exv10wqw7



 




Exhibit 10-Q-7



[FORD LOGO]



March      , 2005




Dear                     ,



     
As communicated to you, you have been granted the
opportunity to earn Restricted Stock Equivalents (RSEs) [valued
at up to
$                    ]
[in addition to Stock Options and Performance Stock Rights
(PSRs) as part of your March 2005 stock-based grants].



     
[Total Stock-Based Award Summary



			
	 	• 	
    Stock Options (Stock—Options)
    
	 
	 	• 	
    RSEs ($ Maximum Value (2005 performance period
    – assumes 100% objectives achieved)
    
	 
	 	• 	
    PSRs (PSRs) (2005-2007 PSR performance
    period – assumes 100% target level achieved)]
    




     
This letter summarizes the terms of your RSE
opportunity.



     
[The maximum value of the RSEs that may be
granted to you in March 2006 based on 2005 performance against
objectives was calculated by converting half of the value of the
amount of stock options [and other long-term incentive awards]
that you otherwise would have received in March 2005] to an
equivalent value of RSEs.] [As a hypothetical example, if you
were planned for a stock option grant covering 50,000 shares,
you would instead be granted stock options covering 25,000
shares plus the opportunity to earn RSEs calculated as follows
(assuming a Black-Scholes value of $4.90 per share on
March 11, 2005: [25,000 options x $4.90] = $122,500 maximum
value of RSEs that may be awarded in March 2006).]*



     
Your leadership and performance towards the
achievement of specific 2005 Objectives, which will be
established and provided to you, will be reviewed at the end of
2005 and used to determine the value of any final RSE award.
Your objectives will be specifically set for you, and will
include [some or all of] these elements:




			
	 	• 	
    Company Performance,
    [                     %
    weight]
    
	 
	 	• 	
    Strategic Direction and Operational Effectiveness
    [                     %
    weight]
    
	 
	 	• 	
    Leadership
    [           %
    weight]
    
	 
	 	• 	
    People and Culture
    [           %
    weight]
    




     
The Compensation Committee of the Board of
Directors will determine the value of the final RSE award that
is earned by you for 2005. The RSEs to be awarded in March 2006
will be based on the Fair Market Value of Common Stock on the
date of award. The RSEs are subject to a one-year restriction
period and will pay dividend equivalents. They do not have
voting rights. As soon as practicable after the restrictions
lapse, shares of Ford Motor Company common stock will be issued
to you for this award[, less any shares withheld to cover any
tax liability on the value of the grant].



     
[For employees on US Payroll, if the tax law
permits, you may be provided the option to defer distribution of
the value of the RSE award, less applicable taxes, determined at
the time the restrictions lapse, into the Deferred Compensation
Plan (DCP). If this deferral option is available, we








 




would expect that such election would be made at
least 6 months prior to the end of the 2005 performance
period.]




     
RSEs are subject to the terms and conditions of
the 1998 Long-Term Incentive Plan. Attachment A provides some
Q&A’s regarding RSEs.



     
If you have any questions regarding your RSE
opportunity, please contact
                              
at
                                                   or
                              
at
                                                  .




		
	 	
    Regards,
    
	 
	 	
                                  ,
    Executive Director
    
	 	
    Compensation & Benefits
    




     
For your information, the Fair Market Value of
Ford Motor Company Common Stock
on                     ,
2005 (average of highest and lowest trading prices on the NYSE
on that date) was
$                    /share.
The Black-Scholes value (calculated by Hewitt & Associates)
was
$                    /per
share.




Attachment








 




Attachment



PERFORMANCE-BASED RESTRICTED STOCK
EQUIVALENTS



What is a Restricted Stock Equivalent
(RSE)?


     
RSEs may be awarded to you based on achievement
of specific objectives. RSEs are phantom shares of Ford Common
Stock that convert to bonafide shares of Ford Common Stock after
a specified, time-based restriction period. Because they are not
“real” shares until the restriction period ends, you
will not be eligible to vote the shares, nor are the shares
registered in your name. The restriction period for any RSE
award granted to you in 2006, based on achievement of specific
objectives for 2005, is one year from the date of the award.




Will I Receive Dividends on my RSE Award
During the Restriction Period?


     
Since you do not actually own shares of stock,
you will not receive dividends. However, you will receive cash
dividend equivalents during the restriction period that mirror
any cash dividend payment on Ford Common Stock. These payments
will be made quarterly by Payroll as soon as practicable after
the dividend payment date.




What Happens When the Restriction Period
Lifts?


     
At the end of the restriction period, RSEs will
be converted to real shares of Ford stock based on the FMV of
Ford Common Stock on that date. Taxes will be paid through share
withholding, and a book entry account of the net shares will be
set up at EquiServe in your name. The shares carry voting rights
and you will receive any dividends paid.




What About Taxes?


     
RSEs are not recognized as taxable income at the
time the award is made. As soon as practicable after the
restriction period ends, shares of Ford Common Stock will be
issued to you for this award, less shares withheld to cover any
tax liability on the value of the award. Your quarterly dividend
equivalent payments are taxed as regular income during the
restriction period and payroll will handle the withholding
before the payment is made to you.




[Can I Defer the Shares When the Restriction
Lapses?


     
For US employees only, you may have the option to
defer distribution of the award. Internal Revenue Code section
409A was enacted by the American Jobs Creation Act of 2004 and
is effective for compensation deferred on or after
January 1, 2005. Under this new provision, compensation
which is “performance based” can be deferred if a
timely election is made at least 6 months prior to the end
of the performance period. We intend that any RSEs granted in
2006 based on achievement of specific objectives for 2005 will
be considered performance based and, if so, you will then have
an opportunity to defer receipt. We are awaiting guidance from
the IRS on this issue. Assuming the RSEs are considered
performance based, you will be offered the alternative to defer
the value of the RSEs, less any applicable taxes, into the
Deferred Compensation Plan (DCP). The RSE value would be
determined based on the Fair Market Value (FMV) of Ford
Common Stock on the date the restrictions lapse. Deferring into
the DCP will allow you to defer federal income tax on the award
until a later date (however, FICA, plus federal and local tax on
the FICA amount, must still be withheld on the date the
restrictions lapse. The deferred RSE value, less any applicable
taxes, will be credited to a book-entry deferral account as
units in the Ford Stock Fund only (using the closing price on
the date of deferral), and will be distributed in shares of Ford
Common Stock, less shares withheld to cover taxes, at the end of
the deferral period. After being credited to your DCP deferral
account, your RSE deferral account, ultimate share distribution,
and related share withholding to pay taxes, will be based on the
closing price of the Ford Stock Fund. You will not be








 




able to transfer or reallocate your RSE deferral
account balance to other measurement options. Remember that
amounts deferred into the DCP will be subject to new Code
section 409A, which, among other things, restricts your ability
to make “second look elections” and may delay your
distribution by 6 months if you are one of the 50 most
highly compensated officers when you retire or otherwise
separate from employment. We will notify you well in advance of
any deferral opportunities.]





Are There Any Other Conditions Related to the
RSEs?


     
There are several other conditions that you
should be aware of:




			
	 	5) 	
    If you terminate your employment for any reason
    other than death, disability or approved retirement before the
    restriction period expires, your grant will automatically be
    forfeited.
    
	 
	 	6) 	
    You must refrain from engaging in any activity
    that is directly or indirectly in competition with any activity
    of the Company or any subsidiary thereof. In the event of
    non-fulfillment of this condition, your rights in the RSE grant,
    including the right to have the grant converted to real shares
    of Ford stock at the end of the restriction period, will be
    forfeited and cancelled.
    
	 
	 	7) 	
    Your rights in the RSE grant, including the right
    to have the grant converted to real shares of Ford Stock at the
    end of the restriction period, will be forfeited and cancelled
    if it is determined that you have acted in a manner inimical to
    the best interests of the Company.
    
	 
	 	8) 	
    Any RSEs awarded to you will be subject to the
    terms and conditions of the 1998 Long-Term Incentive Plan.
    
	 
	 	9) 	
    If you defer the RSE value into the DCP, the
    deferral will be subject to the terms and conditions of the DCP,
    including conditions relating to inimical conduct.
    





		
	* 	
    The FMV is the average of the high and low price
    of Ford Common Stock trading on the New York Stock Exchange on
    the applicable date.