Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
GENERAL MOTORS CORPORATION
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(Name of Registrant as Specified In Its Charter)
......................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required
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and 0-11
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applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
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[GM LOGO]
GENERAL MOTORS CORPORATION
NOTICE OF ANNUAL MEETING
April 21, 2004
Dear Stockholder:
You are invited to attend the annual meeting of stockholders of General
Motors Corporation. It will be held at 9 a.m. local time on Wednesday, June 2,
2004, at the Hotel du Pont, 11th & Market Streets, Wilmington, Delaware. At the
meeting, stockholders will vote on the following matters:
* The election of directors for the next year;
* The ratification of the selection of independent public accountants for
the next year;
* Seven stockholder proposals (if they are properly presented at the
meeting).
If you were a record holder of Common Stock, $1 2/3 par value ("Common
Stock"), at the close of business on April 5, 2004, you will be entitled to vote
at the meeting. Please read the General Information section for further details.
A list of stockholders entitled to vote at the meeting will be available for
examination at General Motors Corporation, Renaissance Center, Detroit,
Michigan, for ten days before the annual meeting between 9 a.m. and 5 p.m., and
at the Hotel du Pont during the meeting.
The annual meeting will include a report on the state of the business, and
then focus on electing directors, voting on the selection of independent public
accountants and stockholder proposals, and related discussion. After that, we
will provide time for business-related questions and comments. If you plan to
attend the meeting, please see the instructions on page 3.
In addition to the annual meeting, GM holds regional stockholder forums.
These meetings provide an opportunity for you to learn about General Motors and
discuss related issues with GM management. The time and location of these
meetings are announced in Stockholder News as well as on the Internet under
"Calendar/Events" at http://investor.gm.com.
Your vote is important. Please read the attached proxy statement carefully
and submit your proxy as soon as possible. You have a choice of voting your
proxy via the Internet, by telephone, or by completing and returning the
enclosed proxy card.
Sincerely,
/s/ Nancy E. Polis /s/ G. Richard Wagoner, Jr.
Secretary Chairman &
Chief Executive Officer
TABLE OF CONTENTS
Page
PROXY STATEMENT........................................................ 1
GENERAL INFORMATION.................................................... 1
Stockholders Entitled to Vote..................................... 1
Voting............................................................ 1
Voting of Stock Plans for Employees............................... 2
Proxy Statement Proposals......................................... 3
Attending the Annual Meeting...................................... 3
Householding of Annual Meeting Materials.......................... 3
Electronic Delivery of Annual Meeting Materials................... 4
Material for Beneficial Owners.................................... 4
Expenses of Solicitation.......................................... 4
BOARD OF DIRECTORS GOVERNANCE.......................................... 4
Selection of Nominees for Directors............................... 4
Directors......................................................... 5
Director Compensation............................................. 5
Committees of the Board of Directors.............................. 6
ITEM NO. 1--Nomination and Election of Directors....................... 7
Information about Nominees for Directors.......................... 7
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE......................... 13
EXECUTIVE COMPENSATION TABLES.......................................... 17
AUDIT COMMITTEE REPORT................................................. 23
FEES PAID TO AUDITOR................................................... 24
ITEM NO. 2--Ratification of the selection of Deloitte & Touche
as independent public accountants for the year 2004........ 25
ITEM NO. 3--Stockholder proposal to eliminate awarding,
repricing, or renewing stock options....................... 25
ITEM NO. 4--Stockholder proposal to eliminate options, SARs, and
severance payments to top management....................... 26
ITEM NO. 5--Stockholder proposal to require an independent
chairman separate from the chief executive officer......... 27
ITEM NO. 6--Stockholder proposal to appoint independent
directors to key Board committees.......................... 29
ITEM NO. 7--Stockholder proposal to report on greenhouse gas
emissions.................................................. 30
ITEM NO. 8--Stockholder proposal to approve "golden parachutes"........ 32
ITEM NO. 9--Stockholder proposal to require senior executives
and directors to retain stock obtained by exercising
options.................................................... 33
OTHER MATTERS.......................................................... 34
EXHIBIT A--TEXT OF THE AUDIT COMMITTEE CHARTER......................... A-1
GENERAL MOTORS CORPORATION
300 RENAISSANCE CENTER, P.O. BOX 300, DETROIT, MICHIGAN 48265-3000
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 2, 2004
This proxy statement is provided in connection with the solicitation of
proxies, by order of the Board of Directors of General Motors Corporation, to be
used at the annual meeting of stockholders of the Corporation. The enclosed
proxy card represents your holdings of Common Stock in the registered account
name shown. We expect this proxy statement and the enclosed proxy card will be
mailed, or will be available through the Internet for those stockholders
receiving their proxy materials electronically, on or after Wednesday, April 21,
2004, to each stockholder entitled to vote.
In addition to this proxy statement and card, the GM 2003 Annual Report is
provided in this package.
GENERAL INFORMATION
STOCKHOLDERS ENTITLED TO VOTE
The Board of Directors designated April 5, 2004, as the record date for
determining stockholders entitled to vote at the annual meeting. On that date,
the Corporation had 564,496,019 shares of Common Stock outstanding and entitled
to vote. Each share of Common Stock entitles the holder to one vote.
VOTING
When you vote your proxy, your shares will be voted according to your
instructions. You may give instructions to grant or withhold authority to vote
for election of all the Board of Directors' nominees, or any individual nominee,
and to vote for or against, or abstain from voting upon, each of the eight
proposals.
If you are a stockholder of record (you hold shares in your name in an
account with GM's stock transfer agent, EquiServe), you can vote in any one of
the following three ways:
* By Internet: Go to the Web site, www.eproxyvote.com/gm, shown on your
proxy card, and follow the instructions.
* By Telephone: Call the toll-free number, 877-779-8683, shown on your
proxy card. If you are outside the continental United States or Canada,
call collect at 201-536-8073. Please follow the instructions on your
proxy card and the voice prompts on the telephone.
* By Mail: Mark your vote, sign your name exactly as it appears on your
proxy card, date your proxy card, and return it in the enclosed envelope.
If you receive more than one proxy card (which means you have shares in
more than one account), you must mark, sign, and date each of them, or
alternatively vote all these shares through the Internet or by telephone.
If you sign and return your proxy card and do not specify a choice, your
shares will be voted as the Board of Directors has recommended, as
indicated in this proxy statement.
If you prefer, you may also vote by ballot at the annual meeting, which
will cancel any proxy you previously gave.
After you have signed and returned the enclosed proxy card or voted through
the Internet or by telephone, you may revoke your proxy at any time until it is
voted at the annual meeting. You may do this by sending a written notice of
revocation or a subsequent proxy card, by voting subsequently through the
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Internet or by telephone, or by voting in person at the annual meeting. The
shares represented by a proxy will be voted unless the proxy card is received
late or in a form that cannot be voted.
By signing and returning the proxy card or by voting through the Internet
or by telephone, you will authorize the Proxy Committee to vote your shares of
Common Stock as you direct and on any proposals that General Motors does not
know about now but that may be presented properly at the meeting. The Proxy
Committee comprises three executive officers of the Corporation:
G. Richard Wagoner, Jr., John M. Devine, and Robert A. Lutz, each of whom is
authorized to act on behalf of the Committee.
If your shares are held by a broker, bank, or other record holder, please
refer to the instructions they provide for voting your shares.
As a matter of policy, GM believes your vote should be private. Therefore,
we use an independent specialist to receive, inspect, count, and tabulate
proxies. Representatives of the independent specialist also act as judges at the
annual meeting.
Except for Item No. 1, or as otherwise noted, each proposal in this proxy
statement will be approved if it receives a majority of the votes present,
either in person or by proxy, at the meeting. Item No. 1, the election of
directors, is somewhat different: the 11 candidates who receive the most votes
will be elected to the 11 available memberships on the Board. If you submit your
proxy or attend the meeting but choose to abstain from voting on any proposal,
you will be considered present at the meeting and not voting in favor of the
proposal. Since most proposals pass only if they receive favorable votes from a
majority of votes present at the meeting, the fact that you are abstaining and
not voting in favor of a proposal will have the same effect as if you had voted
against the proposal. (In contrast, a "broker non-vote," where a broker
withholds authority to cast a vote as to a certain proposal, is deemed not
present at the meeting with regard to that proposal.)
VOTING OF STOCK PLANS FOR EMPLOYEES
If you participate in the following stock plans for employees, your proxy
card will serve to instruct the Trustees, plan committees, or independent
fiduciaries of those plans how to vote your shares in the plan:
* General Motors Savings-Stock Purchase Program for Salaried Employees in
the United States (the "GM S-SPP")
* General Motors Personal Savings Plan for Hourly-Rate Employees in the
United States (the "GM PSP")
* General Motors Canadian Savings-Stock Program for Salaried Employees
(the "GM Canadian Plan")
* General Motors of Canada Limited Group RRSP and Savings Plan for Hourly
Employees (the "GM RRSP")
* Fidelity Investments Canada Limited Next StepTM -- Personal Retirement
Group (the "FICL-PRG")
* Delphi Corporation Savings-Stock Purchase Program for Salaried Employees
in the United States (the "Delphi S-SPP")
* Delphi Corporation Personal Savings Plan for Hourly-Rate Employees in the
United States (the "Delphi PSP")
* Saturn Individual Savings Plan for Represented Members (the "Saturn ISP")
* GMAC Mortgage Group Inc. Savings Incentive Plan (the "GMAC Mortgage
Plan")
* GMAC Insurance Personal Lines -- Retirement Plan (the "GMAC Insurance
Plan")
2
If you do not provide instructions on how to vote your shares held in the
GM S-SPP or the Delphi S-SPP, those shares may be voted at the discretion of the
Trustee, plan committee, or independent fiduciary. If you do not provide
instructions on how to vote your shares held in the GM PSP, the GM Canadian
Plan, the GM RRSP, the FICL-PRG, the Delphi PSP, the Saturn ISP, the GMAC
Mortgage Plan, and the GMAC Insurance Plan, the shares will not be voted.
PROXY STATEMENT PROPOSALS
At the annual meeting each year, the Board of Directors asks stockholders
to vote on its nominees for election as directors. In addition, GM's Bylaws
require that at each annual meeting the stockholders approve the independent
public accountants selected by the Audit Committee with the Board of Directors'
concurrence. The Board of Directors also may submit other matters for
stockholder approval at the annual meeting. In addition to these matters
presented by the Board of Directors, you may be asked to vote on one or more
stockholder proposals.
We have been asked from time to time why the Board opposes the stockholder
proposals included in the proxy statement. The Board does not disagree with all
stockholder proposals submitted to the Corporation. When it agrees with a
proposal and thinks it is in the best interests of GM and its stockholders, the
proposal usually can be implemented without a stockholder vote. The stockholder
proposals that appear in the proxy statement are only those with which the Board
of Directors disagrees and believes it must oppose in fulfilling its obligations
to represent and safeguard the best interests of stockholders as a whole.
The deadline for stockholders to submit a proposal to include in the
Corporation's proxy statement for the 2005 annual meeting is December 17, 2004.
Any proposals intended to be presented at the 2005 annual meeting must be
received by the Corporation on or before that date. Please send proposals to the
Secretary, General Motors Corporation, by mail to MC 482-C38-B71, 300
Renaissance Center, P.O. Box 300, Detroit, MI 48265-3000, or by fax at
313-667-3166.
ATTENDING THE ANNUAL MEETING
If you plan to attend the meeting, please detach and retain the admission
ticket attached to your proxy card. As capacity is limited, you may bring only
one guest to the meeting. If you hold your stock through a broker, bank, or
other record holder, please bring evidence to the meeting that you own Common
Stock, and we will provide you with admission tickets. If you receive your
annual meeting materials electronically and wish to attend the meeting, please
follow the instructions provided for attendance. A form of government-issued
photograph identification will be required to enter the meeting. To permit as
many stockholders as possible to participate, only stockholders or their valid
proxy holders may speak at the meeting. A map with driving directions appears on
the back page of this proxy statement.
HOUSEHOLDING OF ANNUAL MEETING MATERIALS
The Securities and Exchange Commission permits corporations to send a
single copy of the annual report and proxy statement to any household at which
two or more stockholders reside if it appears they are members of the same
family. Each stockholder will continue to receive a separate proxy card. This
procedure, referred to as householding, is intended to reduce the volume of
duplicate information stockholders receive and also to reduce expenses for
corporations. General Motors has instituted this procedure for all stockholders
of record.
If one set of these documents was sent to your household for the use of all
GM stockholders in your household, and one or more of you would prefer to
receive your own set, please contact our stock transfer agent, EquiServe, by
telephone at 800-331-9922 (if calling from outside the continental United States
or Canada, call collect at 781-575-3990) or by Internet at www.equiserve.com.
If a broker or other record holder holds your GM shares, please contact
your broker or other record holder directly if you have questions, require
additional copies of the proxy statement or annual report, or wish to receive
multiple reports by revoking your consent to householding.
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ELECTRONIC DELIVERY OF ANNUAL MEETING MATERIALS
You can save the Corporation postage and printing expenses by consenting to
receive your GM annual report and proxy materials via the Internet. At your
request, you will receive an e-mail notification when these documents are
available electronically through the Internet. Registered stockholders (those
with an account maintained in their name with EquiServe) may sign up for this
service at www.econsent.com/gm. Beneficial stockholders (those holding their
stock through a broker or bank) may sign up at www.icsdelivery.com/gm, if their
broker or bank is among the majority that participate in electronic delivery.
MATERIAL FOR BENEFICIAL OWNERS
Brokers, dealers, banks, voting trustees, and other nominees who want a
supply of the Corporation's proxy soliciting materials to send to beneficial
owners should write to General Motors Corporation, c/o Morrow & Co., Inc., 445
Park Avenue, 5th Floor, New York, NY 10022-2606.
EXPENSES OF SOLICITATION
The Corporation will pay the cost of this solicitation of proxies. General
Motors will solicit proxies by mail and electronic means, and the directors,
officers, and employees of GM may also solicit proxies. These persons will not
receive any additional compensation for such services. In addition, GM has
retained Morrow & Co., Inc., to assist in soliciting proxies for a fee of up to
$50,000, plus reasonable out-of-pocket expenses. The Corporation will reimburse
brokers and other stockholders of record for their expenses in forwarding proxy
material to beneficial owners.
BOARD OF DIRECTORS GOVERNANCE
SELECTION OF NOMINEES FOR DIRECTORS
The Directors and Corporate Governance Committee (the "Committee") is
responsible for recommending candidates for membership on the Board. In
assessing potential new directors, the Committee considers individuals from
various disciplines and diverse backgrounds. The selection of qualified
directors is complex and crucial to GM's long-term success. Board candidates are
considered based upon various criteria, such as their broad-based business
skills and experiences, a global business and social perspective, concern for
the long-term interests of the stockholders, and personal integrity and
judgment. In addition, directors must have time available to devote to Board
activities and to enhance their knowledge of General Motors and the global
automotive industry. To assist in the identification and evaluation of qualified
director candidates, on occasion the services of a search firm have been
engaged.
Under the Corporation's Bylaws, each year prior to the annual meeting of
stockholders, the Committee recommends the Board's nominees to serve as GM
directors for the next year. The Board is soliciting proxies to elect these
individuals. Except for G. Richard Wagoner, Jr., who is an employee of the
Corporation, all candidates nominated by the Board of Directors have been
determined to be independent directors as defined under Section 2.11 of the
Corporation's Bylaws. (If you would like a copy of GM's Bylaws, please write to
the Secretary, General Motors Corporation, MC 482-C38-B71, 300 Renaissance
Center, P.O. Box 300, Detroit, MI 48265-3000, or go to http://investor.gm.com on
the Internet and click on "Corporate Governance.")
To recommend an individual for Board membership, write to the Secretary at
the address given above. The Directors and Corporate Governance Committee will
review the credentials and background of each recommended candidate against the
selection criteria listed above and will notify the candidate of the Committee's
decision. If you intend to either nominate a candidate for director at the
annual meeting, or to introduce any other matter (aside from a stockholder
proposal under Rule 14a-8 of the Securities and Exchange Commission's proxy
rules, which is discussed on page 3), you must give the Corporation written
notice. Such notice must be received by the Secretary not more than 180 days and
not less than 120 days before the date of the annual meeting. For the 2005
annual meeting, such notice must be received between December 9, 2004, and
February 7, 2005.
4
DIRECTORS
The Board of Directors held a total of eight meetings in 2003. It is
currently composed of 11 members.
If you elect all 11 nominees at the 2004 annual meeting, the Board will be
composed of ten directors who are independent and not employed by General Motors
and one who is currently an officer of the Corporation.
In addition to being members of the Board, most directors serve on one or
more of its five standing Committees. (Please refer to "Committees of the Board
of Directors" commencing on page 6 for information concerning Committees'
responsibilities and current membership.) Each Committee has adopted a written
charter that satisfies the requirements of the New York Stock Exchange Listing
Standards. Each charter is available on the Corporation's Web site at
http://investor.gm.com for review by stockholders and others.
Directors spend a considerable amount of time preparing for Board and
Committee meetings and, from time to time, are called upon for their counsel
between meetings. The Board as well as each Committee at their request can
retain the services of one or more outside advisors. In 2003, average attendance
at Board and Committee meetings was 97%. The annual meeting of stockholders is
held in conjunction with a regularly scheduled Board meeting, and directors are
expected to attend. In 2003, 100% of the directors attended the annual meeting.
The non-employee directors of the Board meet in executive sessions at least
two times each year without management present. The Chair of the Directors and
Corporate Governance Committee acts as presiding director at these executive
sessions. During these sessions, the non-employee directors review, at a
minimum, CEO succession, performance, and compensation; strategic issues for
Board consideration; future Board agendas and the flow of information to
directors; management progression and succession; and the Board's corporate
governance guidelines. The presiding director is responsible for advising the
Chairman and Chief Executive Officer of decisions reached, and suggestions made,
at these sessions. The governance guidelines are available from the Secretary
upon written request, or on the Internet at http://investor.gm.com.
Stockholders wishing to communicate with the presiding director or with the
non-management directors as a group may send a letter by regular or express mail
addressed to the Secretary, General Motors Corporation, MC 482-C38-B71, 300
Renaissance Center, P.O. Box 33118, Detroit, MI, 48233-5118, Attention:
Presiding Director or Non-Management Directors. All correspondence sent to that
address will be delivered to those directors on a quarterly basis, unless
management determines by individual case that it should be sent more promptly.
All correspondence to directors will be acknowledged by the Secretary and may
also be forwarded within GM to the subject matter expert for an investigation.
DIRECTOR COMPENSATION
Only non-employee directors receive payment for serving on the Board. Since
Mr. Wagoner is an employee of the Corporation, he is not compensated as a
director. Non-employee directors are not eligible to participate in the
executive incentive program, Savings-Stock Purchase Program, or any of the
retirement programs for General Motors employees. Other than as described in
this section, there are no separate benefit plans for directors. Compensation
paid to non-employee directors is as follows:
* Annual Retainer -- $200,000(a)
* Retainer for Committee Chair -- $ 10,000
* Audit Committee Chair -- $ 30,000
* Audit Committee Member -- $ 20,000
(a) Under the General Motors Compensation Plan for Non-Employee Directors (the
"Plan"), non-employee directors are required to defer $140,000 of the annual
retainer noted above in restricted units of Common Stock. In addition, under
the Plan, directors may also elect to defer all or a portion of the
remaining compensation in cash or restricted units of Common Stock.
Restricted stock units under the Plan are credited with dividend
equivalents in the form of additional stock units. Amounts deferred under the
Plan are not available until after the director retires from the Board
5
at age 70, or otherwise terminates service. After the director leaves the Board,
payment under the Plan is made in cash based on the number of stock units valued
at the average quarterly mean market price prior to payment.
The Board has established a stock ownership guideline for non-employee
directors to enhance the link between director and stockholder interests. Each
non-employee director will be required to own stock and/or deferred restricted
stock units equal in value to three times the annual retainer within five years
of joining the Board. Non-employee directors are also prohibited during their
term of service from selling any shares of Common Stock, except from the
exercise of stock options granted prior to their elimination as a component of
compensation in 2003.
The Corporation also provides the use of company vehicles, certain personal
liability insurances, and other benefits on an annual basis at an estimated
aggregate value of $21,000 per director. Directors are also reimbursed for
travel expenses incurred in connection with their duties as directors.
Directors, like all active GM employees in the U.S., are eligible to participate
in a matching contributions program to accredited four-year colleges,
universities, and community colleges, and all eligible contributions will be
matched on a dollar-for-dollar basis up to $5,000 annually.
COMMITTEES OF THE BOARD OF DIRECTORS
AUDIT COMMITTEE met seven times in 2003. The function of the Committee is
to assist the Board of Directors in fulfilling its oversight responsibilities
with respect to the financial reports and other financial information provided
by the Corporation to the stockholders and others; the Corporation's system of
internal controls; the Corporation's compliance procedures for the employee code
of ethics and standards of business conduct; and the Corporation's audit,
accounting, and financial reporting processes. All members of the Audit
Committee are independent directors as defined by the Corporation's Bylaws and
the Listing Standards of the New York Stock Exchange (the "NYSE"). All members
are financially literate, as the Corporation's Board has interpreted such
qualification in its business judgment. Philip A. Laskawy satisfies the standard
for "audit committee financial expert" in compliance with the Sarbanes-Oxley Act
of 2002 and has accounting or related financial management expertise as required
by the NYSE. Currently, Mr. Laskawy serves on the audit committees of more than
three public companies. The Board has determined, in light of Mr. Laskawy's
depth of knowledge and experience and time available as a retiree, that this
simultaneous service does not impair his ability to function as a member and the
Chair of the Audit Committee. In fact, the Board believes this experience on a
number of audit committees enhances his contribution to GM's Audit Committee.
Membership: Philip A. Laskawy (Chair) Alan G. Lafley
Kent Kresa Eckhard Pfeiffer
DIRECTORS AND CORPORATE GOVERNANCE COMMITTEE met seven times in 2003 and is
comprised entirely of independent directors. The Committee researches and
recommends candidates for membership on the Board and conducts continuing
studies of the size, composition, and compensation of the Board. The Committee
is also responsible for implementing, periodically reviewing, and proposing
revisions to the Board's corporate governance guidelines; recommending Committee
memberships, rotation, and chairs; and setting the agendas for the executive
sessions of the Board of Directors.
Membership: George M.C. Fisher (Chair) Karen Katen
Percy N. Barnevik Alan G. Lafley
John H. Bryan
6
EXECUTIVE COMPENSATION COMMITTEE met six times in 2003. The Committee is
composed entirely of independent directors and ensures that the Corporation's
compensation policies and practices support the successful recruitment,
development, and retention of executive talent. The Committee reviews and
approves corporate goals and objectives related to compensation for the Chief
Executive Officer and senior executives, including the senior leadership group
of the Corporation. It also approves benefit and incentive compensation plans of
the Corporation and its major subsidiaries that affect employees subject to its
review. The members of the Committee are not eligible to participate in any of
the compensation plans or programs it administers.
Membership: John H. Bryan (Chair) Karen Katen
George M.C. Fisher
INVESTMENT FUNDS COMMITTEE met three times in 2003 and is comprised
entirely of independent directors. The Committee serves as the named fiduciary
of GM's and a number of its subsidiaries' benefit plans governed by the Employee
Retirement Income Security Act ("ERISA").
Membership: E. Stanley O'Neal (Chair) Philip A. Laskawy
Armando Codina Eckhard Pfeiffer
Kent Kresa
PUBLIC POLICY COMMITTEE met four times in 2003 and is comprised entirely of
independent directors. The Committee fosters GM's commitment to operate its
business worldwide in a manner consistent with the rapidly changing demands of
society. Topics reviewed by this Committee include research and development,
automotive safety, environmental and energy matters, diversity, health care,
education, communications, employee health and safety, trade, and philanthropic
activities. The Committee provides public policy guidance to management to
support GM's progress in growing the business globally within the framework of
GM's core values.
Membership: Percy N. Barnevik (Chair) E. Stanley O'Neal
Armando Codina
ITEM NO. 1
NOMINATION AND ELECTION OF DIRECTORS
The Proxy Committee will vote your shares for the 11 nominees described in
the following section unless you withhold such authority. Each director will
serve until the next annual election of directors and until a successor is
elected and qualified, or until the director's earlier resignation or removal.
If any nominees for director become unavailable before the annual meeting, which
is not anticipated, the Board of Directors may decrease the number of directors
to be elected or designate substitute nominees, who would receive the votes of
the Proxy Committee.
Of the nominees in the following section, Kent Kresa was elected a director
of General Motors Corporation since the last annual meeting of stockholders.
INFORMATION ABOUT NOMINEES FOR DIRECTORS
The following information about each nominee's principal occupation or
employment and other affiliations as well as Common Stock beneficially owned as
of February 29, 2004, has been furnished to the Corporation by the nominees for
directors.
7
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PERCY N. BARNEVIK AGE 63 JOINED GM BOARD 1996
Chairman, AstraZeneca PLC, United Kingdom, since 1999; Honorary Chairman,
Sandvik AB, Sweden, since 2002; Chairman, Sandvik AB, Sweden (1983-2002);
Chairman, Investor AB, Sweden (1997-2002); Chairman, ABB Ltd.,
Switzerland (1997-2001)
COMMITTEES -- Public Policy (Chair), Directors and Corporate Governance
DIRECTORSHIPS -- AstraZeneca PLC
AFFILIATIONS -- Member of The Business Council, the International Investment
Council advising the South African government, the International Advisory
Council of the Federation of Korean Industries, the India Advisory Council, the
Advisory Council of Centre for European Reform - UK, Advisory Councils at the
Wharton School of Business Administration and at Humboldt University in Berlin,
the Academies of Engineering Sciences in Sweden and Finland; Honorary member of
the American Academy of Arts and Sciences; Honorary member of the Royal Academy
of Engineering, UK
--------------------------------------------------------------------------------
JOHN H. BRYAN AGE 67 JOINED GM BOARD 1993
Retired Chairman and Chief Executive Officer, Sara Lee Corporation, Chicago,
Illinois, since 2001; held offices of Chairman (1976-2001) and Chief Executive
Officer (1975-2000)
COMMITTEES -- Executive Compensation (Chair), Directors and Corporate Governance
DIRECTORSHIPS -- BP p.l.c., Bank One Corporation, Goldman Sachs Group, Inc.
AFFILIATIONS -- Member of The Business Council and the National Trust Council of
the National Trust for Historic Preservation; Trustee of the University of
Chicago and Life Trustee of Rush-Presbyterian-St. Luke's Medical Center;
Chairman of the Board of Trustees of The Art Institute of Chicago and Chairman
of the Board of Millennium Park, Inc.
--------------------------------------------------------------------------------
ARMANDO M. CODINA AGE 57 JOINED GM BOARD 2002
Chairman and Chief Executive Officer, Codina Group, Inc., a full-service
commercial real estate firm based in Coral Gables, Florida, since 1979
COMMITTEES -- Investment Funds, Public Policy
DIRECTORSHIPS -- AMR Corporation, BellSouth Corporation
AFFILIATIONS -- Chairman Emeritus of the Board of Trustees of Florida
International University; Member of the Florida Council of 100
--------------------------------------------------------------------------------
GEORGE M.C. FISHER AGE 63 JOINED GM BOARD 1996
Retired Chairman and Chief Executive Officer, Eastman Kodak Company, Rochester,
New York, since 2001; held offices of Chairman (2000) and Chairman and Chief
Executive Officer (1997-2000)
COMMITTEES -- Directors and Corporate Governance (Chair), Executive Compensation
DIRECTORSHIPS -- Delta Air Lines, Inc., Eli Lilly and Company
AFFILIATIONS -- Chairman of the National Academy of Engineering; Member of The
Business Council and the International Academy of Astronautics; Fellow of the
American Academy of Arts and Sciences
--------------------------------------------------------------------------------
8
KAREN KATEN AGE 54 JOINED GM BOARD 1997
President, Pfizer Global Pharmaceuticals, New York, New York, and Executive Vice
President, Pfizer Inc, since 2001; held offices of Corporate Senior Vice
President (1999-2001), Executive Vice President, Pfizer Pharmaceuticals Group
(1995-2001), and President, Pfizer U.S. Pharmaceuticals Group (1995-2002)
COMMITTEES -- Directors and Corporate Governance, Executive Compensation
DIRECTORSHIPS -- Harris Corporation
AFFILIATIONS -- Member of the National Board of Trustees for the American Cancer
Society Research Foundation, the Boards of Directors of the National Alliance
for Hispanic Health, Catalyst, RAND, and the Council for the United States and
Italy; Trustee of the University of Chicago and Council Member of the Graduate
School of Business; Appointee to the 2003 U.S.-Japan Private Sector/Government
Commission and the National Infrastructure Advisory Committee
--------------------------------------------------------------------------------
KENT KRESA AGE 66 JOINED GM BOARD 2003
Chairman Emeritus, Northrop Grumman Corporation, Los Angeles, California, since
October 2003; held offices of Chairman and Chief Executive Officer (1990-2003)
and President (1987-2001)
COMMITTEES -- Audit, Investment Funds
DIRECTORSHIPS -- Avery Dennison Corporation, Fluor Corporation
AFFILIATIONS -- Member of the Boards of the W.M. Keck Foundation, the Haynes
Foundation, and Performing Arts Center of Los Angeles County; Trustee for
California Institute of Technology
--------------------------------------------------------------------------------
ALAN G. LAFLEY AGE 56 JOINED GM BOARD 2002
Chairman, The Procter & Gamble Company, Cincinnati, Ohio, since 2002, and
President and Chief Executive since 2000; held offices of President -- Global
Beauty Care and North America (1999-2000), Executive Vice President and
President -- North America, Procter & Gamble North America (1998-1999)
COMMITTEES -- Audit, Directors and Corporate Governance
DIRECTORSHIPS -- The Procter & Gamble Company, General Electric Company
AFFILIATIONS -- Member of The Business Roundtable, The Business Council, G100,
the American Society of Corporate Executives, the Boards of Trustees
of Hamilton College and Xavier University, the Lauder Institute Board of
Governors (Wharton School of Arts & Sciences), and the Board of Directors of the
United Negro College Fund
--------------------------------------------------------------------------------
PHILIP A. LASKAWY AGE 63 JOINED GM BOARD 2003
Retired Chairman and Chief Executive Officer, Ernst & Young, New York, New York,
since 2001; held offices of Chairman and Chief Executive Officer (1994-2001)
COMMITTEES -- Audit (Chair), Investment Funds
DIRECTORSHIPS -- Henry Schein, Inc., Loews Corporation, The Progressive
Corporation
AFFILIATIONS -- Trustee of the International Accounting Standards Committee
Foundation
--------------------------------------------------------------------------------
9
E. STANLEY O'NEAL AGE 52 JOINED GM BOARD 2001
Chairman, Merrill Lynch & Co., Inc., New York, New York, since 2003, and Chief
Executive Officer since 2002; held offices of President and Chief Operating
Officer (2001-2002), President, U.S. Private Client Group (2000-2001), Executive
Vice President and Chief Financial Officer (1998-2000)
COMMITTEES -- Investment Funds (Chair), Public Policy
DIRECTORSHIPS -- Merrill Lynch & Co., Inc.
AFFILIATIONS -- Member of the Board of Directors of Memorial Sloan-Kettering
Cancer Center, the Center for Strategic and International Studies (CSIS), and
The Lincoln Center Theater
--------------------------------------------------------------------------------
ECKHARD PFEIFFER AGE 62 JOINED GM BOARD 1996
Retired President and Chief Executive Officer, Compaq Computer Corporation,
Houston, Texas, since 1999; held offices of President and Chief Executive
Officer (1991-1999)
COMMITTEES -- Audit, Investment Funds
DIRECTORSHIPS -- Chairman, Intershop Communications AG; IFCO Systems, N.V.;
Syntek Capital AG; Telefonaktiebolaget LM Ericsson
AFFILIATIONS -- Member of the Advisory Board of Deutsche Bank
--------------------------------------------------------------------------------
G. RICHARD WAGONER, JR. AGE 51 JOINED GM BOARD 1998
Chairman and Chief Executive Officer, General Motors Corporation, since
May 1, 2003; held offices of President and Chief Executive Officer (2000-2003),
President and Chief Operating Officer (1998-2000); joined General Motors
Corporation in 1977
DIRECTORSHIPS -- General Motors Acceptance Corporation, subsidiary of GM
AFFILIATIONS -- Member of The Business Council and The Business Roundtable, the
Boards of Directors of Catalyst and Detroit Renaissance, and the Boards of
Trustees of Duke University and Detroit Country Day School
--------------------------------------------------------------------------------
10
SECURITY OWNERSHIP OF DIRECTORS, NAMED EXECUTIVE OFFICERS,
AND CERTAIN OTHERS
The beneficial ownership as of February 29, 2004, of Common Stock for each
director, each Named Executive Officer, and all current directors and officers
as a group is shown in the following tables. The shares listed below do not
include Common Stock held by the pension or profit sharing plans of any other
corporation or other entity, or of any endowment funds of an educational or
charitable institution of which a director or executive may serve as director or
trustee. Each of the individuals listed below, as well as all the current
directors and officers as a group, owns less than one percent of the outstanding
shares and voting power of Common Stock.
DIRECTORS
SHARES DEFERRED
BENEFICIALLY STOCK STOCK
OWNED UNITS (a) OPTIONS (b)
------------ --------- -----------
P. N. Barnevik.................. 9,628 10,848 2,000
J. H. Bryan..................... 6,603 17,883 10,738
A. M. Codina.................... 2,000 7,476 2,000
G. M.C. Fisher.................. 4,752 12,563 7,908
K. Katen........................ 4,000 13,472 7,141
K. Kresa........................ 8,200 917 0
A. G. Lafley.................... 2,000 8,365 2,000
P. A. Laskawy................... 2,000 3,669 0
E. S. O'Neal.................... 1,000(c) 5,507 2,000
E. Pfeiffer..................... 4,512 14,341 9,436
---------------
(a) Deferred Stock Units -- These amounts have been deferred under the General
Motors Corporation Compensation Plan for Non-Employee Directors. For more
information about this plan, please refer to the section on Director
Compensation on page 5. Prior GM Class H restricted stock units and stock
options were converted into Common Stock restricted stock units as a result
of the split-off of Hughes Electronics Corporation from GM.
(b) Number of shares that may be acquired through the exercise of stock options
within 60 days of February 29, 2004. Directors no longer receive stock
options; the last grant was in 2002.
(c) E. S. O'Neal disclaims any beneficial ownership of any Common Stock owned by
Merrill Lynch & Co., Inc. or its affiliates, for the benefit of others or
itself.
NAMED EXECUTIVE OFFICERS AND
ALL DIRECTORS AND EXECUTIVE OFFICERS
SHARES DEFERRED
BENEFICIALLY STOCK STOCK
OWNED (a) UNITS (b) OPTIONS (c)
------------ --------- -----------
G. L. Cowger.......................... 42,629 2,348 218,656
J. M. Devine.......................... 47,079 262,753 766,669
T. A. Gottschalk...................... 65,914 49,927 500,790
R. A. Lutz............................ 8,722 216,140 333,336
G. R. Wagoner, Jr..................... 141,082 156,099 1,805,547
All Directors & Officers of the
Corporation as a Group................ 518,145 937,046 5,231,941
---------------
(a) Shares Beneficially Owned include shares credited under the General Motors
Savings-Stock Purchase Program for Salaried Employees (the "GM S-SPP") and
the General Motors Canadian Savings-Stock Program for Salaried Employees
(the "GM Canadian Plan"). The GM S-SPP is generally available to all
salaried employees in the U.S. and provides that participants may contribute
up to 50% of eligible salary,
11
subject to maximum limits established by the Internal Revenue Code (the
"IRC"). The GM Canadian Plan is available to all salaried employees in
Canada, and there is no maximum contribution limit.
(b) Deferred Stock Units include shares under the General Motors Benefit
Equalization Plan-Savings (the "BEP-S"). The BEP-S is a non-qualified
"excess benefits" plan that is exempt from the Employee Retirement Income
Security Act ("ERISA") and the IRC limitations and provides executives with
the full GM matching contribution without regard to the IRC limitations.
Amounts credited under the Plan are maintained in share units of Common
Stock. Following termination of employment, an employee may elect to receive
a complete distribution of amounts in the BEP-S account, which will be paid
in cash. Deferred units also include undelivered incentive awards and other
awards that will vest upon the occurrence of certain events and that are
subject to forfeiture under certain circumstances.
(c) Number of shares that may be acquired through the exercise of stock options
within 60 days from February 29, 2004. Additional information regarding
stock options is provided on pages 18 and 19.
CERTAIN BENEFICIAL OWNERS
The following table gives information about each entity known to GM to be
the beneficial owner of more than five percent of Common Stock as of February
29, 2004.
NUMBER OF PERCENT OF
NAME AND ADDRESS SHARES CLASS
---------------- --------- ----------
State Street Bank and Trust Company(a) 101,250,013 18.0%
225 Franklin Street
Boston, MA 02110
Capital Research and Management Company 62,556,470(b) 11.1%
333 South Hope Street
Los Angeles, CA 90071
Sole dispositive power as investment
advisor
---------------
(a) Acting in various fiduciary capacities for various employee benefit plans.
(b) Includes 2,101,270 shares issuable upon the conversion of the 5.25%
Convertible Series B Debentures due March 6, 2032.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
E. Stanley O'Neal, a member of GM's Board, is the Chairman and Chief
Executive Officer of Merrill Lynch & Co., Inc., which provided services
including underwriting and investment banking services to GM in 2003. The Board
of Directors has considered the relevant facts and circumstances regarding the
relationship between GM and Merrill Lynch & Co., Inc., and has concluded that
based on Mr. O'Neal's recusal from GM business with Merrill Lynch, GM's
long-standing practice of maintaining relationships with several major
investment banks, and the amount of fees paid in 2003 and in recent years by GM
to Merrill Lynch in proportion to the revenues and expenses of each company
during those periods, there is no material relationship between Mr. O'Neal and
GM, so that he qualifies as independent under the requirements of the New York
Stock Exchange (the "NYSE").
In 2003, Codina Family Investments ("CFI"), a limited partnership owned
indirectly by Mr. Codina and members of his family, purchased a majority
interest in the limited partnership that publishes Hispanic Magazine. GM has
advertised in that publication for several years, and in 2003 purchased
approximately $490,000 of advertising. In 2003 Mr. Codina held only a 1%
interest in CFI, which he has now divested. The other Codina family members
involved in this transaction are independent adults. Based on these facts, the
Board of Directors has determined Mr. Codina does not have a material
relationship with GM based on his family members' indirect interest in a company
doing business with GM, so that he qualifies as independent under the NYSE
requirements.
12
Executive officers of General Motors have from time to time received
mortgage loans from GMAC or its subsidiaries, or acted as co-signers for loans
made to family members. Those loans were made in the ordinary course of business
and on the same terms and conditions, including interest rates and collateral,
as those prevailing at the same time for comparable transactions with other
employees, retirees, and dealers of General Motors, which are substantially the
same as those offered to unrelated customers.
The Corporation's policy on loans to directors and executive officers of
the Corporation has been revised to comply with the Sarbanes-Oxley Act of 2002
("Sarbanes-Oxley"), which generally prohibits public companies from making
personal loans to their executive officers and directors. The Corporation
prohibits loans to its directors and executive officers, other than GMAC
mortgage and auto loans, which are made on terms that are acceptable under
Sarbanes-Oxley.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Federal securities law requires that directors and certain officers of the
Corporation must report to the Securities and Exchange Commission and the
Corporation, within certain periods, the number of shares of the Corporation's
equity securities they own and any changes in such ownership. Based upon
information furnished by these stockholders, the Corporation believes that all
required filings for 2003 and prior years have been made in a timely manner,
except that in December 2002, K. S. Barclay made a charitable gift of Common
Stock and inadvertently filed her Statement of Changes in Beneficial Ownership
of Securities (Form 4) after the due date.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee is responsible for overseeing the
development and administration of the compensation and benefit programs for the
Corporation's executives, including Named Executive Officers whose compensation
is reported in this proxy statement. To assist in this process, the Committee
engages an independent executive compensation consulting firm, which is directly
accountable to the Committee. Since 1989, the Committee has been composed
entirely of independent directors. In 2003, the membership of the Committee was
composed of John H. Bryan, Chair, George M.C. Fisher, and Karen Katen.
As in prior years, during 2003, the Board of Directors met in executive
session to review the Corporation's performance and the performance of the CEO
and other senior leaders, including the Named Executive Officers. The Committee
advised the Board with respect to all compensation determinations for these
executives. Further, the Committee regularly updates the Board on key
compensation matters.
During the year the Committee also reviewed and strengthened its charter,
including adoption of an annual self-evaluation process to ensure compliance
with Sarbanes-Oxley and the revised NYSE Listing Standards. During 2003, the
Committee held six meetings, and the same number is scheduled for 2004.
COMPENSATION PHILOSOPHY -- Executive compensation programs for General
Motors and its major subsidiaries are based on the belief that the interests of
employees should be closely aligned with those of GM's stockholders. Under this
philosophy:
* A significant portion of each executive's total compensation is linked to
accomplishing specific, measurable results intended to create value for
stockholders in both the short- and long-term.
* Compensation plans are developed to motivate executives to improve the
overall performance and profitability of the Corporation, and the
specific region/unit to which they are assigned. Executives will be
rewarded only when and if the business goals previously established by
management and the Committee have been achieved.
* Each executive's individual performance and contribution will be
reflected through differentiated salary adjustments and the amount of
incentive awards paid, if any.
* Long-term incentive awards are paid in Common Stock to further reinforce
the link between executives' and stockholders' interests.
13
* The target structure for total compensation is established in the third
quartile. As a result, in years of strong performance, executives can
earn highly competitive levels of compensation as compared to executives
at comparator companies. The Corporation will thus be able to attract,
retain, and motivate the leadership talent it needs to maintain and grow
its businesses successfully. Conversely, in years where performance falls
below objectives, executives will receive compensation that is lower than
competitive benchmarks.
STOCK OWNERSHIP GUIDELINES -- The Corporation feels strongly that the best
way to reinforce the link between the executives' and stockholders' interests is
to require that executives own a significant amount of Common Stock. As a
result, the Committee has established formal stock ownership guidelines for all
corporate officers, including the Named Executive Officers, and other select
senior executives. As evidence of their commitment to these guidelines, each
current Named Executive Officer holds more than his respective guideline amount.
The guidelines are as follows:
MINIMUM AGGREGATE
POSITION VALUE EQUIVALENT
-------- -----------------
Chairman and CEO, and Vice Chairmen............. 5 times base salary
Executive Vice Presidents....................... 4 times base salary
Group Vice Presidents........................... 3 times base salary
Vice Presidents and Operating Executives........ 2 times base salary
COMPENSATION DEDUCTIBILITY POLICY -- In 2002, GM stockholders approved an
incentive compensation program effective until 2007, which includes provisions
allowing the Corporation to comply with regulations under Section 162(m) of the
Internal Revenue Code. As a result, the Corporation is able to take a tax
deduction for performance-based compensation in excess of $1 million per taxable
year paid to each of the Named Executive Officers. The Code does not permit
companies to take a tax deduction for salary paid in excess of $1 million. While
the Corporation makes every effort to ensure that it will be able to deduct the
compensation it pays, if compliance with Section 162(m) conflicts with the
Corporation's compensation philosophy, or what is believed to be in the best
interests of the Corporation and its stockholders, we may conclude that paying
non-deductible compensation is more consistent with that philosophy and in the
Corporation's and stockholders' best interests.
TYPES OF COMPENSATION -- In addition to retirement benefits, which are
reviewed in the tables following this report, there are three major components
of an executive's total compensation package:
* Base Salary
* Annual Incentives
* Long-Term Incentives
In determining the proper amount for each compensation component, we review
the compensation paid for similar positions at other large corporations with
which GM competes for executive talent and relative internal equity within our
executive pay structure. Because the job market for these executives is not
limited to the auto industry alone, a group consisting of 28 significant, global
industrial/service corporations has been identified as our "comparator group."
Each year we carefully review the composition of the comparator group and review
the compensation paid at these companies, as well as their corporate
performance, and other factors in determining the appropriate performance
measures and compensation levels for our executives. We also rely on information
and advice provided by our outside consultant.
Base Salary -- When establishing base salaries for GM executives,
consideration is given to compensation data for similar positions at our
comparator group of companies. In addition, other factors such as individual
performance, potential for future advancement, specific job responsibilities,
and length of time in their current position will influence the final
determination for individual executives.
Annual Incentives -- For the 2003 performance year, annual incentives for
all executive officers were earned under the General Motors 2002 Annual
Incentive Plan that was approved by the stockholders at the 2002 annual meeting.
All executives are eligible to be considered for annual incentive awards.
At the beginning of each performance period, the Committee establishes
performance targets, and also sets a minimum performance level that must be
achieved before any awards can be paid. If this minimum
14
level of performance is not met, there will be no annual incentive payout.
Stockholders approved a maximum award payable to any one individual as part of
the 2002 Annual Incentive Plan. When we establish the payout range, we assess
the degree of performance necessary to achieve the objective by reviewing both
past and projected performance levels, as well as external marketplace
conditions such as the economic outlook, competitive performance levels,
projected automotive industry volumes, projected market share, and quality
improvements. The size of final awards depends on the actual level of
performance achieved in comparison with the pre-established corporate and
region/unit objectives, as well as individual performance. Performance data may
be adjusted to reflect the impact of unplanned or extraordinary events. Finally,
a peer review is conducted to assess GM's business performance relative to that
of key competitors.
As in previous years, management recommended that the Committee establish
very aggressive performance targets for 2003. We tied the payment of annual
incentive awards to meeting specific levels of net income, Return On Net Assets
("RONA"), market share, and quality that were based upon the Corporation's
business plans. At the end of 2003, we reviewed the Corporation's overall
operating performance and determined that financial results for net income and
RONA were above target performance requirements. In addition, for geographic
regions/operating units, we reviewed performance against pre-established targets
for quality and market share within those regions/units. Performance varied
significantly from below threshold in some regions to well above target in
others. As a result, in the aggregate, the corporate final incentive award
payouts were slightly above the target level.
Stock Options -- Stock options were also granted under the provisions of
the 2002 Stock Incentive Plan. All executives are eligible to be considered for
stock option grants. We believe that options may be appropriately granted to
emphasize the importance of improving stock price performance and increasing
stockholder value over the long-term, and to encourage executives to own GM
common stock. These options are granted at 100% of the average price of the
stock on the date of grant. In this way executives can be rewarded only if the
stock price increases, which will benefit both stockholders and executives. Our
Plan does not allow the re-pricing of options without stockholder approval.
Options are granted based on competitive long-term incentive compensation
practices. In determining the size of new grants to each Named Executive
Officer, we consider the number of option shares each executive has previously
been granted. Beginning with 2003, all General Motors new stock option grants
are expensed as a compensation cost over the vesting period.
Other Long-Term Incentives -- Stock Performance Program awards under the GM
Long-Term Incentive Plan are normally granted only to the Corporation's senior
executives. Like annual incentive awards, these grants are made annually;
however, any payout is determined based on the Total Shareholder Return ("TSR")
performance ranking of Common Stock compared to that of other stocks in the S&P
500 Composite Stock Price Index (the "S&P 500 Index") over a three-year period.
Executives were granted target awards denominated in shares of the Corporation's
Common Stock at the beginning of the 2003-2005 performance period. The final
number of shares to be delivered at the end of the three-year performance
period, if any, will depend on GM's TSR ranking (based on market price
appreciation plus the compounding effect of reinvested dividends) relative to
other companies in the S&P 500 Index. If the Corporation's ranking in the S&P
500 Index over the three-year period falls below the 25th percentile, no payout
will be made. If the Corporation ranks within the top 10% of the companies in
the S&P 500 Index, the maximum payout level would be achieved. Between threshold
and maximum, payout percentages will be related to the ranking position. By
establishing awards in this fashion, executives will be highly motivated to
improve stock price performance, which would be to their benefit as well as that
of the Corporation's stockholders. We believe this plan in combination with
stock options for our senior executives provides a balanced approach with regard
to equity compensation by providing an additional long-term focus based on
relative performance.
For the 2001-2003 period, GM's TSR results were at the target level
established for payout of the long-term incentive plan, and therefore, awards
were paid at the target level.
In 2002, in order to motivate the executive workforce to intensify its
focus on improving the Corporation's cash flow and cost reduction efforts, we
made a "Leadership Challenge Grant" under the 1997 Performance Achievement Plan
to the entire executive team worldwide. Payment of this grant was predicated on
increasing the Corporation's cash generation from operations in 2002 and 2003,
and reducing structural
15
cost beyond committed levels in 2002 and 2003. The Corporation met three of
these four targets, and the awards were paid in stock at 75% of target award
level in January 2004.
AWARDS TO CHIEF EXECUTIVE OFFICER
In determining Mr. Wagoner's compensation for 2003, the Committee
considered a number of important factors, particularly his continued highly
effective leadership in establishing GM's solid financial performance in cash
generation and cost reduction despite challenging economic conditions and
intense competition. Impressive results were achieved in a number of key areas,
including maintaining high quality standards through well-executed new vehicle
launches with aggressive marketing and improved productivity. Importantly, a
competitive new labor accord was reached in the U.S. during the third quarter of
2003 after intense bargaining, with no disruption in operations or productivity.
In 2003, GM continued to set numerous sales records around the world and
continued to make substantial inroads in key growth markets such as China and
Korea. In addition, financing operations remained strong and GMAC reported
record earnings, nearly doubling results from insurance operations and
generating its biggest year-over-year improvement in mortgage operations. During
the third quarter, GM stockholders voted to approve transactions that would
result in the split-off of Hughes, and GM completed the transactions in December
2003. Mr. Wagoner's role in leading the Corporation was further reflected in
GM's continued solid financial performance during the year, and the Committee
therefore, determined Mr. Wagoner's compensation as follows:
Base Salary -- In recognition of his continued outstanding leadership and
promotion to Chairman of the Board, Mr. Wagoner's salary was increased 10% to
$2,200,000 effective January 1, 2003, after an interval of 24 months since his
last increase. No further compensation adjustments were granted upon his
promotion effective May 1, 2003.
Annual Incentives -- Results in relation to the established corporate and
regional performance targets for net income, RONA, market share, and quality
that were established to encourage continuous improvement from prior-year levels
were above target. Therefore the final award for Mr. Wagoner was set slightly
above the target level.
Stock Options -- As part of the Corporation's continuing compensation
review process, the Committee reviewed the size and expected value of the
options granted to Mr. Wagoner in comparison with option grants to CEOs of our
comparator group of companies and to executives internally. After consideration
of the number of options previously granted to Mr. Wagoner, the Committee set
his 2003 stock option grant at 500,000 shares of Common Stock.
Other Long-Term Incentives -- The Long-Term Incentive Plan target grants
cover the three-year period 2003-2005 and are disclosed on page 19. Because the
cumulative TSR for the 2001-2003 performance period was at target as described
above, payout in shares of Common Stock was set at 100% of target level.
Three of the four discrete cash generation and structural cost reduction
targets of the 2002-03 Leadership Challenge Grant were met despite a highly
competitive market environment, and Mr. Wagoner received a payment in shares of
Common Stock at 75% of target level for the Leadership Challenge Grant, as was
the case with respect to other eligible executives who remained actively
employed throughout the entire performance period.
During 2003, the Committee met with the Board of Directors in executive
session to review the Corporation's performance and the performance of Mr.
Wagoner and other members of senior management. The Board concurred with our
decisions.
EXECUTIVE COMPENSATION COMMITTEE
John H. Bryan, Chair
George M.C. Fisher Karen Katen
16
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below shows the pre-tax compensation paid during the last three
fiscal years to Chairman and Chief Executive Officer G. R. Wagoner, Jr., and
each of the four other most highly compensated executive officers during 2003.
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------------- -----------------------------------
AWARDS PAYOUTS
OTHER -----------------------------------
ANNUAL RESTRICTED LONG-TERM ALL OTHER
NAME AND COMPEN- STOCK UNITS STOCK INCENTIVES COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS SATION(1) (2) OPTIONS (3) SATION(4)
------------------ ---- ------ ----- --------- ----------- ------- ---------- ---------
$ $ $ $ # Shares $ $
G. R. Wagoner, Jr. 2003 2,200,000 2,860,000 58,578 500,000 3,313,000 76,994
Chairman of the Board 2002 2,000,000 0 5,006,250 600,000 0 34,382
& CEO 2001 2,000,000 0 400,000 480,000 84,160
J. M. Devine 2003 1,550,000 1,612,000 55,604 200,000 2,821,000 463,472
Vice Chairman and Chief 2002 1,450,000 0 3,003,750 300,000 703,000 428,953
Financial Officer 2001 1,450,000 1,500,000 69,721 200,000 1,380,000 418,168
R. A. Lutz 2003 1,550,000 1,612,000 57,010 200,000 3,171,000 61,994
Vice Chairman -- Product 2002 1,450,000 0 94,153 3,003,750 200,000 1,388,000 26,581
Development; Chairman, 2001 483,333 500,000 200,000
GM North America; and
Interim President, GM
Europe
T. A. Gottschalk -- Executive 2003 929,167 850,000 52,279 90,000 1,196,000 37,163
Vice President, Law & Public 2002 900,000 0 1,602,000 140,000 0 19,800
Policy and General Counsel 2001 858,000 0 70,000 230,000 32,617
G. L. Cowger* -- Group 2003 775,000 646,000 58,718 55,000 787,000 23,244
Vice President & President,
GM North America
---------------
* Mr. Cowger became an executive officer in 2003.
(1) Amounts include $22,598 (2003) for Mr. Wagoner; $26,599 (2001) and $25,288
(2003) for Mr. Devine; $64,536 (2002) and $17,295 (2003) for Mr. Lutz;
$16,963 (2003) for Mr. Gottschalk; and $16,207 (2003) for Mr. Cowger related
to personal use of company aircraft as well as required spousal business
travel.
(2) The number and value of aggregate unvested or unpaid incentive awards,
including restricted stock or Performance Achievement Plan holdings of each
of the Named Executive Officers to be earned over their careers as of
December 31, 2003, were: Mr. Wagoner 146,710 units Common Stock
($7,834,314); Mr. Devine 227,320 units Common Stock ($12,138,888); Mr. Lutz
135,706 units Common Stock ($7,246,700); Mr. Gottschalk 40,000 units Common
Stock ($2,136,000); and Mr. Cowger 19,460 units Common Stock ($1,039,164).
The value of the restricted stock and Performance Achievement Plan units is
based on the December 31, 2003 closing stock price of $53.40 for Common
Stock. Dividend equivalents are paid at the same rate as paid on the
Corporation's Common Stock.
(3) Amounts reflect long-term incentive payouts under the General Motors 1997
Performance Achievement Plan, the 2002-03 Leadership Challenge Grant, and
vested Restricted Stock Units for Mr. Devine valued at $937,530 and for Mr.
Lutz valued at $1,288,000. The Performance Achievement Plan awards and the
Leadership Challenge Grant were paid in the form of shares of the
Corporation's Common Stock on January 23, 2004.
(4) These amounts include contributions by the Corporation under the various
savings plans and the value of premiums paid by the Corporation with respect
to term life insurance for the benefit of the respective officers.
Additional information regarding the savings plans will be found in footnote
(a) on page 11. For 2003, the respective amounts are as follows: Mr. Wagoner
$65,994 savings plans, $11,000 life and accident insurance; Mr. Devine
$61,994 savings plans, $16,458 life insurance, and periodic pension
17
replacement payments totalling $385,020, as compensation for foregone
non-qualified pension benefits from a previous employer; Mr. Lutz $61,994
savings plans; Mr. Gottschalk $37,163 savings plans; and Mr. Cowger $23,224
savings plans.
OPTION/SAR GRANTS IN 2003
The following table shows the stock options granted to the Named Executive
Officers in 2003. They were granted in a combination of non-qualified and
Incentive Stock Options ("ISOs") on January 21, 2003. All options become
exercisable in three equal annual installments commencing on the first
anniversary of the date of grant. The ISOs expire ten years from the date of
grant, and the non-qualified options expire two days later.
INDIVIDUAL GRANTS
---------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED GRANT DATE
UNDERLYING TO EMPLOYEES EXERCISE EXPIRATION PRESENT
NAME OPTIONS GRANTED IN 2003 PRICE DATE VALUE(1)
---- --------------- --------------- -------- ---------- ----------
# Shares % $/Share $
G. R. Wagoner, Jr............. 500,000 2.97 40.05 1/22/13 4,290,000
J. M. Devine.................. 200,000 1.19 40.05 1/22/13 1,716,000
R. A. Lutz.................... 200,000 1.19 40.05 1/22/13 1,716,000
T. A. Gottschalk.............. 90,000 0.54 40.05 1/22/13 772,200
G. L. Cowger.................. 55,000 0.33 40.05 1/22/13 471,900
---------------
(1) These values were determined based on the Black-Scholes option pricing model
at the time of grant. The following assumptions were used in the
calculation:
* Expected price volatility -- 35.4%;
* Options will be exercised in the fifth year;
* An interest rate based on the yield of a government bond maturing five
years from the date of grant (2.94%);
* Dividends at the rate in effect at the date of grant (4.99%);
* No adjustments for non-transferability.
The fact that we use the Black-Scholes model does not necessarily mean we
believe or acknowledge that it can accurately determine the value of options.
The ultimate value of the option, if any, will depend on the future market price
of Common Stock and the optionee's individual investment decisions, neither of
which can be predicted with any degree of certainty.
18
AGGREGATED OPTION/SAR EXERCISES IN 2003 AND
OPTION/SAR VALUES AT DECEMBER 31, 2003
The following table provides information concerning the options held by
each of the Named Executive Officers at the end of 2003. The year-end value is
based on the closing price of Common Stock on December 31, 2003 ($53.40).
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
DECEMBER 31, 2003 DECEMBER 31, 2003
SHARES
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------------------- ------------------------
# Shares $ # Shares $
G. R. Wagoner, Jr....... 0 0 1,305,548 / 1,033,330 4,510,371 / 7,966,993
J. M. Devine............ 0 0 533,336 / 666,664 680,006 / 3,475,994
R. A. Lutz.............. 0 0 200,002 / 399,998 184,004 / 3,037,996
T. A. Gottschalk........ 0 0 400,793 / 206,662 1,741,843 / 1,488,389
G. L. Cowger............ 0 0 155,324 / 129,997 248,058 / 917,994
LONG-TERM INCENTIVE AWARDS
The following table shows target long-term incentive award opportunities
granted to Named Executive Officers in 2003. The award opportunities cover the
2003-2005 performance period and were granted under the General Motors 2002 Long
Term Incentive Plan. If the minimum or threshold performance level is met or
exceeded, the percentage of the target award that will eventually be paid to
participants will depend on the Corporation's Total Shareholder Return ("TSR")
ranking relative to other companies in the S&P 500 Composite Stock Price Index
(the "S&P 500 Index") over the three-year period. If the minimum performance
level is not met, no awards will be paid. Each unit in the table refers to a
share of Common Stock.
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE-BASED PLANS
# SHARES, -----------------------------------------------
UNITS, OR PERFORMANCE
NAME OTHER RIGHTS PERIOD THRESHOLD TARGET MAXIMUM
---- ------------ ----------- --------- ------ -------
G. R. Wagoner, Jr.......... 100,591 2003-2005 50,296 100,591 201,182
J. M. Devine............... 40,237 2003-2005 20,119 40,237 80,470
R. A. Lutz................. 40,237 2003-2005 20,119 40,237 80,470
T. A. Gottschalk........... 25,483 2003-2005 12,742 25,483 50,966
G. L. Cowger............... 19,850 2003-2005 9,925 19,850 39,700
RETIREMENT PROGRAM
General Motors executives in the United States may receive benefits in
retirement from both a tax-qualified plan that is subject to the requirements of
the Employee Retirement Income Security Act ("ERISA") and from non-qualified
plans. Together, these plans are referred to here as the "GM Salaried Program."
Retired executives' tax-qualified benefits are pre-funded and are paid out of
the assets of the General Motors Retirement Program for Salaried Employees;
however, non-qualified benefits are not pre-funded and are paid out of the
Corporation's general assets.
Two formulas are used to calculate the total of both the tax-qualified and
non-qualified retirement benefits available to eligible U.S. executives, both of
which require a minimum of ten years of Part B service (however in the case of
Mr. Devine, his employment agreement permits eligibility for SERP after a
minimum of five years Part B service). One formula, the regular Supplemental
Executive Retirement Plan ("SERP") Formula, offers benefits that are calculated
based upon an average of the highest five years of salary during the last ten
years of the executive's career, and also takes into account both the
executive's contributory and non-contributory service to GM. These benefits are
subject to an offset of a portion of the maximum Social Security Benefit
available to an individual at age 65, regardless of actual receipt. The Board of
Directors has delegated to the Committee discretionary authority to grant
additional eligible years of credited service to
19
selected key executives under such terms and conditions as the Committee shall
determine for purposes of computing the regular and alternative forms of SERP
for such executives.
The alternative SERP Formula determines benefits based upon average annual
total direct compensation, calculated as the sum of [a] the average of the
highest five years of salary in the ten years before retirement plus [b] the
average of the highest five years of bonus received in the ten years preceding
retirement -- each average calculated independently. The alternative SERP
Formula also takes into account the executive's contributory (or
non-contributory) service subject to a maximum of 35 years and provides for an
offset of 100% of the maximum Social Security Benefit available to an individual
at age 65. Only executives who satisfy certain criteria, including not working
for any competitor or otherwise acting in any manner that is not in the best
interests of the Corporation, are eligible to receive benefits calculated under
the alternative SERP Formula in lieu of benefits calculated under the regular
SERP Formula. If the executive is eligible for the alternative formula, total
tax-qualified and non-qualified retirement benefits payable under both formulas
are compared, and the executive will receive whichever retirement benefit is
greater. Both the regular and alternative forms of the SERP benefit are provided
under a program that is non-qualified for tax purposes and not pre-funded.
Non-qualified benefits under either the regular or alternative formulas can be
reduced or eliminated for both retirees and active employees by the Committee
and/or the Board of Directors.
Table I shows the estimated total of both the tax-qualified and
non-qualified retirement benefits, as calculated under the regular SERP Formula
(based upon an Average Annual Base Salary as of December 31, 2003), that would
be paid in monthly installments as a single life annuity to GM executives
retiring as early as age 62 in 2003.
Table II shows the estimated total of both the tax-qualified and
non-qualified retirement benefits as calculated under the alternative SERP
Formula (based upon Average Annual Total Direct Compensation as of December 31,
2003) that would be paid in monthly installments as a single life annuity to GM
executives retiring as early as age 62 in 2003.
If an eligible executive elects to receive the retirement benefits shown in
Tables I or II in the form of a 65% joint and survivor annuity, the single life
annuity amounts shown in each of the tables would generally be reduced by 5% to
12%, depending upon the age differential between spouses. In addition,
executives may elect to receive a portion of the non-qualified SERP benefit paid
in a lump sum, calculated using mortality tables and a seven percent discount
rate.
TABLE I
PROJECTED TOTAL ANNUAL RETIREMENT BENEFITS FROM ALL COMPONENTS OF THE GM
SALARIED PROGRAM ASSUMING EXECUTIVE'S BENEFITS ARE CALCULATED UNDER THE REGULAR
SERP FORMULA (a)
YEARS OF CREDITED SERVICE
AVERAGE ANNUAL -------------------------------------------------------
BASE SALARY 10 15 25 35 45
-------------- -------- -------- --------- --------- ---------
$ $ $ $ $ $
500,000 95,620 143,430 239,050 334,670 430,290
1,000,000 195,620 293,430 489,050 684,670 880,290
1,500,000 295,620 443,430 739,050 1,034,670 1,330,290
2,000,000 395,620 593,430 989,050 1,384,670 1,780,290
2,500,000 495,620 743,430 1,239,050 1,734,670 2,230,290
---------------
(a) The Average Annual Base Salary and the Years of Credited Service as of
December 31, 2003, for each of the Named Executive Officers were as follows:
Mr. Wagoner $1,807,500 (26 years); Mr. Gottschalk $836,250 (19 years); and
Mr. Cowger $628,500 (37 years). Mr. Devine completed 36 months of service
with the Corporation as of December 31, 2003, and his Average Annual Base
Salary for such 36-month period was $1,483,333 per annum. Mr. Lutz completed
28 months of service with the Corporation as of December 31, 2003, and his
Average Annual Base Salary for such 28-month period was $1,492,857 per
annum. The Annual Base Salaries for the most recent year(s) considered in
the calculations reported here will be found in the Summary Compensation
Table on page 17 in the column labeled "Salary."
20
TABLE II
PROJECTED TOTAL ANNUAL RETIREMENT BENEFITS FROM ALL COMPONENTS OF THE GM
SALARIED PROGRAM ASSUMING EXECUTIVE'S BENEFITS ARE CALCULATED UNDER THE
ALTERNATIVE SERP FORMULA (a)
AVERAGE ANNUAL ELIGIBLE YEARS OF CREDITED SERVICE
TOTAL DIRECT ---------------------------------------------------------
COMPENSATION 10 14 21 28 35
-------------- --------- --------- --------- --------- ---------
$ $ $ $ $ $
1,125,000 146,850 214,350 332,475 450,600 568,725
2,200,000 308,100 440,100 671,100 902,100 1,133,100
3,275,000 469,350 665,850 1,009,725 1,353,600 1,697,475
4,350,000 630,600 891,600 1,348,350 1,805,100 2,261,850
5,425,000 791,850 1,117,350 1,686,975 2,256,600 2,826,225
6,500,000 953,100 1,343,100 2,025,600 2,708,100 3,390,600
7,575,000 1,114,350 1,568,850 2,364,225 3,159,600 3,954,875
---------------
(a) The Average Annual Total Direct Compensation and the Eligible Years of
Credited Service (capped at 35 years), which may be considered in the
alternative SERP calculation as of December 31, 2003, for each of the Named
Executive Officers were as follows: Mr. Wagoner $4,155,500 (26 years);
Mr. Gottschalk $1,541,917 (19 years); and Mr. Cowger $1,255,300 (35 years).
Mr. Devine completed 36 months of service with the Corporation as of
December 31, 2003, and his Average Annual Total Direct Compensation for such
36-month period was $3,352,000 per annum. Mr. Lutz completed 28 months of
service with the Corporation as of December 31, 2003, and his Average Annual
Total Direct Compensation for such 28-month period was $3,466,857 per annum.
The Annual Total Average Direct Compensation for the most recent year(s)
considered in the calculations reported here will be found in the Summary
Compensation Table on page 17 in the columns labeled "Salary" and "Bonus."
For 2002, an amount equal to the hypothetical cash value of a payout under
the Annual Incentive Plan was used to calculate the average of the highest
five years of bonus received in the ten years before retirement for purposes
of calculating the alternative SERP Formula.
EMPLOYMENT AGREEMENTS
General Motors believes that continuity in the Corporation's senior
leadership group serves the Corporation best. In this regard, each Named
Executive Officer has agreed that if he leaves the Corporation he will not work
for a competitor for two years. In addition, like other senior executives of the
Corporation, the Named Executive Officers are eligible to participate in certain
incentive plans that provide for vesting upon certain change in control events.
In December 2000, the Corporation entered into an employment agreement with
John M. Devine. If the Corporation terminates Mr. Devine's employment without
cause prior to December 13, 2005, the Corporation will pay him up to two years
base salary and target bonus. The Corporation also agreed to replace certain
supplemental pension obligations to compensate Mr. Devine for benefits from a
previous employer, which were forfeited when his employment with General Motors
commenced, as well as permit his eligibility for a GM Supplemental Executive
Retirement Program (SERP) benefit after a minimum of five years of Part B
service.
In August 2001, the Corporation entered into an employment agreement with
Robert A. Lutz for a term of three years. Under this agreement, Mr. Lutz was
guaranteed a bonus of no less than $1,000,000 for the second twelve months of
employment, which he waived in lieu of receipt of restricted stock units in
2002. At the time of hire, Mr. Lutz was granted restricted stock units, which
will vest in equal installments during the term of the original employment
agreement. In December 2002, Mr. Lutz and the Corporation extended his
employment agreement through December 2005. Under this agreement, Mr. Lutz was
guaranteed a bonus of no less than $500,000 for 2004.
21
PERFORMANCE PRESENTATION
The following graph compares the five-year cumulative return to
stockholders for General Motors Common Stock against the S&P 500 Composite Stock
Price Index (the "S&P 500 Index") and comparator data. Each line represents an
assumed initial investment of $100 on December 31, 1998, and reinvestment of
dividends over the period.
In developing the comparator data, a comparison is made with Ford Motor
Company and DaimlerChrysler AG.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
GENERAL MOTORS COMMON STOCK, S&P 500 INDEX, FORD, AND DAIMLERCHRYSLER
GM
COMMON
DATE STOCK S&P 500 FORD CHRYSLER
1998 100 100 100 100
1999 126 121 94 84
2000 91 110 78 46
2001 90 97 55 48
2002 71 76 34 36
2003 109 97 57 60
22
AUDIT COMMITTEE REPORT
The Audit Committee of the General Motors Board of Directors (the
"Committee") is a standing committee comprised of four independent directors. It
operates under a written charter adopted by the Committee and approved by the
Board of Directors. The Audit Committee's charter, included in this proxy
statement as Exhibit A, was revised in 2004 in response to new corporate
governance listing standards adopted in November 2003 by the New York Stock
Exchange. The members of the Committee are Philip A. Laskawy (Chair), Kent
Kresa, Alan G. Lafley, and Eckhard Pfeiffer. The Committee annually selects the
Corporation's independent accountants. The Committee's selection is then
submitted to the Board of Directors for its concurrence and to the Corporation's
stockholders for their ratification or rejection.
Management is responsible for the Corporation's internal control and the
financial reporting processes. The independent accountants are responsible for
performing an audit of the Corporation's consolidated financial statements in
accordance with auditing standards generally accepted in the United States of
America and issuing a report thereon. As provided in its Charter, the
Committee's responsibilities include monitoring and overseeing these processes.
Consistent with its Charter responsibilities, the Committee has met and
held discussions with management and the independent accountants. In this
context, management represented to the Committee that the Corporation's
consolidated financial statements were prepared in accordance with accounting
principles generally accepted in the United States of America. The Committee has
reviewed and discussed the consolidated financial statements with management and
the independent accountants and discussed with the independent accountants
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).
The Corporation's independent accountants have also provided to the
Committee the written disclosures required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and the
Committee discussed with the independent accountants that firm's independence.
The Audit Committee has also considered whether the provision of non-audit
services is compatible with maintaining the independent accountants'
independence.
Based upon the Committee's discussions with management and the independent
accountants as described in this report and the Committee's review of the
representation of management and the report of the independent accountants to
the Committee, the Committee recommended that the Board of Directors include the
audited consolidated financial statements in the Corporation's Annual Report on
Form 10-K for the year ended December 31, 2003, filed with the Securities and
Exchange Commission.
Philip A. Laskawy (Chair)
Kent Kresa
Alan G. Lafley
Eckhard Pfeiffer
23
FEES PAID TO AUDITOR
The Corporation retained Deloitte & Touche to audit its consolidated
financial statements for the year ended December 31, 2003. The Corporation and
its subsidiaries also retained Deloitte & Touche, as well as other accounting
and consulting firms, to provide various other services in 2003.
The services performed by Deloitte & Touche in 2003 were pre-approved in
accordance with the pre-approval policy and procedures first adopted by the
Audit Committee at its August 5, 2002 meeting, and as revised more recently.
This policy requires that during its first meeting of the fiscal year the Audit
Committee will be presented, for approval, a description of the Audit-Related,
Tax and Other services expected to be performed by Deloitte & Touche during the
fiscal year. Any requests for such services in excess of $1 million not
contemplated during the first meeting must be submitted to the Audit Committee
(or the Chairman of the Committee in an urgent case) for specific pre-approval.
Requests for services less than $1 million must be pre-approved by the Committee
Chair and reported to the full Committee at its next regularly scheduled
meeting. Proposed annual Audit services are approved by the Audit Committee in
February each year in conjunction with the engagement of the independent
auditors. Proposed Audit fees are presented to the Audit Committee in May each
year for approval on an audit-year basis.
The Audit Committee determined that all services provided by Deloitte &
Touche in 2003 were compatible with maintaining the independence of the
principal accountants.
The aggregate fees billed to the Corporation in 2003 for professional
services performed by Deloitte & Touche and affiliates were:
$ MILLIONS
--------------------------------------------------------
2003 2002
-------------------------- -------------------------
GM HUGHES TOTAL GM HUGHES TOTAL
-------- -------- -------- -------- -------- -------
Audit Fees............. $35 $ 2 $37 $22 $ 3 $ 25
Audit-Related Fees..... 17 3 20 21 1 22
Tax Fees............... 15 1 16 7 2 9
--- --- --- --- --- ----
Subtotal............. $67 $ 6 $73 $50 $ 6 $ 56
--- --- --- --- --- ----
All Other Fees......... 18 1 19 33 67 100
--- --- --- --- --- ----
Total................ $85 $ 7 $92 $83 $73 $156
=== === === === === ====
On December 22, 2003, Hughes Electronics Corporation was split off from the
Corporation, and GM sold all of its interest in Hughes. Beginning in 2004, the
Corporation does not expect to incur any fees on Hughes' behalf.
AUDIT FEES: $37 million, comprised of $35 million-GM and $2 million-Hughes, (in
2002, $25 million: $22 million-GM and $3 million-Hughes) for the audit of the
Corporation's annual consolidated financial statements, including reviews of the
interim financial statements contained in the Corporation's Quarterly Reports on
Form 10-Q and preparation of statutory reports. In addition, included in this
category are fees for services that generally only Deloitte & Touche reasonably
can provide, e.g., comfort letters, statutory audits, attest services, consents,
and assistance with and review of documents filed with the Securities and
Exchange Commission.
AUDIT-RELATED FEES: $20 million, comprised of $17 million-GM and $3
million-Hughes, (in 2002, $22 million: $21 million-GM and $1 million-Hughes) for
assurance and related services that are traditionally performed by the
independent accountant. More specifically, these services include employee
benefit plan audits, due diligence related to mergers and acquisitions,
accounting consultations and audits in connection with proposed or consummated
acquisitions, internal control reviews, attest services that are not required by
statute or regulation, and consultation concerning financial accounting and
reporting standards.
TAX FEES: $16 million, comprised of $15 million-GM and $1 million-Hughes, (in
2002, $9 million: $7 million-GM and $2 million-Hughes) for services performed by
the professional staff in Deloitte & Touche's tax practice. This includes fees
for tax compliance, tax planning, and tax advice. Tax compliance involves
preparation of original and amended tax returns and claims for refund and tax
payment-planning services. Tax planning and tax advice encompass a diverse range
of services, including assistance with tax audits and
24
appeals, tax advice related to mergers and acquisitions and employee benefit
plans, and requests for rulings or technical advice from taxing authorities.
ALL OTHER FEES: $19 million, comprised of $18 million-GM and $1 million-Hughes,
(in 2002, $100 million: $33 million-GM and $67 million-Hughes) for project
management, process improvements, and assistance for systems not associated with
the financial statements. A significant portion of the 2002 fees ($67 million)
was for services provided for a customer satisfaction process reengineering
project at Hughes, which is now complete.
ITEM NO. 2
The Sarbanes-Oxley Act provides that each corporation's audit committee is
directly responsible for appointing the independent public accountants. The
General Motors Bylaws provide in addition that the selection of the independent
public accountants shall be submitted to the stockholders at the annual meeting
for their ratification. The Audit Committee (the "Committee") has selected
Deloitte & Touche as GM's independent accountants for 2004, and the Board of
Directors has concurred with that selection. If the stockholders do not ratify
the Committee's selection of Deloitte & Touche, the Committee will endeavor to
appoint other accountants. Because of the difficulty and expense of making any
change in public accountants beginning mid-year, however, it is likely that the
Committee would not select new public accountants immediately.
Deloitte & Touche is considered well qualified, and has offices or
affiliates in or near most locations in the U.S. and other countries where
General Motors operates. Deloitte & Touche rotates its audit partners assigned
to audit General Motors at least once every five years.
Representatives of Deloitte & Touche will attend the annual meeting and
will have the opportunity to make any statement they wish. They will also be
available to answer questions that you may have.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
SELECTION OF DELOITTE & TOUCHE AS INDEPENDENT PUBLIC ACCOUNTANTS TO AUDIT THE
BOOKS, RECORDS, AND ACCOUNTS OF THE CORPORATION AND ITS SUBSIDIARIES FOR THE
YEAR 2004. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
ITEM NO. 3
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Ave. N.W.,
Suite 215, Washington, DC 20037, owner of approximately 102 shares of Common
Stock, has given notice that she intends to present for action at the annual
meeting the following resolution:
"RESOLVED: 'That the Board of Directors take the necessary steps
so that NO future NEW stock options are awarded to ANYONE, nor
that any current stock options are repriced or renewed (unless
there was a contract to do so on some).
REASONS: 'Stock option awards have gone out of hand in recent
years, and analysts MIGHT inflate earnings estimates, because
earnings, affect stock prices and stock options.
There are other ways to 'reward' executives and other employees,
including giving them actual STOCK instead of options.
Recent scandals involving CERTAIN financial institutions have
pointed out how analysts CAN manipulate earnings estimates and
stock prices,
'If you AGREE, please vote YOUR proxy FOR this resolution.'
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ADOPTION OF THIS
PROPOSAL FOR THE FOLLOWING REASONS:
General Motors has granted stock options as a component of executive
compensation for many years. This incentive compensation tool is intended to
focus executives on the long-term performance of GM stock and further align
their interests with those of GM stockholders.
25
Management strongly endorses continuing to make stock option grants to
eligible executives as an incentive to produce long-term, sustained stock price
appreciation. Eliminating this important tool is inconsistent with compensation
practices followed by the Corporation's major comparator group and could place
it at a disadvantage in recruiting and retaining senior executives. Management
constantly reviews competitive compensation practices with our peers in
determining the various elements of pay and will make changes or modify plans as
needed. GM has historically used a balanced approach in the granting of stock
options, particularly with regard to grants to Named Executive Officers. Grants
to members of this group have always been reasonable and appropriately
competitive. The current Stock Incentive Plan was approved in 2002 by 82% of
stockholders voting and explicitly prohibits repricing underwater options
without stockholder consent. As has been the case with all executive stock
option plans in GM's history, all future plans will be submitted to stockholders
for approval.
Financial reporting systems at GM provide full and accurate information to
the investing public and serve to discourage the types of behavior suggested in
the proposal regarding earnings and stock price manipulation. As a normal
business practice, GM continues to evaluate and strengthen our already stringent
audit controls as appropriate. In addition to the complete disclosure on stock
option grants annually included in our proxy statement, GM began expensing
compensation costs for all stock option grants in 2003 as noted on page 15 of
this report. This provides our stockholders with complete clarity on GM
executive stock options.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 3. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
ITEM NO. 4
Robert D. Morse, 212 Highland Avenue, Moorestown, NJ 08057-2717, owner of
approximately 600 shares of Common Stock, has given notice that he intends to
present for action at the annual meeting the following resolution:
"Management and Directors are requested to consider deleting all
rights, options, SAR's and severance payments to top Management
after expiration of existing plans or commitments. This does not
apply to plans for lesser Managers or employees whom are offered
reasonable options bonuses."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ADOPTION OF THIS
PROPOSAL FOR THE FOLLOWING REASONS:
The 2002 Long-Term Incentive Plan and the 2002 Stock Incentive Plan
(described on pages 15-16) that were approved by stockholders allow the
Executive Compensation Committee to grant equity-based long-term incentive
awards, stock option grants, and grants of restricted stock units to executives
of the Corporation through May 31, 2007. Long-Term Incentive Plan awards are
generally granted to senior executives and provides for awards at threshold
performance based on GM's Common Stock price appreciation compared to the S&P
500 Index performance over a three-year period. LTIP awards are valued and paid
in shares of stock and are subject to retention guidelines consistent with GM's
stock ownership guidelines described on page 14 of this proxy statement.
Stock options form another long-term variable pay component of GM's total
compensation program and are an important retention tool. Among those eligible
under this Plan are members of senior management. We grant options with an
exercise price equal to the fair market value on the date of grant, which allows
executives to benefit from these grants only after (i) their options have become
fully exercisable over a three-year period and (ii) our stock price has
appreciated from the date the options were granted, thus aligning the interests
of our executives with those of stockholders. The options provide an additional
incentive to improve corporate performance over the long-term as they carry
10-year terms. Although GM views the granting of stock options as an important
incentive tool, only a limited number of shares are available to grant under
this plan to prevent excessive dilution of General Motors stock. Grants of
restricted stock units are generally limited to new hires or certain situations
to address retention concerns.
26
This proposal would effectively prohibit the Compensation Committee from
providing anything but annual cash salary to senior executives. By design, cash
compensation for senior executives comprises only a small component of pay. The
greater portion of these executives' total compensation is equity-based and
specifically designed to enhance the link between individual performance and
corporate performance, thereby encouraging executives to make decisions
consistent with long-term value creation important to both the Corporation and
our stockholders. The Committee believes that equity is and should remain a
critical component of the executive compensation structure.
We have designed our compensation program for senior executives with the
specific goal of attracting, retaining, and encouraging the development of
exceptionally talented and experienced executives, while offering compensation
that is competitive in relation to current market practices in order to maintain
a stable, highly-motivated management team. Eliminating this important tool is
inconsistent with compensation practices followed by the Corporation's peer
companies and could place it at a substantial competitive disadvantage in
recruiting and retaining senior executives. Management regularly reviews
competitive compensation practices in determining the various elements of pay
and will make changes or modify plans as needed. Stockholders will have an
opportunity no later than the 2007 annual meeting to vote on whether the
Corporation continues to grant stock options.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 4. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
ITEM NO. 5
Nick Rossi, P.O. Box 249, Boonville, CA 95415, owner of approximately 525
shares of Common Stock, has given notice that he intends to present for action
at the annual meeting the following resolution:
"RESOLVED: Shareholders request that our Board of Directors
amend the By-Laws to require that an independent director,
according to the 2003 Council of Institutional Investors
definition, serve as chairman of the Board of Directors.
The primary purpose of the Board of Directors is to protect
shareholders' interests by providing independent oversight of
management, including the CEO. I believe that separating the
roles of Chairman and CEO will promote greater management
accountability to shareholders and lead to a more objective
evaluation of the CEO. An independent Chairman can enhance
investor confidence in our Company and strengthen the integrity
of the Board of Directors.
Recent corporate scandals have focused attention on the issue of
board independence and the need for an independent board
chairman. According to The Wall Street Journal, 'in a post-Enron
world of tougher corporate-governance standards, the notion of a
separate outside chairman is gaining boardroom support as a way
to improve monitoring of management and relieve overworked CEOs'
('Splitting Posts of Chairman, CEO Catches on With Boards,'
November 11, 2002).
How can one person, serving as both Chairman and CEO,
effectively monitor and evaluate his or her own performance? A
blue-ribbon commission of the National Association of Corporate
Directors recently observed 'it is difficult for us to see how
an active CEO, already responsible for the operations of the
corporation, can give the time necessary to accept primary
responsibility for the operations of the board.'
In January 2003 the Conference Board said, 'Typically, the CEO
is a member of the board, but he or she is also part of the
management team that the board oversees. This dual role can
provide a potential for conflict, particularly in those cases in
which the CEO attempts to dominate both the management of the
company and the exercise of the responsibilities of the board.'
27
The Conference Board added that it was 'profoundly troubled by
the corporate scandals of the recent past. The primary concern
in many of these situations is that strong CEOs appear to have
exerted a dominant influence over their boards, often stifling
the efforts of directors to play the central oversight role
needed to ensure a healthy system of corporate governance.'
I believe that an independent director serving as Chairman can
help ensure the objective functioning of an effective board.
Conversely, I fear that combining the positions of Chairman and
CEO may result in a passive and uninvolved board that
rubber-stamps the CEO's own decisions.
I believe our 2003 Directors' position statement on this topic
was weak and may indicated a deeper problem of unwillingness to
consider changing the status quo. It was based on a thinly
unsupported 'should' and a desire for 'flexibility.' It seemed
to argue the fallacy that once our Directors recognize their
duty that this recognition is largely a guarantee of acting
accordingly. I believe the Enron Directors thoroughly recognized
their duty.
Independent Board Chairman
Yes on 5"
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ADOPTION OF THIS
PROPOSAL FOR THE FOLLOWING REASONS:
The Board believes that it would not be in the best interests of the
Corporation and its stockholders to adopt a Bylaw requiring that an independent
director serve as Chairman of the Board. The Board of Directors, a substantial
majority of whom are independent, has been, and continues to be, a strong
proponent of independent leadership at the Board level. The Board fully
recognizes that independence from management is a prerequisite to fulfilling its
duty, as set forth in its Corporate Governance Guidelines, "to regularly monitor
the effectiveness of management policies and decisions including the execution
of its strategies." Further, the independent directors of the Board meet in
executive sessions at least twice each year without management present and
comprise all five standing committees of the Board. The Chair of the Directors
and Corporate Governance Committee acts as presiding director at these executive
sessions and has other duties as noted on page 5 of this proxy statement. The
presiding director is responsible for advising the Chairman and Chief Executive
Officer of decisions reached, and suggestions made, at these sessions. With
regard to the question whether the Chairman and CEO roles should be separated,
the Board's Corporate Governance Guideline 5 states:
The Board should be free to make this choice any way that seems best
for the Company at a given point in time. Therefore, the Board does
not have a policy, one way or the other, on whether or not the role of
the Chairman and Chief Executive Officer should be separate or
combined and, if it is to be separate, whether the Chairman should be
selected from the non-employee directors or be an employee.
The Board values its flexibility to select the type of leadership structure
best able to meet the Corporation's needs based on the individuals available and
circumstances at the time. The Board has exercised this flexibility over the
past decade, electing at various times an independent Chairman, an employee
Chairman separate from the Chief Executive Officer, and a single individual who
was Chairman and Chief Executive Officer. Similarly, at times the Chief
Executive Officer has been the only employee director; at other times, one or
two additional officers have served as directors. Amending the Bylaws as
proposed would deprive the Board of the flexibility to select a Chairman who at
the time of the decision is the most qualified individual to lead the Board.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 5. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
28
ITEM NO. 6
Ray T. Chevedden, 5965 S. Citrus Ave., Los Angeles, CA 90043, owner of
approximately 2,000 shares of Common Stock, has given notice that he intends to
present for action at the annual meeting the following resolution:
"RESOLVED: Shareholders request a by-law for our Board of
Directors to nominate only strictly independent directors to our
key Board Committees: Audit, Compensation and Nomination. This
includes the nomination of an appropriate number of strictly
independent directors to the full board in order that
independent director candidates will be available for nomination
to our key board committees.
I believe that Directors can be compromised if Directors have
links to our company besides service as a director. Example of
potentially compromising links include financial, family and
philanthropic links.
'If you compromise the independence of the board, you compromise
the single most important safety net a company has,' said Sarah
Teslik, executive director of the Council of Institutional
Investors. Arthur Levitt, Chairman of the SEC from 1993 to 2001
said, 'Outside board members should be free of connections or
business interests that make them feel beholden to the
CEO . . .'
The standard of independence requested is that of the Council of
Institutional Investors director independence standard updated
Sept. 4, 2003.
'A director will not generally be considered independent if he
or she:
a) is, or in the past five years has been, employed by the
corporation or an affiliate in an executive capacity;
b) is, or in the past five years has been, an employee or owner
of a firm that is one of the corporation's or its affiliate's
paid advisers or consultants (including law firms, accountants,
insurance companies and banks).
c) is, or in the past five years has been, employed by a
significant customer or supplier;
d) has, or in the past five years has had, a personal services
contract with the corporation, its chairman, CEO or other
executive officer or any affiliate of the corporation;
e) is, or in the past five years has been, an employee, officer
or director of a foundation, university or other non-profit
organization that receives significant grants or endowments from
the corporation or one of its affiliates;
f) is, or in the past five years has been, a relative of an
executive of the corporation or one of its affiliates;
and
g) is, or in the past five years has been, part of an
interlocking directorate in which the CEO or other executive
officer of the corporation serves on the board of another
corporation that employs the director.'
Source: www.cii.org and www.cii.org/corp_governance.asp.
I believe that Item e) non-profit links - is particularly
important because companies frequently fail to publish
non-profit links. I challenge our Directors to publish the
non-profit links of each individual Director in our directors'
response to this proposal.
I believe that, due to the series of corporate scandals that
began with Enron, there is an increased need to require strict
independence for directors particularly on the key board
committees.
Only Independent Directors on Key Board Committees
Yes on 6"
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ADOPTION OF THIS
PROPOSAL FOR THE FOLLOWING REASONS:
The Board of Directors has been, and continues to be, a strong proponent of
board independence, and has already taken effective measures to ensure that all
of its Committees are composed exclusively of
29
independent directors. General Motors' widely acclaimed Guidelines on
Significant Corporate Governance Issues were adopted by the Board in January
1994, and revised in May 2003, to state in Item 27: "Committee memberships on
all the committees will consist only of independent Directors," as defined in
Bylaw 2.11. The only difference between the Corporation's current policy and the
proposal would be in how "independent" is defined. Section 2.11 of the GM Bylaws
gives this definition of "independent":
(c) A director who qualifies as independent under any definition or
standard of "independence" adopted by the Securities and Exchange
Commission or the New York Stock Exchange.
The Council of Institutional Investors' independent director definition
states, "an independent director is someone whose only nontrivial professional,
familial, or financial connection to the corporation, its chairman, CEO or
another executive officer is his or her directorship." Since the definition does
not define "nontrivial," for a company like GM that maintains scores of business
relationships attempting to comply with such an indefinite requirement would be
unduly burdensome and could impair the Corporation's ability to attract the best
possible directors to its Board. The more concrete, precise definition of
"independent" now set forth in GM's Bylaws is consistent with definitions used
by many major institutional investors, stockholder advisors, and the New York
Stock Exchange and the Securities and Exchange Commission.
The Directors and Corporate Governance Committee and Board have carefully
reviewed all directors' relationships to GM -- both business and non-profit
memberships -- and have concluded that all directors except for Mr. Wagoner are
independent and free of all connections or business interests that could impair
their judgment. Further, none of the directors has any material relationships
with GM nor has GM made any significant grants to non-profit organizations for
which they serve as a director.
Since May 2003, the Board's standing committees have been composed solely
of independent directors as defined by Section 2.11 of the GM Bylaws. Thus, the
Board of Directors believes that the goal of this proposal has already been
achieved and that the proposal is therefore unnecessary and not in the best
interests of the stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 6. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
ITEM NO. 7
The Community of the Sisters of St. Dominic of Caldwell, NJ, 52 Old
Swartswood Station Road, Newton, NJ 07860-5103, owners of approximately 75
shares of Common Stock, and other filers have given notice that they intend to
present for action at the annual meeting the following resolution:
"Whereas:
Passenger cars and light trucks account for one-fifth of all
annual U.S. greenhouse gas emissions linked to global climate
change.
As of the model year 2002, the General Motors passenger vehicle
fleet bore the largest 'carbon burden' of automakers in absolute
terms. Additionally, the average vehicle sold by our company
produces more carbon than the industry average.
Worldwide consensus that greenhouse gas (GHG) emissions need to
be reduced continues to grow, with many countries, the European
Union, and some U.S. states beginning to limit these carbon
emissions, thereby requiring automakers to adopt technologies
that reduce GHG emissions from their products. New
fuel-efficiency standards have recently been approved in China,
the fastest-growing passenger car market in the world, and are
far more stringent than any U.S. standard. Failure by U.S.
vehicle manufacturers to adopt technologies to lower GHG
emissions may therefore undermine competitive positioning of our
products within U.S. markets and exports to climate-conscious
economies.
A World Resources Institute report indicates that the ability to
reduce GHG emissions from vehicles may be indicative of future
profitability. On the upside, concerns about climate
30
change may create substantial new opportunities for proactive
firms capable of meeting demand for cleaner, more efficient
technologies in the global marketplace.
Vehicles offered by competitors Honda and Toyota emit less
carbon because they offer better-than-average fuel economy.
Moreover, these companies have been moving quickly to introduce
advanced technology vehicles to consumers. Toyota successfully
introduced hybrid vehicles three model years ago, and has
already moved to the second generation of hybrid technology.
Toyota has outpaced the U.S. companies on car sales, and has
substantially increased its share in the light truck market.
General Motors is investing heavily in advanced technologies
such as hybrids and hydrogen fuel cells and is also planning to
bring some advanced technologies and some improved conventional
technologies to market in select products. However, GM has not
reported to investors their expectations for reductions in GMs
overall carbon burden or their ability to meet near- and
long-term emerging global competitive and regulatory scenarios.
We believe that commercial production of these advanced
technologies could invigorate the supply chain and product sales
for the domestic auto industry as it transforms from a 20th to
21st century technology base.
Resolved: that the Company report to shareholders (at reasonable
cost and omitting proprietary information) by August 2004: (a)
performance data from the years 1994 through 2003 and ten-year
projections of estimated total annual greenhouse gas emissions
from its products in operation; (b) how the company will ensure
competitive positioning based on emerging near and long-term GHG
regulatory scenarios at the state, regional, national and
international levels; (c) how the Company can significantly
reduce greenhouse gas emissions from its fleet of vehicle
product (using a 2003 baseline) by 2013 and 2023."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ADOPTION OF THIS
PROPOSAL FOR THE FOLLOWING REASONS:
As a full-line vehicle manufacturer, we offer a range of competitive
vehicles to meet the needs of consumers. In the conduct of our business, we take
steps to reduce the environmental aspects of our products and operations,
consistent with the GM Environmental Principles. CO2 emissions from cars and
light duty trucks in the United States are determined by a number of factors,
including what products customers select and how they choose to use them, as
well as other factors such as infrastructure, transit alternatives, land use,
and traffic patterns.
The relative performance of various automakers in terms of meeting
customers' needs with fuel efficient products is best measured by "Like-Model
Vehicle Comparisons" which consider similar product offerings by each competitor
in terms of vehicle size, engine displacement, number of cylinders, type of
transmission, and drivetrain. GM has product entries in 122 of the 172 industry
car, truck, van, and sport utility 2004 model year comparisons and leads in fuel
economy in 77, or 63% of all comparisons where we have a competing product. For
comparison, Toyota is ahead in 27 out of 63 comparisons, or 43% of comparisons
where it has a competing product, and Honda is ahead in 9 out of 26 comparisons,
or 35% of comparisons where it has a competing product.
Under such analysis, GM is a leader both in the total number of car and
truck comparisons with the best fuel economy, and in terms of the percentage of
leaders in the segments in which we offer products.
We continue to improve the fuel efficiency of our vehicles, even as we add
more safety features and customer convenience options, enhance utility and
performance, and reduce emissions from our products. We are introducing
fuel-saving technologies such as Displacement-on-Demand and continuously
variable transmissions to our conventional powertrains. We are focusing our
hybrid offerings where the technology will make the most impact -- on higher
fuel-consuming vehicles. We are now producing and selling hybrid bus powertrain
systems that can improve fuel economy by up to 60% compared to the conventional
buses they are replacing. We are also bringing hybrids to one of the most
popular mass market vehicle segments by producing and selling the industry's
first hybrid pick-up truck. We also will be introducing additional hybrid models
over the coming years. We are a leader in pioneering work on fuel cells, which
offer an opportunity to essentially eliminate CO2 and other air emissions from
motor vehicles, when hydrogen from renewable
31
sources is available. This is a balanced approach to marketplace competitiveness
and environmental responsibility through technological leadership.
Information on the fuel economy of our products is publicly available.
Reports of the sort proposed would be of little value, since they would depend
on a host of variables, speculative assumptions, and market forces which
manufacturers alone do not control. We believe that with our current leadership
in fuel economy on a model-to-model basis and our technology plan, GM is
positioned to perform strongly in the marketplace while continuing to do our
part in addressing environmental issues.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 7. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
ITEM NO. 8
Lucy M. Kessler, 7802 Woodville Road, Mt. Airy, MD 21771, owner of
approximately 200 shares of Common Stock, has given notice that she intends to
present for action at the annual meeting the following resolution:
"RESOLVED: Shareholders request that our Board of Directors seek
shareholder approval for future golden parachutes for senior
executives. This applies to benefits exceeding 200% of the sum
of the executive's base salary plus bonus. Future golden
parachutes include agreements renewing, modifying or extending
existing severance agreements or employment agreements with
golden parachute or severance provisions.
This includes that golden parachutes not be given for a change
in control or merger which is approved but not completed. Or for
executives who transfer to the successor company. This proposal
would include to the fullest extent each golden parachute that
our Board has or will have the power to grant or modify.
Our company would have the flexibility under this proposal of
seeking approval after the material terms of a golden parachute
were agreed upon.
In the view of certain institutional investors . . .
Golden parachutes have the potential to:
1) Create the wrong incentives
2) Reward mis-management
A change in control can be more likely if our executives do not
maximize shareholder value. Golden parachutes can allow our
executives to walk away with millions even if shareholder value
languishes during their tenure.
54% Shareholder Support
The 17 shareholder proposals voted on this topic in 2003
achieved an impressive 54% average supporting vote based on yes
and no votes cast.
The potential magnitude of golden parachutes for executives was
highlighted in the failed merger of Sprint (FON) with MCI
WorldCom. Investor and media attention focused on the estimated
$400 million payout to Sprint Chairman William Esrey. Almost
$400 million would have come from the exercise of stock options
that vested when the deal was approved by Sprint's shareholders.
Another example of questionable golden parachutes is the $150
million parachute payment to Northrop Grumman executives after
the merger with Lockheed Martin fell apart. Kent Kresa, now a GM
director, was then Chairman of Northrop Grumman.
Independent Support for Shareholder Input on Golden
Parachutes
Institutional investors recommend companies seek shareholder
approval for golden parachutes. For instance the California
Public Employees Retirement System (CalPERS) said, 'shareholder
proposals requesting submission of golden parachutes to
shareholder vote will
32
always be supported.' Also, the Council of Institutional
Investors www.cii.org supports shareholder approval of golden
parachutes.
Shareholder Input regarding Golden Parachutes
YES ON 8"
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ADOPTION OF THIS
PROPOSAL FOR THE FOLLOWING REASONS:
The Executive Compensation Committee, an independent Board committee of
non-employee directors, oversees compensation and benefit matters. The
Corporation's executive compensation programs are designed to attract and retain
highly qualified executives and motivate them to focus on stockholder returns.
These programs, which have been developed to be competitive with compensation
packages offered by other comparable employers, link a significant portion of
executive compensation to performance and to total stockholder return and are
fully explained in the Executive Compensation Committee report beginning on page
13 of this proxy statement. The Committee fully recognizes its responsibility to
make thoughtful compensation decisions in a manner it believes to be in the best
interest of the Corporation and its stockholders.
The Corporation's use of separation agreements is very limited. All such
agreements with Named Executive Officers are described on page 21 of this proxy
statement. The Executive Compensation Committee devotes considerable time and
effort to compensation issues, including establishing the appropriate balance
among the various objectives of the program. The Committee believes that it is
ultimately in the stockholders' best interest that responsibility for this
process continues to be vested in the Committee rather than being preempted by
rigid and arbitrary limitations, such as that reflected in the proposed
resolution.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 8. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
ITEM NO. 9
Thomas A. Hirsch, 257 E. 151st Street, Cleveland, OH 44110, owner of
approximately 983 shares of Common Stock, has given notice that he intends to
present for action at the annual meeting the following resolution:
"RESOLVED: Shareholder request that our board of directors adopt
a policy for senior executives and directors to commit to hold
throughout their tenure at least 50% of all General Motors
shares that they obtain by exercising stock options. This would
include each option plan that our Board has the power to modify
accordingly. A senior executive would be any employee who earns
more than $500,000 a year in total compensation.
Since the accounting scandals at Enron, Worldcom and other
companies, the role of stock options in executive pay has become
more controversial. Stock options can provide incentives to
senior executives which conflict with the interests of regular
stockholders. Stock option grants promise executives all the
gain of stock price increases yet none of the risk of stock
price declines. For this reason, stock options can encourage
action to boost short-term stock price at the expense of
long-term shareholder value.
This resolution proposes to align director and executive
interests with those of regular shareholders: By asking our
directors and executives to commit to hold at least 50% of all
General Motors stock that they obtain by exercising options for
as long as they remain directors or executives. This policy
seeks to decouple executive and director compensation from
short-term price movements. This is designed to encourage
greater emphasis on long-term gain while giving directors and
executives the flexibility to sell up to 50% of such holdings.
33
I believe that adopting this policy would be a good way to
assure shareholders that our directors and senior executives are
committed to the long-term growth of General Motors and not
merely on market-timing and short-term gains.
I urge you to vote FOR this resolution.
Retain Stock Obtained through Options
Yes on 9"
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE ADOPTION OF THIS
PROPOSAL FOR THE FOLLOWING REASONS:
Beginning in 2003, General Motors' compensation for non-employee directors
is comprised of an annual retainer of which 70% is provided in the form of
deferred restricted stock units that must be held until retirement.
Additionally, GM directors must hold three times their annual retainer in Common
Stock and cannot sell any shares owned outright until retirement. The exercise
of stock options granted prior to their elimination from the compensation plan
in 2003 is excluded.
The 2002 Stock Incentive Plan, under which executive option grants are
made, provides for 10-year options that become exercisable in one-third
increments over the first three years. Thus, option awards are not fully
exercisable for at least three years from the date of the grant. General Motors
has had Stock Ownership Guidelines in place for its executives since 1993. Under
these guidelines, executives are required to hold amounts ranging from one times
annual salary to five times annual salary, depending on their position.
Management strongly endorses these requirements while providing executives the
latitude by which they achieve their individual threshold requirements.
Individual stockholdings may be increased through a variety of ways, including
option exercises, retention of other stock-based incentive shares, deferrals to
stock accounts under the Deferred Compensation Plan, purchases in the open
market, and in employer-sponsored savings plans. While the Plan does not require
holding shares following a stock option exercise, until senior executives are
fully in compliance with the guidelines, a minimum of 100% of the net after-tax
shares received from an option exercise must be retained.
We believe these policies, taken together, provide a rigorous framework
that encourages stock ownership and a focus on long-range strategic management
of the business.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 9. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
OTHER MATTERS
The enclosed proxy gives the Proxy Committee discretionary authority to
vote your shares in accordance with its best judgment with respect to all
additional matters that might come before the annual meeting.
IF YOU VOTE BY MAIL, WE ENCOURAGE YOU TO SPECIFY YOUR CHOICES BY MARKING
THE APPROPRIATE BOXES ON THE ENCLOSED PROXY CARD. YOU DO NOT NEED TO MARK ANY
BOXES IF YOU WISH TO VOTE ACCORDING TO THE BOARD OF DIRECTORS' RECOMMENDATIONS;
JUST SIGN, DATE, AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE. IF YOU VOTE
THROUGH THE INTERNET OR BY TELEPHONE, SIMPLY FOLLOW THE INSTRUCTIONS ON THE
PROXY CARD. THANK YOU FOR YOUR COOPERATION AND YOUR PROMPT RESPONSE.
By order of the Board of Directors,
Nancy E. Polis, Secretary
April 21, 2004
34
EXHIBIT A
GENERAL MOTORS CORPORATION
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS CHARTER
PURPOSE
The Audit Committee's primary function is assisting the GM Board with its
responsibility for overseeing the integrity of GM's financial statements, GM's
compliance with legal and regulatory requirements, the qualifications and
independence of the independent accountants and the performance of GM's internal
audit department and independent accountants.
In carrying out this function, the Committee shall independently and
objectively monitor the performance of GM's financial reporting processes and
systems of internal controls; review and appraise the audit efforts of GM's
independent accountants and internal audit group; provide for open, ongoing
communications concerning GM's financial position and affairs between the Board
and the independent accountants, GM's financial and senior management, and GM's
internal audit department; review GM's policies and compliance procedures
regarding ethics; prepare the Audit Committee Report for the annual proxy
statement; and report regularly to the Board regarding the execution of its
duties.
MEMBERSHIP
The Committee shall be composed of three or more directors as determined
by the Board. The duties and responsibilities of a Committee member are in
addition to those required of a director. Each Committee member shall be an
independent director as determined in accordance with the Corporation's Bylaws
and as defined by all applicable laws and regulations. All members of the
Committee shall be "financially literate" and the Committee will have at least
one member qualified as an "audit committee financial expert" as defined by
applicable regulations.
MEETINGS
The Committee shall meet approximately six times annually. Periodically,
it shall meet in executive sessions with management, the General Auditor, the
independent accountants, and other GM management members. Annually, it shall
meet at its discretion with representatives of GM's major subsidiaries regarding
their systems of internal control, results of audits, and integrity of financial
reporting. The Committee shall periodically meet in executive session absent GM
management.
The Committee shall maintain independence both in establishing its agenda
and directly accessing management of GM and its subsidiaries. Annually, the
Committee will reassess the adequacy of this charter, evaluate its performance,
and report these and other actions to the Board of Directors with any
recommendations.
RESPONSIBILITIES AND DUTIES
Financial management is responsible for preparing financial statements and
related disclosures and communications; the Committee's primary responsibility
is oversight. To carry out this responsibility, the Committee shall undertake
the following common recurring activities:
FINANCIAL STATEMENTS
* Discuss with management and the independent accountants the annual
audited financial statements and quarterly financial statements prior to
filing including Management's Discussion and Analysis of Financial
Condition and Results of Operations, GM's earnings announcements as well
as financial information and earnings guidance provided to analysts and
rating agencies (NYSE), and the results of the independent accountants'
reviews; these discussions may be general, covering types of information
to be disclosed and the type of presentation to be made, and need not
take place in advance. The Committee may be represented by the Chair or a
subcommittee to review earnings announcements.
* Review critical accounting policies, financial reporting and accounting
standards and principles (including significant changes to those
principles or their application), and key accounting decisions
A-1
and judgments affecting the Corporation's financial statements. The
review shall include the rationale for such choices and possible
alternative accounting and reporting treatments.
* Review the effect of regulatory initiatives and unusual or infrequently
occurring transactions, as well as off-balance sheet structures, on the
financial statements.
* Review with the independent accountants difficulties in performing the
audit or disagreements with management.
* Review GM's financial reporting processes, including the systems of
internal control, and the independent accountants' audit of GM's internal
controls.
* Discuss with the independent accountants the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit.
* Review any disclosure of significant deficiencies in the design or
operation of internal controls and any special audit steps adopted.
INDEPENDENT ACCOUNTANTS
* Select, evaluate, and, if appropriate, terminate or replace the
independent accountants. (The Committee's selection shall be annually
submitted to the Board for approval and to the stockholders for
ratification.) The independent accountants are accountable to the
Committee. The Committee shall approve the audit engagement and
pre-approve any other services to be provided by the independent
accountants.
* Annually review reports by the independent accountants describing: their
internal quality control procedures; any material issues raised by the
most recent internal quality control review, peer review, or by any
inquiry or investigation by governmental or professional authorities,
within the preceding five years, respecting one or more independent
audits carried out by the firm, and any steps taken to deal with any such
issues; and all relationships between the independent accountants and GM.
* Ensure that rotation of the independent accountants' audit partners
satisfies regulatory requirements, and set policies about hiring current
or former employees of the independent accountants.
* Review and discuss with the independent accountants the annual statement
required by the Independence Standards Board (ISB) Standard No. 1.
* Review and discuss the scope and plan of the independent audit.
INTERNAL AUDIT
* Review the performance of the internal audit department including the
objectivity and authority of its reporting obligations, the proposed
audit plans for the coming year, and the results of internal audits.
Review and concur in the appointment and dismissal of the General
Auditor.
LEGAL, COMPLIANCE, AND RISK MANAGEMENT
* Establish procedures for reviewing and handling complaints or concerns
received by GM regarding accounting, internal accounting controls, or
auditing matters, including enabling employees to submit concerns
confidentially and anonymously, and review management's disclosure of any
frauds that involve management or other employees who have a significant
role in internal control.
* Review procedures and compliance processes pertaining to corporate ethics
and standards of business conduct as embodied in GM's policy, Winning
With Integrity: Our Values and Guidelines for Employee Conduct.
* Review policies and procedures with respect to officers' expense accounts
and perquisites, including their use of corporate assets, and consider
the results of any review of these areas by the internal auditors or the
independent accountants.
* Review the assessment of management regarding compliance with laws and
regulations designated by the Federal Deposit Insurance Corporation
(FDIC) as being essential for safety and soundness, compliance with
regulations of the Office of the Comptroller of the Currency (OCC)
relating to fiduciary activities, and compliance with other regulatory
authorities.
A-2
* As the Qualified Legal Compliance Committee (QLCC), review and discuss
any reports received from attorneys with respect to securities law
violations and/or breaches of fiduciary duties which were reported to the
General Counsel or the Chief Executive Officer and not resolved to the
satisfaction of the reporting attorney.
* Discuss policies with respect to risk assessment and risk management,
including GM's major financial and accounting risk exposures and the
steps undertaken to control them.
The Committee may diverge from this list as appropriate if circumstances
or regulatory requirements change. In addition to these activities, the
Committee will perform such other functions as necessary or appropriate under
law, stock exchange rules, GM's certificate of incorporation, and Bylaws, and
the resolutions and other directives of the Board. The Committee may obtain
advice, assistance, and investigative support from outside legal, accounting, or
other advisors as it deems appropriate to perform its duties, and GM shall
provide appropriate funding, as determined by the Committee, for any such
advisers.
A-3
[GM LOGO]
2004 ANNUAL MEETING
Hotel du Pont
11th & Market Streets
Wilmington, Delaware
[MAP]
Complimentary self-parking is available at Hotel du Pont Car Park located on
Orange Street at the corner of 12th Street (parking vouchers will be provided to
stockholders at the meeting). The hotel's valet parking service is available for
a non-reimbursable charge.
GENERAL DIRECTIONS
FROM PHILADELPHIA ON I-95 SOUTH
1. Take I-95 South to Exit 7A marked "52 South, Delaware Avenue."
2. Follow 11th Street in the middle lane through six traffic lights. Hotel du
Pont is on the right. For complimentary self-parking, turn left on Orange
Street. Car Park is on the left.
FROM BALTIMORE ON I-95 NORTH
1. Follow I-95 North to Wilmington, take Exit 7 marked "Route 52, Delaware
Avenue."
2. From right lane, take Exit 7 onto Adams Street.
3. At the third traffic light, turn right onto 11th Street.
4. Follow 11th Street in the middle lane through six traffic lights. Hotel du
Pont is on the right. For complimentary self-parking, turn left on Orange
Street. Car Park is on the left.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
RESULTS OF THE ANNUAL MEETING
Final certified results of voting at the annual meeting will be available on
GM's Web site, WWW.GM.COM. To obtain a transcript of the meeting, stockholders
should write to GM Fulfillment Center, MC 480-000-FC1, 1346 Rankin, Troy, MI
48083.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VISIT GM ON THE INTERNET
Explore the world of General Motors products and services on our Web site,
www.gm.com. Surf our home page to learn about "The Company," our "Automotive"
brands, and "Services." From the home page, you can access our many brand Web
sites to discover the GM product or service that's just right for you.
[Recycle logo] Printed on recycled paper 4000-PS-04
2004 ANNUAL MEETING OF STOCKHOLDERS ADMISSION TICKET
Wednesday, June 2, 2004, 9 a.m. local time
Hotel du Pont, 11th & Market Streets, Wilmington, Delaware
[Map]
PLEASE BRING GOVERNMENT-ISSUED PHOTOGRAPH IDENTIFICATION
TO PRESENT FOR ADMITTANCE TO THE MEETING.
Complimentary self-parking is available at Hotel du Pont Car Park located on
Orange Street at the corner of 12th Street (parking vouchers will be provided to
stockholders at the meeting). The hotel's valet parking service is available for
a non-reimbursable charge.
GENERAL DIRECTIONS
From Philadelphia on I-95 South
1. Take I-95 South to Exit 7A marked "52 South, Delaware Avenue."
2. Follow 11th Street in the middle lane through six traffic lights. Hotel du
Pont is on the right. For complimentary self-parking, turn left on Orange
Street, Car Park is on the left.
From Baltimore on I-95 North
1. Follow I-95 North to Wilmington, take Exit 7 marked "Route 52, Delaware
Avenue."
2. From right lane, take Exit 7 onto Adams Street.
3. At third traffic light, turn right onto 11th Street.
4. Follow 11th Street in the middle lane through six traffic lights. Hotel du
Pont is on the right. For complimentary self-parking, turn left on Orange
Street, Car Park is on the left.
PLEASE RETAIN AND PRESENT THIS TICKET FOR ADMISSION TO THE MEETING.
--------------------------------------------------------------------------------
GENERAL MOTORS CORPORATION
PROXY/VOTING INSTRUCTION CARD
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS
HOTEL DU PONT, 11TH & MARKET STREETS, WILMINGTON, DELAWARE
WEDNESDAY, JUNE 2, 2004, 9 A.M. LOCAL TIME
The undersigned authorizes G. Richard Wagoner, Jr., John M. Devine, and
Robert A. Lutz, and each of them as the Proxy Committee, to vote the COMMON
STOCK of the undersigned upon the nominees for Directors: (01) P. N. Barnevik,
(02) J. H. Bryan, (03) A. M. Codina, (04) G. M.C. Fisher, (05) K. Katen,
(06) K. Kresa, (07) A. G. Lafley, (08) P. A. Laskawy, (09) E. S. O'Neal,
(10) E. Pfeiffer, and (11) G. R. Wagoner, Jr.*; upon the other Items shown on
the reverse side, which are described on the pages identified in the Table of
Contents to the Proxy Statement; and upon all other matters which may come
before the 2004 Annual Meeting of Stockholders of General Motors Corporation,
or any adjournment thereof.
This card also provides voting instructions for the shares held in various
employee savings plans as described in the Proxy Statement. IF YOUR
REGISTRATIONS ARE NOT IDENTICAL, YOU MAY RECEIVE MORE THAN ONE SET OF PROXY
MATERIALS. PLEASE SIGN AND RETURN ALL CARDS YOU RECEIVE.
TO VOTE BY INTERNET OR TELEPHONE -- SEE REVERSE SIDE.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES (SEE
REVERSE SIDE), BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
*Numbers refer to Director nominee telephone voting codes.
2004 ANNUAL MEETING
ADMISSION TICKET
GENERAL MOTORS CORPORATION This ticket will admit
c/o EquiServe Trust Company, N.A. stockholder and one guest.
P.O. Box 8694 (See reverse side.)
Edison, NJ 08818-8694
VOTE BY INTERNET, TELEPHONE OR MAIL.
IF YOU VOTE BY INTERNET OR TELEPHONE, DO NOT MAIL THE PROXY CARD.
--------------------------------
--------------------------------
YOUR VOTE IS IMPORTANT. PLEASE VOTE IMMEDIATELY.
VOTE-BY-INTERNET
1. Log on to the Internet and go to www.eproxyvote.com/gm.
2. Follow the steps outlined on the secured Web site.
OR
VOTE-BY-TELEPHONE
1. Call toll-free 1-877-779-8683. Outside continental United States or Canada,
call collect at 1-201-536-8073.
2. Follow the recorded instructions.
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
--------------------------------------------------------------------------------
4000
PLEASE MARK /X/
VOTES AS IN
THIS EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1-2
AND "AGAINST" ITEMS 3-9.
This proxy/voting instruction card will be voted
"FOR" Items 1-2 if no choice is specified.
GM PROPOSALS FOR WITHHELD
1. Election of Directors / / / /
------------------------------------------------
For, EXCEPT vote withheld from above nominee(s)
FOR AGAINST ABSTAIN
2. Ratify selection of independent
accountants / / / / / /
This proxy/voting instruction card will be voted
"AGAINST" Items 3-9 if no choice is specified.
STOCKHOLDER PROPOSALS FOR AGAINST ABSTAIN
3. Eliminate awarding, repricing, or
renewing stock options / / / / / /
4. Eliminate options, SARs, and
severance payments / / / / / /
5. Require an independent chairman separate
from chief executive officer / / / / / /
6. Appoint independent directors to key
Board committees / / / / / /
7. Report on greenhouse gas emissions / / / / / /
8. Approve "golden parachutes" / / / / / /
9. Require senior executives and directors
to retain stock obtained by exercising
options / / / / / /
Signature(s): ___________________________________ Date _________________ 2004
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY/VOTING INSTRUCTION CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
NOTE: Please add your title if you are signing as attorney, administrator,
executor, guardian, trustee, or in any other representative capacity.
SEE REVERSE SIDE
[Logo]EquiServe V O T E
-----------
B Y N E T
VOTE BY NET
GM
--
STEP 1
Welcome to the EquiServe online voting wizard!
Just follow a few simple steps to complete the secure online voting process:
Authentication: Login using your authentication number
Delivery Preference: Set up future delivery of your annual meeting materials
Voting: Vote your proxy and receive your confirmation online
Options: View and/or print an admission ticket for annual meeting
and review other options
If you have shares in more than one account, you may have received more than one
proxy card or e-mail notification for the annual meeting materials, each with a
specific authentication number. These proxies must be voted one at a time. To
get started now, login below and click "Continue."
Step 1: Authentication
Enter the authentication number printed on your e-mail notification or in the
gray shaded box on your proxy card. ___________________________________________
Enter the last 4 digits of the U.S. social security number (SSN) or the U.S.
taxpayer identification number (TIN) for this account.* _______
*If you do not have a SSN or TIN for this account, please leave this box
blank.
\
CONTINUE --
/
[Logo]EquiServe V O T E
-----------
B Y N E T
VOTE BY NET
GM
STEP 2
WELCOME
YOUR NAME
YOUR ADDRESS
YOUR CITY, STATE ZIP
Delivery Preference
Select how you would like to receive your future annual meeting materials:
/ / Postal mail
/*/ Electronically (View Terms and Conditions for Electronic Delivery)
---------------------------------------------------
E-mail address (e.g., name@xyz.com) ___________________________
Enter e-mail address again for validation _____________________
Annual Meeting Materials
You may view the following Annual Meeting materials and then click "Continue" to
go to the voting page.
Annual Report
-------------
Proxy Statement
---------------
\
CONTINUE --
/
[Logo]EquiServe V O T E
-----------
B Y N E T
VOTE BY NET
GM
STEP 3
GENERAL MOTORS CORPORATION
PROXY/VOTING INSTRUCTIONS
Proxy Solicited by Board of Directors for Annual Meeting of Stockholders
Hotel du Pont, 11th & Market Streets, Wilmington, Delaware
Wednesday, June 2, 2004, 9 a.m. local time
The undersigned authorizes G. Richard Wagoner, Jr., John M. Devine, and Robert
A. Lutz, and each of them as the Proxy Committee, to vote the Common Stock of
the undersigned upon the nominees for Directors: (01) P. N. Barnevik,
(02) J. H. Bryan, (03) A. M. Codina, (04) G. M.C. Fisher, (05) K. Katen,
(06) K. Kresa, (07) A. G. Lafley, (08) P. A. Laskawy, (09) E. S. O'Neal,
(10) E. Pfeiffer, and (11) G. R. Wagoner, Jr.; upon the other Items described
on the pages identified in the Table of Contents to the Proxy Statement; and
upon all other matters which may come before the 2004 Annual Meeting of
Stockholders of General Motors Corporation, or any adjournment thereof.
This also provides voting instructions for the shares held in various employee
savings plans as described in the Proxy Statement. If your registrations are not
identical, you may have received more than one set of proxy materials. For all
your shares to be voted, you must vote all the proxies you received.
General Motors Corporation Board of Directors recommends a vote:
"FOR" all Nominees
"FOR" Proposal 2
"AGAINST" Proposal 3
"AGAINST" Proposal 4
"AGAINST" Proposal 5
"AGAINST" Proposal 6
"AGAINST" Proposal 7
"AGAINST" Proposal 8
"AGAINST" Proposal 9
Check this box to cast your vote in accordance with the recommendations of The
Board of Directors: / /
General Motors Corporation Board of Directors recommends a vote "FOR" all
Nominees.
1. Election of Directors / / FOR ALL NOMINEES, except withheld as noted below
/ / WITHHELD AS TO ALL NOMINEES
/ / P. N. Barnevik
/ / J. H. Bryan
/ / A. M. Codina
/ / G. M.C. Fisher
/ / K. Katen
/ / K. Kresa
/ / A. G. Lafley
/ / P. A. Laskawy
/ / E. S. O'Neal
/ / E. Pfeiffer
/ / G. R. Wagoner, Jr.
General Motors Corporation Board of Directors recommends a vote "FOR"
Proposal 2.
2. Ratify selection of independent accountants FOR AGAINST ABSTAIN
/ / / / / /
General Motors Corporation Board of Directors recommends a vote "AGAINST"
Proposal 3.
3. Eliminate awarding, FOR AGAINST ABSTAIN
repricing, or renewing / / / / / /
stock options
General Motors Corporation Board of Directors recommends a vote "AGAINST"
Proposal 4.
4. Eliminate options, SARs, FOR AGAINST ABSTAIN
and severance payments / / / / / /
General Motors Corporation Board of Directors recommends a vote "AGAINST"
Proposal 5.
5. Require an independent FOR AGAINST ABSTAIN
chairman separate from
chief executive officer / / / / / /
General Motors Corporation Board of Directors recommends a vote "AGAINST"
Proposal 6.
6. Appoint independent FOR AGAINST ABSTAIN
directors to key Board
committees / / / / / /
General Motors Corporation Board of Directors recommends a vote "AGAINST"
Proposal 7.
7. Report on greenhouse gas FOR AGAINST ABSTAIN
emissions / / / / / /
General Motors Corporation Board of Directors recommends a vote "AGAINST"
Proposal 8.
8. Approve "golden FOR AGAINST ABSTAIN
parachutes" / / / / / /
General Motors Corporation Board of Directors recommends a vote "AGAINST"
Proposal 9.
9. Require senior executives FOR AGAINST ABSTAIN
and directors to retain / / / / / /
stock obtained by
exercising options
To cast your vote please click "Submit."
(NOTE: Your vote will not be counted until you click "Submit.")
\
SUBMIT --
/
[Logo]EquiServe V O T E
-----------
B Y N E T
VOTE BY NET
GM
STEP 3
NAME
ADDRESS
CITY, STATE ZIP CODE
CONTROL NUMBER: 00000000000000000
CONFIRMATION NUMBER: 000000
DATE: DAY MONTH YEAR HOUR:MIN:SEC CDT
Thank you for using EquiServe's Vote-By-Net facility.
Step 3: Summary of your vote
Your vote was recorded by EquiServe as follows:
1. Election of Directors _______________
2. Ratify selection of independent accountants _______________
3. Eliminate awarding, repricing, or renewing stock
options _______________
4. Eliminate options, SARs, and severance payments _______________
5. Require an independent chairman separate from chief
executive officer _______________
6. Appoint independent directors to key Board committees _______________
7. Report on greenhouse gas emissions _______________
8. Approve "golden parachutes" _______________
9. Require senior executives and directors to retain
stock obtained by exercising options _______________
Delivery Preference
Electronically
E-mail address:
Please keep a copy for your records. To change your vote, click "Back."
To view and/or print your admission ticket, click "Options."
You can now vote another proxy or go to General Motors Corporation Homepage or
click "Finish" to exit to EquiServe Homepage.
/FINISH/
SCRIPT TO VOTE SHARES BY TELEPHONE
Welcome to the electronic voting system. Please have your proxy card or voting
instruction sheet or ballot available before voting.
Enter the series of numbers printed in the gray shaded box on your card,
followed by the pound sign.
One moment please while we verify your information.
Enter the last four digits of the U.S. social security number or the U.S.
taxpayer identification number for this account followed by the pound sign.
The company that you are voting is General Motors Corporation.
Your vote is subject to the same terms and authorizations as indicated on the
proxy card. It authorizes the Proxy Committee to vote your shares of Common
Stock as you direct.
To vote all proposals in accordance with the recommendations of the Board of
Directors, press 1. If you wish to vote on one proposal at a time, press 2.
Item # 1. To vote for all nominees press 1. To withhold from all nominees press
2. To withhold from individual nominees press 3.
(If 3)
Using your proxy card, enter the 2-digit number of a nominee from whom
you wish to withhold your vote. When completed press 00.
To withhold your vote from another nominee enter the 2-digit number
next to the nominee followed by the pound key, or if you have
completed voting on directors press the pound key again.
Item # 2. To vote for, press 1; against, press 2; to abstain, press 3.
Item # 3. To vote for, press 1; against, press 2; to abstain, press 3.
Item # 4. To vote for, press 1; against, press 2; to abstain, press 3.
Item # 5. To vote for, press 1; against, press 2; to abstain, press 3.
Item # 6. To vote for, press 1; against, press 2; to abstain, press 3.
Item # 7. To vote for, press 1; against, press 2; to abstain, press 3.
Item # 8. To vote for, press 1; against, press 2; to abstain, press 3.
Item # 9. To vote for, press 1; against, press 2; to abstain, press 3.
1
You have cast your vote as follows:
You have voted in the manner recommended by the Board of Directors.
(Or)
For all nominees
(Or)
For all nominees except: #...
(Or)
Withhold For all nominees
Item # (For | Against | Abstain)
Your vote has been successfully recorded. It is not necessary for you to mail in
your card. If you wish to vote another card or change your vote, press 1.
Otherwise, please hang up. Thank you for voting.
2