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Previous: ACCORD ADVANCED TECHNOLOGIES INC, 10KSB, 2000-03-31 |
Next: DELPHI AUTOMOTIVE SYSTEMS CORP, DEFA14A, 2000-03-31 |
¨
Preliminary proxy statement
|
¨
Confidential, for Use of the Commission Only
(as permitted by
Rule 14a-6(e)(2))
|
...................................................................... ............................................................................. ............................................................................. ............................................................................. ........................
(1)
|
Title of each class
of securities to which transaction applies:
|
|
(2)
|
Aggregate number of
securities to which transaction applies:
|
|
(3)
|
Per unit price or
other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):
|
............................................................... ........................................................................... ........................................................................... ............. |
(4)
|
Proposed maximum
aggregate value of transaction:
|
|
.
(5)
|
Total fee
paid:
|
|
(1)
|
Amount previously
paid:
|
(2)
|
Form, Schedule or
Registration Statement No.:
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(3)
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Filing
party:
|
(4)
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Date
filed:
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/s/ J.T. Battenberg III | |
J. T. Battenberg
III
|
Chairman, Chief
Executive Officer and President
|
Proposal
1.
|
The election of
four directors to three-year terms on the Board of Directors. The Board
has nominated for re-election J.T. Battenberg III, Virgis W. Colbert,
Shoichiro Irimajiri and Susan A. McLaughlin, all current
directors.
|
Proposal
2.
|
Approval of the
material terms of the performance goals under the Delphi Incentive
Compensation Program for purposes of Section 162(m) of the Internal
Revenue Code.
|
Proposal
3.
|
The ratification of
Deloitte & Touche LLP as Delphis independent public accountants
for 2000. Deloitte & Touche LLP served in this same capacity in
1999.
|
Proposal
4.
|
A stockholder
proposal relating to the redemption of Delphis stockholder rights
plan.
|
Proposal
5.
|
A stockholder
proposal relating to the adoption of a code for Delphis
international operations.
|
BY ORDER OF THE
BOARD OF DIRECTORS
|
|
/s/
Diane L. Kaye
|
DIANE L.
KAYE
|
Secretary
|
Page | |||
---|---|---|---|
Proxy Statement | 1 | ||
Our First Annual Meeting as an Independent Company | 1 | ||
Who Can Vote | 1 | ||
How You Can Vote | 1 | ||
Revocation of Proxies | 2 | ||
How to Vote Under Our Employee Plans | 2 | ||
Required Votes | 3 | ||
Other Matters to be Acted Upon at the Meeting | 3 | ||
Where to Find Voting Results | 3 | ||
Proposals Requiring Your Vote | 4 | ||
The Board of Directors | 16 | ||
Board of Directors Class I Nominees Standing for Re-Election | 16 | ||
Continuing Directors | 18 | ||
Committees of the Board of Directors | 22 | ||
Stock Ownership of Management and More Than 5% Stockholders | 24 | ||
Compensation of Directors | 25 | ||
Compensation of Executive Officers | 26 | ||
Report on Executive Compensation | 26 | ||
Summary Compensation Table | 30 | ||
Option Grants in Last Fiscal Year | 32 | ||
Aggregated Option Exercises in Last Fiscal Year and Option Values at Fiscal Year End | 33 | ||
Long-Term Incentive Plan-Awards in Last Fiscal Year | 34 | ||
Retirement Programs | 35 | ||
Change In Control Agreements | 37 | ||
Stock Performance Graph | 41 | ||
Stockholder Proposals | 42 | ||
Annual Report and Other Matters | 42 | ||
Expenses of Solicitation | 42 | ||
How to Request Admission Tickets to the Annual Meeting | 43 | ||
APPENDIX A DELPHI AUTOMOTIVE SYSTEMS ANNUAL INCENTIVE PLAN* | A-1
|
||
APPENDIX B DELPHI AUTOMOTIVE SYSTEMS PERFORMANCE ACHIEVEMENT PLAN* | B-1 | ||
APPENDIX C DELPHI AUTOMOTIVE SYSTEMS STOCK INCENTIVE PLAN * | C-1 | ||
___________ | |
*
|
Included as an appendix to the filed copy of the definitive proxy statement pursuant to Instruction 3 to Item 10 of Schedule 14A. |
|
over the telephone
by calling the toll-free number identified on the attached proxy
card,
|
|
over the Internet,
or
|
|
by completing and
mailing in the enclosed proxy card.
|
(1)
|
by notifying Delphi
s secretary in writing;
|
(2)
|
by submitting
another proxy by telephone, via the Internet or by mail that is received
later and, if by mail, that is properly signed; or
|
(3)
|
by voting in person
at the meeting.
|
|
the trustee, plan
committee or independent fiduciary will vote in its discretion any shares
held in the following plans:
|
|
the Delphi
Automotive Systems Corporation Savings-Stock Purchase Program for Salaried
Employees in the United States; and
|
|
the General Motors
Savings-Stock Purchase Program for Salaried Employees in the United
States.
|
|
your shares will
not be voted for the following plans:
|
|
the Delphi Personal
Savings Plan for Hourly Rate Employees in the United States;
|
|
the General Motors
Canadian Savings-Stock Purchase Program; and
|
|
the General Motors
Personal Savings Plan for Hourly Rate Employees in the United
States;
|
|
the Saturn
Individual Savings Plan for Represented Members; and
|
|
the GMAC Mortgage
Corporation Savings Incentive Plan.
|
|
your shares will be
voted in the same ratio as the shares with respect to which the trustee is
instructed for the ASEC Manufacturing Savings Plan.
|
return on assets,
return on net assets, asset turnover, return on equity, return on capital,
market price appreciation of our common stock, economic value added, total
stockholder return, net income, pre-tax income, earnings per share,
operating profit margin, net income margin, sales margin, cash flow,
market share, inventory turnover, sales growth, capacity utilization,
increase in customer base, environmental health and safety, diversity
and/or quality. The business criteria may be expressed in absolute terms
or relative to the performance of other companies or to an
index.
|
return on assets,
return on net assets, asset turnover, return on equity, return on capital,
market price appreciation of our common stock, economic value added, total
stockholder return, net income, pre-tax income, earnings per share,
operating profit margin, net income margin, sales margin, cash flow,
market share, inventory turnover, sales growth, capacity utilization,
increase in customer base, environmental health and safety, diversity
and/or quality. The business criteria may be expressed in absolute terms
or relative to the performance of other companies or to an
index.
|
return on assets,
return on net assets, asset turnover, return on equity, return on capital,
market price appreciation of our common stock, economic value added, total
stockholder return, net income, pre-tax income, earnings per share,
operating profit margin, net income margin, sales margin, cash flow,
market share, inventory turnover, sales growth, capacity utilization,
increase in customer base, environmental health and safety, diversity
and/or quality. The business criteria may be expressed in absolute terms
or relative to the performance of other companies or to an
index.
|
|
Poison pills give
directors absolute veto power over any proposed business combination, no
matter how beneficial it might be for the shareholders.
|
|
Pills adversely
affect shareholder value.
|
Nell Minow and
Robert Monks in their book,
|
Power and
Accountability
|
|
Shareholder right
to vote on poison pill resolutions achieved 60%
|
APPROVAL from
shareholders in 1999.
|
Investor
Responsibility Research Centers Corporate Governance
|
Bulletin,
April-June 1999
|
|
The Council of
Institutional Investors (Internet address: www.ciicentral.com)
recommends shareholder approval of all poison pills in its Shareholder
Bill of Rights.
|
|
No annual election
of all directors.
|
|
No cumulative
voting.
|
|
Shareholders may
not call special meetings.
|
Standard & Poors Stock Reports | November
20, 1999
|
Detroit News | April 16,
1999
|
Auto-parts industry is challenged by high operating costs. Overhead is rising because of changing demands by auto makers. Debt loads are increasing. Executives constantly complain about the low multiples their stocks command.
Wall Street Journal | November 8,
1999
|
Delphis CEO must hustle to transform his low-margin GM albatross into a nimble competitor capable of holding its own.
Business Week | March 15, 1999
|
We expect the company s sales to be flat in 1999 and 2000.
ValueLine | October 8, 1999
|
|
Delphi cannot hire
anyone under the age as specified by local law.
|
|
Delphi pays
market-based compensation, including wages and benefits that meet or
exceed all legal requirements of those countries where Delphi
operates.
|
|
Delphi complies
with all legal requirements applicable to hours worked.
|
|
Delphi has written
health and safety guidelines and uses them consistently
worldwide.
|
|
Delphi has a stated
environmental policy and Delphis operations must comply at minimum
with environmental regulations of those countries where Delphi
operates.
|
|
Delphi shall not
use forced laborprison, indentured, bonded or otherwise.
|
J.T. Battenberg
III
|
Age:
56
Director
Since: 1998
Principal
Occupation: Chairman of the Board, Chief
Executive Officer and President, Delphi Automotive Systems
Corporation
Recent Business
Experience: Mr. Battenberg is the Chairman of
the Board, Chief Executive Officer and President of Delphi. Mr. Battenberg
has led Delphi and its precursor, the Automotive Components Group
Worldwide, since 1992. He held various other positions with General Motors
Corporation from 1961 through 1992. Mr. Battenberg is on the Board of
Trustees of Kettering University, formerly known as General Motors
Institute, and the National Advisory Board for Chase Manhattan
Corporation. He is also a member of the Council on Competitiveness, the
Business Roundtable and the Business Council.
Other
Directorships: FIRST (For Inspiration and
Recognition of Science and Technology) and the Economic Club of
Detroit.
|
Virgis W.
Colbert
|
Age:
60
Director
Since: 1999
Principal
Occupation: Executive Vice President, Miller
Brewing Company
Recent Business
Experience: Mr. Colbert was appointed Executive
Vice President for Miller Brewing Company in July 1997. He has held
several manufacturing and production positions since joining Miller in
1979. Mr. Colbert is currently a Director of Columbia Health Systems and
The Greater Milwaukee Open. He is Chairman of the Thurgood Marshall
Scholarship Fund and of the Board of Trustees of Fisk University. Mr.
Colbert also is a member of the Executive Advisory Committee for the
National Urban Leagues Black Executive Exchange Program, and serves
on the Opportunities Industrialization Centers of Americas National
Industrial Council. Mr. Colbert is a member of the Compensation and
Executive Development Committee of Delphis Board of
Directors.
|
Shoichiro Irimajiri |
Age:
60
Director
Since: 1999
Principal
Occupation: President, Sega Enterprises,
Ltd.
Recent Business
Experience: Mr. Irimajiri was elected President
and Representative Director for Sega Enterprises, Ltd. in February 1998.
Before that, he held various positions within Sega since 1993. Before
joining Sega, Mr. Irimajiri had been an Executive Vice President at Honda
Co. Ltd. since June 1990. He had been associated with Honda since 1963.
Mr. Irimajiri is a member of the Corporate Governance and Public Issues
Committee of Delphis Board of Directors.
|
Susan A. McLaughlin |
Age:
47
Director Since:
1999
Principal
Occupation: President, Consumer Services
BellSouth Telecommunications, Inc.
Recent Business
Experience: Ms. McLaughlin has been President,
Consumer Services BellSouth Telecommunications, Inc. since March 1998.
From 1987 to 1998, Ms. McLaughlin held numerous financial and marketing
management positions at Eastman Kodak. Before working at Kodak, she spent
13 years in corporate banking with Citibank and Chase. Ms. McLaughlin is
Chairman of the Compensation and Executive Development Committee of Delphi
s Board of Directors.
Other
Directorships: Target Corporation
|
Oscar de Paula
Bernardes Neto
|
Age:
53
Director Since:
1999
Principal
Occupation: Chairman of the Board of Santista
Alimentos S/A and Seara Alimentos S/A
Recent Business
Experience: Mr. Bernardes is the Chairman of
the Board of Santista Alimentos S/A and Seara Alimentos S/A. He was Chief
Executive Officer of Bunge International from 1986 to 1999. Before joining
Bunge, Mr. Bernardes was a senior partner with Booz-Allen & Hamilton.
He also has over 15 years of consulting experience, including several
projects related to the automotive industry in South America. Mr.
Bernardes is a member of the Advisory Board for Booz-Allen & Hamilton.
Mr. Bernardes is a member of the Audit Committee of Delphis Board of
Directors.
Other
Directorships: RBS, Alcoa in Brazil
|
John D.
Opie
|
Age:
62
Director Since:
1999
Principal
Occupation: Vice Chairman of the Board and
Executive Officer, General Electric Company
Recent Business
Experience: Mr. Opie has held the position of
Vice Chairman of the Board and Executive Officer for General Electric
Company since 1995. He has been associated with General Electric Company
since 1961 in numerous management positions, including Vice President of
the Lexan and Specialty Plastics Divisions, President of the Distribution
Equipment Business Division and President of General Electric Company
s Lighting Business from 1986 to 1995. Mr. Opie is Chairman of the
Audit Committee of Delphis Board of Directors.
Other
Directorships: General Electric
Company
|
Roger S.
Penske
|
Age:
63
Director Since:
1999
Principal
Occupation: Chairman of Penske
Corporation
Recent Business
Experience: Mr. Penske is the Chairman of
Penske Corporation, Chairman of Detroit Diesel Corporation, Chairman of
United Auto Group, Inc. and Chairman of the Board of Penske Truck Leasing
Corporation and Penske Auto Centers, Inc. He also serves as Vice Chairman
of the Board and as a Director of International Speedway Corporation. Mr.
Penske is also Chairman of the Detroit Investment Fund, a member of the
Robert Bosch International AG Advisory Board, a Trustee of the Henry Ford
Museum and Greenfield Village and a member of the Business Council. Mr.
Penske is Chairman of the Corporate Governance and Public Issues Committee
of Delphis Board of Directors.
Other
Directorships: General Electric
Company
|
Dr. Bernd
Gottschalk
|
Age:
56
Director Since:
2000
Principal
Occupation: President, Association of the
German Automobile Industry
Recent Business
Experience: Before becoming President of the
Association of the German Automobile Industry in 1996, Dr. Gottschalk
worked at Mercedes-Benz AG since 1972 in various positions, such as plant
manager in Mannheim and President of Mercedes-Benz do Brasil in São
Paulo. As a member of the Advisory Board of Mercedes-Benz AG, he was
responsible for the companys worldwide commercial vehicle business.
Dr. Gottschalk is a member of the Advisory Board of each of Hoffman-La
Roche, Thyssen Krupp Automotive, J.M. Voith AG and Dresdner Bank Latin
America. Dr. Gottschalk is a member of the Corporate Governance and Public
Issues Committee of Delphis Board of Directors.
|
Alan S. Dawes |
Age:
45
Director Since:
2000
Principal
Occupation: Executive Vice President and Chief
Financial Officer, Delphi Automotive Systems Corporation
Recent Business
Experience: Mr. Dawes is an Executive Vice
President and Chief Financial Officer of Delphi and has been a Vice
President of Delphi since 1998. He worked in the Treasurers Office
at General Motors Corporation from 1981 until 1991, and in 1992 he was
appointed Executive-in-Charge of Operations for Delphis precursor,
the Automotive Components Group Worldwide. Mr. Dawes was appointed General
Manager of Delphi Chassis Systems in 1994. He was named Financial
Executive of the year in the 1999 Automotive News Industry All Stars and
is a member of the Harvard Business Club.
|
Thomas G.
Labrecque
|
Age:
61
Director Since:
1999
Principal
Occupation: Former Chairman, The Chase
Manhattan Corporation
Recent Business
Experience: Mr. Labrecque is the former
Chairman of The Chase Manhattan Corporation. Since his June 1, 1999
retirement from Chase, he has been the Chairman of Chases
International Advisory Council, a non-policy making body made up of
business leaders, entrepreneurs and former government officials from
around the world. During his 35-year career with Chase, Mr. Labrecque held
various positions including Treasurer, Vice Chairman, President and
Chairman and Chief Executive Officer of The Chase Manhattan Corporation
and The Chase Manhattan Bank, N.A. Upon the merger with Chemical Bank in
1996, Mr. Labrecque became President and Chief Operating Officer of the
company. He is a member of the Board of Directors for the Hospital for
Special Surgery, a director of LLC International Rescue Committee, a
member of the Business Council and a member of the Council of Foreign
Relations. Mr. Labrecque is a member of the Audit Committee of Delphi
s Board of Directors.
Other
Directorships: Pfizer Inc.
|
Donald L.
Runkle
|
Age:
54
Director Since:
2000
Principal
Occupation: Executive Vice President, Delphi
Automotive Systems Corporation; President, Delphi Dynamics and Propulsion
Sector
Recent Business
Experience: Mr. Runkle is an Executive Vice
President of Delphi and President of Delphis Dynamics and Propulsion
Sector. He was Vice President of Delphi and President of Delphi Energy and
Engine Management Systems since 1998. Mr. Runkle held a series of
engineering positions from 1968 to 1993 at General Motors Corporation when
he was appointed General Manager of Delphi Saginaw Steering Systems. He
was named General Manager of Delphi Energy and Engine Management Systems
in 1996. Mr. Runkle is an advisor to the Lean Enterprise Institute and
Chairman of the Agility Forum.
|
Thomas H.
Wyman
|
Age:
70
Director Since:
1998
Principal
Occupation: Former Chairman, President and
Chief Executive Officer of CBS, Inc.
Recent Business
Experience: Mr. Wyman was named Lead
Independent Director for Delphi in October 1998. Mr. Wyman had served on
the Board of Directors for General Motors Corporation from 1985 to October
1998. Mr. Wyman was Senior Advisor of SBC Warburg, Inc. from 1996 to 1997
and Chairman of S.G. Warburg and Co., Inc. from 1992 to 1996. He is also a
member of the Advisory Board of Nestlé USA, Inc., the International
Advisory Group of Toshiba Corporation (Tokyo) and the Business Council.
Mr. Wyman is the Trustee Emeritus of the Ford Foundation and The Aspen
Institute and Chairman Emeritus of Amherst College. Mr. Wyman is an ex
officio member of the Audit Committee, the Compensation and Executive
Development Committee and the Corporate Governance and Public Issues
Committee of Delphis Board of Directors.
Other
Directorships: AT&T Corporation
|
Number of Members: | 4
|
Members: | John D. Opie
(Chairman)
|
Oscar de Paula
Bernardes Neto
|
Thomas G.
Labrecque
|
Thomas H. Wyman (ex
officio)
|
Number of Meetings in 1999: | 5
|
Functions: | Assists the Board
of Directors in overseeing managements conduct of Delphis
financial reporting process, which includes:
|
Discussing with
management and the outside auditors the quality of our internal accounting
and financial controls;
|
Overseeing the
preparation of financial reports provided by Delphi to the government or
the public;
|
Reviewing with
management and our outside auditors our annual audited financial
statements and interim financial results; and
|
Monitoring the
independence of our outside auditors.
|
Number of Members: | 3
|
Members: | Susan A. McLaughlin
(Chairman)
|
Virgis W.
Colbert
|
Thomas H. Wyman (ex
officio)
|
Number of Meetings in 1999: | 2
|
Functions: | Determines the
compensation of non-employee directors and the chief executive officer
and, after receiving a recommendation from the chief executive officer,
all members of the Delphi Strategy Board.
|
Approves any
benefit or incentive compensation plan of Delphi or its subsidiaries which
affects those employees subject to its review.
|
Exercises the
powers granted to it by any executive incentive compensation plan
(including granting stock options, Delphi Automotive Systems Performance
Achievement Plan awards and restricted stock units).
|
Number of Members: | 3
|
Members: | Roger S. Penske
(Chairman)
|
Dr. Bernd
Gottschalk
|
Shoichiro
Irimajiri
|
Thomas H. Wyman (ex
officio)
|
Number of
Meetings in 1999:
|
1
|
Functions: | Makes
recommendations on:
|
Matters relating to
service on the Board, including size and composition of the
Board;
|
Nominees for
election to the Board;
|
Matters relating to
the governance of Delphi; and
|
Policies promoting
best interests of Delphi and the community.
|
The Committee also
considers stockholder suggestions for nominees for director. Suggestions
should be submitted to our secretary, with the recommended candidate
s biographical data and written consent to nomination and to
serving, if elected, not later than the date by which stockholder
proposals for action must be submitted. Procedures to be followed by
stockholders in recommending nominees for director are also described in
the section entitled Stockholder Proposals appearing on page
42 of this proxy statement.
|
Name and Address(1) | Shares
Beneficially Owned(2) |
Stock
Options
Exercisable Within 60 Days |
Total of
Shares
Beneficially Owned and Options |
Percent | Deferred
Stock Units(3) |
|||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
J.T. Battenberg III | 172,065 | 783,842 | 955,907 | * | 258,475 | |||||||
Oscar de Paula Bernardes Neto | 0 | 0 | 0 | * | 6,217 | |||||||
Virgis W. Colbert | 0 | 0 | 0 | * | 6,217 | |||||||
Alan S. Dawes | 51,754 | 346,779 | 398,533 | * | 58,975 | |||||||
Shoichiro Irimajiri | 0 | 0 | 0 | * | 2,345 | |||||||
Thomas G. Labrecque | 2,000 | 0 | 2,000 | * | 3,248 | |||||||
Susan A. McLaughlin | 0 | 0 | 0 | * | 6,500 | |||||||
Rodney O Neal | 16,679 | 142,656 | 159,335 | * | 58,275 | |||||||
John D. Opie | 10,000 | 0 | 10,000 | * | 6,500 | |||||||
Roger S. Penske | 22,000 | 0 | 22,000 | * | 6,500 | |||||||
Donald L. Runkle | 31,167 | 147,207 | 178,374 | * | 60,691 | |||||||
David B. Wohleen | 11,451 | 123,761 | 135,212 | * | 57,061 | |||||||
Thomas H. Wyman | 3,155 | 0 | 3,155 | * | 16,957 | |||||||
State Street Bank
and
Trust Company, in various fiduciary capacities(4) 225 Franklin Street Boston, MA 02110 |
61,227,755 | 0 | 61,227,755 | 10.9 | % | 0 | ||||||
All directors and
executive
officers as a group (31 persons) |
495,554 | 2,777,424 | 3,080,750 | * | 645,482 |
(1)
|
Except as otherwise
indicated in the table, the business address of the beneficial owners is
c/o Delphi Automotive Systems Corporation, 5725 Delphi Drive, Troy, MI
48098.
|
(2)
|
Includes
shares:
|
|
As to which the
named person has sole voting and investment power,
|
|
As to which the
named person has shared voting and investment power with a spouse,
or
|
|
Which the named
person holds in the Delphi Automotive Systems Corporation Savings-Stock
Purchase Program for Salaried Employees in the United States.
|
Excludes shares
that are restricted stock holdings or that may be acquired through the
exercise of stock options that are exercisable through March 10,
2000.
|
|
Restricted stock
units subject to a vesting schedule, forfeiture risk and other
restrictions. The restricted stock units earn dividend equivalents at the
same rate as dividends paid to stockholders.
|
|
Phantom shares
included in common stock units under the Delphi Benefit Equalization
Plan-Savings. This is a non-qualified excess benefit plan that
is exempt from ERISA and IRS code limitations and provides executives with
full Delphi matching contributions without regard to limits imposed by the
IRS code. Amounts credited under the plan are maintained in share units of
Delphi common stock. After leaving Delphi, an employee may at any time
choose to receive a complete distribution of amounts in the Benefit
Equalization Plan, which will be in cash. Common stock units have no
voting rights.
|
|
Common stock units
held by non-employee directors under Delphis Deferred Compensation
Plan for Non-Employee Directors.
|
(4)
|
Based on a Schedule
13G dated December 31, 1999 filed by State Street Bank and Trust Company
with the Securities and Exchange Commission. Represents shares held by
State Street Bank and Trust Company as trustee for various Delphi employee
benefit plans and in various other fiduciary capacities.
|
|
$100,000 cash
retainer and $200,000 in common stock units per year for the lead
independent director;
|
|
$55,000 cash
retainer and $55,000 in common stock units per year for the other
non-employee directors; and
|
|
a fee of $5,000 per
year for serving as chairman of a board committee (for other than the lead
independent director).
|
|
Sets specific,
measurable goals to create value for the stockholders in both the short-
and long-term;
|
|
Rewards executives
when they have achieved the goals we have set;
|
|
Motivates
executives to improve the performance and profitability of Delphi overall
and of each business sector to which an executive is assigned;
and
|
|
Adjusts each
executives compensation to reflect his or her individual performance
and contribution to Delphi.
|
|
Base
Salary
|
|
Annual
Incentives
|
|
Long-Term
Incentives
|
Compensation and
Executive Development Committee
|
Virgis W.
Colbert
|
Susan A.
McLaughlin
|
Thomas H. Wyman
(ex officio)
|
Long-Term Compensation | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
||||||||||||||||
Annual Compensation | Awards | Payouts | ||||||||||||||
|
||||||||||||||||
Name and
Principal Position |
Year | Salary
($) |
Bonus
($) |
Other
Annual Compensation ($) |
Restricted
Stock Unit Awards ($)(1) |
Securities
Underlying Options (#)(2) |
Long-
Term Incentive Payouts ($)(3) |
A ll
|
||||||||
|
||||||||||||||||
J.T. Battenberg
III
Chairman, Chief |
1999 | 1,208,333 | 2,200,000 | n/a
|
|
4,080,000
|
|
532,637
|
|
2,135,000
|
48,838
|
|||||
Executive Officer | 1998 | 1,000,000 | 450,000 | 50,624
|
|
n/a
|
|
416,571
|
|
750,000
|
49,215
|
|||||
and President | 1997 | 887,000 | 1,020,000 | 53,448
|
|
n/a
|
|
451,956
|
|
475,000
|
38,112
|
|||||
|
||||||||||||||||
Donald L. Runkle | 1999 | 581,250 | 650,000 | n/a
|
|
933,000
|
|
121,802
|
|
609,000
|
22,945
|
|||||
Executive | 1998 | 458,000 | 235,000 | n/a
|
|
n/a
|
|
66,651
|
|
198,000
|
19,250
|
|||||
Vice President | 1997 | 391,000 | 325,000 | n/a
|
|
n/a
|
|
72,312
|
|
111,000
|
14,085
|
|||||
|
||||||||||||||||
Alan S. Dawes | 1999 | 506,250 | 635,000 | n/a
|
|
933,000
|
|
121,802
|
|
609,000
|
20,977
|
|||||
Chief Financial Officer | 1998 | 398,000 | 210,000 | n/a
|
|
n/a
|
|
58,319
|
|
198,000
|
16,730
|
|||||
and Executive Vice
President |
1997 | 360,000 | 262,000 | n/a
|
|
n/a
|
|
63,272
|
|
111,000
|
12,960
|
|||||
|
||||||||||||||||
Rodney O Neal | 1999 | 426,667 | 660,000 | n/a
|
|
933,000
|
|
121,802
|
|
581,000
|
15,169
|
|||||
Executive Vice
President |
|
|
|
|
||||||||||||
|
||||||||||||||||
David B. Wohleen | 1999 | 411,250 | 625,000 | n/a
|
|
933,000
|
|
121,802
|
|
459,000
|
17,915
|
|||||
Executive Vice
President |
|
|
|
|
(1)
|
Shows value of
restricted stock units on the date of grant. Under Delphis
Founders Grant program, restricted stock units vest pro
rata over four years from the date of grant but no restricted stock units
are delivered until four years from the date of grant. Restricted stock
units earn dividend equivalents at the same rate as dividends paid to
stockholders. The restricted stock units are described in more detail
under Compensation and Executive Development Committee Report on
Executive Compensation above.
|
Listed below are the total number of shares represented by restricted stock units allocated to the named executive officers and the market values of such shares (based on the closing price of our common stock on the New York Stock Exchange as of December 31, 1999). |
Named
Executive
|
Number of
Shares |
Market
Value($) |
|||
---|---|---|---|---|---|
J.T. Battenberg III | 241,959
|
|
3,810,854
|
||
Donald L. Runkle | 55,330
|
|
871,447
|
||
Alan S. Dawes | 55,330
|
|
871,447
|
||
Rodney O Neal | 55,330
|
|
871,447
|
||
David B. Wohleen | 55,330
|
|
871,447
|
(2)
|
Awards in 1999 were
granted by Delphi with respect to its common stock; awards in 1997 and
1998 were granted by General Motors Corporation with respect to its $1-2/3
par value common stock. At the time of the May 28, 1999 distribution by
General Motors Corporation of its Delphi stock to holders of its $1-2/3
par value common stock, Delphi issued replacement options for Delphi
common stock to Delphi employees holding General Motors Corporation
options. This replacement was intended to preserve the
economic value of the General Motors Corporation options at the time of the
May 28, 1999 distribution. Accordingly, the numbers shown in the table for
stock options granted in 1997 and 1998 represent the number of General
Motors Corporation shares underlying the original award by General Motors
Corporation multiplied by a factor of 4.16571, which is the rate at which
Delphi issued the replacement options. The exercise price of the options
originally granted by General Motors Corporation was decreased by dividing
the exercise price by 4.16571.
|
(3)
|
Reflects long-term
incentive payouts as follows:
|
|
Under the General
Motors 1992 Performance Achievement Plan: Performance Periods 1995-1997
and 1996-1998.
|
|
Under the Delphi
Automotive Systems Performance Achievement Plan: Performance Periods
1997-1999 and 1997-2000.
|
|
Payments were made
in General Motors Corporation $1-2/3 par value common stock and General
Motors Corporation Class H common stock for 1997 and 1998 payouts, and
Delphi common stock for 1999 payouts.
|
|
Dividend
equivalents were paid on unvested shares.
|
The General Motors
Corporation awards were subject to vesting in installments. We accelerated
the vesting of future installments of all such awards to December 31, 1999
because we believe that the vesting requirements of such awards did not
particularly promote the long-term retention of our executives, and paid
the awards on January 4, 2000 in shares of Delphi common stock. Listed
below are the number of shares of all such awards to the named executive
officers that were vested as of December 31, 1999 (no shares were unvested
as of that date):
|
Name of
Executive Officer |
Shares
Vested as of
December 31, 1999(#) |
Value of
Shares
Vested as of December 31, 1999($)* |
|||
---|---|---|---|---|---|
J.T. Battenberg III | 68,503
|
|
1,078,922
|
||
Donald L. Runkle | 7,388
|
|
116,361
|
||
Alan S. Dawes | 7,388
|
|
116,361
|
||
Rodney O Neal | 4,240
|
|
66,780
|
||
David B. Wohleen | 0
|
|
0
|
*
|
Based on the
closing price of our common stock on the New York Stock Exchange on
December 31, 1999, which was $15.75 per share.
|
(4)
|
Includes matching
contributions by Delphi under the Savings Stock Purchase Plan and the
values of certain credits provided to the named executive officers under
the Benefit Equalization PlanSavings, which are shown together in
the Savings Plans column in the table below for 1999, and the
value of the insurance premium paid by Delphi with respect to the Delphi
Executive Split-Dollar Endorsement Plan, a life insurance policy for the
benefit of Mr. Battenberg, which is shown in the Imputed Income
column in the table below for 1999. Under the Benefit Equalization
Plan, Delphi provides benefits substantially equal to benefits that could
not be provided under the Savings Stock Purchase Plan because of
limitations under the Internal Revenue Code.
|
Savings
Plans |
Imputed
Income($) |
||||
---|---|---|---|---|---|
J.T. Battenberg III | 40,488
|
|
8,350
|
||
Donald L.
Runkle
|
22,945
|
|
|
||
Alan S. Dawes | 20,977
|
|
|
||
Rodney O Neal | 15,169
|
|
|
||
David B. Wohleen | 17,915
|
|
|
Upon the death of
Mr. Battenberg, Delphi would be reimbursed for its premiums paid on the
Executive Split-Dollar Endorsement Plan.
|
Name | Number of
Securities Underlying Options Granted(#)(1) |
% of
Total
Options Granted to Employees in Fiscal Year(2) |
Exercise
Price ($/Sh.)(3) |
Expiration
Date |
Grant Date
Present Value($)(4) |
||||||
---|---|---|---|---|---|---|---|---|---|---|---|
|
|||||||||||
J.T. Battenberg III | 532,637
|
|
2
|
|
18.66
|
|
2/6/09
|
|
3,238,225
|
||
|
|||||||||||
Donald L. Runkle | 121,802
|
|
.46
|
|
18.66
|
|
2/6/09
|
|
748,035
|
||
|
|||||||||||
Alan S. Dawes | 121,802
|
|
.46
|
|
18.66
|
|
2/6/09
|
|
748,035
|
||
|
|||||||||||
Rodney O Neal | 121,802
|
|
.46
|
|
18.66
|
|
2/6/09
|
|
748,035
|
||
|
|||||||||||
David B. Wohleen | 121,802
|
|
.46
|
|
18.66
|
|
2/6/09
|
|
748,035
|
||
|
|
|
|
|
|
|
|
|
|
|
(1)
|
These options were
granted on February 5, 1999 and include both non-qualified and incentive
stock options. One-fourth of each option grant becomes exercisable on
February 5 of each of 2000, 2001, 2002 and 2003. The incentive stock
options expire ten years from the date of grant and the non-qualified
options expire two days later. If a grantee retires, becomes disabled, or
dies, his or her pro-rated options continue to be exercisable up to the
earlier of the normal expiration date or five years. In most other
instances of employment termination, all rights end upon termination.
Optionees are subject to certain conditions, including refraining from
competitive activity after they retire from Delphi or otherwise cease
employment with Delphi under circumstances in which they retain their
options. Options generally cannot be transferred except through
inheritance.
|
(2)
|
Includes Delphi
replacement options only to the extent that the General Motors Corporation
options which such options replaced were granted by General Motors
Corporation in 1999.
|
(3)
|
The exercise price
of the stock options is the average of the high and low selling prices as
reported in the Wall Street Journal on the grant date.
|
(4)
|
These values were
determined based on the Black-Scholes option pricing model. Calculation of
the Grant Date Present Value was based on the following assumptions:
Exercise of an option in the fifth year after its grant, price volatility
of 29.88%, a risk free rate of return of 6.48% and a dividend yield of
1.59%. No adjustments were made for non-transferability. Our use of this
model does not necessarily mean that we believe that this model accurately
determines the value of options. The ultimate value of the options in this
table depends upon each holders individual investment decisions and
the actual performance of Delphis common stock.
|
General
Motors Corporation Shares Acquired on Exercise(#)(1) |
Value
Realized ($) |
Number of
Securities
Underlying Unexercised Options at FY-End(#)(2) |
Value of
Unexercised In-the-Money Options at FY-End($)(3) |
||||||
---|---|---|---|---|---|---|---|---|---|
Name | Exercisable/
Unexercisable |
Exercisable/
Unexercisable |
|||||||
|
|||||||||
J.T. Battenberg III | 72,413
|
|
2,280,837
|
|
361,176/960,995
|
|
956,542/1,066,573
|
||
|
|||||||||
Donald L. Runkle | 35,883
|
|
901,554
|
|
70,439/190,330
|
|
188,047/170,627
|
||
|
|||||||||
Alan S. Dawes | 3,667
|
|
166,188
|
|
275,806/181,756
|
|
1,351,202/149,278
|
||
|
|||||||||
Rodney O Neal |
0
|
|
0
|
|
81,477/171,962
|
|
263,801/121,464
|
||
|
|||||||||
David B. Wohleen | 8,569
|
|
325,186
|
|
71,443/155,744
|
|
258,929/83,350
|
||
|
|
|
|
|
|
|
|
|
(1)
|
In 1999, none of
the named executive officers exercised options granted by Delphi.
Shares reported in this column of the table represent shares of General
Motors Corporations $1-2/3 par value common stock acquired through
the exercise of options granted by General Motors Corporation before the
May 28, 1999 distribution by General Motors Corporation of its Delphi
shares to the holders of General Motors Corporations $1-2/3 par
value common stock.
|
(2)
|
Includes shares
underlying Delphi options granted before the May 28, 1999 distribution of
our common stock and shares underlying Delphi options with which Delphi
replaced General Motors Corporation options in connection with the May 28,
1999 distribution by General Motors Corporation of its Delphi stock to
holders of General Motors Corporations $1-2/3 par value common
stock. This replacement was intended to preserve the economic value of the
options at the time of the distribution. The number of shares of Delphi
common stock covered by the replacement option was calculated by
multiplying the number of shares of General Motors Corporation common
stock under the original option by a factor of 4.16571; the exercise price
of the option, which is reflected in the value of options in the table,
was decreased by dividing the original exercise price by the same
factor.
|
(3)
|
These year-end
values represent the difference between the fair market value of Delphi
s common stock underlying options (based on the stocks closing
price on the New York Stock Exchange on December 31, 1999) and the
exercise prices of the options. The closing price of Delphis common
stock on the New York Stock Exchange on December 31, 1999 was $15.75.
In-the-money means that the fair market value of the
underlying stock is greater than the options exercise price on the
valuation date.
|
Estimated
Future Payouts Under
Non-Stock-Price-Based Plans(3) |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
|
|||||||||||
Name | Number of
Shares, Units or Other Rights(1) |
Performance
or
Other Period Until Maturation or Payout(2) |
Threshold
($) |
Target
($) |
Maximum
($) |
||||||
|
|||||||||||
J.T. Battenberg III | RSUs
240,000
|
|
RSUs
2003
|
n/a | n/a | n/a | |||||
PAP n/a
|
|
PAP
1999-2001
|
576,000 | 1,440,000 | 2,880,000 | ||||||
|
|||||||||||
Donald L. Runkle | RSUs
54,882
|
|
RSUs
2003
|
n/a | n/a | n/a | |||||
PAP n/a
|
|
PAP
1999-2001
|
164,000 | 410,000 | 820,000 | ||||||
|
|||||||||||
Alan S. Dawes | RSUs
54,882
|
|
RSUs
2003
|
n/a | n/a | n/a | |||||
PAP n/a
|
|
PAP
1999-2001
|
164,000 | 410,000 | 820,000 | ||||||
|
|||||||||||
Rodney O Neal | RSUs
54,882
|
|
RSUs
2003
|
n/a | n/a | n/a | |||||
PAP
4,240
|
|
PAP
1999-2001
|
164,000 | 410,000 | 820,000 | ||||||
|
|||||||||||
David B. Wohleen | RSUs
54,882
|
|
RSUs
2003
|
n/a | n/a | n/a | |||||
PAP n/a
|
|
PAP
1999-2001
|
164,000 | 410,000 | 820,000 | ||||||
|
(1)
|
Represents the
number of shares specified in restricted stock units granted under the
Delphi Automotive Systems Stock Incentive Plan in 1999. Restricted stock
units earn dividend equivalents at the same rate paid to our stockholders.
The total number of shares represented by restricted stock units allocated
to the named executive officers is set out in footnote 1 to the Summary
Compensation Table on page 30. Incentive awards under the Delphi
Automotive Systems Performance Achievement Plan are not currently
denominated in shares, units or other rights.
|
(2)
|
There are no
performance criteria associated with the grant of restricted stock
units.
|
(3)
|
Relates to payment
of incentive awards under the Delphi Automotive Systems Performance
Achievement Plan for performance during 1999 through 2001. If the
threshold performance level is met or exceeded, the percentage of the
incentive award that may be paid to participants will depend on the extent
to which the established performance target for the three-year performance
period is achieved, but will not exceed the maximum level. If the
threshold performance level is not met, no awards will be
paid.
|
Average
Annual
Base Salary(1) |
Years of
Part B Credited Service |
|||||||
---|---|---|---|---|---|---|---|---|
15 |
25 |
35 |
45 |
|||||
$ 250,000 | $ 69,841 | $116,402 | $ 162,963 | $ 209,524 | ||||
490,000 | 141,841 | 236,402 | 330,963 | 425,524 | ||||
730,000 | 213,841 | 356,402 | 498,963 | 641,524 | ||||
970,000 | 285,841 | 476,402 | 666,963 | 857,524 | ||||
1,210,000 | 357,841 | 596,402 | 834,963 | 1,073,524 | ||||
1,450,000 | 429,841 | 716,402 | 1,002,963 | 1,289,524 |
(1)
|
Average annual base
salary means the average of the highest five years of base salary paid
during the final ten calendar years of service preceding an executive
s retirement.
|
Average
Annual
Total Direct Compensation(1) |
Eligible
Years of Part B Credited
Service |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
15 |
20 |
25 |
30 |
35 |
||||||
$ 380,000 | $ 68,304 | $ 96,804 | $ 125,304 | $ 153,804 | $ 182,304 | |||||
1,122,000 | 235,254 | 319,404 | 403,554 | 487,704 | 571,854 | |||||
1,864,000 | 402,204 | 542,004 | 681,804 | 821,604 | 961,404 | |||||
2,606,000 | 569,154 | 764,604 | 960,054 | 1,155,504 | 1,350,954 | |||||
3,348,000 | 736,104 | 987,204 | 1,238,304 | 1,489,404 | 1,740,504 | |||||
4,090,000 | 903,054 | 1,209,804 | 1,516,554 | 1,823,304 | 2,130,054 |
(1)
|
Average annual
total direct compensation means the sum of the average annual base salary
and the average of the highest five annual incentive awards earned in
respect of the final ten calendar years of service preceding an executive
s retirement.
|
|
all of the
participants unvested options will vest and become immediately
exercisable in accordance with their terms;
|
|
all of the
participants unvested restricted stock units will vest and the
company will deliver to the participant stock certificates and/or, at the
participants option, cash in an amount equal to the value of the
restricted stock units;
|
|
all of the
participants target awards, calculated based on the greater of 150%
of the initial awards or 150% of the forecasted payout level at the time
of the change in control, will be fully funded by the company
contributing amounts equal to such awards to a rabbi trust and
will thereafter be paid to the participant at the times contemplated by
the plans under which the awards were made;
|
|
any compensation
previously deferred at the election of the participant, together with
accrued interest or earnings, will be funded by the company
contributing amounts equal to such deferrals and accrued interest or
earnings to a rabbi trust, which amounts will be paid to the participant
as previously directed by the participant;
|
|
the company will
contribute to a rabbi trust an amount equal to the present value of the
Regular SERP Benefit or the Alternative SERP Benefit, which amount will be
paid to the participant under the terms of the Supplemental Executive
Retirement Program at the same time as his or her benefits under the
Delphi Salaried Retirement Program are paid to him or her; if the
participant does not become vested in his or her retirement benefit under
the Delphi Salaried Retirement Program, then the present value of the
Regular SERP Benefit or the present value of the Alternative SERP Benefit
will be paid to the participant within 30 days after his or her separation
from service with the company; solely for purposes of calculating the
Regular SERP Benefit and/or the Alternative SERP Benefit, the participant
s benefit under the Delphi Salaried Retirement Program will be
calculated with additional year(s) of service equal to the multiplier (1,
2 or 3) described below and with the additional compensation paid as a
result of such multiplier;
|
|
a participant will
be deemed fully vested in his or her benefit under any tax-qualified
defined benefit plans of the company so that if he or she separates from
service with the company before actually becoming vested in such benefits,
the company will pay him or her an amount equal to the present value of
his or her accrued benefits under such plans;
|
|
a participant will
be deemed fully vested in his or her benefit under any tax-qualified
defined contribution plans of the company so that if he or she separates
from service with the company before actually becoming vested in such
benefits, the company will pay him or her an amount equal to the excess of
his or her account balance under such plans over the vested account
balance.
|
|
The company
terminates the participants employment other than for cause,
i.e., for any reason other than the participants willful
failure to perform substantially his or her duties or the conviction of
the participant for a felony;
|
|
the participant
terminates his or her employment if, without his or her consent, (i) his
or her salary and other compensation or benefits are reduced for reasons
unrelated to the companys or the participants performance,
(ii) his or her responsibilities are negatively and materially changed,
(iii) he or she must relocate his or her work location or residence more
than 25 miles from its location as of the date of the change in control or
(iv) the company fails to offer him or her a comparable position after the
change in control;
|
|
during the
one-month period following the first anniversary of the change in control,
the participant ceases to be employed by the company for any reason other
than for cause.
|
|
Payment in cash of
(i) the participants annual base salary through the termination date
for work performed for which the participant has not yet been paid,
together with accrued vacation pay and (ii) a multiple (either 1, 2 or 3)
of the greater of (x) the participants annual base salary plus his
or her target bonus, each for the year in which the change in control
occurs, and (y) the participants annual base salary plus his or her
target bonus, each for the year in which his or her employment is
terminated;
|
|
continuation by the
company of the participants health and life insurance coverage for
36 months after the termination date;
|
|
reimbursement from
the company of up to $50,000 for expenses related to outplacement
services;
|
|
continued use of
the participants company car and/or any applicable car allowance for
one year after the termination date, plus payment by the company of any
amounts necessary to offset any taxes incurred by the participant by
reason of the companys car-related payments;
|
|
provision by the
company of investment advisory services comparable to those services
available to the participant as of the date of his or her change in
control agreement, for two years after the termination date;
and
|
|
payment by the
company of the participants legal fees resulting from any dispute
resolution process entered into to enforce his or her change in control
agreement, plus payment by the company of the gross-up amount necessary to
offset any taxes incurred by the participant by reason of such payments by
the company.
|
The graph covers a period of time beginning February 5, 1999, when Delphis common stock first traded on the New York Stock Exchange, through December 31, 1999.
DESCRIPTION | STARTING
BASIS February 5, 1999 |
March 31,
1999 |
June 30,
1999 |
September 30,
1999 |
December 31,
1999 |
||||||
---|---|---|---|---|---|---|---|---|---|---|---|
DELPHI AUTOMOTIVE
SYSTEMS CORPORATION |
$100.00 | $104.41 | $109.24 | $ 95.25 | $ 93.82 | ||||||
S & P 500 | $100.00 | $100.77 | $107.87 | $101.14 | $116.19 | ||||||
PEER GROUP | $100.00 | $ 93.62 | $106.46 | $ 86.02 | $ 71.65 |
|
|
/s/ Diane L.
Kaye
|
Diane L.
Kaye
|
Secretary
|
NOTICE
OF
|
2000
|
ANNUAL
MEETING
|
OF
STOCKHOLDERS
|
AND
|
PROXY
STATEMENT
|
APPENDIX A
DELPHI AUTOMOTIVE SYSTEMS ANNUAL INCENTIVE PLAN
1. The purposes of the Delphi Automotive Systems Annual Incentive Plan (this "Plan") are to reward performance and provide incentive for future endeavor to employees who contribute to the success of the business by making them participants in that success.
2(a). The Executive Development and Compensation Committee of the Delphi Automotive Systems Corporation Board of Directors (the "Committee"), as from time to time constituted pursuant to the By-Laws of Delphi Automotive Systems Corporation ("Delphi," or the "Corporation"), may, prior to June 1, 2004, authorize the granting to employees of the Corporation of annual target awards. The Committee, in its sole discretion, shall determine the performance levels at which different percentages of such awards shall be earned, the collective amount for all awards to be granted at any one time, and the individual annual grants with respect to employees who are officers of the Corporation. The Committee may delegate to the Delphi Strategy Board (the "Strategy Board") responsibility for determining, within the limits established by the Committee, individual award grants for employees who are not officers of the Corporation. All such awards shall be denominated and paid in cash (U.S. dollars or local currency equivalent).
2(b). Prior to the grant of any target award, the Committee shall establish for each such award performance levels related to the enterprise (as defined below) at which 100% of the award shall be earned and a range (which need not be the same for all awards) within which greater and lesser percentages shall be earned. The term "enterprise" shall mean the Corporation and/or any unit or portion thereof, and any entities in which the Corporation has, directly or indirectly, a substantial ownership interest.
2(c). With respect to the performance levels to be established pursuant to paragraph 2(b), the specific measures for each grant shall be established by the Committee at the time of such grant. In creating these measures, the Committee may establish the specific goals based upon or relating to one or more of the following business criteria: return on assets, return on net assets, asset turnover, return on equity, return on capital, market price appreciation of Delphi common stock, economic value added, total stockholder return, net income, pre-tax income, earnings per share, operating profit margin, net income margin, sales margin, cash flow, market share, inventory turnover, sales growth, capacity utilization, increase in customer base, environmental health and safety, diversity, and/or quality. The business criteria may be expressed in absolute terms or relative to the performance of other companies or to an index.
2(d). If any event occurs during a performance period which requires changes to preserve the incentive features of this Plan, the Committee may make appropriate adjustments (either upward or downward), in the specified performance levels.
2(e). Except as otherwise provided in paragraph 6, the percentage of each target award to be distributed to an employee shall be determined by the Committee on the basis of the performance levels established for such award and the performance of the applicable enterprise or specified portion thereof, as the case may be, during the performance period. Following determination of the final payout percentage, the Committee may, upon the recommendation of the Chief Executive Officer, make adjustments to awards for officers of the Corporation to reflect individual performance during such period. Adjustments to awards to reflect individual performance for employees who are not officers of the Corporation may be made by the Strategy Board. Any target award, as determined and adjusted pursuant to this paragraph 2(e) and paragraph 6, is herein referred to as a "final award." The total award paid to any employee for any one year shall not exceed $7.5 million.
3. Subject to such additional limitations or restrictions as the Committee may impose, the term "employees" shall mean persons (a) who are employed by the Corporation, or any subsidiary (as such term is defined below), including employees who are also directors of the Corporation or any such subsidiary, or (b) who accept (or previously have accepted) employment, at the request of the Corporation, with any entity not described in 3(a) above but in which the Corporation has, directly or indirectly, a substantial ownership interest. For purposes of this Plan, the term "subsidiary" shall mean (i) a corporation of which capital stock having ordinary voting power to elect a majority of the board of directors of such corporation is owned, directly or indirectly, by the Corporation, or (ii) any unincorporated entity in respect of which the Corporation can exercise, directly or indirectly, comparable control. The Committee shall, among other things, determine when and to what extent individuals otherwise eligible for consideration shall become or cease to be, as the case may be, employees for purposes of this Plan and shall determine when, and under what circumstances, any individual shall be considered to have terminated employment for purposes of this Plan. To the extent determined by the Committee, the term employees shall be deemed to include former employees and any beneficiaries thereof.
4(a). Target awards which have become final awards shall be subject to a vesting schedule established by the Committee. Except as otherwise provided in this Plan, no final award (or portion thereof) subject to a vesting schedule shall be paid prior to vesting, and the unpaid portion of any final award shall be subject to the provisions of paragraph 6. The Committee shall have the authority to modify a vesting schedule as may be necessary or appropriate in order to implement the purposes of this Plan. As a condition to the vesting of all or any portion of a final award, the Committee may, among other things, require an employee to enter into such agreements as the Committee considers appropriate and in the best interests of the Corporation.
4(b). If employment of an employee is terminated by death, all final awards not currently vested shall immediately vest. In all other cases, if employment of an employee is terminated for any reason prior to the vesting of any final award, the Committee may, but in any case shall not be required to, change the vesting period with respect to such final awards to accelerate the vesting period related to all or any portion of such final award.
4(c). With respect to target awards which have become final awards as provided in paragraph 2(e), the Committee may, in its discretion, pay to the participant interest on all portions thereof which are unvested. No holder of a target award shall have any rights to interest prior to such target award becoming a final award. Any interest payable with respect to such unvested final awards shall be paid at such times, in such amounts, and in accordance with such procedures as the Committee shall determine.
5(a). An employee shall be eligible for consideration for a target award based on such criteria as the Committee shall from time to time determine.
5(b). No target award shall be granted to any director of the Corporation who is not an employee at the date of grant.
6(a). Payment of any final award (or portion thereof) to an individual employee shall be subject to the satisfaction of the conditions precedent that such employee: (i) continue to render services as an employee (unless this condition is waived by the Committee), (ii) refrain from engaging in any activity which, in the opinion of the Committee, is competitive with any activity of the Corporation or any subsidiary (except that employment at the request of the Corporation with an entity in which the Corporation has, directly or indirectly, a substantial ownership interest, or other employment specifically approved by the Committee, shall not be considered to be an activity which is competitive with any activity of the Corporation or any subsidiary) and from otherwise acting, either prior to or after termination of employment, in any manner inimical or in any way contrary to the best interests of the Corporation, and (iii) furnish to the Corporation such information with respect to the satisfaction of the foregoing conditions precedent as the Committee shall reasonably request. Except as otherwise provided under paragraph 6(c) below, the failure by any employee to satisfy such conditions precedent shall result in the immediate cancellation of the unvested portion of any final award previously made to such employee and such employee shall not be entitled to receive any consideration in respect of such cancellation.
6(b). If any employee is dismissed for cause or quits employment without the prior consent of the Corporation, the unvested portion of any final award previously made to such employee shall be canceled as of the date of such termination of employment, and such employee shall not be entitled to receive any consideration in respect of such cancellation.
6(c). Upon termination of an employee's employment for any reason other than as described in (b) above, the Committee may, but shall not in any case be required to, waive the condition precedent relating to the continued rendering of services in respect of all or any specified percentage of the unvested portion of any final award, as the Committee shall determine. To the extent such condition precedent is waived, the Committee may accelerate the vesting of all or any specified percentage of the unvested portion of any final award.
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6(d). For purposes of this Plan, a qualifying leave of absence, determined in accordance with procedures established by the Committee, shall not constitute a termination of employment, except that a final award shall not vest during a leave of absence granted an employee for government service.
7. Subject to paragraph 6, all final awards which have vested in accordance with the provisions of this Plan shall be paid as soon as practicable following the end of the related vesting period. If the Corporation shall have any unpaid claim against an employee arising out of or in connection with the employee's employment with the Corporation, such claim may be offset against awards under this Plan. Such claim may include, but is not limited to, unpaid taxes, the obligation to repay gains pursuant to paragraph 5(d) of the Delphi Stock Incentive Plan, or Corporate business credit card charges.
8. To the extent that any employee, former employee, or any other person acquires a right to receive payments or distributions under this Plan, such right shall be no greater than the right of a general unsecured creditor of the Corporation. All payments and distributions to be made hereunder shall be paid from the general assets of the Corporation. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between the Corporation and any employee, former employee, or any other person.
9. The expenses of administering this Plan shall be borne by the Corporation.
10. Except as otherwise determined by the Committee, with the exception of transfer by will or the laws of descent and distribution, no target or final award shall be assignable or transferable and, during the lifetime of the employee, any payment in respect of any final award shall be made only to the employee. An employee shall designate a beneficiary or beneficiaries to receive all or part of the amounts to be distributed to the employee under this Plan in case of death. A designation of beneficiary may be replaced by a new designation or may be revoked by the employee at any time. A designation or revocation shall be on forms prescribed by and filed with the Secretary of the Committee. In case of the employee's death, the amounts distributable to the employee under this Plan with respect to which a designation of beneficiary has been made (to the extent it is valid and enforceable under applicable law) shall be distributed in accordance with this Plan to the designated beneficiary or beneficiaries. The amount distributable on account of an employee's death which is not subject to such a designation shall be distributed to the employee's estate or legal representative. If there shall be any question as to the legal right of any beneficiary to receive a distribution under this Plan, the amount in question may be paid to the estate of the employee, in which event the Corporation shall have no further liability to any party with respect to such amount.
11. Full power and authority to construe and interpret this Plan shall be vested in the Committee. To the extent determined by the Committee, administration of this Plan, including, but not limited to (a) the selection of employees for participation in this Plan, (b) the determination of the number of installments, and (c) the determination of the vesting schedule for final awards, may be delegated to the Strategy Board; provided, however, the Committee shall not delegate to the Strategy Board any powers, determinations, or responsibilities with respect to officers of the Corporation. Any person who accepts any award hereunder agrees to accept as final, conclusive, and binding all determinations of the Committee and the Strategy Board. The Committee shall have the right, in the case of participants not employed in the United States, to vary from the provisions of this Plan in order to preserve the incentive features of this Plan.
12. The Committee, in its sole discretion, may, at any time, amend, modify, suspend, or terminate this Plan provided that no such action shall (a) adversely affect the rights of an employee with respect to previous target awards or final awards under this Plan (except as otherwise permitted under paragraphs 2(d), 4, or 6), and this Plan, as constituted prior to such action, shall continue to apply with respect to target awards previously granted and final awards which have not been paid, or (b) without the approval of the stockholders, (i) increase the limit on the maximum amount of final awards provided in paragraph 2(e), or (ii) render any director of the Corporation who is not an employee at the date of grant or any member of the Committee on Executive Development and Compensation or the Audit Committee, eligible to be granted a target award, or (iii) permit any target award to be granted under this Plan after May 31, 2004.
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13. Every right of action by, or on behalf of, the Corporation or by any stockholder against any past, present, or future member of the Board of Directors, officer, or employee of the Corporation or its subsidiaries arising out of or in connection with this Plan shall, irrespective of the place where action may be brought and irrespective of the place of residence of any such director, officer, or employee, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action arises. Any and all right of action by any employee (past, present, or future) against the Corporation arising out of or in connection with this Plan shall, irrespective of the place where an action may be brought, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action arises. This Plan and all determinations made and actions taken pursuant hereto shall, , be governed by the laws of the State of Delaware, without giving effect to principles of conflict of laws, and construed accordingly.
14. This Plan shall be effective on January 1, 1999.
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APPENDIX B
DELPHI AUTOMOTIVE SYSTEMS PERFORMANCE ACHIEVEMENT PLAN
1. The purpose of the Delphi Automotive Systems Performance Achievement Plan (this "Plan ") is to provide employees in positions of senior leadership with incentive compensation related to accomplishment of key Corporate long-term strategic objectives which enhance stockholder value.
2(a). The Executive Development and Compensation Committee of the Delphi Board of Directors (the "Committee"), as from time to time constituted pursuant to the By-Laws of the Delphi Automotive Systems Corporation ( "Delphi," or the "Corporation"), may prior to June 1, 2004 authorize the granting to employees of the Corporation of target awards. The Committee, in its sole discretion, shall determine the performance levels at which different percentages of such awards shall be earned, the collective amount for all awards to be granted at any one time, and the individual amounts with respect to employees who are officers of the Corporation. The Committee may delegate to the Delphi Strategy Board (the "Strategy Board") responsibility for determining, within the limits established by the Committee, individual award grants for employees who are not officers of the Corporation.
2(b). Prior to the grant of any target award, the Committee shall establish for each such award (i) performance levels related to the enterprise (as defined below) at which 100% of the award shall be earned and a range (which need not be the same for all awards) within which greater and lesser percentages shall be earned and (ii) a performance period which shall not be less than two nor more than five years. The term "enterprise" shall mean the Corporation and/or any unit or portion thereof, and any entities in which the Corporation has, directly or indirectly, a substantial ownership interest.
2(c). With respect to the performance levels to be established pursuant to paragraph 2(b), the specific measures for each grant shall be established by the Committee at the time of such grant. In creating these measures, the Committee may establish the specific goals based upon or relating to one or more of the following business criteria: return on assets, return on net assets, asset turnover, return on equity, return on capital, market price appreciation of Delphi Stock (as defined below), economic value added, total stockholder return, net income, pre-tax income, earnings per share, operating profit margin, net income margin, sales margin, cash flow, market share, inventory turnover, sales growth, capacity utilization, increase in customer base, environmental health and safety, diversity, and/or quality. The business criteria may be expressed in absolute terms or relative to the performance of other companies or to an index.
2(d). If any event occurs during a performance period which requires changes to preserve the incentive features of this Plan, the Committee may make adjustments (either upwards or downwards), in the specified performance levels of this Plan.
2(e). Except as otherwise provided in paragraph 3, the percentage of each target award to be distributed to an employee shall be determined by the Committee (i) on the basis of the performance levels established for such award and the performance of the applicable enterprise during the performance period and (ii) in the discretion of the Committee, on the basis of individual performance during such period. Following determination of the final payout percentage, the Committee may, upon the recommendation of the Chief Executive Officer, make adjustments to awards for officers of the Corporation to reflect individual performance during such period. Adjustments to awards to reflect individual performance for employees who are not officers of the Corporation shall be made by the Strategy Board. Any target award, as determined and adjusted pursuant to this paragraph and paragraph 3, is herein referred to as a "final award." The amount related to any final award for each performance period grant paid to any employee shall not exceed $7.5 million. No distribution of any final award (or portion thereof) shall be made if the minimum performance level applicable to the related target award is not achieved during the applicable performance period, except as otherwise provided in paragraph 3(d), or, unless otherwise determined by the Committee, if the employment of the employee to whom the related target award was granted shall terminate for any reason whatsoever (including death) within 12 months after the date the target award was granted.
2(f). All final awards which have vested in accordance with the provisions of paragraphs 3 and 4 shall be paid as soon as practicable following the end of the related vesting period. Final awards shall be paid in cash, in common stock of Delphi Automotive Systems Corporation ("Delphi Stock"), or partly in cash and partly in Delphi Stock, as the Committee shall determine. With respect to final awards which become payable partly or wholly in stock, the number of shares to be delivered upon determination of the final award and satisfaction of the related vesting provisions shall be determined by dividing the final award, less any cash received, by the fair market value of a share of Delphi Stock, such fair market value to be determined in accordance with procedures established by the Committee. Shares deliverable in payment of such final awards shall be made available from shares reacquired by the Corporation, including shares purchased in the open market. If shares are purchased in the open market for delivery in payment of such final awards, they shall be held in a treasury account specifically for awards under this Plan. If the Corporation shall have any unpaid claim against the employee arising out of or in connection with such employee's employment with the Corporation, such claim may be offset against awards under this Plan. Such claim may include, but is not limited to, unpaid taxes, the obligation to pay gains pursuant to paragraph 5(d) of the Delphi Stock Incentive Plan, or Corporate business credit card charges.
2(g). Subject to such additional limitations or restrictions as the Committee may impose, the term "employees" shall mean persons who, at any time during the period to which an award relates, (i) are employed by the Corporation or any subsidiary (as such term is defined below), including employees who are also directors of the Corporation or any such subsidiary, or (ii) accept (or previously have accepted) employment, at the request of the Corporation, with any entity not described in (i) above but in which the Corporation has, directly or indirectly, a substantial ownership interest. For purposes of this Plan, the term "subsidiary" means (A) a corporation of which capital stock having ordinary voting power to elect a majority of the board of directors of such corporation is owned, directly or indirectly, by the Corporation or (B) any unincorporated entity in respect of which the Corporation can exercise, directly or indirectly, comparable control. The Committee shall, among other things, determine when and to what extent individuals otherwise eligible for consideration shall become or cease to be, as the case may be, employees for purposes of this Plan and to determine when and under what circumstances any individual shall be considered to have terminated employment for purposes of this Plan. To the extent determined by the Committee, the term employees shall be deemed to include former employees and any beneficiaries thereof.
3(a). Payment of any final award (or portion thereof) to an individual employee shall be subject to the satisfaction of the following conditions precedent that such employee: (i) continue to render services as an employee (unless this condition is waived by the Committee), (ii) refrain from engaging in any activity which, in the opinion of the Committee, is competitive with any activity of the Corporation or any subsidiary (except that employment at the request of the Corporation with an entity in which the Corporation has, directly or indirectly, a substantial ownership interest, or other employment specifically approved by the Committee, shall not be considered to be an activity which is competitive with any activity of the Corporation or any subsidiary) and from otherwise acting, either prior to or after termination of employment, in any manner inimical or in any way contrary to the best interests of the Corporation, and (iii) furnish to the Corporation such information with respect to the satisfaction of the foregoing conditions precedent as the Committee shall reasonably request. If the Committee shall determine that such employee has failed to satisfy any of the foregoing conditions precedent, all target awards granted to such employee which have not become final awards, and all final awards which have not been paid pursuant to paragraph 4(a) shall be immediately canceled. Upon termination of an employee's employment other than by death (whether such termination is before or after a target award shall have become a final award), the Committee may, but shall not in any case be required to, waive the condition precedent of continuing to render services but in the event of such waiver, the payment of any target award which shall thereafter become a final award and payment of any final award which shall remain unpaid shall nevertheless remain subject to the conditions precedent that (A) the employee refrains from engaging in any activity which, in the opinion of the Committee, is competitive with any activity of the Corporation or any subsidiary (except that employment at the request of the Corporation with an entity in which the Corporation has, directly or indirectly, a substantial ownership interest or other employment specifically approved by the Committee shall not be considered to be an activity which is competitive with any activity of the Corporation or any subsidiary) and from otherwise acting, either prior to or after termination of employment, in any manner inimical or in any way contrary to the best interests of the Corporation and (B) the employee furnish to the Corporation such information with respect to the satisfaction of the foregoing condition precedent as the Committee shall reasonably request. As used in the immediately preceding clause (B), the term employees shall include the beneficiary or beneficiaries designated by such employee as provided in paragraph 7, or if no such designation of any beneficiary or beneficiaries has been made, the employee's legal representative or other persons entitled to any payment or benefit with respect to the employee pursuant to this Plan. As a condition to the vesting and payment of all or any portion of a final award, the Committee may, among other things, require an employee to enter into such agreements as the Committee considers appropriate and in the best interests of the Corporation.
3(b). If, upon termination of an employee's employment prior to the end of any performance period for a reason other than death, the Committee shall determine to waive the condition precedent of continuing to render services as provided in paragraph 3(a), the target award granted to such employee with respect to such performance period shall be reduced pro rata based on the number of months remaining in the performance period after the month of such termination. The final award for such employee shall be determined by the Committee (i) on the basis of the performance levels established for such award (including the minimum performance level) and the performance level achieved through the end of the performance period and (ii) in the discretion of the Committee, on the basis of individual performance during the period prior to such termination. A qualifying leave of absence, determined in accordance with procedures established by the Committee, shall not be deemed to be a termination of employment but, except as otherwise determined by the Committee, the employee's target award will be reduced pro rata based on the number of months during which such person was on such leave of absence during the performance period. A target award shall not vest during a leave of absence granted an employee for government service.
3(c). Upon termination of an employee's employment by reason of death prior to the end of any performance period, the target award granted to such employee with respect to such performance period, except as otherwise provided in paragraph 2(e), shall be reduced pro rata based on the number of months remaining in the performance period after the month of such employee's death. The percentage of the reduced target award to be distributed to such employee shall be determined by the Committee (i) on the basis of the performance levels established for such award (including the minimum performance level) and the performance level achieved through the end of the fiscal year during which such employee died and (ii) in the discretion of the Committee, on the basis of individual performance during the applicable period. Such final awards will immediately vest and be paid as promptly as practicable.
3(d). If the performance levels established for any target award are based on the performance of a specified portion of the enterprise and that portion is sold or otherwise disposed of or reorganized or the employee is transferred to another portion of the enterprise prior to the end of the performance period, the target award granted to such employee with respect to such performance period shall be reduced pro rata based on the number of months remaining in the performance period after the month of such event. The final award for such employee shall be determined by the Committee (i) on the basis of the performance levels established for such award (including the minimum performance level) and the performance level achieved, in the case of a sale, disposition or reorganization of the applicable portion of the enterprise, through the end of the fiscal year during which such event occurs and, in the case of a transfer of the employee, through the end of the performance period and (ii) in the discretion of the Committee, on the basis of individual performance during the applicable period. In addition, in any such case, the Committee may, in its discretion, further adjust such award upward as it may deem appropriate and reasonable.
3(e). If an employee is promoted during the performance period with respect to any target award, such target award may, in the discretion of the Committee, be increased to reflect such employee's new responsibilities.
3(f). If the Corporation acquires an entity which has issued and outstanding long-term target awards, the Corporation may substitute awards under this Plan in place of such awards, under such provisions consistent with the terms of this Plan, as the Committee, in its sole discretion, may determine.
4(a). Target awards which have become final awards shall be subject to a vesting schedule established by the Committee. Except as otherwise provided in this Plan, no final award (or portion thereof) subject to a vesting schedule shall be paid prior to vesting and the unpaid portion of any final award shall be subject to the provisions of paragraph 3(a). The Committee shall have the authority to modify a vesting schedule as may be necessary or appropriate in order to implement the purposes of this Plan. As a condition to the vesting of all or any portion of a final award, the Committee may, among other things, require an employee to enter into such agreements as the Committee considers appropriate and in the best interests of the Corporation.
4(b). If the employment of an employee is terminated for any reason prior to the vesting of any final award, the Committee may, but in any case shall not be required to, change the vesting period with respect to such final awards to accelerate the vesting period related to all or any portion of such final award. If the employment of an employee is terminated by death, all final awards not currently vested shall immediately vest.
4(c). No holder of a target award shall have any rights to dividends or interest (other than as provided in paragraph 4(d) below) or other rights of a stockholder with respect to a target award prior to such target award's becoming a final award.
4(d). With respect to target awards which have become final awards payable in cash pursuant to paragraph 2(f) but which have not vested, the Committee may, in its discretion, pay to the employees interest on all such unvested cash amounts. With respect to target awards which have become final awards payable in Delphi Stock pursuant to paragraph 2(f) but which have not vested, the Committee may, in its discretion, pay to the employees an amount equal to the dividends which would have been paid if such shares had been vested and registered in the employee's name. Any interest or dividend equivalents payable with respect to such final awards shall be paid at such times, in such amounts, and in accordance with such procedures as the Committee shall determine.
4(e). With respect to any dividend or other distribution on the Delphi Stock, the Committee may, in its discretion, authorize current or deferred payments (payable in cash or Delphi Stock or a combination thereof, as determined by the Committee) or appropriate adjustments to outstanding target awards and unvested final awards denominated in shares of Delphi Stock to reflect such dividend or distribution.
5(a). An employee shall be eligible for consideration for a target award based on such criteria as the Committee shall, from time to time, determine.
5(b). No target award shall be granted to any director of the Corporation who is not an employee at the date of grant nor to any member of the Committee on Executive Development and Compensation or the Audit Committee.
5(c). The Committee shall have discretion with respect to the determination of each target award. Recommendations shall be made to the Committee by the Chief Executive Officer under such procedures as may, from time to time, be approved by the Committee as to the employees to be granted target awards, the amounts of such awards, the performance levels at which different percentages of such awards would be earned and adjustments, if any, to such levels, the adjustments to such awards on the basis of individual performance, and the amounts of final awards, except that no such recommendations shall be made with respect to employees who are members of the Board of Directors, but such selections and determinations shall be dealt with exclusively by the Committee under such procedures as it may determine.
6. Except as otherwise determined by the Committee, with the exception of transfer by will or the laws of descent and distribution, no target or final award shall be assignable or transferable and, during the lifetime of the employee, any payment in respect of any final award shall be made only to the employee. An employee shall designate a beneficiary or beneficiaries to receive all or part of the amounts to be distributed to the employee under this Plan in case of death. A designation of beneficiary or beneficiaries may be replaced by a new designation or may be revoked by the employee at any time. A designation or revocation shall be on forms prescribed by and filed with the Secretary of the Committee. In case of the employee's death, the amounts distributable to the employee under this Plan with respect to which a designation of beneficiary or beneficiaries has been made (to the extent it is valid and enforceable under applicable law) shall be distributed in accordance with this Plan to the designated beneficiary or beneficiaries. The amount distributable on account of an employee's death which is not subject to such a designation shall be distributed to the employee's estate or legal representative. If there shall be any question as to the legal right of any beneficiary to receive a distribution under this Plan, the amount in question may be paid to the estate of the employee, in which event the Corporation shall have no further liability to any party with respect to such amount.
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7. To the extent that any employee, former employee, or any other person acquires a right to receive payments or distributions under this Plan, such right shall be no greater than the right of a general unsecured creditor of the Corporation. All payments and distributions to be made hereunder shall be paid from the general assets of the Corporation. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Corporation and any employee, former employee, or any other person.
8. The expenses of administering this Plan shall be borne by the Corporation.
9. Full power and authority to construe and interpret this Plan shall be vested in the Committee. To the extent determined by the Committee, administration of this Plan, including, but not limited to (a) the selection of employees for participation in this Plan, (b) the determination of the number of installments, and (c) the determination of the vesting schedule for final awards, may be delegated to the Strategy Board; provided, however, the Committee shall not delegate to the Strategy Board any powers, determinations, or responsibilities with respect to officers of the Corporation. Any person who accepts any award hereunder agrees to accept as final, conclusive, and binding all determinations of the Committee and the Strategy Board. The Committee shall have the right, in the case of participants not employed in the United States, to vary from the provisions of this Plan in order to preserve the incentive features of this Plan.
10. The Committee, in its sole discretion, may, at any time, amend, modify, suspend, or terminate this Plan provided that no such action shall (a) adversely affect the rights of an employee with respect to previous target awards or final awards under this Plan (except as otherwise permitted under paragraphs 2(d) and 3), and this Plan, as constituted prior to such action, shall continue to apply with respect to target awards previously granted and final awards which have not been paid, or (b) without the approval of the stockholders, (i) increase the limit on the maximum amount of final awards provided in paragraph 2(e), or (ii) render any director of the Corporation who is not an employee at the date of grant or any member of the Committee on Executive Development and Compensation or the Audit Committee, eligible to be granted a target award, or (iii) permit any target award to be granted under this Plan after May 31, 2004.
11. Every right of action by, or on behalf of, the Corporation or by any stockholder against any past, present, or future member of the Board of Directors, officer, or employee of the Corporation or its subsidiaries arising out of or in connection with this Plan shall, irrespective of the place where action may be brought and irrespective of the place of residence of any such director, officer, or employee, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action arises. Any and all right of action by any employee (past, present, or future) against the Corporation arising out of or in connection with this Plan shall, irrespective of the place where an action may be brought, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action arises. This Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Delaware, without giving effect to principles of conflict of laws, and construed accordingly.
12. This Plan shall be effective on January 1, 1999.
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APPENDIX C
DELPHI AUTOMOTIVE SYSTEMS STOCK INCENTIVE PLAN
1. The purposes of the Delphi Automotive Systems Stock Incentive Plan (this "Plan") are to provide incentive for the creation of stockholder value and provide employees with the opportunity for long-term capital accumulation through the grant of options and restricted stock units to acquire shares of common stock ("Delphi Stock") of Delphi Automotive Systems Corporation ( "Delphi," or the "Corporation"). Subject to such additional limitations or restrictions as may be imposed as provided below, the term "employees" shall mean persons (a) who are employed by the Corporation or any "subsidiary" (as such term is defined below), including employees who are also directors of the Corporation or any such subsidiary, or (b) who accept (or previously have accepted) employment, at the request of the Corporation, with any entity not described in (a) above but in which the Corporation has, directly or indirectly, a substantial ownership interest. For purposes of this Plan, the term "subsidiary" means (i) a corporation of which capital stock having ordinary voting power to elect a majority of the board of directors of such corporation is owned, directly or indirectly, by the Corporation or (ii) any unincorporated entity in respect of which the Corporation can exercise, directly or indirectly, comparable control. The rights reserved herein shall, among other things, permit the Executive Development and Compensation Committee of the Delphi Board of Directors (the "Committee"), as from time to time constituted pursuant to the By-Laws of the Corporation, to determine when, and to what extent, individuals otherwise eligible for consideration shall become or cease to be, as the case may be, employees for purposes of this Plan and to determine when, and under what circumstances, any individual shall be considered to have terminated employment for purposes of this Plan. To the extent determined by the Committee, the term employees shall be deemed to include former employees and any beneficiaries thereof.
2. Subject to the provisions of paragraph 10, the aggregate number of shares of stock with respect to which options and restricted stock units may be granted under this Plan shall not exceed 85,000,000 shares of Delphi Stock; provided, however, subject to the provisions of paragraph 10, the maximum number of shares of stock which may be granted in the form of restricted stock units under this Plan shall not exceed 8,000,000 shares of Delphi Stock. Subject to the provisions of paragraph 10, no individual may be granted options in any calendar year covering more than 1,000,000 shares of Delphi Stock and no individual may be granted restricted stock units in any calendar year covering more than 500,000 shares of Delphi Stock. If, prior to June 1, 2004, all or any portion of an option granted under this Plan shall have expired or terminated for any reason without having been exercised in full or all or any portion of a restricted stock unit shall have failed to vest, the corresponding unpurchased or undelivered shares shall (unless this Plan shall have been terminated) again become available for grant under the terms of this Plan.
3. The Committee may, at such time or times as it may determine prior to June 1, 2004, establish for any calendar year a maximum number of shares, consistent with the provisions of paragraph 2, to be awarded as stock options and restricted stock units for such year. To the extent authorized by the Committee, the Delphi Strategy Board (the "Strategy Board") may grant options and restricted stock units, within the maximum number of shares established by the Committee, to employees selected by it, except that no such grant may be made by the Strategy Board to employees who are officers of the Corporation or members of the Board of Directors. The Committee shall make all grants of stock options and restricted stock units to employees who are officers of the Corporation. Determinations as to whether the options granted shall be "incentive stock options" within the meaning of Section 422, or any successor provision, of the Internal Revenue Code of 1986, as amended (the "Code"), or non-qualified options, and as to any restrictions which shall be placed on options and restricted stock units, shall be made by the Committee under such procedures as it may, from time to time, determine.
4. Except as provided in paragraph 9, the purchase price of the shares of stock under each option shall be not less than 100% of the fair market value (but in no event less than the par value) of such stock at the time the option is granted, such fair market value to be determined based on the mean of the highest and lowest sales prices as reported for Delphi Stock in The Wall Street Journal for the date of grant. In accordance with such rules and procedures as the Committee may establish, the aggregate fair market value (determined as of the time of option grant) of the stock with respect to which incentive stock options granted and held by an employee
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which are exercisable for the first time by such employee during any calendar year under this Plan and all other plans of the Corporation (and any subsidiary or any parent corporation within the meaning of Section 424 of the Code, or any successor provision), shall not exceed $100,000 (except that such amount may be adjusted by the Committee as appropriate to reflect any amendment of Section 422 of the Code). The terms of any incentive stock option granted hereunder shall comply in all respects with the provisions of Section 422 of the Code, or any successor provision, and any regulations promulgated thereunder.
5. Options granted under this Plan shall be subject to the following provisions:
5(a). Except as otherwise determined by the Committee, no option shall become exercisable prior to the first anniversary date of the date of option grant (or such later date as may be established by the Committee) and after such date shall be exercisable only in accordance with the terms and conditions established at the time of grant. As a condition to the exercise of any option, an employee may, among other things, be required to enter into such agreements as are considered by the Committee to be appropriate and in the best interests of the Corporation.
5(b). The expiration date of the option shall be determined at the time of grant, provided that each such option shall expire not more than ten years and two days after the date the option was granted or, in the case of an "incentive stock option," ten years after the date such option was granted.
5(c). (i) If an employee is dismissed for cause or quits employment without the prior written consent of the Corporation or, except as otherwise determined by the Committee, the employee's employment terminates for any reason prior to the first anniversary of the date an option is granted, the option shall terminate on the date of termination of employment. (ii) If an employee's employment is terminated by reason of death at any time after the first anniversary of the date of grant of an option, the option shall, except as otherwise determined by the Committee, terminate on the third anniversary of the date of death or, if earlier, the expiration date of such option. (iii) If an employee's employment terminates at any time on or after the first anniversary of the date of grant of an option for any reason other than as set forth above in this paragraph 5(c), the option shall, except as otherwise determined by the Committee, terminate not later than the fifth anniversary of the date of termination of employment or, if earlier, the expiration date of the option; provided that (A) if the employee dies within such period, the option shall terminate on the third anniversary of the date of death or, if earlier, the expiration date of the option; (B) the Committee may, at any time prior to any termination of employment under the circumstances covered by this clause (iii), determine that the option shall terminate on the date of notice of termination of employment, or such later date as may be determined by Committee; and (C) the exercise of any option after termination of employment shall be subject to satisfaction of the conditions precedent that the employee refrain from engaging in any activity which, in the opinion of the Committee, is competitive with any activity of the Corporation or any subsidiary (except that employment at the request of the Corporation with an entity in which the Corporation has, directly or indirectly, a substantial ownership interest, or other employment specifically approved by the Corporation, shall not be considered to be an activity which is competitive with any activity of the Corporation or any subsidiary), and from otherwise acting, either prior to or after termination of employment, in any manner inimical or in any way contrary to the best interests of the Corporation, and that the employee furnish to the Corporation such information with respect to the satisfaction of the foregoing condition precedent as the Committee shall reasonably request.
5(d). In consideration for any option granted under this Plan and as a condition to the exercise thereof, the employee being granted the option, by accepting such option, will thereby agree to remain in the employment of the Corporation for a period of six months after the date of exercise of any such option, unless such employment is terminated by death or retirement (unless the Committee has determined at the time of issuance or exercise of the option not to require such agreement). If, contrary to any such agreement, the employee terminates employment for any reason (unless the employee retires with the prior consent of the Corporation or dies) within six months after the date of exercise of any stock option, the employee shall pay to the Corporation an amount equal to any gain from such exercise, determined by multiplying the difference between the mean of the highest and lowest market price as reported in The Wall Street Journal for the date of the option exercise and the exercise price of the option (without regard to any subsequent market price decrease or increase) by the
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number of option shares exercised. Any such option gain realized by the employee from exercising an option shall be paid by the employee to the Corporation within thirty days of the date of termination. By accepting an option grant under this Plan, the employee consents to a deduction of an amount equal to such option gain from any amounts the Corporation owes the employee, including, but not limited to, amounts owed as wages or other compensation, fringe benefits, or vacation pay.
5(e). For purposes of this Plan, a qualifying leave of absence shall not constitute a termination of employment, except that an option shall not be exercisable during a leave of absence granted an employee for government service.
5(f). All shares purchased upon exercise of any option shall be paid for in full at the time of purchase. Such payment shall be made in cash, through delivery of Delphi Stock, or a combination of cash and stock. Any shares so delivered shall be valued at their fair market value based on the mean of the highest and lowest sales prices as reported in The Wall Street Journal for the date of exercise of the option. If payment of federal, state, and/or local withholding taxes is required in connection with the exercise of an option, the optionee will, at the time of exercise, pay such taxes in cash or stock (including shares obtained from the exercise and delivery of option shares). To the extent authorized by the Committee, any exercise of an option granted under this Plan may be made in accordance with any cashless exercise program approved by the Committee.
5(g). No holder of any option shall have any rights to dividends or other rights of a stockholder with respect to shares subject to the option prior to purchase of such shares upon exercise of the option.
5(h). Unless otherwise determined by the Committee, with the exception of transfer by will or the laws of descent and distribution, or as otherwise provided in paragraph 7, no option shall be assignable or transferable, and an option shall be exercisable during the life of an employee only by such employee.
6. Restricted stock units (sometimes referred to herein as "Units") granted under this Plan shall be subject to the following provisions:
6(a). Subject to adjustments contemplated under Section 10 of this Plan, (i) a Unit granted hereunder shall relate to one share of Delphi Stock (a "Corresponding Share"), and (ii) the value of a Unit at any time shall be the fair market value of the Corresponding Share, determined in accordance with procedures established by the Committee.
6(b). Subject to the terms of this Plan, the Committee shall determine the number of Units to be granted to an employee and the terms and conditions applicable to the grant (a "Unit Grant") of such Units. Subject to the terms of this Plan, the Committee may impose different terms and conditions on any particular Unit Grant made to any particular employee.
6(c). Subject to the satisfaction of the conditions precedent set forth under paragraph 6(d) below and such additional conditions as may be imposed by the Committee, each Unit Grant shall vest at the time or times determined by the Committee, provided that the Committee, in making such determination, shall establish the vesting increments (including their number, amounts, and timing) so as to carry out the purposes of this Plan. Within the limitations specified in the preceding sentence, the Committee may, in its sole discretion, modify vesting provisions with respect to the unvested portion of any Unit Grant if, in the judgment of the Committee, circumstances outside the control of the Corporation have so changed as to make such modifications necessary or advisable in order to preserve the reward and incentive purposes of this Plan. As a condition to the vesting of all or any portion of a Unit Grant, the Committee may, among other things, require an employee to enter into such agreements as the Committee considers appropriate and in the best interests of the Corporation. In addition, the Committee may establish performance vesting criteria with respect to all or any portion of a Unit Grant which relate to and are contingent upon the satisfaction of specific goals established by the Committee at the time of the Unit Grant. Such goals may be based upon or relate to one or more of the following business criteria: return on assets, return on net assets, asset turnover, return on equity, return on capital, market price appreciation of Delphi common stock, economic value added, total stockholder return, net income, pre-tax income, earnings per share, operating profit margin, net income margin, sales margin, cash flow, market share, inventory turnover, sales growth, capacity utilization, increase in customer base, environmental health and safety, diversity, and/or quality. The business criteria may be expressed in absolute terms or relative to the performance of other companies or to
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an index. With respect to any Unit Grant which is subject to performance vesting, the Committee shall establish for each such award performance levels related to the enterprise (as defined below) at which 100% of the award shall be earned and a range (which need not be the same for all awards) within which greater and lesser percentages shall be earned. The term "enterprise" shall mean the Corporation and/or any unit or portion thereof, and any entities in which the Corporation has, directly or indirectly, a substantial ownership interest.
6(d). (i) The vesting of each Unit Grant shall be subject to the satisfaction of the conditions precedent that: (A) the employee continue to render services as an employee (unless waived by the Committee), (B) the employee refrain from engaging in any activity which, in the opinion of the Committee, is competitive with any activity of the Corporation or any subsidiary (except that employment at the request of the Corporation with an entity in which the Corporation has, directly or indirectly, a substantial ownership interest, or other employment specifically approved by the Committee, shall not be considered to be an activity which is competitive with any activity of the Corporation or any subsidiary) and from otherwise acting, either prior to or after termination of employment, in any manner inimical or in any way contrary to the best interests of the Corporation, and (C) the employee furnish to the Corporation such information with respect to the satisfaction of the foregoing conditions precedent as the Committee shall reasonably request. Except as otherwise provided under (iii) below, the failure by any employee to satisfy such conditions precedent shall result in the immediate cancellation of the unvested portion of any Unit Grant previously made to such employee and all Units still covered by such Unit Grant, and such employee shall not be entitled to receive any consideration in respect of such cancellation. (ii) If any employee is dismissed for cause or quits employment without the prior written consent of the Corporation, the unvested portion of any Unit Grant previously made to such employee, and all Units still covered thereby shall be canceled as of the date of such termination of employment, and such employee shall not be entitled to receive any consideration in respect of such cancellation. (iii) Upon termination of an employee's employment for any reason other than as described in (ii) above, the Committee may, but shall not in any case be required to, waive the condition precedent relating to the continued rendering of services in respect of all or any specified percentage of the unvested portion of any Unit Grant, as the Committee in its discretion shall determine. To the extent such condition precedent is waived, the Committee may, in its discretion, accelerate the vesting of all or any specified percentage of the unvested portion of any Unit Grant. (iv) For purposes of this Plan, a qualifying leave of absence, determined in accordance with procedures established by the Committee, shall not constitute a termination of employment, except that a Unit Grant shall not vest during a leave of absence granted an employee for government service.
6(e). With respect to any dividend or other distribution on any Corresponding Shares, the Committee may, in its discretion, authorize current or deferred payments (payable in cash or stock or a combination thereof, as determined by the Committee) or appropriate adjustments to outstanding Unit Grants to reflect such dividend or distribution.
6(f). (i) Upon vesting of all or any portion of a Unit Grant, the percentage of the Unit Grant then vesting will be applied to the total number of Units then covered by such Unit Grant, and the proportionate number of Units so computed, disregarding fractional Units, will be paid to such Participant in the form of shares of Delphi Stock, or in cash based on the fair market value of the Corresponding Shares on the vesting date, or partly in cash and partly in shares of Delphi Stock as the Committee in its sole discretion shall determine. The stock and/or related cash payment, will be delivered, in accordance with procedures to be established by the Committee, and upon satisfaction of the applicable withholding requirements, as soon as practicable after such vesting date. (ii) In the discretion of, and in accordance with procedures to be established by the Committee, Corresponding Shares, or cash of equivalent value, may be designated for, and delivered to, the Corporation in satisfaction of any federal, state and/or local withholding taxes applicable to the payment of Units.
6(g). Unless otherwise determined by the Committee, no holder of a Unit Grant shall have any rights to dividends (other than as provided in paragraph 6(e) above) or other rights of a stockholder with respect to Units and Corresponding Shares relating to such Unit Grant prior to the delivery of such Corresponding Shares pursuant to the vesting of such Unit Grant.
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6(h). Unless otherwise determined by the Committee, with the exception of transfer by will or the laws of descent and distribution or as otherwise provided in paragraph 7, no Unit Grant shall be assignable or transferable and, during the lifetime of the grantee thereof, any payment in respect of such Unit Grant shall be made only to such grantee.
7. An employee holding an option or Unit Grant under this Plan may make a written designation of beneficiary or beneficiaries on a form prescribed by and filed with the Secretary of the Committee. Such beneficiary or beneficiaries or, if no such designation of any beneficiary or beneficiaries has been made, the employee's legal representative(s) or such other person(s) entitled thereto as determined by a court of competent jurisdiction, (i) may exercise, in accordance with and subject to the provisions of paragraph 5, any unterminated and unexpired option granted to such employee and (ii) receive payment, in accordance with and subject to the provisions of paragraph 6, pursuant to the vesting of all or any portion of a Unit Grant. A designation of beneficiary may be replaced by a new designation or may be revoked by the employee at any time.
8. The shares to be delivered upon exercise of an option or vesting of a Unit Grant shall be made available, at the discretion of the Board of Directors or a Committee of the Board of Directors as designated by the Board, either from authorized but previously unissued shares or from shares reacquired by the Corporation, including shares purchased in the open market. If shares are purchased in the open market for delivery upon the exercise of an option or vesting of a Unit Grant, they shall be held in a treasury account specifically designated for such awards.
9. For employees transferring from General Motors on or after January 1, 1999, or if the Corporation acquires an entity which has issued and outstanding stock options or other rights, the Corporation may substitute an appropriate number of stock options or Units under this Plan for options or rights of such entity, including options to acquire stock at less than 100% of the fair market price of the stock at the time of grant, as determined by the Committee in its sole discretion.
10. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, or other change in Corporate structure affecting Delphi Stock the Committee may, but shall not be required to, make such adjustments in the aggregate number of shares which may be delivered under this Plan, the number and option price of shares subject to outstanding options and the number of shares subject to Units granted under this Plan (provided the number of shares subject to any award shall always be a whole number), as may be determined to be appropriate by the Committee.
11. To the extent determined by the Committee, any subsidiary may, without regard to the limitations under this Plan, have a separate incentive plan or program. The Committee shall have exclusive jurisdiction and sole discretion to approve or disapprove any such plan or program and, from time to time, to amend, modify, or suspend any such plan or program. Individuals eligible for grants under any such plan or program shall not be considered employees eligible for grants under this Plan, unless otherwise determined by the Committee. No provision of any such plan or program shall be included in or considered a part of this Plan, and any awards made under any such plan or program shall not be charged against the aggregate number of shares of stock available for grant under this Plan, unless otherwise determined by the Committee.
12. The expenses of administering this Plan shall be borne by the Corporation.
13. Full power and authority to construe and interpret this Plan shall be vested in the Committee. To the extent determined by the Committee, administration of this Plan, including, but not limited to (a) the selection of employees for participation in this Plan and (b) the grant amounts and the vesting schedules for options and RSUs, may be delegated to the Strategy Board; provided, however, the Committee shall not delegate to the Strategy Board any powers, determinations or responsibilities with respect to officers of the Corporation. The instruments evidencing options and RSUs and documentation with respect to the exercise of options and payment of RSUs, if any, shall be in such form, consistent with this Plan, as may be determined by the Committee. Any person who accepts any award hereunder agrees to accept as final, conclusive, and binding all determinations of the Committee and the Strategy Board. The Committee shall have the right, in the case of participants not employed in the United States, to vary from the provisions of this Plan in order to preserve the incentive features of this Plan.
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14. The Committee, in its sole discretion, may, at any time, amend, modify, suspend, or terminate this Plan provided that no such action without the approval of the stockholders shall increase the maximum number of shares for which, or with respect to which, options or restricted stock units may be granted to employees under this Plan (except as permitted by paragraph 10), or permit the granting of options under this Plan with an option price of less than 100% of the fair market value of Delphi Stock at the time the options are granted (except as permitted in paragraphs 9 and 10 of this Plan), or permit exercise of the options unless full payment is made at the time of exercise, or extend the period during which options may be exercised, as set forth in Section 5(b), or render any member of the Committee on Executive Development and Compensation or the Audit Committee, or any director who is not an employee, eligible to be granted an option or Unit, or (iii) grant any option or Unit under this Plan after May 31, 2004.
15. Every right of action by, or on behalf of, the Corporation or by any stockholder against any past, present, or future member of the Board of Directors, officer, or employee of the Corporation or its subsidiaries arising out of or in connection with this Plan shall, irrespective of the place where action may be brought and irrespective of the place of residence of any such director, officer, or employee, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action arises. Any and all right of action by any employee (past, present, or future) against the Corporation arising out of or in connection with this Plan shall, irrespective of the place where an action may be brought, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action arises. This Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Delaware, without giving effect to principles of conflict of laws, and construed accordingly.
16. This Plan shall be effective on January 1, 1999.
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TO CAST YOUR VOTE BY PHONE OR INTERNET
SEE REVERSE SIDE.
If you would like to attend the annual meeting, please call toll-free 1-800-818-6599 to request an admission ticket; outside the US call collect 1-781-575-3990.
DIRECTIONS TO THE ANNUAL MEETING
From the Indianapolis International Airport, take I-465 North. It will automatically turn into I-465 East as it bypasses the city. Take the U.S. 31 (Meridian Street) Exit and go north to Kokomo. Once in Kokomo, turn right on Lincoln Road. After driving under an overhead walkway connecting buildings on the Delphi Delco Electronics Systems technology campus, turn right at the Delphi sign and proceed to the designated parking area.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS
Delphi Delco Electronics Systems Headquarters
One Corporate Center, Kokomo, Indiana
WEDNESDAY, MAY 10, 2000, 8:00 A.M. LOCAL TIME
The undersigned authorizes J.T. Battenberg III and Thomas H. Wyman and each of them, with full power of substitution, as proxies of the undersigned to vote the COMMON STOCK of the undersigned upon the nominees for Director (J.T. Battenberg III, Virgis W. Colbert, Shoichiro Irimajiri and Susan A. McLaughlin), upon the other items shown on the reverse side, which are described on pages 4 through 15 of the Proxy Statement, and upon all other matters which may properly come before the 2000 Annual Meeting of Stockholders of Delphi Automotive Systems Corporation, or any adjournment thereof.
This card also provides voting instructions for shares held in the various employee savings plans of Delphi and its subsidiaries and certain other 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 VOTE ALL CARDS YOU RECEIVE.
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.
SEE REVERSE SIDE
[logo of Delphi Automotive]
c/o EquiServe
P.O. Box 9398
Boston, MA 02205-9398
TWO EASY WAYS TO VOTE!
Available 24 hours a day, 7 days a week
VOTE BY PHONE
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CALL TOLL FREE ON A TOUCH-TONE PHONE
1-877-779-8683 |
OUTSIDE THE US CALL COLLECT
1-201-536-8073 (There is no charge for this call) |
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VOTE BY INTERNET
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LOG ON TO THE INTERNET AND GO TO THE FOLLOWING WEB ADDRESS:
http://www.eproxyvote.com/dph |
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Your phone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, and returned your proxy card.
VOTE BY MAIL: Simply mark, sign and date your proxy card and return in the enclosed postage-paid envelope.
IF YOU ARE VOTING BY TELEPHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD.
Thank you for voting!
DETACH CARD IF MAILING
Please mark votes as in this example [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
ITEMS 1, 2, AND 3, AND "AGAINST" ITEMS 4 AND 5
FOR
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WITHHOLD
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1. | Election of Directors
(01) J.T. Battenberg III, (02) Virgis W. Colbert, (03) Shoichiro Irimajiri, (04) Susan A. McLaughlin |
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For, except vote withheld for the following nominee(s):
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FOR
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AGAINST
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ABSTAIN
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2.
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Approval of material terms of performance goals under Delphi's Incentive Compensation Program for purpose of Section 162(m) | |||
3.
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Ratify selection of independent accountants |
FOR
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AGAINST
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ABSTAIN
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4. | Stockholder proposal relating to the redemption of Delphi's stockholder rights plan | |||
5. | Stockholder proposal relating to adoption of code for Delphi's international operations |
Signature(s):
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Date
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, 2000 | ||
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Please mark, date and sign this proxy as name(s) appears above and return it promptly whether or not you plan to attend the annual meeting. If signing for a corporation or partnership or as agent, attorney or fiduciary, indicate the capacity in which you are signing. If you do attend the annual meeting and decide to vote by ballot, such vote will supersede this proxy. |
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