Document:

exv4w1

Exhibit 4.1

FORD MOTOR COMPANY DEFERRED COMPENSATION PLAN

(Amended and Restated as of December 31, 2008)

     1. Purpose. This Plan, which shall be known as the “Ford Motor Company Deferred Compensation
Plan” and is hereinafter referred to as the “Plan”, is intended to provide for the deferment of
payment of (i) awards of incentive compensation under the Ford Motor Company Annual Incentive
Compensation Plan and similar plans, (ii) base salary, and (iii) new hire signing bonus.

     2. Definitions. As used in the Plan, the following terms shall have the following meanings,
respectively:

          (a) The term “AIC Plan” shall mean the Ford Motor Company Annual Incentive Compensation Plan,
as amended.

          (b) The term “Code” shall mean the Internal Revenue Code of 1986, as amended.

          (c) The term “Committee” shall mean, unless the context otherwise requires, the following as
they from time to time may be constituted:

     (i) The Compensation Committee with respect to all matters affecting any Section 16
Person.

     (ii) The Deferred Compensation Committee with respect to all matters affecting employees
other than Section 16 Persons.

          (d) The term “Company” means Ford Motor Company and, when used in the Plan with reference to
employment, shall include subsidiaries of the Company.

          (e) The term “Compensation Committee” shall mean the Compensation Committee of the Board of
Directors of the Company.

          (f) The term “Deferred Compensation” shall mean compensation deferred pursuant to paragraph
(b), (c), (d) or (e) of Section 4 hereto, and any interest equivalents, dividend equivalents or
other earnings or return on such amounts determined in accordance with the Plan.

          (g) The term “Deferred Compensation Account” with respect to a participant shall mean the book
entry account established by the Company for such participant with respect to his or her Deferred
Compensation.

          (h) The term “Deferred Compensation Committee” shall mean the committee comprised of the Group
Vice President, Human Resources and Corporate Services, the Executive Vice President and Chief
Financial Officer and the Senior Vice President and General Counsel (or, in the event of a change
in title, their functional equivalent), or such other persons as may be designated members of such
Committee by the Compensation Committee.

          (i) The term “employee” shall mean any person who is regularly employed by the Company or a
subsidiary at a salary (as distinguished from a pension, retirement allowance, severance pay,
retainer, commission, fee under a contract or other arrangement, or hourly, piecework or other
wage) and is enrolled on the active employment rolls of the Company or a subsidiary, including, but
without limitation, any employee who also is an officer or director of the Company or a subsidiary.

          (j) The term “Ford Stock” shall mean Ford Common Stock.

          (k) The term “Ford Stock Unit” shall mean a unit having a value based upon Ford Stock.

 

 

          (l) The term “IPOC” shall mean the Investment Process Oversight Committee comprised of the
Vice President — Treasurer, the Associate General Counsel and Secretary, and the Director —
Employee Benefits (or, in the event of a change in title, their functional equivalent).

          (m) The term “Investment Process Committee” shall mean the committee comprised of the
Director — Global Trading and Automotive Risk Management, the Director — Asset Management, and
the Director — Global Retirement and Income Security (or, in the event of a change in title, their
functional equivalent).

          (o) The term “SC Plan” shall mean the Ford Motor Company Supplemental Compensation Plan, as
amended.

          (p) The term “Section 16 Person” shall mean any employee who is subject to the reporting
requirements of Section 16(a) or the liability provisions of Section 16(b) of the Securities
Exchange Act of 1934, as amended.

          (q) The term “Separation From Service” shall occur upon an employee’s retirement or other
termination from employment with the Company.

          (r) The term “Specified Employee” shall mean an employee of the Company who is a “Key
Employee” as defined in Code Section 416(i)(1)(A)(i), (ii) or (iii), applied in accordance with the
regulations thereunder and disregarding Subsection 416(i)(5). A Specified Employee shall be
identified as of December 31st of each calendar year and such identification shall apply
to any Specified Employee who shall incur a Separation From Service in the 12-month period
commencing April 1st of the immediately succeeding calendar year. An employee who is
determined to be a Specified Employee shall remain a Specified Employee throughout such 12-month
period regardless of whether the employee meets the definition of “Specified Employee” on the date
the employee incurs a Separation From Service. This provision is effective for Specified Employees
who incur a Separation From Service on or after January 1, 2005. For purposes of determining
Specified Employees, the definition of compensation under Treasury Regulation Section
1.415(c)-2(d)(3) shall be used, applied without the use of any of the special timing rules provided
in Treasury Regulation Section 1.415(c)-2(e) or the special rule in Treasury Regulation Section
1.415(c)-2(g)(5)(i), but applied with the use of the special rule in Treasury Regulation Section
1.415(c)-2(g)(5)(ii).

          (s) The term “SSIP” shall mean the Company’s Savings and Stock Investment Plan for Salaried
Employees, as amended.

          (t) The term “subsidiary” shall mean (i) any corporation a majority of the voting stock of
which is owned directly or indirectly by the Company or (ii) any limited liability company a
majority of the membership interest of which is owned directly or indirectly by the Company.

          (u) The term “VIP Plan” shall mean Ford Motor Credit Company Variable Incentive Plan, as
amended.

     3. Administration. Except as otherwise herein expressly provided, the Compensation Committee
shall have full power and authority to construe, interpret and administer the Plan. The
Compensation Committee shall make all decisions relating to matters affecting any Section 16
Person, but may otherwise delegate any of its authority under the Plan. The Compensation Committee
and the Deferred Compensation Committee each may at any time adopt or terminate, and may from time
to time amend, modify or suspend such rules, regulations, policies and practices as they in their
sole discretion may determine in connection with the administration of, or the performance of their
respective responsibilities under, the Plan. In the event that an Article, Section or paragraph of
the Code, Treasury Regulations, AIC Plan, SC Plan, SSIP, or VIP Plan is renumbered, such renumbered
Article, Section or paragraph shall apply to applicable references herein.

 

 

     4. Eligibility of Participants; Amounts Deferrable.

          (a) Participating Subsidiaries and Foreign Location Participants. The Deferred Compensation
Committee shall determine the extent to which subsidiaries and employees at foreign locations may
participate in the Plan or similar plans and the type and amount of compensation that may be
deferred under, or the type and amount of account balances that may be transferred to, the Plan
pursuant to this paragraph (a).

          (b) Annual Incentive Compensation Deferrals under the AIC Plan and Other Similar Plans.
Subject to any limitations determined under paragraph (a) or paragraph (g) of this Section 4 or
paragraph (a) of Section 5, U.S. employees who receive an annual incentive compensation award or an
installment of such an award payable in cash under the AIC Plan or the VIP Plan are eligible to
defer payment under the Plan from 1% to 100%, in 1% increments, of such amount, net of applicable
taxes, but not less than $1,000, provided that such employees are actively employed by the Company
in Leadership Level 1-5 or the equivalent at the time of the election to defer. Notwithstanding the
foregoing, the Compensation Committee may in its sole discretion allow deferrals under this
paragraph (b) by persons that do not meet the eligibility requirements described above.

          (c) Base Salary Deferrals. Subject to any limitations determined under paragraph (a) or
paragraph (g) of this Section 4, U.S. employees who are eligible to participate in the AIC Plan or
the VIP Plan, and who are actively employed by the Company in Leadership Level 1-5 or the
equivalent at the time a salary deferral election is made, are eligible to defer payment from 1% to
50%, in 1% increments, of base salary, net of applicable taxes, provided that the Compensation
Committee has determined that base salary deferrals may be made for the employment period covered
by such deferral. Notwithstanding the foregoing, the Compensation Committee may impose such
additional limitations on eligibility as it deems appropriate in its sole discretion.

          (d) Deferral of Awards under SC Plan. Notwithstanding anything in the Plan to the contrary,
deferrals of awards of supplemental compensation made under the SC Plan for years 1995-1997 shall
be governed by the same provisions of the Plan that apply to awards of incentive compensation under
the AIC Plan. Any references to the AIC Plan shall be deemed to cover awards under the SC Plan.

          (e) Deferral of New Hire Signing Bonus. Notwithstanding anything contained in the Plan to the
contrary, subject to any limitations determined under paragraph (a) or paragraph (e) of this
Section 4, newly hired U.S. employees who are eligible to participate in the AIC Plan or the VIP
Plan, and who received an employment offer from the Company that included a new hire signing bonus
in cash, are eligible to defer payment from 1% to 100%, in 1% increments, of such new hire signing
bonus, net of applicable taxes, but not less than $1,000, provided that such employees are actively
employed by the Company in Leadership Level 1-5 or the equivalent at the time the new hire signing
bonus would otherwise be payable in the absence of such deferral.

          (f) Eligibility of Compensation Committee Members. No person while a member of the
Compensation Committee shall be eligible to participate under the Plan.

          (g) Transfer of Deferral Accounts from SC Plan. Effective as of the close of business on
October 16, 1998, all outstanding book entry accounts maintained under the SC Plan in the form of
contingent credits for cash and/or Ford Common Stock shall be transferred to the Plan and governed
by the provisions of the Plan. Upon such transfer, contingent credits for cash shall be valued
based on the Fidelity Retirement Money Market Portfolio and contingent credits for Ford Common
Stock shall be valued based on the Ford Stock Fund until such time, if any, as all or any part of
such amounts are transferred by the applicable participants to other investment options available
under the Plan. Ultimate payout of a transferred deferral account shall be in cash, except that, to
the extent that the transferred

 

 

account is valued based on the Ford Stock Fund, the participant may make an election prior to
the transfer of the account to receive the ultimate payout in whole shares of Common Stock.

          (h) Transfer of Deferral Accounts to Visteon Plan. Anything in the Plan to the contrary
notwithstanding, all outstanding book entry deferral accounts maintained under the Plan for
participants who become employees of Visteon Corporation (“Visteon”) or any of its consolidated
subsidiaries immediately following employment with the Company shall be transferred to a new
Visteon Deferred Compensation Plan (“Visteon DCP”) to be adopted by Visteon and governed by the
provisions of that plan, effective as of 5:00 p.m. Eastern Time on June 30, 2000 (the “Transfer
Date”). The transferred account balances may not be immediately available for redesignations under
the Plan until account balances have been properly verified by the recordkeepers for both plans.
On and after the Transfer Date, any deferrals by such employees shall be made under the Visteon
DCP, even if the election to defer was made prior to the Transfer Date. Unless the participant
changes his or her investment options for any such deferral, the Visteon DCP shall honor the
investment elections that were in effect under this Plan for such class year and type of
compensation to the extent the Visteon DCP has the same investment choices. The Visteon DCP shall
have a Ford Stock Fund investment option for those transferred accounts that had deferrals based on
the Ford Stock Fund under this Plan as of the Transfer Date, but the Ford Stock Fund under the
Visteon DCP shall be a “sell only” fund, and would not be available for any new deferrals or
redesignations into such fund from other funds or for credits based on dividend equivalents.
Distributions relating to the transferred accounts shall be made under the Visteon DCP in the form
specified by the participant while employed by the Company.

     5. Deferral Elections.

          (a) Annual Incentive Compensation Deferrals. For performance years beginning prior to January
1, 2005, a participant’s decision to defer payment of annual incentive compensation under paragraph
(b) of Section 4 under the Plan must be made prior to October 31 of the performance year for which
the compensation is determined. For performance years beginning on or after January 1, 2005, a
participant’s decision to defer payment of annual incentive compensation under paragraph (b) of
Section 4 under the Plan must be made on or before June 30 of the performance year for which the
compensation is determined; provided, however, that, at the time of such deferral election, the
amount of any annual incentive compensation subject to such deferral election is substantially
uncertain; provided, further, that newly hired employees who are hired on or after June
1st may not make such an election to defer payment of annual incentive compensation in
the year of hire.

          (b) Base Salary Deferrals. A participant’s decision to defer payment of base salary under the
Plan must be made prior to the calendar year during which the base salary will be earned; provided,
however, that such decision may be made with respect to base salary earned during the first
calendar year that base salary deferrals are permitted under the Plan within thirty days of
implementation of the base salary component of the Plan but prior to earning any such salary.
Employees hired or rehired on or after June 1st may not make such elections to defer
payment of base salary until the next election period following the year of hire or rehire.

          (c) New Hire Signing Bonus Deferrals. A participant’s decision to defer payment of a new hire
signing bonus must be made before the earlier of: (i) the payment date of such signing bonus, or
(ii) 30 days after the date of hire or rehire.

          (d) Mandatory Deferrals. The Compensation Committee may mandatorily defer payment under the
Plan of all or a portion of certain annual incentive compensation awards pursuant to the AIC Plan.
In no event may any mandatory deferral pursuant to this Section be made later than June
30th of the performance year for which such annual incentive compensation award is
determined. Additionally, no mandatory deferral may be made pursuant to this Section if, at the
time of such mandatory deferral, the amount of any annual incentive compensation award subject to
such mandatory deferral is substantially certain. Any such mandatory deferral must designate the
time and form of payment of any annual incentive compensation award subject to such mandatory
deferral.

 

 

          (e) Deferred Compensation Accounts. Amounts deferred pursuant to paragraphs (a), (b), (c), or
(d) of Section 5, and deferral amounts relating to any transfer to the Plan pursuant to paragraph
(g) of Section 4, will be credited by book entry to the participant’s Deferred Compensation
Account. All such amounts shall be held in the general funds of the Company. Each participant shall
have the status of an unsecured general creditor of the Company with respect to his or her Deferred
Compensation Account. The participant shall designate the percentage of the amount elected for
deferral to be allocated to each investment option available under the Plan for purposes of
accounting only and not for actual investment. In addition, with respect to any particular deferral
under the Plan, at the time of a participant’s initial deferral election, the participant shall
elect one of the following: (i) lump sum in-service distribution for a specified year, (ii) lump
sum distribution after Separation From Service, or (iii) up to 10 annual installment payments after
Separation From Service.

          (g) Prohibited Elections or Other Actions. Notwithstanding anything contained in the Plan to
the contrary, no otherwise permissible election or other action is allowed that would trigger
taxation of any amount under Code Section 409A.

     6. Investment Options; Methodology; No Ownership Rights.

          (a) General. The IPOC has the sole discretion to determine the investment options available as
the measurement mechanism for deferrals and redesignations under the Plan and shall perform the
same functions under the Plan that it performs under the SSIP. The manner and extent to which
elections may be made, the method of valuing the various investment options and the Deferred
Compensation Accounts and the method of crediting the Deferred Compensation Accounts with, or
making other adjustments as a result of, dividend equivalents, interest equivalents or other
earnings or return on such Accounts shall be the same as under SSIP.

          (b) Methodology. Unless otherwise determined by the Compensation Committee, the methodology
for valuing the various investment options and the Deferred Compensation Accounts and for
calculating amounts to be credited or debited or other adjustments to any Deferred Compensation
Account with respect to any investment options shall be the same as that used under the SSIP.

          (c) No Ownership Rights. Investment options available under the Plan shall be used solely for
measuring the value of Deferred Compensation Accounts and accounting, on a book entry basis, as if
the deferred amounts had been invested in actual investments, but no such investments shall be made
on behalf of participants. Participants shall not have any voting rights or any other ownership
rights with respect to the investment options selected as the measuring mechanism for their
Deferred Compensation Accounts.

     7. Redesignation within a Deferred Compensation Account.

          (a) General. Except as otherwise provided in paragraph (f) of this Section 7, a participant or
the beneficiary or legal representative of a deceased participant, may redesignate amounts credited
to a Deferred Compensation Account among the investments available under the Plan. No
redesignations relating to a particular deferral may occur on or after the scheduled distribution
date for the deferral under the Plan.

          (b) Eligible Participants. Active employees and retired participants are eligible to
redesignate.

          (c) Permitted Frequency. Redesignations may be made at the same frequency as transfers may be
made under the SSIP.

          (d) Amount of Redesignation. Any redesignation relating to a particular deferral shall be in a
specified percentage or dollar amount of the investment option from which the redesignation is
being made.

 

 

          (e) Timing. Redesignation shall occur on the day the participant’s written redesignation
election form or telephonic election is received by the Company or its agent designated for this
purpose; provided, however, that if such redesignation request is received after 4 p.m. Eastern
Time, or on a day that is not a business day (i.e., a day that either the Company’s World
Headquarters offices in Dearborn, Michigan or the principal offices of its designated agent are not
open to the public for business), then such redesignation shall be effective on the next business
day.

          (f) Limitations on Redesignations Involving Ford Stock Units. The Committee in its sole
discretion at any time may rescind a redesignation in or out of Ford Stock Units if such
redesignation was made by a participant who (i) at the time of the redesignation the Committee
believes was in the possession of material, nonpublic information with respect to the Company and
(ii) in the Committee’s estimation benefited from such information by the timing of his or her
redesignation. In the event of a rescission, the participant’s Deferred Compensation Account shall
be restored to a status as though such redesignation had not occurred.

     8. Adjustments. In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, rights offering or any other change in the
corporate structure of the Company or shares of Ford Stock or units of any other investment option
provided under the Plan, the Compensation Committee shall make such adjustments, if any, as it may
deem appropriate in the number of Ford Stock Units, shares of Ford Stock, including shares
represented by Ford Stock Units, or shares or units of other investment options credited to
participants’ Deferred Compensation Accounts.

     9. Distribution of Deferred Compensation; Financial Hardship.

          (a) General. Except as otherwise provided in paragraph (b) of this Section 9 or in Section
11, or as otherwise determined by the Committee, distribution of all or any part of a participant’s
Deferred Compensation Account shall be made upon the earliest of the following:

               (i) If the participant elected to receive the distribution in a lump sum payment in a
specified year when the participant is an active employee, such payment shall be made as soon as
practicable after the March 15th of the specified year, but in no event later than
December 31st of the specified year. If a participant elected to receive a lump sum
payment in a specified year, after Separation From Service prior to such specified year, the
participant shall receive a lump sum payment as soon as practicable after the March 15th
following the participant’s Separation From Service, but in no event later than the December
31st immediately following such March 15th.

               (ii) After Separation From Service with the Company, distribution will occur in either a lump
sum payment or in no more than ten annual installment payments, as elected by the participant, with
such lump sum payment being made, or such annual installments beginning, as soon as practicable
after the March 15th following the participant’s Separation From Service, but in no
event later than the December 31st immediately following such March 15th. If
the participant elected annual installments, each installment paid after the initial installment
payment shall be paid annually as soon practicable after each successive March 15th, but
in no event later than the December 31st following such March 15th.

               (iii) Notwithstanding any prior election by a participant, upon a participant’s death, the
participant’s Deferred Compensation Account shall be distributed in its entirety as soon as
practicable after the March 15th following the participant’s death, but in no event
later than December 31st following such March 15th.

Unless otherwise determined by the Committee, a Deferred Compensation Account, or part thereof,
relating to a particular distribution shall be valued for purposes of the distribution as of the
March 15th of the year of distribution, or the next preceding day for which valuation
information is available. Notwithstanding anything contained in the Plan to the contrary, no
distribution of any or all of a Deferred Compensation Account held by a Specified Employee shall
occur earlier than the first day of the seventh month following the Specified Employee’s Separation
From Service, other than as a result of such Specified Employee’s death. Any payments to which a
Specified Employee otherwise would have been

 

 

entitled under the Plan during the first 6 months following such Specified Employee’s Separation
From Service shall be accumulated and paid in a lump sum payment on or after the first day of the
seventh month following such Separation From Service.

          (b) Financial Hardship. At the written request of a participant, the Committee, in its sole
discretion, may authorize the cessation of deferrals under the Plan by such participant and
distribution of all or any part of the participant’s Deferred Compensation Account prior to
his or her scheduled distribution date or dates, or accelerate payment of any installment
payable with respect to Deferred Compensation, upon a showing of unforeseeable emergency by
the participant. For purposes of this paragraph, “unforeseeable emergency” shall mean severe
financial hardship resulting from extraordinary and unforeseeable circumstances arising as a
result of one or more recent events beyond the control of the participant. In any event,
payment shall not be made to the extent such emergency is or may be relieved (i) through
reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the
participant’s assets, to the extent the liquidation of such assets would not itself cause
severe financial hardship and (iii) by cessation of deferrals under the Plan. Withdrawals of
amounts because of unforeseeable emergency shall only be permitted to the extent reasonably
necessary to satisfy the emergency. Examples of what are not considered to be unforeseeable
emergencies include the need to send a participant’s child to college or the desire to
purchase a home. The Committee shall determine the applicable distribution date and the date
as of which the amount to be distributed shall be valued with respect to any financial
hardship withdrawal or distribution made pursuant to this paragraph (b) of this Section 9.
Any participant whose deferrals have ceased under the Plan pursuant to this paragraph may not
elect to recommence deferrals until such time as is determined by the Committee, but in no
event earlier than permitted under Code Section 409A. In the event of a participant’s
financial hardship withdrawal under the Plan or any employer-sponsored savings plan, deferrals
by such participant under the Plan shall be suspended for twelve months following the date of
such withdrawal. Notwithstanding anything contained in the Plan to the contrary, no hardship
distribution shall be allowed that would result in taxation under Code Section 409A.

          (c) Prohibited Distributions or Other Actions. Notwithstanding anything contained in the Plan
to the contrary, no otherwise permissible distribution or other action is allowed that would
trigger taxation of any amount under Code Section 409A.

          (d) One Time Election to Change Method and/or Timing of Distributions. Notwithstanding
anything contained in the Plan to the contrary, elections by active participants to change the
method and/or timing of distributions may be allowed in accordance with Internal Revenue Service
Notice 2005-1, Q&A-19, such that such elections shall not be treated as a change in the form and
timing of a payment under Code Section 409A(a)(4) or an acceleration of a payment under Code
Section 409A(a)(3); provided, that such elections are made on or before December 31, 2006 and that
no such election results in (i) an acceleration of a distribution into the year of the election, or
(ii) the deferral of a distribution otherwise payable in the year of the election into a subsequent
year. Such elections are irrevocable as of December 31, 2006.

     10. Designation of Beneficiaries and Effect of Death.

          (a) Designation of Beneficiaries. A participant may file with the Company a written
designation of a beneficiary or beneficiaries (subject to such limitations as to the classes and
number of beneficiaries and contingent beneficiaries and such other limitations as the Compensation
Committee from time to time may prescribe) to receive, in the event of the death of the
participant, undistributed amounts of Deferred Compensation that would have been payable to such
participant had he or she been living. A participant shall be deemed to have designated as
beneficiary or beneficiaries under the Plan the person or persons who receive such participant’s
life insurance proceeds under the Company-paid basic Life Insurance Plan unless such participant
shall have assigned such life insurance or shall have filed with the Company a written designation
of a different beneficiary or beneficiaries under the Plan. A participant may from time to time
revoke or change any such designation of beneficiary and any designation of beneficiary under the
Plan shall be controlling over any testamentary or other disposition; provided, however, that if
the Committee shall be in doubt as to the right of any such beneficiary to receive any such
payment, or if

 

 

applicable law requires the Company to do so, the same may be paid to the legal
representatives of the participant, in which case the Company, the Committee and the members
thereof shall not be under any further liability to anyone.

          (b) Distribution Upon Death. Subject to the provisions of Section 9 hereof, in the event of
the death of any participant prior to distribution of all or part of such participant’s Deferred
Compensation Account, the total value of such participant’s entire Deferred Compensation Account
shall be distributed in cash, except as otherwise provided in paragraph (h) or (j) of Section 4, in
one lump sum in accordance with paragraph (a) of Section 9 to any beneficiary or beneficiaries
designated or deemed designated by the participant pursuant to paragraph (a) of this Section 10 who
shall survive such participant (to the extent such designation is effective and enforceable at the
time of such participant’s death) or, in the absence of such designation or such surviving
beneficiary, or if applicable law requires the Company to do so, to the legal representative of
such person, at such time (or as soon thereafter as practicable) and otherwise as if such person
were living and had fulfilled all applicable conditions as to earning out set forth in, or
established pursuant to the Plan, provided such conditions shall have been fulfilled by such person
until the time of his or her death.

     11. Effect of Inimical Conduct. Anything contained in the Plan notwithstanding, all rights of
a participant under the Plan to receive distribution of all or any part of his or her Deferred
Compensation Account shall cease on and as of the date on which it has been determined by the
Committee that such participant at any time (whether before or subsequent to termination of such
participant’s employment) acted in a manner inimical to the best interests of the Company.

     12. Limitations. A participant shall not have any interest in any Deferred Compensation
credited to his or her Deferred Compensation Account until it is distributed in accordance with the
Plan. All amounts deferred under the Plan shall remain the sole property of the Company, subject to
the claims of its general creditors and available for use for whatever purposes are desired. With
respect to Deferred Compensation, a participant shall be merely a general creditor of the Company
and the obligation of the Company hereunder shall be purely contractual and shall not be funded or
secured in any way. The Plan shall not constitute part of any participant’s or employee’s
employment contract with the Company or any participating subsidiary. Participation in the Plan
shall not create or imply a right to continued employment.

     13. Annual Statements of Account. Account statements shall be sent to participants as soon as
practicable following the end of each year as to the balances of their respective Deferred
Compensation Accounts as of the end of the previous calendar year.

     14. Withholding of Taxes. The Company shall have the right to withhold an amount sufficient to
satisfy any federal, state or local income taxes or FICA or Medicare taxes that the Company may be
required by law to pay with respect to any Deferred Compensation Account, including withholding
payment from a participant’s current compensation.

     15. No Assignment of Benefits. No rights or benefits under the Plan shall, except as otherwise
specifically provided by law, be subject to assignment (except for the designation of beneficiaries
pursuant to paragraph (a) of Section 10), nor shall such rights or benefits be subject to
attachment or legal process for or against a participant or his or her beneficiary or
beneficiaries, as the case may be.

     16. Administration Expense. The entire expense of offering and administering the Plan shall be
borne by the Company and its participating subsidiaries.

     17. Amendment, Modification, Suspension and Termination of the Plan; Rescissions and
Corrections. The Compensation Committee, at any time may terminate, and at any time and from time
to time, and in any respect, may amend or modify the Plan or suspend any of its provisions;
provided, however, that no such amendment, modification, suspension or termination shall, without
the consent of a participant, adversely affect such participant’s rights with respect to amounts
credited to or accrued in his or her Deferred Compensation Account; provided, further, however,
that no distribution of benefits shall occur

 

 

upon termination of this Plan unless applicable requirements of Code Section 409A have been
met. The Committee at any time may rescind or correct any deferrals or credits to any Deferred
Compensation Account made in error or that jeopardize the intended tax status or legal compliance
of the Plan.

     18. Section 10. Code Section 409A.

          (a) The Company reserves the right to take such action, on a uniform and consistent basis, as
the Company deems necessary or desirable to ensure compliance with Code Section 409A, and
applicable additional regulatory guidance thereunder, or to achieve the goals of the Plan without
having adverse tax consequences under this Plan for any employee or beneficiary.

          (b) In no event shall any transfer of liabilities to or from this Plan result in an
impermissible acceleration or deferral under Code Section 409A. In the event such a transfer would
cause an impermissible acceleration or deferral under Code Section 409A, such transfer shall not
occur.

          (c) In the event an employee is reemployed following a Separation From Service, distribution
of any deferrals shall not cease upon such employee’s reemployment.

          (d) After receipt of any deferrals, the obligations of the Company with respect to such
amounts shall be satisfied and no employee, surviving spouse, or beneficiary shall have any further
claims against the Plan or the Company with respect to any deferrals under the Plan.

     19. Indemnification and Exculpation.

          (a) Indemnification. Each person who is or shall have been a member of the Compensation
Committee or a member of the Deferred Compensation Committee 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 such person in connection with or resulting from any claim, action,
suit or proceeding to which such person may be or become a party or in which such person may be or
become involved by reason of any action taken or failure to act under the Plan and against and from
any and all amounts paid by such person in settlement thereof (with the Company’s written approval)
or paid by such person 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 such person’s lack of good faith;
subject, however, to the condition that upon the institution of any claim, action, suit or
proceeding against such person, such person shall in writing give the Company an opportunity, at
its own expense, to handle and defend the same before such person undertakes to handle and defend
it on such person’s 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
the Company may have to indemnify or hold such person harmless.

          (b) Exculpation. Each member of the Compensation Committee, each member of the Deferred
Compensation Committee, each member of the IPOC and each member of the Investment Process Committee
shall be fully justified in relying or acting in good faith upon any information furnished in
connection with the administration of the Plan or any appropriate person or persons other than such
person. In no event shall any person who is or shall have been a member of the Compensation
Committee, a member of the Deferred Compensation Committee, a member of the IPOC or a member of
the Investment Process Committee be held liable for any determination made or other action taken or
any omission to act in reliance upon any such information, or for any action (including the
furnishing of information) taken or any failure to act, if in good faith.

     20. Finality of Determinations; Request for Review. Each determination, interpretation or
other action made or taken pursuant to the provisions of the Plan by the Compensation Committee or
the Deferred Compensation Committee shall be final and shall be binding and conclusive for all
purposes and upon all persons, including, but without limitation thereto, the Company, its
stockholders, the Compensation Committee and each of the members thereof, the Deferred Compensation
Committee and each of the members thereof, and the directors, officers, and employees of the
Company, the Plan participants, and their respective successors in interest. In the event a participant wishes to appeal a
decision relating to the Plan, a request in writing may be submitted to the Committee.

     21. Governing Law. The Plan shall be governed by and construed in accordance with the laws of
the State of Michigan.exv10w1

Exhibit 10.1

SETTLEMENT AGREEMENT AND MUTUAL RELEASES

     This Settlement Agreement and Mutual Releases (the “Agreement”) is made and entered into as of
August 18, 2009 (the “Effective Date”), by and between Medicis Pharmaceutical Corporation, a
Delaware corporation with offices located at 7720 North Dobson Road, Scottsdale, Arizona 85256,
U.S.A. on behalf of itself and its Affiliates (collectively, “Medicis”), and Sandoz Inc., a
Colorado corporation with offices located at 506 Carnegie Center, Princeton, NJ 08540 on behalf of
itself and its Affiliates (collectively, “Sandoz”).

RECITALS

     WHEREAS, Medicis has asserted various claims and causes of action against Sandoz in an action
captioned Medics Pharmaceutical Corp. v. Mylan Inc. et al., Case No. 09-CV-33-JJF (the
“Litigation”), which is pending in the United States District Court, District of Delaware (the
“Court”);

     WHEREAS, the Parties mutually desire to enter into a patent license and business partnership
agreement for the purpose of selling products (“License and APA Agreement”),

     WHEREAS, the Parties have agreed in principle to the terms of said License and APA Agreement,
but have yet to finalize a written agreement reflecting said terms,

     WHEREAS, to avoid the expense of further litigation the Parties desire to settle the
Litigation on the terms set forth herein.

     NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants and promises set
forth herein, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

     1. License and APA Agreement. After the Effective Date, the parties shall negotiate
in good faith to reach a definitive License and APA Agreement reflecting the two term sheets, which
are attached hereto as Exhibits A and B.

     2. Dismissal of Claims and Permanent Injunction. No later than August 19, 2009,
Medicis shall file with the Court an unopposed motion for entry of Consent Judgment and Permanent
Injunction, attached hereto as Exhibit C, asking the Court to dismiss the Litigation with prejudice
and enter a Permanent Injunction against Sandoz’s manufacture, use, offer to sell, sale,
importation, or distribution of any current products, or future products having the same strength
and dosage form of the current Solodyn® products, that are the subject of Sandoz’s Abbreviated New
Drug Application No. 90-422 (“ANDA”) that is not pursuant to a license granted by Medicis, and from
inducing others to infringe U.S. Patent No. 5,908,838 (“‘838 Patent”) by inducing others to
manufacture, use, offer to sell, sale, import, or distribute any current products, or future
products having the same strength and dosage form of the current Solodyn® products, that are the
subject of Sandoz’s ANDA that is not pursuant to a license granted by Medicis, said permanent
injunction to be in effect until expiration of the ‘838 Patent.

 

 

     3. Confidentiality. The Parties agree that, except as otherwise may be required by
applicable laws, regulations, rules or orders, no information concerning this Agreement shall be
made public by either Party without the prior written consent of the other.

     4. Due Authorization. The Parties represent and warrant that the individuals signing
this Agreement on their behalf are duly authorized and fully competent to do so.

     5. Assignment, Predecessors, Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Parties and their respective permitted successors and
assigns.

     6. Construction. The Parties hereby mutually acknowledge and represent that they have
been fully advised by their respective legal counsel of their rights and responsibilities under
this Agreement, that they have read, know and understand completely the contents of this Agreement,
and that they have voluntarily executed the same. The Parties further mutually acknowledge that
they have had input into the drafting of this Agreement and that, accordingly, in any construction
to be made of the Agreement, it shall not be construed for or against any party, but rather shall
be given a fair and reasonable interpretation, based on the plain language of the Agreement and the
expressed intent of the Parties.

     7. Entire Agreement. The Parties acknowledge that, subject to additional terms and
conditions that are customary and have yet to be drafted and negotiated and included in the License
and APA Agreement, this Agreement sets forth the entire agreement and understanding of the Parties
and supersedes all prior written or oral agreements or understandings with respect to the subject
matter hereof. No modification of any of the terms of this Agreement, or any amendments thereto,
shall be deemed to be valid unless in writing and signed by an authorized agent or representative
of both parties hereto. No course of dealing or usage of trade shall be used to modify the terms
and conditions herein. This Agreement shall be binding on each of Medicis and Sandoz and their
respective permitted successors and assigns. Medicis acknowledges that the License and APA
Agreement is subject to the final approval of Sandoz’s Board.

     8. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument. The Parties agree that telecopied or PDF copies of signatures will be sufficient, with
original signature pages to be supplied and exchanged at a later date.

     9. Governing Law. In any action brought regarding the validity, construction and
enforcement of this Agreement, it shall be governed in all respects by the laws of the State of New
York, without regard to the principles of conflicts of laws. The federal and state courts in the
State of New York shall have jurisdiction over the parties hereto in all matters arising hereunder
and the parties hereto agree that the venue with respect to such matters will be a state or federal
court in the State of New York.

2

 

     10. Waiver of Claims and Defenses. The Parties agree that this Agreement shall not be
subject to any claim of fraud, duress, deceit, mistake of law or mistake of fact, and that it
expresses the full and complete settlement of the Parties.

IN WITNESS WHEREOF, the Parties have fully executed and delivered this Settlement Agreement as of
the day and year first written above.

	 	 	 	 	 
	

MEDICIS PHARMACEUTICAL CORP.

 	 	 
	By:  	/s/ Jason Hanson
 	 	 
	 	Name:  	Jason Hanson 	 	 
	 	Title:  	Executive Vice President, General
Counsel and Corporate Secretary 	 	 
	 
	SANDOZ INC.

 	 	 
	By:  	/s/ Stephen Auten
 	 	 
	 	Name:  	Stephen Auten 	 	 
	 	Title:  	Vice President, Legal — Intellectual
Property 	 	 
	 

3

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