-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GWMqx2XwXWDu+ErucAvb12CaLZBsmsCpVpyDmJysmzaG1HPUWEKVGjNKjoamJ6rk 0EWrNsR5SooUcvFEXTQ8dA== 0000037996-96-000019.txt : 19960524 0000037996-96-000019.hdr.sgml : 19960524 ACCESSION NUMBER: 0000037996-96-000019 CONFORMED SUBMISSION TYPE: S-8 POS PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19960523 EFFECTIVENESS DATE: 19960523 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORD MOTOR CO CENTRAL INDEX KEY: 0000037996 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 380549190 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 POS SEC ACT: 1933 Act SEC FILE NUMBER: 033-58861 FILM NUMBER: 96571541 BUSINESS ADDRESS: STREET 1: THE AMERICAN RD CITY: DEARBORN STATE: MI ZIP: 48121 BUSINESS PHONE: 3133223000 S-8 POS 1 Registration No. 33-58861 ================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________ AMENDMENT NO. 1 TO FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 FORD MOTOR COMPANY (Exact name of registrant as specified in its charter) _______________________________________________________ PRIMUS AUTOMOTIVE FINANCIAL SERVICES, INC. PRIME ACCOUNT (Full title of the Plan) _________________________________________________________ J. M. RINTAMAKI, Esq. Ford Motor Company P. O. Box 1899 The American Road Dearborn, Michigan 48121-1899 (313) 323-2260 (Name, address and telephone number, including area code, of agent for service) ================================================================= -2- PRIMUS AUTOMOTIVE FINANCIAL SERVICES, INC. PRIME ACCOUNT ______________________ INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. The following documents filed or to be filed with the Securities and Exchange Commission are incorporated by reference in this Registration Statement: (a) The latest annual report of Ford Motor Company ("Ford") filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "1934 Act") which contains, either directly or indirectly by incorporation by reference, certified financial statements for Ford's latest fiscal year for which such statements have been filed. (b) All other reports filed pursuant to Section 13(a) or 15(d) of the 1934 Act since the end of the fiscal year covered by the annual report referred to in paragraph (a) above. (c) The description of Ford's Common Stock contained in registration statement no. 33-43085 filed by Ford under the Securities Act of 1933 (the "1933 Act"). All documents subsequently filed by Ford pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing such documents. Item 8. Exhibits. Exhibit 4.1 Description of Primus Automotive Financial Services, Inc. Prime Account. Filed with this Registration Statement. Exhibit 4.2 Trust Agreement dated as of December 29, 1995 between Primus Automotive Financial Services, Inc. and Fidelity Management Trust Company, as Trustee. Filed with this Registration Statement. Exhibit 5.1 Opinion of Thomas J. DeZure, an Assistant Secretary and Counsel of Ford Motor Company, with respect to the legality of the securities being registered hereunder. Filed with this Registration Statement. Exhibit 5.2 Opinion of F. C. King, a Senior Attorney of Ford Motor Company, with respect to compliance requirements of the Employee Retirement Income Security Act of 1974. Filed with this Registration Statement. Exhibit 15 Letter from Independent Certified Public Accountants regarding unaudited interim financial information. Filed with this Registration Statement. -3- Exhibit 23 Consent of Independent Certified Public Accountants. Filed with this Registration Statement. Exhibit 24.1* Powers of Attorney authorizing signature. Exhibit 24.2* Certified resolutions of Board of Directors authorizing signature pursuant to a power of attorney. Exhibit 24.3 Power of Attorney authorizing signature. Filed as Exhibit 24.1 to Registration Statement No. 33-64605 and incorporated herein by reference. ________________________ * Previously filed as an Exhibit to this Registration Statement on April 27, 1995. -4- The Plan. Pursuant to the requirements of the Securities Act of 1933, the Plan has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Franklin, State of Tennessee, on this 23rd day of May, 1996. PRIMUS AUTOMOTIVE FINANCIAL SERVICES, INC. PRIME ACCOUNT By:/s/Dennis T. Delaney ----------------------------------------- Dennis T. Delaney, Committee Member Primus Automotive Financial Services, Inc. Prime Account Committee -5- The Registrant. Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dearborn, State of Michigan, on this 23rd day of May, 1996. FORD MOTOR COMPANY By: Alex Trotman* -------------------------- (Alex Trotman) Chairman of the Board of Directors Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the date indicated. Signature Title Date --------- ----- ---- Director and Chairman of the Board of Directors, President and Chief Executive Officer Alex Trotman* (principal executive officer) May 23, 1996 - --------------------- (Alex Trotman) Michael D. Dingman* Director May 23, 1996 - --------------------- (Michael D. Dingman) Director and Vice President, Ford Motor Company, and Director and President and Chief Operating Officer, Edsel B. Ford II* Ford Motor Credit Company May 23, 1996 - ---------------------- (Edsel B. Ford II) William Clay Ford* Director May 23, 1996 - ---------------------- (William Clay Ford) -6- Signature Title Date - --------- ----- ---- William Clay Ford, Jr.* Director May 23, 1996 - ------------------------- (William Clay Ford, Jr.) Roberto C. Goizueta* Director May 23, 1996 - ------------------------ (Roberto C. Goizueta) Irvine O. Hockaday, Jr.* Director May 23, 1996 - ------------------------ (Irvine O. Hockaday, Jr.) Marie-Josee Kravis* Director May 23, 1996 - ------------------------ (Marie-Josee Kravis) Drew Lewis* Director May 23, 1996 - ----------------------- (Drew Lewis) Ellen R. Marram* Director May 23, 1996 - ----------------------- (Ellen R. Marram) Carl E. Reichardt* Director May 23, 1996 - ----------------------- (Carl E. Reichardt) John L. Thornton Director May 23, 1996 - ----------------------- (John L. Thornton) -7- Signature Title Date - --------- ----- ---- Clifton R. Wharton, Jr.* Director May 23, 1996 - ------------------------- (Clifton R. Wharton, Jr.) Group Vice President and Chief Financial Officer John M. Devine* (principal financial officer) May 23, 1996 - ------------------------ (John M. Devine) Director of Accounting Daniel R. Coulson* (principal accounting officer) May 23, 1996 - ------------------------ (Daniel R. Coulson) *By: /s/K. S. Lamping -------------------- (K. S. Lamping, Attorney-in-Fact) -8- EXHIBIT INDEX Sequential Page at Which Found (or Incorporated by Reference) --------------- Exhibit 4. 1 Description of Primus Automotive Financial Services, Inc. Prime Account. Filed with this Registration Statement. Exhibit 4.2 Trust Agreement dated as of December 29, 1995 between Primus Automotive Financial Services, Inc. and Fidelity Management Trust Company, as Trustee. Filed with this Registration Statement. Exhibit 5.1 Opinion of Thomas J. DeZure, an Assistant Secretary and Counsel of Ford Motor Company, with respect to the legality of the securities being registered hereunder. Filed with this Registration Statement. Exhibit 5.2 Opinion of F. C. King, a Senior Attorney of Ford Motor Company, with respect to compliance requirements of the Employee Retirement Income Security Act of 1974. Filed with this Registration Statement. Exhibit 15 Letter from Independent Certified Public Accountants regarding unaudited interim financial information. Filed with this Registration Statement. Exhibit 23 Consent of Independent Certified Public Accountants. Filed with this Registration Statement. Exhibit 24.1* Powers of Attorney authorizing signature. Exhibit 24.2* Certified resolutions of Board of Directors authorizing signature pursuant to a power of attorney. Exhibit 24.3 Power of Attorney authorizing signature. Filed as Exhibit 24.1 to Registration Statement No. 33-64605 and incorporated herein by reference. ________________________ * Previously filed as an Exhibit to this Registration Statement on April 27, 1995. EX-4.1 2 THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. December 20, 1995 PRIMUS AUTOMOTIVE FINANCIAL SERVICES, INC. PRIME ACCOUNT This document is intended to satisfy the summary plan description requirements under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), for the PRIMUS Automotive Financial Services, Inc. Prime Account (the "Plan") and to serve as a prospectus pursuant to certain requirements of the Securities and Exchange Commission. This prospectus covers shares of Ford Motor Company ("Ford") Common Stock being offered on the basis set forth herein to eligible participants under the Plan sponsored by Primus Automotive Financial Services, Inc. (the "Company"). Plan participants will be entitled to invest their own contributions and Company matching contributions in several different investment funds, including: the Ford Stock Fund, Fidelity Retirement Government Money Market Portfolio, Fidelity Intermediate Bond Fund, Fidelity Growth and Income Portfolio, Fidelity Puritan Fund, Fidelity U.S. Equity Index Portfolio, Fidelity Blue Chip Growth Fund, Fidelity Contrafund, Fidelity Growth Company Fund, Fidelity Magellan Fund, Fidelity OTC Portfolio, Fidelity International Growth And Income Fund, Fidelity Overseas Fund, Fidelity Asset Manager, Fidelity Asset Manager: Growth, and Fidelity Asset Manager: Income. General Plan Information - ------------------------ The Plan, which is maintained on a calendar year basis, was established effective April 1, 1992, to assist eligible employees in saving for their retirement. The trustee of the trust related to the Plan is Fidelity Management Trust Company. The Plan includes a retirement savings section under which employee contributions (pre-tax and after-tax) may be matched by the Company. Although it has not expressed any intention to do so, the Plan Committee (the "Committee"), appointed by the Company and which serves as the Plan administrator, has the authority to terminate the Plan at any time. In the event of Plan termination, the Committee will direct the trustee to distribute the assets of the Plan to the participants, former participants, and beneficiaries in accordance with their interests under the Plan. In the event of termination, all participant accounts become fully vested. The Committee also has the right to amend the Plan; however, in no event will an amendment reduce the interest in the Plan of any participant. The duties and responsibilities of the Committee include, but are not limited to the following: the right to appoint accountants, consultants, counsel, etc. as deemed necessary to administer the Plan, the right to determine benefits and resolve questions, and the right to settle any claims against the Plan. In order to obtain more information about the Plan and its administrators, participants may call (615) 665-7939 or write to the Committee, Primus Automotive Financial Services, Inc., One Burton Hills Boulevard, Suite 350, P.O. Box 150395, Nashville, Tennessee 37215 or call the Fidelity Retirement Benefits Line at 1-800-835-3361. 1 ERISA - ----- The Plan is a defined contribution plan described in Section 3(34) of ERISA. As such, the Plan is subject to the applicable provisions of Part 1 (Reporting and Disclosure), Part 2 (Participation and Vesting), Part 4 (Fiduciary Responsibility) and Part 5 (Administration and Enforcement) of Subtitle B of Title 1 of ERISA. The Plan is neither subject to Part 3 (Funding) of Subtitle B of Title 1 of ERISA nor subject to any of the provisions in Title IV (Pension Benefit Guaranty Corporation Plan Termination Insurance) of ERISA, because those portions of ERISA pertain to defined benefit plans described in Section 3(35) of ERISA. Because the Plan is not subject to Title IV of ERISA, there is no PBGC insurance for the Plan. Employees Who May Participate in the Plan - ----------------------------------------- A full-time employee becomes eligible to participate in the retirement savings section of the Plan (the pre-tax and company matching contributions) on the first day of the Plan Year quarter that follows the completion of twelve (12) months of service provided such employee has completed at least 1,000 hours of service for the Company during such one year period. Eligibility to contribute to the Plan is suspended during an unpaid leave of absence and during the one year period following a hardship withdrawal. Employees Who May Not Participate in the Plan - --------------------------------------------- Certain employees are not eligible to participate in the Plan, even if they satisfy the above eligibility requirements. Employees are not able to participate if they fall into one of the following categories: (i) members of collective bargaining units, unless the agreement makes the Plan available to the unit, (ii) leased employees (employees of outside contractors performing work for Primus). Contributing to the Retirement Savings Section of the Plan - ---------------------------------------------------------- Generally, ERISA states that participants may contribute the lesser of $30,000 or 25% of their annual compensation to the Plan; this includes all contributions made by the employee and the company. All participant contributions must be in multiples of 1% and must be made through payroll deductions. When you enroll in the Plan, you elect how much to save in pre-tax contributions or after-tax contributions, or both. You can save up to 11% as pre-tax contributions and up to an additional 4% as after-tax contributions. Under present law, the Company must limit the sum of contributions to the Plan (pre-tax contributions, after-tax contributions, and Company matching contributions) to the lower of $30,000 or 25% of your taxable compensation. 2 Federal law provides that the maximum amount of annual compensation that may be used for determining participant contributions under the Plan is $150,000, adjusted annually by the Internal Revenue Service ("IRS") to reflect cost of living increases. How to Contribute - ----------------- In order to contribute to the retirement savings section of the Plan, eligible participants must enroll by contacting the Fidelity Retirement Benefits Line. Participants will elect the percentage of their annual compensation they wish to contribute. The Fidelity Retirement Benefits Line generally provides 24-hour access to Plan account information and permits a variety of transactions to be initiated, toll-free, from any touch-tone telephone. Fidelity Representatives are available 15 1/2 hours a day from 8:30 a.m. to midnight (Eastern Time) on business days. The Plan can be managed almost entirely over the phone with the Fidelity Retirement Benefits Line. Forms will not be available for most transactions. To use the automated telephone system or speak to a representative, you should call: - Fidelity Retirement Benefits Line 1-800-835-3361 - From overseas, Call Collect 1-508-787-9444 - TTY Phone Line for the Hearing Impaired 1-800-610-4015 If a participant wishes to suspend contributions completely, (except for hardship) the Plan requires that contributions remain suspended for a period of at least one month. Your percentage of payroll deductions will be changed or stopped as soon as administratively feasible after notice is received by the Fidelity Retirement Benefits Line. Pre-Tax Contributions - --------------------- Pre-tax contributions are made to the retirement savings section of the Plan by the Company on behalf of a participant pursuant to a participant's Salary Savings Agreement. Generally, participants may contribute up to 11% of their annual compensation (which includes a participant's base pay, overtime and incentive compensation) on a pre-tax basis. However, there are some additional limitations: Federal law limits 1996 participant contributions on a pre-tax basis to $9,500 per year, adjusted annually by the IRS to reflect cost of living increases. The annual limit was $8,475 for 1991, $8,728 for 1992, $8,994 for 1993, $9,240 for 1994, $9,240 for 1995 and is raised to $9,500 for 1996. 3 Each year the Plan must pass certain nondiscrimination tests imposed by the IRS concerning the total participant contributions to the Plan on a pre-tax basis. In order to pass these tests, highly compensated employees (generally, those earning over $60,535 in 1991, over $62,345 in 1992, over $64,245 in 1993, over $66,000 in 1994, over $66,000 in 1995 and remains unchanged at $66,000 for 1996) are limited in the percentage they are permitted to contribute to the Plan. The Plan provides participants with various investment choices in which they may invest their pre-tax contributions. These choices under "Investment Funds" are described below. After-Tax Contributions - ----------------------- After-tax contributions are made to the Plan by way of payroll deductions. After-tax contributions must pass certain nondiscrimination tests imposed by the IRS. The Plan provides participants with various investment choices in which they may invest their after-tax contributions. These choices are described herein. Rollover Contributions - ---------------------- The Plan accepts rollovers from prior employers' qualified plans, provided such amounts are eligible for rollover treatment under Federal law. The prior employer or prior plan administrator must verify in writing to the Committee that the distribution is eligible for favorable tax treatment and must provide documentation that the prior plan was qualified. Also, the rollover must be completed within 60 days from receipt of the distribution. An individual may also accomplish a rollover to the Plan by making a "direct rollover" from a prior employer's qualified plan. A "direct rollover" is a direct transfer of benefits from one plan to another, in which the individual does not have the benefits in his or her direct possession. Rollover contributions, if any, are not matched and will be invested in accordance with the participant's election on the rollover authorization form, or if no election is made, in the same manner as the participant's current retirement savings contributions. When you are entitled to receive a distribution of benefits from the Plan, there are several special tax rules that you will need to consider. These rules are briefly discussed below and will be set forth in detail in a Special Tax Notice Regarding Plan Payments that you will be given prior to the date on which you decide how to receive your benefits from the Plan. If your payment from the Plan is an "eligible rollover distribution," then you must decide whether to have it paid directly to you or directly rolled over to another qualified plan or an individual retirement account ("IRA"). Generally, all distributions to you from the Plan will be "eligible rollover distributions," except the following: Non-taxable payments. In general, only the "taxable portion" of your Plan distribution is an eligible rollover distribution. Post-tax contributions to the Plan will be non-taxable when they are paid to you, and they cannot be rolled over. Note, however, that any earnings' on post-tax contributions would be taxable when distributed to you and, thus, would be treated as eligible rollover distributions. 4 Payments spread over long periods. You cannot roll over a payment if it is part of a series of equal (or almost equal) payments that are made at least once a year and that will last for your lifetime (or your life expectancy), or your lifetime and your beneficiary's lifetime (or life expectancies), or a period of ten years or more. Required Minimum Payments. Beginning in the year in which you reach age 70-1/2, a certain portion of your payment cannot be rolled over because it is a "required minimum payment" that must be paid to you. With regard to your eligible rollover distribution, the tax consequences to you will differ depending on whether you elect a direct rollover or a payment directly to you. If you elect a direct rollover, your payment will not be taxed in the current year and no income tax will be withheld. Also, your payment will be made directly to the IRA or qualified employer plan that you specify. Your payment will be taxed at a later time when you take it out of the IRA or the qualified employer plan. If, on the other hand, you choose to have your Plan benefits paid directly to you, you will receive only 80% of the payment because the Plan administrator is required to withhold 20% of the payment and send it to the IRS as income tax withholding to be credited against your taxes. Your payment will be taxed in the current year unless you decide to roll it over to an IRA or another qualified employer plan on your own. You may be able to use special tax rules (namely, five-year or ten-year averaging or capital gain treatment) that could reduce the amount of tax you owe. However, if you receive the payment before age 59-1/2, you may also have to pay an additional 10% tax. You can roll over the payment by contributing it to your IRA or to another qualified employer plan that accepts your rollover within 60 days of receiving the payment. The amount rolled over generally will not be taxed until you take it out of the IRA or the qualified employer plan. If you want to roll over 100% of the payment to an IRA or a qualified employer plan, you must find other money to replace the 20% that was withheld. If you roll over only the 80% that you receive, you will be taxed on the 20% that was withheld and that is not rolled over. There is a special rule for a payment from the Plan that includes a distribution of Ford Common Stock (see discussion below of Ford Stock Fund). If you qualify for this special rule, you may have the option of not paying tax on the "net unrealized appreciation" of the stock until you sell the stock. Net unrealized appreciation generally is the increase in the value of the Ford Common Stock represented by Ford Stock Fund units during the time they were credited to your Plan account. For example, if Ford Stock Fund units were contributed to your Plan account when Ford Common Stock was worth $l,000 but the stock was worth $1,200 when you received it, you would not have to pay tax on the $200 increase in the value until you later sold the stock. To qualify for this special rule regarding employer stock, you must receive, within one year, a lump sum distribution of your entire balance under the Plan (and other similar plans of the Company) that is payable to you because you have reached age 59-1/2 or have separated from service with the Company. You may also qualify for this special rule if the Ford Common Stock included in the payment to you is attributable to post-tax contributions you made under the Plan. 5 Company Matching Contributions - ------------------------------ The Company, at its discretion, may match the first 2% of a participant's pre-tax and/or after-tax contributions at the rate of 100% and the next 4% of a participant's pre-tax and/or after- tax contributions at the rate of 50%. Matching contributions, if any, are made at the same time as the participant's contributions and may be invested in a choice of fifteen investment funds and the Ford Stock Fund described below. Investment Funds - ---------------- The Plan provides a choice of sixteen investment funds: fifteen presently managed by Fidelity Management and Research Company and the Ford Stock Fund. Prospectuses or other information for these funds may be obtained by contacting the Fidelity Service Center. Investment returns for the investment funds available under the Plan are shown in the Performance History Sheet. This Performance History Sheet shall be updated quarterly. All participant contributions are invested according to their enrollment investment elections. Company contributions are invested consistent with a participant's elections. When participants originally enroll in the Plan they are sent information describing this procedure. Change to investment elections will be effective as of the close of business on any business day if the request is made prior to the close of the New York Stock Exchange (usually 4:00 p.m. Eastern Time) on that day. If a request is made after this time or on non-business days, such as weekends or holidays, new investment elections will be effective as of the close of business on the next business day. Contributions under the Plan may be invested in multiples of 1% of the participant's pre-tax annual compensation, with a minimum investment of 5% of the participant's contributions allocated to any individual fund available under the Plan. The price at which an individual has funds invested or divested from a particular investment Fund is determined based on the unit price of the Fund at the close of business on the day of the contribution or request to transfer into or out of the Fund if the request is made prior to the close of the New York Stock Exchange on that day. Otherwise as of the close of business on the next business day. The value of a unit of a particular Fund is generally determined by the dividends paid on shares of stock held by the Fund, gains or losses realized on sales of stock held by the Fund, appreciation or depreciation in the market price of stock held by the Fund, and interest on other investments held by the Fund. Responsibility Of Participants - ------------------------------ Under the Plan, each participant is solely responsible for the selection of the participant's investment option. Ford Motor Company, PRIMUS, the Trustee, any appointed Fiduciary, the Plan Administrator, the Fidelity Retirement Benefits Line, and employees and agents of PRIMUS are not empowered to provide investment advice. The fact that an investment option is available for investment under the Plan should not be construed as a recommendation for investment in that option. It should be noted that the market price and the rate of return on each investment option may fluctuate over time and in varying degrees. Accordingly, the proceeds realized from such investments, if any, will depend on the prevailing market price of the investments at a particular time, which may be more or less than the amount expended initially. There is no assurance that the investment options will achieve their objectives. 6 Ford Stock Fund - --------------- The Ford Stock Fund is essentially an investment in Ford Common Stock. The Fund provides participants an opportunity to become shareholders of Ford and to share in any growth in the value of Ford Common Stock. The goal of the Fund is to provide a return that closely corresponds to the total return on Ford Common Stock, including price changes and dividends. The Trustee invests Fund assets primarily in shares of Ford Common Stock (par value $1); a small portion is invested in short- term investments to provide liquidity for daily activity. Normally, stock transactions require a three-day waiting period between the day shares are sold on one of the stock exchanges and the day the proceeds of the sale are available. The short-term investments of the Fund provide immediate cash so that a trade can be completed on the day it is requested rather than three days later. On average, it is expected that about one to two percent of the Fund will be held in short-term investments, but the percentage may be higher or lower depending upon the expected liquidity requirements of the Fund. The inclusion of short term investments requires that the Fund be valued in units instead of shares of stock. Such units represent a proportionate interest in all of the assets of this Fund. The value of a unit of participation, which is referred to as the Net Asset Value or NAV, was $9.28 as of December 1, 1995. Fund assets will be expressed in units of the Fund with each unit representing a proportionate share of the value of the Fund. Dividends paid on Ford Common Stock will be used by the Trustee to acquire additional shares of Ford Stock. The number of units in your account will be increased to reflect the acquisition by the Trustee of those additional shares. Shares of Ford Common Stock required for the Plan may be acquired by the Trustee directly from Ford; or on the open market. Sales of shares of Ford stock will be made on the open market. Your proportionate interest in all shares of Ford Common Stock held by this Fund will be voted by the Trustee in accordance with such instructions as you may give to the Trustee pursuant to the provisions of the Plan. In the absence of such instructions such shares will be voted by the Trustee proportionately in the same manner as it votes the aggregate of all shares as to which instructions are received from other Plan members. Tendering of Ford stock held by the Fund in response to a tender offer shall be passed through to participants. A tender offer is generally an offer to buy shares of stock by a company made directly to the stockholders of another company. 7 Participants may elect to receive the portion of their account invested in the Ford Stock Fund in the form of stock certificates when they are eligible for a distribution from the Plan. The market value of the Fund will increase or decrease with the current market value of Ford Common Stock as traded on various stock exchanges and on dividends paid and other earnings. This Fund does not offer the diversification or portfolio management that mutual funds provide and as a result its value may fluctuate more than the other fund options. It may become necessary for the Trustee to limit or suspend transactions in the Fund temporarily because liquidity is insufficient to satisfy the requested volume of transactions, or for other reasons. Fidelity Retirement Government Money Market Portfolio - ----------------------------------------------------- A money market mutual fund with a goal to preserve your investment, keep a stable price and provide current income. This fund may be appropriate for participants who are seeking high- quality money market securities for which U. S. government or its agencies guarantee timely payment of principal and interest. Fidelity Intermediate Bond Fund - ------------------------------- This is an income mutual fund with a goal to provide high current income. It invests in U. S. and foreign bonds. Select bonds are considered medium to high quality with an average maturity of 3- 10 years. This fund may be appropriate for someone who is looking for income in the short term or to balance more growth- oriented choices in a portfolio. Fidelity Growth And Income Portfolio - ------------------------------------ This fund is a growth and income mutual fund with a goal to provide a high total return from a combination of current income and capital growth. It invests primarily in U. S. and foreign stocks that pay current dividends and show potential earnings growth. May also invest in some bonds. May be appropriate for the investor who is willing to ride out stock market ups and downs to try to get potentially high long-term return. 8 Fidelity Puritan Fund - --------------------- This fund is a growth and income mutual fund with a goal to provide income while preserving investment. It invests in a wide variety of U. S. and foreign securities. It includes all types of bonds of any quality as well as common and preferred stock. May be appropriate for someone looking for income and who plans to invest long term. Fidelity U.S. Equity Index Portfolio - ------------------------------------ This fund is a growth and income mutual fund with a goal to duplicate the composition and return of the Standard and Poor's composite index of 500 stocks. It invests primarily in the 500 companies that make up the S&P 500. May be appropriate for someone who wants to try to achieve roughly the same performance as the overall U. S. stock market. Fidelity Blue Chip Growth Fund - ------------------------------ This fund is a growth mutual fund with a goal to increase the value of the investment over the long term through capital growth. It invests primarily in common stocks of well known, established growth companies. May be appropriate for someone who prefers stocks of "household name" companies and established companies with strong earnings and future growth potential. Fidelity Contrafund - ------------------- This fund is a growth mutual fund with a goal to increase the value of investment over the long term through capital growth. It invests primarily in common stocks the funds manager believes are undervalued and also in companies that are currently out of public favor but show potential for capital growth. Such stocks may be subject to more frequent and greater price changes. May be appropriate for someone who wants to invest in the stock market over the long term and who is comfortable with the ups and downs of the stock market. Fidelity Growth Company Fund - ---------------------------- This fund is a growth mutual fund with a goal to increase the value of investment over the long term through capital growth. It invests primarily in stocks of companies with earnings or gross sales that indicate the potential for above average growth. May be appropriate for someone who is interested in capital growth rather than current income and is willing to ride out stock market ups and downs to try to get a higher return over the long term. Fidelity Magellan Fund - ---------------------- This fund is a growth mutual fund with a goal to increase the value of investment over the long term through capital growth. It invests primarily in common stocks of small, medium and large foreign and U.S. companies with investments that are broadly diversified across many different kinds of companies and industries. May be appropriate for someone who will be invested in the fund over the long term and who is comfortable with the ups and downs of the overall stock market. Fidelity OTC Portfolio - ---------------------- This fund is a growth mutual fund with a goal to increase the value of investment over the long term through aggressive capital growth. It invests primarily in stocks traded in the "over-the- counter" (OTC) market, but may also include preferred stocks, debt securities, and other types of investments. May be appropriate for someone who has a long term investing horizon and who is comfortable with the ups and downs of the stock market. 9 Fidelity International Growth And Income Fund - --------------------------------------------- This fund is a growth and income mutual fund that invests internationally with a goal to increase the value of investment over the long term through capital growth while also providing current income. It invests primarily in stock that the fund manager feels have growth possibilities. It will keep at least 25% of assets invested in bonds for income. Investments may be made in assets in one country but will generally be spread in investments across at least six different countries. May be appropriate for someone who wants to complement the performance of U. S. investments with that of investments overseas which may behave quite differently. Fidelity Overseas Fund - ---------------------- This fund is a growth mutual fund that invests internationally with a goal to increase the value of investment over the long term through capital growth. It invests primarily in stocks and bonds of companies whose principal business activities are outside the U. S. Sixty-five percent of the fund's total assets will be invested in securities from at least three different countries outside of North America. May be appropriate for someone who wants to complement the performance of U. S. investments with that of investments overseas which may behave differently. Fidelity Asset Manager - ---------------------- This fund is an asset allocation mutual fund with a goal to provide high total return with reduced risk over the long term. It invests in stocks, bonds and short term instruments of U.S. and foreign issuers including those in emerging markets. The manager of this fund may gradually shift assets from one type to another, based on the current outlook of the various markets. May be appropriate for someone who wants to diversify among stocks, bonds and short term instruments and who can tolerate ups and downs in share price, but does not want the burden of selecting individual securities. Fidelity Asset Manager: Growth - ------------------------------ This fund is an asset allocation mutual fund with a goal to provide high total return. It invests in stocks, bonds and short term instruments of U. S. and foreign issuers. The manager of the fund may gradually shift assets from one type to another based on the current outlook of various markets. May be appropriate for someone who wants to diversify among stocks, bonds and short-term instruments and who can tolerate ups and downs in share price but does not want the burden of selecting individual securities. Fidelity Asset Manager: Income - ------------------------------ This fund is an asset allocation mutual fund with a goal to provide high current income. It invests in stocks, bonds and short term instruments of U. S. and foreign issuers. The manager of the fund may gradually shift assets from one type to another based on the current outlook of the various markets. May be appropriate for someone who is looking for immediate income but who also wants the opportunity to benefit if the stock market does well. 10 Account Statements - ------------------ Fidelity Management Trust Company, the present trustee under the Plan, provides participants with printed statements of their accounts approximately 20 days after the close of each calendar quarter. Vesting - ------- Participants become vested in the value of all Company contributions and earnings on those contributions based upon the number of years of vesting service of a participant. Company contributions are based on the pre-tax and/or after-tax contributions of the participant. The Company matching contributions vest according to the following schedule: Years of Vesting Service Vesting Percentage ------------------------ ------------------ 1 year 20% 2 years 50% 3 years 100% Participants who leave the Company prior to completing three years of vesting service will be treated as fully vested in the Company's contributions if one of the following occurs: The participant becomes permanently and totally disabled and qualifies for benefits under the Long-Term Disability Plan. The participant dies while employed by the Company. Generally, vesting service is measured from the starting date of employment until the date the employee leaves the Company. Fractional years are not counted in determining vesting service. If an employee terminates employment with the Company and later rejoins the Company, all service before and after the period of absence will be added together. If a former participant is rehired within 12 months after the date he/she terminated employment, he/she will also be given credit for vesting service during the period of absence. Forfeitures of Non-Vested Amounts - --------------------------------- If participants terminate employment before they are fully vested, they will forfeit their right to any non-vested balance of the Company contributions. 11 However, if they are re-employed before incurring a "five year break in service" and have not received a distribution of their vested account balance, the amount previously forfeited will be credited to their account. If participants are reemployed before incurring a five year break in service and received a distribution of their vested account balances, they may "buy back" the non-vested balance within five years of reemployment. More information regarding the "buy back" process may be obtained from Compensation / Benefits Planning and Personnel Services Department in Nashville. For these purposes, a "five year break in service" consists of five consecutive 12-month periods beginning on the date an employee terminates employment with the Company. Certain approved leaves of absence will not cause a break in service period to begin unless the participant does not return when the approved leave is over. Withdrawals While Employed - -------------------------- The Plan allows you to make withdrawals from your Prime Account with restrictions. Withdrawal rules vary depending on the type of assets involved, your age, and other factors. If you withdraw Elective Deferral Account assets and are not partially vested, you will forfeit the related Participating Employer Contribution account assets. Company Matching Contribution Account - ------------------------------------- You may withdraw all or a portion of your vested Company Matching Contributions assets. In addition, you may withdraw all or a portion of your earnings associated with vested Company Matching Contributions assets. Elective Deferral Account (Pre-Tax Contributions) - ------------------------------------------------ You may withdraw all or a portion of your Elective Deferral Account assets anytime after you reach the age of 59-1/2 or terminate employment or have an approved financial hardship. The requirements for a financial hardship are: You must have an immediate and heavy financial need. The distribution must be necessary to satisfy such financial need. The amount of hardship withdrawal cannot be in excess of the heavy financial need. The following expenses are deemed to constitute immediate and heavy financial needs: Deductible medical expenses incurred by you, your spouse, or any of your dependents. The purchase (excluding mortgage payments) of your principal residence. 12 Tuition for the next semester or quarter of post secondary education for you, your spouse, children or dependents. The payment of amounts necessary to prevent your eviction from your principal residence, or foreclosure on the mortgage of your principal residence. Hardship withdrawals are limited to the value of your Elective Deferral Account contributions made after December 31, 1988 but not earnings on these contributions. If your hardship is approved, you will be prohibited from making Elective Deferral Account (pre-tax) contributions to the Plans of the Company for 12 months, through payroll deduction or any other type of compensation. Payroll deductions will be restarted 12 months later if you re-enroll in the Plan. If you're considering a hardship withdrawal, contact Compensation / Benefits Planning and Personnel Services Department for more information. After-Tax Contributions - ----------------------- You may withdraw all or a portion of your after-tax contributions assets. There is no suspension in Plan participation for a withdrawal of after-tax contributions. Benefits Paid Upon Termination - ------------------------------ Generally, any distribution of pre-tax contributions of a participant, Company contributions or earnings credited to your account will be subject to income tax upon your receipt of a distribution under the Plan following termination of employment. In addition, as a general rule, any distribution after termination of employment of taxable amounts that are made before age 59-1/2 will be subject to an additional penalty tax of 10% unless rolled over into an IRA or another qualified plan. For these reasons, participants are encouraged to consult their tax advisor about the tax impact of a distribution. The discussion above under the section entitled Rollover Contributions is also relevant here. If you separate from employment before your retirement, death or disability, you may request early payment of the vested portion of your Prime Account balance by submitting a written request to the Compensation Benefits Planning and Personnel Services Department in Nashville. If the vested portion of your Prime Account balance at the time of termination exceeds $3,500, you may defer the payment of your benefit until April 1 of the calendar year following the calendar year during which you attain age 70-1/2. Even if you initially elect to defer your benefit payment, you may change your election at any time and request immediate payment of the vested portion of your Prime Account balance. The Company has the option to pay immediately any vested portion of your Prime Account balance not in excess of $3,500. The portion of your Prime Account balance to which you are not vested is called a "forfeiture" and remains in the Plan to reduce future employer contributions to the Plan. The value of the benefit and the manner and time of payment are determined by the following rules: 13 The participant may elect to receive this balance as a lump-sum distribution. 20% of the taxable portion of the distribution will be withheld to cover Federal income taxes. The participant may elect to directly roll over the taxable portion of the distribution into an IRA or another qualified plan. The participant may elect to receive part of the distribution paid directly to him/her (with 20% of the taxable portion of the distribution withheld for Federal income taxes) and elect to directly roll over the remaining taxable portion of the distribution to an IRA or another qualified plan. The participant may elect to receive Ford common stock certificates representing the portion of their account invested in the Ford Stock Fund. The participant may elect to defer payment until age 65. Generally, the amount of the distribution (i.e., the value of the account) will be determined at the time the payment is processed. Participants with outstanding loan balances at termination should read the section below entitled "Loans From the Plan." Death Benefits - -------------- Beneficiaries are designated on a form provided by Compensation / Benefits Planning and Personnel Services Department in Nashville. If participants are married, they must designate their spouse unless the spouse consents in writing to the naming of another beneficiary. If no designated person survives, the beneficiary will be the estate of the participant. The beneficiary will be able to choose the payment in cash, whole shares or a combination. The account balance will be paid to the beneficiary as soon as administratively possible. Compensation / Benefits Planning and Personnel Services Department must receive a distribution form and death certificate to process the distribution. Loans From the Plan - ------------------- Participants may obtain a loan from the Plan, but the total of all a participant's loans may not exceed the lesser of: a. 1/2 of the vested balance in the participant's Prime Account, or b. $50,000 14 The Plan also requires the minimum amount of any loan to be at least $1,000. The number of loans outstanding at any time is limited to two. The term of any loan is from one to five years. However, if the proceeds of the loan are to be used to purchase a primary residence, the term of the loan may be extended to 10 years. For terms over five years, participants are required to submit complete documentation regarding the purchase of the home. Loan interest rates are set monthly but will not change during the term of the loan. The interest rate will be the prime rate as quoted in The Wall Street Journal in the "Money Rates" section of the paper as of the last business day of the month preceding the month in which the loan is taken. If more than one rate is quoted in The Wall Street Journal on the day the loan rate is set, the lowest rate will be used. Every loan applicant will receive a clear statement of charges involved in each loan transaction. This statement will include the dollar amount and interest rate of the finance charge. The loan repayments (principal plus interest) are deducted from the participant's paycheck and deposited into the participant's loan account as provided in the Plan. Participants may pay off their loans in full at any time without penalty. No partial prepayments are allowed. Missed payments must be made up in one of two ways: 1.) Payments may be made through payroll deductions; 2.) By payment in full by the participant of a lump-sum amount. Upon termination of employment, the outstanding loan balance will be automatically deducted from the final distribution, but the participant may owe taxes on all or part of this amount. The amount of the loan is funded from the participant's Elective Deferral Account. The outstanding account balance following distribution of the loan proceeds will not be invested in any of the investment options, but rather will be earning interest for the participant's account at the stated interest rate until repaid in full or total account liquidation. Loan proceeds and repayments are taken from and repaid to the participant's Elective Deferral Account on a pro-rata basis. A loan from the Plan is generally not taxable. However, if the participant does not make the payments as scheduled, the loan may be considered in default. In addition, Federal laws require that the Plan treat certain defaults as distributions from the Plan, which may have tax and penalty implications for the participant. If the participant leaves the Company before the loan is fully repaid, the outstanding loan balance will be added to the present Prime Account balance and will be subject to taxes and possibly early distribution penalties, even though the loan balance was not paid in cash to the participant at the time of the participant's termination. 15 Participants may obtain loans by calling the Fidelity Retirement Benefits Line. Terms of the loan will be discussed at that time. You must speak with a Fidelity Retirement Benefits representative if you wish to specify the order in which your assets will be sold proportionately from each investment option. Your loan will be effective as of the close of business on any business day if your request is made prior to the close of the New York Stock Exchange (usually 4:00 p.m. Eastern Time) on that day. A business day is any day that the New York Stock Exchange is open. Plan Administration - ------------------- Contributions to the Plan are placed in an independent trust fund, which is administered by the Trustee. It is the responsibility of the Trustee, currently Fidelity Management Trust Company, to administer all funds under the Plan. These funds are then invested for the benefit of the Plan participants. All or a portion of the contributions made by the Company for Plan participants who do not become fully entitled to (i.e., 100% vested in) a benefit remain in the trust fund to reduce Plan costs. Neither the Plan nor the Plan administrator will be responsible for errors in contribution percentage or allocation of investments designated by the employee unless Compensation / Benefits Planning and Personnel Services Department in Nashville is notified within 60 days after receipt by the participant of the applicable confirmation or regular periodic statement, whichever is earlier, which contains the error. No errors in contributions may be corrected after the close of the tax year applicable to such contributions. The Plan is a self-directed Plan, meaning that each participant directs the investment of his or her account among the authorized investment funds. Neither the Trustee nor the Company will be responsible for losses on investments. Tax Consequences to the Company - ------------------------------- The Company is currently entitled to deduct on its tax return the amounts that it contributes as Company matching contributions to the Plan because of the Plan's qualified status under Section 401(a) of the Internal Revenue Code of 1986, as amended. Benefits and Claim Procedure - ---------------------------- Benefits under the Plan are solely for participants, and generally a participant may not assign or hypothecate his or her interest in the Plan. Also, a participant may not create a lien on any funds, securities, or other property held by the Plan. However, the Plan must honor qualified domestic relations orders in assigning benefits for a divorce settlement or for child support payments. The Committee may request that participants file written claims and provide certain information before they receive benefits. If the Committee denies the claim in whole or in part, the Committee will send the participant or participant's beneficiary a notice that will include: 16 Specific reasons for denial; Specific references to plan provisions that were considered in the denial; A description of additional material or information needed and why it is needed to approve the request; and Information about how to request a review (described below). The notice will be sent within 90 days after the claim is received. If the notice is not received within this time, a participant may request to have the Committee review the decision. When a claim has been denied by the Committee, the participant or the participant's beneficiary may: Submit a written application to have the claim reviewed; Review any documents that may have affected the Committee's decision; or Submit issues and comments in writing. The participant or the participant's beneficiary must submit the review application within 60 days after the claim has been denied. The written application should be sent to Compensation / Benefits Planning and Personnel Services Department in Nashville at: Primus Automotive Financial Services, Inc. One Burton Hills Boulevard P.O. Box 150395 Suite 350 Nashville, Tennessee 37215 Compensation / Benefits Planning and Personnel Services Department will answer any questions the participant or the participant's beneficiary may have and forward the application to the Committee. The Committee will normally consider claim reviews at its next scheduled meeting; however, if the application is received less than 30 days prior to the next meeting, then the review will be made at the second meeting after receipt of the application. If a hearing is required, the Committee will consider the review at its next meeting after the hearing, but not later than the third quarterly meeting 17 after the application is received. When the Committee requires an extension of time, the participant or the participant's beneficiary will be notified of such in writing. The extension will not be longer than the original period for review. Once the Committee has made a decision on the review, the participant or the participant's beneficiary will be notified of such in writing. This notice will include specific reasons (and references to plan provisions) for the denial, and will be sent as soon as reasonably possible, but generally within 30 days of the date the Committee has made a decision on the review. If after the above has taken place the participant or beneficiary feels he or she was wrongly denied benefits, he or she may file suit in the appropriate court. Other Information Required by Securities Laws The following documents filed or to be filed with the Securities and Exchange Commission are incorporated herein by reference: Ford's and the Plan's latest annual reports filed pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "1934 Act") which contain, either directly or by incorporation by reference, certified financial statements for Ford's latest fiscal year for which such statements have been filed. All other reports filed pursuant to Sections 13(a) or 15(d) of the 1934 Act since the end of the fiscal year covered by the annual report referred to in the preceding paragraph. The description of Ford's Common Stock contained in Registration No. 33-43085 filed by Ford under the Securities Act of 1933. All documents subsequently filed by Ford pursuant to Sections 13(a), 13(c), 14, and 15(d) of the 1934 Act, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which de-registers all securities then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing such documents. Ford will provide without charge to each individual to whom a copy of this material is delivered, upon written or oral request of such individual, a copy of any and all of the information that has been incorporated by reference in this material (not including exhibits to the information that is incorporated by reference unless such exhibits are specifically incorporated by reference into the information that this material incorporates) and any other documents required to be delivered to participants. Written or telephone requests for such information should be directed to: Ford Motor Company Stockholder Relations Department P.O. Box 1899 Dearborn, Michigan 48121-1899 Telephone (313) 845-8540. 18 Trustee And Recordkeeper - ------------------------ The Plan Trustee is Fidelity Management Trust Company, and the recordkeeping and administrative services will be provided by Fidelity Institutional Retirement Services Company, Inc. Their address are: Fidelity Management Trust Company 400 Puritan Way Marlborough, MA 01752 Fidelity Institutional Retirement Services Company, Inc. 300 Puritan Way Marlborough, MA 01752 Administrative Charges Against Investment Funds and/or Plan - ----------------------------------------------------------- There are no fees for any of the investment options at the time of purchase, and any normal sales charge or "load" of any fund offered under the Plan will be waived. However, all of the investment options have management fees and other operating expenses associated with them. PRIMUS will pay all fees and expenses of the Ford Stock Fund relating to the Plan. All other fees and expenses are deducted from the assets of the particular fund. The management fees, operating expenses, and other charges associated with the mutual funds are explained in each of the fund's individual prospectus. Participants should request and read the mutual fund's prospectus prior to making a decision involving that fund. You may obtain a prospectus by contacting the Fidelity Retirement Benefits Line at 1-800-835-3361. Other ERISA Information - ----------------------- The Plan is subject to certain provisions of the Employee Retirement Income Security Act (ERISA) of 1974, as amended, including generally, the reporting and disclosure, participation and vesting, fiduciary responsibility, and administration and enforcement provisions in Title I of ERISA. The Plan is also qualified under Section 401 (a) of the Internal Revenue Code of 1986, as amended. The Plan is intended to constitute a plan described in Section 404 (c) of ERISA. The fiduciaries of the Plan are relieved of liability for any losses which are the direct and necessary result of investment instructions given by participants in the Plan. As a participant in the Plan you are entitled to certain rights and protection under ERISA. ERISA provides that all participants shall be entitled to: 19 Examine, without charge, at the Plan administrator's office and at other specified locations all Plan documents, including any insurance contracts and copies of all documents filed by the Plan with the U.S. Department of Labor, such as detailed annual reports and Plan descriptions. Obtain copies of all Plan documents and other Plan information upon written request to the Plan administrator. The administrator may make a reasonable charge for the copies. Receive a summary of the Plan's annual financial report. The Plan administrator is required by law to furnish each participant with a copy of this summary annual report. Obtain a statement telling you whether you have a right to receive a pension at normal retirement age under the plan (age 65) and if so, what your benefits would be at normal retirement age if you stop working now. If you do not have a right to a pension, the statement will tell you how many more years you have to work to receive a pension. This statement must be requested in writing and is not required to be given more than once a year. The Plan must provide the statement free of charge. The only entity sponsoring the Plan is the Company. If you are uncertain of whether an entity sponsors the Plan, you may contact Compensation / Benefits Planning and Personnel Services Department in Nashville for clarification. The Company's employer identification number (EIN) is 16-0998154, and the Plan number is 002. The Committee is the agent for service of legal process and the address on page 1 hereof is to be used for such service. Service of legal process may also be made on the trustee or the Plan administrator. In addition to creating rights for participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate the Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including the Company or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension benefit or exercising your rights under ERISA. If your claim for a pension benefit is denied in whole or in part you must receive a written explanation of the reason for the denial. You have the right to have the Committee review and reconsider your claim. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Committee and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the Plan administrator to provide the materials and pay you up to $100 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit. If it should happen that Plan fiduciaries misuse the investments made under the Plan, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. If you have any questions about your Plan, you should contact the Plan administrator. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest Area office of the U.S. Labor-Management Services Administration, Department of Labor. Public Disclosure Room, N 5507 Pension & Welfare Benefit Administration U.S. Department of Labor 200 Constitution Avenue, NW Washington DC, 20210 21 EX-4.2 3 TRUST AGREEMENT Between PRIMUS AUTOMOTIVE FINANCIAL SERVICES, INC. And FIDELITY MANAGEMENT TRUST COMPANY PRIMUS AUTOMOTIVE FINANCIAL SERVICES, INC. PRIME ACCOUNT TRUST Dated as of December 29, 1995 -i- TABLE OF CONTENTS Section Page 1. Definitions...................................................... 2 2. Trust............................................................ 4 (a) Establishment of Trust (b) Trust Property 3. Exclusive Benefit and Reversion of Company Contributions......... 5 4. Investment of Trust.............................................. 5 (a) Selection of Investment Options (b) Available Investment Options (1) Fidelity Mutual Funds (2) Ford Stock Fund (3) Loans to Participants (c) Trustee Powers 5. Participant Directions.......................................... 10 (a) Investments (b) Disbursements 6. Recordkeeping and Administrative Services to Be Performed....... 11 (a) General (b) Accounts (c) Inspection and Audit (d) Effect of Plan Amendment (e) Returns, Reports and Information (f) Allocation of Plan Interests 7. Compensation and Expenses....................................... 12 8. Directions and Responsibility................................... 13 (a) Directions from Company or Administrator (b) Conduct (c) Co-Fiduciary Liability (d) Responsibility (e) Survival 9. Resignation or Removal of Trustee............................... 15 (a) Resignation (b) Removal -ii- TABLE OF CONTENTS (Continued) Section Page 10. Successor Trustee.............................................. 15 (a) Appointment (b) Acceptance (c) Corporate Action 11. Termination................................................... 16 12. Resignation, Removal, and Termination Notices................. 16 13. Duration...................................................... 16 14. Amendment or Modification...................................... 16 15. General........................................................ 17 (a) Performance by Trustee, its Agents or Affiliates (b) Entire Agreement (c) Waiver (d) Successors and Assigns (e) Partial Invalidity (f) Section Headings 16. Governing Law.................................................. 18 (a) Massachusetts Law Controls (b) Which Agreement Controls 17. Plan Qualifications........................................... 18 Schedules A. Recordkeeping and Administrative Services B. Fee Schedule C. Investment Options D. IRS Determination Letter or Opinion of Counsel E. Telephone Exchange Guidelines F. Signature Authorization -1- TRUST AGREEMENT, dated as of the 29th day of December, 1995, between PRIMUS Automotive Financial Services, Inc., a New York corporation, having an office at One Burton Hills Blvd., Suite 350, Nashville, Tennessee 37215 (the "Company"), and FIDELITY MANAGEMENT TRUST COMPANY, a Massachusetts trust company, having an office at 82 Devonshire Street, Boston, Massachusetts 02109 (the "Trustee"). WITNESSETH: WHEREAS, the Company is the sponsor of the PRIMUS Automotive Financial Services, Inc. Prime Account (the "Plan") and the PRIMUS Automotive Financial Services, Inc. Prime Account Committee (the "Named Fiduciary") is the named fiduciary (within the meaning of Section 402(a) of ERISA), for the Plan; and WHEREAS, the Trustee has been appointed as Trustee by the Company under the Plan; and WHEREAS, the Company desires to establish a Trust for the purpose of holding and investing Plan assess under the Plan for the exclusive benefit of participants in the Plan and their beneficiaries; and WHEREAS, the Company may in the future adopt savings plans and subsidiaries and affiliates of the Company may adopt, in the future, savings plans under which assets may appropriately be included in the Trust with the consent of the Company and the Trustee; and WHEREAS, the Trustee is willing to hold and invest such assets of the Plan and of other such plans in the future; and NOW THEREFORE, in consideration of the foregoing premised and the mutual covenants and agreements set forth below the Company and the Trustee agree as follows: -2- Section 1. Definitions. The following terms as used in this Trust Agreement have the meaning indicated unless the context clearly requires otherwise: (a) "Administrator" shall mean, with respect to the Plan, PRIMUS Automotive Financial Services, Inc. (b) "Agreement" shall mean this Trust Agreement, as the same may be amended and in effect from time to time. (c) "Code" shall mean the Internal Revenue Code of 1986, as it has been or may be amended from time to time. (d) "Company" shall mean PRIMUS Automotive Financial Services, Inc., or any successor to all or substantially all of its businesses which, by agreement, operation of law or otherwise, assumes the responsibility of the Company under this Agreement. (e) "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as it has been or may be amended from time to time. (f) "Fidelity Mutual Fund" shall mean any investment company advised by Fidelity Management & Research Company (or any of its affiliates) which is listed on Schedule "A". (g) "Ford Stock" shall mean the publicly-traded common stock of the Ford Motor Company which meets the requirements of section 407(d)(5) or ERISA with respect to the Plan. (h) "Ford Stock Fund" shall mean the investment option in which investments of Ford Stock are made. -3- (i) "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 perform investment management service under the laws of more than one state. (j) "Trust" shall mean the trust established by the Company and the Trustee pursuant to the provisions of this Agreement. (k) "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 10(c). The term Trustee shall also include any successor trustee appointed pursuant to Section 10 to the extent such successor agrees to serve as Trustee under this Agreement. (l) "Participant" shall mean, with respect to the Plans, any employee (or former employee) 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. (m) "Participant Recordkeeping Reconciliation Period" shall mean the period beginning on the date of the initial transfer of assets to the Trust and ending on the date of the completion of the reconciliation of Participant records. (n) "Plan" shall mean the PRIMUS Automotive Financial Services, Inc.'s qualified plan designated in the recitals and shall include such other qualified defined contribution plans which are maintained by the Company or any of its subsidiaries or affiliates for the benefit of their eligible employees as may be designated by the Company in writing to the Trustee as a Plan hereunder. Each reference to "a Plan" or "the Plans" 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. -4- (o) "Reporting Date" shall mean the last day of each calendar quarter, the date as of which the Trustee resigns or is removed pursuant to Section 9 hereof and the date as of which this Agreement terminates pursuant to Section 11 hereof. Section 2. Trust. (a) Establishment of Trust. The Company hereby establishes the PRIMUS Automotive Financial Services, Inc. Prime Account Trust (the "TRUST") with the Trustee. The Company hereby appoints the Trustee as trustee and the Trustee hereby accepts the trust on the terms and conditions hereinafter set forth. In accepting the Trust, the Trustee shall be accountable for the assets received by it, subject to the terms and conditions of this Agreement. (b) Trust Property. The Trust shall consist of money or other property acceptable to the Trustee, in its sole discretion, that (i) are transferred to it by Comerica Bank, predecessor trustee under the Plan (ii) are paid to it by the Company in the forms of additional sums of money or Ford Stock or other property acceptable to the Trustee, (iii) are paid to it by the Company or by participants to the Plan as contributions to the Plan or that may be rolled over in cash by an eligible employee from the plan of such employee's prior employer of from a "conduit IRA", pursuant to the provisions of any plan participating in the Trust and the provisions of the Summary Plan Description applicable to such plan, and (iv) all earnings and payments that are made by the Trustee as provided herein. Section 3. Exclusive Benefit and Reversion of Company Contributions. Except as provided under applicable law and the provisions of each of the plans participating in the Trust, no part of the Trust allocable to the Plan participating in the Trust may be used for, or diverted to, purposes other than the exclusive benefit of the Participants in such Plan or their beneficiaries or other person entitled thereto prior to the satisfaction of all liabilities with respect to the Participants and their beneficiaries. -5- Section 4. Investment of Trust. (a) Selection of Investment Options. The Trustee shall have no responsibility for the selection of investment options under the Trust, and shall not render investment advice to any person in connection with the selection of such options. (b) Available Investment Options. The Company shall direct the Trustee as to what investment options: (i) the Trust shall be invested during the Participant Recordkeeping Reconciliation Period, and (ii) the investment options in which Participants may invest in the following such period, subject to the limitations described in this Section 4. The Company may determine to offer as investment options: (i) Fidelity Mutual Funds, (ii) Ford Stock, (iii) Notes evidencing loans to Participants in accordance with the terms of the Plan. The investment options selected by the Company are identified on Schedule "A" attached hereto and in the Summary Plan Description provided to plan Participants. The Company may add, delete or substitute additional investment options upon mutual amendment of this Trust Agreement and the Schedules thereto to reflect such additions. (1) Fidelity Mutual Funds. The Company hereby acknowledges that it has received from the Trustee a copy of the prospectus for each Fidelity Mutual Fund selected by the Company as a Plan investment option. Trust investments in Fidelity Mutual Funds shall be subject to the following limitations: (i) Execution of Purchases and Sales. Purchases of Fidelity Mutual Funds with contributions made by the Company or Participants (other than for exchanges) shall be made on the date on which the Trustee receives from the Company in good order the information and documentation necessary to accurately effect such purchases or, if later, the date on which the Trustee has received a wire transfer of funds necessary to make such purchase. Exchanges or sales of Fidelity Mutual Funds shall be made at the direction of Participants in accordance with the Telephone Exchange Guidelines attached hereto as Schedule "E". -6- (ii) Voting. At the time of mailing of notice of each annual or special stockholders' meeting of any Fidelity Mutual Fund, the Trustee shall send a copy of the notice and all proxy solicitation material to each Participant who has shares of the Fidelity Mutual Fund credited to the Participant's accounts, together with a voting directions form for return to the Trustee or its designee. The participant shall have the right to direct the Trustee as to the manner in which the Trustee is to vote the shares credited to the Participant's accounts (both vested and unvested). The Trustee shall vote the shares only as directed by the Participant. With respect to all rights other than the right to vote, the Trustee shall follow the directions of the Participant. (2) Ford Stock Fund. To the extent that the Named Fiduciary selects Ford Motor Company stock as an investment option, the Company hereby directs the Trustee to invest and participate in the Ford Stock Fund maintained under and in accordance with the Ford Defined Contributions Plans Master Trust dated as of September 30, 1995, subject to the consents of Ford Motor Company. The Trustee hereby acknowledges and consents to such direction, and agrees to provide Company with written notice of any change in the Ford Stock Fund. The Trustee shall provide the Company with a monthly Trial Balance Report which presents the amount of Ford Stock allocable to the Company's Plan. (i) Voting. Notwithstanding any other provision of this Agreement, the provisions of this Section shall govern the voting of Ford Stock. The Company, after consultation with the Trustee, shall provide and pay for all printing, mailing, tabulation and other costs associated with the voting of Ford Stock. (a) When the Company prepares for any annual meeting, the Company shall notify the Trustee 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 Trustee. Based on these materials the Trustee shall prepare a voting instruction form. At the time of mailing of notice of each annual or special stockholders' meeting of the issuer of the Ford Stock, the Trustee shall cause a copy of the notice and all proxy solicitation materials to be sent to each Participant, together with the foregoing voting instruction form to be returned to the 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. -7- (b) Each Participant shall have the right to direct the Trustee as to the manner in which the Trustee is to vote that number of shares of Ford Stock attributable to the Participant's interest in the Ford Stock Fund. Directions from a Participant to the Trustee concerning the voting of Ford Stock shall be communicated in writing, or by mailgram or similar means as determined by the Trustee. These directions shall be held inconfidence by the Trustee and shall not be divulged to the Company, or any officer or employee thereof, or any other person. Upon its receipt of the directions, the Trustee shall vote the shares of Ford Stock as directed by the Participant. The Trustee shall vote shares of Ford Stock credited to a Participant's accounts for which it has received no directions 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. (ii) General. With respect to all rights other than the right to vote, in the case of Ford Stock credited to a Participant's accounts, the Trustee shall follow the directions of the Participant. (iii) Conversion. All provisions in this Section 4(b)(2) shall also apply to any securities received as a result of a conversion of Ford Stock. (3) Loans to Participants (i) To originate a Participant loan, the Plans participant shall direct the Trustee as to the term and amount of the loan to be made from the Participant's individual account. Such directions shall be made by Plan Participants by use of the telephone exchange system maintained for such purpose by the Trustee or its agent. The Trustee shall determine, based on the current value of the Participant's account on the date of the request and any guidelines provided by the Company, the amount available for the loan. Based on the interest rate supplied by the Company in accordance with the terms of the Plan the Trustee shall advise the Participant of such interest rate, as well as the installment payment amounts. In the case of Participant -8- residential loans, the Trustee shall forward the loan document for the Participant for execution and submission for approval to the Trustee. The Trustee shall distribute the loan note with the proceeds check to the Participant. The Trustee also shall distribute truth-in-lending disclosure to the Participant. To facilitate recordkeeping, the Trustee may destroy the original of any promissory note made in connection with a loan to a Participant under the Plans, provided that the Trustee first creates a duplicate by a photographic or optical scanning or other process yielding a reasonable facsimile of the promissory note and the Plan Participant's signature thereon, which duplicate may be reduced or enlarged in size from the actual size of the original promissory note. (ii) Principal and interest payments on Participant loans shall be remitted to the Trustee (1) by the Company in the case of active employees, (2) directly from former employees in other cases. (iii) The Administrator shall continue to hold Participant loan notes issued before the effective date of this Agreement as agent for the Trustee. (c) Trustee Powers. The Trustee shall have the following powers and authority: (i) Subject to the limitations imposed by this Section 4, to sell, exchange, convey, transfer, or otherwise dispose of any property held in the Trust, by private contract or at public auction. No person dealing with the Trustee shall be bound to see to the application for the purchase money or other property delivered to the 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 4, and short term investments (including interest bearing accounts with the Trustee or money market mutual funds advise by affiliates of the Trustee) and in collective investment funds maintained by the Trustee for qualified plans, in which case the provisions of each collective investment fund in which the Trust is invested shall be deemed adopted by the Company and the provisions thereof incorporated as a part of this Trust as long as the fund remains exempt from taxation under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as amended. -9- (iii) To cause any securities or other property held as part of the Trust to be registered in the Trustee's own name, in the name of one or more of its nominees, or in the 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 Trustee shall at all times show that all such investments are part of the Trust. (iv) To borrow funds from a ban not affiliated with the Trustee in order to provide sufficient liquidity to process Plan transactions in a timely fashion, provided that the cost of such borrowing shall be allocated in a reasonable fashion to the investment funds(s) in need of liquidity. (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 the Company, to settle, compromise, or submit to arbitration any claims, debts, or damages due to or arising from the Trust; to commence or defend suits or legal or administrative proceedings; to represent the Trust in all suits and legal administrative hearings; and to pay all reasonable expenses arising from any such action, from the Trust if not paid by the Company. (vii) To do all other acts although not specifically mentioned herein, as the Trustee may deem necessary to carry out any of the foregoing powers and the purposes of the Trust. Section 5. Participant Directors. (a) Investments. Each Participant shall be responsible for directing the 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 maintained for such purposes by the Trustee or its agent, in accordance with written Telephone Exchange Guidelines attached hereto as Schedule "E". In the event that -10- the Trustee fails to receive a proper direction, the assets shall be invested in the Fidelity Retirement Government Money Market Portfolio while the Trustee seeks a proper direction. The Trustee shall not be liable for any loss, or by reason of any breach, which arises from the 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 Trustee to make benefit payments or Participant loans in accordance with the procedures set forth on Schedule "A". The 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 6. Recordkeeping and Administrative Services to be Performed. (a) General. The Trustee or Fidelity Investments Retirement Services Company, an affiliate of the Trustee, shall perform those recordkeeping and administrative functions described in Schedule "A" attached hereto. These recordkeeping and administrative functions shall be performed within the framework of the Company's written directions regarding the Plan's provisions, guidelines and interpretations. (b) Accounts. The 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 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 Trustee, or the termination of this Agreement, the Trustee shall file with the Company a written account setting forth all investments, receipts, disbursements, and other transactions effected by the 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 reburied under ERISA, upon the expiration of eight (8) months from the date of filing such account with the Company, the 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 the Company shall within such eight (8) month period file with the Trustee written objections. -11- (c) Inspection and Audit. All records generated by the Trustee in accordance with paragraphs (a) and (b) shall be open to inspection and audit, during the Trustee's regular business hours prior to the termination of this Agreement, by the Company or any person designated by the Company. Upon the resignation or removal of the Trustee or the termination for this Agreement, the Trustee shall provide to the Company, at no expense to the Company, in the format regularly provided to the Company, a statement of each Participant's accounts as of the resignation, removal, or termination, and the Trustee shall provide to the Company or the Plan's new recordkeeper such further records as are reasonable, at the Company's expense. (d) Effect of Plan Amendment. The Trustee's provision of the recordkeeping and administrative services set forth in this Section 6 shall be conditioned on the Company delivering to the Trustee a copy of any amendment to the Plan as soon as administratively feasible following the amendment's adoption, with, if requested, an IRS determination letter or an opinion of counsel substantially in the form of Schedule "D" covering such amendment, and on the Company providing the Trustee on a timely basis with all the information the Company deems necessary for the Trustee to perform the recordkeeping and administrative services and such other information as the Trustee may reasonable request. (e) Returns, Reports and Information. The Company shall be responsible for the preparation and filing of all returns, reports, and information required of the Trust or Plan by law. The Trustee shall provide the Company with such information as the Company may reasonably request to make these filings. (f) Allocation of Plan Interests. All transfers to, withdrawals from or other transactions regarding the Trust shall be conducted in such a way that the proportionate interest in the Trust of the Plan and the fair market value of the interest may be determined at any time. -12- Section 7. Compensation and Expenses. Within thirty (30) days of receipt of the Trustee's bill, which shall be computed and billed in accordance with Schedule "B" attached hereto and made a part hereof, as amended from time to time, the Company shall send to the Trustee a payment in such amount or, to the extent that the Plan may permit, the Company may direct the Trustee to deduct such amount from Participant's account. All expenses of the Trustee relating directly to the acquisition and disposition of investments constituting part of the 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 Trust or the income thereof, shall be a charge against and paid from the appropriate investment option. Section 8. Directions and Responsibility. (a) Directions from Company or Administrator. The Company 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 communication signed by the Vice President Human Resources, the Secretary, or an Assistant Secretary of the Company and shall include the signature of the persons so designated, as attached hereto as Schedule "F". Whenever the Company or Administrator provides a direction to the Trustee, the 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 any individual whose name and signature have been submitted and not withdrawn) in wirting to the Trustee by the Company, provided the Trustee reasonably believes the signature of the individual to be genuine. Such direction may also be made via electronic date transfer in accordance with procedures agreed to by the Company and the Trustee; provided, however, that the Trustee shall be fully protected in relying on such direction as if it were a direction made in writing by the Company. The 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). (b) Conduct. The Trustee hereby agrees not to take any action contrary to the Plan (as communicated to the Trustee) or the Summary Plan Description provided to Participants (as communicated to the Trustee). The Trustee hereby acknowledges that it has received from the Company a draft of the Summary Plan Description. -13- (c) Co-Fiduciary Liability. In any other case, the Trustee shall not be liable for any loss, or by reason of any breach, arising from any act or omission of another fiduciary under the Plans except as provided in section 405(a) of ERISA. Without limiting the foregoing, the Trustee shall have no liability for the acts or omissions of any predecessor or successor trustee. (d) Responsibility. The Company and the 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 the Company or the Trustee or both and the apportionment of the resulting expenses (including reasonable attorney's fees) and liability, if any, in connection with such claim. The Company and the Trustee acknowledge that some claims may be made against either both parties even though only one of the parties would be responsible under the Plan and the Agreement for the action, or inaction, gives rise to the claim may not always be clear. The parties agree that, in general, claims arising by reason of interpretation of the Plan provisions or by reason of Company directions or the directions of an Investment Manager will be defended by the Company and the Company will be responsible for any expenses or liability therefor; and claims arising from the administration and operation of the Trust will be defended by the Trustee and the Trustee will be responsible for any expenses or liability therefor. In any event, each will give notice to the other of any controversy and each will cooperate with the other to resolve such controversy. (e) Survival. The provisions of this Section 8 shall survive the termination of this Agreement. Section 9. Resignation or Removal of Trustee. (a) Resignation. The Trustee may resign at any item upon sixty (60) days' notice in writing to the Company, unless a shorter period of notice is agreed upon by the Company. -14- (b) Removal. The Company may remove the Trustee at any time upon sixty (60) days' notice in writing to the Trustee, unless a shorter period of notice is agreed upon by the Trustee. Section 10. Successor Trustee. (a) Appointment. If the office of Trustee becomes vacant for any reason, the Company 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 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 Trust. (b) Acceptance. When the successor trustee accepts its appointment under this Agreement, title to and possession of the 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 reasonably may be necessary or reasonably may be requested in writing by the Company or the successor trustee to vest title to all Trust assets in the successor trustee or to deliver all Trust assets to the successor trustee. (c) Corporate Action. Any successor of the Trustee or successor trustee, through sale or transfer of the business or trust department of the Trustee or successor trustee, or though reorganization, consolidation, or merger, or any similar transaction, shall, upon consummation of the transaction, become the successor trustee under this Agreement. Section 11. Termination. This Agreement may be terminated at any time by the Company upon sixty (60) days' notice in writing to the Trustee. On the date of the termination of this Agreement, the Trustee shall forthwith transfer and deliver to such individual or entity as the Company shall designate, all cash and assets then constituting the Trust. If, by the termination date, the Company has not notified the Trustee in writing as to whom the assets and cash are to be transferred and delivered, the Trustee may bring -15- an appropriate action or proceeding for leave to deposit the assets and cash in a court of competent jurisdiction. The Trustee shall be reimbursed by the Company for all costs and expenses of the action or proceeding including, without limitation, reasonable attorneys' fees and disbursements. 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 the Company c/o Mr. Dennis Delaney, Vice President, PRIMUS Automotive Financial Services, Inc., One Burton Hills Blvd., Suite 350, Nashville, Tennessee 37215, and to the Trustee c/o John M. Kimpel, Fidelity Investments, 82 Devonshire Street, C8A, Boston, Massachusetts 02109, or to such other addresses as the parties have notified each other of in the foregoing manner. Section 13. Duration. This 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 of Modification. This Agreement may be amended or modified at any time and from time to time only by an instrument executed by both the Company and the Trustee. Nothwithstanding the foregoing and not before January 1, 1998, to reflect increased operating costs the Trustee may once each calendar year amend Schedule "B" with the Company's consent upon ninety (90) days' written notice to the Company, whose consent shall not be unreasonably withheld. Section 15. General. (a) Performance by Trustee, its Agents or Affiliates. The Company acknowledges and authorizes that the services to be provided under this Agreement shall be provided by the Trustee, its agents or affiliates, including Fidelity Investments Institutional Operations Company or its successor, and that certain of such services may be provided pursuant to one or more other contractual agreements or relationships. The 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. -16- (b) Entire Agreement. This Agreement contains all of the terms agreed upon between the parties wit respect to the subject matter hereof. (c) 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 or subsequent failure or refusal to so comply. (d) 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. (e) 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. (f) Section Headings. The headings of the various sections and subsections of this Agreement have been inserted only for the purposes of convenience and are a 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. Section 16. Governing Law. (a) Massachusetts Law Controls. This Agreement is being made in the Commonwealth of Massachusetts, and the 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. -17- (b) Which Agreement Controls. The Trustee is not a party to the Plans. In the event of any conflict between the provision of the Plans and the provisions of this Agreement, the provisions of the Plan shall control, provided that nothing shall increase or expand the responsibilities or duties of the Trustee beyond those set forth in this Agreement without the written consent of the Trustee. Section 17. Plan Qualification. The Company shall be responsible for verifying that while any assets of a particular Plan are held in the Trust, the Plan (i) shall upon application to the Internal Revenue Service for qualification and subject to the receipt by Company of a letter of qualification from the Internal Revenue Service, be qualified within the meaning of section 401(a) of the Code. In any Plan ceases to be qualified within the meaning of section 401(a) of the Code, the Company shall notify the Trustee as promptly as is reasonable. Upon receipt of such notice, the Trustee shall promptly segregate and withdraw from the Trust, the assets which are allocable to such disqualified Plans, and shall dispose of such assets in the manner directed by the Company. 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. PRIMUS AUTOMOTIVE FINANCIAL SERVICES, INC. Attest:/s/Terri Spencer By:/s/ ------------------ ----------------------------------- Vice President - Human Resources FIDELITY MANAGEMENT TRUST COMPANY Attest:/s/ By:/s/ ------------------ ---------------------------------- Vice President -20- Schedule "A" RECORDKEEPING AND ADMINISTRATIVE SERVICES ----------------------------------------- Administration - -------------- Establishment and maintenance of participant account and election percentages. Maintenance of sixteen (16) plan investment options: Investment Options - ------------------ 1. Ford Motor Company Unitized Stock Fund 2. Fidelity Magellan Fund 3. Fidelity Contrafund 4. Fidelity Overseas Fund 5. Fidelity Asset Manager: Income 6. Fidelity Asset Manager 7. Fidelity Asset Manager: Growth 8. Fidelity Puritan Fund 9. Fidelity Growth & Income Portfolio 10. Fidelity Growth Company Fund 11. Fidelity International Growth and Income Fund 12. Fidelity Retirement Government Money Market Portfolio 13. Fidelity Intermediate Bond Fund 14. Fidelity U.S. Equity Index Portfolio 15. Fidelity Blue Chip Growth Fund 16. Fidelity OTC Portfolio * Maintenance of the following money classifications: Employee Pre-Tax Employee After-Tax Employer Match Rollover -21- The trustee will provide only the recordkeeping and administrative services set forth on this Schedule "A" and as detailed in the Plan Administrative Manual and no others. A) Participant Telephone Services 1. Fidelity registered representatives are available from 8:30 a.m. - 8:00 p.m. Eastern Time, to provide toll free telephone service for Participant inquiries and transactions. Additionally, participants have 24-hour account balances inquiry access utilizing our automated voice response system. 2. For security purposes, all calls are recorded. In addition, several levels of security are available including the verification of a Personal Identification Number (PIN) and/or any other indicative data resident on the system. 3. Through our telephone services, Fidelity provides the following services: - Provide mutual fund investment information. - Allow Participants to establish a new Personal Identification Number (PIN) on Fidelity's VRS. - Maintain plan specific provisions. - Process exchanges between all investment options on a daily basis. - Maintain and process changes to Participants' payroll/spillover elections on a daily basis. - Consult with Participants in various loan scenarios and generate all documentation. - Process all Participant loan and withdrawal requests according to plan provision on a daily basis. - Process in-service withdrawals via telephone due to certain circumstances previously approved by the Company. - Process hardship withdrawals and ten-year loans via telephone according to guidelines previously approved by the Company. B) Plan Accounting 1. Process payroll contributions according to your payroll frequency via electronic data transfer (EDT). The data format will be provided by Fidelity. -22- 2. Provide plan and Participant level accounting for up to four (4) money classifications for the Plan. 3. Value, audit and reconcile the Plans and participant accounts daily. 4. Provide daily plan and Participant level accounting for up to sixteen investment options, including Fidelity-managed investment funds and Ford Stock. 5. Reconcile and process Participant withdrawal requests as approved and directed by the Company. All requests are paid based on the current market values of Participants' accounts, not advanced or estimated values. A distribution report will accompany each check. 6. Track individual Participant loans, administer all loans outstanding as of the conversion date, process loan withdrawals, re- invest loan repayments, and prepare and deliver comprehensive reports to assist in the administration of Participant loans. Promissory notes for existing loans will continue to be the responsibility of the Company. 7. Qualify hardship requests and ten-year loans in accordance with written guidelines provided by the Company. Process Participant hardship requests on a daily basis (assumes receipt of request in "good order:). 8. All withdrawals and distributions will be processed on a daily basis. All requests will be paid based upon the current market value of a Participant's account. 9. Maintain and process changes to Participant's investment elections on a daily basis via Fidelity's toll-free telephone service. 10. Accept written processing instructions from the Company with regard to Qualified Domestic Relations Orders. The instructions may include freezing Participant's accounts, splitting account balances, and distributing QDRO accounts. -23- C) Participant Reporting Note: The Company will be responsible for researching Participant's inquiries on a timely basis involving activities that occurred prior to Fidelity becoming the full- service provider. 1. Mail confirmation to Participants of all transactions initiated via Fidelity Telephone Services within three (3) to five (5) business days of the transaction. 2. Prepare and distribute to each plan Participant (with a balance or activity during the period) a detailed Participant statement reflecting all activity of the Participant on FPRS as of the last business day of March, June, September and December. Statements will be mailed four (4) times per year within approximately twenty (20) days following the end of each calendar quarter in the absence of unusual circumstances. D) Plan Reporting 1. Prepare, reconcile and deliver a monthly Trail Balance Report for the Plan presenting all money classes and investments. This report is based on the market value as of the last business day of the month. The report will be mailed within approximately twenty (20) days following the end of each month in the absence of unusual circumstances. 2. Provide on-line access to the Fidelity recordkeeping system through personal computers located at the Company. This feature allows the ability to access plan and Participant level information for inquiry purposes. E) Government Reporting - Process 1099R year-end tax reports for Participants with balances, as well as provide financial reporting to the Company. F) Communication Services 1. Provide employee communications describing available investment options, including multimedia informational materials and group presentations. -24- G) Discrimination Testing Perform up to four (4) discrimination tests per year for the Company. Additional test(s) may be requested at additional fee(s). To obtain this service, the Company will be required to provide the information identified in the Fidelity Discrimination Testing Package Guidelines. The above mentioned services will be phased in during a transition period to Fidelity. Comerica Bank, as the terminating trustee and recordkeeper will perform their last valuation of the Plan for the period ending December 31, 1995. The transition period is scheduled to begin on January 1, 1996, with a projected completion dated of March 31, 1996. This projection is based upon several critical path items, one of which is the receipt of the final valuations from Comerica Bank on January 29, 1996. The Company and Fidelity have agreed that there will be a suspension of recordkeeping services during the transition period except for contributions, loan repayments for the Plan and enrollments. It is the goal of both parties that the transition period be as short as possible. -25- Schedule "B" FEE SCHEDULE ------------ Annual Participant Fee: $16.00 per Participant*, subject to a $15,000 per year minimum, billed and payable quarterly. Enrollments by Phone: $5.00 per non-active employee residing on Fidelity's Participant recordkeeping system. Loan Fee: Establishment fee of $35.00 per loan account; annual fee of $15.00 per loan account. Minimum Required Distribution: $25.00 per Minimum Required Distribution recipient per year. In-Service Withdrawals by Phone: $15.00 per withdrawal. Remote Access: $1,000 per year, plus a monthly charge of $3-$5 per hour for TYMNET usage. Installation of one remote access provided free of charge; installation of each additional terminal is $1,500. Return of Excess Contribution Fee: $25.00 per Participant, one-time charge per calculation and check generation. * This fee will be imposed pro rata for each calendar quarter, or any part thereof, that it remains necessary to keep a Participant's account(s) as part of the Plan's records, e.g., vested, deferred, forfeiture, top- heavy and terminated Participants who must remain on file through calendar year-end for 1099R reporting purposes. Trustee Fee - ----------- - - To the extent that assets are invested in Ford Stock, .25% of such assets in the Trust payable pro rata quarterly on the basis of such assets as of the calendar quarter's last valuation date, but no less than $10,000 nor more than $25,000. -26- Other Fees - ---------- - - Separate charges for optional non-discrimination testing, extraordinary expenses resulting from large numbers of simultaneous manual transactions or from errors not caused by Fidelity, or for reports not contemplated in this Agreement. The Administrator may withdraw reasonable administrative fees from the Trust by written direction to the Trustee. -27- Schedule "C" INVESTMENT OPTIONS In accordance with Section 4(b), the Named Fiduciary hereby directs the Trustee that Participants' individual accounts may be invested in the following investment options: INVESTMENT OPTIONS (16) 1. Ford Motor Company Unitized Stock Fund 2. Fidelity Magellan Fund 3. Fidelity Contrafund 4. Fidelity Overseas Fund 5. Fidelity Asset Manager: Income 6. Fidelity Asset Manager 7. Fidelity Asset Manager: Growth 8. Fidelity Puritan Fund 9. Fidelity Growth & Income Portfolio 10. Fidelity Growth Company Fund 11. Fidelity International Growth and Income Fund 12. Fidelity Retirement Government Money Market Portfolio 13. Fidelity Intermediate Bond Fund 14. Fidelity U.S. Equity Index Portfolio 15. Fidelity Blue Chip Growth Fund 16. Fidelity OTC Portfolio -28- Schedule "D" (Law Firm Letterhead) Ms. Carolyn Redden Fidelity Institutional Retirement Services Company 82 Devonshire Street - ZZ4 Boston, MA 02109 (Name of Plan) Dear Ms. Redden: 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 "Plans"). The material facts regarding the Plans as we understand them are as follows. The most recent favorable determination letter as to the Plans' 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 Plans 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).) The Company has informed us that it intends to submit the Plans 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 Plans' qualified status under section 401(a) of the Code. The Company may have to make some modification s to the Plans 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. The Company has informed us that it will make these modifications. Based on the foregoing statements of the Company and our review of the provisions of the Plans, it is our opinion that the Internal Revenue Service will issue a favorable determination letter as to the qualified status of the Plans, as modified at the request of the Internal Revenue Service, under section 401(a) of the Code, subject to the customary condition that continued -29- qualification of the Plans, as modified, will depend on its effect in operation. Furthermore, in that the assets are in part invested in common stock issued by the Company or an affiliate, it is our opinion that the Plans is an "eligible individual account plan" (as defined under Section 407(d)(3) of ERISA) and that the shares of common stock of the Company held and to be purchased under the Plans are "qualified employer securities" (as defined under Section 407(d)(5) of ERISA). Finally, it is our opinion that interests in the Plans 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) -30- Schedule "E" TELEPHONE EXCHANGE GUIDELINES The following telephone exchange guidelines are currently employed by Fidelity Institutional Retirement Services Company (FIRSCO). Telephone exchange hours are 8:30 a.m. (ET) to 8:00 p.m. (ET) on each business day. A "business day" is any day on which the New York Stock Exchange is open. FIRSCO reserves the right to change these telephone exchange guidelines at its discretion. Exchanges Between Investment Options Participants may call on any business day to exchange between the investment options. If the request is received before 4:00 p.m. (ET), it will receive that day's trade date. Calls received after 4:00 p.m. (ET) will be processed on a next day basis. Exchange Restrictions Investments in the Ford Stock Fund will consist primarily of shares of Ford Stock. In order to satisfy daily participant requests for exchanges, loans and withdrawals, the Ford Stock Fund will also hold cash or other short-term liquid investments in an amount that has been agreed to in writing by the Ford Motor Company and the Trustee. The Trustee will be responsible for ensuring that the percentage of these investments falls within the agreed upon range over time. However, if there is insufficient liquidity in the Ford Stock Fund to allow for such activity, the Trustee will sell shares of Ford Stock in the open market. Exchange and redemption transactions will be processed as soon as proceeds from the sale of Ford Stock are received. -31- Schedule "F" SIGNATURE AUTHORIZATION PRIMUS Automotive Financial Services, Inc. PRIME Account Committee Ms. Carolyn Redden Fidelity Institutional Retirement Services Company 82 Devonshire Street - MM3H Boston, Massachusetts 02109 PRIMUS Automotive Financial Services, Inc. PRIME Account Dear Ms. Redden: This letter is sent to you in accordance with Section 8(a) of the Trust Agreement, dated as of _______________, between PRIMUS Automotive Financial Services, Inc. and Fidelity Management Trust Company. We hereby designate Dennis T. Delaney, Rene Ramirez, and Toby N. Hynes as the individuals who may provide directions upon which Fidelity Management Trust Company shall be fully protected I 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 we deliver to you written notice of the termination of authority of a designated individual. Very truly yours, PRIMUS Automotive Financial Services, Inc. PRIME Account Committee /s/Dennis T. Delaney Dennis T. Delaney Vice President /s/Dennis T. Delaney Dennis T. Delaney /s/Rene Ramirez Rene Ramirez /s/Toby N. Hynes Toby N. Hynes EX-5.1 4 FORD MOTOR COMPANY THE AMERICAN ROAD DEARBORN, MI 48121 May 23, 1996 Ford Motor Company The American Road Dearborn, Michigan 48121 Ladies and Gentlemen: This will refer to the Registration Statement on Form S 8, as amended (the "Registration Statement") filed by Ford Motor Company (the "Company") with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Act of 1933, as amended (the "Securities Act"), with respect to 100,000 shares of Common Stock, par value $1.00 per share, of the Company ("Common Stock"), relating to the Primus Automotive Financial Services, Inc. Prime Account (the "Plan") of Primus Automotive Financial Services, Inc. As an Assistant Secretary and Counsel of the Company, I am familiar with the Certificate of Incorporation and the ByLaws of the Company and with its affairs, including the actions taken by the Company in connection with the Plan. I also have examined such other documents and instruments and have made such further investigation as I have deemed necessary or appropriate in connection with this opinion. Based upon the foregoing, it is my opinion that: (1) The Company is duly incorporated and validly existing as a corporation under the laws of the State of Delaware. (2) All necessary corporate proceedings have been taken to authorize the issuance of the shares of Common Stock being registered under the Registration Statement, and all such shares of Common Stock acquired by the Trustee under the Plan in accordance with the Plan will be legally issued, fully paid and -2- non-assessable when the Registration Statement shall have become effective and the Company shall have received therefor the consideration provided in the Plan (but not less than the par value thereof). I hereby consent to the use of this opinion as Exhibit 5.1 to the Registration Statement. In giving this consent, I do not admit that I am in the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission issued thereunder. Very truly yours, /s/Thomas J. DeZure Thomas J. DeZure Assistant Secretary and Counsel EX-5.2 5 FORD MOTOR COMPANY THE AMERICAN ROAD DEARBORN, MI 48121 May 23, 1996 Ford Motor Company The American Road Dearborn, Michigan 48121 Ladies and Gentlemen: This will refer to the Registration Statement on Form S-8, as amended (the "Registration Statement") filed by Ford Motor Company (the "Company") with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Act of 1933, as amended (the "Securities Act"), relating to the Primus Automotive Financial Services, Inc. Prime Account (the "Plan") of Primus Automotive Financial Services, Inc. As a Senior Attorney of the Company, I am familiar with the affairs of the Company, including the action taken by the Company in connection with the Plan. I have examined, or caused to be examined, the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and the provisions of the Plan. I also have examined or caused to be examined such other documents and instruments and have made such further investigation as I have deemed appropriate in connection with this opinion. Based upon the foregoing, it is my opinion that the provisions of the Plan, as amended and subsequently modified if necessary to obtain a favorable determination letter from the Internal Revenue Service, will comply with the requirements of ERISA pertaining to such provisions. I hereby consent to the use of this opinion as Exhibit 5.2 to the Registration Statement. In giving this consent, I do not admit that I am in the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission issued thereunder. Very truly yours, /s/F. C. King F. C. King Senior Attorney EX-15 6 Exhibit 15 COOPERS & LYBRAND L.L.P. Ford Motor Company The American Road Dearborn, Michigan Re: Ford Motor Company Amendment No. 1 to Registration Statement No. 33-58861 on Form S-8 We are aware that our report dated April 15, 1996 accompanying the unaudited interim financial information of Ford Motor Company and Subsidiaries for the periods ended March 31, 1996 and 1995, and included in the Ford Motor Company Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, is incorporated by reference in this Registration Statement. Pursuant to Rule 436(c) under the Securities Act of 1933, this report should not be considered a part of the Registration Statement prepared or certified by us within the meaning of Sections 7 and 11 of the Act. /s/Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. 400 Renaissance Center Detroit, Michigan 48243 May 21, 1996 EX-23 7 Exhibit 23 COOPERS & LYBRAND L.L.P. Ford Motor Company The American Road Dearborn, Michigan CONSENT OF COOPERS & LYBRAND L.L.P. Re: Ford Motor Company Amendment No. 1 to Registration Statement No. 33-58861 on Form S-8 We consent to the incorporation by reference in this Registration Statement of our report dated January 26, 1996 on our audits of the consolidated financial statements of Ford Motor Company at December 31, 1995 and 1994, and for the years ended December 31, 1995, 1994 and 1993, which report is included in Ford's 1995 Annual Report on Form 10-K. /s/COOPERS & LYBRAND L.L.P. COOPERS & LYBRAND L.L.P. 400 Renaissance Center Detroit, Michigan 48243 May 21, 1996 -----END PRIVACY-ENHANCED MESSAGE-----