inserted only for the purposes of
convenience and are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement.
Section 16. Governing Law.
(a) Massachusetts Law Controls. This Agreement is being made in the
Commonwealth of Massachusetts, and the Master Trust shall be administered as a
Massachusetts trust. The validity, construction, effect, and administration of
this Agreement shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Massachusetts, except to the extent those laws are
superseded under section 514 of ERISA.
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<PAGE>
(b) Which Agreement Controls. The Master Trustee is not a party to
the Plans. In the event of any conflict between the provisions of the Plans and
the provisions of this Agreement, the provisions of the Plan shall control,
provided that nothing shall increase or expand the responsibilities or duties of
the Master Trustee beyond those set forth in this Agreement without the written
consent of the Master Trustee.
Section 17. Plan Qualification. The Company shall be responsible for verifying
that while any assets of a particular Plans are held in the Master Trust, the
Plans (i) is qualified within the meaning of section 401(a) of the Code; (ii)
is permitted by existing or future rulings of the United States Treasury
Department to pool its funds in a group trust; and (iii) permits its assets to
be commingled for investment purposes with the assets of other such plans by
investing such assets in this Master Trust. If any Plan ceases to be qualified
within the meaning of section 401(a) of the Code, the Company shall notify the
Master Trustee as promptly as is reasonable. Upon receipt of such notice, the
Master Trustee shall promptly segregate and withdraw from the Master Trust, the
assets which are allocable to such disqualified Plans, and shall dispose of
such assets in the manner directed by the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
FORD MOTOR COMPANY
Attest: Stephen E. Weiner By E.S. Acton
--------------------------- ----------------------------
FIDELITY MANAGEMENT TRUST
COMPANY
Attest: Douglas O. Kant By John P. O'Reilly Jr.
--------------------------- ----------------------------
Assistant Clerk Vice President
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Schedule "A"
RECORDKEEPING AND ADMINISTRATIVE SERVICES
Administration
* Establishment and maintenance of participant account and election
percentages.
* Maintenance of sixty-three (63) plan investment options:
"CORE" INVESTMENT OPTIONS (13)
1. Ford Motor Company Unitized Stock Fund
2. Class year Contract 1993
3. Class year Contract 1994
4. Class year Contract 1995
5. Interest Income Fund
6. Common Stock Fund (Comerica Commingled Pools)
7. Bond Fund (Wells Fargo Commingled Pool)
8. Fidelity Magellan Fund
9. Fidelity Contrafund
10. Fidelity Overseas Fund
11. Fidelity Asset Manager: Income
12. Fidelity Asset Manager
13. Fidelity Asset Manager: Growth
"NON CORE" INVESTMENT OPTIONS (50)
<TABLE>
<S> <C> <C> <C>
1. Fidelity U.S. Investments - Government Securities Fund, L.P. 26. Scudder
International Fund
2. Fidelity Investment Grade Bond Fund 27. Scudder
Global Small Company Fund
3. Fidelity Global Bond Fund 28. Scudder
Income Fund
4. Fidelity New Markets Income Fund 29. Scudder
Global Fund
5. Fidelity Equity-Income Fund 30. Scudder
International Bond Fund
6. Fidelity Puritan Fund 31. Scudder
Growth and Income Fund
7. Fidelity Growth & Income Portfolio 32. Scudder
Japan Fund
8. Fidelity Balanced Fund 33. Scudder
Greater Europe Growth Fund
9. Fidelity Global Balanced Fund 34. T. Rowe
Price High Yield Fund
10. Fidelity Utilities Fund 35. T. Rowe
Price Spectrum Income Fund
11. Fidelity Real Estate Investment Portfolio 36. T. Rowe
Price Spectrum Growth Fund
12. Fidelity Fund 37. T. Rowe
Price New Horizons Fund
13. Fidelity Growth Company Fund 38. T. Rowe
Price International Stock Fund
14. Fidelity Dividend Growth Fund 39. T. Rowe
Price Latin America Fund
15. Fidelity Stock Selector 40. T. Rowe
Price New Asia Fund
16. Fidelity Trend Fund 41. T. Rowe
Price International Discovery Fund
17. Fidelity Small Cap Stock Fund 42. T. Rowe
Price New Era Fund
18. Fidelity Capital Appreciation Fund 43.
Vanguard Index 500 Fund
19. Fidelity Retirement Growth Fund 44.
Vanguard Index Value Fund
20. Fidelity Value Fund 45.
Vanguard Index Growth Fund
21. Fidelity International Growth and Income Fund 46.
Vanguard Explorer Fund
22. Fidelity Worldwide Fund 47.
Vanguard Trustees International Fund
23. Fidelity Canada Fund 48.
Vanguard Life Strategy Conservative Fund
24. Fidelity Europe Fund 49.
Vanguard Life Strategy Moderate Fund
25. Fidelity Pacific Basin Fund 50.
Vanguard Life Strategy Growth Fund
</TABLE>
* Maintenance of nine (9) money classifications:
- Tax Efficient Matched
- Tax Efficient Unmatched
- Regular Savings Matched
- Regular Savings Unmatched
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- Match on Tax Efficient
- Match on Regular Savings
- Ford Credit Match on Tax Efficient
- Ford Credit Match on Regular Savings
- Rollover
The Trustee will provide only the recordkeeping and administrative services
set forth on this Schedule "A" and as detailed in the Plan Administrative
Manual and no others.
A) PARTICIPANT TELEPHONE SERVICES
1. Fidelity registered representatives are available from 8:30 a.m. -
12:00 midnight Eastern Time, beginning October 1, 1995, to
provide toll free telephone service for participant inquiries and
transactions. Additionally, participants have 24-hour account balance
inquiry access utilizing our automated voice response system.
2. For security purposes, all calls are recorded. In addition, several
levels of security are available including the verification of
a Personal Identification Number (PIN) and/or any other indicative data
resident on the system.
3. Through our telephone services, Fidelity provides the following
services:
- Provide mutual fund investment information.
- Allow participants to establish a new Personal Identification Number
(PIN) on Fidelity's VRS.
- Allow Ford participants to update their mailing address through a
Fidelity Phone Representative. Participants who update their address
through Fidelity will have a fifteen (15) day freeze placed on their
accounts for loan, withdrawal and distribution transactions.
- Maintain plan specific provisions.
- Process exchanges between all investment options (except class year
GICs) on a daily basis.
- Perform exchanges into Class Year Contract 1995 weekly.
- Maintain and process changes to participants' investment elections
on a daily basis.
- Maintain and process changes to participants' payroll/spillover
elections on a daily basis.
- Consult with participants in various loan scenarios and generate all
documentation.
- Process all participant loan and withdrawal requests according to
plan provisions on a daily basis. GIC withdrawals will be processed
weekly.
- Process in-service withdrawals via telephone due to certain
circumstances previously approved by Ford Motor Company.
- Process hardship withdrawals and ten-year loans via telephone
according to guidelines previously approved by Ford Motor Company.
B) PLAN ACCOUNTING
1. Process weekly, bi-monthly, and monthly consolidated payroll
contributions and loan repayments from Ford Motor Company's
payroll via electronic data transfer (EDT). The data format will be
provided by Fidelity.
2. Provide plan and participant level accounting for up to nine (9) money
classifications for the SSIP and TESPHE Plans as well as the
individual accounts maintained on FPRS.
3. Value, audit and reconcile the Plans and participant accounts daily.
4. Provide daily plan and participant level accounting for up to
sixty-three investment options, including Fidelity-managed
investment funds, Company Stock, GICs and non-Fidelity mutual funds.
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5. Reconcile and process participant withdrawal requests as approved and
directed by the Sponsor. All requests are paid based on the
current market values of participants' accounts, not advanced or
estimated values. A distribution report will accompany each check.
6. Track individual participant loans, administer all loans outstanding as
of the conversion date, process loan withdrawals, re-invest
loan repayments, provide coupon books to participants (as agreed to by
Ford and Fidelity) and prepare and deliver comprehensive reports to
assist in the administration of participant loans. Promissory notes
for existing loans will continue to be the responsibility of Ford.
7. Qualify hardship requests and ten-year loans in accordance with written
guidelines provided by Ford. Process participant hardship
requests on a daily basis (assumes receipt of request in "good order").
8. Distributions and withdrawals from the class year GIC contracts will be
processed on a weekly basis. All other withdrawals and
distributions will be processed on a daily basis. All requests will be
paid based upon the current market value of a participant's account.
9. Maintain and process changes to participants' investment elections on a
daily basis via Fidelity's toll-free telephone service.
10. Accept written processing instructions from Ford with regard to
Qualified Domestic Relations Orders. The instructions may
include freezing participant accounts, splitting account balances, and
distributing QDRO accounts.
C) PARTICIPANT REPORTING
Note: Ford Motor Company will be responsible for researching participant
inquiries on a timely basis involving activities that occurred prior to
Fidelity becoming the full-service provider.
1. Maintain all eligible employee identification data on the
recordkeeping system and automatically send out enrollment kits
to newly eligible employees (as determined by Fidelity) based upon a
data feed from Ford Motor Company Payroll.
2. Maintain all plan literature fulfillment requests on the recordkeeping
system. Automatically send out literature kits to the
appropriate employees based upon a data feed from Ford Payroll (i.e.
Termination Kits), as well as send literature kits based upon a
participant's request.
3. Mail confirmation to participants of all transactions initiated via
Fidelity Telephone Services within three (3) to five (5)
business days of the transaction.
4. Maintain a supply of blank beneficiary designation forms for
distribution to participants by means of the literature
solicitation service. John Hancock will be responsible for collection
and storage of the completed forms. The NESC will instruct Fidelity
in writing regarding beneficiary distribution requirements.
5. Prepare and distribute to each plan participant (with a balance or
activity during the period) a detailed participant statement
reflecting all activity of the participant on FPRS as of the last
business day of March, June, September and December. Statements will
be mailed four (4) times per year within approximately thirty (30)
days following the end of each calendar quarter in the absence of
unusual circumstances.
D) PLAN REPORTING
1. Prepare, reconcile and deliver a monthly Trial Balance Report for
the SSIP and TESPHE Plans presenting all money classes and investments.
This report is based on the market value as of the last business day of
the month. The report will be mailed
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within approximately twenty (20) days following the end of each
month in the absence of unusual circumstances.
2. Provide on-line access to the Fidelity recordkeeping system
through personal computers located at Ford. This feature allows
the ability to access plan and participant level information for
inquiry purposes.
E) GOVERNMENT REPORTING
- Process 1099R year-end tax reports for participants with
balances, as well as provide financial reporting to Ford Motor Company
to assist in the preparation of Form 5500.
F) COMMUNICATION SERVICES
1. Prepare a customized communications program as outlined in
Jack Florea's letter dated May 4, 1995, as well as offer the STAGES
product line to Ford participants beginning in the fourth quarter of
1995.
2. Fidelity will maintain and monitor a reasonable inventory of
plan literature, and mail appropriate literature based upon
status code changes or instructions entered by Fidelity Phone
Representatives the Workstation or initiated by participants via
the Fidelity Voice response System (VRS). Plan literature
includes enrollment kits, termination kits, phone brochures,
prospectuses for Fidelity and Non-Fidelity mutual funds, SPD's
and beneficiary designation forms.
G) DISCRIMINATION TESTING
Perform up to four (4) discrimination tests per year for Ford.
Additional test(s) may be requested at additional fees(s). To obtain
this service, Ford Motor Company will be required to provide the
information identified in the Fidelity Discrimination Testing Package
Guidelines.
The above mentioned services will be phased in during a
transition period to Fidelity. Comerica Bank, as the terminating
trustee and recordkeeper will perform their last valuation of SSIP,
TESPHE, and BEP for the period ending 9/30/95. The transition period is
scheduled to begin on October 1, 1995 with a projected completion date
of November 1, 1995. This projection is based upon several critical
path items, one of which is the receipt of the final valuations from
Comerica Bank on October 6, 1995. Ford and Fidelity have agreed that
there will be a suspension of recordkeeping services during the
transition period except for contributions, loan repayments for SSIP,
and enrollments. It is the goal of both parties that the transition
period be as short as possible.
For further information regarding how the Ford plan will be
administered, refer to the "Ford Motor Company Plan Changes and
Recommendations" document dated as of April 10, 1995.
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<PAGE>
Schedule "B"
FEE SCHEDULE
<TABLE>
<S> <C>
Annual Participant Fee: $5.00 per participant (with balances)*
per plan per year, billed and payable
quarterly.
Loans-by-Telephone: Establishment fee of $35.00 per loan
account; annual fee of $15.00 per loan
account.
In-Service Withdrawals by Phone: $15.00 per withdrawal.
Remote Access: $1,500 installation per terminal,
$1,000 annual maintenance per terminal,
and $3 - $5 per hour for Tymnet usage
per terminal. Fidelity will subsidize
the installation fees and annual
maintenance fee for up to four (4)
terminals. If an alternative to
obtaining remote access through
personal computers is mutually agreed
upon between Ford and Fidelity, the
subsidy may be applied to partially
offset the cost of this alternative.
Return of Excess Contribution Fee: $25.00 per participant, one-time charge
per calculation and check generation.
Ad Hoc Reports: A reasonable quantity of ad hoc reports
will be provided at no charge.
Extensive ad hoc reporting services
will be billed to Ford at the rate of
$90 per hour. In addition, significant
CPU costs associated with executing
extensive ad hoc reports will also be
billed to Ford.
Proxy Mailing: If requested, Fidelity will provide
printing, mailing and tabulation
services associated with voting and
tendering Ford Stock in the SSIP and
TESPHE Plans. Expenses associated with
these services will be billed to Ford.
Fidelity shall retain the services of a
third-party vendor to handle proxy
solicitation mailings and vote
tabulation for the non-Fidelity Mutual
Funds. Expenses associated with these
services will be billed directly to
the non-Fidelity Fund vendors.
Discrimination Testing: Fidelity will provide up to four (4)
discrimination tests per year for Ford
at a cost of $11,000. If Ford requests
or requires additional tests, Ford will
be assessed $2,750 per test. If
extraordinary consulting is provided by
Fidelity personnel, such consulting
will be provided at the rate of $100
per hour. In addition, the correction
and manipulation of plan data requested
by Ford will be charged at a rate of
$100 per hour.
</TABLE>
- - - Other Fees: separate charges for optional non-discrimination testing,
extraordinary expenses resulting from large numbers of simultaneous manual
transactions or from errors not caused by Fidelity, or for reports not
contemplated in this Agreement. The Administrator may withdraw reasonable
administrative fees from the Trust by written direction to the Trustee.
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<PAGE>
* This fee will be imposed pro rata for each calendar quarter, or any
part thereof, that it remains necessary to keep a participant's
account(s) as part of the Plans' records, e.g., vested, deferred,
forfeiture, top-heavy and terminated participants who must remain on
file through calendar year-end for 1099-R reporting purposes.
GIC Fees
Existing GIC Recordkeeping Fee: 0.02% per year on all existing
GIC assets. This fee includes
daily valuation of the Class Year
GIC contracts as well as monthly
and annual reporting.
Interest Income Fund Management Fees: 0.06% per year on assets in the
Fidelity-managed and synthetic
portion of the Fund;
0.20% per year on assets in the
Short Duration Fixed Income
portion of the Fund.
If Ford adds a second
Investment Manager to manage the
Interest Income Fund, 0.06% per
year will be assessed on the
non-Fidelity managed assets in
this fund. This fee includes
utilizing Fidelity's GUIDE system
to value, accrue, and report on
the combined Interest Income
Fund. Additional custody costs
will be incurred and charged back
to Ford if a separately managed
account is established for any
investment manager.
Company Stock Administration Fee: 0.02% on the market value of
company stock assets, subject
to a $100,000 maximum per year.
Upon Ford's direction, Fidelity
will utilize exclusively the
services of Fidelity Brokerage
Services, Inc. ("FBSI"), a
subsidiary of Fidelity Management
and Research. FBSI's standard
commission is 3.5 cents per
share. If Ford does not so
direct, Fidelity will utilize
other brokers that may charge
more or less than 3.5 cents per
share when trading Company Stock.
The fees detailed above are fixed for a five year period (October 1, 1995
through September 30, 2000) with the following exceptions:
- if more than 5% of plan assets are invested in non-core,
non-Fidelity investment options, Fidelity will revisit the fee
structure with Ford.
- Extraordinary circumstances such as acquisitions or dispositions
that have a significant impact on plan population or require
additional Fidelity resources may result in a mutual modification
of the fee structure and/or a one time "event" fee.
In approximately April of the year 2000, Fidelity and Ford will begin the
process of negotiating a new contract with the end result being a new
contract and fee structure in place by September 30, 2000.
Note: These fees have been negotiated and accepted based on plan
assets of $6.5 billion, 156,000 eligible employees, participation of
109,000 participants, projected net cash flows of $110 million
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<PAGE>
per year, and volumes of adjustments and transactions consistent with
historical experience (as stated in the Fidelity Proposal of Service and Fees
dated September 12, 1994). Fees will be subject to revision if these Plan
characteristics change significantly by either falling below or exceeding
current or projected levels. Fees also have been based on the use of up to 63
investment options, and such fees will be subject to revision if additional
investment options are added.
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<PAGE>
Schedule "C"
INVESTMENT OPTIONS
In accordance with Section 4(b), the Named Fiduciary hereby directs the
Trustee that Participants' individual accounts may be invested in the following
investment options:
"CORE" INVESTMENT OPTIONS (13)
1. Ford Motor Company Unitized Stock
Fund
2. Class year Contract 1993
3. Class year Contract 1994
4. Class year Contract 1995
5. Interest Income Fund
6. Common Stock Fund (Comerica
Commingled Pools)
7. Bond Fund (Wells Fargo Commingled
Pool)
8. Fidelity Magellan Fund
9. Fidelity Contrafund
10. Fidelity Overseas Fund
11. Fidelity Asset Manager: Income
12. Fidelity Asset Manager
13. Fidelity Asset Manager: Growth
"NON CORE" INVESTMENT OPTIONS (50)
1. Fidelity U.S. Investments - Government Securities Fund, L.P.
2. Fidelity Investment Grade Bond Fund
3. Fidelity Global Bond Fund
4. Fidelity New Markets Income Fund
5. Fidelity Equity-Income Fund
6. Fidelity Puritan Fund
7. Fidelity Growth & Income Portfolio
8. Fidelity Balanced Fund
9. Fidelity Global Balanced Fund
10. Fidelity Utilities Fund
11. Fidelity Real Estate Investment Portfolio
12. Fidelity Fund
13. Fidelity Growth Company Fund
14. Fidelity Dividend Growth Fund
15. Fidelity Stock Selector
16. Fidelity Trend Fund
17. Fidelity Small Cap Stock Fund
18. Fidelity Capital Appreciation Fund
19. Fidelity Retirement Growth Fund
20. Fidelity Value Fund
21. Fidelity International Growth and Income Fund
22. Fidelity Worldwide Fund
23. Fidelity Canada Fund
24. Fidelity Europe Fund
25. Fidelity Pacific Basin Fund
26. Scudder International Fund
27. Scudder Global Small Company Fund
28. Scudder Income Fund
29. Scudder Global Fund
30. Scudder International Bond Fund
31. Scudder Growth and Income Fund
32. Scudder Japan Fund
33. Scudder Greater Europe Growth Fund
34. T. Rowe Price High Yield Fund
35. T. Rowe Price Spectrum Income Fund
36. T. Rowe Price Spectrum Growth Fund
37. T. Rowe Price New Horizons Fund
38. T. Rowe Price International Stock Fund
39. T. Rowe Price Latin America Fund
40. T. Rowe Price New Asia Fund
41. T. Rowe Price International Discovery Fund
42. T. Rowe Price New Era Fund
43. Vanguard Index 500 Fund
44. Vanguard Index Value Fund
45. Vanguard Index Growth Fund
46. Vanguard Explorer Fund
47. Vanguard Trustees International Fund
48. Vanguard Life Strategy Conservative Fund
49. Vanguard Life Strategy Moderate Fund
50. Vanguard Life Strategy Growth Fund
-29-
<PAGE>
SCHEDULE "D"
[Law Firm Letterhead]
Ms. Carolyn Redden
Fidelity Institutional Retirement
Services Company
82 Devonshire Street - ZZ4
Boston, MA 02109
[Name of Plan]
Dear Ms. Redden:
In accordance with your request, this letter sets forth our opinion
with respect to the qualified status under section 401(a) of the Internal
Revenue Code of 1986 (including amendments made by the Employee Retirement
Income Security Act of 1974)(the "Code"), of the [name of plan], as amended to
the date of this letter (the "Plans").
The material facts regarding the Plans as we understand them are as
follows. The most recent favorable determination letter as to the Plans'
qualified status under section 401(a) of the Code was issued by the [location
of Key District] District Director of the Internal Revenue Service and was
dated [date] (copy enclosed). The version of the Plans submitted by [name of
company](the "Company") for the District Director's review in connection with
this determination letter did not contain amendments made effective as of
[date]. These amendments, among other matters, [brief description of
amendments]. [Subsequent amendments were made on [date] to amend the provisions
dealing with [brief description of amendments].]
The Company has informed us that it intends to submit the Plans to the
[location of Key District] District Director of the Internal Revenue Service
and to request from him a favorable determination letter as to the Plans'
qualified status under section 401(a) of the Code. The Company may have to make
some modifications to the Plans at the request of the Internal Revenue Service
in order to obtain this favorabele determination letter, but we do not expect
any of these modifications to be material. The Company has informed us that it
will make these modifications.
Based on the foregoing statements of the Company and our review of the
provisions of the Plans, it is our opinion that the Internal Revenue Service
will issue a favorable determination letter as to the qualified status of the
Plans, as modified at the request of the Internal Revenue Service, under
section 401(a) of the Code, subject to the customary condition that continued
qualification of the Plans, as modified, will depend on its effect in
operation.
Futhermore, in that the assets are in part invested in common stock
issued by the Company or an affiliate, it is our opinion that the Plans is an
"eligible individual account plan" (as defined under Section 407(d)(3) of
ERISA) and that the shares of common stock of the Company held and to purchased
under the Plans are "qualifying employer securities" (as defined under Section
407(d)(5) of ERISA). Finally, it is our opinion that interests in the Plans are
not required to be registered under the Securities Act of 1933, as amended,
or, if such registration is required, that such interests are effectively
registered under said Act.
Sincerely,
[name of law firm]
By [Signature]
[name of partner]
-30-
<PAGE>
Schedule "E"
EXISTING GICs
In accordance with Section 4(b), the Named Fiduciary hereby directs the
Trustee to continue to hold the following Existing GICs until such time as the
Named Fiduciary directs otherwise:
-Contract Issuer: John Hancock
-Contract #: GAC 7628
-Contract Rate: 8.07%
-Maturity Date: 6/30/98
-Contract Issuer: Lehman
-Contract #: 5980310
-Contract Rate: 5.49%
-Maturity Date: 6/30/96
-Contract Issuer: Prudential
-Contract #: 5065-281
-Contract Rate: 4.94%
-Maturity Date: 6/30/97
-31-
<PAGE>
Schedule "F"
TELEPHONE GUIDELINES
The following telephone guidelines are currently employed by Fidelity
Institutional Retirement Services Company (FIRSCO).
Representative-assisted telephone hours are 8:30 a.m. (ET) to 12:00 midnight
(ET) on each business day. A "business day" is any day on which the New York
Stock Exchange is open. The Voice Response System (VRS) is available 24 hours a
day, seven days a week.
FIRSCO reserves the right to change these telephone guidelines at its
discretion.
I. Participants may call on any business day in order to request a loan,
withdrawal or exchange transaction. If the request is received before
4:00 p.m. (ET), it will receive that day's trade date. Calls received
after 4:00 p.m. (ET) on a business day or non-business day will be
processed on a next business-day basis.
II. RESTRICTIONS
(A) GICs
1. Loan transactions are not permitted.
2. Withdrawal transactions will be processed on a weekly basis at
each Friday's net asset value (NAV). Withdrawal requests made
after 4 p.m. ET each Friday will be processed at the following
Friday's NAV.
3. Exchanges into and out of Class Year Contracts 1993 and 1994
are not permitted.
4. Weekly exchanges into Class Year Contract 1995 are permitted
and will be processed at each Friday's NAV. Exchange requests
made after 4 p.m. ET each Friday will be processed at the
following Friday's NAV.
5. Exchanges out of Class Year Contract 1995 are not permitted.
(B) SPONSOR STOCK - Investments in the Stock Fund will consist
primarily of shares of Sponsor Stock. However, in order to
satisfy daily participant requests for exchanges, loans and
withdrawals, the Stock Fund will also hold cash or other
short-term liquid investments in an amount that has been
agreed to in writing by the Sponsor and the Trustee. The
Trustee will be responsible for ensuring that the percentage
of these investments falls within the agreed upon range over
time. However, if there is insufficient liquidity in the
Sponsor Stock Fund to allow for such activity, the Trustee
will sell shares of Sponsor Stock in the open market. Exchange
and redemption transactions will be processed as soon as
proceeds from the sale of Company Stock are received.
(C) COMMON STOCK FUND AND BOND FUND - Investments in the Common
Stock and Bond Funds will consist of units in the Comerica and
Wells Fargo commingled pools respectively. However, in order
to satisfy daily participant requests for exchanges, loans and
withdrawals, these Funds will also hold cash or other
short-term liquid investments in an amount that has been
agreed to in writing by the Sponsor and the Trustee. The
Trustee will be responsible for ensuring that the percentage
of these investments falls within the agreed upon range over
time. However, if there is insufficient liquidity in either
Fund to allow for such activity, the Trustee will be required
to sell shares of the "investment component" of the Fund (as
defined in Schedule K) to meet the requests. Exchange and
redemption transactions will be processed as soon as proceeds
from the sale of the investment component are received.
-32-
<PAGE>
SCHEDULE "G-1"
INVESTMENT GUIDELINES
FOR THE INTEREST INCOME FUND
(FIDELITY MANAGEMENT TRUST COMPANY GUIDELINES)
I. OBJECTIVE
The investment objective for the Interest Income Fund ("IIF") is to provide a
relatively high fixed-income yield with little market-related risk. Of primary
importance is the preservation of both invested principal and earned interest.
Secondary to the preservation of capital is the need to generate, over time, a
composite yield in excess of short-term yields available in the marketplace.
II. DESCRIPTION OF THE INTEREST INCOME FUND
The IIF is a diversified book value fund comprised of the following investments
types (described below in more detail): Guaranteed Investment Contracts
("GICs"), individual fixed-income securities, and units in commingled pools
managed by Fidelity Management Trust Company in its capacity as Investment
Manager (hereafter "FMTC"). The IIF will also be invested in a Short-Term
Investment Fund ("STIF") for liquidity purposes.
In conjunction with the investment types described above, FMTC shall purchase
constant-duration synthetic contracts (hereafter "synthetic contracts") to
ensure that the IIF is fully benefit-responsive and accounted for at
book-value. The IIF will be divided among these synthetic contracts on a
pro-rata basis and the contracts will provide a fixed rate of return each
calendar year.
FMTC shall invest the IIF within the ranges indicated below, realizing that
such allocations will be achieved over a reasonable time period:
GICs 0% to 25%
Individual fixed-income securities 25% to 50%
Commingled Pool Units * 48% to 52%
STIF 1% to 3%
* If greater than 50% of the IIF is invested in commingled pool units, then
FMTC shall not purchase additional units until the amount invested falls
below 50%. If the commingled pool units exceed 52%, then the FMTC shall
periodically rebalance the IIF by selling the excess over 52% at fair market
value. The proceeds of such sale will be reinvested in GICs, individual
fixed-income securities or STIF.
III. PERMISSIBLE INVESTMENTS AND LIMITATIONS
A. GICS
GICs are book-value, benefit-responsive investment contracts issued by
insurance companies, banks and other institutions that guarantee the payback of
principal at full book value. GICs are unsecured agreements backed by the
assets of the issuer. The three types of permissible GICs are:
1. Standard GICs: invested principal and earned interest are guaranteed
for the full term of investment.
2. Indexed and/or Structured GICs: interest and maturity may be adjusted
periodically according to a published index.
3. Participating GICs: interest adjusted periodically to reflect the
performance of an underlying portfolio of assets in the general
account of the issuer.
-33-
Credit Limitations
GICs for the IIF will be limited to those issuers whose creditworthiness has
been approved by the FMTC at the time of purchase. Such approval will be given
only to those issuers having substantial asset basis and adequate surplus
assets to assure financial strength under adverse conditions. A copy of the
current FMTC credit standards is available upon request.
Diversification
FMTC will seek to diversify holdings among issuers and investment types to
avoid unwise concentrations of risk. Investment exposure to any single GIC
issuer shall not exceed 2.5% of the IIF assets managed by FMTC. FMTC's
dynamic diversification guidelines utilize multiple categories of issuers rated
as to maturity limits, percentage of client's portfolio and percentage of
issuer's surplus or net worth. A copy of the current FMTC diversification
standards is available upon request.
B. SECURITIES
1. Individual Fixed-Income Securities
FMTC will invest in high quality individual fixed-income securities for the
IIF. Such securities will be owned directly by the Plan, and the Plan assumes
default risk on the security. The minimum credit quaility of any security at the
time of purchase will be "AA-" by at least one of the major rating agencies.
The expected final maturity of any security purchased shall not exceed seven
years.
Below is a list including, but not limited to, the securities types which may
be purchased for the IIF:
- Asset-backed securities
- Collateralized Mortgage Obligations (CMOs)
- Commercial Paper rated A1/P1 or higher
- Corporate Notes and Bonds
- Mortgage-backed Securities
- U.S. Government Agencies
- U.S. Treasury Securities
Except for U.S. Treasuries, U.S. Government Agency, and U.S. Government
sponsored issuers, investment exposure to any single issuer shall not exceed
2.5% of the IIF assets managed by FMTC.
FMTC may also invest in ARMs, Treasury Bills, Notes, and Bonds, (including
Treasury STRIPS), U.S. Agency mortgage-backed securities, excluding IO's and
PO's, Inverse Floaters, Super Floaters, residuals, structured notes, futures
and options. Any exception to the above exclusions shall not be permitted
unless agreed to in writing by the wrap issuer, the Investment Manager.
2. Commingled pool Units
Initially, the IIF will be invested in units of the Fidelity Short
Duration/Diversified Collective Trust according to the Investment Guidelines
referred to in Schedule I-2.
FMTC may invest in other commingled pool units provided these Investment
Guidelines are amended accordingly.
C. STIF
To assure sufficient liquidity for the IIF, FMTC will invest in money market
portfolios, including commingled pools and mutual funds, offered by FMTC or
its affiliates.
-34-
D. CONSTANT DURATION SYNTHETIC AGREEMENTS
FMTC will purchase synthetic contracts for all of the investment types
described above. Such contracts do not guarantee the underlying investments
(described in A and B above) purchased on behalf of the Plan. FMTC will
purchase such synthetic contracts from third party issuers (usually an
insurance company, bank, or brokerage firm) approved by FMTC at the time of
purchase.
IV. WITHDRAWAL HIERARCHY FOR BENEFIT PAYMENTS
The withdrawal hierarchy for benefit payments from the IIF shall be as follows:
(1) STIF, (2) Commingled pool units, (3) individual fixed-income securities,
and (4) GICs.
-35-
<PAGE>
SCHEDULE "G-2"
INVESTMENT GUIDELINES FOR THE
FIDELITY SHORT DURATION/DIVERSIFIED COLLECTIVE TRUST
The Fidelity Short Duration/Diversified Collective Trust seeks to add
incremental return above a selected benchmark (either a published index or a
customized benchmark) while matching the benchmark in terms of duration and
risk parameters. The Sponsor acknowledges that it has received a copy of the
terms of the Fidelity Group Trust and terms of the Declaration of Separate Fund
for the Short Duration/Diversified Collective Trust.
-36-
<PAGE>
Exhibit 5.B
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P. O. BOX 2508
CINCINNATI, OH 45201
Date: Dec 13 , 1995 Employer Identification Number:
38-0549l90
File Folder Number:
385048000
FORD MOTOR COMPANY Person to Contact:
P.O. Box 1899, THE AMERICAN RD. LESLIE LEE
DEARBORN, MI 48121-1899 Contact Telephone Number:
(513) 684-3866
Plan Name:
SAVINGS AND STOCK INVESTMENT PLAN
FOR SALARIED EMPLOYEES
Plan Number: 010
Dear Applicant:
We have made a favorable determination on your plan identified
above, based on the information supplied. Please keep this letter
in your permanent records.
Continued qualification of the plan under its present form
will depend on its effect in operation. (See section 1.401-1(b)(3)
of the Income Tax Regulations.) We will review the status of the
plan in operation periodically.
The enclosed document explains the significance of this
favorable determination letter, points out some features that may
affect the qualified status of your employee retirement plan, and
provides information on the reporting requirements for your plan.
It also describes some events that automatically nullify it. It is
very important that you read the publication.
This letter relates only to the status of your plan under the
Internal Revenue Code. It is not a determination regarding the
effect of other federal or local statutes.
This determination is subject to your adoption of the proposed
amendments submitted in your letter dated December 21, 1994. The proposed
amendments should be adopted on or before the date prescribed by the
regulations under Code section 402(b).
This determination is also subject to your soption of the proposed
amendments submitted in your letter(s) dated 11/14/95 & 12/4/95. These proposed
amendments should also be adopted on or before the date prescribed by the
regulations under Code section 401(b).
This plan satisfies the requirements of Code section
4975(e)(7).
This plan has been mandatorily disaggregated, permissively aggregated,
or restructed to satisfy the nondiscrimination requirements.
This letter is issued under Rev. Proc 93-39 and considers the amendments
required by the Tax Reform Act of 1986 except as otherwise specified in this
letter.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with respect to
those benefits, rights, and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's
coverage group consists of those employees treated as currently
benefiting for purposes of demonstrating
that the plan satisfies the minimum coverage requirements of section 410(b) of
the Code.
This letter may not be relied upon with respect to whether the plan
satisfied the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
We have sent a copy of this letter to our representative as
indicated in the power of attorney.
If you have any questions concerning this matter, please
contact the person whose name and telephone number are shown above.
Sincerely yours,
/s/C. Ashley Bullard
C. Ashley Bullard
District Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
registration statement of Associates First Capital Corporation on
Form S-8 (File No. 333- ) of our report dated January 26,1996,
except for Note 18, as to which date is February 8, 1996 on our
audits of the consolidated financial statements of Associates
First Capital Corporation as of December 31, 1995 and 1994,and
for the years ended December 31, 1995, 1994, and 1993, appearing
in the Annual Report on Form 10-K of Associates First Capital
Corporation.
Additionally, we consent to the incorporation by reference in
this registration statement of our report dated July 3, 1996, on
our audit of the combined financial statements of Associates
International Group as of December 31, 1995 for the year ended,
appearing in the Current Report on Form 8-K of Associates First
Capital Corporation dated July 3, 1996.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
February 26, 1997
<PAGE>
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, being an
officer or director, or both, of ASSOCIATES FIRST CAPITAL CORPORATION, a
Delaware corporation (the "Company"), do hereby make, constitute and appoint
Roy A. Guthrie, Timothy M. Hayes, and Chester D. Longenecker, and each of
them, attorneys-in-fact and agents of the undersigned with full power and
authority of substitution and resubstitution, in any and all capacities, to
execute for and on behalf of the undersigned the Registration Statement on
Form S-8 relating to the shares of Class A Common Stock of the Company and/or
obligations of the Company with values based on the value of Class A Common
Stock and certain other indexes, and any and all pre-effective and
post-effective amendments or supplements to the foregoing Registration
Statement and any other documents and instruments incidental thereto, and to
deliver and file the same, with all exhibits thereto, and all documents and
instruments in connection therewith, with the Securities and Exchange
Commission, and with each exchange on which any class of securities of the
Company is registered, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act
and thing that said attorneys-in-fact and agents, and each of them, deem
advisable or necessary to enable the Company to effectuate the intents and
purposes hereof, and the undersigned hereby fully ratify and confirm all that
said attorneys-in-fact and agents, or any of them, or their respective
substitutes, if any, shall do or cause to be done by virtue hereof.
IN WITNESS HEREOF, each of the undersigned has subscribed his or her
name, this 26th day of February, 1997.
<TABLE>
<C> <C>
/s/ J. Carter Bacot /s/ Joseph M. McQuillan
- ------------------------ --------------------------
Name: J. Carter Bacot Name: Joseph M. McQuillan
Title: Director Title: Director
/s/ John M. Devine /s/ Harold D. Marshall
- ------------------------ --------------------------
Name: John M. Devine Name: Harold D. Marshall
Title: Director Title: Director
/s/ Kenneth Whipple /s/ Keith W. Hughes
- ------------------------ --------------------------
Name: Kenneth Whipple Name: Keith W. Hughes
Title: Director Title: Chairman of
the Board, Principal
/s/ H. James Toffey, Jr. Executive Officer and
- ------------------------- Director
Name: H. James Toffey, Jr.
Title: Director
/s/ Kevin P. Hegarty /s/ Roy A. Guthrie
- -------------------------- --------------------------
Name: Kevin P. Hegarty Name: Roy A. Guthrie
Title: Senior Vice President Title: Executive Vice President
and Principal And Chief Financial
Accounting officer Officer
</TABLE>
