UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D. C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report: April 7,
2008
(Date of
earliest event reported)
FORD
MOTOR COMPANY
(Exact
name of registrant as specified in its charter)
Delaware
(State or
other jurisdiction of incorporation)
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1-3950
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38-0549190
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(Commission
File Number)
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(IRS
Employer Identification No.)
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One American Road,
Dearborn, Michigan
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48126
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code 313-322-3000
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
140.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR
240.13e-4(c))
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ITEM 1.01. Entry
into a Material Definitive Agreement
ITEM
2.03. Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant
ITEM
3.02. Unregistered Sales of Equity Securities
Settlement
Agreement
On April
7, 2008, Ford Motor Company ("Ford"), the International Union, United
Automobile, Aerospace and Agricultural Workers of America (the "UAW") and the
class representatives of former UAW-represented Ford employees (the "Class") in
Int'l Union, UAW, et al. v.
Ford Motor Company, Civil Action No. 07-14845 (E.D. Mich. filed Nov. 9,
2007) filed with the court a Settlement Agreement dated March 28, 2008 (the
"Settlement Agreement"). If approved by the Court, the Settlement
Agreement will effectuate the transactions contemplated by the November 3, 2007
Memorandum of Understanding – Post Retirement Medical Care (the "MOU") between
Ford and the UAW, which was ratified on November 14, 2007, in conjunction with a
new national collective bargaining agreement governing the wages, hours and
terms and conditions of employment for UAW-represented employees of Ford (the
"National Agreement"). For a more specific description of the terms
of the MOU, see Ford's Current Report on Form 8-K filed on November 15,
2007. A copy of the Settlement Agreement is attached to this Form 8-K
as Exhibit 10.1, and the following description of the Settlement Agreement is
qualified in its entirety by reference to the Settlement Agreement.
The
Settlement Agreement provides that on the later of December 31, 2009, final
court approval of the Settlement Agreement, and Ford's completion of discussions
with the Securities and Exchange Commission ("SEC") regarding satisfactory
accounting treatment, a new retiree health care plan (the "New Plan"), to be
funded by a new Voluntary Employee Beneficiary Association trust (the "New
VEBA"), will be permanently responsible for providing retiree health care
benefits to covered UAW employees. Ford will fund the New VEBA
through a number of sources, including funds that are currently in existing
voluntary employee beneficiary association trusts, Ford-issued convertible and
term notes, and cash on hand. The parties to the Settlement Agreement
have acknowledged that Ford's obligations to pay into the New VEBA are fixed and
capped as provided in the Settlement Agreement and that Ford is not responsible
for, and does not provide a guarantee of: (1) the payment for future
benefits to plan participants, (2) the asset returns of the funds in the New
VEBA, or (3) the sufficiency of assets in the New VEBA to fully pay the
obligations of the New VEBA or the New Plan.
In
addition, effectiveness of the Settlement Agreement is conditioned upon each of
the following: (1) issuance of a class certification order by the
United States District Court for the Eastern District of Michigan (the "Court")
that defines the class in the same manner as Class is defined in the Settlement
Agreement; (2) Court approval of the Settlement Agreement in a form
acceptable to Ford, the UAW and the Class; (3) successful completion of
discussions between Ford and the SEC regarding satisfactory accounting
treatment. The Settlement Agreement may be terminated by any party
upon thirty (30) days notice if, among other reasons, satisfactory class
certification or Court approval has been received and such certification or
Court approval is subsequently overturned on appeal. Ford may
immediately terminate the Settlement Agreement if, after discussions with the
SEC, Ford does not believe that the accounting treatment for the New VEBA and
the New Plan is satisfactory.
Convertible
Note
On April
9, 2008, pursuant to the Settlement Agreement, Ford issued $3,334,000,000
principal amount of its 5.75% Senior Convertible Notes Due 2013 (the
"Convertible Note") to Ford – UAW Holdings LLC, a Delaware limited liability
company of which Ford is the sole member ("Ford – UAW Holdings"). The
Convertible Note was issued to Ford – UAW Holdings in an unregistered
transaction in accordance with an exemption under Section 4(2) of the Securities
Act of 1933, as amended. The form of the Convertible Note is attached
to this Form 8-K as Exhibit 10.2, and the following description of the
Convertible Note is qualified in its entirety by reference to the Convertible
Note.
Ford –
UAW Holdings will hold the Convertible Note until it is transferred to the New
VEBA in accordance with the terms of the Settlement
Agreement. Interest on the Convertible Note is payable
semiannually. In accordance with the Settlement Agreement, Ford – UAW
Holdings will transfer any interest it receives on the Convertible Note to a
temporary asset account maintained by Ford or Ford – UAW Holdings (the
"TAA"). The funds in the TAA will be transferred to the New VEBA in
accordance with the terms of the Settlement Agreement.
The
Convertible Note was issued pursuant to an Indenture dated as of January 30,
2002 (the "Indenture"), as supplemented by the Second Supplemental Indenture
dated as of January 1, 2008 (the "Second Supplemental Indenture"),
each being between Ford and The Bank of New York, as successor trustee to
JPMorgan Chase Bank. The form of Indenture was filed as Exhibit 4.1
to Ford's Registration Statement No. 333-75214 filed with the SEC; the Second
Supplemental Indenture is attached to this Form 8-K as Exhibit
10.3. The following descriptions of the Indenture and the Second
Supplemental Indenture are qualified in their entirety by reference to the
Indenture and the Second Supplemental Indenture, respectively. The
Convertible Note matures on January 1, 2013 and will constitute a part of Ford's
senior debt and will rank equally with all of Ford's other unsecured and
unsubordinated debt. Ford may redeem the Convertible Note, in whole
or in part, at any time after January 1, 2011 in cash at a price equal to 100%
of the principal amount to be redeemed plus (1) accrued and unpaid interest and
(2) an additional redemption adjustment amount under certain
circumstances.
The
Convertible Note will be initially convertible, subject to certain conditions,
into shares of Ford Common Stock ($.01 par value per share) at a conversion rate
of 108.6956 shares of Ford Common Stock per $1,000 principal amount of the
Convertible Note, representing an initial effective conversion price of $9.20
per share. The conversion rate is subject to adjustment upon certain
circumstances. The Ford Common Stock received upon conversion (the
"Converted Stock") may not be sold or otherwise transferred except under one of
the following circumstances: (1) upon Ford providing notice that it is
redeeming the Convertible Note, (2) within three months before the maturity
date, or (3) in any calendar quarter, the closing market price of Ford
Common Stock is greater than $11.04 for at least 20 trading days in the last 30
consecutive trading days of the preceding calendar quarter.
Security Holder and
Registration Rights Agreement.
In
conjunction with the issuance of the Convertible Note and in accordance with the
Settlement Agreement, Ford has agreed to enter into a Security Holder and
Registration Rights Agreement with Ford – UAW Holdings in the form attached to
this Form 8-K as Exhibit 10.4. The following description of the
Security Holder and Registration Rights Agreement is qualified in its entirety
by reference to the Security Holder and Registration Rights
Agreement.
Under the
Security Holder and Registration Rights Agreement, the holder of the Convertible
Note or Converted Stock ("Registrable Securities") may (i) cause Ford to
register the Registrable Securities for a public offering no more than once per
year, (ii) participate in public offerings of securities by Ford and (iii)
privately place the Registrable Securities, in each case subject to certain
conditions and subject to volume limitations of 100 million shares per quarter
and 200 million shares per year of Convertible Stock or a principal amount of
the Convertible Note equivalent thereto, unless such restrictions are waived by
Ford in accordance with the Settlement Agreement. In addition, the
holder of the Convertible Note may not sell (1) a block of Converted Stock
that would be more than 2% of the outstanding shares of Ford Common Stock to a
single buyer, or (2) any Converted Stock to a transferee if, after giving
effect to the sale, the sale would result in the transferee owning more than 5%
of the outstanding shares of Ford Common Stock that has the intention to, or
reserves the right to, exert Control or influence over Ford. The
trustee of the New VEBA will vote Converted Stock held in the New VEBA in the
same proportion as the votes cast by all other stockholders in a given
election. The holder of the Convertible Note or the Converted Stock
may sell to a tender offeror only if the tender offer has been recommended by an
independent committee of the Ford Board of Directors.
Second Lien Term
Note
On April
9, 2008, Ford issued its 9.50% Guaranteed Secured Note Due January 1, 2018 in
the principal amount of $3,000,000,000 to Ford – UAW Holdings (the "Second Lien
Term Note") pursuant to the Settlement Agreement and a Note Purchase Agreement
dated as of April 7, 2008 by and among Ford, Ford - UAW Holdings and the
Subsidiary Guarantors named therein. The form of the Second Lien Term
Note and the Note Purchase Agreement are attached to this Form 8-K as Exhibit
10.5 and 10.6, respectively, and the following description of the Second Lien
Term Note and/or Note Purchase Agreement is qualified in its entirety by
reference to the Second Lien Term Note and the Note Purchase
Agreement.
Ford –
UAW Holdings will hold the Second Lien Term Note until it is transferred to the
New VEBA in accordance with the terms of the Settlement
Agreement. Interest on the Second Lien Term Note is payable
semiannually. In accordance with the Settlement Agreement, Ford – UAW
Holdings will transfer any interest it receives on the Second Lien Term Note to
the TAA. Fifty percent of the principal amount of the Second Lien
Term Note is payable on each of January 1, 2017 and January 1,
2018. The Second Lien Term Note is pre-payable by Ford at par value
at any time without penalty. The Second Lien Term Note will be
transferable, in whole or in part, at any time after such note has been
transferred to the New VEBA, subject to available exemption from the
registration requirements under the federal securities laws. No
registration rights have been granted with respect to the Second Lien Term
Note. Ford has designated the Second Lien Term Note as Second
Priority Additional Debt in accordance with and subject to the terms of the
Credit Agreement dated as of December 15, 2006, among Ford, the Lenders parties
thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (the "Credit
Agreement"), and the Loan Documents (as defined in the Credit
Agreement). Accordingly, payment of the principal of and interest and
any premium on the Second Lien Term Note is (1) secured on a second lien basis
with the Collateral pledged by Ford and its Subsidiary Guarantors to the Lenders
under the Credit Agreement and Loan Documents, and (2) guaranteed by the
Subsidiary Guarantors under the Credit Agreement. Holders of the
Second Lien Term Note are subject to, among other things, the intercreditor
provisions of the Collateral Trust Agreement relating to the Credit
Agreement.
Item
9.01 Financial Statements and Exhibits
EXHIBITS
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Designation
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Description
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Method of
Filing
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Settlement
Agreement
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Filed
with this Report
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10.2
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Form
of Convertible Note
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Included
in Exhibit 10.3
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Second
Supplemental Indenture
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Filed
with this Report
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Form
of Security Holder and Registration Rights Agreement
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Filed
with this Report
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10.5
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Form
of Second Lien Term Note
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Included
in Exhibit 10.6
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Note
Purchase Agreement
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Filed
with this Report
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