<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
General Motors Corporation
.................................................................
(Name of Registrant as Specified In Its Charter
General Motors Corporation
.................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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:(1)
4) Proposed maximum aggregate value of transaction:
.............................................................
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
..............................................................
2) Form, Schedule or Registration Statement No.:
..............................................................
3) Filing Party:
..............................................................
4) Date Filed:
..............................................................
<PAGE>
GENERAL MOTORS
Notice of Annual Meeting
of Stockholders
and Proxy Statement
[logo]
Annual Meeting
May 24, 1996
Holiday Inn Downtown
700 King Street
Wilmington, Delaware
<PAGE>
GENERAL MOTORS CORPORATION
NOTICE OF ANNUAL MEETING
April 9, 1996
Dear Stockholder:
We are pleased to invite you to attend the annual meeting of General Motors
stockholders which will be held at 9:00 a.m. local time on Friday, May 24, 1996,
at the Holiday Inn Downtown, 700 King Street, Wilmington, Delaware.
As set forth in the attached Proxy Statement, the meeting will be held for
the following purposes:
ITEM NO. 1--to elect 14 directors;
ITEM NO. 2--to ratify the selection of independent public accountants for
the year 1996;
ITEMS NO.
3 THROUGH 6--to take action upon 4 stockholder proposals;
and to act upon such other matters as may properly be brought before the
meeting.
Holders of record of Common Stock, $1-2/3 par value ("Common Stock"); Class
E Common Stock, $0.10 par value ("Class E Common Stock"); and Class H Common
Stock, $0.10 par value ("Class H Common Stock"), at the close of business on
March 25, 1996, are entitled to vote at the meeting. It is requested that you
read carefully the attached Proxy Statement for information on the matters to be
considered and acted upon.
In accordance with Delaware law, a list of General Motors common
stockholders entitled to vote at the 1996 Annual Meeting will be available for
examination at the offices of Richards, Layton & Finger, One Rodney Square, 920
King Street, 2nd Floor, Wilmington, Delaware, for ten days prior to the meeting,
between the hours of 9:00 a.m. and 5:00 p.m., and during the annual meeting.
The format of the 1996 Annual Meeting will follow the general format
established in 1995 of a short meeting focused on business items, including the
election of directors and discussion and voting on management and stockholder
proposals. Time will also be provided for stockholder questions and comments on
the business.
As a supplement to the Annual Meeting, GM continues to strengthen its
communications with stockholders. Our regional Stockholder Forums, which provide
a less formal venue for stockholders throughout the country to interact with
management about the business, will resume in the fall for their fifth
consecutive season. The 1996-97 series will be announced in the June issue of
StockHolder News, a special newsletter for stockholders begun last year. We
continue to offer stockholders information about their Corporation as well as
their individual accounts through our toll-free number (1-800-331-9922).
If you plan to attend the annual meeting, please enclose a note with your
proxy indicating the number of tickets required for you and immediate family
members, together with your return address. Admittance cards will be mailed to
you. Application for admittance may be made at the door for stockholders who do
not receive tickets by mail.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
ON THE ENCLOSED PROXY/VOTING INSTRUCTION CARD. HOWEVER, IT IS NOT NECESSARY TO
MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS; MERELY SIGN, DATE AND RETURN THE PROXY/VOTING INSTRUCTION CARD
IN THE ENCLOSED ENVELOPE. THE PROXY COMMITTEE CANNOT VOTE YOUR SHARES UNLESS YOU
SIGN AND RETURN THE ENCLOSED PROXY/VOTING INSTRUCTION CARD.
Cordially,
Nancy E. Polis John F. Smith Jr.
Secretary Chairman and Chief Executive Officer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
General Information for Stockholders Page
Proxy Procedure...................................................... ii
Proxy Statement Proposals............................................ ii
Directors............................................................ iii
Basis for Selection of Nominees for Directors........................ iii
Director Compensation................................................ iv
Proxy Statement
ITEM NO. 1--Nomination and Election of Directors..................... 2
Information about Nominees for Directors............................. 3
Report of the Executive Compensation Committee....................... 11
Executive Compensation Tables........................................ 17
</TABLE>
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ITEM NO. 2-- Ratification of the selection of Deloitte & Touche
LLP as independent public accountants for the
year 1996............................................ 27
ITEM NO. 3-- Stockholder proposal to provide for cumulative
voting............................................... 28
ITEM NO. 4-- Stockholder proposal regarding incentive awards...... 30
ITEM NO. 5-- Stockholder proposal regarding independent
chairman............................................. 31
ITEM NO. 6-- Stockholder proposal regarding involvement in nuclear
defense systems...................................... 33
Expenses of Solicitation............................................ 35
Other Matters....................................................... 35
</TABLE>
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GENERAL INFORMATION FOR STOCKHOLDERS
PROXY PROCEDURE
Although many of our stockholders are unable to attend the annual meeting
in person, stockholders have the opportunity to vote by means of the proxy
solicited by the Board of Directors. When a proxy is returned properly executed,
the shares represented thereby must be voted by the Proxy Committee as directed
by the stockholder. Stockholders are urged to specify their choices by marking
the appropriate boxes on the enclosed proxy. If no choice is specified, the
shares will be voted as recommended by the Board of Directors. A stockholder may
vote by ballot at the annual meeting, thereby cancelling any proxy previously
given.
The Proxy Committee, composed of three executive officers of the
Corporation, J. F. Smith, Jr., J. M. Losh and H. J. Pearce, each of whom is
authorized to act on behalf of the Committee, will vote all shares of common
stocks represented by proxies signed and returned by stockholders. Proxies also
authorize the Proxy Committee to vote the shares represented thereby on any
matters not known at the time this Proxy Statement went to press that may
properly be presented for action at the meeting.
It is the policy of the Corporation that the stockholders be provided
privacy in voting. The Corporation engages the services of an independent
specialist to receive, inspect, count and tabulate proxies. Representatives of
the independent specialist also act as judges at the annual meeting.
PROXY STATEMENT PROPOSALS
At the annual meeting each year, the Board of Directors submits to
stockholders its nominees for election as directors. In addition, the By-laws of
the Corporation require that the selection of independent public accountants by
the Audit Committee of the Board of Directors be submitted for stockholder
ratification at each annual meeting. The Board of Directors also may submit
other matters to the stockholders for action at the annual meeting.
In addition to such matters presented by the Board of Directors, the
stockholders may be asked to take action at the annual meeting upon one or more
stockholder proposals. Occasionally, inquiries have been made as to why the
Board of Directors opposes these proposals in the Proxy Statement.
THE BOARD OF DIRECTORS DOES NOT DISAGREE WITH ALL STOCKHOLDER PROPOSALS
SUBMITTED TO THE CORPORATION. WHEN THE BOARD FINDS THAT A STOCKHOLDER PROPOSAL
IS CONSISTENT WITH THE BEST INTERESTS OF THE CORPORATION AND THE STOCKHOLDERS,
IT NORMALLY CAN BE IMPLEMENTED WITHOUT NEED FOR A STOCKHOLDER VOTE. THE
CORPORATION, OVER THE YEARS, HAS ADOPTED A NUMBER OF STOCKHOLDER PROPOSALS AND
OTHER SUGGESTIONS. THUS, THE STOCKHOLDER PROPOSALS THAT APPEAR IN THE PROXY
STATEMENT ARE ONLY THOSE WITH WHICH THE BOARD OF DIRECTORS DISAGREES AND
BELIEVES IT MUST OPPOSE IN FULFILLING ITS OBLIGATIONS TO REPRESENT AND SAFEGUARD
THE BEST INTERESTS OF STOCKHOLDERS AS A WHOLE.
To meet the deadline for inclusion in the Corporation's Proxy Statement for
the 1997 Annual Meeting, stockholder proposals intended to be presented at that
meeting must be received by General Motors on or before December 10, 1996.
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DIRECTORS
The Board of Directors, which held a total of 12 meetings in 1995, is
currently composed of 13 members. The Board has proposed one new nominee, Mr.
Eckhard Pfeiffer, for election at the 1996 Annual Meeting. If all 14 nominees
are elected by the stockholders at the annual meeting in May, the composition of
the Board will be 12 directors whose principal occupation or employment is and
has been outside General Motors and two who are currently officers of the
Corporation.
In addition to membership on the Board, most directors served on one or
more of seven Committees of the Board in 1995, covering a total of 41
memberships. The directors spend a considerable amount of time preparing for
Board and Committee meetings and, in addition, are called upon for their counsel
between meeting dates. In 1995, average attendance at Board and Committee
meetings was 94%.
BASIS FOR SELECTION OF NOMINEES FOR DIRECTORS
The Committee on Director Affairs of the General Motors Board of Directors
has responsibility to conduct continuing studies of the size and composition of
the Board and, from time to time, make recommendations as to candidates for
membership.
The Committee on Director Affairs consists of Mr. Charles T. Fisher, III,
Chairman, Mrs. Anne L. Armstrong and Messrs. Edmund T. Pratt, Jr., J. Willard
Marriott, Jr., and John G. Smale, none of whom is or has been an employee of the
Corporation. Four meetings of the Committee on Director Affairs were held in
1995.
The Corporation's By-laws provide that each year, prior to the annual
meeting of stockholders, the Committee on Director Affairs shall recommend to
the Board those individuals who will constitute the nominees of the Board of
Directors for the election of whom the Board will solicit proxies. As part of
this process, the Committee reviews candidates recommended by stockholders of
the Corporation. A stockholder who wishes to recommend an individual for Board
membership may do so by writing to: Secretary, General Motors Corporation, 3044
West Grand Boulevard, Detroit, Michigan 48202. Notice of intent to make a
director nomination, or to bring before the meeting any matter other than a
stockholder proposal submitted pursuant to Securities and Exchange Commission
Rule 14a-8, must be received by the Secretary of the Corporation not more than
180 days and not less than 120 days in advance of the annual meeting. For the
1997 Annual Meeting, the applicable time period is November 24, 1996 through
January 23, 1997.
In considering potential new directors, the Committee on Director Affairs
reviews individuals from various disciplines and backgrounds. Among the
qualifications considered in the selection of candidates are broad experience in
business, finance or administration; familiarity with national and international
business matters; and an appreciation of the relationship that a large
industrial corporation must maintain with the changing needs of society. Since
prominence and reputation in a particular profession or field of endeavor are
what bring most persons to the Board's attention, there is the further
consideration of whether the individual has the time available to devote to the
work of the Board of Directors and one or more of its Committees.
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<PAGE>
A majority of the nominees of the Board of Directors identified herein
consists of individuals who, as of the date of their selection as nominees, have
been determined by the Board of Directors to be Independent Directors as the
term "Independent Director" is defined under Section 2.12 of the Corporation's
By-laws, entitled "Independent Directors." (A copy of that By-law, adopted on
January 7, 1991, is available to stockholders from the Secretary upon written
request.) Generally, the By-law provides that individuals are "Independent
Directors" if neither they nor their immediate relatives are or have been
employed by the Corporation or a subsidiary in an executive capacity within the
five years preceding the next annual meeting, and have no significant direct or
indirect business relationships with the Corporation or its subsidiaries.
An extensive review is also made of the activities and associations of each
candidate to ensure that there is no legal impediment, conflict of interest, or
other consideration that might prevent service on the Board of Directors. In
making its selection, the Board of Directors bears in mind that the foremost
responsibility of a GM director is to represent the interests of the
stockholders as a whole.
DIRECTOR COMPENSATION
For service on the Board, each non-employee director receives an annual
retainer of $26,000 and an attendance fee of $1,000 for each Board meeting
attended. Each non-employee director also receives under the Deferred
Compensation Plan (as described below) a grant of deferred stock units with a
market value of $14,000 as part of the annual retainer fee. In addition,
non-employee directors receive annual retainers of $6,000 for each committee of
the Board on which they serve, except for the Executive Committee, and an
attendance fee of $750 for each committee meeting attended. The Chairman of each
Committee, except as noted below, receives an additional annual $5,000 retainer.
(Each director's membership in one or more of the seven committees of the Board
- - - -- Audit, Capital Stock, Director Affairs, Executive, Finance, Executive
Compensation, and Public Policy -- is set forth below under "Information About
Nominees for Directors.") Non-employee directors also receive a $1,000 per diem
fee for special services and assignments requiring their attendance outside the
scope of ordinary Board and Committee activities.
Mr. John G. Smale as Chairman of the Executive Committee of the Board
serves as an ex-officio member of each of the standing Committees of the Board.
Mr. Smale annually receives $200,000 as compensation for his service as Chairman
of the Executive Committee, and is not compensated for Committee service as an
ex-officio member.
Under the Deferred Compensation Plan adopted by the Board, non-employee
directors have the opportunity to make an irrevocable election, prior to the
commencement of any year, to defer receipt of all or a portion of their cash
compensation. At the option of the director, amounts deferred are treated as
cash and credited with annual interest at the average pre-tax yield on the
Corporation's U.S. cash portfolio, or converted into units of General Motors
common stocks to be credited with dividend equivalents in the form of additional
stock units. Distribution of amounts accumulated is generally not available
until after age 70, following termination of service on the Board.
Effective January 1, 1996, the new Director Long-Term Stock Incentive Plan
(the "Director Stock Plan") replaced the GM Director Retirement Plan, which
provided a lifetime annual benefit equivalent to the annual Board retainer fee.
Under the Director Stock Plan, each non-employee director who is at least 55
years old will receive on June 1 of each year
iv
<PAGE>
a grant of $1-2/3 Common Stock units valued at $10,000 (based on the average
market price of the $1-2/3 Common Stock for the three months preceding the
grant). After the director has served on the Board for six years, all grants
already received will vest, and all subsequent annual grants vest immediately on
the date of grant. Directors may not sell or otherwise transfer this stock, and
dividends on this stock will be automatically reinvested in $1-2/3 Common Stock.
Each director will be eligible to receive the then-current value of all vested
grants on June 1 following retirement, or the director's 70th birthday if the
director resigns or retires prior to that date. Before receiving each grant,
each director may choose to receive the value of such grant in one payment or in
up to 10 annual installments. If a director dies before receiving the value of
all vested grants of $1-2/3 Common Stock units, his or her surviving spouse or
estate will receive the value of the remaining undistributed grants on June 1
following the director's death.
Under the Director Stock Plan, on January 2, 1996, each non-employee
director who would be required to retire in 15 years or less was credited with
an initial grant of $1-2/3 Common Stock units, the amount of which was
determined based on the director's estimated life expectancy. The amount of this
initial grant was set such that if a given director retired at age 70, the value
of this initial grant to that director and the annual grants described above,
plus an estimated return on the shares in such grants through dividend
reinvestment and appreciation of the stock price, would be equivalent to the
retirement benefit that director would have received under the now-terminated GM
Director Retirement Plan. For purposes of calculating the amount of the initial
grant, the average rate of return on such grants was estimated at the rate GM
applies to determine its normal contribution requirements for funding defined
benefit plans under the Employee Retirement Income Security Act (ERISA).
The Board anticipates that it will request stockholder approval at the 1997
Annual Meeting of Stockholders to amend GM's stock option plan to permit each
director to elect to receive his or her annual grant under the Director Stock
Plan in the form of either shares of Common Stock or a non-qualified stock
option with a 10-year term.
Non-employee directors of the Corporation are not eligible to participate
in the Incentive Program, Savings-Stock Purchase Program or the Retirement
Programs for certain General Motors employees, and except as described in this
section, there are no separate benefit plans for directors.
v
<PAGE>
GENERAL MOTORS CORPORATION
3044 WEST GRAND BOULEVARD, DETROIT, MICHIGAN 48202
767 FIFTH AVENUE, NEW YORK, NEW YORK 10153
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 24, 1996
This Proxy Statement is furnished to stockholders of General Motors
Corporation in connection with the solicitation, by order of the Board of
Directors of General Motors Corporation, of proxies to be used at the annual
meeting of stockholders of the Corporation. The accompanying form of proxy
represents your holdings of Common Stock, Class E Common Stock, and Class H
Common Stock in the registered account name shown on the proxy. It is expected
that this Proxy Statement and enclosed form of proxy will be mailed commencing
Tuesday, April 9, 1996, to each stockholder entitled to vote.
After the enclosed form of proxy is duly executed and returned, a
stockholder may nevertheless revoke it at any time to the extent it has not been
exercised, by return of a duly executed written notice of revocation or by
return of a duly executed subsequent proxy or by voting at the annual meeting.
The shares represented by a proxy will be voted unless the proxy is received
late or in a form that cannot be voted. The proxy is in ballot form so that a
stockholder may specify its intent to grant or withhold authority to vote for
election of the Board of Directors, or any individual nominee, and its intent to
vote for or against, or abstain from voting upon, each of the five proposals.
If a stockholder is a participant in the General Motors Savings-Stock
Purchase Program for Salaried Employees in the United States, the General Motors
Personal Savings Plan for Hourly-Rate Employees in the United States, the
General Motors Canadian Savings-Stock Purchase Program, the EDS Stock Purchase
Plan, the EDS Deferred Compensation Plan, the EDS Stock Incentive Plan, the
Hughes Aircraft Company Salaried Employees' Thrift and Savings Plan, the Hughes
Aircraft Company Tucson Bargaining Employees' Thrift and Savings Plan, the
Hughes Aircraft Company California Hourly Employees' Thrift and Savings Plan,
the Hughes Thrift and Savings Plan, the Saturn Individual Savings Plan for
Union-Represented Employees, the Saturn Personal Choices Savings Plan for
Non-Represented Employees or the GMAC Mortgage Corporation Savings Incentive
Plan, the proxy card will also serve as a voting instruction for the trustees,
plan committees or independent fiduciaries of those plans where all
registrations are identical. With the exception of the EDS Deferred Compensation
Plan, shares in these plans cannot be voted unless the card is signed and
returned. If voting instructions are not received for shares in the EDS Deferred
Compensation Plan, those shares will be voted by the Trustee, Plan Committee or
Independent Fiduciary in the same proportion as the shares in the plan for which
voting instructions are received.
If a stockholder participates in any of these plans or maintains other
accounts under a different name (e.g., with and without a middle initial), the
stockholder may receive more than one set of proxy materials. To ensure that all
shares are voted, the stockholder must sign and return every proxy card
received.
Brokers, dealers, banks, voting trustees, and their nominees who desire a
supply of the Corporation's proxy soliciting material for transmittal by them to
beneficial owners should write to General Motors Corporation,
c/o Morrow & Co., Inc., 909 Third Avenue, 20th Floor, New York, NY 10022-4799.
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The Board of Directors fixed March 25, 1996, as the record date for
determining stockholders entitled to vote at the annual meeting. On that date,
the Corporation had outstanding and entitled to vote 756,062,037 shares of
Common Stock, 485,708,417 shares of Class E Common Stock, and 97,911,854 shares
of Class H Common Stock. Each such share of Common Stock entitles the holder to
one vote, each such share of Class E Common Stock entitles the holder to
one-eighth vote and each such share of Class H Common Stock entitles the holder
to one-half vote. With the exception of the election of directors which requires
a plurality of the votes cast, or as otherwise noted, the affirmative vote of
the holders of a majority of the voting power of the common stocks represented
at the meeting is required for approval of each proposal presented in this Proxy
Statement. With respect to votes indicating an abstention, the shares are
considered present at the meeting for a particular proposal, but since they are
not affirmative votes for the proposal, they will have the same effect as votes
against the proposal. With respect to broker non-votes, the shares are not
considered present at the meeting for the particular proposal for which the
broker withheld authority.
ITEM NO. 1
Nomination and Election of Directors
It is intended that the shares represented by the enclosed proxy will be
voted, unless such authority is withheld, for the election of the 14 nominees
for directors named in the following section. The term of office of each
director will be until the next annual election of directors and until a
successor is elected and qualified or until the director's earlier resignation
or removal. In the event that any nominees for directors should become
unavailable, which is not anticipated, the Board of Directors may provide by
resolution for a lesser number of directors or designate substitute nominees,
who would receive the votes of the Proxy Committee.
Mr. Paul H. O'Neill, Chairman and Chief Executive Officer of Aluminum
Company of America (ALCOA), is not standing for reelection in 1996. Mr. O'Neill
resigned from the Board of Directors effective October 5, 1995.
Of the nominees in the following section, Mr. Harry J. Pearce was elected a
director of General Motors since the last annual meeting of stockholders and Mr.
Eckhard Pfeiffer has not previously been a director of the Corporation.
Mr. Pearce has been associated with General Motors since 1985. In 1987, Mr.
Pearce was appointed Vice President and General Counsel. In 1992, he was
appointed Executive Vice President and General Counsel and in that capacity was
responsible for GM Environmental & Energy, Industry-Government Relations, Legal,
and Worldwide Economics Staffs, GM Hughes Electronics Corporation, and
Electronic Data Systems. In 1994, Mr. Pearce relinquished his Legal Staff
responsibilities and received added responsibilities for Corporate Affairs,
which not only included his previous responsibilities but encompassed Corporate
Communications, Corporate Relations, Office of the Secretary, Executive
Compensation and Corporate Governance, Corporate Information Management, Allison
Transmission Division, and GM Locomotive Group. Effective January 1, 1996, Mr.
Pearce was elected a director and appointed Vice Chairman.
Mr. Pfeiffer joined Compaq Computer Corporation in September 1983 as Vice
President, Europe and was elected Senior Vice President International Operations
in 1986, President, Europe and International Division in May 1989, and Executive
Vice President and Chief Operating Officer in January 1991. In October 1991 he
was elected President and Chief Executive Officer and appointed a director of
the company.
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INFORMATION ABOUT NOMINEES FOR DIRECTORS
The following information with respect to principal occupation or
employment and name of the corporation or other organization in which such
occupation or employment is carried on and in regard to other affiliations and
to shares of Common Stock, Class E Common Stock, and Class H Common Stock deemed
beneficially owned at February 29, 1996 under a rule of the Securities and
Exchange Commission has been furnished to the Corporation by the nominees for
directors. In addition to the affiliations mentioned on the following pages, the
nominees are active in many local and national cultural, charitable,
professional, and trade organizations.
[photo] ANNE L. ARMSTRONG, 68, Chairman, Board of Trustees, Center for
Strategic and International Studies; former Chairman of the
President's Foreign Intelligence Advisory Board and former
Ambassador to Great Britain; Joined General Motors Corporation
Board in 1977, member of Audit Committee, Committee on Director
Affairs and Public Policy Committee; Director of American
Express Company, Boise Cascade Corporation, Glaxo-Wellcome and
Halliburton Company; Member of the Council on Foreign Relations
and Board of Overseers Hoover Institution.
[photo] JOHN H. BRYAN, 59, Chairman and Chief Executive Officer, Sara
Lee Corporation, Chicago; Joined General Motors Corporation
Board in 1993, member of Capital Stock Committee and Executive
Compensation Committee; Director of Amoco Corporation, First
Chicago NBD Corporation and its subsidiary, First National Bank
of Chicago; Member of The Business Roundtable and Vice Chairman
of The Business Council; Chairman of Catalyst; Trustee of the
University of Chicago and the Committee for Economic
Development.
[photo] THOMAS E. EVERHART, 64, President and Professor of Electrical
Engineering and Applied Physics, California Institute of
Technology, Pasadena; Former Chancellor of University of
Illinois, Urbana-Champaign; Joined General Motors Corporation
Board in 1989, Chairman, Public Policy Committee, member of
Audit Committee and Executive Committee; Director of
Hewlett-Packard Corporation, Reveo, Inc., Corporation for
National Research Initiatives, Community Television of Southern
California (KCET); Member of National Academy of Engineering;
Vice Chairman, Council on Competitiveness; Former Chairman of
General Motors Science Advisory Committee.
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[photo] CHARLES T. FISHER, III, 66, Retired Chairman and President of
NBD Bancorp, Inc. and its subsidiary NBD Bank, N.A.; Joined
General Motors Corporation Board in 1972, Chairman of Committee
on Director Affairs, member of Executive Committee, Finance
Committee and Public Policy Committee; Director of Hughes
Electronics Corporation, AMR Corporation and its subsidiary
American Airlines, Inc., First Chicago NBD Corporation and its
subsidiaries First National Bank of Chicago and NBD Bank
(Michigan).
[photo] J. WILLARD MARRIOTT, JR., 64, Chairman, President and Chief
Executive Officer, Marriott International, Inc., Washington,
D.C., since October 1993; Chairman, President and Chief
Executive Officer, Marriott Corporation (1985-1993); Joined
General Motors Corporation Board in 1989, member of Committee
on Director Affairs, Finance Committee and Public Policy
Committee; Director of Host Marriott Corporation (formerly
Marriott Corporation), Host Marriott Services Corporation,
Outboard Marine Corporation, and the U.S.-Russia Business
Council; Serves on Board of Trustees of National Geographic
Society, Georgetown University and the Mayo Foundation; Member
of The Business Council and The Business Roundtable.
[photo] ANN D. MCLAUGHLIN, 54, Former U.S. Secretary of Labor
(1987-1989); Vice Chairman, The Aspen Institute; President,
Federal City Council, Washington, D.C. (1990-1995); Joined
General Motors Corporation Board in 1990, member of Audit
Committee, Capital Stock Committee and Public Policy Committee;
Director of AMR Corporation and its subsidiary American
Airlines, Inc., Federal National Mortgage Association, Harman
International Industries, Host Marriott Corporation (formerly
Marriott Corporation); Kellogg Company, Nordstrom, Potomac
Electric Power Company, Sedgwick Group plc, Union Camp
Corporation, and Vulcan Materials Company; Trustee of The
Public Agenda Foundation, The Conservation Fund and RAND; Board
of Overseers, Wharton School of Business, University of
Pennsylvania.
[photo] HARRY J. PEARCE, 53, Vice Chairman, Board of Directors since
January 1, 1996, and Executive Vice President, Electronic Data
Systems Corporation, Hughes Electronics Corporation, GM
Locomotive Group, Allison Transmission Division and Corporate
Affairs since 1994, Executive Vice President and General
Counsel (1992-1994), Vice President and General Counsel (1987-
1992); Joined General Motors Corporation in 1985 and its Board
in 1996; Director of Hughes Electronics Corporation, Marriott
International, Inc.; Member, The Conference Board, North-
western University School of Law Visiting Committee, and Board
of Visitors, United States Air Force Academy; Trustee, Howard
University.
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[photo] ECKHARD PFEIFFER, 54, President, Chief Executive Officer and
director (since October 1991), Compaq Computer Corporation,
Houston, Texas, Executive Vice President and Chief Operating
Officer (January-October 1991), President, Europe and
International Division (1989-1990); Director of Bell Atlantic
Corporation; Member of Executive Board of Southern Methodist
University Cox School of Business.
[photo] EDMUND T. PRATT, JR., 69, Chairman Emeritus and currently
director of Pfizer Inc., New York; Joined General Motors
Corporation Board in 1977, Chairman of Executive Compensation
Committee, member of Executive Committee, Committee on Director
Affairs and Finance Committee; Director of Hughes Electronics
Corporation, Chase Manhattan Corporation and its subsidiary
Chase Manhattan Bank, N.A., International Paper Company,
Minerals Technologies Inc. and AEA Investors, Inc.; Member of
The Business Council.
[photo] JOHN G. SMALE, 68, Chairman of the Executive Committee of
General Motors Corporation since January 1, 1996, former
Chairman, General Motors Corporation (November 2, 1992
December 31, 1995); Retired Chairman and Chief Executive of The
Procter & Gamble Company; Joined General Motors Corporation
Board in 1982; Ex-officio member of Audit Committee, Capital
Stock Committee, Finance Committee, Executive Compensation
Committee, Committee on Director Affairs and Public Policy
Committee; Member of the Executive Committee of The Business
Council; Board of Governors, The Nature Conservancy; Emeritus
Trustee of Kenyon College.
[photo] JOHN F. SMITH, JR., 58, Chairman, General Motors Corporation
since January 1, 1996, and Chief Executive Officer and
President since November 2, 1992, President (April-November
1992), Vice Chairman, Board of Directors (1990-1992), Executive
Vice President, International Operations (1988-1990); Joined
General Motors Corporation in 1961 and its Board in 1990;
member of Finance Committee; Director of Hughes Electronics
Corporation, The Procter & Gamble Company; Member of The
Business Roundtable, The Business Council, U.S.-Japan Business
Council and the Chancellor's Executive Committee of the
University of Massachusetts, and Board of Trustees, Boston
University; Member of Board of Overseers of Memorial Sloan-
Kettering Cancer Center and Member of Board of Polish-American
Enterprise Fund.
5
<PAGE>
[photo] LOUIS W. SULLIVAN, 62, President, Morehouse School of Medicine,
Atlanta, Georgia, since January 21, 1993; U.S. Secretary of
Health and Human Services (1989-1993); Joined General Motors
Corporation Board in 1993, member of Audit Committee and Public
Policy Committee; Director of Georgia Pacific, 3M Corporation,
Household International Inc., CIGNA Corporation, Bristol-Myers
Squibb Company and Equifax Corporation.
[photo] DENNIS WEATHERSTONE, 65, Retired Chairman and currently
director of J. P. Morgan & Co. Incorporated and its subsidiary
Morgan Guaranty Trust Company of New York; Joined General
Motors Corporation Board in 1986, Chairman of Audit Committee,
member of Capital Stock Committee, Executive Committee and
Executive Compensation Committee; Director of L'Air Liquide,
Merck & Co., Inc. and the Institute for International
Economics; Member of The Business Council; President and
trustee of the Royal College of Surgeons Foundation, Inc., New
York; Trustee of the Alfred P. Sloan Foundation; Independent
member of the Board of Banking Supervision of the Bank of
England.
[photo] THOMAS H. WYMAN, 66, Chairman, S.G. Warburg & Co. Inc., New
York, and former Chairman, President and Chief Executive
Officer, CBS Inc., New York; Joined General Motors Corporation
Board in 1985, Chairman of Capital Stock Committee and Finance
Committee, member of Audit Committee, Executive Committee and
Executive Compensation Committee; Director of Hughes
Electronics Corporation, AT&T, Zeneca Group PLC (London) and
United Biscuits (Holdings) plc (Edinburgh); Member of The
Business Council; Trustee Emeritus of The Ford Foundation and
of The Aspen Institute; Chairman Emeritus of Amherst College.
SECURITY OWNERSHIP OF DIRECTORS, NAMED EXECUTIVE OFFICERS AND CERTAIN OTHERS
The following table sets forth beneficial ownership of all classes of
common stock of the Corporation for each current nominee for Director, each
Named Executive Officer and all current directors and officers of the
Corporation as a group as of February 29, 1996 (except for Mr. Pfeiffer). As a
result of the proposed split-off of EDS, each share of General Motors Class E
Common Stock will be converted into one share of EDS common stock. The
conversion of Class E shares to EDS shares is anticipated to be completed in the
second quarter of 1996.
6
<PAGE>
Each of the individuals/groups listed below is the owner of less than one
percent of the outstanding shares and voting power of any class of common stock
of the Corporation, except that the General Motors Hourly-Rate Employees Pension
Plan owns 30.9% of the outstanding shares and voting power of the Class E Common
Stock (2.2% of the combined voting power of the Common Stock, Class E Common
Stock, and Class H Common Stock). The Capital Group Companies, Inc. is the
parent of six investment management companies which beneficially own 5.3% of the
outstanding shares and voting power of the Class H Common Stock (0.3% of the
combined voting power of the Common Stock, Class E Common Stock, and Class H
Common Stock). No managed account by itself owns 5% or more of the Class H
Common Stock. Except as otherwise noted in the footnotes, each individual has
sole voting and investment power with respect to the shares beneficially owned
and the totals of shares owned by the individual nominees and all directors and
officers as a group. These shares do not include any shares of Common Stock,
Class E Common Stock, or Class H Common Stock held by the pension and profit
sharing plans or endowment funds of other corporations, or by educational and
charitable institutions of which such directors and officers serve as directors
or trustees.
</TABLE>
<TABLE>
<CAPTION>
Shares
Beneficially Deferred Stock
Directors Class Of Stock Owned Stock Units Total Options(a)
- - - ------------------------------ ---------------------- ------------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
A. L. Armstrong (b)........... Common Stock 1,500 13,477 14,977 0
Class E Common Stock 112 3,848 3,960 0
Class H Common Stock 48 1,586 1,634 0
J. H. Bryan (b)............... Common Stock 2,000 2,758 4,758 0
T. E. Everhart (b)(c)......... Common Stock 400 5,644 6,044 0
Class E Common Stock 0 3,944 3,944 0
Class H Common Stock 0 1,098 1,098 0
C. T. Fisher, III (b)(d)(e)... Common Stock 14,766 6,735 21,501 0
Class E Common Stock 224 1,924 2,148 0
Class H Common Stock 58 2,120 2,178 0
J. W. Marriott, Jr. (b)....... Common Stock 1,000 5,627 6,627 0
A. D. McLaughlin (b).......... Common Stock 923 1,131 2,054 0
Class E Common Stock 0 226 226 0
Class H Common Stock 0 560 560 0
H. J. Pearce (f).............. Common Stock 11,124 25,001 36,125 123,138
Class E Common Stock 4,332 0 4,332 35,250
Class H Common Stock 21,858 8,402 30,260 35,284
E. Pfeiffer (g)............... Common Stock 1,000 0 1,000 0
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially Deferred Stock
Directors Class Of Stock Owned Stock Units Total Options(a)
- - - ------------------------------ ---------------------- ------------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
E. T. Pratt, Jr. (b)(d)(h).... Common Stock 200 16,491 16,691 0
Class E Common Stock 40 14,416 14,456 0
Class H Common Stock 10 11,432 11,442 0
J. G. Smale (b)............... Common Stock 16,000 4,538 20,538 0
Class E Common Stock 200 0 200 0
Class H Common Stock 200 0 200 0
J. F. Smith, Jr. (f).......... Common Stock 58,992 55,117 114,109 497,200
Class E Common Stock 27,328 0 27,328 0
Class H Common Stock 17,897 12,759 30,656 0
L. W. Sullivan (b)............ Common Stock 100 1,654 1,754 0
Class E Common Stock 0 108 108 0
Class H Common Stock 0 117 117 0
D. Weatherstone (b)........... Common Stock 6,000 10,599 16,599 0
Class E Common Stock 0 6,881 6,881 0
Class H Common Stock 0 564 564 0
T. H. Wyman (b)(d)............ Common Stock 1,000 4,764 5,764 0
Class E Common Stock 500 412 912 0
Class H Common Stock 250 765 1,015 0
<CAPTION>
Other Named Executives
- - - ------------------------------
<S> <C> <C> <C> <C> <C>
C. M. Armstrong (i)(j)........ Common Stock 4,950 0 4,950 25,000
Class H Common Stock 34,508 9,578 44,086 242,500
L. R. Hughes (f).............. Common Stock 18,254 27,413 45,667 175,046
Class E Common Stock 13,793 0 13,793 0
Class H Common Stock 7,609 6,232 13,841 0
G. R. Wagoner, Jr. (f)........ Common Stock 13,379 27,094 40,473 160,457
Class E Common Stock 8,881 0 8,881 0
Class H Common Stock 4,599 6,232 10,831 0
All directors and officers
of the Corporation as a
group......................... Common Stock 661,285 568,939 1,230,224 4,225,725
Class E Common Stock 223,465 31,759 255,224 35,250
Class H Common Stock 173,061 136,446 309,507 309,584
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Shares
Beneficially Deferred Stock
Certain Others Class Of Stock Owned Stock Units Total Options(a)
- - - ------------------------------ ---------------------- ------------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
General Motors Hourly-Rate
Employees Pension Plan ....... Class E Common Stock 149,537,219 0 149,537,219 0
3044 West Grand Blvd.
Detroit, MI 48202
The Capital Group
Companies, Inc. .............. Class H Common Stock 5,070,200 0 5,070,200 0
333 South Hope Street
Los Angeles, CA 90071
</TABLE>
(a) Common Stocks that may be acquired within 60 days through exercise of stock
options; additional information regarding stock options is provided on pages
20 and 21.
(b) Deferred Stock Units -- Includes amounts deferred under General Motors
Deferred Compensation Plan for Non-Employee Directors. Under the plan,
non-employee directors of General Motors are required to retain a portion of
the annual retainer in deferred stock units of GM Common Stock. Directors
may also elect to defer receipt of all or a portion of their remaining
compensation by converting amounts deferred into units of any class of
General Motors common stock. In anticipation of the proposed EDS split-off,
effective January 1, 1996 no further amounts may be deferred into Class E
stock units. Further, under the Director Long-Term Stock Incentive Plan, as
more fully described on page iv, directors were credited with Common Stock
units related to their length of service on the Board. Under both plans,
these stock units are credited with dividend equivalents in the form of
additional stock units of the same class. Distribution of amounts deferred
is generally not available until after age 70, following termination of
service on the Board, and will be paid in cash based on the number of stock
units and the market price of the shares at the time of payment.
(c) Does not include 32,000 shares of Common Stock, 16,700 shares of Class E
Common Stock, and 1,400 shares of Class H Common Stock held in the endowment
fund of the California Institute of Technology or the Beckman Foundation
Equity Index Portfolio, the IDS Beckman Foundation portfolio and the Sarofim
Beckman Foundation portfolio which it oversees. Dr. Everhart is a member of
the Institute's 11-member Investment Committee which has the power to
acquire or dispose of the financial investments of the Institute.
(d) Deferred Stock Units -- Includes amounts deferred under Hughes Electronics
Deferred Compensation Plan for Non-Employee Directors. Under the plan,
members of the Board who are not employees of either General Motors or
Hughes Electronics may elect to defer receipt of all or a portion of their
compensation as a director of Hughes Electronics. Provisions of the Hughes
Electronics deferral plan are identical in all significant respects to
provisions of the GM plan described in footnote (b) above, except that the
portion required to be retained will be in the form of Class H common stock.
(e) Includes 11,378 shares of Common Stock held in a trust of which Mr. Fisher
is a co-trustee and in which he, among other family members, has a residuary
interest; 1,688 shares of Common Stock held in two trusts in which Mr.
Fisher
9
<PAGE>
has a one-seventh remainderman interest; and 500 shares of Common Stock held
in one trust of which Mr. Fisher is a co-trustee and the beneficiary is a
relative of Mr. Fisher.
(f) "Shares Beneficially Owned" includes shares credited under the General
Motors Savings-Stock Purchase Program ("S-SPP"). Under this program,
participants may contribute up to 15% of eligible salary, subject to
maximum limits established by the Internal Revenue Code. "Deferred Stock
Units" include shares under the General Motors Benefit Equalization
Plan-Savings ("BEP-S"). This Plan is a non-qualified "excess benefit" plan
that is exempt from ERISA and the Internal Revenue Code limitations, and
provides executives with the full GM matching contribution without regard
to such limitations. Amounts credited under the Plan are maintained in
share units of the Corporation's Common Stock. Upon distribution of an
employee's S-SPP account, all amounts in the executive's BEP-S account will
be paid in cash. Deferred stock units also include undelivered incentive
awards which will vest upon the occurrence of certain events and which are
subject to forfeiture under certain circumstances.
(g) Mr. Pfeiffer was nominated as a director on March 4, 1996. Information about
Mr. Pfeiffer's stock ownership is as of March 31, 1996.
(h) Does not include shares held by a family member for which Mr. Pratt
disclaims voting or investment power.
(i) Includes 280 shares of Common Stock held by Mr. Armstrong's wife. Beneficial
ownership of these shares is expressly disclaimed.
(j) "Shares Beneficially Owned" includes shares credited under the Hughes
Salaried Employees' Thrift and Savings Plan. Under this program,
participants may contribute up to 12% of eligible salary, subject to
maximum limits established by the Internal Revenue Code. "Deferred Stock
Units" include shares under the Hughes Salaried Employees' Excess Benefits
Plan. This plan is a non-qualified "excess benefit" plan that is exempt
from ERISA and the Internal Revenue Code limitations, and provides
executives with the full Hughes matching contribution without regard to
such limitations. Amounts credited under the plan are maintained in share
units of General Motors Class H common stock. Upon distribution of an
employee's Excess Savings account, all amounts will be paid in cash.
Under federal securities law, the Corporation's directors, certain
officers, and persons holding more than ten percent of any class of the
Corporation's common stocks are required to report, within specified monthly and
annual due dates, their initial ownership in any class of the Corporation's
common stocks and all subsequent acquisitions, dispositions or other transfers
of interest in such securities, if and to the extent reportable events occur
which require reporting by such due dates. The Corporation is required to
describe in this proxy statement whether it has knowledge that any person
required to file such a report may have failed to do so in a timely manner. In
this regard, all of the Corporation's directors, all officers subject to the
reporting requirements and each beneficial owner of more than ten percent of any
class of the Corporation's common stocks satisfied such filing requirements in
full, except for Mr. W. A. Reed and Ms. S. Young, officers of the Corporation,
who each inadvertently filed one monthly report relating to one transaction
after the due date. The transactions have now been reported. The foregoing is
based upon reports furnished to the Corporation and written representations and
information provided to the Corporation by the persons required to make such
filings.
10
<PAGE>
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The compensation of senior executives -- at GM and all subsidiaries -- is
determined by the Executive Compensation Committee ("the Committee") of the
General Motors Board of Directors. The Committee, which has oversight of the
incentive compensation plans and benefit programs for all GM executive
employees, is a standing committee of the Board of Directors. It is comprised
entirely of independent Directors and met eight times in 1995. No member of the
Committee is eligible to participate in any of the compensation plans or
programs it administers. Further, there are no interlocks between the members of
the Committee and any executive.
For 1995, Mr. John F. Smith, Jr. was Chief Executive Officer and President.
Effective January 1, 1996, he was also elected to the position of Chairman of
the Board of Directors. Mr. Harry J. Pearce, an Executive Vice President in
1995, was elected Vice Chairman and a member of the General Motors Board of
Directors effective January 1, 1996. Messrs. Louis R. Hughes and G. Richard
Wagoner, Jr. are Executive Vice Presidents of the Corporation. All of these
individuals were members of the Corporation's senior leadership group known as
the President's Council in 1993, 1994, and 1995. Effective July 1, 1995, Mr. C.
Michael Armstrong, Chairman and CEO of General Motors subsidiary, Hughes
Electronics Corporation ("Hughes"), was appointed as a member of the GM
President's Council. The above named individuals are the Corporation's Named
Executive Officers for 1995.
COMPENSATION PHILOSOPHY
General Motors' executive compensation program is premised on the belief
that the interests of executives should be closely aligned with those of GM's
stockholders. Based on this philosophy, a meaningful portion of each executive's
total compensation is placed at-risk and linked to the accomplishment of
specific results which will lead to the creation of value for the Corporation's
stockholders in both the short-and long-term. Under this pay-for-performance
orientation:
* executives are motivated to improve the overall performance and
profitability of the Corporation, as well as the business sector to which
each is assigned, and rewarded only when specific, measurable results
have been achieved;
* accountability is further encouraged through the adjustment of salaries
and incentive awards on the basis of each executive's individual
performance and contribution;
* long-term incentive awards are paid in GM common stocks to further
reinforce the linkage of executives' interest with those of stockholders;
and
* a highly competitive level of compensation can be earned in years of
strong performance to ensure the Corporation attracts and retains the
leadership talent needed to successfully maintain and grow its
businesses; conversely, in years of below-average performance, an
executive's compensation is below competitive benchmarks.
The philosophies of the Corporation's major subsidiaries are in most respects
similar to the GM philosophy.
11
<PAGE>
Stock Ownership Guidelines -- To further underscore the importance of
linking executive and stockholder interests, the Committee established formal
stock ownership guidelines for the Named Executive Officers, as well as other
Corporate Officers and select senior executives. These guidelines were revised
in 1995 and early 1996, increasing the requirements for the most senior
executives, as well as expanding to approximately 400 the number of executives
subject to them. Under the revised guidelines, the GM Chairman is required to
hold GM common stocks with a minimum aggregate value equivalent to 3.5 times his
base salary. Other members of the President's Council are required to hold 2.5
times base salary, group executives 1.5 times base salary, and other Corporate
officers one times base salary. Effective January 1, 1996, the value of the
holdings for the remaining executives covered by the guidelines must at least be
equivalent to one half of their respective annual base salaries. Ownership of
all classes of GM common stocks will be considered toward compliance with the
guidelines. As of February 29, 1996, all Named Executive Officers met or
exceeded their respective guideline level. While formal guidelines have not been
established for the balance of the executive group, the importance of stock
ownership is reinforced through plan design and in communications with these
executives.
Compensation Deductibility Policy -- In order to preserve the deductibility
of performance-based compensation in excess of $1 million per taxable year to
each of the Named Executive Officers, the Committee intends to comply with
Section 162(m) of the Internal Revenue Code (and any regulations promulgated
thereunder) to the extent such compliance is practicable. However, if compliance
with the rules conflicts with the aforementioned executive compensation
philosophy, or is deemed not to be in the best interests of stockholders, the
Committee will abide by the executive compensation philosophy regardless of the
impact of such actions on the tax deductibility of compensation paid to
executive officers covered by Section 162(m). In this regard, under a plan
adopted in 1995, all base salary amounts in excess of $1 million for Mr. John F.
Smith, Jr. are deferred until retirement.
COMPENSATION PLAN
In carrying out its responsibilities, the Committee annually reviews the
executive compensation programs and policies of the domestic competitors of the
Corporation and its major subsidiaries. In view of the limited number of
automotive industry competitors and in recognition of the fact that the
competitive labor market for GM's executives is broader than the automotive
industry, compensation levels and policies are also benchmarked against a group
of very large manufacturing companies [which are included in Standard and Poor's
("S&P") 500 Composite Stock Index] worldwide to ensure that GM's plans and
practices provide a highly competitive compensation opportunity in the context
of its performance and compensation philosophy. For reference, the performance
of General Motors common stocks relative to its competition and the S&P 500
Index is provided at the conclusion of the compensation disclosure section
starting on page 25.
Market data are obtained from comparator group companies through annual
surveys. In addition, compensation program design/practice data are regularly
solicited from various compensation consultants to assist the Committee in its
evaluation of competitive pay levels and program trends. These data, in addition
to their interpretation of the compensation philosophy discussed above, serve as
the basis for the Committee's development and periodic review and adjustment, if
appropriate, of the compensation structure (e.g., relative size of each element
of the compensation package and mix of fixed to variable, or at-risk,
compensation) for executives.
12
<PAGE>
During 1995, the Board of Directors met in executive session to review the
Corporation's performance and the performance of the CEO and other members of
the President's Council, including the other Named Executive Officers. The
Committee advised the Board with respect to all compensation determinations for
these executives.
As discussed below, aside from benefits (which will be reviewed in the
tables following this report), an executive's total compensation package is
comprised of four components: (1) base salary; (2) annual incentives; (3) stock
options and (4) other long-term incentives. Compensation for Mr. Armstrong,
Chairman and CEO of Hughes Electronics Corporation, as well as other executives
at Hughes, is paid in accordance with terms of the Hughes Annual Incentive,
Stock Option and Long-Term Achievement Plans. Awards/grants under these Plans
are similar in most respects to awards granted to General Motors executives
under the General Motors Amended 1987 Stock Incentive Plan ("SIP") and the
General Motors Performance Achievement Plans ("PAP"). Where significant
differences exist between provisions of the General Motors incentive plans
versus Hughes incentive plans, such differences will be discussed either in this
Report of the Compensation Committee or, if appropriate, in the relevant tables
in the Executive Compensation section of this Proxy Statement. Absent any
comments to the contrary, it may be assumed that compensation provisions for Mr.
Armstrong are identical in all significant respects to provisions for the other
General Motors Named Executives.
Base Salary -- Under the current compensation structure, base salaries for
GM executives are targeted to be in the upper end of the third quartile of the
salaries paid to comparable positions at the comparator group (fourth quartile
being the highest). Salaries for Hughes executives are targeted at the fiftieth
percentile. The base salaries of individual executives can and do vary from this
salary benchmark based on such factors as the executive's scope of
responsibility, current performance, maturity in position, future potential and
overall competitive positioning relative to comparable positions at other
companies.
In 1994, as part of a reorganization, Messrs. Hughes, Pearce, and Wagoner
were given added responsibilities in the management of the Corporation. In line
with these added responsibilities, the Committee determined that the base
salaries of these individuals should be increased. In making this decision, the
Committee carefully considered the scope of each executive's responsibilities
relative to comparable positions at survey companies. No salary increases were
granted to any Named Executive Officer, including the CEO, in 1995. In
recognition of his election as Chairman of the Board of Directors, the
Committee's assessment of his outstanding performance and an interval of 34
months since his last increase, Mr. Smith received an increase in salary of 17%
(6% on an annual basis) to $1,750,000 on January 1, 1996.
At the time of his respective salary adjustment while an executive officer,
each executive signed a non-compete agreement barring him from working for an
automotive competitor for a period of three years from the date of the salary
adjustment. The Committee believes that it is in GM stockholders' best interests
to ensure continuity in the Corporation's senior leadership group. At the time
of his employment with Hughes, Mr. Armstrong entered into an agreement related
to his retirement benefits which is discussed in the section entitled
"Retirement Program" commencing on page 22. Aside from these agreements, the
Corporation has no contractual or other arrangements with these executive
officers.
Annual Incentives -- Annual incentives for Messrs. Smith, Hughes, Pearce,
and Wagoner are granted under the General Motors Amended 1987 Stock Incentive
Plan which was approved by stockholders at the 1992 Annual Meeting. To further
reinforce accountability at all levels within the executive group and to enhance
the overall motivational value of the plan, there are two separate annual
incentive award components -- one based exclusively on Corporate results and the
13
<PAGE>
other strictly on the performance of the business sector to which the executive
is assigned. The apportionment of an executive's annual incentive award between
the two components varies by level of responsibility. In view of their
Corporate-wide responsibility, the annual incentive award opportunity for all
Named Executive Officers except Mr. Armstrong is based exclusively on GM's
overall performance. The annual incentive award opportunity for Mr. Armstrong
was determined prior to his becoming a member of the President's Council and is
based exclusively on Hughes' overall performance.
In addition to establishing a targeted performance level for both award
components, the Committee also identifies threshold or minimum performance
levels which must be achieved before awards for either component are granted.
The size of final awards granted is scaled to the actual level of performance
achieved. In establishing this payout range, the Committee assesses the relative
degree of performance necessary to achieve the target objective and reviews past
and projected budgeted performance levels and external marketplace conditions
(e.g., economic outlook, projected size of automotive industry volumes, expected
market share projections). There is no specified weight assigned to these
factors; the Committee uses its judgment based on these and other considerations
in establishing the payout range.
For 1995, the payment of either a GM Corporate or sector award was
triggered solely on the achievement of predetermined profitability goals. For
the Corporate component, the goal was expressed in terms of net income
attributable to GM $1-2/3 Common Stock. Profitability goals for the various
sectors were generally based on net income. Profitability goals for both award
components were derived from the Corporation's budget and business plan for the
year and, based on Management's input, the Committee used its discretion in
setting the specific profitability targets for the Corporate component and each
sector. For each of the GM Named Executive Officers, individual award targets
were based on a percent of base salary on January 1, 1995, ranging from .6 times
base salary for threshold performance, one times base salary if target levels
were realized and, for maximum performance, individual awards for these
executives could be 1.75 times base salary. The performance target for Hughes
was based on sales margin, net asset turnover, and operating profit. The target
award for Mr. Armstrong was set at an amount equal to .8 times base salary on
January 1, 1995, and was determined prior to his becoming a member of the
President's Council in July 1995. For threshold performance, Mr. Armstrong's
award will pay out at .56 times base salary and, for maximum performance, will
pay at 1.4 times base salary. For both GM and Hughes, for earnings performance
falling within the ranges for minimum, target, and maximum, individual awards
are prorated accordingly.
General Motors' overall record net income results for 1995 were above
target but below the level for a maximum payout. After a thorough review of the
Corporation's overall performance and an evaluation of Messrs. Smith, Hughes,
Pearce and Wagoner's individual performance and other factors, the Committee
approved 1995 annual incentive award payouts for each Named Executive Officer on
a basis above target but below maximum payout levels. In determining such
awards, the Committee noted that the total bonus fund for 1995 was below 1994,
despite record corporate performance (net income up approximately 40% before
adjustments for unusual items). Upon the recommendation of Management, the
Committee had set aggressive financial targets for 1995 and, even with
significant performance improvements, final results were at a level below those
established by the Committee for maximum incentive payout. The Committee
continues to adhere to a rigorous standard for paying incentive awards.
Similarly, after reviewing Hughes' overall performance and Mr. Armstrong's
individual performance and other factors, the Committee approved the 1995 annual
incentive award payout for Mr. Armstrong on a basis above target but below
maximum payout levels.
14
<PAGE>
Awards for Messrs. Smith, Hughes, Pearce and Wagoner were denominated in
restricted stock units of GM Common, Class E, and Class H stocks at the time of
award and are paid in cash on an installment basis. The Committee determined
that 1995 awards would be paid in two installments with the first in early 1996
and the final installment in early 1997, except that, in recognition of the
anticipated split-off of EDS, the second installment of Class E stock would vest
on the date of grant and be paid simultaneous with the first installment. In
accordance with provisions of the Hughes Annual Incentive Plan, the award to Mr.
Armstrong was paid in a lump-sum cash payment.
Stock Options -- Like annual incentives, stock options are also granted
under the provision of the Amended 1987 SIP. Stock options are granted to
reinforce the importance of improving stockholder value over the long term and
to encourage and facilitate executive stock ownership. Stock options are granted
at 100% of the fair market value of the stock on the date of grant to ensure the
executives can only be rewarded for appreciation in the price of GM common
stocks when the Corporation's stockholders are similarly benefited. While all
executives are eligible to receive stock options, participation in each annual
grant, as well as the size of the grant each participating executive receives,
is contingent on the executive's performance and potential.
Option grant levels, as with each element of an executive's compensation
package, are determined on the basis of the compensation structure developed by
the Committee. Under this structure, target option grants have been patterned
after industry-competitive long-term incentive compensation practices. Following
an examination of these practices, the Committee determined to increase the
grants to the four GM Named Executive Officers in 1995. These grants are
positioned at a level which, in conjunction with their target Performance
Achievement Plan (PAP) awards (which are detailed on page 21 and discussed in
the following section of this report), places the executives at a level which
equates to the upper end of the third quartile of the long-term incentives paid
to comparable positions at survey companies. The Committee considered the number
of option shares each executive had been previously granted in determining the
size of the grants to the Named Executive Officers.
In view of his oversight responsibility for Electronic Data Systems and
Hughes, the Committee determined that the grant for Mr. Pearce would be
denominated in all three classes of GM common stocks as detailed starting on
page 17. In addition, the award to Mr. Armstrong, which was made prior to his
appointment as a member of the President's Council, was denominated entirely in
Class H stock, reflecting his position as CEO of Hughes. Grants to all other GM
executives, including the other three Named Executive Officers, were denominated
exclusively in GM $1-2/3 Common Stock.
Other Long-Term Incentives -- In contrast to stock options, which reward
executives for stockholder value creation as measured by improvement in the
prices of GM common stocks, the GM Performance Achievement Plan and Hughes
Long-Term Achievement Plan are intended to focus executives on the
accomplishment of key long-term strategic business objectives which require more
than one year to complete. Participation in these long-term plans is generally
restricted to those executives in positions of major responsibility
(approximately the top 450 GM executives under the PAP and approximately the top
75 Hughes executives under the LTAP).
Target PAP and LTAP awards are typically made annually and payout is
contingent on the achievement of predetermined targets over a three-year plan
period as outlined in the Corporation's and Hughes' strategic business plans for
the award period. Payment of any awards relating to the 1995-1997 PAP and LTAP
grant will be based on the
15
<PAGE>
achievement of predetermined Return On Net Assets ("RONA") levels based on GM's
and Hughes' respective business plans. The percentage of each target award, if
any, that eventually is distributed to participants is determined by the
Committee based on the actual level of performance achieved over the award
period versus the targeted goal. No awards are paid for cumulative performance
below a predetermined threshold level and final awards are capped at 200% of
target under the PAP and 175% of target under the LTAP, for performance in
excess of predetermined maximum levels.
The 1995 PAP and LTAP target awards (starting on page 21) cover the
three-year period 1995-1997. The sizes of the target awards for the CEO and the
other Named Executive Officers were developed in line with the methodology
discussed in the previous section on stock options and expressed as a percentage
of base salary as of January 1, 1995. For Messrs. Smith, Hughes, Pearce, and
Wagoner, these awards were denominated in cash but, if earned, will be paid out
in GM Common and Class H stocks. To reinforce executive stock ownership, the
payment of any final awards is subject to a mandatory vesting schedule of up to
four installments, depending on a participant's level of responsibility and the
size of the final award. For Messrs. Smith, Hughes, Pearce, and Wagoner, the
final installment will be paid subsequent to retirement. The award for Mr.
Armstrong will be paid in a single installment in the form of 25% GM Common
Stock and 75% Class H Common Stock.
The cumulative GM earnings results for the 1993-1995 performance period
were above the maximum established by the Committee. As a result, the awards for
Messrs. Smith, Hughes, Pearce, and Wagoner paid out at the maximum level. The
Hughes RONA realized for the 1993-1995 performance period was above target but
below the maximum payout level. As a result, the final award for Mr. Armstrong
was paid above target but below the maximum payout level.
EXECUTIVE COMPENSATION COMMITTEE
Edmund T. Pratt, Jr., Chairman
John H. Bryan
John G. Smale
Dennis Weatherstone
Thomas H. Wyman
16
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the compensation
of the Chief Executive Officer and each of the other four most highly
compensated Named Executive Officers of General Motors Corporation (all of whom
were members of the President's Council in 1995), for services in all capacities
while a Named Executive Officer of the Corporation during 1993, 1994, and 1995.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------------- -------------------------
Awards Payouts
Other ------ -----------
Annual $1-2/3 Long-Term All Other
Name and Compen- Stock Incentive Compen-
Principal Position Year Salary Bonus(1) sation(2) Options Payouts(3) sation(4)
- - - ------------------------- --------- ------------- ------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ $ $ # Shares $ $
J. F. Smith, Jr.
CEO & President..... 1995 1,500,000 1,750,000 54,181 150,000 2,300,000 33,750
1994 1,500,000 1,925,000 N.A. 120,000 2,268,000 22,500
1993 1,375,000 -0- N.A. 120,000 -0- 20,624
C. M. Armstrong*
CEO & Chairman...... 1995 700,000 775,000 139,038 Cl. H 55,000 1,377,000 43,501
Hughes Electronics
L. R. Hughes
Executive VP........ 1995 850,000 900,000 N.A. 80,000 1,100,000 19,125
1994 800,000 963,000 N.A. 50,000 961,000 12,000
1993 688,000 -0- N.A. 50,000 -0- 10,312
H. J. Pearce
Executive VP........ 1995 850,000 900,000 N.A. Com. 40,000 1,100,000 19,125
Cl. E 22,300
Cl. H 25,000
1994 800,000 963,000 N.A. Com. 25,000 978,000 12,000
Cl. E 25,900
Cl. H 18,700
1993 688,000 -0- N.A. Com. 25,000 -0- 10,312
Cl. E 13,000
Cl. H 16,500
G. R. Wagoner, Jr.
Executive VP........ 1995 850,000 900,000 N.A. 80,000 1,100,000 19,125
1994 800,000 963,000 N.A. 50,000 952,000 12,000
1993 675,000 -0- N.A. 50,000 -0- 10,125
</TABLE>
* Not a Named Executive Officer prior to July 1, 1995.
(1) The award for Mr. Armstrong was paid in cash in one installment under terms
of the Hughes Annual Incentive Plan. Awards for the other Named Executive
Officers were granted under the General Motors Amended 1987 Stock Incentive
Plan and were denominated in the form of restricted stock units equivalent
to shares of the
17
<PAGE>
Corporation's Common, Class E, and Class H stocks, which vest on an
installment basis and will be paid in cash. Final awards for each year are
determined shortly after the close of the award year, with payment
commencing as soon as practicable thereafter. For awards which are paid in
installments, the second installment vests on the last day of the year in
which the final award is determined and payment is made in the following
month. In recognition of the anticipated EDS split-off, all Class E shares
in the 1995 grant vested on date of grant and were paid in the first
installment. Prior to delivery, shares will be retained by the Corporation
to satisfy tax withholding obligations. Dividend equivalents will be paid on
unvested shares. The following table sets forth the number of shares which
were vested and paid and the number of shares which remain unvested and
unpaid as of February 29, 1996:
<TABLE>
<CAPTION>
1995 Award Shares Vested
and Paid in 1996 1995 Award Shares Unvested
Grant ----------------------------------- -----------------------------------
Year Common Cl. E Cl. H Common Cl. E Cl. H
------ --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
# # # # # #
J. F. Smith, Jr............... 1995 5,861 5,517 6,028 14,067 -0- 3,617
L. R. Hughes.................. 1995 3,015 2,837 3,100 7,234 -0- 1,860
H. J. Pearce.................. 1995 3,015 2,837 3,100 6,782 -0- 2,325
G. R. Wagoner, Jr............. 1995 3,015 2,837 3,100 7,234 -0- 1,860
</TABLE>
<TABLE>
<CAPTION>
Second Installment 1994 Award
Shares Vested 12/31/95 and Paid in
1996 Value of Second Installment Shares
Grant ----------------------------------- -----------------------------------
Year Common Cl. E Cl. H Common Cl. E Cl. H
------ --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
$52.88 $52.00 $49.13
# # # $ $ $
J. F. Smith, Jr............... 1994 16,789 3,714 4,042 887,718 193,128 198,563
L. R. Hughes.................. 1994 8,398 1,858 2,022 444,044 96,616 99,331
H. J. Pearce.................. 1994 8,398 1,858 2,022 444,044 96,616 99,331
G. R. Wagoner, Jr............. 1994 8,398 1,858 2,022 444,044 96,616 99,331
</TABLE>
(2) For Mr. Smith, amount includes $21,047 related to use of Corporate aircraft.
For Mr. Armstrong, includes $50,167 related to use of Corporate aircraft and
$40,000 for housing allowance.
(3) Awards under the General Motors 1987 and 1992 Performance Achievement Plans
and Hughes Electronics Long-Term Achievement Plan. Under the Plans, awards
were made covering the 1990-93, 1991-94, 1992-94, and 1993-95 performance
periods. Final awards are determined shortly after the close of the
performance period, with payment commencing as soon as practicable
thereafter. There were no long-term payments related to the 1990-93 PAP
performance period. For the 1991-94 PAP cycle, the Committee determined that
awards would be paid in cash in one installment. For the 1992-94 and 1993-95
PAP cycles, the Committee determined that awards would be paid in all three
classes of GM common stocks and would be subject to an installment vesting
schedule. For the Named Executive Officers other than Mr. Armstrong, vesting
occurs in four equal installments, the first at the time the final
18
<PAGE>
award is determined, the second and third at the end of the same and
following year, and the fourth installment subsequent to retirement, except
that in recognition of the anticipated EDS split-off, all Class E shares in
the 1993-95 grant vested on date of grant and were paid simultaneous with
the first installment. Further, all remaining Class E shares in the 1992-94
grant vested on December 31, 1995 and were paid in January 1996. The award
to Mr. Armstrong was made under the Hughes Long-Term Achievement Plan and
paid in a single installment in the form of Common and Class H stocks.
Dividend equivalents will be paid on unvested PAP shares. The following
table sets forth for the 1992-94 and 1993-95 award cycles, the number of
shares which were vested and paid and the number of shares which remain
unvested and unpaid as of February 29, 1996:
<TABLE>
<CAPTION>
Shares Vested and Paid in 1996 Shares Unvested
Grant ----------------------------------- -----------------------------------
Year Common Cl. E Cl. H Common Cl. E Cl. H
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
# # # # # #
J. F. Smith, Jr............... 1993-95 8,089 6,524 1,783 24,266 -0- 5,348
C. M. Armstrong............... 1993-95 4,567 -0- 21,368 -0- -0- -0-
L. R. Hughes.................. 1993-95 3,869 3,120 853 11,605 -0- 2,558
H. J. Pearce.................. 1993-95 2,763 5,200 1,421 8,289 -0- 4,263
G. R. Wagoner, Jr............. 1993-95 3,869 3,120 853 11,605 -0- 2,558
</TABLE>
<TABLE>
<CAPTION>
Shares Vested Value of Shares Vested Shares Unvested as of
December 31, 1995 December 31, 1995 December 31, 1995
Grant -------------------------- ------------------------------ --------------------------
Year Common Cl. E Cl. H Common Cl. E Cl. H Common Cl. E Cl. H
------- ------ ----- ----- ------- ------- ------ ------ ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$52.88 $52.00 $49.13
# # # $ $ $ # # #
J. F. Smith, Jr.... 1992-94 7,876 5,226 1,897 416,444 271,752 93,190 15,751 -0- 3,792
L. R. Hughes....... 1992-94 3,768 2,500 907 199,233 130,000 44,556 7,535 -0- 1,814
H. J. Pearce....... 1992-94 3,768 2,500 907 199,233 130,000 44,556 7,535 -0- 1,814
G. R. Wagoner, Jr.. 1992-94 3,768 2,500 907 199,233 130,000 44,556 7,535 -0- 1,814
</TABLE>
(4) Except for Mr. Armstrong, amounts are Company contributions under the S-SPP
and the BEP-S. Under the S-SPP, which is open to all eligible salaried
employees, an employee can contribute up to 15% of salary, subject to an IRS
maximum ($150,000 salary for 1995) and the Corporation provides
contributions up to 25% of the employee's savings up to 6% of salary in GM
Common Stock units. Effective July 1, 1995, the Corporation's matching
percentage was increased from 25% to 50%. Under the BEP-S (a non-qualified,
unfunded benefit plan) the Corporation matches contributions on a basis
identical to the S-SPP on that portion of an executive's salary in excess of
the IRS limit. For Mr. Armstrong, amounts reflect Company contributions
under the Hughes Salaried Employees' Thrift and Savings Plan and Hughes
Salaried Employees' Excess Benefit Plan. Under both Plans, which are open to
all eligible salaried employees of Hughes Electronics, an employee can
contribute up to 12% of salary, subject to the IRS maximum stated above.
Hughes contributes an amount equal to 100% of the first 3% of salary in
Class H stock units.
19
<PAGE>
OPTIONS AND SAR GRANTS IN 1995
The following table shows the options granted to Messrs. Smith, Hughes,
Pearce and Wagoner on January 9, 1995. These options were comprised of both
non-qualified and Incentive Stock Options (ISOs) and are 33% exercisable one
year after date of grant, 67% exercisable two years after date of grant and 100%
exercisable three years after the date of grant. The table also displays the
non-qualified options granted to Mr. Armstrong on May 1, 1995. These options are
50% exercisable one year after date of grant and 100% exercisable two years
after the date of grant. All ISOs expire ten years from the date of grant and
non-qualified options expire ten years and two days from the date of grant.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------- Potential Realizable Value at
Number of % of Total Assumed Annual Rates of Stock Price
Securities Options Appreciation for Option Term(1)
Underlying Granted to ------------------------------------------------
Options Employees Exercise Expiration At 0% Annual At 5% Annual At 10% Annual
Name Granted in 1995 Price Date Growth Rate Growth Rate Growth Rate
- - - ------------------ --------- ------------- ----------- ------------- ------------ --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
# Shares % $/Share $ $ $
<CAPTION>
$1-2/3 Par
Common Stock
Options
- - - ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
J. F. Smith, Jr.... 150,000 2.27 43.25 1/10/05 -0- 4,080,000 10,339,500
L. R. Hughes....... 80,000 1.21 43.25 1/10/05 -0- 2,176,000 5,514,400
H. J. Pearce....... 40,000 0.61 43.25 1/10/05 -0- 1,088,000 2,757,200
G. R. Wagoner, Jr.. 80,000 1.21 43.25 1/10/05 -0- 2,176,000 5,514,400
<CAPTION>
Class E Stock
Options
- - - ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
H. J. Pearce...... 22,300 100.00 38.88 1/10/05 -0- 545,235 1,381,708
<CAPTION>
Class H Stock
Options
- - - ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
H. J. Pearce...... 25,000 1.37 34.63 1/10/05 -0- 544,500 1,379,750
C. M. Armstrong... 55,000 3.01 39.94 5/2/05 -0- 1,381,600 3,500,750
</TABLE>
(1) The dollar amounts under these columns are the results of calculations at
0%, and at the 5% and 10% annual appreciation rates set by the SEC for
illustrative purposes and, therefore, are not intended to forecast future
financial performance or possible future appreciation, if any, in the price
of GM common stocks. Stockholders are, therefore, cautioned against drawing
any conclusion from the appreciation data shown. Optionees will only realize
value from this grant if the price of GM common stock appreciates, which
would benefit all stockholders commensurably. The Corporation did not use an
alternative formula for grant valuation as it is not aware of any formula
which will determine, with reasonable accuracy, a present value based on
future unknown or volatile factors.
20
<PAGE>
AGGREGATE OPTION/SAR EXERCISES IN 1995 AND
OPTION/SAR VALUES AT DECEMBER 31, 1995
The following table provides information as to options exercised by each of
the Named Executive Officers in 1995 and the value of options held by such
executives at year-end, measured in terms of the closing prices of General
Motors common stocks (Common -- $52.88; Class E -- $52.00; Class H -- $49.13) on
December 29, 1995. No SARs may be granted under the General Motors Amended 1987
Stock Incentive Plan.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/[SARs] at Options/[SARs] at
Dec. 31, 1995 Dec. 31, 1995
Shares
Class of Acquired Value Exercisable/ Exercisable/
Name Stock on Exercise Realized Unexercisable Unexercisable
- - - ------------------------ -------------- -------------- ----------- ------------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
# Shares $ # Shares $
J. F. Smith, Jr......... Common -0- -0- 402,104 / 210,000 5,191,857 / 1,443,750
C. M. Armstrong......... Common -0- -0- 25,000 / -0- 378,125 / -0-
Class H 20,000 448,800 187,500 / 82,500 4,273,413 / 845,488
L. R. Hughes............ Common -0- -0- 123,379 / 105,000 1,590,213 / 770,000
H. J. Pearce............ Common -0- -0- 97,305 / 52,500 1,227,093 / 385,000
Class E 25,950 433,813 -0- / 35,250 -0- / 608,051
Class H -0- -0- 17,600 / 34,350 430,056 / 590,842
G. R. Wagoner, Jr....... Common -0- -0- 108,790 / 105,000 1,391,161 / 770,000
</TABLE>
LONG-TERM INCENTIVE AWARDS
The following table displays target long-term incentive awards granted to
Named Executive Officers in 1995 under the General Motors 1992 Performance
Achievement Plan and to Mr. Armstrong under the Hughes Long-Term Achievement
Plan. Assuming that the minimum or threshold performance level is met, the
percentage of the target award eventually paid to participants depends upon the
extent to which the established RONA target for the three-year performance
period is achieved. If the threshold performance level established by the
Committee is not met, no final awards will be paid.
21
<PAGE>
<TABLE>
<CAPTION>
Estimated Future Payouts
Number of Under Non-Stock Price-Based Plans
Shares, Units ---------------------------------------------------------
or Performance Below
Name Other Rights Period Threshold Threshold Target Maximum
- - - ---------------------- -------------- -------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
# Shs. $ $ $ $
J. F. Smith, Jr....... N.A. 1995-97 -0- 600,000 1,500,000 3,000,000
L. R. Hughes.......... N.A. 1995-97 -0- 340,000 850,000 1,700,000
H. J. Pearce.......... N.A. 1995-97 -0- 340,000 850,000 1,700,000
G. R. Wagoner, Jr..... N.A. 1995-97 -0- 340,000 850,000 1,700,000
C. M. Armstrong # Shs. # Shs. # Shs.
--Common......... 4,307 1995-97 -0- 861 4,307 7,537
--Class H........ 14,546 1995-97 -0- 2,909 14,546 25,455
</TABLE>
RETIREMENT PROGRAM
The retirement program for General Motors executives in the United States
consists of the General Motors Retirement Program for Salaried Employees, which
is a tax-qualified plan and subject to ERISA, as well as two non-qualified plans
(collectively the "GM Salaried Program"). The contributory portion of the
tax-qualified plan provides defined benefits under a formula based on eligible
years of credited service and upon the average pensionable remuneration received
in the highest five years out of the final ten years of service, subject to
certain Internal Revenue Code limitations which change from time to time. In
addition, employees receive an annual retirement benefit which is equal to the
sum of 100% of their contributions made after October 1, 1979 and of smaller
percentages of contributions made before that date. If employees do not elect to
contribute to the tax-qualified plan, they are entitled to receive only basic
retirement benefits equal to a flat dollar amount per year of credited service,
essentially equivalent to the General Motors Hourly-Rate Employees Pension Plan.
Benefits under the tax-qualified plan vest after five years of credited service
and are payable at the normal retirement age of 65, either in the form of a
single life annuity or in a reduced amount, in joint and survivor form.
If executives made the required contributions to the tax-qualified plan,
they may also be eligible to receive the regular form of a supplemental
executive retirement benefit. The sum of the qualified plan benefits and the
regular form of the supplemental executive retirement benefit will provide the
executive with total annual retirement benefits under the GM Salaried Program
that are equal to 2% times eligible years of credited service times the average
of the highest five years of base salary during the final ten years of service,
less 2% times the years of credited service times the maximum annual Social
Security benefit payable to a person retiring at age 65. Table I, on page 23,
shows the regular form of the estimated total annual retirement benefit related
to final average base salary as of December 31, 1995 that would be payable in 12
equal monthly installments per annum as a single life annuity to executives
retiring in 1996 at age 65 (the benefits shown are based upon maximum Social
Security benefits of $14,976 payable to persons retiring in 1996). If the
executive elects to receive benefits in the form of a 60% joint and survivor
annuity, the amounts shown would generally be reduced by from 5% to 7.5%,
depending upon the age differential between spouses.
22
<PAGE>
TABLE I
PROJECTED TOTAL ANNUAL RETIREMENT BENEFITS FROM ALL PARTS OF THE GM SALARIED
PROGRAM
ASSUMING EXECUTIVE QUALIFIES FOR REGULAR SUPPLEMENTAL EXECUTIVE RETIREMENT
PROGRAM BENEFITS(A)
<TABLE>
<CAPTION>
Years of Eligible Contributory Credited Service
Highest Five-Year -------------------------------------------------
Average Annual Salary 15 25 35 45
- - - ---------------------- ------- --------- --------- ---------
<S> <C> <C> <C> <C>
$ $ $ $ $
500,000 145,507 242,512 339,517 436,522
775,000 228,007 380,012 532,017 684,022
1,050,000 310,507 517,512 724,517 931,522
1,325,000 393,007 655,012 917,017 1,179,022
1,600,000 475,507 792,512 1,109,517 1,426,522
1,875,000 558,007 930,012 1,302,017 1,674,022
</TABLE>
(a) The average annual base salary for the highest five years over the last
10-year period and the eligible years of credited service as of December 31,
1995 for each of the Named Executive Officers were as follows: Louis R.
Hughes, $570,583, 28 years; Harry J. Pearce, $587,167, 16 years; John F.
Smith, Jr., $1,139,583, 35 years; and G. Richard Wagoner, Jr., $547,500, 18
years. The annual base salaries for the most recent year(s) considered in
the calculation of the averages reported here are in the Summary
Compensation Table on page 17 in the column labeled "Salary."
An executive may be eligible to receive the alternative form of the
supplemental executive retirement benefit in lieu of the regular form of the
supplemental executive retirement benefit contingent upon satisfaction of
certain criteria including, but not limited to, refraining from working for any
competitor or otherwise acting in any manner inimical or contrary to the best
interests of the Corporation. The executive will receive the greater of the
regular form or the alternative form of the supplemental executive retirement
benefit. The sum of the qualified plan benefits and the alternative form of the
supplemental executive retirement benefit will provide the executive with total
annual retirement benefits that are equal to 1.5% times eligible years of
credited service (up to a maximum of 35 years) times the average of the
executive's highest five years of total direct compensation (i.e., the average
of the five highest years of base salary plus the average of the five highest
years of bonus and/or restricted stock units awarded) out of the last ten years,
less 100% of the maximum annual Social Security benefit payable to a person age
65. Table II, on page 24, shows the alternative form of the estimated total
annual retirement benefit related to final average total direct compensation as
of December 31, 1995, that would be payable in 12 equal monthly installments per
annum as a single life annuity to executives retiring in 1996 at age 65 (the
benefits shown are based upon maximum Social Security benefits of $14,976
payable to persons retiring in 1996). Again, the amounts shown would be reduced
in the same way as under the regular form if the executive were to elect joint
and survivor benefits.
23
<PAGE>
TABLE II
PROJECTED TOTAL ANNUAL RETIREMENT BENEFITS FROM ALL PARTS OF THE GM SALARIED
PROGRAM
ASSUMING EXECUTIVE QUALIFIES FOR ALTERNATIVE SUPPLEMENTAL EXECUTIVE RETIREMENT
PROGRAM BENEFITS(A)
<TABLE>
<CAPTION>
Highest Five-Year Years of Eligible Contributory Credited Service
Average Annual Total -------------------------------------------------------------------
Direct Compensation 15 20 25 30 35
- - - ---------------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ $ $ $ $ $
900,000 187,524 255,024 322,524 390,024 457,524
1,550,000 333,774 450,024 566,274 682,524 798,774
2,200,000 480,024 645,024 810,024 975,024 1,140,024
2,850,000 626,274 840,024 1,053,774 1,267,524 1,481,274
3,500,000 772,524 1,035,024 1,297,524 1,560,024 1,822,524
4,150,000 918,774 1,230,024 1,541,274 1,852,524 2,163,774
</TABLE>
(a) The average annual total direct compensation, determined as described in the
preceding paragraph, and the eligible years of credited service as of
December 31, 1995 for each of the Named Executive Officers were as follows:
Louis R. Hughes, $1,088,183, 28 years; Harry J. Pearce, $1,147,767, 16
years; John F. Smith, Jr., $2,224,583, 35 years; and G. Richard Wagoner,
Jr., $1,017,100, 18 years. The annual total direct compensation for the most
recent year considered in the calculation of the sum of the averages of
salary and of bonus income, which is reported here as average annual total
direct compensation, will be found in the Summary Compensation Table on page
17 in the column labeled "Salary" and in the column labeled "Bonus."
In addition, the Board of Directors has delegated to the Committee
discretionary authority to grant additional eligible years of credited service
to selected key executives under such terms and conditions as the Committee
shall determine for purposes of computing the regular and alternative forms of
supplemental executive retirement benefits for such executives. The regular or
alternative form of the supplemental executive retirement benefit is provided
under a program which is non-qualified for tax purposes and not pre-funded.
Supplemental executive retirement benefits under the regular and alternative
formula can be reduced or eliminated for both retirees and active employees by
the Committee and the Board of Directors.
At the time of his employment with Hughes, Mr. Armstrong entered into an
agreement which provided that Hughes would provide the difference between the
amount of retirement benefit Mr. Armstrong actually receives from his former
employer and the amount of retirement benefit he would have received had he
remained with his previous employer until age 60, less any amounts accrued under
the Hughes retirement program.
24
<PAGE>
PERFORMANCE PRESENTATION
Set forth below are graphs which compare the cumulative total returns,
including reinvestment of dividends, for each of the three classes of General
Motors common stocks against the cumulative total return of the Standard &
Poor's (S&P) 500 Composite Stock Index and respective peer group indices for the
last five fiscal years, assuming investment of $100 in each of the Corporation's
common stocks and each of the respective peer indices noted on January 1, 1991.
For General Motors Common Stock, a peer group index comprised of Ford Motor
Company and Chrysler Corporation has been used. The comparator index used for
Class E Common Stock is the Standard & Poor's Computer Software Index.
Reflecting the diversity of Hughes Electronics Corporation's business, a
comparator group index has been developed using Value Line industry group data
for the following: Auto Parts--OEM; Telecommunications Service;
Telecommunications Equipment; Aerospace/Defense; and Electronics. In
constructing the index, a two-stage weighting process was applied. The data were
first weighted by market value within each industry group and then by the
percentage each line represented of Hughes Electronics Corporation's segment
revenue.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
GENERAL MOTORS COMMON STOCK,
S&P 500 INDEX, FORD AND CHRYSLER
DATE GM COMMON STOCK S&P 500 FORD AND CHRYSLER
1/1/91 100 100 100
1/1/92 88 130 110
1/1/93 102 140 208
1/1/94 177 154 346
1/1/95 138 156 319
12/31/95 177 215 366
25
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
GENERAL MOTORS CLASS E COMMON STOCK,
S&P 500 INDEX, AND S&P COMPUTER SOFTWARE INDEX
DATE GM CLASS E COMMON STOCK S&P 500 S&P COMPUTER SOFTWARE INDEX
1/1/91 100 100 100
1/1/92 165 130 153
1/1/93 175 140 181
1/1/94 157 154 230
1/1/95 209 156 272
12/31/95 287 215 383
26
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
GENERAL MOTORS CLASS H COMMON STOCK,
S&P 500 INDEX, AND VALUE LINE COMPOSITE INDEX
DATE GM CLASS H STOCK S&P 500 VALUE LINE COMPOSITE INDEX
1/1/91 100 100 100
1/1/92 87 130 114
1/1/93 157 140 117
1/1/94 244 155 154
1/1/95 223 156 156
12/31/95 321 215 208
ITEM NO. 2
The By-laws of the Corporation provide that the Audit Committee shall be
composed of directors who are not officers of the Corporation and that the
selection by the Committee of independent public accountants shall be subject to
ratification by the stockholders at the annual meeting. This standing Committee
of the Board reviews the scope and results of the audits, the accounting
principles being applied, and the effectiveness of internal controls and, in its
oversight role, assures that management fulfills its responsibilities in the
preparation of the financial statements. During 1995, the Audit Committee was
composed of Mr. Dennis Weatherstone, Chairman, Mrs. Anne L. Armstrong, Ms. Ann
D. McLaughlin, Messrs. Paul H. O'Neill (through October 5, 1995), John G. Smale
and Thomas H. Wyman, and Drs. Thomas E. Everhart and Louis W. Sullivan. The
Committee held six meetings in 1995.
27
<PAGE>
In accordance with the By-laws, the Committee has selected and engaged the
firm of Deloitte & Touche LLP as independent public accountants for the year
1996 and this selection is being presented to the stockholders for ratification.
Representatives of Deloitte & Touche LLP will attend the annual meeting, will
have the opportunity to make a statement if they desire to do so, and will be
available to answer questions that may be asked by stockholders.
Deloitte & Touche LLP has audited the Corporation's books annually since
1918, has offices or affiliates in or convenient to most of the localities in
the United States and other countries where the Corporation operates, and is
considered to be well qualified. The firm uses the work and reports of other
independent auditors who have examined the financial statements of subsidiaries
or investments included in the financial statements of the Corporation. Deloitte
& Touche LLP rotates its personnel assigned to the General Motors engagement at
least once every five years, with assignments beyond three years of supervising
partners responsible for the General Motors engagement reviewed and approved in
advance by the Audit Committee. In the event the selection of Deloitte & Touche
LLP as independent public accountants is not ratified by the stockholders, the
Audit Committee will seek other accountants. However, because of the difficulty
and expense of making any change in public accountants so long after the
beginning of the current year, it is likely that the appointment would stand for
1996 unless the Committee found other good reason for making a change.
During the 1995 calendar year, Deloitte & Touche LLP provided GM with
extensive audit and other services. Fees for all services totaled approximately
$41 million.
THE BOARD OF DIRECTORS FAVORS A VOTE FOR THE PROPOSAL TO RATIFY THE
SELECTION, BY THE AUDIT COMMITTEE OF THE CORPORATION, OF DELOITTE & TOUCHE LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS TO AUDIT THE BOOKS, RECORDS AND ACCOUNTS OF
THE CORPORATION AND ITS SUBSIDIARIES FOR THE YEAR 1996. PROXIES SOLICITED BY THE
BOARD OF DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY A DIFFERENT
CHOICE.
ITEM NO. 3
Mr. John J. Gilbert and the estate of Lewis D. Gilbert, 29 East 64th
Street, New York, NY 10021-7043, each the owner of record of 100 shares of
Common Stock, 40 shares of Class E Common Stock, and 10 shares of Class H Common
Stock, and additional family ownership of 200 shares of Common Stock; Margaret
R. Gilbert and John J. Gilbert, co-trustees under the will of Samuel Rosenthal,
owners of 200 shares of Common Stock; Mr. John C. Henry, 5 East 93rd Street, New
York, NY 10128, who is the owner of 1,148 shares of Common Stock, 224 shares of
Class E Common Stock, and 200 shares of Class H Common Stock, have given notice
that they intend to present for action at the annual meeting the following
resolution:
"RESOLVED: That the stockholders of General Motors Corporation, assembled
in annual meeting in person and by proxy, hereby request the Board of
Directors to take the steps necessary to provide for cumulative voting in
the election of directors, which means each stockholder shall be entitled
to as many votes as shall equal the number of shares he or she owns
multiplied by the number of directors to be elected, and he or she may cast
all of such votes for a single candidate, or any two or more of them as he
or she may see fit."
28
<PAGE>
The following statement was submitted in support of such resolution:
"REASONS
"Continued strong support along the lines we suggest were shown at the last
annual meeting when 23%, 82,621 owners of 118,625,646 shares, were cast in
favor of this proposal. The vote against included 68,746 unmarked proxies.
"A law enacted in California provides that all state pension holdings and
state college funds, invested in shares must be voted in favor of
cumulative voting proposals, showing increasing recognition of the
importance of this democratic means of electing directors.
"The National Bank Act provides for cumulative voting. Unfortunately, in
many cases companies get around it by forming holding companies without
cumulative voting. Banking authorities have the right to question the
capability of directors to be on banking boards. Unfortunately, in many
cases authorities come in after and say the director or directors were not
qualified. We were delighted to see that the SEC has finally taken action
to prevent bad directors from being on the boards of public companies.
"We think cumulative voting is the answer to find new directors for various
committees. In addition, some recommendations have been made to carry out
the CERES 10 points. The 11th should be, in our opinion, having cumulative
voting and ending stagger systems of electing directors.
"When Alaska became a state it took away cumulative voting over our
objections. The Valdez oil spill might have been prevented if environmental
directors were elected through cumulative voting. Also, the huge derivative
losses might have been prevented with cumulative voting.
"Many successful corporations have cumulative voting. For example, Pennzoil
having cumulative voting defeated Texaco in that famous case. Another
example is Ingersoll-Rand which has cumulative voting and won two awards.
In FORTUNE magazine it was ranked second in its industry as `America's Most
Admired Corporations' and the WALL STREET TRANSCRIPT noted `on almost any
criteria used to evaluate management, Ingersoll-Rand excels.' Also, in 1994
and 1995 they raised their dividend. In the recent Lockheed-Martin merger
they put in that if anyone has 40% of the shares cumulative voting would
apply. We believe that General Motors should follow these examples.
"If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain."
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF THIS PROPOSAL
FOR THE FOLLOWING REASONS:
A similar proposal was disapproved by stockholders at the 1995 meeting and
on eleven other occasions. Eleven of GM's 13 Board members are independent
non-employee directors and are all nominated for the Board by GM's Committee on
Director Affairs which consists entirely of outside independent directors. This
guarantees the continued independence of the Board, which has the responsibility
to represent all of the stockholders. The cohesive actions of this Board are
self evident. The Board of Directors believes that for it to continue to be
effective, each member must feel a responsibility to represent all the
stockholders. From this perspective, cumulative voting is undesirable since
directors so elected might be principally concerned about representing and
acting in the interest of special groups of stockholders
29
<PAGE>
rather than the interests of all stockholders. Cumulative voting also introduces
the possibility of partisanship among Board members that could impair their
ability to work together, a requirement essential to the effective functioning
of any board of directors.
At General Motors all of our stockholders are minority owners, albeit some
with more extensive holdings than others. The Board does not believe that some
minority of stockholders should be advantaged--or disadvantaged-- compared with
all other stockholders. In other words, all stockholders are, and should be,
equally represented. Although there have been efforts by some minority
stockholders to have corporations adopt cumulative voting, the trend is in the
opposite direction. Many companies have eliminated cumulative voting over the
years. Overall, its presence has declined. The State of California, considered
most protective of stockholder interests, amended its state laws to permit the
repeal of cumulative voting in 1989. In arguing for the change, the
Corporation's Committee of the California State Bar's Business Law Section
supported this change. It said:
"While a healthy diversity of opinion and experience, as
represented by independent directors, is desirable, factionalism
is not appropriate in the board's essential executive function.
The principal objective of a business enterprise should be profit
and gain for its shareholders, not political accommodation of
competing interests . . . Practical experience has shown that
effective management of a corporation requires candor and
consensus in the Boardroom, (not) rancor and contention."
No reason is given, and the Board of Directors knows of none, why the
present method of voting should not continue to work as successfully in the
future as it has in the past.
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 3. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
ITEM NO. 4
Robert D. Morse, 212 Highland Avenue, Moorestown, NJ 08057-2717, owner of
600 shares of Common Stock, has given notice that he intends to present for
action at the annual meeting the following resolution:
"I, Robert D. Morse, of 212 Highland Ave., Moorestown, NJ 08057-2717 owner
of 100 or more shares of company stock, presents the following proposal to
the shareowners for a vote in favor:
"That the Company discontinue use of all options, rights, SAR's, etc. after
termination of existing agreements with management and directors."
The following statement was submitted in support of such resolution:
"REASONS: These increased benefits have failed to produce the claim that it
holds and retains qualified personel.
"Notice the increasing number of management persons who have left simply
because of better corporate offers.
"We as shareowners are being gradually undervalued with each issuance. Call
a halt by voting YES!
"Many pages of a proxy are expended to promote self-benefits; then there
are unmentioned administrative costs of distribution and record keeping.
30
<PAGE>
"Executives and directors are compensated enough to buy stock on the open
market, just as you and I, if we are so inclined.
"Again: Vote YES."
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF THIS PROPOSAL
FOR THE FOLLOWING REASONS:
In 1991 and 1992, the Executive Compensation Committee undertook a detailed
review of the salaries and incentive awards, including stock options, paid to GM
executives. Following this review, the incentive program was submitted to the
1992 annual meeting where it was overwhelmingly approved by stockholders. The
results of this review are reflected in the Report of the Executive Compensation
Committee on Executive Compensation commencing on page 11. Basically, GM's
philosophy is to provide a competitive level of base salary and, at the same
time, provide executives with the opportunity to realize meaningful rewards
through granting of stock options and payment of incentives, when the
Corporation's performance so justifies.
The use of stock options as an executive compensation vehicle is a
generally accepted practice and aligns the interests of GM executives more
closely with those of stockholders by providing executives with an opportunity
for financial reward which is directly linked to the value of GM stock. In
recent years, GM's stockholders and executives have benefited together from
improvements in GM's financial performance as reflected in GM's stock prices.
With respect to options and rights, the Corporation does not grant rights to any
executives and SARs have not been granted since 1986. In fact, SARs are no
longer permissible under GM's current incentive plans.
The Board of Directors believes that through the use of stock options
executives focus on the creation of value for all stockholders, thus ensuring
the long-term viability and profitability of the Corporation. Therefore, the use
of stock options as an incentive tool is in the best interest of the Corporation
and its stockholders.
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 4. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
ITEM NO. 5
John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, owner
of 89 shares of Class H Common Stock, has given notice that he intends to
present for action at the annual meeting the following resolution:
"INDEPENDENT CHAIRMAN OF THE BOARD RESOLUTION
" `RESOLVED: Shareholders recommend the Board of Directors take the
necessary steps to ensure that from here forward an independent Director
serve as Chairman of the Board of Directors.' "
31
<PAGE>
The following statement was submitted in support of such resolution:
"SUPPORTING STATEMENT
"In December 1995 General Motors announced that GM Chief Executive Officer
John Smith would replace John Smale as Chairman of the Board. This reversed
General Motors existing practice of an independent Chairman of the Board (a
Chairman that is not currently nor has previously been a GM employee) to
oversee management.
"The Chairman's key duty is to oversee management. When the Chief Executive
Officer is also the Chairman, he oversees his own plan and in effect
`grades his own papers.' This limits the degree of objective oversight and
scrutiny, the prime duty of the Chairman.
"An independent Chairman of the Board is consistent with John Smale's
speech to the Council of Institutional Investors on April 15, 1994. The
number one GM policy guideline that Mr. Smale called for was: Freedom to
separate the roles of the Chairman of the Board and the Chief Executive
Officer. This is also consistent with Mr. Smale's same speech as he
highlighted the need for a `willingness . . . to face new challenges with
new approaches or a new vision.' He also cautioned that company `faults
develop so slowly over time, the organization doesn't realize it's
happening. And when these faults come to dominate the decision-making
process, also without the organization really realizing what's happened,
failure is inevitable if not immediate.'
"I believe that John Smale, in his capacity as an independent Chairman,
played a key role in the General Motors turnaround since 1992 and
consequently an independent Chairman should continue. I believe that if the
recent success of General Motors is to continue in our highly competitive
global economy, an independent Chairman of the Board is crucial.
"I urge you to vote yes: Recommend the Board of Directors take the
necessary steps to ensure that from here forward an independent Director
serve as Chairman of the Board of Directors.
"If you agree with this shareholder resolution please vote yes. If you
disagree vote no. Proxy or proxies signed, but not marked, will be voted
for this resolution."
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF THIS PROPOSAL
FOR THE FOLLOWING REASONS:
The Board of Directors has been, and continues to be, a strong proponent of
independent leadership at the board level. To reinforce this, the Board has
adopted Corporate Governance Guidelines that ensure independent board leadership
whether or not the Chairman and CEO roles are separated. Recognizing that
independence from Management is a prerequisite to fulfilling its duty, the
Guidelines include a Mission Statement that states that the Board's
responsibility is "to regularly monitor the effectiveness of Management policies
and decisions including the execution of its strategies."
The Board of Directors believes that the appropriate balancing of
independent board structure with flexibility in determining board leadership is
expressed in its current Guidelines. Guideline 4, addressing the "Selection (and
Separation) of Chairman and CEO," ensures flexibility by providing that: "the
Board should be free to make this choice any way that seems best for the Company
at a given point in time." Guideline 5, addressing "the Lead Director Concept,"
ensures appropriate board independence from management by providing that: "the
Board . . . have a Director selected by
32
<PAGE>
the outside Directors who will assume the responsibility of chairing the
regularly scheduled meetings of outside Directors or other responsibilities
which the outside Directors as a whole might designate from time to time." This
Guideline further provides that this role be filled either by the non-executive
Chairman, or should the Chairman be a Company employee, by another Director.
Presently, the Chairman of the Executive Committee, Mr. John G. Smale, serves in
this capacity. Thus, the fundamental role of GM's Directors in overseeing GM's
Management and affairs will continue following the Management changes announced
last December. This active oversight is not dependent on mandating that the
Chairman be an outside Director. A copy of the Guidelines is available from the
Secretary upon request.
In light of these and other mechanisms in the Guidelines that ensure the
Board's independence from Management and accountability to stockholders, the
Board believes that no purpose is served by imposing an absolute rule against a
member of Management serving as Board Chairman. Indeed, that is why the Board
provided itself the flexibility to select either an employee or non-employee as
Chairman. Therefore, the Board opposes the resolution because it would reduce
the Board's flexibility to select a style of leadership depending on time and
circumstances.
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 5. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
ITEM NO. 6
The Sisters of the Order of St. Dominic of Grand Rapids, 2025 East Fulton
Street, Grand Rapids, MI 49503-3895, owners of 2,500 shares of GM Common Stock,
and other filers have given notice that they intend to present for action at the
annual meeting the following resolution:
"GENERAL MOTORS
"WHEREAS Star Wars is far from dead despite its name change from
`Strategic Defense Initiative' to `Ballistic Missile Defense'
(BMD).
"WHEREAS we believe, it is an ironic twist to the end of the Cold War that
the U.S. has accelerated plans to deploy strategic defenses
against intercontinental ballistic missiles. These plans
undermine international law and threaten satellite communication
and verification systems which make possible arms control
agreements.
"WHEREAS the US and Russia, as well as other countries, are struggling for
arms control agreements. Because no country has an effective
anti-satellite weapons system (ASAT), a bilateral ban on ASAT
testing could succeed.
"WHEREAS in 1994 General Motors ranked number 5 among the top 100
Department of Defense (DOD) contractors with contracts in excess
of $3 billion; General Motors was number 5 among the ten biggest
"Star Wars" contractors with contracts in excess of $25 million;
number 3 in missile procurement with contracts is excess of $771
million and number 2 in DOD electronics and communications with
contracts in excess of $964 million;
"THEREFORE BE IT RESOLVED the shareholders request the Board of Directors
to provide a comprehensive report describing General Motors' involvement in
the nuclear defense system, formerly the space-based Star Wars
33
<PAGE>
or Strategic Defense Initiative, and now called Ballistic Missile Defense.
The report should be available to shareholders on request within six months
of the 1997 annual meeting, may omit proprietary and classified information
and be prepared at reasonable cost."
The following statement was submitted in support of such resolution:
"Supporting Statement
"As investors, we are concerned about company dependence upon Department of
Defense contracts and hope a written report would describe the following
aspects:
--current value of outstanding contracts to develop components for the
Ballistic Missile Defense Organization;
--amount of General Motors' own money (versus DOD funding) spent on
in-house research and development (R&D) for the BMD program. Since the
current mission has a more traditional ground-based orientation, is it
likely our company will designate more of its own R&D money for the
program?
--General Motors' efforts to diversify into non-DOD contracts in this
segment of its aerospace and defense division;
--how annual threats to cut federal funding for the components of these
programs affect our company e.g. employment and how our company counters
these threats e.g. lobbying, industry associations' public relations
efforts;
--the moral and financial reasons for bidding on DOD contracts.
"As religiously-affiliated sponsors of this resolution, we question the judgment
of the special-interest groups who lobby Congress to make weapons a higher
priority than meeting human needs. We believe further expenditures for
development of space-based nuclear defense systems, the ballistic missile
system, are immoral and indefensible. We urge release of information about the
extent to which our company is involved in the research, production and
promotion of weapons for the Ballistic Missile Defense Organization."
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF THIS PROPOSAL
FOR THE FOLLOWING REASONS:
The Board of Directors believes that responsibility for national defense
policies rests with the United States Government. Debate on issues concerning
arms control is more properly conducted within the executive and legislative
branches of the Federal Government, as well as other public forums, than at the
annual meeting of General Motors stockholders.
General Motors, through its various divisions and subsidiaries, has
participated for many years in a wide range of military and space technology
programs. Management believes that continued involvement in defense programs
which fall within its technological and manufacturing capabilities should be
aggressively pursued. Publicly discussing the propriety of these programs from a
political viewpoint is considered by the Board of Directors to be inappropriate
and contrary to the best interests of General Motors stockholders.
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 6. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
34
<PAGE>
EXPENSES OF SOLICITATION
The cost of this solicitation of proxies will be borne by the Corporation.
General Motors will solicit proxies by mail and the directors, officers, and
employees of GM may also solicit proxies by telephone, telegram or personal
contact. These persons will receive no additional compensation for such
services. In addition, General Motors has retained Morrow & Co., Inc., to assist
in soliciting proxies for a fee of up to $50,000, plus reasonable out-of-pocket
expenses. The Corporation will reimburse brokers and other stockholders of
record for their expenses in forwarding proxy material to beneficial owners.
OTHER MATTERS
The enclosed proxy confers upon the person or persons entitled to vote the
shares represented thereby discretionary authority to vote such shares in
accordance with their best judgment with respect to all matters which may come
before the meeting in addition to the scheduled items of business, including any
stockholder proposal omitted from the Proxy Statement and form of proxy pursuant
to the Proxy Rules of the Securities and Exchange Commission and matters
incident to the conduct of the meeting. At the time this Proxy Statement went to
press, the Board of Directors did not know of any other matter which may
properly be presented for action at the meeting, but the enclosed proxy confers
the same discretionary authority with respect to any such other matter.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
ON THE ENCLOSED PROXY. HOWEVER, IT IS NOT NECESSARY TO MARK ANY BOXES IF YOU
WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS; MERELY
SIGN, DATE AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE. THE PROXY COMMITTEE
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THE ENCLOSED PROXY. YOUR
PROMPT RESPONSE IS HELPFUL, AND YOUR COOPERATION IS APPRECIATED.
By order of the Board of Directors,
NANCY E. POLIS, Secretary
April 9, 1996
35
<PAGE>
- - - --------------------------------------------------------------------------------
RESULTS OF THE ANNUAL MEETING
The results of the voting at the annual
meeting will be made available to all
stockholders. Any stockholder desiring a
transcript of the meeting may obtain it by
writing to General Motors Corporation, Mail
Code 482-111-200, General Motors Building,
Detroit, Michigan 48202.
- - - --------------------------------------------------------------------------------
<PAGE>
- - - --------------------------------------------------------------------------------
ENVIRONMENTAL REPORT
Any stockholder desiring a copy of the new
General Motors Environmental Report may
obtain it by writing to General Motors
Corporation, Environmental and Energy Staff,
Mail Code 482-112-157, General Motors
Building, Detroit, Michigan 48202. This
report provides information on the
environmental aspects of GM's products and
operations.
- - - --------------------------------------------------------------------------------
<PAGE>
[logo]
IMPORTANT!
Stockholders are encouraged to specify their
choices by marking the appropriate boxes on
the enclosed proxy. However, it is not
necessary to mark any boxes if you wish to
vote in accordance with the Board of
Directors' recommendations; merely sign, date
and return the proxy in the enclosed
envelope. THE PROXY COMMITTEE CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN AND RETURN THE
ENCLOSED PROXY.
[logo] Printed on recycled paper
<PAGE>
GM GENERAL MOTORS CORPORATION
---- PROXY/VOTING INSTRUCTION CARD
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS
HOLIDAY INN DOWNTOWN, 700 KING STREET, WILMINGTON, DELAWARE
FRIDAY, MAY 24, 1996, 9:00 A.M. LOCAL TIME
The undersigned authorizes John F. Smith, Jr., J. Michael Losh and Harry J.
Pearce and each of them as the Proxy Committee, to vote the COMMON STOCK, CLASS
E COMMON STOCK AND CLASS H COMMON STOCK of the undersigned upon the nominees for
Director (A. L. Armstrong, J. H. Bryan, T. E. Everhart, C. T. Fisher, III, J. W.
Marriott, Jr., A. D. McLaughlin, H. J. Pearce, E. Pfeiffer, E. T. Pratt, Jr., J.
G. Smale, J. F. Smith, Jr., L. W. Sullivan, D. Weatherstone, T. H. Wyman), upon
the other Items shown on the reverse side, which are described and page
referenced in the Table of Contents (page i) to the Proxy Statement, and upon
all other matters which may come before the 1996 Annual Meeting of Stockholders
of General Motors Corporation, or any adjournment thereof.
This card also provides voting instructions for shares held in the various
employee savings/incentive plans of General Motors and its subsidiaries as
described in the Proxy Statement. IF REGISTRATIONS ARE NOT IDENTICAL, YOU MAY
RECEIVE MORE THAN ONE SET OF PROXY MATERIALS. PLEASE SIGN AND RETURN ALL CARDS
YOU RECEIVE.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING -----------
THE APPROPRIATE BOXES (SEE REVERSE SIDE) BUT YOU NEED NOT SEE REVERSE
MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE WITH THE SIDE
BOARD OF DIRECTORS' RECOMMENDATIONS. YOUR SHARES CANNOT -----------
BE VOTED UNLESS YOU SIGN AND RETURN THIS PROXY/VOTING
INSTRUCTION CARD.
<PAGE>
PLEASE MARK
X YOUR VOTE
WITH AN X.
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1-2 AND "AGAINST" ITEMS 3-6
This proxy/voting instruction card will be voted "FOR" Items 1-2 if no choice is specified.
<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. Election of / / / / 2. Ratify selection / / / / / /
Directors of Independent
Accountants
----------------------------------------
For, except vote withheld from the above
nominee(s):
</TABLE>
<TABLE>
<CAPTION>
This proxy/voting instruction card will be voted
"AGAINST" Items 3-6 if no choice is specified.
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
3. Stockholder proposal on / / / / / /
cumulative voting
4. Stockholder proposal on / / / / / /
incentive awards
5. Stockholder proposal / / / / / /
regarding independent
chairman
6. Stockholder proposal / / / / / /
regarding nuclear defense
systems
</TABLE>
THIS PROXY/VOTING INSTRUCTION CARD REPRESENTS YOUR HOLDINGS OF
COMMON STOCK, CLASS E COMMON STOCK AND CLASS H COMMON STOCK.
- - - -------------------------------------------------------------------------------
SIGNATURE(S) PLEASE MARK, SIGN, DATE AND RETURN THIS DATE
PROXY/VOTING INSTRUCTION
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
NOTE: Please add your title if you are signing as Attorney, Administrator,
Executor, Guardian, Trustee or in any other representative capacity.
<PAGE>
GM GENERAL MOTORS CORPORATION
---- PROXY/VOTING INSTRUCTION CARD COMMON
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS
HOLIDAY INN DOWNTOWN, 700 KING STREET, WILMINGTON, DELAWARE
FRIDAY, MAY 24, 1996, 9:00 A.M. LOCAL TIME
The undersigned authorizes John F. Smith, Jr., J. Michael Losh and Harry J.
Pearce and each of them as the Proxy Committee, to vote the COMMON STOCK of the
undersigned upon the nominees for Director (A. L. Armstrong,
J. H. Bryan, T. E. Everhart, C. T. Fisher, III, J. W. Marriott, Jr., A. D.
McLaughlin, H. J. Pearce, E. Pfeiffer, E. T. Pratt, Jr., J. G. Smale, J. F.
Smith, Jr., L. W. Sullivan, D. Weatherstone, T. H. Wyman), upon the other Items
shown on the reverse side, which are described and page referenced in the Table
of Contents (page i) to the Proxy Statement, and upon all other matters which
may come before the 1996 Annual Meeting of Stockholders of General Motors
Corporation, or any adjournment thereof.
This card also provides voting instructions for shares held in the various
employee savings/incentive plans of General Motors and its subsidiaries as
described in the Proxy Statement. IF REGISTRATIONS ARE NOT IDENTICAL, YOU MAY
RECEIVE MORE THAN ONE SET OF PROXY MATERIALS. PLEASE SIGN AND RETURN 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. YOUR SHARES CANNOT BE VOTED UNLESS
YOU SIGN AND RETURN THIS PROXY/VOTING INSTRUCTION CARD.
-----------
SEE REVERSE
SIDE
-----------
<PAGE>
PLEASE MARK YOUR COMMON
X VOTE WITH AN X.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1-2 AND "AGAINST" ITEMS 3-6
<TABLE>
<CAPTION>
This proxy/voting instruction card will be voted "FOR" Items 1-2 if no choice is specified.
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. Election / / / / 2. Ratify / / / / / /
of Directors selection of
Independent
Accountants
</TABLE>
For, except vote withheld from the
following nominee(s):
- - - ----------------------------------
THIS PROXY/VOTING INSTRUCTION CARD
REPRESENTS YOUR HOLDINGS OF COMMON STOCK.
<TABLE>
<CAPTION>
This proxy/voting instruction card will be voted
"AGAINST" Items 3-6 if no choice is specified.
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
3. Stockholder proposal on / / / / / /
cumulative voting
4. Stockholder proposal on / / / / / /
incentive awards
5. Stockholder proposal regarding / / / / / /
independent chairman
6. Stockholder proposal regarding / / / / / /
nuclear defense systems
</TABLE>
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY/VOTING INSTRUCTION
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
NOTE: Please add your title if you are signing as Attorney,
Administrator, Executor, Guardian, Trustee or in any other
representative capacity.
Signature: _____________________________________________ Date _____________
Signature: _____________________________________________ Date _____________
<PAGE>
GM GENERAL MOTORS CORPORATION
---- PROXY/VOTING INSTRUCTION CARD CLASS H
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS
HOLIDAY INN DOWNTOWN, 700 KING STREET, WILMINGTON, DELAWARE
FRIDAY, MAY 24, 1996, 9:00 A.M. LOCAL TIME
The undersigned authorizes John F. Smith, Jr., J. Michael Losh and Harry J.
Pearce and each of them as the Proxy Committee, to vote the CLASS H COMMON STOCK
of the undersigned upon the nominees for Director (A. L. Armstrong,
J. H. Bryan, T. E. Everhart, C. T. Fisher, III, J. W. Marriott, Jr., A. D.
McLaughlin, H. J. Pearce, E. Pfeiffer, E. T. Pratt, Jr., J. G. Smale, J. F.
Smith, Jr., L. W. Sullivan, D. Weatherstone, T. H. Wyman), upon the other Items
shown on the reverse side, which are described and page referenced in the Table
of Contents (page i) to the Proxy Statement, and upon all other matters which
may come before the 1996 Annual Meeting of Stockholders of General Motors
Corporation, or any adjournment thereof.
This card also provides voting instructions for shares held in the various
employee savings/incentive plans of General Motors and its subsidiaries as
described in the Proxy Statement. IF REGISTRATIONS ARE NOT IDENTICAL, YOU MAY
RECEIVE MORE THAN ONE SET OF PROXY MATERIALS. PLEASE SIGN AND RETURN 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. YOUR SHARES CANNOT BE VOTED UNLESS
YOU SIGN AND RETURN THIS PROXY/VOTING INSTRUCTION CARD.
-----------
SEE REVERSE
SIDE
-----------
<PAGE>
PLEASE MARK YOUR CLASS H
X VOTE WITH AN X.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1-2 AND "AGAINST" ITEMS 3-6
<TABLE>
<CAPTION>
This proxy/voting instruction card will be voted "FOR" Items 1-2 if no choice is specified.
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. Election / / / / 2. Ratify / / / / / /
of Directors selection of
Independent
Accountants
</TABLE>
For, except vote withheld from the
following nominee(s):
- - - ----------------------------------
THIS PROXY/VOTING INSTRUCTION CARD
REPRESENTS YOUR HOLDINGS OF CLASS H
COMMON STOCK.
<TABLE>
<CAPTION>
This proxy/voting instruction card will be voted
"AGAINST" Items 3-6 if no choice is specified.
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
3. Stockholder proposal on / / / / / /
cumulative voting
4. Stockholder proposal on / / / / / /
incentive awards
5. Stockholder proposal regarding / / / / / /
independent chairman
6. Stockholder proposal regarding / / / / / /
nuclear defense systems
</TABLE>
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY/VOTING INSTRUCTION
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
NOTE: Please add your title if you are signing as Attorney,
Administrator, Executor, Guardian, Trustee or in any other
representative capacity.
Signature: _____________________________________________ Date _____________
Signature: _____________________________________________ Date _____________
<PAGE>
GM GENERAL MOTORS CORPORATION
---- PROXY/VOTING INSTRUCTION CARD CLASS E
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS
HOLIDAY INN DOWNTOWN, 700 KING STREET, WILMINGTON, DELAWARE
FRIDAY, MAY 24, 1996, 9:00 A.M. LOCAL TIME
The undersigned authorizes John F. Smith, Jr., J. Michael Losh and Harry J.
Pearce and each of them as the Proxy Committee, to vote the CLASS E COMMON STOCK
of the undersigned upon the nominees for Director (A. L. Armstrong,
J. H. Bryan, T. E. Everhart, C. T. Fisher, III, J. W. Marriott, Jr., A. D.
McLaughlin, H. J. Pearce, E. Pfeiffer, E. T. Pratt, Jr., J. G. Smale, J. F.
Smith, Jr., L. W. Sullivan, D. Weatherstone, T. H. Wyman), upon the other Items
shown on the reverse side, which are described and page referenced in the Table
of Contents (page i) to the Proxy Statement, and upon all other matters which
may come before the 1996 Annual Meeting of Stockholders of General Motors
Corporation, or any adjournment thereof.
This card also provides voting instructions for shares held in the various
employee savings/incentive plans of General Motors and its subsidiaries as
described in the Proxy Statement. IF REGISTRATIONS ARE NOT IDENTICAL, YOU MAY
RECEIVE MORE THAN ONE SET OF PROXY MATERIALS. PLEASE SIGN AND RETURN 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. YOUR SHARES CANNOT BE VOTED UNLESS
YOU SIGN AND RETURN THIS PROXY/VOTING INSTRUCTION CARD.
-----------
SEE REVERSE
SIDE
-----------
<PAGE>
PLEASE MARK YOUR CLASS E
X VOTE WITH AN X.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1-2 AND "AGAINST" ITEMS 3-6
<TABLE>
<CAPTION>
This proxy/voting instruction card will be voted "FOR" Items 1-2 if no choice is specified.
<S> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election / / / / 2. Ratify / / / / / /
of Directors selection of
Independent
Accountants
</TABLE>
For, except vote withheld from the
following nominee(s):
- - - ----------------------------------
THIS PROXY/VOTING INSTRUCTION CARD
REPRESENTS YOUR HOLDINGS OF CLASS E
COMMON STOCK.
<TABLE>
<CAPTION>
This proxy/voting instruction card will be voted
"AGAINST" Items 3-6 if no choice is specified.
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
3. Stockholder proposal on / / / / / /
cumulative voting
4. Stockholder proposal on / / / / / /
incentive awards
5. Stockholder proposal regarding / / / / / /
independent chairman
6. Stockholder proposal regarding / / / / / /
nuclear defense systems
</TABLE>
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY/VOTING INSTRUCTION
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
NOTE: Please add your title if you are signing as Attorney,
Administrator, Executor, Guardian, Trustee or in any other
representative capacity.
Signature: _____________________________________________ Date _____________
Signature: _____________________________________________ Date _____________
