Document:

ex10a.htm

    
      
        

      

    

    Exhibit
10-A

    Ford
Motor Company

    

    VEBA TERM
SHEET

    Proposed
Terms

    

    
      
        
          	
                   

                  VEBA
      Payments

                   

                	
                   

                  All
      payments occurring on or after December 31, 2009, shall be made as set
      forth under “Payment Dates” below.  All payments occurring prior
      to December 31, 2009, including payments to the TAA, shall occur as
      scheduled under the 2007 VEBA Settlement.

                  Internal
      VEBA, TAA (other than the Short Term Note), and mitigation VEBA assets to
      be transferred consistent with 2007 VEBA Settlement.

                
	
                   

                  Payment
      Dates

                	
                   

                  All
      payments of principal, interest, and base payments occurring prior to
      December 31, 2009, to remain as scheduled per the 2007 VEBA
      settlement.  On the effective date of this settlement (the
      “Effective Date”), the existing payment obligations occurring on or after
      December 31, 2009, and the Notes created by the 2007 VEBA agreement (“the
      Notes”) shall be exchanged for two new notes (New Note A and New Note B),
      each having the payment schedules set out below with the payments
      allocated between New Note A  (having a principal amount of
      $6,630.47 million) and New Note B (having a principal amount of $6,511.85
      million) as indicated for each payment (the “New Notes”), the terms of
      which are further set forth herein.  For the avoidance of doubt,
      the Notes shall include the TAA Note.  The New Notes shall
      provide for the following payments from Ford to the VEBA:

                   

                
	 
      	
                  ■

                	
                  December
      31, 2009:  New Note A - $1,243.47 million, plus the True Up
      Amount, if any, as defined in the TAA Note; New Note B - $609.95
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2010:  New Note A - $265 million; New Note B - $609.95
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2011:  New Note A - $265 million; New Note B - $609.95
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2012:  New Note A - $679 million; New Note B - $654
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2013:  New Note A - $679 million; New Note B - $654
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2014:  New Note A - $679 million; New Note B - $654
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2015:  New Note A - $679 million; New Note B - $654
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2016:  New Note A - $679 million; New Note B - $654
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2017:  New Note A - $679 million; New Note B - $654
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2018:  New Note A - $679 million; New Note B - $654
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2019:  New Note A - $26 million; New Note B - $26
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2020:  New Note A - $26 million; New Note B - $26
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2021:  New Note A - $26 million; New Note B - $26
      million

                
	 
      	 
      	 
      
	 
      	
                  ■

                	
                  June
      30, 2022:  New Note A - $26 million; New Note B - $26
      million

                
	 
      	 
      	 
      
	 
      	
                  Ford
      may prepay either or both of the New Notes, in whole or in
      part.  For prepayments in whole, the payment on each Payment
      Date shall be equal to the corresponding amounts (each, a “Prepayment
      Amount”) set forth on Schedule A hereto for the applicable New
      Note.  In the event of any partial prepayment, future payments
      shall be determined, subject to the VEBA’s review and confirmation, on a
      basis that provides the economically equivalent present value and duration
      to the UAW VEBA using a discount rate of 9% per annum. Notwithstanding
      anything to the contrary herein, any prepayment of either of the New Notes
      shall be made in cash.

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        	 
      	 
      
	
                 

                New
      Note A

              	
                 

                On
      each payment date occurring under the New Notes, the Company shall settle
      the amount due with respect to New Note A in cash.

              
	
                 

                Stock
      Payment Option of New Note B

              	
                 

                On
      each payment date occurring under the New Notes, subject to satisfaction
      of the Stock Contribution Conditions (see below), the Company shall have
      the option to settle all or any portion of the amount due with respect to
      New Note B set forth above under “Payment Dates” with shares of Ford
      common stock of equal value based on the then-current Stock Price as
      described below, but subject to the fixed price referred to below for the
      Fixed Price Fundings.

              
	
                 

                Stock
      Contribution Conditions

              	
                 

                The
      Company’s option to settle all or any portion of the amounts due with
      respect to New Note B shall be subject in each instance to the
      satisfaction of the following conditions on the applicable Payment
      Date:

                 

              
	 
      	 
      	
                A.

              	
                No
      event of default under Company’s outstanding public debt securities, bank
      credit facilities, New Notes, or other securities issued to the VEBA, and
      Company shall have paid in full all amounts due on or prior to such date
      on the New Notes (it being
      understood that the exercise of the Stock Payment Option with respect to
      any payment or the deferral of any payment as permitted below shall
      not constitute a breach of this condition)

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                B.

              	
                No
      bankruptcy or insolvency proceedings commenced by or against the
      Company

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                C.

              	
                No
      assignment for benefit of creditors or admission by Company of inability
      to pay debts generally

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                D.

              	
                Ford
      common stock shall be listed on the NYSE (or another national securities
      exchange) on the Payment Date, and the NYSE (or such other securities
      exchange) shall not have commenced or provided notice of the commencement
      of any delisting proceedings or inquiries on or prior to the Payment
      Date

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                E.

              	
                No
      judgment in excess of a specified amount that remains unsatisfied and
      unstayed for more than 30 days

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                F.

              	
                No
      “termination event” (under ERISA) under either of the Company's two major
      U.S. defined benefit pension plans

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                G.

              	
                No
      audit opinion containing a going concern explanatory paragraph received
      for fiscal year immediately preceding the applicable Payment
      Date

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                H.

              	
                Stock
      Price is greater than $1.00 (subject to adjustment for future reverse
      share splits or other similar transactions consistent with the Conversion
      Adjustment Provisions of the existing $3.334 billion Convertible Note
      provided for in the Settlement Agreement)

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                I.

              	
                No
      corporate action in furtherance of A, B, C, or F above

              
	 
      	 
      	 
      
	 
      	 
      	
                If,
      on any Payment Date, Ford shall (a) be in compliance with all of the
      conditions set forth above other than condition D, G and/or H and (b) have
      been in compliance with each of the Stock Contribution Conditions on each
      previous Payment Date (provided, however, that the foregoing clause (b)
      shall not apply in the event that (i) Ford has failed to comply solely
      with condition D, G and/or H above on at most two previous Payment Dates,
      (ii) Ford has otherwise complied with each of the Stock Contribution
      Conditions on each previous Payment Date, and (iii) not more than two of
      the Payment Dates covered by this proviso shall have occurred in
      consecutive years),  then Ford shall make the payment arising
      under New Note B on such Payment Date to the VEBA in cash, but, at Ford’s
      option:

                 

              
	 
      	 
      	 
      
	 
      	
                ■

              	
                Ford
      may elect to settle its obligations for such payment (the “Deferred
      Payment”) in up to five equal installments, accruing interest at a 9%
      annual rate, payable on the first through fifth anniversaries of the
      originally scheduled date of the Deferred Payment (each, an “Installment
      Payment Date”),

              
	 
      	 
      	 
      
	 
      	
                ■

              	
                On
      each Installment Payment Date, subject to satisfaction of the Stock
      Contribution Conditions on such date, the Company shall have the option to
      settle all or any portion of the applicable installment of the Deferred
      Payment (including the interest, if any, accrued thereon) with shares of
      Ford common stock,

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        
          
            	 
      	
                    ■

                  	
                    For
      each installment payment made in shares of Ford common stock, the amount
      of shares payable in such installment shall be calculated by reference to
      the Stock Price for the applicable Installment Payment Date,
      notwithstanding any provision to the contrary in the Fixed Price Funding
      paragraph herein, and

                  
	 
      	 
      	 
      
	 
      	
                    ■

                  	
                    Each
      installment of the Deferred Payment paid in shares of Ford common stock
      shall receive a pro rata share of the applicable Ford Backstop, if the
      Deferred Payment is a Backstopped Payment.

                  
	 
      	 
      	 
      
	 
      	
                    In
      the event Ford shall have exhausted its deferral rights provided herein
      and a Stock Contribution Condition in D, G and/or H subsequently occurs,
      the UAW VEBA will consider in good faith Ford's request for an additional
      deferral right, but shall be under no obligation to do
  so.

                  
	 
      	 
      
	
                    Ford
      Backstop

                  	
                    Ford
      agrees to pay in cash (and on a pro rata basis in the event less than 100%
      of such shares are sold), subject to the limitations described below, the
      shortfall between the cash realized from sale of the share component, if
      any, of each payment under New Note B due on December 31, 2009 and June
      30, 2010 and 2011 (each, a “Backstopped Payment”) and the product of the
      Stock Price for each Backstopped Payment multiplied by the number of
      shares issued in such Backstopped Payment (the “Ford
      Backstop”).  Any gains or losses realized by the UAW VEBA from
      hedging activities in Ford common stock in respect any Backstopped Payment
      shall not affect the shortfall calculation.  The amount payable
      under the Ford Backstop for each of the Backstopped Payments shall be
      limited to $50 million; provided, however, that any portion of such $50
      million not paid shall be carried forward and shall increase the limit
      applicable to the subsequent Backstopped Payment.  Such
      payments, if any, shall be calculated and paid three months after the
      minimum period required under the Registration Rights Agreement to sell
      such shares.

                  
	
                     

                    Registration
      Rights

                  	
                     

                    Two
      shelf takedown or demand registrations permitted per year with a maximum
      amount of sales thereunder of 250 million shares per quarter and 500
      million shares per year (in each case in combination with Rule 144 and
      Rule 144A sales), provided that, beginning on January 1, 2012, such
      amounts shall be reduced to 200 million shares and 400 million shares,
      respectively.

                     

                    Rule
      144 and 144A sales permitted up to 100 million shares per quarter (no more
      than 250 million shares per quarter and 500 million per year in each case
      in combination with shelf takedowns or demand registrations, provided that
      such amounts shall be reduced to 200 million shares and 400 million
      shares, respectively, beginning on January 1, 2012).

                     

                    For
      any calendar year in which an Installment Payment Date occurs, the
      limitations above shall be increased by one-fifth of the applicable share
      limitations that applied during the calendar year during which the
      Deferred Payment was originally scheduled.

                     

                    The
      above limitations shall be adjusted for share splits.

                     

                    Notwithstanding
      the quarterly and annual limits set forth above, sales of shares pursuant
      to Rule 144 and 144A on any day shall be subject to a daily limit of not
      more than 15% of the Average Daily Trading Volume for the trailing 30-day
      trading period.

                     

                    In
      addition, the UAW VEBA may not sell (i) a block of common stock that would
      amount to more than 2% of the outstanding shares of Ford to a single
      buyer, or (ii) any common stock to a transferee if, after giving effect to
      the sale, the sale would result in the transferee owning more than 5% of
      the outstanding shares of the Company if such transferee has the intention
      to, or reserves the right to, exert control over the Company.

                     

                    Warrants
      (as defined below) and shares issued under Warrants shall be included in
      the foregoing limitations and restrictions.

                     

                    Ford
      and the UAW VEBA agree to establish reasonable reporting provisions or
      other mechanisms consistent with the existing registration rights
      agreement to ensure compliance with foregoing sales
      limitations.

                     

                  

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          	
                   

                  Fixed
      Price Fundings

                	
                   

                  In
      the event that Ford elects the Stock Payment Option for any portion of the
      New Note B payments due on December 31, 2009, June 30, 2010, or June 30,
      2011, the shares of Ford common stock to be delivered by Ford in
      settlement of such payment shall be priced for this purpose at $2.00,
      $2.10, and $2.20, respectively.

                
	
                   

                  Hedging

                	
                   

                  Hedging
      permitted only on (i) shares of Ford common stock received by VEBA prior
      to such hedging as a result of exercise by the Company of its Stock
      Payment Option and (ii) up to 25% of the shares of Ford common stock
      deliverable by the Company, subject to satisfaction of the Stock
      Contribution Conditions, upon exercise of its Stock Payment Option on the
      next succeeding Payment Date (determined based on the then-current Stock
      Price), provided that no new hedging activity shall be permitted under
      clause (ii) hereof during the 30 trading days ending on the second
      business day prior to the Payment Date, and otherwise restricted (as to
      (i) and (ii) taken together) in a manner consistent with existing
      registration rights agreement (including sales limitations), adjusted to
      reflect sales limitations and modifications in the Registration Rights
      section above.

                
	
                   

                  Warrants

                	
                   

                  On
      the Effective Date, Ford shall issue to the VEBA warrants to acquire
      362,391,305 shares of Ford common stock at a strike price equal to the
      conversion price under the existing VEBA convertible note (the “VEBA
      Convert”), with a time to expiration equal to the maturity date under the
      VEBA Convert (the “Warrants”).  The Warrants shall contain
      adjustment provisions consistent with the Conversion Adjustment Provisions
      (as defined therein) in the VEBA Convert.  The Warrants shall
      also contain other terms typical for securities of this type, including
      cashless exercise provisions. The Warrants are intended to preserve the
      economies of the VEBA Convert.

                
	
                   

                  Other
      Terms of New Notes

                	
                   

                  Except
      for the Stock Payment Option of New Note B, the New Notes shall have terms
      substantially similar to those of the existing Second Lien Note, including
      a second lien on assets currently securing the existing Credit Agreement
      securing obligations under the New Notes in amounts equal to $3 billion,
      provided that, to the extent permitted under Ford’s December 15, 2006
      Credit Agreement, in no event shall the terms relating to the New Notes be
      less favorable to the VEBA than those contained in any existing Ford
      public debt indenture.  The New Notes will also contain a
      covenant limiting sale/leaseback transactions, and an Event of Default
      triggered by certain change of control events.  Both provisions
      will be modeled on the corresponding provisions in Ford’s December 15,
      2006 Credit Agreement.

                   

                  Each
      payment under the New Notes shall be deemed a payment of
      principal.  Any payment not made, in addition to any default
      implications, shall earn interest at an annual rate of 9% per annum plus a
      default premium of 2% per annum from the due date to date of
      payment.

                   

                  The
      amount of the Second Lien shall be apportioned between New Note A and New
      Note B based on their respective principal amounts and shall be reduced in
      total to $1,500 million on July 1, 2017, and to $0 on July 1, 2018,
      subject to compliance with the Stock Contribution Conditions (other than
      condition D  and/or H) on each date, but in no event shall
      Second Lien exceed amount outstanding under New Notes A and B and shall be
      automatically released to the extent of any such excess.

                   

                  New
      Note A shall be transferable in whole or in part on terms similar to those
      under the existing Second Lien Note. New Note B shall not be transferable
      by UAW VEBA.

                
	
                   

                  Stock
      Price

                	
                   

                  Volume
      weighted average stock price for the 30 trading days ending on the second
      business day prior to the Payment Date.

                
	
                   

                  Amendment
      to Trust Agreement

                	
                   

                  The
      Trust Agreement, as approved by the court as part of the 2007 VEBA
      settlement, shall be amended to eliminate the January 1, 2012 restriction
      on benefit modifications by the Committee.

                
	
                   

                  Additional
      Terms

                	
                   

                  On
      February 16, President Obama created a Presidential Task Force (the “Task
      Force”) to deal with restructuring in the automobile industry and
      administer the Loan Agreements between the Treasury and GM and
      Chrysler.  Ford and the UAW will work actively with the Task
      Force, and will encourage the Task Force to take or recommend actions
      mutually acceptable to the UAW and Ford to support the VEBA and provide
      additional security to the retirees in whatever form
    possible.

                
	
                   

                  Contingencies

                	
                   

                  Subject
      to final documentation, ratification, court approval, Ford Board and
      Shareholder approval, SEC approval of accounting treatment acceptable to
      Ford, DOL prohibited transaction exemption and completion of
      other  restructuring actions with other stakeholders on terms
      acceptable to the UAW.

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
A: New Note Prepayment Amounts(a)

    

    On each
Payment Date set forth below, Ford may redeem either or both of the New Notes in
exchange for a cash payment equal to the applicable amounts for such Payment
Date (in millions), such amounts subject to adjustment for any partial
prepayments.

    

    

    
      
        
          
            
              
                
                  
                    	
                            New
      Note A

                          	 
      	
                            New
      Note B

                          
	
                            Payment

                            
                              Date

                            

                          	 
      	
                            Prepayment

                            
                              Amount

                            

                          	 
      	
                            Payment

                            
                              Date

                            

                          	 	
                            Prepayment

                            
                              Amount

                            

                          
	
                            12/31/2009

                            6/30/2010

                            6/30/2011

                            6/30/2012

                            6/30/2013

                            6/30/2014

                            6/30/2015

                            6/30/2016

                            6/30/2017

                            6/30/2018

                            6/30/2019

                            6/30/2020

                            6/30/2021

                            6/30/2022

                          	
                            (a)

                          	
                            $4,774

                            3,686

                            3,728

                            3,775

                            3,375

                            2,938

                            2,463

                            1,944

                            1,379

                            763

                            92

                            72

                            50

                            26

                          	 
      	
                            12/31/2009

                            6/30/2010

                            6/30/2011

                            6/30/2012

                            6/30/2013

                            6/30/2014

                            6/30/2015

                            6/30/2016

                            6/30/2017

                            6/30/2018

                            6/30/2019

                            6/30/2020

                            6/30/2021

                            6/30/2022

                          	 	
                            $4,663

                            4,232

                            3,948

                            3,638

                            3,253

                            2,832

                            2,375

                            1,875

                            1,331

                            738

                            92

                            72

                            50

                            26

                          

                  

                

              

            

          

        

      

      

    

     

    ______________________________

    (a) The
Prepayment Amount for December 31, 2009, shall be increased by the True Up
Amount, if any, as defined in the TAA Note.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

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