8-KMaterial Agreements

FORD MOTOR CO 8-K Report, Material Agreement (May 15, 2006)

Filed May 15, 2006For Securities:FF-PCF-PDF-PB

Summary

This 8-K filing from Ford Motor Company primarily announces the retirement of its President and Chief Operating Officer, James J. Padilla, effective July 1, 2006. The report details the terms of his retirement package, which includes standard retirement benefits, post-retirement healthcare and life insurance, and eligibility for executive vehicles. Additionally, Mr. Padilla will receive performance-based compensation, including a Restricted Stock Equivalent award for 2006 performance and non-prorated Final Awards for his outstanding Performance Stock Rights, with restrictions on his 2005 award lapsing. To ensure a smooth transition, Ford has also entered into a consulting agreement with Mr. Padilla, who will serve as a consultant to the Chairman and CEO from July 1, 2006, to June 30, 2007. This agreement includes a consulting fee, reimbursement for business expenses, and provision of office resources and travel support for authorized travel. This filing is important for investors as it signals a significant leadership change and outlines the financial implications and transitional arrangements associated with this departure.

Key Highlights

  • 1Retirement of President and Chief Operating Officer, James J. Padilla, effective July 1, 2006.
  • 2Mr. Padilla will receive retirement benefits under the Select Retirement Plan.
  • 3Eligibility for post-retirement benefits including health care and life insurance.
  • 4Entitlement to two executive vehicles under the Executive Evaluation Vehicle Program.
  • 5Potential for a performance-based Restricted Stock Equivalent award for 2006 and non-prorated Final Awards for Performance Stock Rights.
  • 6Restrictions on 2005 Restricted Stock Equivalents award will lapse on July 1, 2006.
  • 7A consulting agreement is in place for Mr. Padilla to advise the Chairman and CEO for one year post-retirement.

Frequently Asked Questions

The main event reported is the retirement of Ford Motor Company's President and Chief Operating Officer, James J. Padilla, effective July 1, 2006, and the associated terms of his separation and a subsequent consulting agreement.

Mr. Padilla will be entitled to retirement benefits as designated for his role, post-retirement health care and life insurance benefits similar to other salaried employees, and may receive performance-based equity awards for his 2006 performance and previously granted stock awards.

Mr. Padilla will serve as a consultant to the Chairman and CEO from July 1, 2006, to June 30, 2007, for a fee of $592,080, paid quarterly in advance. He will be reimbursed for authorized business expenses and provided with office resources and travel support.

Yes, in connection with his retirement, Mr. Padilla agrees not to enter into any competitive arrangements, to maintain confidentiality regarding company matters, refrain from inimical conduct, and assist in litigation on the Company's behalf.