Exhibit 4.4
MASTER TRUST AGREEMENT
Between
_______________________________________________________________________
FORD MOTOR COMPANY
And
FIDELITY MANAGEMENT TRUST COMPANY
_______________________________________________________________________
FORD DEFINED CONTRIBUTION PLANS
MASTER TRUST
Amended and Restated as of January 1, 2005
TABLE OF CONTENTS
Section 1. Definitions.......................................................2
Section 2. Establishment of Master Trust.....................................6
Section 3. Exclusive Benefit and Reversion of Ford Contributions.............6
Section 4. Disbursements and Participant Loans...............................6
Section 5. Investment of Trust...............................................7
(a) Selection of Investment Options.......................................7
(b) Available Investment Options..........................................7
(c) Mutual Funds..........................................................8
(i) Execution of Purchases and Sales....................................8
(ii) Voting..............................................................8
(d) Ford Stock............................................................8
(i) Acquisition Limit................................................10
(ii) Fiduciary Duty...................................................10
(iii) Execution of Purchases and Sales.................................10
(iv) Execution of Purchases and Sales of Units........................11
(v) Securities Law Reports...........................................12
(vi) Voting...........................................................12
(vii) Tender Offers....................................................12
(viii) General........................................................13
(ix) Confidentiality of Participant Records
Relating to Ford Stock Fund.....................................13
(x) Redemption Distributions.........................................14
(xi) Special Indemnification for Purchases of Ford Common Stock.....14
(xii) Conversion.....................................................14
(e) Commingled Pools.....................................................14
(f) Separately Managed Portfolios........................................15
(g) Interest Income Fund.................................................16
(h) Strategy Funds.......................................................16
(i) Liquidity Shortfall..................................................16
(j) Master Trustee Powers................................................16
Section 6. Participant Direction.........................................17
(a) Investments..........................................................17
(b) Disbursements........................................................18
Section 7. Accounts, Plan Qualification and Allocation of Interests.........18
(a) Accounts.............................................................18
(b) Plan Qualification and ERISA Section 404(c)..........................18
(c) Allocation of Interests..............................................19
Section 8. Compensation and Expenses........................................19
Section 9. Directions and Responsibility....................................19
(a) Directions from Ford or Administrator................................19
(b) Conduct..............................................................20
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(c) Co-Fiduciary Liability...............................................20
(d) Responsibility.......................................................20
(e) Indemnification......................................................20
Section 10. Resignation or Removal of Master Trustee and Termination........21
(a) Resignation and Removal..............................................21
(b) Termination..........................................................21
Section 11. Successor Trustee...............................................21
(a) Appointment..........................................................21
(b) Acceptance...........................................................21
(c) Corporate Action.....................................................21
Section 12. Resignation, Removal, and Termination Notices...................22
Section 13. Duration........................................................22
Section 14. Amendment or Modification.......................................22
Section 15. Electronic Services.............................................22
Section 16. Assignment......................................................23
Section 17. General.........................................................24
(a) Performance by Master Trustee, its Agents or Affiliates..............24
(b) Delegation by Employer...............................................24
(c) Entire Agreement.....................................................24
(d) Waiver...............................................................24
(e) Successors and Assigns...............................................24
(f) Partial Invalidity...................................................24
(g) Section Headings.....................................................24
(h) Returns, Reports and Information.....................................25
(i) Communications.......................................................25
Section 18. Governing Law...................................................25
(a) Massachusetts Law Controls...........................................25
(b) Which Agreement Controls.............................................25
Section 19. Plan Qualification..............................................26
SCHEDULES....................................................................27
Schedule "A" - Authorized Signers (Ford).....................................27
Schedule "B" - Statement of Tax-Qualified Status.............................28
Schedule "C" - Ford Motor Company Guidelines for the Interest Income Fund....29
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TRUST AGREEMENT, originally dated as of September 30, 1995, amended and
restated as of October 25, 1997, and again amended and restated as of January 1,
2005, between FORD MOTOR COMPANY ("Ford"), a Michigan corporation, having an
office at World Headquarters, Xxx Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000,
and FIDELITY MANAGEMENT TRUST COMPANY ("FMTC"), a Massachusetts trust company,
having an office at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the
"Master Trustee").
WITNESSETH:
WHEREAS, Ford is the sponsor of the Ford Motor Company Savings and Stock
Investment Plan for Salaried Employees (the "SSIP"), the Ford Motor Company
Tax-Efficient Savings Plan for Hourly Employees (the "TESPHE") and the Ford
Retirement Plan (the "FRP") and Ford is the Named Fiduciary (within the meaning
of Section 402(a) of ERISA), for the SSIP, the TESPHE and the FRP (individually
and collectively, the "Plan"); and
WHEREAS, the Master Trustee has been appointed as trustee by Ford under the
SSIP, the TESPHE and the FRP; and
WHEREAS, Ford wishes to establish a Master Trust for the purpose of
commingling for investment and administrative purposes some or all of the assets
in the trusts established under the SSIP, the TESPHE and the FRP; and
WHEREAS, Ford may in the future adopt savings plans and subsidiaries and
affiliates of Ford may have adopted or may adopt in the future savings plans
under which assets may appropriately be included in the Master Trust with the
consent of Ford and the Master Trustee; and
WHEREAS, the Master Trustee is willing to hold and invest such assets of
the SSIP, the TESPHE and the FRP and of other such plans in the future; and
WHEREAS, pursuant to a Master Recordkeeping Services Agreement dated as of
the date of this Agreement, January 1, 2005, (the "Recordkeeping Agreement"), by
and between Ford and Fidelity Employer Services Company LLC ("FESCO"), FESCO
will provide recordkeeping and benefit administration services for the Plans in
this Master Trust; and
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements set forth below, Ford and the Master Trustee agree as
follows:
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Section 1. Definitions.
The following terms as used in this Trust Agreement have the meaning indicated
unless the context clearly requires otherwise:
(a) "Administrator"
"Administrator" shall mean Ford, identified in the Plan document as the
administrator of the Plan (within the meaning of section 3(16)(A) of ERISA), and
with respect to plans whose assets may be included in the future, the sponsor of
such plans.
(b) "Agreement"
"Agreement" shall mean this Master Trust Agreement, and the Schedules and
Exhibits attached hereto, as the same may be amended and in effect from time to
time.
(c) "Available Liquidity"
"Available Liquidity" shall mean the amount of short-term investments held in
the Ford Stock Fund decreased by any outgoing cash for expenses then due,
payables for loan principal, and obligations for pending stock purchases, and
increased by incoming cash (such as contributions, exchanges in, loan
repayments) and to the extent credit is available and allocable to the Ford
Stock Fund, receivables for pending stock sales.
(d) "Business Day"
"Business Day" shall mean each day the NYSE is open.
(e) "Code"
"Code" shall mean the Internal Revenue Code of 1986, as it has been or may be
amended from time to time.
(f) "Closing Price"
"Closing Price" shall mean either (1) the closing price of the stock on the
principal national securities exchange on which Ford Stock is traded; or, if (1)
is unavailable, (2) the latest available price as reported by the principal
national securities exchange on which the Ford Stock is traded or, for an over
the counter stock, the last bid price prior to the close of the New York Stock
Exchange (generally 4:00 p.m. Eastern time).
(g) "Commingled Pool"
"Commingled Pool" shall mean a group trust collective investment fund maintained
by a bank or trust company for plans qualified under Section 401(a) of the Code
which is exempt from tax under Section 501(a) of the Code.
(h) "Ford"
"Ford" shall mean Ford Motor Company, a Michigan corporation, or any successor
to all or substantially all of its businesses which, by agreement, operation of
law or otherwise, assumes the responsibility of Ford under this Agreement.
(i) "Declaration of Separate Trust"
"Declaration of Separate Trust" shall mean the declaration of separate trust for
each separate fund of the Group Trust.
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(j) "EDT"
"EDT" shall mean electronic data transfer.
(k) "Electronic Products"
"Electronic Products" shall mean software products made available via electronic
media.
(l) "Electronic Services"
"Electronic Service" shall mean communications and services made available via
electronic media.
(m) "ERISA"
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as it
has been or may be amended from time to time.
(n) "External Account Information"
"External Account Information" shall mean account information, including
retirement savings account information, from third party websites or other
websites maintained by Fidelity or its affiliates.
(o) "Fidelity Mutual Fund"
"Fidelity Mutual Fund" shall mean any investment company advised by Fidelity
Management & Research Company or any of its affiliates.
(p) "FIFO"
"FIFO" shall mean First In First Out.
(q) "FIIOC"
"FIIOC" shall mean Fidelity Investments Institutional Operations Company, Inc.
(r) "FPRS"
"FPRS" shall mean Fidelity Participant Recordkeeping System.
(s) "Ford Stock"
"Ford Stock" shall mean the publicly traded common stock of Ford, which meets
the requirements of section 407(d)(5) of ERISA with respect to the Plans.
(t) "Ford Stock Fund"
"Ford Stock Fund" shall mean the investment option consisting of Ford Stock and
cash or short term liquid investments.
(u) "GICs"
"GICs" shall mean guaranteed investment contracts.
(v) "Group Trust"
"Group Trust" shall mean the Fidelity Group Trust for Employee Benefit Plans for
tax-qualified plans.
(w) "Investment Manager"
"Investment Manager" shall mean (i) an investment adviser registered under the
Investment Advisers Act of 1940 (ii) a bank, as defined in that Act or (iii) an
insurance company qualified to
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perform investment management service under the laws of more than one state and
who has acknowledged in writing that it is a fiduciary under the Plan.
(x) "Losses"
"Losses" shall mean any and all loss, damage, penalty, liability, cost and
expense, including without limitation, reasonable attorney's fees and
disbursements.
(y) "Master Trust"
"Master Trust" shall mean the Ford Defined Contribution Plans Master Trust,
being the trust established by Ford and the Master Trustee pursuant to the
provisions of this Agreement.
(z) "Master Trustee"
"Master Trustee" shall mean Fidelity Management Trust Company, a Massachusetts
trust company and any successor to all or substantially all of its trust
business as described in Section 11. The term Master Trustee shall also include
any successor trustee appointed pursuant to Section 11 to the extent such
successor agrees to serve as Master Trustee under this Agreement.
(aa) "Mutual Fund"
"Mutual Fund" shall refer both to Fidelity Mutual Funds and Non-Fidelity Mutual
Funds.
(bb) "Named Fiduciary"
"Named Fiduciary" shall mean Ford, a named fiduciary of the Plan (within the
meaning of section 402(a) of ERISA).
(cc) "NAV"
"NAV" shall mean the net asset value of a single unit or share held by a
Participant in any investment option.
(dd) "NFSLLC"
"NFSLLC" shall mean National Financial Services LLC.
(ee) "Non-Fidelity Mutual Fund"
"Non-Fidelity Mutual Fund" shall mean certain investment companies not advised
by Fidelity Management & Research Company or any of its affiliates.
(ff) "NYSE"
"NYSE" shall mean the New York Stock Exchange.
(gg) "Participant"
"Participant" shall mean, with respect to the Plan, any employee, former
employee, or alternate payee with respect to a Qualified Domestic Relations
Order ("QDRO") with an account under the Plan, which has not yet been fully
distributed and/or forfeited, and shall include the designated beneficiary(ies)
with respect to the account of any deceased employee (or deceased former
employee) until such account has been fully distributed and/or forfeited or any
other person entitled to benefits with respect to the Plans.
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(hh) "Participant Recordkeeping Reconciliation Period"
"Participant Recordkeeping Reconciliation Period" shall mean the period
beginning on the date of the initial transfer of assets (in conjunction with a
Plan merger or similar corporate action) to the Master Trust and ending on the
date of the completion of the reconciliation of Participant records.
(ii) "Participation Agreement"
"Participation Agreement" shall mean the participation agreement for the Group
Trust.
(jj) "PIN"
"PIN" shall mean personal identification number.
(kk) "Plan"
"Plan" or "Plans" shall mean the Ford Motor Company Savings and Stock Investment
Plan for Salaried Employees ("SSIP"), the Ford Motor Company Tax-Efficient
Savings Plan for Hourly Employees ("TESPHE"), the Ford Retirement Plan ("FRP")
and such other tax-qualified, defined contribution plans which are maintained by
Ford or any of its subsidiaries or affiliates for the benefit of their eligible
employees as may be designated by Ford in writing to the Master Trustee as a
Plan hereunder. Each reference to "a Plan" or "the Plan" in this Agreement shall
mean and include the Plan or Plans to which the particular provision of this
Agreement is being applied or all Plans, as the context may require.
(ll) "Plan Administration Manual" or "XXX"
"Plan Administration Manual" or "XXX" shall mean the document which sets forth
the administrative and recordkeeping duties and procedures to be followed by the
Master Trustee in administering the Plan, as such document may be amended and in
effect from time to time.
(mm) "Plan Sponsor Webstation" or "PSW"
"Plan Sponsor Webstation" or "PSW" shall mean the graphical windows based
application that provides current Plan and Participant information including
indicative data, account balances, activity and history.
(nn) "Redemption Distributions"
"Redemption Distributions" shall mean those participant distributions made under
a Plan from the proceeds of a redemption by Ford of shares of Ford Stock held by
the Master Trust as set forth in the Operating Procedures attached to Part I of
Exhibit 2 (DC) to the separate Recordkeeping Agreement as Schedule "F".
"Original Redemption Distributions" and "Other Redemption Distributions", as
defined in Schedule "F", shall be collectively referred to as Redemption
Distributions.
(oo) "Reporting Date"
"Reporting Date" shall mean the last day of each calendar quarter of the Plan or
the date as of which the Master Trustee resigns or is removed pursuant to
Section 10 hereof or the date as of which this Agreement terminates pursuant to
Section 12 hereof.
(pp) "SEC"
"SEC" shall mean the Securities and Exchange Commission.
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(qq) "Specified Hierarchy"
"Specified Hierarchy" shall mean the Ford Stock Fund processing order set forth
in Schedule "H" to the separate Recordkeeping Agreement, that gives precedence
to distributions, loans and withdrawals, and otherwise on a FIFO basis.
(rr) "Strategy Funds"
"Strategy Funds" shall mean the unitized investment options consisting of
investment components and cash or short-term liquid investments as set forth in
Schedule "G" to Exhibit 2 (DC), Part I of the separate Recordkeeping Agreement.
(ss) "VRS"
"VRS" shall mean Voice Response System.
Section 2. Establishment of Master Trust.
Ford hereby establishes the Master Trust with the Master Trustee and the Master
Trustee hereby accepts the trust on the terms and conditions hereinafter set
forth. The Master Trust shall consist of money or other property acceptable to
the Master Trustee in its sole discretion, that (i) are transferred to it by
Comerica Bank, predecessor trustee under the SSIP and the TESPHE, on behalf of
separate trusts established under each such plan concurrently with the
establishment of this Master Trust, or by the trustee of such trusts, (ii) are
paid to it by Ford or transferred to it from the trustee of a separate trust
under each Plan permitted by Ford and the Master Trustee to participate in the
Master Trust, (iii) are paid to it by Ford or other subsidiaries with respect to
such Plans in the forms of additional sums of money or Ford Stock or other
property acceptable to the Master Trustee , and (iv) are paid to it by Ford or
by Participants as contributions to the Plan or that may be rolled over in cash
by an eligible employee pursuant to the provisions of any Plan participating in
the Master Trust and the provisions of the Summary Plan Description applicable
to such Plan, as reflected in the XXX.
Section 3. Exclusive Benefit and Reversion of Ford Contributions.
Except as provided under applicable law, and the provisions of each of the Plans
communicated by Ford to the Master Trustee, no part of the Master Trust
allocable to a Plan may be used for, or diverted to, purposes other than the
exclusive benefit of the Participants in the Plan or their beneficiaries or
other person entitled thereto prior to the satisfaction of all liabilities with
respect to the Participants and their beneficiaries or the reasonable expenses
of Plan administration. No assets of the Plan shall revert to Ford, except as
specifically permitted by the terms of the Plan.
Section 4. Disbursements and Participant Loans.
(i) Disbursements. The Trustee shall make disbursements as directed by the
Participant or the Administrator, as applicable, in accordance with
the provisions of the Plan Administration Manual and as described in
Part I of Exhibit 2 (DC) to the separate Recordkeeping Agreement. The
Trustee shall have no responsibility to ascertain any direction's
compliance with the terms of the Plan (except to the extent the terms
of the Plan have been communicated to the Trustee in writing) or of
any applicable law or the direction's effect for tax purposes or
otherwise; nor shall the Trustee have any responsibility to see to the
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application of any disbursement. The Trustee shall not be required to
make any disbursement under a Plan in excess of the net realizable
value of the assets of the Trust allocable to such Plan at the time of
the disbursement.
(ii) Participant Loans. Participant loans shall be processed and
administered in accordance with the Plan Administration Manual and as
described in Part I of Exhibit 2 (DC) to the separate Recordkeeping
Agreement. The Administrator shall act as the Master Trustee's agent
with regard to Participant loans and as such shall (i) separately
account for repayments of such loans and clearly identify such assets
as Plan assets allocated to such participant's account; and (ii)
collect and remit all principal and interest payments to the Trustee.
To the extent that the Participant is required to submit loan
documentation to the Administrator for approval prior to the issuance
of a Participant loan, the Administrator shall also be responsible for
(i) holding physical custody of and keeping safe the notes and other
loan documents; and (ii) canceling and surrendering the notes and
other loan documentation when a loan has been paid in full.
To facilitate recordkeeping, the Master Trustee may destroy the
original of any proceeds check (including the promissory note on the
reverse side of the check) made in connection with a loan to a
Participant under the Plan, provided that the Trustee or its agent
first creates a duplicate by a photographic or optical scanning or
other process yielding a reasonable facsimile of the proceeds check
(including the promissory note on the reverse side of the check) and
the Participant's signature thereon, which duplicate may be reduced or
enlarged in size from the actual size of the original.
Section 5. Investment of Trust.
(a) Selection of Investment Options.
The Master Trustee shall have no responsibility for the selection of investment
options under the Master Trust and shall not render investment advice to any
person in connection with the selection of such options.
(b) Available Investment Options.
Ford, with respect to a Plan merger or similar corporate action, shall direct
the Master Trustee as to the investment options in which the Master Trust shall
be invested during the Participant Recordkeeping Reconciliation Period and the
investment options in which Participants may invest following the Participant
Recordkeeping Reconciliation Period, subject to limitations described in this
Section 5. Ford may determine to offer as investment options only: (i) Mutual
Funds, (ii) Ford Stock, (iii) investment contracts chosen by the Master Trustee,
(iv) Commingled Pools, (v) portfolios of assets managed by a third party
Investment Manager as referred to in section 402(c)(3) of ERISA and not
affiliated with the Master Trustee, and (vi) Strategy Funds, as described in
Schedule "G" to Part I of Exhibit 2 (DC) to the separate Recordkeeping
Agreement.
The Master Trustee shall be considered a fiduciary with investment discretion
only with respect to Plan assets that are invested in investment contracts
chosen by the Master Trustee or in the Group Trust.
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The investment options initially selected by Ford are identified on Schedule "A"
to Part I of Exhibit 2 (DC) to the separate Recordkeeping Agreement. Ford may
add, delete or substitute additional investment options with the consent of the
Trustee to reflect administrative considerations, which consent shall not be
unreasonably withheld, and upon mutual amendment of this Agreement, and the
Schedules thereto, to reflect such additions.
(c) Mutual Funds.
Ford hereby acknowledges that it has received from the Master Trustee a copy of
the prospectus for each Fidelity Mutual Fund selected by Ford as a Plan
investment option or short-term investment fund. All transactions involving
Non-Fidelity Mutual Funds shall be done in accordance with the Operational
Guidelines attached to Part I of Exhibit 2 (DC) to the separate Recordkeeping
Agreement as Schedule "D". Trust investments in Mutual Funds shall be subject to
the following limitations:
(i) Execution of Purchases and Sales.
Purchases of Fidelity Mutual Funds with contributions made by Participants or by
Ford on behalf of Participants (other than for exchanges) shall be made on the
date on which the Master Trustee receives from the Participant or Ford in good
order the information, and documentation necessary to accurately effect such
purchases, or if later, the date on which the Master Trustee has received a wire
transfer of funds necessary to make such purchase. Purchases and sales of
Non-Fidelity Mutual Funds (other than for exchanges) shall be made in accordance
with the operating procedures established for each fund. Exchanges or sales of
Mutual Funds shall be made at the direction of Participants in accordance with
the Exchange Guidelines attached to Part I of Exhibit 2 (DC) to the separate
Recordkeeping Agreement as Schedule "C".
(ii) Voting.
The Master Trustee may retain at its expense the services of a third-party
vendor to handle proxy solicitation mailings and tabulation for Non-Fidelity
Mutual Funds. In the case of Fidelity Mutual Funds, the Master Trustee shall
handle any proxy solicitation and tabulation. At the time of mailing of notice
of each annual or special stockholders' meeting of any Mutual Fund, the Master
Trustee or third party vendor shall send a copy of the notice and all proxy
solicitation materials to each Participant who has shares of such Mutual Fund
credited to the Participant's accounts, together with a voting direction form
for return to the Master Trustee or its designee. The Participant shall have the
right to direct the Master Trustee as to the manner in which the Master Trustee
is to vote the shares credited to the Participant's accounts (both vested and
unvested). The Master Trustee shall vote the shares as directed by the
Participant. The Master Trustee shall not vote shares for which it has received
no directions from the Participant. With respect to all rights other than the
right to vote, the Master Trustee shall follow the directions of the
Participant. The Master Trustee shall have no further duty to solicit directions
from Ford.
(d) Ford Stock.
Master Trust investments in Ford Stock shall be made via the Ford Stock Fund.
While investments in the Ford Stock Fund shall consist primarily of shares of
Ford Stock, and in order to satisfy daily participant requests for transfers and
payments, the Ford Stock Fund shall also include cash or short-term liquid
investments, subject to the limitation described below. Such holdings will
include Colchester Street Trust: Money Market Portfolio: Class I or such other
Mutual Fund or commingled money market pool as agreed to in writing by Ford and
Master
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Trustee. A target percentage and drift allowance for such short-term liquid
investments shall be agreed to in writing by Ford and Master Trustee, and the
Master Trustee shall be responsible for ensuring that the short-term investments
held in the Ford Stock Fund fall within the agreed-upon range (1.5% +/- .20%) as
of the date of this Agreement), subject to its ability to execute open-market
trades in Ford Stock or to otherwise trade with Ford. Ford shall have the right
to direct the Master Trustee as to the manner in which the Master Trustee is to
vote the shares of a Mutual Fund used as the liquidity reserve.
Each Participant's proportional interest in the Ford Stock Fund shall be
measured in units of participation, rather than shares of Ford Stock. Such units
shall represent a proportionate interest in all of the assets of the Ford Stock
Fund, which includes shares of Ford Stock, short-term investments and at times,
receivables and payables (such as receivables and payables arising out of
unsettled stock trades).
Each day, the Master Trustee shall determine a NAV for each unit outstanding of
the Ford Stock Fund. Valuation of the Ford Stock Fund shall be based upon: (a)
the Closing Price or, if not available, (b) the price determined in good faith
by the Master Trustee. The NAV will fluctuate daily and shall be adjusted for
gains or losses realized on sales of Ford Stock, appreciation or depreciation in
the value of those shares owned, dividends paid on Ford Stock to the extent not
used to purchase additional units of the Ford Stock Fund for affected
Participants, and interest on the short-term investments held by the Ford Stock
Fund, payables and receivables for pending stock trades, receivables for
dividends not yet distributed, and payables for other expenses of the Ford Stock
Fund, including principal obligations, if any, and expenses.
Amounts paid to the Master Trust and received by the Ford Stock Fund as cash
dividends on shares of Ford Common Stock ("Cash Dividends") shall, according to
direction from Participants or Ford, either be: a) paid to the Participant in
cash; or b) retained by the Master Trustee in the Ford Stock Fund and used to
allocate additional units of such fund to the accounts of Participants who have
elected to have dividends reinvested. For purposes of this Section, the term
"Cash Dividend" shall not include Redemption Distributions.
Notwithstanding the foregoing paragraph, no Participant shall be entitled to
elect a Cash Dividend unless the dividend attributable to such Participant with
respect to the Ford Stock Fund exceeds $10.00 (or any other amount that may be
mutually agreed by Ford and the Master Trustee) for any given dividend payment.
In the event dividends attributable to any Participant are $10.00 (or any other
amount that may be mutually agreed by Ford and the Master Trustee) or less, the
dividends shall be reinvested in the Ford Stock Fund as if the Participant has
so elected.
In the absence of valid Participant or Ford direction to the contrary, Ford
hereby directs the Master Trustee to retain the dividend in the Ford Stock Fund
and use any dividend to allocate additional units of such fund to the accounts
of affected Participants.
The Master Trustee shall pay or reinvest dividends according to the direction of
Participants or Ford in accordance with the Flexible Dividend Operating
Procedures attached to Part I of Exhibit 2 (DC) the separate Recordkeeping
Agreement as Schedule "E".
All Cash Dividends shall be paid net of any required withholding. The Master
Trustee shall withhold and remit taxes, and file information with the Internal
Revenue Service (Forms 1099-
9
DIV) with respect to Cash Dividends in accordance with information supplied by
Participants or Ford or as otherwise required by Code section 3406.
The Master Trustee shall pay to Participants in accordance with their elections
amounts paid to it by Ford as Cash Dividends for Participants. Ford shall
indemnify and hold harmless the Master Trustee and its affiliates from any
Losses arising in connection with the Master Trustee's payment or failure to pay
such amounts and any other matters related to the operation of the flexible
dividend program not attributable to the negligence of the Master Trustee.
Investments in Ford Stock shall be subject to the following limitations:
(i) Acquisition Limit.
Pursuant to the applicable provisions of Plans, the Master Trust may be invested
in Ford Stock to the extent necessary to comply with investment directions in
accordance with this Agreement. Ford shall be responsible for providing specific
direction on any acquisition limits required by the Plans or applicable law.
(ii) Fiduciary Duty.
Except as may otherwise be permitted under Section 404(c) of ERISA, Ford shall
continually monitor the suitability of acquiring and holding Ford Stock under
the fiduciary duty rules of section 404(a)(1) of ERISA (as modified by section
404(a)(2) of ERISA). It shall be the responsibility of Ford to determine and
assure that any securities which are issued by Ford and which are to be held in
the Master Trust satisfy the definition of Ford Stock. At the request of the
Master Trustee, Ford shall provide a legal opinion reasonably satisfactory to
the Master Trustee that any such securities meet the definition of Ford Stock.
(iii) Execution of Purchases and Sales.
Unless otherwise directed by Ford in writing pursuant to directions that the
Master Trustee can administratively implement, the following provisions shall
govern purchases and sales of Ford Stock.
(A) Open Market Purchases and Sales. Except for sales
necessary to fund Redemption Distributions, purchases and sales of Ford Stock
shall be made on the open market, as necessary to honor exchange and withdrawal
activity and to maintain the target cash percentage and drift allowance for the
Ford Stock Fund, provided that:
(1) If the Master Trustee is unable to purchase or sell
the total number of shares required to be purchased or sold on such day as a
result of market conditions; or
(2) If the Master Trustee is prohibited by the SEC,
the NYSE or principal exchange on which Ford Stock is traded, or any other
regulatory body from purchasing or selling any or all of the shares required to
be purchased or sold on such day, then, under the circumstances set forth in
either (1) or (2), the Master Trustee shall purchase or sell such shares as soon
thereafter as administratively feasible.
(B) It is intended that with respect to the purchase of Ford
Stock in the market, the Master Trustee will qualify as an "agent independent of
the issuer" within the meaning of Rule 10b-18 under the Securities Exchange Act
of 1934 as amended. Accordingly, neither the Administrator or affiliate of the
Administrator, may exercise any direct or indirect control or influence over the
time when or the prices at which the Master Trustee purchases Ford Stock in the
market under the Plan, the amounts to be purchased, the manner in which the
shares are to be purchased, or the selection of a broker or dealer through which
purchases
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are executed. Purchases and sales of Ford Stock (other than exchanges) shall be
made by the Master Trustee when the Master Trustee receives from the
Administrator in good order all information and documentation necessary to
effect accurately such purchases and sales (or, in the case of purchases, when
the Master Trustee has received a wire transfer of the funds necessary to make
such purchases).
(C) Purchases from Ford. The Master Trustee shall purchase
shares of Ford Common Stock as are necessary for Plan purchases in accordance
with the Operating Procedures attached to Part I of Exhibit 2 (DC) to the
separate Recordkeeping Agreement as Schedule "I". Such purchases shall be for
adequate consideration (within the meaning of Section 3(18) of ERISA) and no
commission shall be charged.
(D) Sales to Ford. The Master Trustee shall sell and Ford
shall purchase such shares of Ford Common Stock as are necessary to fund
Redemption Distributions to Ford in accordance with the Operating Procedures
attached to Part I of Exhibit 2 (DC) the separate Recordkeeping Agreement as
Schedule "F". Such sales shall be adequate consideration (within the meaning of
Section 3(18) of ERISA) and no commission shall be charged.
(E) Use of Brokers. Ford hereby directs the Master Trustee to
use such brokers, unaffiliated with the Master Trustee, as the Master Trustee
deems appropriate to provide brokerage services in connection with any purchase
or sale of Ford Stock on the open market. Commissions on the purchase and sale
of Ford Stock shall be charged back to the Ford Stock Fund.
(iv) Execution of Purchases and Sales of Units.
Unless otherwise directed in writing pursuant to directions that the Master
Trustee can administratively implement, purchases and sales of units in the Ford
Stock Fund shall be made as follows:
(A) Subject to subparagraphs (B) and (C) below, purchases
and sales of units in the Ford Stock Fund (other than for exchanges) shall be
made on the date on which the Master Trustee receives from Ford in good order
all information and documentation necessary to accurately effect such
transactions. Exchanges of units in the Ford Stock Fund shall be made in
accordance with the Exchange Guidelines attached to Part I of Exhibit 2 (DC) to
the separate Recordkeeping Agreement as Schedule "C".
(B) In addition to the procedure stated in Section 5(j),
aggregate sales of units in the Ford Stock Fund on any day shall be limited to
the Ford Stock Fund's Available Liquidity for that day. In the event that the
requested sales exceed the Available Liquidity, then transactions shall be
processed giving precedence to distributions, loans and withdrawals (not
necessarily in that order), and otherwise on a FIFO basis, as provided in
Schedule "H" to Part I of Exhibit 2 (DC) to the separate Recordkeeping Agreement
(the "Specified Hierarchy"). So long as the Ford Stock Fund is open for such
transactions, sales of units that are requested but not processed on a given day
due to insufficient Available Liquidity shall be suspended until Available
Liquidity is sufficient to honor such transactions in accordance with the
Specified Hierarchy.
(C) The Master Trustee shall close the Ford Stock Fund to
sales or purchases of units, as applicable, on any date on which trading in Ford
Stock has been
11
suspended or substantial purchase or sale orders are outstanding and cannot be
executed. Ford is to be notified should this event occur.
(v) Securities Law Reports.
Ford shall be responsible for filing all reports required under Federal or state
securities laws with respect to the Master Trust's ownership of Ford Stock,
including, without limitation, any reports required under section 13 or 16 of
the Securities Exchange Act of 1934, except for any such reports that the Master
Trustee is required to file, and shall immediately notify the Master Trustee in
writing of any requirement to stop purchases or sales of Ford Stock pending the
filing of any report. The Master Trustee shall provide to Ford such information
on the Master Trust's ownership of Ford Stock as Ford may reasonably request in
order to comply with Federal or state securities laws.
(vi) Voting.
Notwithstanding any other provision of this Agreement the provisions of this
Section shall govern the voting of Ford Stock. Ford, after consultation with the
Master Trustee, shall provide and pay for all printing, mailing, tabulation and
other costs associated with the voting of Ford Stock.
(A) When Ford prepares for any annual meeting, Ford shall
notify the Master Trustee at least thirty (30) days in advance of the intended
record date and shall cause a copy of all proxy solicitation materials to be
sent to the Master Trustee. Based on these materials the Master Trustee shall
prepare a voting instruction form. At the time of the mailing of notice of each
annual or special stockholders' meeting of the issuer of Ford Stock, the Master
Trustee shall cause a copy of all proxy solicitation materials to be sent to
each Participant with an interest in Ford Stock held in the Master Trust,
together with the foregoing voting instruction form to be returned to the Master
Trustee or its designee. The form shall show the number of full and fractional
shares of Ford Stock attributable to the Participant's interest in the Ford
Stock Fund.
(B) Each Participant with an interest in the Ford Stock Fund
shall have the right to direct the Master Trustee as to the manner in which the
Master Trustee is to vote that number of shares of Ford Stock attributable such
Participant's interest in the Ford Stock Fund. Directions from a Participant to
the Master Trustee concerning the voting of Ford Stock shall be communicated in
writing, or by such other means as is agreed upon by the Master Trustee and
Ford. Upon its receipt of the directions, the Master Trustee shall vote the
shares of Ford Stock credited to a Participant's account as directed by the
Participant. Except as otherwise required by law, the Master Trustee shall vote
shares of Ford Stock credited to a Participant's account for which it has
received no direction from the Participant in the same proportion on each issue
as it votes those shares credited to Participants' accounts for which it
received voting directions from Participants.
(vii) Tender Offers.
Notwithstanding any other provision of this Agreement the provisions of this
Section shall govern the tendering of Ford Stock. Ford, after consultation with
the Master Trustee, shall provide and pay for all printing, mailing, tabulation
and other costs associated with the tendering of Ford Stock.
(A) Upon commencement of a tender offer for any securities
held in the Master Trust that are Ford Stock, Ford shall timely notify the
Master Trustee in advance of
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the intended tender date and shall cause a copy of all materials to be sent to
the Master Trustee. Based on these materials and after consultation with Ford
the Master Trustee shall prepare a tender instruction form and shall provide a
copy of all tender materials to be sent to each Participant with an interest in
the Ford Stock Fund, together with the foregoing tender instruction form, to be
returned to the Master Trustee or its designee. The tender instruction form
shall show the number of full and fractional shares of Ford Stock that reflect
the Participant's proportional interest in the Ford Stock Fund.
(B) Each Participant with an interest in the Ford Stock Fund
shall have the right to direct the Master Trustee to tender or not to tender
some or all of the shares of Ford Stock reflecting such Participant's
proportional interest in the Ford Stock Fund. Directions from a Participant to
the Master Trustee concerning the tender of Ford Stock shall be communicated in
writing, or by such other means as is agreed upon by the Master Trustee and
Ford. The Master Trustee shall tender or not tender shares of Ford Stock as
directed by the Participant. Except as otherwise required by law, the Master
Trustee shall not tender shares of Ford Stock reflecting a Participant's
proportional interest in the Ford Stock Fund for which it has received no
direction from the Participant.
(C) A Participant who has directed the Master Trustee to tender
some or all of the shares of Ford Stock reflecting the Participant's
proportional interest in the Ford Stock Fund may, at any time prior to the
tender offer withdrawal date, direct the Master Trustee to withdraw some or all
of the tendered shares reflecting the Participant's proportional interest, and
the Master Trustee shall withdraw the directed number of shares from the tender
offer prior to the tender offer withdrawal deadline. A Participant shall not be
limited as to the number of directions to tender or withdraw that the
Participant may give to the Master Trustee.
(D) A direction by a Participant to the Master Trustee to
tender shares of Ford Stock reflecting the Participant's proportional interest
in the Ford Stock Fund shall not be considered a written election under the Plan
by the Participant to withdraw, or have distributed, any or all of the
Participant's withdrawable shares. The Master Trustee shall credit to each
proportional interest of the Participant from which the tendered shares were
taken the proceeds received by the Master Trustee in exchange for the shares of
Ford Stock tendered from that interest. Pending receipt of directions from the
Participant or Ford, as provided under the Plans, as to which of the remaining
investment options the proceeds should be invested in, the Master Trustee shall
invest the proceeds in the Interest Income Fund.
(viii) General.
With respect to all shareholder rights other than the right to vote, and the
right to tender, in the case of Ford Stock attributable to a Participant's
interest in the Ford Stock Fund, the Master Trustee shall follow the directions
of the Participant.
(ix) Confidentiality of Participant Records Relating to Ford Stock
Fund.
The Master Trustee agrees that it shall maintain as confidential all information
concerning a Participant's investments in the Ford Stock Fund, exchanges in or
out of the Ford Stock Fund, and the voting or tendering of Ford Stock
represented by Participants' proportionate interests in the Ford Stock Fund and
shall not disclose such information to any party other than Participants
entitled to information regarding their investments in the Ford Stock Fund,
except upon written instructions from Ford and except as may be available to
individuals designated by Ford to have access to information tools such as PSW.
Notwithstanding the foregoing, it shall not be necessary for Ford to provide
written instructions to the Master Trustee for information
13
regarding Participants' investment in and exchange in or out of the Ford Stock
Fund when such information is necessary to administer claims for benefits and
process appeals concerning Participants' investment in and exchanges in or out
of the Ford Stock Fund, and the Master Trustee may rely on Ford's oral requests
for such information.
(x) Redemption Distributions.
(A) Redemption Distributions shall be made in accordance with
the Operating Procedures attached to Part I of Exhibit 2 (DC) to the separate
Recordkeeping Agreement as Schedule "F".
(B) Certain affiliates of the Master Trustee and Ford have
executed herewith a letter agreement governing certain matters related to the
Redemption Distributions.
(C) Ford, in its capacity as named fiduciary of the SSIP
and the TESPHE, shall direct the Master Trustee concerning any communication to
Participants with respect to the nature and tax treatment of Redemption
Distributions.
(D) Ford shall indemnify and hold the Master Trustee and its
Affiliates harmless from, any Losses that may be incurred by, imposed upon, or
asserted against the Master Trustee or its affiliates by reason of any claim,
regulatory proceeding, or litigation arising from any act done or omitted to be
done by an individual or person with respect to the Plan or Master Trust in
connection with Redemption Distributions.
(xi) Special Indemnification for Purchases of Ford Common
Stock.
Ford shall indemnify and hold the Master Trustee and its Affiliates harmless,
from any and all Losses that may be incurred by, imposed upon, or asserted
against the Master Trustee or its affiliates by reason of any claim, regulatory
proceeding, or litigation arising from any act done or omitted to be done by any
individual or person with respect to the Plan or Master Trust in connection with
purchases of Ford Common Stock from Ford; provided, however, that Ford shall not
be required to indemnify the Master Trustee in the event any Losses are caused
by the bad faith, negligence, willful misconduct, or breach of fiduciary duty of
the Master Trustee or its affiliates and their respective employees and agents.
(xii) Conversion.
All provisions in this Section 5(d) shall also apply to any securities received
as a result of a conversion of Ford Stock.
(e) Commingled Pools.
Master Trust investments in Commingled Pools shall be subject to the following:
(i) Ford hereby agrees to the Plans' participation in the Group
Trust, and adopts the terms of the Group Trust as part of this Agreement.
Additionally, Ford acknowledges that it has received from the Master Trustee a
copy of the terms of the Group Trust and the terms of the Declaration of
Separate Fund for each separate fund of the Group Trust selected by Ford.
(ii) The Master Trustee shall at the direction of an Investment
Manager transfer all or any specified assets of a Separately Managed Portfolio
to any Commingled Pool which is maintained by such Investment Manager, an
affiliate thereof or any other entity which is a bank, and whereupon the
instrument establishing such Commingled Pool, as amended
14
from time to time shall constitute a part of the Master Trust, provided,
however, that following the transfer of funds to the bank, the Master Trustee
shall have no responsibility with respect to the holding, investment or
administration of such funds.
(iii) At the direction of Ford, the Master Trustee shall
transfer all or any portion of the Master Trust assets to any Commingled Pool
which is maintained by a bank as defined by the Investment Advisers Act of 1940,
as amended, and whereupon the instrument establishing such Commingled Pool shall
constitute part of the Master Trust, provided; however, that following the
transfer of funds to the bank, the Master Trustee shall have no responsibility
with respect to the holding, investment or administration of such funds.
(iv) Purchases and sales of Commingled Pools other than the
Group Trust shall be made in accordance with the operational procedures agreed
to separately between the Master Trustee and such Commingled Pool provider.
(f) Separately Managed Portfolios.
At Ford's direction the Master Trustee shall separate all or a portion of the
Master Trust into one or more Separately Managed Portfolios. Each Separately
Managed Portfolio may be invested in individual equity and debt securities,
whether domestic or foreign, mutual funds, commingled pools and any other
property or investments, in the sole judgment of the person who is directing the
investments of such Separately Managed Portfolio.
Ford shall from time to time specify by written notice to the Master Trustee
whether the investment of the Separately Managed Portfolio shall be managed by
the Master Trustee, or shall be directed by one or more Investment Managers, or
whether both the Master Trustee and one or more Investment Managers are to
participate in the investment management of the Separately Managed Portfolio.
Ford shall be responsible for ascertaining that while each Investment Manager is
acting in such capacity hereunder, such Investment Manager acknowledges in
writing that it is a fiduciary within the meaning of Section 3(21)(A) of ERISA,
with respect to the Plans.
The Master Trustee shall follow the directions of an Investment Manager
regarding the investment and reinvestment of the Master Trust, or such portion
thereof as shall be under management by the Investment Manager, and shall be
under no duty or obligation to review any investment to be acquired, held or
disposed of pursuant to such directions nor to make an recommendations with
respect to the disposition or continued retention of any such investment. The
Master Trustee shall have no liability or responsibility for acting without
question on the direction of, or failing to act in the absence of any direction
from an Investment Manager, unless the Master Trustee has knowledge that by such
action or failure to act it will be participating in or undertaking to conceal a
breach of fiduciary duty by that Investment Manager.
The Investment Manager at any time and from time to time may issue orders for
the purchase or sale of securities or investments directly to a broker. In order
to facilitate such transactions, the Master Trustee, upon the direction by the
Investment Manager, shall execute and deliver appropriate trading
authorizations, provided, however, that the Master Trustee may require evidence
that all risks associated with such purchase or sale of securities or other
investments by the Investment Manager are acknowledged by Ford and the
Investment Manager. Written notification of the issuance of each such order
shall be given promptly to the Master Trustee by the Investment Manager and the
execution of each such order shall be confirmed to the Master Trustee by the
broker. Such notification shall be authority for the Master Trustee to pay for
15
securities purchased against receipt thereof and to deliver securities sold
against payment therefore, as the case may be. The Master Trustee is also
authorized to execute and deliver appropriate trading authorizations when
notified by the Investment Manager by other means of communication mutually
agreed upon by the Master Trustee and the Investment Manager. The Master Trustee
shall, upon receiving written notice of the resignation or removal of the
Investment Manager, manage, pursuant to this Section, the investment of the
portion of the Master Trust under management by such Investment Manager at the
time of its resignation or removal, unless and until the Master Trustee shall be
notified of the appointment of another Investment Manager, as provided in this
Section, for such portion of such fund.
An Investment Manager shall certify, at the request of the Master Trustee, the
value of any securities or other property held in any Manager Fund managed by
such Investment Manager, and such certification shall be regarded as a direction
with regard to such valuation. The Master Trustee shall be entitled to
conclusively rely upon such valuation for all purposes under this Agreement.
(g) Interest Income Fund.
Master Trust investments in the Interest Income Fund shall be in accordance with
the Investment Guidelines for the Interest Income Fund attached hereto as
Schedule "C".
(h) Strategy Funds.
All transactions involving the Strategy Funds shall be done in accordance with
the Operating Procedures attached to Part I of Exhibit 2 (DC) to the separate
Recordkeeping Agreement as Schedule "G". The investment managers of the
respective Strategy Funds, as documented in Schedule "G", shall be responsible
for the voting of shares of Mutual Funds, for any annual or special
shareholders' meeting, held in the respective Strategy Funds. Ford shall notify
the Master Trustee in writing of any change to underlying funds in the Strategy
Funds or any change to the investment mix in the Strategy Funds at least 90 days
prior to the effective date of such change.
(i) Liquidity Shortfall.
In any circumstance where credit for any unitized investment fund that is
available from unaffiliated banks (as allocated in accordance with the Master
Trustee's policies and procedures) together with loans from Ford, if any, are
insufficient to meet the liquidity shortfall of any investment fund, Ford shall
provide appropriate direction to the Master Trustee concerning how to administer
such investment fund in light of a liquidity shortfall, and in the absence of
such directions, the Master Trustee shall take steps to close such investment
fund to transactions, and/or to delay settlement of such transactions, or such
other steps as it deems necessary or appropriate. Ford agrees to hold the Master
Trustee and its affiliates harmless, and to indemnify them from and against any
and all Losses that may arise in connection with any actions taken by the Master
Trustee in accordance with this paragraph.
(j) Master Trustee Powers.
The Master Trustee shall have the following powers and authority:
(i) Subject to the limitations imposed by this Section 5, to
sell, exchange, convey, transfer, or otherwise dispose of any property held in
the Master Trust, by private contract or at public auction. No person dealing
with the Master Trustee shall be bound to see
16
to the application of the purchase money or other property delivered to the
Master Trustee or to inquire into the validity, expediency, or propriety of any
such sale or other disposition.
(ii) Subject to the limitations of this Section 5, to invest in
investment contracts and short term investments (including interest bearing
accounts with the Master Trustee or money market mutual funds advised by
affiliates of the Master Trustee) and in any Commingled Pool, including those
maintained by the Master Trustee, in which case the provisions of each
collective investment fund in which the Master Trust is invested shall be deemed
adopted by Ford and the provisions thereof incorporated as part of this Master
Trust as long as the fund remains exempt from taxation under Sections 401(a) and
501(a) of the Code.
(iii) To cause any securities or other property held as part of
the Master Trust to be registered in the Master Trustee's own name, in the name
of one or more of its nominees, or in the Master Trustee's account with the
Depository Trust Company of New York and to hold any investments in bearer form,
but the books and records of the Master Trustee shall at all times show that all
such investments are part of the Master Trust.
(iv)
(a) To borrow funds from a bank not affiliated with the Master Trustee in
order to provide sufficient liquidity to process Plan transactions in a timely
fashion, provided that the reasonable cost of such borrowing, to the extent not
borne by Ford or others, shall be allocated in a reasonable fashion to the
unitized investment fund(s) in need of liquidity.
(b) With regard to the Ford Stock Fund, to borrow additional funds from
Ford, pursuant to the Uncommitted Line of Credit Agreement dated October 20,
2000, or as may be specified in a subsequent, superseding agreement.
(v) To make, execute, acknowledge, and deliver any and all
documents of transfer or conveyance and to carry out the powers herein granted.
(vi) Subject to consultation with and approval by Ford, to
settle, compromise, or submit to arbitration any claims, debts, or damages due
to or arising from the Master Trust; to commence or defend suits or legal or
administrative proceedings; to represent the Master Trust in all suits and legal
and administrative hearings; and to pay all reasonable expenses arising from any
such action, from the Master Trust if not paid by Ford.
(vii) To do all other acts, although not specifically mentioned
herein, as the Master Trustee may deem necessary to carry out any of the
foregoing powers and the purposes of the Master Trust.
Section 6. Participant Direction.
(a) Investments.
Each Participant shall be responsible for directing the Master Trustee in which
investment option(s) to invest the assets in the Participant's individual
accounts. Such directions may be made by Participants by use of the telephone
exchange system, the internet or in such other manner as may be agreed upon from
time to time by Ford and the Master Trustee, in accordance with written Exchange
Guidelines attached to Part I of Exhibit 2 (DC) to the
17
separate Recordkeeping Agreement as Schedule "C". In the event that the Master
Trustee fails to receive a proper direction from the Participant with regard to
the SSIP or the TESPHE, the assets shall be invested in the Interest Income
Fund, while the Master Trustee seeks a proper direction. In the event that the
Master Trustee fails to receive a proper direction from the Participant with
regard to the FRP, the assets shall be invested in the Fidelity Freedom Fund
determined according to a methodology selected by Ford and communicated to the
Master Trustee in writing. Any assets in the FRP or SSIP Forfeiture Accounts
will be invested in the Interest Income Fund. In the case of any other
unallocated Plan assets for which the Master Trustee does not have proper
direction, the Plan's default investment shall be the Interest Income Fund.
Neither Ford nor the Master Trustee shall be liable for any Losses, or by reason
of any breach, which arises from a Participant's exercise or non-exercise of
rights under this Agreement over the assets in the Participant's accounts.
(b) Disbursements.
Each Participant shall be responsible for directing the Master Trustee to make
benefit payments or Participant loans in accordance with the procedures set
forth in the Plan Administrative Manual. The Master Trustee shall not be
responsible for any disbursement properly made in accordance with such
procedures (other than tax withholding and reporting obligations assumed under
this Agreement.)
Section 7. Accounts, Plan Qualification and Allocation of Interests.
(a) Accounts.
The Master Trustee shall keep accurate accounts of all investments, receipts,
disbursements, and other transactions hereunder, and shall report the value of
the assets held in the Master Trust as of each Reporting Date. Within thirty
(30) days following each Reporting Date or within sixty (60) days in the case of
a Reporting Date caused by the resignation or removal of the Master Trustee, or
the termination of this Agreement, the Master Trustee shall file with Ford a
written account setting forth all investments, receipts, disbursements, and
other transactions effected by the Master Trustee between the Reporting Date and
the prior Reporting Date, and setting forth the value of the Trust as of the
Reporting Date. Except as otherwise required under ERISA, upon the expiration of
twelve (12) months from the date of filing such account with Ford, the Master
Trustee shall have no liability or further accountability to anyone with respect
to the propriety of its acts or transactions shown in such account, except with
respect to such acts or transactions as to which Ford shall within such twelve
(12) month period file with the Master Trustee written objections.
(b) Plan Qualification and ERISA Section 404(c).
The Plans are intended to be qualified under section 401(a) of the Code and the
Master Trust established hereunder is intended to be tax-exempt under section
501(a) of the Code. Ford represents that to the extent Participants are able to
instruct the investment of their accounts, the Plan is intended to constitute a
plan described in section 404(c) of ERISA and Title 29 of the Code of Federal
Regulations Section 2550.404c-1. A confirmation of the Plans' current
tax-qualified status is attached hereto as Schedule "B," and Ford shall provide
evidence reasonably satisfactory to the Master Trustee of the Plans' continued
qualification upon request by the Master Trustee. Ford has the sole
responsibility for ensuring the Plans' tax-qualified status. The Master
Trustee's provision of the services set forth in this Agreement shall be
conditioned on Ford delivering to the Master Trustee a copy of any amendment to
the Plan as soon as administratively feasible following the amendment's adoption
and on Ford providing the Master
18
Trustee, on a timely basis, with all the information the Master Trustee
reasonably deems necessary for it to perform the recordkeeping and
administrative services set forth herein, and such other information as the
Master Trustee may reasonably request.
(c) Allocation of Interests.
All transfers to, withdrawals from, or other transactions regarding the Master
Trust shall be conducted in such a way that the proportionate interest in the
Master Trust of each Plan and the fair market value of that interest may be
determined at any time. Whenever the assets of more than one Plan are commingled
in the Master Trust or in any investment option, the undivided interest therein
of each such Plan shall be debited or credited (as the case may be) (i) for the
entire amount of every contribution received on behalf of such Plan, every
benefit payment, or other expense attributable solely to such Plan, and every
other transaction relating only to such Plan; and (ii) for its proportionate
share of every item of collected or accrued income, gain or loss, and general
expense, and of any other transactions attributable to the Trust or that
investment option as a whole.
Section 8. Compensation and Expenses.
The Master Trustee's xxxx shall be computed and remitted in accordance with
Section F of Part I of Exhibit 2 (DC) to the separate Recordkeeping Agreement,
as amended from time to time, or as otherwise agreed to in writing by the Master
Trustee and Ford. Ford shall send to the Master Trustee a payment in such
amount, or to the extent that the Plan may permit, Ford may direct the Master
Trustee to deduct such amount from Participants' accounts. All expenses of the
Master Trustee relating directly to the acquisition and disposition of
investments constituting part of the Master Trust, and all taxes of any kind
whatsoever that may be levied or assessed under existing or future laws upon or
in respect of the Master Trust or the income thereof, shall be a charge against
and paid from the appropriate investment option.
Section 9. Directions and Responsibility.
(a) Directions from Ford or Administrator.
Ford shall from time to time designate the persons authorized to act on its
behalf under the provisions of this Agreement. Such designation shall be made in
a communication in the form attached hereto as Schedule "A" signed by the Vice
President-Treasurer, the Secretary or Assistant Secretary of Ford, and shall
include the signature of the person so designated. Whenever Ford or
Administrator provides a direction to the Master Trustee, the Master Trustee
shall not be liable for any loss, or by reason of any breach, arising from the
direction if the direction is contained in a writing (or is oral and immediately
confirmed in a writing) signed by an individual whose name and signature have
been submitted (and not withdrawn) in writing to the Master Trustee by Ford in
the form attached hereto as Schedule "A", provided that the Master Trustee
reasonably believes the signature of the individual to be genuine. Such
direction may also be made via EDT or other electronic means in accordance with
procedures agreed to by Ford and the Master Trustee; provided, however, that the
Master Trustee shall be fully protected in relying on such direction as if it
were a direction made in writing by Ford. The Master Trustee shall have no
responsibility to ascertain any direction's (i) accuracy, (ii) compliance with
applicable law, or (iii) effect for tax purposes (other than tax withholding and
reporting obligations assumed under this Agreement.
19
(b) Conduct.
The Master Trustee hereby agrees not to take any action contrary to the Plans
(as communicated to the Master Trustee) or the Summary Plan Description provided
to Participants (as communicated to the Master Trustee). The Master Trustee
hereby acknowledges that it has received from Ford a copy of the Summary Plan
Description. The Master Trustee shall discharge its responsibilities as a
"directed trustee" under section 403(a)(1) of ERISA.
(c) Co-Fiduciary Liability.
In any other case, the Master Trustee shall not be liable for any Losses, or by
reason of any breach, arising from any act or omission of another fiduciary
under the Plan except as provided in section 405(a) of ERISA. Without limiting
the foregoing, the Master Trustee shall have no liability for the acts or
omissions of any predecessor or successor trustee.
(d) Responsibility.
Ford and Master Trustee agree that they will cooperate with each other in the
event of litigation or other dispute to determine the response that is
appropriate to any claim made against Ford or the Master Trustee or both and the
apportionment of the resulting Losses and liability, if any, in connection with
such claim. Ford and the Master Trustee acknowledge that some claims may be made
against either or both parties even though only one of the parties would be
responsible under the Plans and the Agreement for the action, or inaction, that
gives rise to the claim and that the identity of the party whose action, or
inaction, gives rise to the claim may not always be clear. The parties agree
that, in general, and subject to the requirements of applicable law, claims
arising by reason of the interpretation of the Plan provisions or by reason of
Ford directions will be defended by Ford and Ford will be responsible for any
Losses therefore; and claims arising from the administration and operation of
this Agreement will be defended by the Master Trustee and the Master Trustee
will be responsible for any Losses therefore. In any event, each party will give
notice to the other of any controversy and each party will cooperate with the
other to resolve such controversy.
(e) Indemnification.
Ford shall indemnify the Master Trustee against, and hold the Master Trustee
harmless from, Losses, that may be incurred by, imposed upon, or asserted
against the Master Trustee by reason of any claim, regulatory proceeding, or
litigation arising from any act done or omitted to be done by any individual or
person with respect to the Plan or Master Trust; provided however, that Ford
shall not be required to indemnify Master Trustee in the event any Losses are
caused by the bad faith, negligence, willful misconduct or breach of fiduciary
duty of the Master Trustee or its affiliates and their respective employees and
agents.
The Master Trustee shall indemnify Ford against, and hold Ford harmless from,
any and all Losses that may be incurred by, imposed upon, or asserted against
Ford by reason of any claim, regulatory proceeding, or litigation arising from
Master Trustee's breach of this Agreement, bad faith, negligence, willful
misconduct or breach of fiduciary duty of the Master Trustee or its affiliates
and their respective employees and agents.
20
Section 10. Resignation or Removal of Master Trustee and Termination.
(a) Resignation and Removal.
The Master Trustee may resign at any time upon sixty (60) days' notice in
writing to Ford, unless a shorter period of notice is agreed upon by Ford. Ford
may remove the Master Trustee upon sixty (60) days' notice in writing to the
Master Trustee, unless a shorter period of notice is agreed upon by the Master
Trustee.
(b) Termination.
This Agreement may be terminated at any time by Ford upon sixty (60) days'
notice in writing to the Master Trustee. On the date of termination of this
Agreement, the Master Trustee shall forthwith transfer and deliver to such
individual or entity as Ford shall designate, all cash and assets then
constituting the Master Trust. If, by the termination date, Ford has not
notified the Master Trustee in writing as to whom the assets and cash are to be
transferred and delivered, the Master Trustee may bring an appropriate action or
proceeding for leave to deposit the assets and cash in a court of competent
jurisdiction. The Master Trustee shall be reimbursed by Ford for all costs and
expenses of the action or proceeding including, without limitation, reasonable
attorneys' fees and disbursements.
The provisions of Section 9, and the last sentence of Section 5(j) shall survive
termination of this Agreement.
Section 11. Successor Trustee.
(a) Appointment.
If the office of Master Trustee becomes vacant for any reason, Ford may in
writing appoint a successor trustee under this Agreement. The successor trustee
shall have all of the rights, powers, privileges, obligations, duties,
liabilities, and immunities granted to the Master Trustee under this Agreement.
The successor trustee and predecessor trustee shall not be liable for the acts
or omissions of the other with respect to the Master Trust.
(b) Acceptance.
As of the date the successor trustee accepts its appointment under this
Agreement, title to and possession of the Master Trust assets shall immediately
vest in the successor trustee without any further action on the part of the
predecessor trustee. The predecessor trustee shall execute all instruments and
do all acts that may be reasonably necessary or reasonably requested in writing
by Ford or the successor trustee to vest title to all Master Trust assets in the
successor trustee and to deliver all Master Trust assets to the successor
trustee.
(c) Corporate Action.
Any successor to the Master Trustee or successor trustee, either through sale or
transfer of the business or trust department of the Master Trustee or successor
trustee, or through reorganization, consolidation, or merger, or any similar
transaction of either the Master Trustee or successor trustee, shall, upon
consummation of the transaction, become the successor trustee under this
Agreement.
21
Section 12. Resignation, Removal, and Termination Notices.
All notices of resignation, removal, or termination under this Agreement must be
in writing and mailed to the party to which the notice is being given by
certified or registered mail, return receipt requested, to Ford c/o Vice
President-Treasurer, Ford Motor Company, 00xx Xxxxx - Xxx Xxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000-0000, and to the Master Trustee c/o FESCo Business
Compliance, Contracts Administration, 00 Xxxxxxxxxx Xxxxxx, XX0X, Xxxxxx,
Xxxxxxxxxxxxx 00000, or to such other addresses as the parties have notified
each other of in the foregoing manner.
Section 13. Duration.
This Master Trust shall continue in effect without limit as to time, subject,
however, to the provisions of this Agreement relating to amendment,
modification, and termination thereof.
Section 14. Amendment or Modification.
This Agreement may be amended or modified at any time and from time to time only
by an instrument executed by both Ford and the Master Trustee. The individuals
authorized to sign such instrument on behalf of Ford shall be those authorized
by Ford on Schedule "A."
Section 15. Electronic Services.
(a) The Master Trustee may provide Electronic Services and/or Electronic
Products, including, but not limited to, Fidelity Plan Sponsor WebStation. Ford
and its agents agree to use such Electronic Services and Electronic Products
only in the course of reasonable administration of or participation in the Plan
and to keep confidential and not publish, copy, broadcast, retransmit,
reproduce, commercially exploit or otherwise redisseminate the Electronic
Products or Electronic Services or any portion thereof without the Master
Trustee's written consent, except, in cases where Master Trustee has
specifically notified Ford that the Electronic Products or Services are suitable
for delivery to Ford's Participants, for non-commercial personal use by
Participants or beneficiaries with respect to their participation in the Plan or
for their other retirement planning purposes.
(b) Ford shall be responsible for installing and maintaining all Electronic
Products, (including any programming required to accomplish the installation)
and for displaying any and all content associated with Electronic Services on
its computer network and/or intranet so that such content will appear exactly as
it appears when delivered to Ford. The Master Trustee will assist Ford in such
installation and maintenance upon request by Ford. All Electronic Products and
Services shall be clearly identified as originating from the Master Trustee or
its affiliate. Ford shall promptly remove Electronic Products or Services from
its computer network and/or intranet, or replace the Electronic Products or
Services with updated products or services provided by the Master Trustee, upon
written notification (including written notification via facsimile) by the
Master Trustee.
(c) All Electronic Products shall be provided to Ford without any express
or implied legal warranties or acceptance of legal liability by the Master
Trustee, and all Electronic Services shall be provided to Ford without
acceptance of legal liability related to or arising out of the electronic nature
of the delivery or provision of such Services. Provided, however, the Master
Trustee shall defend, indemnify and hold Ford harmless from any claims brought
by third parties based upon infringement of any patent, copyright, trademark,
trade secret or other
22
proprietary right in connection with the Electronic Products furnished under the
Agreement. Ford shall promptly notify the Master Trustee in writing of any such
claim. Ford shall give reasonable assistance to the Master Trustee in defense of
any claim, at the Master Trustee's expense. The Master Trustee shall have sole
control of the defense of any such claim. Except as otherwise stated in this
Agreement, and except with respect to data specific to Ford's Participants
embedded in the products or services, which data is the property of Ford and/or
Ford's Participants, no rights are conveyed to any property, intellectual or
tangible, associated with the contents of the Electronic Products or Services
and related material. The Master Trustee hereby grants to Ford a non-exclusive,
non-transferable revocable right and license to use the Electronic Products and
Services in accordance with the terms and conditions of this Agreement.
(d) To the extent that any Electronic Products or Services utilize internet
services to transport data or communications, the Master Trustee will take, and
Ford agrees to follow, reasonable security precautions, however, the Master
Trustee disclaims any liability for interception of any such data or
communications, provided that the Master Trustee has followed such reasonable
security precautions. The Master Trustee reserves the right not to accept data
or communications transmitted via electronic media by Ford or a third party if
it determines that the media does not provide adequate data security, or if it
is not administratively feasible for the Master Trustee to use the data security
provided. The Master Trustee shall not be responsible for, and makes no
warranties regarding access, speed or availability of Internet or network
services, or any other service required for electronic communication. The Master
Trustee shall not be responsible for any loss or damage related to or resulting
from any changes or modifications to the Electronic Products or Services after
delivering it to Ford.
(e) The Master Trustee will provide to Participants the FullViewSM service
via NetBenefits, through which Participants may elect to consolidate and manage
any retirement account information available through NetBenefits as well as
External Account Information. To the extent not provided by the Master Trustee
or its affiliates, the data aggregation service will be provided by Xxxxxx.xxx,
Inc. or such other independent provider as the Master Trustee may select,
pursuant to a contract that requires the provider to take appropriate steps to
protect the privacy and confidentiality of information furnished by users of the
service. Ford acknowledges that Participants who elect to use FullViewSM must
provide passwords and PINs to the provider of data aggregation services. The
Master Trustee will use External Account Information to furnish and support
FullViewSM or other services provided pursuant to this Agreement, and as
otherwise directed by the Participant. The Master Trustee will not furnish
External Account Information to any third party, except pursuant to subpoena or
other applicable law. Ford agrees that the information accumulated through
FullViewSM shall not be made available to Ford, provided, however, that the
Master Trustee shall provide to Ford, upon request, aggregate usage data that
contains no personally identifiable information.
Section 16. Assignment.
This Agreement shall be binding on the Parties hereto and their respective
successors and assigns. Neither Party shall assign this Agreement without the
prior written consent of the other Party, which consent shall not be
unreasonably withheld.
23
Section 17. General.
(a) Performance by Master Trustee, its Agents or Affiliates.
Ford acknowledges and authorizes that the services to be provided under this
Agreement shall be provided by the Master Trustee, its agents or affiliates,
including, but not limited to, FIIOC, or the successor to any of them, and that
certain of such services may be provided pursuant to one or more separate
contractual agreements or relationships. The Master Trustee acknowledges and
agrees that it shall remain fully responsible for the performance of all
services or duties performed under this Agreement by its affiliates.
(b) Delegation by Employer.
By authorizing the assets of any Plan as to which it is an "employer" to be
deposited in the Master Trust, each employer, other than Ford, hereby
irrevocably delegates and grants to Ford full and exclusive power and authority
to exercise all of the powers conferred upon Ford and each employer by the terms
of this Agreement, and to take or refrain from taking any and all action which
such employer might otherwise take or refrain from taking with respect to this
Agreement, including the sole and exclusive power to exercise, enforce or waive
any rights whatsoever which such employer might otherwise have with respect to
the Master Trust, and irrevocably appoints Ford as its agent for all purposes
under this Agreement. The Master Trustee shall have no obligation to account to
any such employer or to follow the instructions of or otherwise deal with any
such employer, the intention being that the Master Trustee shall deal solely
with Ford.
(c) Entire Agreement.
This Agreement together with the schedules attached hereto, which are hereby
incorporated by reference herein, contains all of the terms agreed upon between
the parties with respect to the subject matter hereof.
(d) Waiver.
No waiver by either party of any failure or refusal to comply with an obligation
hereunder shall be deemed a waiver of any other obligation hereunder or any
subsequent failure or refusal to comply with any other obligation hereunder.
(e) Successors and Assigns.
The stipulations in this Agreement shall inure to the benefit of, and shall
bind, the successors and assigns of the respective parties.
(f) Partial Invalidity.
If any term or provision of this Agreement or the application thereof to any
person or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
(g) Section Headings.
The headings of the various sections and subsections of this Agreement have been
inserted only for the purposes of convenience and are not part of this Agreement
and shall not be deemed in any manner to modify, explain, expand or restrict any
of the provisions of this Agreement.
24
(h) Returns, Reports and Information.
Except as otherwise specified in this Agreement, Ford shall be responsible for
the preparation and filing of all returns, reports, and information required of
the Master Trust or Plans by law. The Master Trustee shall provide Ford with
such information as Ford may reasonably request to make these filings.
(i) Communications.
For any Participant communications which are prepared solely by Xxxx, Xxxx
represents that such communications will include all necessary information
required by the regulations under ERISA ss.404(c). The Master Trustee shall
request and Ford shall provide all information regarding the content of the
communications reasonably necessary to allow the Master Trustee to meet its
obligations under this Agreement. The Master Trustee shall have no liability for
any loss resulting from Ford's failure to communicate in a manner that would
afford the fiduciaries protection under the ERISA ss.404(c) regulations.
For any Participant communications which are furnished solely by Ford, whether
prepared by Ford or the Master Trustee, Ford represents that such communications
will be furnished to all Participants and beneficiaries in a manner that is
consistent with ERISA including, but not limited to, any applicable provisions
added by the Xxxxxxxx-Xxxxx Act or otherwise required by law to afford
fiduciaries protection under the ERISA ss.404(c) regulations. For any
Participant communications which are furnished in part by Ford, whether prepared
by Ford or the Master Trustee, Ford represents that such communications will be
furnished to all designated Participants and beneficiaries in a manner that is
consistent with ERISA including, but not limited to, any applicable provisions
added by the Xxxxxxxx-Xxxxx Act or otherwise required by law to afford
fiduciaries protection under the ERISA ss.404(c) regulations. Communications may
be furnished electronically as long as such delivery is consistent with ERISA
regulations regarding electronic transmission (ss. 2501.104b-1) and any future
applicable guidance. The Master Trustee and its affiliates shall have no
liability for any Losses resulting from failure of Ford to furnish any
communications in a manner consistent with ERISA, the Xxxxxxxx-Xxxxx Act or
other applicable law.
Section 18. Governing Law.
(a) Massachusetts Law Controls.
This Agreement is being made in the Commonwealth of Massachusetts, and the
Master Trust shall be administered as a Massachusetts trust. The validity,
construction, effect, and administration of this Agreement shall be governed by
and interpreted in accordance with the laws of the Commonwealth of
Massachusetts, except to the extent those laws are superseded under section 514
of ERISA.
(b) Which Agreement Controls.
The Master Trustee is not a party to the Plans, and in the event of any conflict
between the provisions of the Plans and the provisions of this Agreement, the
provisions of the Plans shall control, provided that nothing shall increase or
expand the responsibilities of the Master Trustee beyond those set forth in this
Agreement without the written consent of the Master Trustee.
25
Section 19. Plan Qualification.
Ford shall be responsible for verifying that while any assets of a particular
Plan are held in the Master Trust, the Plan (i) is qualified within the meaning
of section 401(a) of the Code; (ii) is permitted by existing or future rulings
of the United States Treasury Department to pool its funds in a group trust; and
(iii) permits its assets to be commingled for investment purposes with the
assets of other such plans by investing such assets in this Master Trust. If any
Plan ceases to be qualified within the meaning of section 401(a) of the Code,
Ford shall notify the Master Trustee as promptly as is reasonable. Upon receipt
of such notice, the Master Trustee shall promptly segregate and withdraw from
the Master Trust, the assets which are allocable to such disqualified Plan, and
shall dispose of such assets in the manner directed by Ford.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
FORD MOTOR COMPANY
By: /s/A M Petach
----------------------------------
Vice President-Treasurer
Name:
----------------------------------
Xxxx Xxxxx Xxxxxx
Date:
----------------------------------
FIDELITY MANAGEMENT TRUST COMPANY
By: /s/Xxxxxxx Xxxxxx
----------------------------------
FMTC Authorized Signatory
Name: Xxxxxxx Xxxxxx
----------------------------------
Authorized Signer
Date: 6/10/05
----------------------------------
26
SCHEDULES
Schedule "A" - Authorized Signers (Ford)
[Ford's Letterhead]
[Date]
Xx. Xxxx Xxxxx
Fidelity Employer Services Company LLC
000 Xxxxxxx Xxx - XX0X
Xxxxxxxxxxx, XX 00000-0000
Ford Motor Company Savings and Stock Investment Plan for Salaried
Employees ("SSIP")
Ford Motor Company Tax-Efficient Savings Plan for Hourly Employees
("TESPHE")
Ford Retirement Plan ("FRP")
Dear Xx. Xxxxx:
This letter is sent to you in accordance with Section 9(a) of the Master
Trust Agreement, restated as of January 1, 2005, between Ford Motor Company and
Fidelity Management Trust Company. [I or We] hereby designate[ myself - if so
desired], [name of individual], [name of individual], and [name of individual],
as the individuals who may provide directions on behalf of Ford upon which
Fidelity Management Trust Company shall be fully protected in relying. Only one
such individual need provide any direction. The signature of each designated
individual is set forth below and certified to be such.
You may rely upon each designation and certification set forth in this
letter until [I or we] deliver to you written notice of the termination of
authority of a designated individual.
Very truly yours,
Ford Motor Company
By:
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
[signature of designated individual]
[name of designated individual]
27
Schedule "B" - Statement of Tax-Qualified Status
[Law Firm Letterhead]
**Note: This Schedule is not necessary if the Plan's IRS determination
letter is not more than two (2) years old.
Xx. Xxxxxxx Xxxx
Fidelity Investments Institutional Operations Company, Inc.
000 Xxxxxxx Xxx - XX0X
Xxxxxxxxxxx, XX 00000-0000
Ford Motor Company Savings and Stock Investment Plan for Salaried
Employees ("SSIP")
Ford Motor Company Tax-Efficient Savings Plan for Hourly Employees
("TESPHE")
Ford Retirement Plan ("FRP")
Dear Xx. Xxxx;
In accordance with your request, this letter sets forth our opinion with
respect to the qualified status under section 401(a) of the Internal Revenue
Code of 1986 (including amendments made by the Employee Retirement Income
Security Act of 1974) (the "Code"), of the [name of plan], as amended to the
date of this letter (the "Plan").
The material facts regarding the Plan as we understand them are as follows.
The most recent favorable determination letter as to the Plan's qualified status
under section 401(a) of the Code was issued by the [location of Key District]
District Director of the Internal Revenue Service and was dated [date] (copy
enclosed). The version of the Plan submitted by [name of company] (the
"Company") for the District Director's review in connection with this
determination letter did not contain amendments made effective as of [date].
These amendments, among other matters, [brief description of amendments].
[Subsequent amendments were made on [date] to amend the provisions dealing with
[brief description of amendments].]
Ford has informed us that it intends to submit the Plan to the [location of
Key District] District Director of the Internal Revenue Service and to request
from him a favorable determination letter as to the Plan's qualified status
under section 401(a) of the Code. Ford may have to make some modifications to
the Plan at the request of the Internal Revenue Service in order to obtain this
favorable determination letter, but we do not expect any of these modifications
to be material. Ford has informed us that it will make these modifications.
Based on the foregoing statements of Ford and our review of the provisions
of the Plan, it is our opinion that the Internal Revenue Service will issue a
favorable determination letter as to the qualified status of the Plan, as
modified at the request of the Internal Revenue Service, under section 401(a) of
the Code, subject to the customary condition that continued qualification of the
Plan, as modified, will depend on its effect in operation.
[Furthermore, in that the assets are in part invested in common stock
issued by Ford or an affiliate, it is our opinion that the Plan is an "eligible
individual account plan" (as defined under Section 407(d)(3) of ERISA) and that
the shares of common stock of Ford held and to be purchased under the Plan are
"qualifying employer securities" (as defined under Section 407(d)(5) of ERISA).
Finally, it is our opinion that interests in the Plan are not required to be
registered under the Securities Act of 1933, as amended, or, if such
registration is required, that such interests are effectively registered under
said Act.]
Sincerely,
[name of law firm]
By: [signature]
[name of partner]
28
SCHEDULE "C"
Confidential
FORD MOTOR COMPANY
GUIDELINES FOR THE INTEREST INCOME FUND
---------------------------------------
EFFECTIVE DATE: November 1, 2003
I. DESCRIPTION OF THE INTEREST INCOME FUND
The Interest Income Fund ("IIF") is a diversified book value fund comprised
of the following investment types: guaranteed investment contracts ("GICs")
and individual fixed-income securities managed by Fidelity Management Trust
Company in its capacity as Investment Manager (hereafter "Manager"). The
IIF may also be invested in a short-term investment fund for liquidity
purposes.
In conjunction with the investment types described above, Manager shall
purchase constant-duration synthetic contracts (hereafter "Synthetic
Contracts") to ensure that the IIF is fully benefit-responsive and
accounted for at book-value. The IIF will be divided among these synthetic
contracts on a pro-rata basis and the contracts will provide a fixed rate
of return each calendar year.
II. INTEREST INCOME FUND OBJECTIVE
The investment objective for the IIF is to provide a relatively high fixed
income yield with little market-related risk. Of primary importance is the
preservation of both invested principal and earned interest. Secondary to
the preservation of capital is the desire to generate, over time, a
composite yield in excess of short-term yields available in the market
place.
III. PERMISSIBLE INVESTMENTS AND LIMITATIONS
Guaranteed Investment Contracts ("GICs")
----------------------------------------
GICs are book-value, benefit-responsive investment contracts issued by
insurance companies, banks or other financial services institutions. GICs
are unsecured agreements backed by the assets of the issuer.
GICs for the IIF will be limited to those issuers which have a credit
rating of at least AA- (or equivalent) by either Xxxxx'x Investors Service,
Inc., Standard & Poor's Corporation or other Nationally Recognized
Statistical Rating Organization ("NRSRO") at time of purchase. A copy of
the Manager's current approved issuer list will be provided upon request.
Individual Fixed Income Securities
----------------------------------
Manager will invest in U.S. dollar denominated individual fixed income
securities ("Securities") for the IIF. Such Securities will be owned
directly by the Ford Motor Company Defined Contribution Plans Master Trust
(the "Plan"). Subject to the restrictions and limitations contained in
these Guidelines, Manager shall have full discretion to invest the IIF over
the broad spectrum of fixed income securities. Securities may include, but
are not limited to, the following:
o Asset-backed securities
o Mortgage-backed securities
Page 1 of 6
Confidential
o Commercial mortgage-backed securities
o Collateralized mortgage obligations
o U.S. Treasuries
o Securities issued or backed by U.S. government agencies, U.S.
government sponsored issuers
o Securities issued by supranational organizations
o Structured notes and similar arrangements
o Corporate bonds
o Private placements (including Rule 144a securities)
o Money market instruments
o Futures contracts, options contracts, and swap agreements (derivative
instruments subject to CFTC regulation will be used solely for bona
fide hedging or other risk management purposes consistent with these
Guidelines and in accordance with CFTC rules)
Synthetic Contracts
-------------------
The IIF will be "wrapped" by one or more Synthetic Contracts issued by
insurance companies, banks or other financial-services institutions (the
"Synthetic Contract Issuers"). Synthetic Contracts shall be
benefit-responsive, which means that they shall provide for benefit
withdrawals and investment exchanges to be paid at the full book-value of
the IIF (i.e., principal plus accrued interest). In this manner, Synthetic
Contracts are designed to decrease the normal market fluctuations
associated with the performance of the Securities.
Liquidity Considerations
------------------------
To assure sufficient liquidity for the IIF, Manager will invest in the
fund(s) listed in Appendix A attached hereto.
IV. RESTRICTIONS AND LIMITATIONS
General Restrictions & Limitations
----------------------------------
o At the time of purchase, Securities must have a credit rating of at
least a- (or equivalent) by either Xxxxx'x Investors Service, Inc.,
Standard & Poor's Corporation or other Nationally Recognized
Statistical Rating Organization ("NRSRO"). For purposes of this
limitation, Securities issued or backed by the U.S. Government, U.S.
Government agencies, and U.S. Government sponsored issuers shall be
deemed to carry a aaa rating (or equivalent).
o The minimum average credit quality of the portfolio will be the
equivalent of aa- or higher. For purposes of determining the minimum
average credit quality of the portfolio, Securities issued or backed
by the U.S. Government, U.S. Government agencies, and U.S. Government
sponsored issuers shall be deemed to carry a aaa rating (or
equivalent).
o At the time of purchase, the duration of any Security shall not exceed
eight years.
o The assets shall be managed with a weighted average duration of not
less than two nor more than three-and-one-half years. Short-term
investments must be included in the calculation of the portfolio's
duration.
o The market value of the aggregate investment in any single issuer,
including its associated companies shall not exceed five percent of
the aggregate market value of the portfolio. The net uncollateralized
xxxx-to-market amount owed from a counterparty on derivatives that are
non-exchange traded, non-standardized and for which the exchange has
not "de-coupled" the counterparties shall be included along with cash
securities issued by such counterparty
Page 2 of 6
Confidential
for the purpose of calculating the aggregate exposure to any single
issuer. [Note: net amounts due to counterparties are not included as
an offset to securities exposure.] This limitation shall not apply to
Securities backed by the U.S. Government, U.S. Government agencies,
and U.S. Government sponsored issuers.
o Any investment that is denominated in a currency other than U.S.
dollars is prohibited.
o Borrowing to increase the amount of assets available for investment
(leverage) is not permitted.
o Investing in equity securities, any security convertible into equity
securities, and securities with equity type enhancements (e.g.
warrants and rights) or any derivative or combination of derivatives
that create an equity type exposure is prohibited.
o Equity type securities received through corporate actions (e.g.
warrants rights or shares received in a default work-out) should be
liquidated in an orderly manner at Manager's discretion. Manager must
notify Ford should the aggregate market value of such holdings as
reported on the book of record exceed one percent of the portfolio's
market value.
o Investments in pooled or commingled accounts are prohibited. This
limitation shall not apply to investments in the fund(s) listed in
Appendix A.
Restrictions and Limitations on Derivatives
-------------------------------------------
o Derivatives may not be used to leverage the portfolio. Notwithstanding
the prohibition on leverage, the Manager may use interest rate futures
or other derivatives as part of the overall process to manage
portfolio risks, provided that the notional amount of derivatives
outstanding do not exceed 100% of the market value of the Account. The
use of derivatives to manage portfolio risks may include using
derivatives 1) as substitutes for traditional securities, 2) to reduce
portfolio risks created by other securities, or 3) in fully hedged
positions to take advantage of market anomalies. The risks of
derivatives, like more traditional securities, should be evaluated in
the context of the total portfolio.
o Investments in any security, derivative security, derivative
instrument or combination thereof that can lose more than the original
amount invested are prohibited (no leverage).
o Any non-exchange traded transaction requiring the delivery of
collateral from the portfolio (e.g., two-way collateralized swaps) is
prohibited.
V. NOTIFICATION & ESCALATION PROCEDURES
Should the portfolio be out of tolerance with the restrictions or
limitations contained herein (e.g. market value of a single issuer
increases to more than 5% of the portfolio's market value), Manager shall
notify Ford within two business days following the close of business on the
date of such occurrence. Such notification should include a summary of
action (including timing) Manager will take to rectify the condition. It is
expected that Manager will take action to bring the portfolio back into
compliance as soon as prudently possible.
Securities that no longer carry a credit rating of at least A- (or the
equivalent) by Xxxxx'x Investors Service, Inc., Standard & Poor's
Corporation or any other NRSRO must be removed from the portfolio within 60
days. Exceptions to removing Securities within 60 days may be allowed if
the Manager demonstrates it is in the best interest of the Plan to hold the
Securities beyond the 60-day removal period. Request for such exceptions
must be sent in writing to the Director of Pension Asset Management, Ford
Motor Company for approval.
Page 3 of 6
Confidential
VI. MANAGER PERFORMANCE EVALUATION
The Manager will recommend a benchmark (or a blend of multiple benchmarks)
which is representative of their articulated Investment Strategy or Process
and represents their universe of investable securities; this will be used
as an aid to describe short-term performance.
VII. MANAGER RELATIONSHIPS
Relationships are expected to be long term; however, Manager may be
terminated as investment manager of the IIF without cause. Typical reasons
for termination may include, but are not limited to, the following events:
o Ford's ability or willingness to maintain an externally managed
account is reduced.
o Non-adherence to these Guidelines, or Manager's articulated
investment strategy or process.
o Significant changes in Manager's organizational structure or
personnel.
o Loss of confidence in Manager's ability to add value.
Poor short-term performance by itself is not necessarily cause for
dismissal. Poor long-term performance may be suggestive of personnel
problems, faulty strategies, or a failure to control the investment process
and is cause for concern.
Formal Ford-Manager meetings take place at least annually and should
include the following elements:
1. An update on organizational developments, personnel changes,
strategic issues, etc.
2. A review of the investment process for adding value.
3. Performance results in the context of Manager's articulated
investment strategy.
4. Statement of compliance with these Guidelines and/or a summary of
activities that may have compromised these Guidelines.
5. An update on any regulatory compliance issues.
VIII. OTHER ISSUES
Soft Dollars: With respect to the IIF, the use of soft dollar arrangements
is discouraged and may only be used with Ford's written approval.
Securities Lending: Manager may not lend securities from the portfolio. The
custodian is allowed to lend securities for the benefit of the portfolio,
subject to a separate agreement.
Counterparty Selection: Manager will act in good faith and with due
diligence in its choice and use of counterparties and may deal in such
markets and/or exchanges and with such counterparties as Manager deems
appropriate, subject to the restrictions and limitations contained herein.
Use of Affiliated Parties: Manager cannot trade through an affiliated
broker dealer or enter into transactions with an affiliated counterparty
without Ford's written approval.
Page 4 of 6
Confidential
FORD MOTOR COMPANY FIDELITY MANAGEMENT TRUST COMPANY
as Investment Manager
By: /s/A M Petach By: /s/Xxxxxxx X. Xxxxxxxx
----------------------- --------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Sr. Vice President
Date Date 10/31/03
----------------------- --------------------------
Page 5 of 6
Confidential
APPENDIX A
Effective as of the date first executed on page 4 of the guidelines on
behalf of the Manager, permissible investments for the liquidity portion of
the IIF are:
1. Fidelity Institutional Money Market Fund: Money Market Portfolio
2. Bankers Trust Company Pyramid Directed Account Cash Fund
Page 6 of 6
