ex10b.htm


    
      

    

    Exhibit
10-B

    
      

      


      


      Joe
W. Laymon

      Group
Vice President

      Corporate
Human Resources and Labor Affairs

      


      October
3, 2007

      Mr. James
Farley

      [Address
redacted]

      


      Dear
Jim,

      


      I am
pleased to offer you the position of Group Vice President, Chief Marketing and
Communications Officer of Ford Motor Company, an at-will Leadership Level 1
position, reporting to Alan Mulally, President & Chief Executive Officer,
subject to the approval of the Board of Directors.  We believe you
will be an excellent addition to our senior leadership team.  The main
features of our offer are detailed below.

      


      Compensation

      
        	
                 
      

              	
                Ø

              	
                An
      annual base salary of $700,000 payable according to Ford’s regular payroll
      practices.

              


      

      


      
        	
                 
      

              	
                Ø

              	
                A
      signing bonus of $1,500,000.  This amount will be paid in cash
      within two weeks after your effective date of hire.  The payment
      may be deferred, in whole or part, into our Deferred Compensation Plan as
      long as you declare your election prior to your effective date of hire or
      within 30 days of the acceptance of this offer, whichever comes
      first.  If you voluntarily leave Ford Motor Company within two
      years of your date of hire or if you are discharged ‘for Cause’ within
      that period, the entire signing bonus must be repaid in full to the
      Company within two weeks of your
departure.

              


      

      


      
        	
                 
      

              	
                Ø

              	
                An
      initial stock grant valued at $1,000,000.  This grant will be
      made in the form of 50% stock options and 50% time-vested restricted stock
      units.  The quantity of stock options and restricted stock units
      will be determined by the Fair Market Value (FMV) of Ford Common Stock
      using the average of high and low prices for Ford Motor Company Common
      Stock (trading the regular way on the NYSE) on November 15, 2007 which
      will be the grant date for these stock awards (assuming your effective
      date of hire is prior to this date).  The stock options will be
      non-qualified stock options that vest over a three-year period—33% would
      vest one year from grant date, another 33% two years from the grant date,
      and the remaining 34% three years from the grant date.  The
      options would have a ten-year term and be subject to the terms and
      provisions of the Company’s Long Term Incentive Plan.  The
      restricted stock units will vest over a three-year period, similar to the
      stock options, and are also subject to the terms and conditions of the
      Company's Long Term Incentive Plan.

              


      

      


      
        	
                 
      

              	
                Ø

              	
                As
      a member of the leadership team, you are eligible to participate in the
      Company’s shareholder-approved Annual Incentive Compensation Plan
      (AICP).  The final AICP award is dependent on Company
      performance and may be adjusted by the Compensation Committee of the Board
      of Directors based on your individual performance.  Your annual
      incentive (bonus) target will be $630,000 (equivalent to 90% of your base
      salary) for performance years 2007 and 2008.  You are guaranteed
      full payment of the 2007 and 2008 AICP targets which will be paid in March
      2008 and March 2009 respectively.

              


      

      


      
        	
                 
      

              	
                Ø

              	
                You
      will be eligible to receive annual grants of stock options and
      performance-based restricted stock units (usually granted in March of each
      year) comparable to other Officers at your level, with the actual quantity
      determined by the Compensation
Committee.

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      Retirement

      Upon your
hire, you will be eligible to participate in the Company’s primary retirement
plan, the Ford Retirement Plan (FRP) and the associated Benefit Equalization
Plan (BEP).  Additionally, you will be eligible to participate in
Company-sponsored savings plan and any supplemental executive separation
programs available to other similarly situated executives. Under the FRP, the
Company will periodically contribute a percentage of your base annual salary
(based on your age) into a tax-qualified defined contribution
plan.  Where limited under the Tax Code, the FRP section of the BEP
(an unfunded non-qualified plan) will be credited with contributions as if under
the FRP.  Under each Plan, you will have the ability to determine and
manage your investment elections.  Vesting under the FRP is at the
third anniversary of your date of hire.  Your participation in each
Plan will be subject to its terms and conditions.  For further
information, please feel welcome to ask me for any Plan’s summary
description.

      


      In
consideration of the value of the retirement benefits that you may forfeit by
leaving your present employer, the Company will provide you with a series of
lump-sum cash payments designed to make-up the forfeited benefit
amount.  The lump-sum amounts shall be determined on the following
basis, less any retirement benefit otherwise payable by your present employer or
the Company (including assumed investment returns):

      
        	
                 
      

              	
                Ø

              	
                Two
      identical lump-sum amounts, while on the active employment roll, payable
      on the 1st of the month you become age 50 and age 55, designed to provide
      equivalent value as if you had met your present employer's eligibility
      requirements for early retirement;
and,

              


      

      
        	
                 
      

              	
                Ø

              	
                Additional
      lump-sum amounts, while on the active employment roll, payable on the 1st
      of the month you become age 58, 60 and 62, designed to provide the
      additional years of benefit accrual forfeit as an early retiree under your
      present employer's retirement
plans.

              


      

      


      We
understand the following terms apply to your present arrangement and will be
used in the lump-sum determination unless you or plan documentation advise to
the contrary:

      
        	
                 
      

              	
                Ø

              	
                Age
      55 early retirement eligibility

              


      

      
        	
                 
      

              	
                Ø

              	
                Pension
      Earnings pay: base plus 100% bonus

              


      

      
        	
                 
      

              	
                Ø

              	
                Salary/bonus
      increase: 4.5% per year

              


      

      
        	
                 
      

              	
                Ø

              	
                SERP:
      2% final average base/bonus (less offsets) times years of service (maximum
      30 years)

              


      

      
        	
                 
      

              	
                Ø

              	
                50%
      joint and survivor coverage

              


      

      
        	
                 
      

              	
                Ø

              	
                5%
      early retirement reduction from age
62

              


      

      


      We may
request additional information regarding your present employer's plan design or
statements of your rights under the plans.

      


      Health
Care

      You will
have immediate eligibility for yourself and your eligible family members for the
Ford Medical Plan-PPO.  This health care and prescription drug
coverage is effective on your date of hire at no cost to you, except for
applicable deductibles and co-payments.  You will become eligible to
elect different health care coverage through the Ford Flex benefit program on
the first day of the fourth month following your date of hire.  Other
health care coverage may include additional out-of-pocket costs.

      


      In
addition to the above coverage, you may choose to maintain your present
employer's health care coverage through COBRA for the time period allowed by
law.  If you do choose to continue that health care under COBRA, the
Company will pay you $15,000 to defer the costs of that coverage.  The
payment will be made upon verification from you that you have elected COBRA
coverage and the payment will be included in your signing bonus
check.

      


      Relocation

      You will
be eligible for relocation assistance under the Company Relocation
Policy.  This includes home sale, house-hunting trip(s), relocation
assistance, and home purchase assistance on your primary residence in
Michigan.  If you choose to live in temporary housing in Southeast
Michigan for the first year of your employment, we will reimburse you for the
costs of temporary living and at the end of that period, when you relocate your
household, you would be eligible for relocation assistance under the Company
program.  Anticipated costs incurred for flights made during a
temporary housing arrangement are included in your signing
bonus.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      Life
Insurance

      You will
be eligible for life insurance in the amount of three times your base
salary.  You also will have the opportunity to purchase up to an
additional five time base salary at a cost of approximately
$200/month.

      


      Country
Club Membership

      The
Company does not offer country club memberships.  In light of your
existing club membership, the Company will reimburse you the cost of the
initiation fee upon verification from you that you have repaid it.

      


      Additional
Benefits Information

      For
benefits and pension plan purposes, you will be credited four (4) additional
years of service for every year of actual service.  You were
previously provided a summary of the broader range of compensation and benefits
related to this offer.  Items described in this letter and that
benefits summary, are subject to the terms, conditions and requirements of our
existing benefit or pension plans and programs.  The terms of the
benefit or pension plans may be amended or terminated from time-to-time in the
future.

      


      Severance
Pay

      In the
event that the Company terminates your employment for any reason other than ‘for
Cause’ during the first two years of your employment, the Company will pay you
the equivalent of two years base salary plus the equivalent of two years of your
annual incentive target as a separation payment.  Should you leave
Ford under these circumstances and receive this separation payment, it is made
on the condition that you do not join or otherwise perform work for a competitor
for two years after the date of your termination and also sign and deliver an
acceptable general claims release.

      


      For the
purposes of this offer letter, the term ‘for Cause’ is described
as:

      (a) any
material act of dishonesty or knowing and willful breach of fiduciary duty on
your part which is intended to result in your personal enrichment or gain at the
expense of Ford or any of its affiliates or subsidiaries; or (b) your commission
of any felony, or any misdemeanor (or securities law violation) involving moral
turpitude or unlawful, dishonest, or unethical conduct that a reasonable person
would consider damaging to the reputation or image of Ford or any of its
affiliates or subsidiaries; or (c) any material violation of the published
standards of conduct applicable to Officers or executives of Ford or any of its
affiliates or subsidiaries that warrants termination; or (d) insubordination or
refusal to perform assigned duties or to comply with the lawful directions of
your superiors; or (e) any deliberate, willful or intentional act that causes
substantial harm, loss or injury to Ford or any of its affiliates or
subsidiaries.

      


      Tax
Consequences and Possible Delays in Payment to Avoid Penalties

      You are solely responsible and liable for all taxes that
may arise in connection with the compensation and benefits that you receive from
Ford.   This includes any tax arising under the newly-enacted
Section 409A of the Code.  Ford may, however, delay any payment to you
by up to six months and a day following termination, to the extent Ford
reasonably determines that the delay is necessary or appropriate to avoid a
violation of Section 409A.  Please consult your personal financial or
tax advisor about the tax consequences of your compensation and
benefits.  No one at Ford is authorized to provide this advice to
you.

      


      Conditions
on Our Offer

      This
offer of at-will employment is subject to the following
conditions.  First, you must successfully complete a drug screen
test.  Second, you must provide a completed Health History
Form.  Third, you must produce valid proof of identification and
acceptable evidence that you are authorized to work in the United
States.  Fourth, you must sign our standard Trade Secrets/Non-Compete
Agreement.  Fifth, we must determine, to our satisfaction, that
information provided by you in your job application or resume is
valid.  Sixth, you must sign the documents we require all workers to
execute before they start work.  Seventh, you must establish to Ford’s
reasonable satisfaction that your commencement of employment with Ford will not
violate any agreement (such as a non-competition agreement) between you and any
prior employer.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      This
offer remains in effect until October 19, 2007.  We anticipate that
your effective date of hire will be November 12, 2007.  Upon
acceptance of this offer, please plan to provide proof of identification (e.g.,
passport, driver’s license or other documentation with a photo or physical
description) and proof of the ability to work in the Unites States (e.g., visa,
work permit, etc.) when you report for your first day of
work.  Michigan law will, of course, control all issues arising under
this offer.

      


      Jim, we are pleased to offer
you this opportunity to join the Ford team and look forward to your favorable
response.

      


      
        
          	 
      	
                  Sincerely,

                
	 
      	 
      
	 
      	
                  /s/
      Joe Laymon

                
	 
      	 
      
	 
      	
                  Joe
      Laymon

                


        

      

      


      
        


        I have
read the foregoing offer of at-will employment.  I agree with, and
accept, this offer of employment subject to the terms and conditions detailed
above.

         

        Signed:  /s/ Jim
Farley                                                                Date:                      October 3,
2007