L:\secfiles\8-k\1997\janpress.doc
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported) January 27, 1997
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GENERAL MOTORS CORPORATION
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(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 1-143 38-0572515
- ---------------------------- ----------------------- -------------------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
100 Renaissance Center, Detroit, Michigan 48243-7301
3044 West Grand Boulevard, Detroit, Michigan 48202-3091
- -------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313)-556-5000
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- 1 -
ITEM 5. OTHER EVENTS
(a) On January 27, 1997, General Motors Corporation (GM or General
Motors) issued a news release announcing that its Board of Directors (the GM
Board) had increased the dividend on the GM $1-2/3 par value and Class H common
stocks and approved a $2.5 billion repurchase program for GM $1-2/3 par value
common stock. The news release was as follows:
GM NEWS RELEASE
GENERAL MOTORS CORPORATION -- The General Motors Board of Directors today
raised the dividends on GM's $1-2/3 par value and Class H common stocks, and
approved a $2.5 billion repurchase program for the company's $1-2/3 common
stock.
"The actions taken by GM's Board underscore our confidence in the future
and our commitment to enhancing stockholder value," said John F. Smith, Jr., GM
chairman, chief executive officer and president. "GM is not only strengthening
its global automotive business with the largest number of new model
introductions ever in North America and significant investments in overseas
markets, but also returning capital to shareholders in a manner which is
sustainable throughout the business cycle."
The quarterly dividend on GM $1-2/3 common stock is being increased by
$0.10, to $0.50 per share. The dividend has been increased three times, for a
total of $0.30 per share, since May 1995. The dividend is payable March 10,
1997, to holders of record on February 6, 1997.
The GM Board today also approved a $2.5 billion repurchase program for GM
$1-2/3 common stock, which the company plans to execute through open-market
purchases within the next 12 months. This would represent a repurchase of
slightly more than 5 percent of the outstanding shares of GM $1-2/3 common
stock, based on the NYSE's closing price on January 24, 1997 of $62-1/2 per
share of GM $1-2/3 common stock.
"We intend to pursue the repurchase program vigorously," said Smith. "The
decision to announce a $2.5 billion program at this time is based on our belief
that we can execute a program of this size quickly and with confidence."
Smith noted that GM's cash generation capability continues to be strong --
GM's cash balance at year-end 1996 was $17 billion, compared to $10.2 billion at
the end of 1995.
"We'll consider additional repurchase programs in the future," Smith added.
The program announced today will supplement GM's other continuing stock
repurchases used to satisfy ongoing needs of employee benefit plans and
executive stock option plans. GM has repurchased about $800 million of GM $1-2/3
common stock over the last two years, which are then reissued in support of
benefit and compensation plans. As a result of this practice, all of the shares
repurchased through the new program announced today are expected to reduce the
total number of outstanding shares of GM $1-2/3 common stock.
- 2 -
The board also increased the quarterly dividend on GM Class H stock to
$0.25, up from $0.24 per share. The 1997 dividend rate on GM Class H is based on
the 1996 earnings of GM's Hughes Electronics subsidiary. The dividend is payable
March 10, 1997, to holders of record on February 6, 1997.
The GM Board's policy is to distribute dividends on GM $1-2/3 common stock
based on the outlook and indicated capital needs of the business, and to
establish dividends at a level that the board believes will be sustainable
throughout the automotive business cycle. In light of this policy, the board
will continue to regularly review the dividend on the $1-2/3 common stock as
well as stock repurchases.
The current dividend policy for GM Class H common stock states that 35
percent of the prior year's earnings of Hughes Electronics will be distributed
to Class H stockholders through quarterly dividends. If, as previously
announced, GM Class H is recapitalized to provide a more focused investment in
the Hughes Electronics telecommunications and space business, the dividend
policy will take into account the factors related to this business, including
its growth opportunities and capital needs.
The GM Board also declared the following dividends: $0.570313 per GM Series
B depositary share; $0.495 per Series D depositary share; and $0.57 per GM
Series G depositary share. These dividends are payable May 1, 1997, to holders
of record on April 7, 1997.
Recently, GM has undertaken a number of initiatives designed to enhance
shareholder value, including a proposal to: Distribute to stockholders a
valuable equity interest in the defense business of Hughes Aircraft; provide a
more focused, appropriately-capitalized investment in Hughes Electronics'
telecommunications business; and transfer Delco Electronics from Hughes
Electronics to GM's Delphi Automotive Systems. GM has also made significant
progress in rebuilding the company's balance sheet.
* * * * * *
(b) On January 28, 1997, a news release was issued on the subject of
fourth quarter and year-to-date consolidated earnings for GM. The news release
did not include financial statement footnotes and certain supplementary
information that will be filed with the Securities and Exchange Commission at a
later date. The GM news release and related news releases dated January 27 and
January 28, 1997 for fourth quarter and year-to-date earnings of Hughes
Electronics Corporation (Hughes) and General Motors Acceptance Corporation
(GMAC), respectively, were as follows:
GM NEWS RELEASE
GENERAL MOTORS CORPORATION (GM) -- reported today that income from
continuing operations for the fourth quarter of 1996 totaled $786 million, or
$0.92 per share of GM $1-2/3 par value common stock, compared with $1.6 billion,
or $1.95 per share, in the fourth quarter of 1995.
Income from continuing operations (which excludes EDS) for the calendar
year was $5.0 billion, or $6.07 per share, compared with $6.0 billion, or $7.14
per share, in 1995.
- 3 -
The fourth-quarter results included an estimated unfavorable impact of
approximately $700 million after taxes, or $0.91 per share of GM $1-2/3 par
value common stock, due to strike-related work stoppages in the United States
and Canada, which resulted in the temporary shutdown of certain GM North
American assembly and component plants during the quarter. Work stoppages in the
United States and Canada reduced calendar-year earnings on an after-tax basis by
approximately $1.2 billion, after considering partial recovery of production
losses from the work stoppages. The fourth-quarter results in 1996 and 1995 also
include a number of special and unusual items. (See "Special Items" for
additional information.)
"Clearly our 1996 fourth-quarter and calendar-year results were impacted
by the strike-related production losses in the United States and Canada and are
not indicative of GM's potential for continued profit improvement," GM Chairman
and Chief Executive Officer John F. Smith, Jr., said. "We continue to rebuild
our strength in North America and grow our business in key international markets
throughout the world."
Smith said GM has the flexibility to continue its drive to become the
industry's low-cost competitor. "We recognize that we face significant
challenges, but we're well-positioned to follow our strategy of utilizing common
parts and processes, while implementing lean operations, to compete on a global
basis, and grow the business in all of our sectors," he said.
Significant highlights of fourth-quarter and calendar-year-1996 results
from the automotive sectors included the following:
- GM North American Operations (GM-NAO) and Delphi Automotive Systems
(Delphi) reported a combined (GM-NAO/Delphi) net loss of $124 million
in the fourth quarter of 1996, compared with net income of $603 million
in the fourth quarter of 1995. Work stoppages in the United States and
Canada resulted in an estimated reduction to GM-NAO/Delphi's
1996-fourth-quarter net income of approximately $655 million.
- GM-NAO/Delphi earned $1.2 billion during calendar year 1996, compared
with earnings of $2.4 billion during the prior year, with almost all of
the year-over-year decrease accounted for by the above-mentioned work
stoppages in the first and fourth quarters of 1996.
- GM International Operations (GMIO) reported net income of $353 million
in the fourth quarter of 1996, compared with net income of $498 million
in the prior-year period.
- GMIO's calendar-year-1996 net income totaled $1.5 billion, versus net
income of $1.6 billion in 1995.
Highlights of 1996 fourth-quarter and calendar-year results reported by
GM's major subsidiaries included the following:
- General Motors Acceptance Corporation (GMAC) reported net income of
$274 million for the fourth quarter of 1996, compared with net income
of $263 million in the fourth quarter of 1995. GMAC's
calendar-year-1996 net income totaled $1.2 billion, compared with $1.0
billion in 1995.
- 4 -
- Hughes Electronics Corporation (Hughes) reported 1996-fourth-quarter
earnings of $281 million, compared with earnings of $295 million in the
prior-year period. Excluding the approximately $45-million-estimated
impact of the work stoppages, Hughes' fourth-quarter earnings would
have been $326 million. Hughes earned a record $1.2 billion during
calendar-year 1996, compared with $1.1 billion in 1995, even after
estimated losses of approximately $75 million related to work stoppages
in the first and fourth quarters of 1996.
GM recently announced that shareholders will be asked to approve a
spin-off of Hughes' defense business and the transfer of Delco Electronics from
Hughes Electronics to GM's Delphi Automotive Systems. Subsequent to the
spin-off, Hughes' defense business would merge with Raytheon Company.
Additionally, GM's Class H common stock would be recapitalized and linked solely
to the performance of the Hughes telecommunications and space business.
As previously announced, GM completed the split-off of Electronic Data
Systems Corporation (EDS) on June 7, 1996, and accordingly, the financial
results related to EDS through the split-off date have been classified as
discontinued operations. In 1995's fourth quarter, total net income of $1.9
billion reflected income from discontinued operations of $269 million. GM's
total consolidated net income for 1996, including the results of EDS through the
split-off date, totaled $5.0 billion, or $6.06 per share, compared with $6.9
billion, or $7.21 per share, in 1995.
(See additional information in sections detailing individual automotive
sector results, "Special Items" and "Highlights.")
GM CONSOLIDATED FINANCIAL DATA (with financing & insurance operations on an
equity basis)
The corporation's pretax income from continuing operations was $240
million in the fourth quarter of 1996, compared with $1.3 billion in the fourth
quarter of 1995. Pretax income from continuing operations for the calendar year
was $4.5 billion, compared with $6.3 billion in 1995.
The income-tax benefit in the fourth quarter of 1996, which totaled $262
million, was primarily due to research and experimentation credits in the United
States, as well as certain international tax benefits, and tax benefits relating
to the resolution of certain tax contingencies at Hughes. The
fourth-quarter-1995 effective income-tax rate of 3 percent reflected the
resolution of numerous tax issues worldwide, efficient utilization of a
net-operating-loss carryback, and tax benefits associated with the mix of
foreign earnings and foreign income taxes.
The corporation's net-profit margin -- income from continuing operations
as a percent of net sales and revenues -- was 2.2 percent in the fourth quarter
of 1996, compared with 4.3 percent in the fourth quarter of 1995. The net-profit
margin for the 1996 calendar year was 3.4 percent, compared with 4.2 percent in
1995.
The corporation's cash position continued to improve during the fourth
quarter of 1996. Cash and marketable securities totaled $17.0 billion at Dec.
31, 1996, compared with $10.2 billion at Dec. 31, 1995, and $14.5 billion at
Sept. 30, 1996.
- 5 -
"We're extremely pleased that the year-end cash balance is well in excess
of our $13.0-billion target, and that it increased nearly $2.5 billion since
September 30, after considering the effects of strike-related work stoppages,"
Smith said. "This shows that we can generate significant cash -- even at lower
production levels - and this was a major consideration in allowing us to proceed
with the dividend increase and stock buy-back program that was announced
yesterday," Smith said.
Fully consolidated net sales and revenues in the fourth quarter of 1996
totaled $40.9 billion compared with $41.4 billion in the same period last year.
Net sales and revenues for the 1996 calendar year totaled $164.1 billion -- a
2.4-percent increase from 1995, when net sales and revenues totaled $160.3
billion.
During the fourth quarter of 1996, GM dealers delivered 1,923,000 cars and
trucks worldwide, which resulted in a 15.5-percent worldwide market share,
compared to 1995's market share of 17.3 percent. In calendar-year 1996,
deliveries totaled 8,381,000 units, maintaining GM's position as the number-one
vehicle producer worldwide.
Following is a summary of financial performance for GM's automotive
business sectors (see "Highlights" for additional details):
GM NORTH AMERICAN OPERATIONS/DELPHI AUTOMOTIVE SYSTEMS (GM-NAO/DELPHI)
GM North American Operations, including Delphi Automotive Systems,
reported a net loss of $124 million in the fourth quarter of 1996 compared with
net income of $603 million in the fourth quarter of 1995. Net income for 1996
was $1.2 billion compared with net income of $2.4 billion in 1995.
The fourth-quarter financial results included an estimated unfavorable
impact of approximately $655 million after taxes in connection with the
strike-related work stoppages in the United States and Canada, in addition to
several items which are detailed in the "Special Items" section of this report.
GM-NAO/Delphi reported a pretax loss of $418 million in the fourth quarter
of 1996, compared with pretax income of $656 million in the prior-year period,
with the 1996 work stoppages accounting for almost all of the variance. (See
"Highlights" for additional details.)
GM-NAO/Delphi's net-loss margin was 0.5 percent in the fourth quarter of
1996, compared with a net-profit margin of 2.3 percent in the prior-year period.
For calendar year 1996, GM-NAO/Delphi's net-profit margin was 1.2 percent,
compared with 2.4 percent in 1995.
"Obviously, we took a financial hit from the strike-related production
losses, in both the first and fourth quarters of 1996," Smith said. "Our results
were also affected by restrained availability of certain product offerings due
to the significant number of new-vehicle launches, along with the predictable
increase in advertising and other consumer-influence expenses related to these
launches. We're continuing our efforts to keep driving costs down, increasing
the flexibility of operations, and improving the quality of our products and
services."
- 6 -
"Production start-ups in 1996 for our new models ran according to plan and
were much better than those in 1994 and 1995. We have more new cars and trucks
going into the market now than any time in the last 15 years," Smith explained.
"In fact, about 20 percent of the 1997 production will be for the new models
launched in 1996. Those new cars and trucks are key to our plans to aggressively
increase market share in the United States this year."
GM vehicle deliveries in the United States in the fourth quarter of 1996
totaled 1,085,000 units, which resulted in a 30.2-percent share of the U.S.
vehicle market, compared with a 33.5-percent market share in the fourth quarter
of 1995. For calendar-year 1996, U.S. deliveries of GM vehicles totaled
4,793,000 units for a market share of 31.0 percent compared with a 32.4-percent
market share in 1995. (See additional information in "Highlights.")
"Delphi Automotive Systems continues to aggressively grow its non-GM-NAO
vehicle-group business throughout the world and increased its percentage of
non-GM-NAO vehicle-group sales from 30 percent in 1995 to more than 35 percent
in 1996," Smith said.
"Delphi continues to move into new markets to serve its customers
worldwide with a strong focus on improving cost, quality and sales growth,"
Smith said. "In 1996, Delphi undertook 20 new business initiatives, including 10
joint ventures, four all-new operations, and six acquisitions."
GM INTERNATIONAL OPERATIONS (GMIO)
GM International Operations reported net income of $353 million for the
fourth quarter of 1996, compared with net income of $498 million in the same
period in 1995.
GMIO reported pretax income of $319 million in the fourth quarter of 1996,
which represented an increase of $209 million compared with pretax income of
$110 million in 1995.
Net income for calendar-year-1996 totaled $1.5 billion compared with
1995 net income of $1.6 billion. Pretax income of $1.8 billion for
calendar-year 1996 exceeded 1995's results, which totaled $1.6 billion. (See
"Highlights" for additional details.)
"The higher pretax income in the fourth quarter of 1996 was primarily the
result of increased volume, and favorable year-over-year currency exchange,"
Smith said. "Net income reflects a substantially larger tax benefit in 1995
versus 1996, and unusually high equity income in 1995 from nonrecurring asset
sales at Isuzu."
The net-profit margin for GMIO was 4.0 percent in the fourth quarter of
1996, compared with 5.9 percent in the prior-year period. GMIO's net-profit
margin was 4.3 percent for calendar year 1996, compared with 5.1 percent in
1995.
GM's automotive operations in Europe reported net income of $99 million in
the fourth quarter of 1996, compared with net income of $248 million in the same
period of 1995. For calendar-year 1996, GM's European automotive operations
reported net income of $778 million, compared with $796 million in 1995.
- 7 -
For the remainder of GM's International Operations, which include the
Latin American and Asian and Pacific Operations, net income totaled $254 million
in the fourth quarter of 1996, compared with $250 million in the prior-year
period. Net income for calendar-year 1996 totaled $754 million, compared with
net income of $848 million in 1995.
Volume totaling 714,000 unit deliveries in the fourth quarter of 1996
resulted in a 8.5-percent market share, compared with fourth-quarter-1995
deliveries of 719,000 units and a market share of 9.3 percent. GMIO's vehicle
deliveries for calendar year 1996 totaled 3,118,000 units and resulted in a
9.0-percent market share compared with a 9.1-percent market share in 1995.
Deliveries during 1996 hit an all-time record, marking the first time GMIO
annual deliveries exceeded three million units.
"GM is targeting the fastest-growing world markets with cars and trucks
that meet the needs of specific consumer segments, while leveraging common parts
and processes," Smith said. "We have embarked on the largest international
production-capacity expansion in our history with major new manufacturing and
assembly facilities planned for key international regions. Those facilities will
provide us with significant opportunities to leverage GM's global resources and
enhance our competitive position throughout the world."
During 1996, GM started production at its assembly facility in Russia and
continued work on new manufacturing and assembly plants in Argentina, China,
Poland and Thailand.
SPECIAL ITEMS
During the 1996 fourth quarter, GM-NAO/Delphi recorded a net favorable
plant-closings-reserve adjustment of $318 million pretax ($197 million after
taxes, or $0.26 per share). This was primarily caused by revised estimates of
costs to be incurred in connection with plant closings, in light of changes in
redeployment and other assumptions, including those resulting from the 1996
settlements with the United Auto Workers Union (UAW) and Canadian Auto Workers
Union.
The 1996 GM-NAO/Delphi fourth-quarter results also reflect a pretax loss
of $253 million ($157 million after taxes, or $0.21 per share) in connection
with the sale of four Delphi component facilities, located in Flint and Livonia,
Mich., and Oshawa and Windsor, Canada, and GM-NAO's Oshawa die-management
business to Peregrine Inc.
The 1996-fourth-quarter results of GM-NAO/Delphi also include a
$105-million pretax gain ($65 million after taxes, or $0.09 per share) on the
sale of GM's preferred-stock interest in Avis Inc. to HFS Inc.
Retiree-benefit increases associated with the new UAW labor agreement
include lump-sum payments that resulted in a charge against GM-NAO/Delphi's
1996-fourth-quarter pretax earnings of approximately $270 million ($167 million
after taxes, or $0.22 per share).
Prior-year unusual items included the reversal of interest-expense
accruals related to certain prior-year tax issues, which had a favorable impact
on 1995-fourth-quarter earnings of $401 million pretax ($249 million after
taxes, or $0.33 per share). Additionally, temporary layoffs at certain
GM-NAO/Delphi facilities resulted in 1995-fourth-quarter pretax costs totaling
- 8 -
$183 million ($114 million after taxes, or $0.15 per share). The corporation
also increased certain reserves at GM-NAO/Delphi by $163 million pretax ($101
million after taxes, or $0.13 per share) during the 1995 fourth quarter to
reflect the significant decline in interest rates during 1995.
PROFIT SHARING
As a result of the profits generated in 1996 by GM's operations in the
United States, profit-sharing payments will be made in 1997 to approximately
282,000 of GM's represented employees in the United States. Each full-time
represented employee who worked the entire year should receive approximately
$300. This is the third consecutive year that profit-sharing payments have been
made to U.S. employees. Profits generated in 1995 resulted in a profit-sharing
payout of approximately $800. In addition, approximately 76,000 eligible
salaried employees will receive 1996 incentive payments under a salaried
program, with payments generally increasing with the level of pay and
responsibility.
- 9 -
HIGHLIGHTS - Q4 Financial Results
(Dollars in Millions Except
Per Share Amounts) Three Months Ended
December 31,
----------------------
1996 1995
--------- ----------
Net sales and revenues
Manufactured products $35,925 $36,849
Financial services 3,191 3,069
Other income 1,832 1,433
-------- --------
Total $40,948 $41,351
======== ========
Gross profit margin percentage(1) 13.6% 14.2%
.....................................................
Income from continuing
operations before
income taxes(1) $240 $1,267
Effective income (benefit)
tax rate(1,2) (109.2%) 2.7%
.....................................................
Income from continuing
operations(3) $786 $1,597
Income from discontinued
operations - 269
-------- --------
Consolidated net income $786 $1,866
======== ========
Net profit margin on income
from continuing operations(1) 2.2% 4.3%
.....................................................
Earnings attributable to common stocks
$1-2/3 par value(4) $696 $1,500
Class E $ - $244
Class H $ 70 $71
.....................................................
Earnings per share attributable to common stocks
$1-2/3 par value(3,4) $0.92 $1.98
Class E $ - $0.56
Class H $0.70 $0.74
.....................................................
Cash dividends per share of common stocks
$1-2/3 par value $0.40 $0.30
Class E $ - $0.13
Class H $0.24 $0.23
.....................................................
Book value per share of common stocks
December 31,
----------------------
1996 1995
--------- ----------
$1-2/3 par value $27.95 $24.37
Class E $ - $ 3.11
Class H $13.97 $12.20
....................................................
See footnotes beginning on page 14.
continues
- 10 -
HIGHLIGHTS - Q4 Sector Financial Results
(Dollars in Millions)
Three Months Ended
December 31,
----------------------
1996 1995
--------- ----------
Major business sector results GM-NAO/Delphi:
Net sales and revenues $24,387 $26,220
====== ======
Pre-tax (loss) income $(418) $656
Income tax (benefit) expense (279) 81
Equity income 15 28
------ ------
GM-NAO/Delphi net (loss)
income $(124) $603
------ ------
GMIO:
Net sales and revenues $8,893 $8,408
====== ======
Pre-tax income $319 $110
Income tax benefit (37) (319)
Equity (loss) income (3) 69
------ ------
GMIO net income (5) $353 $498
------ ------
GMAC net income $274 $263
Hughes earnings 281 295
Other(6) 2 (62)
------ ------
Income from continuing
operations 786 1,597
Income from discontinued
operations - 269
------ ------
Consolidated net income $786 $1,866
====== ======
.....................................................
See footnotes beginning on page 14.
continues
- 11 -
HIGHLIGHTS - Q4 Special and Unusual Items
(Dollars in Millions Except
Per Share Amounts)
Three Months Ended
December 31,
----------------------
1996 1995
--------- ----------
Special and Unusual Items Analysis
Income from continuing
operations $786 $1,597
------ ------
Special and unusual items
Work stoppages(7) (700) -
Plant closings reserve
adjustment(8) 197 -
Sale of facilities(9) (157) -
Sale of preferred stock
interest(10) 65 -
Retiree lump sum payments(11) (167) -
Interest on taxes(12) - 249
Costs associated with
temporary layoffs (13) - (114)
Discount rate change (14) - (101)
------ ------
Total special and unusual
items (762) 34
------ ------
Income from continuing operations
-excluding special and
unusual items $1,548 $1,563
====== ======
.....................................................
$1-2/3 EPS Impact of Special and Unusual Items
Attributable to continuing
operations(4) $0.92 $1.95
------ ------
Special and unusual items
Work stoppages(7) (0.91) -
Plant closings reserve
adjustment(8) 0.26 -
Sale of facilities(9) (0.21) -
Sale of preferred stock
interest(10) 0.09 -
Retiree lump sum payments(11) (0.22) -
Interest on taxes (12) - 0.33
Costs associated with
temporary layoffs (13) - (0.15)
Discount rate change (14) - (0.13)
----- ------
Total special and unusual
items (0.99) 0.05
----- ------
Attributable to continuing
operations - excluding
special and unusual items $1.91 $1.90
===== ======
...................................................
See footnotes beginning on page 14.
continues
- 12 -
HIGHLIGHTS - Q4 Operating Information
Three Months Ended
December 31,
----------------------
1996 1995
--------- ----------
Worldwide wholesale sales (units in 000s)
United States: Cars 581 763
Trucks 504 515
------ ------
Total United States 1,085 1,278
Canada and Mexico 122 84
------ ------
Total North America 1,207 1,362
International 779 775
------ ------
Total Worldwide 1,986 2,137
====== ======
....................................................
Unit deliveries (units in 000s)
United States
Chevrolet - Cars 188 261
- Trucks 370 359
Pontiac 129 142
GMC 118 114
Buick 93 115
Oldsmobile 75 89
Saturn 62 69
Cadillac 45 51
Other 5 5
------ ------
Total United States 1,085 1,205
Canada and Mexico 124 95
------ ------
Total North America 1,209 1,300
------ ------
International
Europe 393 384
Latin America, Africa and
the Middle East (LAAMO) 187 174
Asian and Pacific 134 161
------ ------
Total International 714 719
------ ------
Total Worldwide 1,923 2,019
====== ======
....................................................
Market share
United States
Cars 31.2% 36.1%
Trucks 29.1% 30.3%
Total 30.2% 33.5%
Western Europe 14.8% 15.6%
Latin America 17.3% 19.3%
Asian and Pacific 4.0% 4.0%
....................................................
U.S. retail/fleet mix
% Fleet sales - Cars 22.3% 25.3%
% Fleet sales - Trucks 11.3% 10.9%
Total vehicles 17.2% 19.5%
....................................................
Days supply of inventory -- U.S.
Gross landed stock
Cars 93 103
Trucks 97 81
....................................................
Capacity utilization %
U.S. and Canada (2-shift rated) 79.9% 85.2%
....................................................
Retail incentives (15) ($ per unit)
GM-NAO $739 $518
GM Europe $580 $326
....................................................
See footnotes beginning on page 14.
continues
- 13 -
HIGHLIGHTS - Q4 Operating Information
(Dollars in Millions Except
Per Share Amounts)
Three Months Ended
December 31,
----------------------
1996 1995
--------- ----------
Depreciation and Amortization(1)
Depreciation $1,084 $874
Amortization of special tools 579 804
Amortization of intangible
assets 47 58
----- -----
$1,710 $1,736
===== =====
....................................................
Worldwide employment at December 31 (in 000s)
GM-NAO/Delphi 424 434
GMIO 111 103
GMAC 17 17
Hughes 86 84
Other 9 11
--- ---
Employees associated with
continuing operations 647 649
=== ===
....................................................
Worldwide payrolls - continuing operations
($ millions) $7,344 $7,512
....................................................
(1) Calculated with financing and insurance operations on an
equity basis.
(2) The income-tax benefit in the fourth quarter of 1996, which totaled
$262 million, was primarily due to research and experimentation credits
in the U.S., as well as certain international tax benefits and tax
benefits relating to the favorable resolution of certain tax
contingencies at Hughes. The fourth quarter 1995 effective income tax
rate reflected the resolution of numerous tax issues worldwide,
efficient utilization of a net-operating loss carryback, and tax
benefits associated with the mix of foreign earnings and foreign income
taxes.
(3) See Special and Unusual Items Analysis on page 12.
(4) $1-2/3 par value includes: Three Months Ended
December 31,
----------------------
1996 1995
--------- ----------
Earnings attributable to:
Continuing operations $696 $1,475
Discontinued operations - 25
------- -------
Net earnings $696 $1,500
======= =======
Earnings per share attributable to:
Continuing operations $0.92 $1.95
Discontinued operations - 0.03
------- -------
Net earnings per share $0.92 $1.98
======= =======
(5) GMIO includes: Three Months Ended
December 31,
----------------------
1996 1995
--------- ---------
GM Europe $99 $248
Other GMIO $254 $250
(6) Includes Allison Transmission Division, GM Locomotive Group, and
purchase accounting adjustments, as well as certain tax and foreign
exchange items not allocated to any one business sector.
continues
- 14 -
HIGHLIGHTS - Q4 Operating Information - Concluded
(7) Fourth-quarter 1996 results include an unfavorable impact
of approximately $700 million after taxes, or $0.91 per
share, due to strike-related work stoppages in the U.S. and
Canada.
(8) During the 1996 fourth quarter, GM-NAO/Delphi recorded a net favorable
plant-closings reserve adjustment of $197 million after taxes, or $0.26
per share, which primarily resulted from revised estimates of costs to
be incurred in connection with plant closings, in light of changes in
redeployment and other assumptions, including those relating to 1996
settlements with the UAW and CAW.
(9) Fourth quarter 1996 results for GM-NAO/Delphi reflect a loss of $157
million after taxes, or $0.21 per share, in connection with the sale of
four Delphi component facilities, located in Flint and Livonia, Mich.,
and Oshawa and Windsor, Canada, and GM-NAO's Oshawa die-management
business.
(10)GM-NAO/Delphi's 1996 fourth quarter results also include a gain of $65
million after taxes, or $0.09 per share, on the sale of GM's
preferred-stock interest in Avis, Inc.
(11)Retiree benefit increases associated with the new UAW labor agreement
include lump-sum payments that resulted in a charge against
GM-NAO/Delphi's 1996-fourth-quarter earnings of approximately $167
million after taxes, or $0.22 per share.
(12)The reversal of interest expense accruals related to certain prior year
tax issues had a favorable impact on 1995 fourth quarter earnings of
$249 million after tax, or $0.33 per share.
(13)During the fourth quarter of 1995, temporary layoffs at certain
GM-NAO/Delphi facilities resulted in costs totaling $114 million
after-tax, or $0.15 per share.
(14)Certain reserves at GM-NAO/Delphi were increased by $101 million after
taxes, or $0.13 per share, during the 1995 fourth quarter to reflect
the significant decline in interest rates during 1995.
(15)Amounts reported for 1995 have been restated to reflect the methodology
used to calculate Retail Incentives for the 1996 period.
- 15 -
HIGHLIGHTS - 12 Months Financial Results
(Dollars in Millions Except
Per Share Amounts) Twelve Months Ended
December 31,
----------------------
1996 1995
--------- ----------
Net sales and revenues
Manufactured products $145,341 $143,666
Financial services 12,674 11,664
Other income 6,054 4,942
--------- ---------
Total $164,069 $160,272
========= =========
Gross profit margin percentage(1) 14.8% 15.6%
.....................................................
Income from continuing
operations before
income taxes(1) $4,469 $6,284
Effective income tax rate(1) 19.8% 24.9%
.....................................................
Income from continuing
operations before cumulative
effect of accounting change(2) $4,953 $6,033
Income from discontinued
operations 10 900
Cumulative effect of
accounting change(3) - (52)
------- -------
Consolidated net income $4,963 $6,881
======= =======
Net profit margin on
continuing operations(1) 3.4% 4.2%
.....................................................
Earnings attributable to common stocks
$1-2/3 par value(4) $4,584 $5,457
Class E $15 $795
Class H $283 $265
.....................................................
Earnings per share attributable to common stocks
$1-2/3 par value(2,4) $6.06 $7.21
Class E $0.04 $1.96
Class H $2.88 $2.77
.....................................................
Cash dividends per share of common stocks
$1-2/3 par value $1.60 $1.10
Class E $0.30 $0.52
Class H $0.96 $0.92
.....................................................
See footnotes beginning on page 20.
continues
- 16 -
HIGHLIGHTS - 12 Months Sector Financial Results
(Dollars in Millions) Twelve Months Ended
December 31,
----------------------
1996 1995
--------- ----------
Major business sector results GM-NAO/Delphi:
Net sales and revenues $101,002 $103,253
======= =======
Pre-tax income $1,206 $3,346
Income tax expense 44 962
Equity income 84 64
Cum. effect of acct. change - (52)
------- -------
GM-NAO/Delphi net income $1,246 $2,396
------- -------
GMIO:
Net sales and revenues $35,251 $32,112
======= =======
Pre-tax income $1,787 $1,601
Income tax expense 307 162
Equity income 52 205
------- -------
GMIO net income (5) $1,532 $1,644
------- -------
GMAC net income $1,240 $1,031
Hughes earnings 1,151 1,108
Other (6) (216) (198)
------- -------
Income before discontinued
operations $4,953 $5,981
Income from discontinued
operations 10 900
------- -------
Consolidated net income $4,963 $6,881
======= =======
See footnotes beginning on page 20.
continues
- 17 -
HIGHLIGHTS - 12 Months Special and Unusual Items
(Dollars in Millions Except
Per Share Amounts)
Twelve Months Ended
December 31,
----------------------
1996 1995
--------- ----------
Special and Unusual Items Analysis
Income from continuing
operations $4,953 $6,033
------ ------
Special and unusual items
Work stoppages(7) (1,201) -
Plant closings reserve
adjustments(8) 450 -
Sale of facilities(9) (157) -
Sale of 2.5% of DIRECTV(R)(10) 72 -
Sale of preferred stock
interest(11) 65 -
Retiree lump sum payments(12) (167) -
Interest on taxes(13) - 249
Sale of NCRS (14) - 163
Costs associated with
temporary layoffs (15) - (114)
Discount rate change (16) - (101)
Preference stock buyback (17) - (14)
------ ------
Total special and unusual
items (938) 183
------ ------
Income from continuing operations
-excluding special and
unusual items $5,891 $5,850
====== ======
.....................................................
$1-2/3 EPS Impact of Special and Unusual Items
Attributable to continuing
operations(4) $6.07 $7.14
----- -----
Special and unusual items
Work stoppages(7) (1.56) -
Plant closings reserve
adjustments(8) 0.60 -
Sale of facilities(9) (0.21) -
Sale of 2.5% of DIRECTV (10) 0.07 -
Sale of preferred stock
interest(11) 0.09 -
Retiree lump sum payments(12) (0.22) -
Interest on taxes (13) - 0.33
Sale of NCRS (14) - 0.22
Costs associated with
temporary layoffs (15) - (0.15)
Discount rate change (16) - (0.13)
Preference stock buyback (17) - (0.22)
----- ------
Total special and unusual
items (1.23) 0.05
----- ------
Attributable to continuing
operations - excluding
special and unusual items $7.30 $7.09
===== =====
.....................................................
See footnotes beginning on page 20.
continues
- 18
HIGHLIGHTS - 12 Months Operating Information
Twelve Months Ended
December 31,
----------------------
1996 1995
--------- ----------
Worldwide wholesale sales (units in 000s)
United States: Cars 2,647 3,112
Trucks 2,026 2,030
------ ------
Total United States 4,673 5,142
Canada and Mexico 479 418
------ ------
Total North America 5,152 5,560
International 3,111 3,007
------ ------
Total Worldwide 8,263 8,567
====== ======
....................................................
Unit deliveries (units in 000s)
United States
Chevrolet - Cars 1,046 1,054
- Trucks 1,497 1,429
Pontiac 551 599
GMC 464 462
Buick 427 472
Oldsmobile 331 387
Saturn 279 286
Cadillac 170 180
Other 28 26
------ ------
Total United States 4,793 4,895
Canada and Mexico 470 433
------ ------
Total North America 5,263 5,328
------ ------
International
Europe 1,798 1,725
Latin America, Africa and
the Middle East (LAAMO) 691 648
Asian and Pacific 629 619
------ ------
Total International 3,118 2,992
------ ------
Total Worldwide 8,381 8,320
====== ======
....................................................
Market Share
United States
Cars 32.7% 34.2%
Trucks 29.0% 29.9%
Total 31.0% 32.4%
Western Europe 11.7% 12.2%
Latin America 19.2% 17.9%
Asian and Pacific 4.6% 4.7%
....................................................
U.S. retail/fleet mix
% Fleet sales - Cars 25.0% 23.3%
% Fleet sales - Trucks 10.9% 12.4%
Total vehicles 19.1% 19.0%
....................................................
Capacity utilization %
U.S. and Canada (2-shift rated) 82.4% 86.9%
....................................................
Retail incentives (18) ($ per unit)
GM-NAO $700 $522
GM Europe $529 $505
....................................................
See footnotes beginning on page 20.
continues
- 19 -
HIGHLIGHTS - 12 Months Operating Information - Concluded
(Dollars in Millions Except
Per Share Amounts)
Twelve Months Ended
December 31,
----------------------
1996 1995
---------- ----------
....................................................
Depreciation and Amortization(1)
Depreciation $4,139 $3,404
Amortization of special tools 2,856 3,212
Amortization of intangible
assets 150 171
------- ------
$7,145 $6,787
======= ======
....................................................
Worldwide payrolls -
continuing operations
($ millions) $29,807 $29,840
....................................................
Footnotes
(1) Calculated with financing and insurance operations on an
equity basis.
(2) See Special and Unusual Items Analysis on page 18.
(3) In November 1995, the Corporation adopted, retroactive to
January 1, 1995, the consensus of EITF Issue No. 95-1. The
unfavorable effect of adopting EITF Issue No. 95-1 on
GM-NAO/Delphi was $52 million after-tax or $0.07 per share
of $1-2/3 par value common stock.
(4) $1-2/3 par value includes: Twelve Months Ended
December 31,
----------------------
1996 1995
--------- ----------
Earnings attributable to:
Continuing operations $4,589 $5,404
Discontinued operations (5) 105
Cumulative effect of
accounting change - (52)
------- -------
Net earnings $4,584 $5,457
======= =======
Earnings per share attributable to:
Continuing operations $6.07 $7.14
Discontinued operations (0.01) 0.14
Cumulative effect of
accounting change - (0.07)
------- -------
Net earnings per share $6.06 $7.21
======= =======
(5) GMIO Includes: Twelve Months Ended
December 31,
-------------------
1996 1995
---- ----
GM Europe $778 $796
Other GMIO $754 $848
(6) Includes Allison Transmission Division, GM Locomotive Group, and
purchase accounting adjustments, as well as certain tax and foreign
exchange items not allocated to any one business sector.
(7) Work stoppages in the United States and Canada reduced calendar-year
earnings on an after-tax basis by approximately $1.2 billion, or $1.56
per share, after considering partial recovery of production losses from
the work stoppages.
continues
- 20 -
HIGHLIGHTS - 12 Months Operating Information - Concluded
(8) Plant closings reserve adjustments in 1996 increased calendar year
earnings by $450 million after taxes, or $0.60 per share. The
adjustments included $253 million after taxes, or $0.34 per share,
associated with GM's decision to utilize its Wilmington, DE facility
for the assembly of a new generation Saturn vehicle, and $197 million,
or $0.26 per share, which primarily resulted from revised estimates of
costs to be incurred in connection with plant closings, in light of
changes in redeployment and other assumptions, including those
resulting from the 1996 settlements with the UAW and CAW.
(9) Calendar year 1996 results for GM-NAO/Delphi reflect a loss of $157
million after taxes, or $0.21 per share, in connection with the sale of
four Delphi component facilities, located in Flint and Livonia, Mich.,
and Oshawa and Windsor, Canada, and GM-NAO's Oshawa die-management
business.
(10)The 1996 earnings include a $72 million after tax gain, or $0.07 per
share, on the sale of 2.5% of DIRECTV to AT&T.
(11)GM-NAO/Delphi's 1996 results also include a gain of $65 million after
taxes, or $0.09 per share, on the sale of GM's preferred-stock interest
in Avis, Inc.
(12)Retiree benefit increases associated with the new UAW labor agreement
include lump-sum payments that resulted in a charge against
GM-NAO/Delphi's 1996- earnings of approximately $167 million after
taxes, or $0.22 per share.
(13)The reversal of interest expense accruals related to certain prior year
tax issues had a favorable impact on 1995 earnings of $249 million
after taxes, or $0.33 per share.
(14)The sale of the net assets of NCRS during 1995 had a favorable impact
of $163 million after taxes, or $0.22 per share.
(15)During 1995, temporary layoffs at certain GM-NAO/Delphi facilities
resulted in costs totaling $114 million after taxes, or $0.15 per
share.
(16)Certain reserves at GM-NAO/Delphi were increased in 1995 by $101
million after taxes, or $0.13 per share, to reflect the significant
decline in interest rates.
(17)The buyback of Series B, D and G preference shares resulted in an
unfavorable impact of $14 million after taxes, or $0.22 per share.
(18)Amounts reported for 1995 have been restated to reflect the methodology
used to calculate Retail Incentives for 1996.
- 21 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Years Ended
December 31,
1996 1995 1994
---- ---- ----
(Dollars in Millions)
Net sales and revenues
Manufactured products $145,341 $143,666 $134,760
Financial services 12,674 11,664 9,419
Other income 6,054 4,942 4,320
-------- -------- --------
Total net sales and revenues 164,069 160,272 148,499
------- ------- -------
Costs and expenses
Cost of sales and other operating charges,
exclusive of items listed below 123,922 121,300 113,585
Selling, general, and administrative
expenses 14,580 12,550 11,319
Depreciation and amortization expenses 11,840 11,213 9,645
Interest expense 5,695 5,182 5,392
Plant closings reserve adjustments (727) - -
Other deductions 2,083 1,678 1,460
-------- -------- --------
Total costs and expenses 157,393 151,923 141,401
------- ------- -------
Income from continuing operations before
income taxes 6,676 8,349 7,098
Income taxes 1,723 2,316 2,232
-------- -------- --------
Income from continuing operations before cumulative
effect of accounting changes 4,953 6,033 4,866
Income from discontinued operations 10 900 793
Cumulative effect of accounting changes - (52) (758)
----------- ---------- --------
Net income 4,963 6,881 4,901
Preference shares tender offer premium - 153 -
Dividends on preference stocks 81 211 321
---------- ---------- ----------
Income on common stocks $ 4,882 $ 6,517 $ 4,580
======== ========= =========
- 22 -
<PAGE>
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME - Concluded
Years Ended December 31,
1996 1995 1994
---- ---- ----
(Dollars In Millions
Except Per Share Amounts)
Earnings attributable to common stocks
$1-2/3 par value from continuing operations before
cumulative effect of accounting changes $4,589 $5,404 $4,296
Income (loss) from discontinued operations (5) 105 349
Cumulative effect of accounting changes - (52) (751)
------- ------- -------
Net earnings attributable to $1-2/3 par
value $4,584 $5,457 $3,894
===== ===== =====
Income from discontinued operations attributable
to Class E $15 $795 $444
== === ===
Class H before cumulative effect of
accounting change $283 $265 $249
Cumulative effect of accounting change - - (7)
------ -------- -----
Net earnings attributable to Class H $283 $265 $242
=== === ===
Average number of shares of common
stocks outstanding (in millions)
$1-2/3 par value 756 750 741
Class E 470 405 260
Class H 98 96 92
Earnings per share attributable
to common stocks
$1-2/3 par value from continuing operations before
cumulative effect of accounting changes $6.07 $7.14 $5.74
Income (loss) from discontinued operations (0.01) 0.14 0.46
Cumulative effect of accounting changes - (0.07) (1.05)
------ ---- ----
Net earnings attributable to $1-2/3 par
value $6.06 $7.21 $5.15
==== ==== ====
Income from discontinued operations attributable
to Class E $0.04 $1.96 $1.71
==== ==== ====
Class H before cumulative effect of
accounting change $2.88 $2.77 $2.70
Cumulative effect of accounting change - - (0.08)
------ ------- -----
Net earnings attributable to Class H $2.88 $2.77 $2.62
==== ==== ====
- 23 -
<PAGE>
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31,
ASSETS 1996 1995
---- ----
(Dollars in Millions)
Cash and cash equivalents $14,063 $10,495
Other marketable securities 8,199 5,523
-------- --------
Total cash and marketable securities 22,262 16,018
Finance receivables - net 57,550 59,806
Accounts and notes receivable (less allowances) 6,557 6,979
Inventories (less allowances) 11,898 11,348
Net assets of discontinued operations - 5,055
Contracts in process (less advances and progress
payments of $1,010 and $1,327) 2,507 2,469
Deferred income taxes 19,510 19,720
Equipment on operating leases (less accumulated
depreciation of $7,661 and $7,225) 30,112 27,702
Property
Real estate, plants and equipment 69,770 67,415
Less accumulated depreciation (41,298) (41,017)
------- -------
Net real estate, plants and equipment 28,472 26,398
Special tools - net 9,032 8,171
-------- --------
Total property 37,504 34,569
Intangible assets - net 12,691 10,273
Other assets 21,551 19,724
-------- --------
Total assets $222,142 $213,663
======= =======
- 24 -
<PAGE>
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - Concluded
December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
---- ----
(Dollars in Millions
Except Per Share Amounts)
Liabilities
Accounts payable (principally trade) $14,221 $12,685
Notes and loans payable 85,300 81,222
Deferred income taxes 3,207 3,108
Postretirement benefits other than pensions 43,190 41,596
Pensions 7,599
6,691
Other liabilities and deferred credits 45,207 45,015
-------- --------
Total liabilities 198,724 190,317
Stockholders' equity
Preference stocks 1 1
Common stocks
$1-2/3 par value (issued, 756,619,625 and
753,008,273 shares) 1,261 1,255
Class E (issued, 442,812,166 shares in 1995) - 44
Class H (issued, 100,075,000 and 97,152,014 shares) 10 10
Capital surplus (principally additional paid-in capital)19,189 18,871
Retained earnings 6,137 7,185
Subtotal 26,598 27,366
Minimum pension liability adjustment (3,490) (4,736)
Accumulated foreign currency translation adjustments (113) 223
Net unrealized gains on investments in certain debt and
equity securities 423 493
---------- ----------
Total stockholders' equity 23,418 23,346
-------- --------
Total liabilities and stockholders' equity $222,142 $213,663
- 25 -
<PAGE>
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Years Ended December 31,
1996 1995 1994
(Dollars in Millions)
Cash flows from operating activities
Income from continuing operations before
cumulative effect of accounting changes $4,953 $6,033 $4,866
Adjustments to reconcile income from
continuing operations before cumulative
effect of accounting changes to net cash
provided by operating activities
Depreciation and amortization expenses 11,840 11,213 9,645
Provision for ongoing postretirement
benefits other than pensions, net of
cash payments 1,575 1,684 2,253
Pension expense, net of cash
contributions 801 (2,932) (5,018)
Plant closings reserve adjustments (727) - -
Pre-tax (gain) loss on sale of business
units 253 116 (18)
Originations and purchases of mortgage
loans (19,455) (12,086) (10,136)
Proceeds on sales of mortgage loans 18,157 11,613 10,719
Provision for financing losses 669 449 177
Change in other operating assets and liabilities
Accounts receivable (178) (331) (1,991)
Inventories (757) (1,214) (1,656)
Accounts payable 1,530 980 1,267
Deferred taxes and income taxes payable(562) 1,892 968
Other liabilities 227 31 2,573
Other 394 (899) (2,523)
------- -------- ------
Net cash provided by operating activities 18,720 16,549 11,126
------ ------ ------
Cash flows from investing activities
Expenditures for property (9,949) (8,786) (6,023)
Special Inter-Company Payment from EDS 500 - -
Investments in other marketable securities
- acquisitions (27,431) (17,794) (14,236)
Investments in other marketable securities
- liquidations 24,966 17,254 13,583
Finance receivables - acquisitions (155,477) (163,033) (156,580)
Finance receivables - liquidations 120,253 134,265 136,151
Proceeds from sales of finance receivables 36,657 25,389 20,248
Operating leases - acquisitions (18,494) (15,125) (14,938)
Operating leases - liquidations 10,507 6,268 4,698
Other 778 (495) 888
------- -------- --------
Net cash used in investing activities (17,690) (22,057) (16,209)
------ ------ ------
Cash flows from financing activities
Net increase in loans payable 660 6,227 3,900
Increase in long-term debt 15,933 11,242 12,351
Decrease in long-term debt (12,810) (9,580) (14,111)
Proceeds from the sale of minority
interest in DIRECTV(R) 138 - -
Repurchases of common and preference stocks (251) (1,681) -
Proceeds from issuing common stocks 480 453 1,017
Cash dividends paid to stockholders (1,530) (1,328) (1,112)
------- ------- -------
Net cash provided by financing activities 2,620 5,333 2,045
------- ------- -------
Effect of exchange rate changes on cash
and cash equivalents (185) 146 (14)
Net cash provided by (used in) continuing
operations 3,465 (29) (3,052)
Net cash provided by (used in) discontinued
operations 103 193 (24)
------- -------- --------
Net increase (decrease) in cash and cash
equivalents 3,568 164 (3,076)
Cash and cash equivalents at beginning
of the year 10,495 10,331 13,407
Cash and cash equivalents at end of the year$14,063 $10,495 $10,331
====== ====== ======
- 26 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Results of Operations With Financing and Insurance Operations on an Equity
Basis
To facilitate analysis, the following financial statements present
financial data for the Corporation's manufacturing, wholesale marketing, defense
and electronics operations with the financing and insurance operations
(primarily GMAC) reflected on an equity basis. This is the same basis and format
used in years prior to the Corporation's adoption of SFAS No. 94, Consolidation
of All Majority-Owned Subsidiaries.
Consolidated Statement of Income With Financing and Insurance Operations on
an Equity Basis
Years Ended December 31,
1996 1995 1994
---- ---- ----
(Dollars in Millions)
Net sales and revenues(1) $145,427 $143,754 $134,888
------- ------- -------
Costs and expenses
Cost of sales and other operating charges,
exclusive of items listed below 123,966 121,312 113,655
Selling, general and administrative
expenses 11,827 10,195 9,385
Depreciation and amortization expenses 7,145 6,787 6,343
Plant closings reserve adjustments (727) - -
------- ------- -------
Total costs and expenses 142,211 138,294 129,383
------- ------- -------
Operating income 3,216 5,460 5,505
Other income less income deductions 2,112 1,168 1,213
Interest expense 859 344 1,265
------- -------- -------
Income from continuing operations before
income taxes 4,469 6,284 5,453
Income taxes 885 1,563 1,719
------- ------- -------
Income from continuing operations before earnings
of nonconsolidated affiliates and cumulative
effect of accounting changes 3,584 4,721 3,734
Earnings of nonconsolidated affiliates 1,369 1,312 1,125
------- ------- -------
Income from continuing operations before
cumulative effective of accounting changes 4,953 6,033 4,859
Income from discontinued operations 10 900 793
Cumulative effect of accounting changes (2) - (52) (751)
-------- ------- -------
Net income $ 4,963 $ 6,881 $ 4,901
======= ======= =======
Net profit margin (3) 3.4% 4.2% 3.6%
(1) Includes sales to nonconsolidated affiliates of $954 million, $855
million and $856 million in 1996, 1995 and 1994, respectively.
(2) Effective January 1, 1995, GM adopted EITF Issue No. 95-1 and effective
January 1, 1994, GM adopted SFAS No. 112. Not included in 1994 is the
unfavorable cumulative effect on GMAC earnings of $7 million of adopting
SFAS No. 112 because the cumulative effect is included in earnings of
nonconsolidated affiliates.
(3) Net profit margin represents income from continuing operations before
cumulative effect of accounting change as a percent of net sales and
revenues.
- 27 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet With Financing and Insurance Operations on an
Equity Basis
December 31,
1996 1995
ASSETS (Dollars in Millions)
Cash and cash equivalents $13,320 $ 9,047
Other marketable securities 3,642 1,194
------- --------
Total cash and marketable securities 16,962 10,241
Accounts and notes receivable (less allowances)
Trade 4,909 5,595
Nonconsolidated affiliates 927 2,103
Inventories (less allowances) 11,898 11,348
Net assets of discontinued operations - 5,055
Contracts in process - net 2,507 2,469
Net equipment on operating leases 3,918 4,393
Deferred income taxes and other 3,141 5,527
------- -------
Total current assets 44,262 46,731
Equity in net assets of nonconsolidated affiliates 9,855 9,983
Deferred income taxes 20,075 17,375
Other investments and miscellaneous assets 11,391 12,011
Property - net 37,156 34,438
Intangible assets - net 12,523 10,106
------- -------
Total assets $135,262 $130,644
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $11,527 $ 10,624
Loans payable 1,214 2,187
Income taxes payable - 101
Accrued liabilities and customer deposits 29,822 28,093
------ -------
Total current liabilities 42,563 41,005
Long-term debt 5,192 4,114
Capitalized leases 198 166
Postretirement benefits other than pensions 40,578 39,001
Pensions 5,966
5,594
Other liabilities and deferred income taxes 15,742 15,908
Deferred credits 1,605 1,510
Stockholders' equity 23,418 23,346
------ -------
Total liabilities and stockholders' equity $135,262 $130,644
======= =======
- 28 -
<PAGE>
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Consolidated Statement of Cash Flows With Financing and Insurance Operations on
an Equity Basis
Years Ended December 31,
1996 1995 1994
---- ---- ----
(Dollars in Millions)
Cash flows from operating activities
Income from continuing operations before
cumulative effect of accounting changes $4,953 $6,033 $4,859
Adjustments to reconcile income from continuing
operations before cumulative effect of accounting
changes to net cash provided by operating activities
Depreciation and amortization expenses 7,145 6,787 6,343
Provision for ongoing postretirement benefits
other than pensions, net of cash
payments 1,549 1,659 2,205
Pension expense, net of cash contributions 801 (2,932) (5,018)
Plant closings reserve adjustments (727) - -
Pre-tax (gain) loss on sale of business
units 253 116 (18)
Change in other operating assets and liabilities
Accounts receivable 1,196 (137) (838)
Inventories (757) (1,214) (1,656)
Accounts payable 898 (288) 1,267
Deferred taxes and income taxes payable (303) 1,077 406
Other liabilities 460 576 1,662
Other 1,447 (575) (1,555)
------- ------- -----
Net cash provided by operating activities 16,915 11,102 7,657
------ ------ ------
Cash flows from investing activities
Expenditures for property (9,606) (8,653) (5,890)
Special Inter-Company Payment from EDS (Note 2) 500 - -
Investments in other marketable securities
- acquisitions (14,340) (5,581) (2,511)
Investments in other marketable securities
- liquidations 11,891 5,496 1,914
Operating leases - acquisitions (4,090) (1,090) (1,851)
Operating leases - liquidations 3,819 506 1,128
Other 334 (71) 737
-------- ------- ------
Net cash used in investing activities (11,492) (9,393) (6,473)
------ ----- -----
Cash flows from financing activities
Net (decrease) increase in loans payable (971) 1,072 (528)
Increase in long-term debt 1,937 646 152
Decrease in long-term debt (871) (1,597) (786)
Proceeds from sale of minority interest in
DIRECTV 138 - -
Net increase (decrease) in payable to GMAC - 311 (143)
Repurchases of common and preference stocks (251) (1,681) -
Proceeds from issuing common stocks 480 453 1,017
Cash dividends paid to stockholders (1,530) (1,328) (1,112)
----- ----- -----
Net cash used in financing activities (1,068) (2,124) (1,400)
----- ----- -----
Effect of exchange rate changes on cash and
cash equivalents (185) 146 (16)
----- ----- -----
Net cash provided by (used in) continuing
operations 4,170 (269) (232)
Net cash provided by (used in) discontinued
operations 103 193 (24)
------ ------ -----
Net increase (decrease) in cash and
cash equivalents 4,273 (76) (256)
Cash and cash equivalents at beginning
of the year 9,047 9,123 9,379
Cash and cash equivalents at end of the year $13,320 $9,047 $9,123
====== ===== =====
- 29 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Results of Operations With Financing and Insurance Operations on an Equity
Basis
Consolidated Statement of Income With Financing and Insurance Operations on an
Equity Basis
Three Months Ended
December 31,
1996 1995
(Dollars in Millions)
Net sales and revenues(1) $35,966 $36,891
------ ------
Costs and expenses
Cost of sales and other operating charges,
exclusive of items listed below 31,088 31,651
Selling, general and administrative expenses 3,574 2,921
Depreciation and amortization expenses 1,710 1,736
Plant closings reserve adjustment ( 318) -
------ ------
Total costs and expenses 36,054 36,308
------ ------
Operating (loss) income (88) 583
Other income less income deductions 523 444
Interest expense 195 ( 240)
------- -------
Income from continuing operations before income taxes 240 1,267
Income tax (benefit) expense ( 262) 34
------- --------
Income from continuing operations before earnings
of nonconsolidated affiliates 502 1,233
Earnings of nonconsolidated affiliates 284 364
------- -------
Income from continuing operations 786 1,597
Income from discontinued operations - 269
------- -------
Net income $ 786 $ 1,866
======= ======
Net profit margin (2) 2.2% 4.3%
(1) Includes sales to nonconsolidated affiliates of $216 million and $284
million for the fourth quarter of 1996 and 1995, respectively.
(2) Net profit margin represents income from continuing operations as a percent
of net sales and revenues.
* * * * * *
- 30 -
HUGHES ELECTRONICS NEWS RELEASE
January 27, 1997 -- Hughes Electronics Corporation (Hughes) today reported
record full year earnings, before the effects of purchase accounting adjustments
related to General Motors' (GM) 1985 acquisition of Hughes Aircraft Company, of
$1,151.2 million, or $2.88 per share of GM Class H common stock. Fourth quarter
earnings, on the same basis, were $280.9 million, or $0.70 per share.
Revenues for 1996, also a record for Hughes, were $15,917.9 million, a
7.8% increase over the $14,771.8 million reported in 1995. Revenues for the
fourth quarter were $4,296.1 million, a 6.7% increase from the $4,028.1 million
reported in the same period in 1995.
Operating profit (excluding GM purchase accounting adjustments) in 1996
was $1,594.3 million, a 4.4% decrease from the operating profit of $1,667.3
million reported in 1995. The operating profit margin on the same basis was
10.1% for the year compared with 11.3% in 1995. Fourth quarter operating profit
(excluding GM purchase accounting adjustments) decreased 11.7% to $369.4
million, compared with $418.5 million reported in last year's fourth quarter.
The operating profit margin on the same basis was 8.6% for the fourth quarter
compared with 10.5% in 1995.
C. Michael Armstrong, Hughes Chairman and Chief Executive Officer, said
that "the record 1996 revenues and earnings reflect Hughes' improved
competitiveness and commitment to growth. The 1996 revenue increase was fueled
by a 33% growth rate in Telecommunications and Space segment revenues primarily
due to continued DIRECTV(R) subscriber growth as well as increased sales of
commercial satellites, and cellular communications and DSS(R) equipment."
Further, he stated that the Aerospace and Defense Systems segment also
contributed to the increase in 1996 revenues primarily due to the December 1995
acquisition of Hughes Defense Communications (formerly Magnavox Electronic
Systems Company) and higher information systems and services revenues. Mr.
Armstrong attributed the full year and fourth quarter operating profit decline
principally to lower GM production volumes related to the United Auto Workers
(UAW) and Canadian Auto Workers (CAW) strikes and continued price reductions in
the Automotive Electronics segment.
Earnings in 1996 increased 3.9% from the $1,107.8 million reported in
1995. Earnings per share increased 4.0% to $2.88 per share from $2.77 per share
in 1995. The 1996 earnings included a $71.6 million after-tax gain recognized in
the first quarter from the sale of a 2.5% equity interest in DIRECTV to AT&T and
the impact from a decrease in the effective tax rate. Earnings for the fourth
quarter of 1996 decreased 4.6% from the $294.4 million reported in the fourth
quarter of 1995. Earnings per share decreased 5.4% to $0.70 per share from $0.74
per share in the fourth quarter of 1995. The Automotive Electronics segment
accounted for the majority of the decline in fourth quarter earnings primarily
due to lower GM production volumes related to the UAW and CAW strikes, and
continued price reductions which more than offset the favorable impact of the
lower effective tax rate.
On January 16, 1997, GM and Hughes announced a series of transactions
designed to address strategic challenges and unlock shareholder value in the
three Hughes business segments. The transactions include the tax-free spin-off
of the Hughes defense business to holders of GM's $1-2/3 par value and Class H
common stock, followed by the tax-free merger of that business with Raytheon
Company. At the same time, Delco Electronics will be transferred from Hughes to
GM's Delphi Automotive Systems unit. Finally, GM's Class H
- 31 -
common stock will be recapitalized into a tracking stock linked to the
telecommunications and space business of Hughes. The transactions, which are
expected to be submitted to stockholders for approval in mid-1997, had no impact
on 1996 financial results.
Segment Financial Review: Fourth Quarter and Calendar Year
TELECOMMUNICATIONS AND SPACE
Revenues for the quarter were $1,224.8 million, an increase of 30.9% over
revenues of $936.0 million reported in the prior year's fourth quarter. The
growth was principally due to continued DIRECTV subscriber growth and increased
sales of cellular communications and DSS equipment, commercial satellites, and
Galaxy satellite transponders. DIRECTV subscribers at December 1996 month-end
totaled 2.3 million.
Operating profit in the fourth quarter increased 43.8% to $66.3 million
compared with $46.1 million reported in the same period in 1995. This
improvement was primarily the result of reduced DIRECTV operating losses in the
United States, reduced development costs related to the geostationary satellite
mobile telephony product line, and profits on higher sales of cellular
communications equipment, commercial satellites and Galaxy transponders. These
increases were partially offset by operating losses related to the start of
DIRECTV service in Latin America. As a result, fourth quarter operating profit
margin increased to 5.4% from 5.0% in 1995.
Revenues in 1996 increased 33.1% to $4,114.9 million from $3,092.7 million
last year. The revenue growth reflects continued expansion of the DIRECTV
subscriber base and increased sales of commercial satellites, cellular
communications and DSS equipment, and Galaxy transponders.
For the full year, operating profit was $259.8 million, a 37.3% increase
over the $189.2 million reported in 1995. The increase was principally due to
the aforementioned revenue growth and reduced mobile telephony satellite
development costs offset, in part, by operating losses related to the start of
DIRECTV service in Latin America. As a result, full year operating profit margin
increased to 6.5% from 6.2% in 1995.
AUTOMOTIVE ELECTRONICS
Revenues for the quarter were $1,249.8 million, a decrease of 11.2% from
revenues of $1,407.0 million for the same period in 1995. The reduced revenues
reflect an 11.7% decrease in GM vehicles produced in the United States and
Canada (excluding joint ventures) primarily related to the UAW and CAW strikes
and a 1.3% decline in Hughes-supplied electronic content in these vehicles (from
$914 per vehicle to $902 per vehicle), partially offset by an 8.9% increase in
international and non-GM sales (from $248 million to $270 million).
Operating profit in the fourth quarter was $92.0 million, a 57.0% decline
from $213.9 million reported for the comparable period in 1995. The decline was
primarily due to reduced production volumes and continued price reductions
resulting from competitive pricing in connection with GM's global sourcing
initiative. As a result, fourth quarter operating profit margin was 7.4%
compared with 15.4% last year.
- 32 -
For the full year, revenues were $5,350.8 million, a 3.8% decrease from
the $5,561.3 million reported in 1995. This decline was principally due to a
6.4% reduction in GM vehicles produced in the United States and Canada
(excluding joint ventures) primarily related to the aforementioned strikes
offset, in part, by a 2.0% increase in Hughes-supplied electronic content in
these vehicles (from $888 per vehicle to $906 per vehicle) and a 20.1% increase
in international and non-GM sales (from $841 million to $1,010 million).
The 1996 operating profit was $654.0 million compared with $869.0 million
in 1995, a decrease of 24.7%. The decline was mostly due to reduced production
volumes, continued price reductions resulting from competitive pricing in
connection with GM's global sourcing initiative, and the impact from continued
investment in international expansion. As a result, the 1996 operating profit
margin declined to 12.3% compared with last year's 15.9%.
AEROSPACE AND DEFENSE SYSTEMS
Fourth quarter 1996 revenues were $1,790.4 million, an 11.1% increase over
revenues of $1,610.9 million reported in the same period in 1995. The growth was
primarily due to additional revenues resulting from the December 1995
acquisition of Hughes Defense Communications and the build-up of newer programs
including Desktop V, Wide Area Augmentation System and Land Warrior.
Operating profit for the period increased 8.4% to $208.3 million
compared with $192.2 million for the fourth quarter of 1995. The operating
profit margin in the period declined to 11.6% from 12.1% in last year's fourth
quarter primarily due to a continued shift from production programs to
engineering and development programs, and growth in information systems and
services revenues.
Revenues for 1996 increased 6.6% to $6,338.4 million from $5,945.4
million in 1995. The increase reflects the Hughes Defense Communications
acquisition, higher information systems and services revenues, and build-up of
newer programs including Desktop V, Wide Area Augmentation System and Land
Warrior. These increases were partially offset by lower production rates on
several missile programs including Stinger, Standard and Sparrow.
Operating profit in 1996 was $694.7 million, a 1.0% increase from
the $688.0 million reported in 1995. The operating profit margin for the year
declined to 11.0% from 11.7% in 1995 primarily due to a continued shift from
production programs to engineering and development programs, and growth in
information systems and services revenues.
- 33 -
CONSOLIDATED STATEMENT OF INCOME AND
AVAILABLE SEPARATE CONSOLIDATED NET INCOME
(Dollars in Millions Except Per Share Amounts)
Years Ended
Fourth Quarter December 31,
------------------ ------------------
1996 1995 1996 1995
------------------ ------------------
Revenues
Net sales
Outside customers $3,100.6 $2,678.5 $10,661.5 $9,528.8
General Motors and affiliates 1,187.2 1,292.2 5,082.6 5,185.5
Other income - net 8.3 57.4 173.8 57.5
------- ------- -------- --------
Total Revenues 4,296.1 4,028.1 15,917.9 14,771.8
------- ------- -------- --------
Costs and Expenses
Cost of sales and other operating charges,
exclusive of items listed below 3,302.3 3,023.8 12,083.9 11,325.1
Selling, general, and administrative
expenses 463.7 396.3 1,505.6 1,234.2
Depreciation and amortization 152.4 132.1 560.3 487.7
Amortization of GM purchase accounting
adjustments related to Hughes
Aircraft Company 30.6 30.5 122.3 123.4
Interest expense - net (0.5) 1.7 11.2 7.5
------- ------- -------- --------
Total Costs and Expenses 3,948.5 3,584.4 14,283.3 13,177.9
------- ------- -------- --------
Income before Income Taxes 347.6 443.7 1,634.6 1,593.9
Income taxes 97.3 179.8 605.7 645.6
------- ------- ------- -------
Net Income 250.3 263.9 1,028.9 948.3
Adjustments to exclude the effect of
GM purchase accounting adjustments
related to Hughes Aircraft Company 30.6 30.5 122.3 159.5
------- ------- ------- -------
Earnings Used for Computation of Available
Separate Consolidated Net Income $280.9 $294.4 $1,151.2 $1,107.8
======= ======= ======= ========
Available Separate Consolidated
Net Income $69.8 $71.1 $283.3 $264.6
======= ======= ======= ========
Net Earnings Attributable to General Motors
Class H Common Stock on a Per Share
Basis $0.70 $0.74 $2.88 $2.77
==== ==== ==== ====
- 34 -
<PAGE>
CONSOLIDATED BALANCE SHEET
(Dollars in Millions)
December 31, December 31,
ASSETS 1996 1995
------------ ------------
Current Assets
Cash and cash equivalents $1,161.3 $1,139.5
Accounts and notes receivable
Trade receivables 1,200.6 1,235.6
General Motors and affiliates 113.4 146.7
Contracts in process 2,507.1 2,469.2
Inventories 1,528.5 1,225.5
Prepaid expenses, including deferred income taxes 568.1 594.3
-------- --------
Total Current Assets 7,079.0 6,810.8
Property-Net 2,886.6 2,739.2
Telecommunications and Other Equipment-Net 1,133.5 1,175.1
Intangible Assets-Net 3,466.0 3,573.7
Investments and Other Assets, Including Deferred
Income Taxes 1,915.0 1,675.6
-------- --------
Total Assets $16,480.1 $15,974.4
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable
Outside $896.4 $748.7
General Motors and affiliates 27.5 52.2
Advances on contracts 868.9 838.3
Notes and loans payable 248.1 432.5
Income taxes payable 132.9 190.8
Accrued liabilities 2,025.8 2,046.3
-------- --------
Total Current Liabilities 4,199.6 4,308.8
-------- --------
Long-Term Debt and Capitalized Leases 34.5 258.8
-------- --------
Postretirement Benefits Other Than Pensions 1,658.9 1,610.6
-------- --------
Other Liabilities, Deferred Income Taxes,
and Deferred Credits 1,407.2 1,270.5
-------- --------
Total Stockholder's Equity 9,179.9 8,525.7
-------- --------
Total Liabilities and Stockholder's Equity $16,480.1 $15,974.4
======== ========
Certain amounts for 1995 have been reclassified to conform with 1996
classifications.
Holders of GM Class H common stock have no direct rights in the equity or assets
of Hughes, but rather have rights in the equity and assets of General Motors
(which includes 100% of the stock of Hughes).
- 35 -
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Millions)
Years Ended
December 31,
------------------
1996 1995
------------------
Cash Flows from Operating Activities
Net income $1,028.9 $948.3
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 560.3 487.7
Amortization and adjustments of GM
purchase accounting adjustments related
to Hughes Aircraft Company 122.3 159.5
Pension expense, net of cash contributions (1.3) (51.9)
Provision for postretirement benefits
other than pensions, net of cash payments 40.1 43.5
Net (gain) loss on sale of property (23.2) 6.1
Net gain on sale of investments and businesses (120.3) (12.9)
Change in deferred income taxes and other 130.9 (150.1)
Change in other operating assets and liabilities
Accounts receivable 86.7 (147.3)
Contracts in process (34.1) (186.2)
Inventories (302.8) (160.1)
Prepaid expenses (30.3) (3.0)
Accounts payable 122.0 (92.0)
Income taxes (57.9) 160.4
Accrued and other liabilities (13.9) 257.0
Other (308.0) (272.8)
------- -------
Net Cash Provided by Operating Activities 1,199.4 986.2
------- -------
Cash Flows from Investing Activities
Investment in companies, net of cash acquired (28.7) (309.5)
Expenditures for property and special tools (652.3) (545.7)
Increase in telecommunications and other equipment (191.2) (198.9)
Proceeds from sale and leaseback of satellite transponders
with General Motors Acceptance Corporation 252.0 -
Proceeds from disposal of property 96.2 50.6
Proceeds from sale of investments and businesses - 127.2
Decrease (increase) in notes receivable 1.6 (13.6)
----- -----
Net Cash Used in Investing Activities (522.4) (889.9)
----- -----
Cash Flows from Financing Activities
Net decrease in notes and loans payable (393.2) (80.9)
Increase in long-term debt 13.5 28.0
Decrease in long-term debt (29.0) (37.7)
Proceeds from sale of minority interest in subsidiary 137.5 -
Cash dividends paid to General Motors (384.0) (368.0)
----- -----
Net Cash Used in Financing Activities (655.2) (458.6)
----- -----
Net increase (decrease) in cash and cash equivalents 21.8 (362.3)
Cash and cash equivalents at beginning of the year 1,139.5 1,501.8
------- -------
Cash and cash equivalents at end of the year $1,161.3 $1,139.5
======= =======
- 36 -
<PAGE>
PRO FORMA SELECTED SEGMENT DATA*
(Dollars in Millions)
Years Ended
Fourth Quarter December 31
------------------ -------------------
1996 1995 1996 1995
------------------ -------------------
TELECOMMUNICATIONS AND SPACE
Revenues
Amount $1,224.8 $936.0 $4,114.9 $3,092.7
As a percentage of Hughes Revenues 28.5% 23.2% 25.9% 20.9%
Net Sales $1,227.0 $930.2 $3,992.2 $3,075.8
Operating Profit(1) $66.3 $46.1 $259.8 $189.2
Operating Profit Margin(2) 5.4% 5.0% 6.5% 6.2%
Depreciation and Amortization(3) $53.0 $52.5 $194.8 $178.3
Capital Expenditures(4) $104.9 $190.3 $449.8 $436.5
AUTOMOTIVE ELECTRONICS
Revenues
Amount $1,249.8 $1,407.0 $5,350.8 $5,561.3
As a percentage of Hughes Revenues 29.1% 34.9% 33.6% 37.6%
Net Sales $1,243.3 $1,389.1 $5,311.3 $5,479.7
Operating Profit(1) $92.0 $213.9 $654.0 $869.0
Operating Profit Margin(2) 7.4% 15.4% 12.3% 15.9%
Depreciation and Amortization $48.4 $35.7 $195.9 $151.4
Capital Expenditures $40.1 $82.3 $196.0 $264.7
AEROSPACE AND DEFENSE SYSTEMS
Revenues
Amount $1,790.4 $1,610.9 $6,338.4 $5,945.4
As a percentage of Hughes Revenues 41.7% 40.0% 39.8% 40.2%
Net Sales $1,788.0 $1,586.2 $6,331.5 $5,899.7
Operating Profit(1) $208.3 $192.2 $694.7 $688.0
Operating Profit Margin(2) 11.6% 12.1% 11.0% 11.7%
Depreciation and Amortization(3) $47.7 $36.2 $157.6 $132.0
Capital Expenditures $65.4 $36.1 $171.1 $109.8
CORPORATE AND OTHER
Operating Profit (Loss)(1) $2.8 $(33.7) $(14.2) $(78.9)
* The Consolidated Financial Statements reflect the application of purchase
accounting adjustments related to GM's acquisition of Hughes Aircraft
Company. However, as provided in the General Motors Certificate of
Incorporation, the earnings attributable to GM Class H common stock for
purposes of determining the amount available for the payment of dividends
on GM Class H common stock specifically excludes such adjustments. In
order to provide additional analytical data, the above unaudited pro
forma selected segment data, which excludes the purchase accounting
adjustments related to GM's acquisition of Hughes Aircraft Company, is
presented.
(1) Net Sales less Total Costs and Expenses other than Interest Expense.
(2) Operating Profit as a percentage of Net Sales.
(3) Excludes amortization arising from purchase accounting adjustments
related to GM's acquisition of Hughes Aircraft Company amounting to $5.1
million in each of the fourth quarters and $21.0 million in each of the
years for the Telecommunications and Space segment and $25.3 million in each
of the fourth quarters and $100.9 million in each of the years for the
Aerospace and Defense Systems segment.
(4) Includes expenditures related to telecommunications and other equipment
amounting to $45.3 million, $127.0 million, $187.9 million, and $274.6
million, respectively.
* * * * * *
- 37 -
GMAC NEWS RELEASE
General Motors Acceptance Corporation (GMAC) -- reported 1996 consolidated
net income of $1,240 million, up 20% from the $1,031 million earned in 1995,
GMAC President John R. Rines announced today. These earnings were the highest
since 1991.
In 1996, net income from financing operations, including results from the
GMAC Mortgage Group, totaled $1,048 million, up 21% from the $868 million earned
in 1995. Earnings benefited from a favorable funding mix, continued growth in
retail leasing, and higher earnings from the mortgage operations.
Motors Insurance Corporation (MIC), GMAC's insurance subsidiary, generated
net income of $192 million in 1996, up 18% from the $163 million earned in 1995.
The increase is principally due to improved performance from commercial
dealership and extended warranty coverages and higher capital gains.
Fourth quarter 1996 results totaled $274 million, up 4% from the $263
million earned in the final quarter of 1995. For the quarter, net income from
financing operations, including the mortgage group's results, totaled $206
million, up from $201 million earned a year ago. MIC's net income for the fourth
quarter 1996 totaled $68 million, which is a record fourth-quarter return and up
from $62 million earned a year ago.
* * * * * *
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit 3(ii) By-Laws, reflecting amendments to Section 3.1, 3.2, and 3.5.
Section Amendment
------- ---------
3.1
Committees of the Board Amended to revise the name of the
of Directors "Finance Committee" to the "Investment
Funds Committee"
3.2
Election and Vacancies Amended to revise the name of the
"Finance Committee" to the "Investment
Funds Committee"
3.5
Investment Fund Committee Amended to revise the name of the
of Directors "Finance Committee" to the "Investment
Funds Committee"
- 38 -
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
--------------------------
(Registrant)
Date February 3, 1997
-----------------
By
s/Wallace W. Creek
-------------------------------
(Wallace W. Creek, Comptroller)
- 39 -
l:\secfiles\8_k\1996\by-law.doc 29
EXHIBIT 3(ii)
G E N E R A L M O T O R S C O R P O R A T I O N
----------------------
BY-LAWS
As Amended to
December 2, 1996
<PAGE>
GENERAL MOTORS CORPORATION
BY-LAWS
INDEX
Page
ARTICLE I -- MEETINGS OF STOCKHOLDERS
1.1. Annual.........................................................1
1.2. Special........................................................1
1.3. Notice of Meetings.............................................1
1.4. List of Stockholders Entitled to Vote..........................1
1.5. Quorum.........................................................2
1.6. Organization...................................................2
1.7. Voting; Proxies................................................2
1.8. Fixing Date for Determination of Stockholders of Record........2
1.9. Adjournments...................................................3
1.10. Judges.........................................................3
ARTICLE II -- BOARD OF DIRECTORS
2.1. Responsibility and Number......................................3
2.2. Election; Resignation; Vacancies...............................3
2.3. Regular Meetings...............................................4
2.4. Special Meetings...............................................4
2.5. Quorum; Vote Required for Action ..............................4
2.6. Organization...................................................4
2.7. Transactions with Corporation..................................5
2.8. Ratification...................................................5
2.9. Informal Action by Directors...................................5
2.10. Telephonic Meetings Permitted..................................6
2.11. Notice of Stockholder Nomination and Stockholder Business......6
2.12. Independent Directors..........................................7
ARTICLE III -- COMMITTEES
3.1. Committees of the Board of Directors...........................8
3.2. Election and Vacancies.........................................8
3.3. Procedure; Quorum..............................................8
3.4. Executive Committee............................................9
3.5. Investment Funds Committee.....................................9
3.6. Audit Committee................................................9
3.7. Executive Compensation Committee...............................9
i
<PAGE>
Page
3.8. Public Policy Committee........................................10
3.9. Committee on Director Affairs..................................10
3.10. Capital Stock Committee.......................................11
ARTICLE IV -- OFFICERS
4.1. Elected Officers ..............................................11
4.2. Chief Executive Officer........................................11
4.3. President......................................................12
4.4. Treasurer......................................................12
4.5. Secretary......................................................12
4.6. Comptroller....................................................12
4.7. General Counsel................................................12
4.8. General Auditor................................................12
4.9. Chief Tax Officer..............................................13
4.10. Subordinate Officers...........................................13
4.11. Resignation, Removal, Suspension and Vacancies.................13
ARTICLE V -- INDEMNIFICATION
5.1. Right to Indemnification of Directors and Officers ............14
5.2. Advancement of Expenses of Directors and Officers..............14
5.3. Claims by Officers or Directors................................14
5.4. Indemnification of Employees...................................15
5.5. Advancement of Expenses of Employees...........................15
5.6. Non-Exclusivity of Rights......................................15
5.7. Other Indemnification..........................................15
5.8. Insurance......................................................15
5.9. Amendment or Repeal............................................16
ARTICLE VI -- MISCELLANEOUS
6.1. Offices........................................................16
6.2. Stock Certificates.............................................16
6.3. Seal...........................................................16
6.4. Dividends on Preferred Stock...................................17
6.5. Fiscal Year....................................................17
6.6. Annual Report..................................................17
6.7. Notice.........................................................17
6.8. Waiver of Notice...............................................17
6.9. Voting of Stocks Owned by the Corporation......................17
6.10. Form of Records................................................18
6.11. Amendment of By-Laws...........................................18
6.12. Anti-Greenmail.................................................18
6.13. Gender Pronouns................................................19
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Page
DEFINITION OF CERTAIN TERMS USED IN AND GUIDELINES
FOR THE APPLICATION OF BY-LAW 2.12 OF GENERAL MOTORS
CORPORATION..........................................................i
SECURITIES ACT AND EXCHANGE ACT PARAGRAPH 2 OF INSTRUCTIONS TO PARAGRAPH (b) OF
ITEM 404 OF REGULATION S-K AS IN EFFECT ON JANUARY 7, 1991 (REFERRED TO IN
PARAGRAPH (i) OF GUIDELINES FOR APPLICATION OF BY-LAW 2.12 OF GENERAL MOTORS
CORPORATION).........................................................iv
DEFINITION OF CERTAIN TERMS USED IN BY-LAW 6.12......................v
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GENERAL MOTORS CORPORATION
BY-LAWS
ARTICLE I
MEETINGS OF STOCKHOLDERS
1.1. Annual.
The annual meeting of stockholders for the election of directors, ratification
or rejection of the selection of auditors and the transaction of such other
business as may properly be brought before the meeting shall be held on the
third Friday following the first Monday in May in each year, or on such other
date and at such place and time as the chairman of the board or the board of
directors shall designate.
1.2. Special.
Special meetings of stockholders may be called by the board of directors or the
chairman of the board of directors at such place, date and time and for such
purpose or purposes as shall be set forth in the notice of such meeting.
1.3. Notice of Meetings.
Written notice of each meeting of stockholders shall be given by the chairman
of the board and/or the secretary in compliance with the provisions of
Delaware law.
1.4. List of Stockholders Entitled to Vote.
The secretary shall prepare, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof and may be inspected by any stockholder who is
present.
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1.5. Quorum.
At each meeting of stockholders, except where otherwise provided by law or the
certificate of incorporation or these by-laws, the holders of one-third of the
voting power of the outstanding shares of stock entitled to vote at the meeting,
present in person or by proxy, shall constitute a quorum. In the absence of a
quorum, the stockholders so present may, by majority vote, adjourn the meeting
from time to time in the manner provided in Section 1.9 of these by-laws until a
quorum shall attend. Shares of its own stock belonging to the corporation or to
another corporation, if a majority of the shares entitled to vote in the
election of directors of such other corporation is held, directly or indirectly,
by the corporation, shall neither be entitled to vote nor be counted for quorum
purposes; provided, however, that the foregoing shall not limit the right of the
corporation to vote stock, including but not limited to its own stock, held by
it in a fiduciary capacity.
1.6. Organization.
The chairman or, if he so designates or is absent, the chief executive officer
or, in their absence, an executive vice president or vice president designated
by the board of directors, shall preside at meetings of the stockholders. The
secretary of the corporation shall act as secretary, but in his absence the
presiding officer may appoint a secretary.
1.7. Voting; Proxies.
Each stockholder shall be entitled to vote in accordance with the number of
shares and voting powers of the voting shares held of record by him. Each
stockholder entitled to vote at a meeting of stockholders may authorize another
person or persons to act for him by proxy, but such proxy, whether revocable or
irrevocable, shall comply with the requirements of Delaware law. Voting at
meetings of stockholders, on other than the election of directors, need not be
by written ballot unless the holders of a majority of the outstanding shares of
all classes of stock entitled to vote thereon present in person or by proxy at
such meeting shall so determine. At all meetings of stockholders for the
election of directors a plurality of the voting power of the shares of stock
present in person or represented by proxy and entitled to vote shall be
sufficient. All other elections and questions shall, unless otherwise provided
by law or by the certificate of incorporation or these by-laws, be decided by
the vote of the holders of a majority of the voting power of the shares of stock
entitled to vote thereon present in person or by proxy at the meeting.
1.8. Fixing Date for Determination of Stockholders of Record.
In order that the corporation may determine the stockholders entitled: (a) to
notice of or to vote at any meeting of stockholders or any adjournment thereof;
(b) to express consent to corporate action in writing without a meeting; (c) to
receive payment of any dividend or other distribution or allotment of any
rights; or (d) to exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action, the board of
directors may fix a record date. The record date shall not precede the date upon
which the resolution fixing the record date is adopted by the board of directors
and which record date: (a) in the case of
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determination of stockholders entitled to vote at any meeting of stockholders or
adjournment thereof, shall not be more than sixty nor less than ten days before
the date of such meeting; (b) in the case of determination of stockholders
entitled to express consent to corporate action in writing without a meeting,
shall not be more than ten days from the date upon which the resolution fixing
the record date is adopted by the board of directors; and (c) in the case of any
other action, shall not be more than sixty days prior to such other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.
1.9. Adjournments.
Any meeting of stockholders, annual or special, may adjourn from time to time to
reconvene at the same or some other place, and notice need not be given of any
such adjourned meeting if the time and place thereof are announced at the
meeting at which the adjournment is taken. At the adjourned meeting the
corporation may transact any business which might have been transacted at the
original meeting. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting.
1.10. Judges.
All votes by ballot at any meeting of stockholders shall be conducted by two
judges appointed for the purpose, either by the directors or by the chairman of
the meeting. The judges shall decide upon the qualifications of voters, count
the votes and declare the result.
ARTICLE II
BOARD OF DIRECTORS
2.1. Responsibility and Number.
The business and affairs of the corporation shall be managed by or under the
direction of a board of directors. The number of directors shall be determined
from time to time by resolution of the board of directors, but the total number
of directors shall not be less than twelve or more than twenty.
2.2. Election; Resignation; Vacancies.
At each annual meeting of stockholders, the stockholders shall elect directors
each of whom shall hold office for a term commencing on the date of the annual
meeting of stockholders, or such later date as shall be determined by the board
of directors, and ending on the next annual meeting of stockholders, or until
his successor is elected and qualified. Any director may resign at any time upon
written notice to the chairman of the board or to the secretary.
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Any vacancy occurring in the board of directors for any cause may be filled by a
majority of the remaining members of the board of directors, although such
majority is less than a quorum. Each director so elected shall hold office
concurrent with the term of other directors or until his successor is elected
and qualified.
2.3. Regular Meetings.
Unless otherwise determined by resolution of the board of directors, a meeting
of the board of directors for the election of officers and the transaction of
such other business as may come before it shall be held as soon as practicable
following the annual meeting of stockholders, and other regular meetings of the
board of directors shall be held either on the first Monday of each month, and
if that be a legal holiday, then on the next Monday not a legal holiday, or such
other days as may from time to time be designated by the chairman of the board
of directors.
2.4. Special Meetings.
Special meetings of the board of directors may be called by the chairman of the
board of directors, the chief executive officer, the president or a vice
chairman, and shall be called by the secretary at the request in writing of
one-third of the directors then in office. Notice of a special meeting of the
board of directors shall be given at least twenty-four hours before the special
meeting.
2.5. Quorum; Vote Required for Action.
At all meetings of the board of directors, one-third of the whole board shall
constitute a quorum for the transaction of business. Except in cases in which
applicable law, the certificate of incorporation or these by-laws otherwise
provide, the vote of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the board of directors.
2.6. Organization.
The board of directors shall annually elect one of its members to be chairman of
the board and shall fill any vacancy in the position of chairman of the board at
such time and in such manner as the board of directors shall determine. The
chairman of the board may but need not be an officer of or employed in an
executive or any other capacity by the corporation.
The chairman of the board of directors shall preside at meetings of the board of
directors and lead the board in fulfilling its responsibilities as defined in
section 2.1 and, in particular, its responsibilities to oversee the performance
of the corporation and of the executive management of the corporation.
The board of directors may also elect one of its members as vice chairman of the
board of directors who shall have such duties and responsibilities as are
provided by these by-laws or may be directed by the board of directors, the
chairman of the board, or the chairman of the executive committee of the board
of directors.
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In the absence of the chairman of the board of directors, the vice chairman, or
in his absence, the chairman of the executive committee of the board of
directors, or in his absence, a member of the board selected by the members
present, shall preside at meetings of the board. The secretary of the
corporation shall act as secretary of the meetings of the board of directors,
but in his absence, the presiding officer may appoint a secretary for the
meeting.
2.7. Transactions with Corporation.
No contract or transaction between the corporation and one or more of its
directors, or between the corporation and any other corporation, partnership,
association, or other organization in which one or more of its directors or
officers are directors or officers, or have a financial interest, shall be void
or voidable for this reason, or solely because the director or officer is
present at or participates in the meeting of the board or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose: (1) if the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the board of directors or the committee, and the board or committee
in good faith authorizes the contract or transaction by the affirmative votes of
a majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or (2) if the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (3) if the contract or transaction is fair as to the corporation as of the
time it is authorized, approved or ratified, by the board of directors, a
committee thereof, or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the board of directors or of a committee which authorizes
the contract or transaction.
2.8. Ratification.
Any transaction questioned in any stockholders' derivative suit on the ground of
lack of authority, defective or irregular execution, adverse interest of
director, officer or stockholder, non-disclosure, miscomputation, or the
application of improper principles or practices of accounting may be ratified
before or after judgment, by the board of directors or by the stockholders in
case less than a quorum of directors are qualified; and, if so ratified, shall
have the same force and effect as if the questioned transaction had been
originally duly authorized, and said ratification shall be binding upon the
corporation and its stockholders and shall constitute a bar to any claim or
execution of any judgment in respect of such questioned transaction.
2.9. Informal Action by Directors.
Unless otherwise restricted by the certificate of incorporation or these
by-laws, any action required or permitted to be taken at any meeting of the
board of directors, or of any committee thereof, may be taken without a meeting
if all members of the board or such committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the board or committee.
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2.10. Telephonic Meetings Permitted.
Members of the board of directors, or any committee designated by the board, may
participate in a meeting of such board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this by-law shall constitute presence in person at such meeting.
2.11. Notice of Stockholder Nomination and Stockholder Business.
At a meeting of the stockholders, only such business shall be conducted as shall
have been properly brought before the meeting. Nominations for the election of
directors may be made by the board of directors or by any stockholder entitled
to vote for the election of directors. Other matters to be properly brought
before the meeting must be: (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the board of directors,
including matters covered by rule 14a-8 of the Securities and Exchange
Commission; (b) otherwise properly brought before the meeting by or at the
direction of the board of directors; or (c) otherwise properly brought before
the meeting by a stockholder.
A notice of the intent of a stockholder to make a nomination or to bring any
other matter before the meeting shall be made in writing and received by the
secretary of the corporation not more than 180 days and not less than 120 days
in advance of the annual meeting or, in the event of a special meeting of
stockholders, such notice shall be received by the secretary of the corporation
not later than the close of the fifteenth day following the day on which notice
of the meeting is first mailed to stockholders.
Every such notice by a stockholder shall set forth:
(a) the name and residence address of the stockholder of the corporation who
intends to make a nomination or bring up any other matter;
(b) a representation that the stockholder is a holder of the corporation's
voting stock and intends to appear in person or by proxy at the meeting to make
the nomination or bring up the matter specified in the notice;
(c) with respect to notice of an intent to make a nomination, a description of
all arrangements or understandings among the stockholder and each nominee and
any other person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the stockholder;
(d) with respect to notice of an intent to make a nomination, such other
information regarding each nominee proposed by such stockholder as would have
been required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had each nominee been nominated
by the board of directors of the corporation; and
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(e) with respect to notice of an intent to bring up any other matter, a
description of the matter, and any material interest of the stockholder in the
matter.
Notice of intent to make a nomination shall be accompanied by the written
consent of each nominee to serve as director of the corporation if so elected.
At the meeting of stockholders, the chairman shall declare out of order and
disregard any nomination or other matter not presented in accordance with this
section.
2.12. Independent Directors.
(a) Majority of Board's Nominees in Annual Proxy Statement for Election to Board
of Directors to be Independent. A majority of the individuals to constitute the
nominees of the board of directors for the election of whom the board will
solicit proxies from the stockholders for use at the corporation's annual
meeting shall consist of individuals who, on the date of their selection as the
nominees of the board of directors, would be Independent Directors.
(b) Directors Elected by Board of Directors. In the event the board of directors
elects directors between annual meetings of stockholders, the number of such
directors who qualify as Independent Directors on the date of their nomination
shall be such that the majority of all directors holding office immediately
thereafter shall have been Independent Directors on the date of the first of
their nomination or selection as nominees of the board of directors.
(c) Definition of Independent Director. For purposes of this by-law, the term
"Independent Director" shall mean a director who: (i) is not and has not been
employed by the corporation or its subsidiaries in an executive capacity within
the five years immediately prior to the annual meeting at which the nominees of
the board of directors will be voted upon; (ii) is not (and is not affiliated
with a company or a firm that is) a significant advisor or consultant to the
corporation or its subsidiaries; (iii) is not affiliated with a significant
customer or supplier of the corporation or its subsidiaries; (iv) does not have
significant personal services contract(s) with the corporation or its
subsidiaries; (v) is not affiliated with a tax-exempt entity that receives
significant contributions from the corporation or its subsidiaries; and (vi) is
not a spouse, parent, sibling or child of any person described by (i) through
(v).
(d) Interpretation and Application of This By-Law. The board of directors shall
have the exclusive right and power to interpret and apply the provisions of this
by-law, including, without limitation, the adoption of written definitions of
terms used in and guidelines for the application of this by-law (any such
definitions and guidelines shall be filed with the Secretary, and such
definitions and guidelines as may prevail shall be made available to any
stockholder upon written request); any such definitions or guidelines and any
other interpretation or application of the provisions of this by-law made in
good faith shall be binding and conclusive upon all holders of GM Equity
Securities, provided that, in the case of any interpretation or application of
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this by-law by the board of directors to a specific person which results in such
person being classified as an Independent Director, the board of directors shall
have determined that such person is independent of management and free from any
relationship that, in the opinion of the board of directors, would interfere
with such person's exercise of independent judgment as a board member.
ARTICLE III
COMMITTEES
3.1. Committees of the Board of Directors.
The board of directors may, by resolution passed by a majority of the whole
board, designate one or more committees, consisting of one or more of the
directors of the corporation, to be committees of the board of directors
("committees of the board"). All committees of the board may authorize the seal
of the corporation to be affixed to any papers which may require it. To the
extent provided in any resolution of the board of directors or these by-laws,
and to the extent permissible under the laws of the State of Delaware and the
certificate of incorporation, any such committee shall have and may exercise all
the powers and authority of the board of directors in the management of the
business and affairs of the corporation.
The following committees shall be standing committees of the board: the
executive committee, the investment funds committee, the audit committee, the
executive compensation committee, the public policy committee, the committee on
director affairs and the capital stock committee. The board of directors may
designate, by resolution adopted by a majority of the whole board, additional
committees of the board and may prescribe for each such committee such powers
and authority as may properly be granted to such committees in the management of
the business and affairs of the corporation.
3.2. Election and Vacancies.
The members and chairmen of each standing committee of the board shall be
elected annually by the board of directors at its first meeting after each
annual meeting of stockholders or at any other time the board of directors shall
determine. The members of other committees of the board may be elected at such
time as the board may determine. Vacancies in any committee of the board may be
filled at such time and in such manner as the board of directors shall
determine. No officer or other employee of the corporation shall be a member of
any standing committee of the board, with the exception of the investment funds
committee.
3.3. Procedure; Quorum.
Except to the extent otherwise provided in these by-laws or any resolution of
the board of directors, each committee of the board and each committee of the
corporation may fix its own rules of procedure.
The members necessary to constitute a quorum of any committee of the board or
committee of the corporation shall be one-third of the members thereof, or such
larger number as shall be set forth in the by-laws, or as shall be
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determined from time to time by resolution of the board of directors. The vote
of a majority of the members present at a meeting of a committee of the board or
committee of the corporation at which meeting a quorum is present shall be the
act of the committee unless the certificate of incorporation, the by-laws or a
resolution of the board of directors shall require the vote of a greater number.
3.4. Executive Committee.
The members of the executive committee shall be the chairman of the other
standing committees of the board of directors and the chairman of the executive
committee, who shall be a director designated by the board of directors. The
chairman of the executive committee shall not concurrently be the chairman of
any of the standing committees of the board of directors and shall not be an
officer or employee of the corporation. The chairman of the executive committee
shall be an ex officio member of each standing committee of the board of
directors. The executive committee of the board of directors shall have and may
exercise, between meetings of the board of directors, all of the powers and
authority which the board of directors may exercise in the direction and
management of the business and affairs of the corporation, except as prohibited
by the law of the State of Delaware or the certificate of incorporation.
3.5. Investment Funds Committee.
The board of directors shall select the members of the investment funds
committee and shall designate the chairman of the committee. Except for powers
hereinafter assigned to the audit committee and the executive compensation
committee, or as otherwise provided by the board of directors, the investment
funds committee shall have and may exercise the powers, authority and
responsibilities of the board of directors for the determination of the
financial policies of the corporation and the management of the financial
affairs of the corporation.
3.6. Audit Committee.
The board of directors shall select the members of the audit committee and shall
designate the chairman of the committee. The members of the audit committee
shall not be eligible to participate in any incentive compensation plan for
employees of the corporation or any of its subsidiaries. The selection by the
committee of accountants for the ensuing calendar year shall be made annually in
advance of the annual meeting of stockholders and shall be submitted to the
stockholders for ratification or rejection at such meeting. The audit committee
shall have and may exercise such powers, authority and responsibilities as are
normally incident to the functions of an audit committee or as may be determined
by the board of directors.
3.7. Executive Compensation Committee.
The board of directors shall select the members of the executive compensation
committee and shall designate the chairman of the committee. No member of the
committee shall be eligible to participate in any plan falling within the
jurisdiction of the committee. The committee shall have and may exercise the
powers and authority granted to it by any incentive compensation plan for
9
employees of the corporation or any of its subsidiaries, and such other powers,
authority and responsibilities as may be determined by the board of directors.
The committee shall determine the compensation of: (a) employees of the
corporation who are directors of the corporation; and (b) after receiving and
considering the recommendation of the chief executive officer and the president
of the corporation, all other employees of the corporation who are officers of
the corporation or who occupy such other positions as may be designated by the
committee.
Where compensation is payable to an employee of any subsidiary and such employee
is also a director or officer of the corporation or one of its subsidiaries, or
where such employee occupies such other position as may be designated by the
committee and such compensation is determined by or on behalf of such
subsidiary, the amount so determined shall first be submitted to the committee
for its review. No such determination shall be effective if it would result in
compensation which, in the aggregate or with respect to any one or more of such
employees, would exceed amounts or rates established or approved by the
committee.
Where any employee benefit or incentive compensation plan affects employees of
the corporation or its subsidiaries and the compensation of such employees is
determined or subject to review by the committee, such plan shall first be
submitted to the committee for its review. Any such plan or amendment or
modification shall be made effective with respect to such employees only if and
to the extent approved by the committee.
3.8. Public Policy Committee.
The board of directors shall select the members of the public policy committee,
and shall designate the chairman of the committee. The committee shall, upon its
own initiative or otherwise, inquire into all phases of the corporation's
business activities that relate to matters of public policy. The committee may
make recommendations to the board of directors to assist it in the formulation
and adoption of basic policies calculated to promote the best interests of the
corporation and the community. The public policy committee shall have and may
exercise such other powers, authority and responsibilities as may be determined
by the board of directors.
3.9. Committee on Director Affairs.
The board of directors shall select the members of the committee on director
affairs, and shall designate the chairman of the committee. The committee shall
be responsible for matters related to service on the board of directors of the
corporation, and associated issues of corporate governance. The committee from
time to time shall conduct studies of the size and composition of the board of
directors. Prior to each annual meeting of stockholders, the committee shall
recommend to the board the individuals to constitute the nominees of the board
of directors, the election of whom the board will solicit proxies. The committee
shall review the qualifications of individuals for consideration as director
candidates and shall recommend to the board, for its consideration, the names of
individuals for election by the board. In
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addition, the committee shall from time to time conduct studies and make
recommendations to the board regarding compensation of directors. The committee
shall have and may exercise such other powers, authority and responsibilities as
may be determined by the board of directors.
3.10. Capital Stock Committee.
The board of directors shall select the members of the capital stock committee
and shall designate the chairman of the committee. The committee shall be
responsible for reviewing the policies, programs and practices of the
corporation relating to: (a) the business and financial relationships between
the corporation or any of its units with Hughes Electronics Corporation; (b)
dividends in respect of, disclosures to stockholders and the public concerning,
and transactions by the corporation or any of its subsidiaries in, shares of
Class H Common Stock; and (c) any matters arising in connection therewith, all
to the extent the committee may deem appropriate, and to recommend such changes
in such policies, programs and practices as the committee may deem appropriate.
In performing this function, the committee's role is not to make decisions
concerning matters referred to its attention, but rather to oversee the process
by which decisions concerning such matters are made. The committee shall have
and may exercise such other powers, authority and responsibilities as may be
determined by the board of directors.
ARTICLE IV
OFFICERS
4.1. Elected Officers.
The officers of the corporation shall be elected by the board of directors.
There shall be a chief executive officer, a president, one or more executive
vice presidents, one or more vice presidents, a secretary, a treasurer, a
comptroller, a general counsel, a general auditor and a chief tax officer. The
chief executive officer and the president shall be members of the board of
directors and shall have the other powers, authority and responsibilities
provided by these by-laws. The officers, other than the chief executive officer
and the president, shall each have, in addition to the powers, authority and
responsibilities of those officers otherwise provided by the by-laws, such
powers, authority and responsibilities as the board of directors or the chief
executive officer may determine. The board of directors may also elect persons
to hold such other offices as the board of directors shall determine, including
one or more vice chairmen of the board. A person may hold any number of offices.
Elected officers shall hold their offices at the pleasure of the board of
directors, or until their earlier resignation.
4.2. Chief Executive Officer.
The chief executive officer shall have the general executive responsibility for
the conduct of the business and affairs of the corporation. If the chairman so
designates or is absent, the chief executive officer shall preside at meetings
of the stockholders. He shall exercise such other powers, authority and
responsibilities as the board of directors may determine.
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In the absence of or during the physical disability of the chief executive
officer, the board of directors shall designate an officer who shall have and
exercise the powers, authority and responsibilities of the chief executive
officer.
4.3. President.
The president shall have and exercise such powers, authority and
responsibilities as the board of directors may determine.
4.4. Treasurer.
The treasurer shall have custody of all funds and securities of the corporation
and shall perform all acts incident to the position of treasurer. He shall
render such accounts and reports as may be required by the board of directors.
The records, books and accounts of the office of the treasurer shall, during the
usual hours for business at the office of the treasurer, be open to the
examination of any director.
4.5. Secretary.
The secretary shall keep the minutes of all meetings of stockholders and
directors and of such committees of the board of directors as to which he may be
so directed. He shall give all required notices and shall have charge of such
books and papers as the board of directors may require. He shall submit such
reports to the board of directors or to any of the committees of the board or
committees of the corporation as the board of directors or any such committee
may require. Any action or duty required to be performed by the secretary may be
performed by an assistant secretary.
4.6. Comptroller.
The comptroller shall be in charge of the accounts of the corporation and shall
perform all acts incident to the position of comptroller. He shall submit such
reports and records to the board of directors or to any of the committees of the
board or committees of the corporation as the board of directors or any such
committee may require.
4.7. General Counsel.
The board of directors shall elect a general counsel who shall be the chief
legal officer of the corporation. He shall have general control of all matters
of legal import concerning the corporation and shall have such other powers,
authority and responsibilities as may be determined by the board of directors or
the chief executive officer.
4.8. General Auditor.
The general auditor shall have such powers, authority and responsibilities as
are incident to the position of general auditor in the performance of an
independent audit activity of the corporation and shall have direct access to
the audit committee.
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4.9. Chief Tax Officer.
The chief tax officer shall have responsibility for all tax matters involving
the corporation, with authority to sign and to delegate to others authority to
sign all returns, reports, agreements and documents involving the administration
of the corporation's tax affairs.
4.10. Subordinate Officers.
The board of directors may from time to time appoint one or more assistant
secretaries, assistant treasurers, assistant comptrollers, and such other
subordinate officers as the board of directors may deem advisable. Such
subordinate officers shall have such powers, authority and responsibilities as
the board of directors may from time to time determine. The board of directors
may grant to any committee of the board or the chief executive officer the power
and authority to appoint subordinate officers and to prescribe their respective
terms of office, powers, authority and responsibilities. Each subordinate
officer shall hold his position at the pleasure of the board of directors, the
committee of the board appointing him, the chief executive officer and any other
officer to whom such subordinate officer reports.
In the interval between annual organizational meetings of the board of
directors, the chief executive officer shall have the power and authority to
appoint such subordinate officers. Such subordinate officers shall serve until
the first meeting of the board of directors immediately following the annual
meeting of stockholders.
4.11. Resignation, Removal, Suspension and Vacancies.
Any officer may resign at any time by giving written notice to the chief
executive officer, the president or the secretary. Unless stated in the notice
of resignation, the acceptance thereof shall not be necessary to make it
effective. It shall take effect at the time specified therein or, in the absence
of such specification, it shall take effect upon the receipt thereof.
Any officer elected by the board of directors may be suspended or removed at any
time by the affirmative vote of a majority of the whole board. Any subordinate
officer of the corporation appointed by the board of directors or a committee of
the board, or the chief executive officer, may be suspended or removed at any
time by a majority vote of a quorum of the board of directors or committee
appointing such subordinate officer, or by the chief executive officer or any
other officer to whom such subordinate officer reports.
The chief executive officer may suspend the powers, authority, responsibilities
and compensation of any elected officer or appointed subordinate officer for a
period of time sufficient to permit the board or the appropriate committee of
the board a reasonable opportunity to consider and act upon a resolution
relating to the reinstatement, further suspension or removal of such person.
As appropriate, the board of directors, a committee of the board, and/or the
chief executive officer may fill any vacancy created by the resignation,
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death, retirement or removal of an officer in the same manner as provided for
the election or appointment of such person.
ARTICLE V
INDEMNIFICATION
5.1. Right to Indemnification of Directors and Officers.
Subject to the other provisions of this article, the corporation shall indemnify
and advance expenses to every director and officer (and to such person's heirs,
executors, administrators or other legal representatives) in the manner and to
the full extent permitted by applicable law as it presently exists, or may
hereafter be amended, against any and all amounts (including judgments, fines,
payments in settlement, attorneys' fees and other expenses) reasonably incurred
by or on behalf of such person in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative ("a proceeding"), in which such director or officer was or is made
or is threatened to be made a party or is otherwise involved by reason of the
fact that such person is or was a director or officer of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee, fiduciary or member of any other corporation, partnership, joint
venture, trust, organization or other enterprise. The corporation shall not be
required to indemnify a person in connection with a proceeding initiated by such
person if the proceeding was not authorized by the board of directors of the
corporation.
5.2. Advancement of Expenses of Directors and Officers.
The corporation shall pay the expenses of directors and officers incurred in
defending any proceeding in advance of its final disposition ("advancement of
expenses"); provided, however, that the payment of expenses incurred by a
director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the director or officer to repay
all amounts advanced if it should be ultimately determined that the director or
officer is not entitled to be indemnified under this article or otherwise.
5.3. Claims by Officers or Directors.
If a claim for indemnification or advancement of expenses by an officer or
director under this article is not paid in full within ninety days after a
written claim therefor has been received by the corporation, the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification or advancement of
expenses under applicable law.
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5.4. Indemnification of Employees.
Subject to the other provisions of this article, the corporation may indemnify
and advance expenses to every employee who is not a director or officer (and to
such person's heirs, executors, administrators or other legal representatives)
in the manner and to the full extent permitted by applicable law as it presently
exists, or may hereafter be amended against any and all amounts (including
judgments, fines, payments in settlement, attorneys' fees and other expenses)
reasonably incurred by or on behalf of such person in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative ("a proceeding"), in which such
employee was or is made or is threatened to be made a party or is otherwise
involved by reason of the fact that such person is or was an employee of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, fiduciary or member of any other corporation,
partnership, joint venture, trust, organization or other enterprise. The
ultimate determination of entitlement to indemnification of employees who are
not officers and directors shall be made in such manner as is provided by
applicable law. The corporation shall not be required to indemnify a person in
connection with a proceeding initiated by such person if the proceeding was not
authorized by the board of directors of the corporation.
5.5. Advancement of Expenses of Employees.
The advancement of expenses of an employee who is not an officer or director
shall be made by or in the manner provided by resolution of the board of
directors or by a committee of the board of directors or of the corporation.
5.6. Non-Exclusivity of Rights.
The rights conferred on any person by this Article V shall not be exclusive of
any other rights which such person may have or hereafter acquire under any
statute, provision of the certificate of incorporation, these by-laws,
agreement, vote of stockholders or disinterested directors or otherwise.
5.7. Other Indemnification.
The corporation's obligation, if any, to indemnify any person who was or is
serving at its request as a director, officer or employee of another
corporation, partnership, joint venture, trust, organization or other enterprise
shall be reduced by any amount such person may collect as indemnification from
such other corporation, partnership, joint venture, trust, organization or other
enterprise.
5.8. Insurance.
The board of directors may, to the full extent permitted by applicable law as it
presently exists, or may hereafter be amended from time to time, authorize an
appropriate officer or officers to purchase and maintain at the corporation's
expense insurance: (a) to indemnify the corporation for any
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obligation which it incurs as a result of the indemnification of directors,
officers and employees under the provisions of this Article V; and (b) to
indemnify or insure directors, officers and employees against liability in
instances in which they may not otherwise be indemnified by the corporation
under the provisions of this Article V.
5.9. Amendment or Repeal.
Any repeal or modification of the foregoing provisions of this Article V shall
not adversely affect any right or protection hereunder of any person in respect
of any act or omission occurring prior to the time of such repeal or
modification.
ARTICLE VI
MISCELLANEOUS
6.1. Offices.
The registered office of the corporation shall be located at 1209 Orange Street,
Wilmington, New Castle County, Delaware, and the name of the registered agent in
charge thereof shall be The Corporation Trust Company. The corporation may also
have other offices without as well as within the State of Delaware. The books of
the corporation may be kept outside the State of Delaware.
6.2. Stock Certificates.
Every holder of stock shall be entitled to have a certificate signed by or in
the name of the corporation by the chairman or a vice chairman of the board of
directors, or the president or a vice president, and by the treasurer or an
assistant treasurer, or the secretary or an assistant secretary of the
corporation, certifying the number of shares owned by him in the corporation.
The form of such certificates and the signatures thereon shall comply with the
requirements of Delaware law. The corporation shall maintain a record of the
holders of each certificate and transfer stock and issue new certificates to
replace lost, stolen or destroyed certificates only pursuant to the applicable
requirements of Delaware law as they presently exist, or may be amended from
time to time.
6.3. Seal.
The corporate seal shall have inscribed upon it the name of the corporation, the
year of its organization and the words "Corporate Seal," and "Delaware." The
seal shall be in the charge of the secretary. The board of directors or the
finance committee may authorize a duplicate seal to be kept and used by any
other officer.
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6.4. Dividends on Preferred Stock.
All dividends declared upon the preferred stock shall be payable quarterly upon
the first day of February, May, August and November in each year, but if that is
a legal holiday, then on the next day not a legal holiday.
6.5. Fiscal Year.
The fiscal year of the corporation shall begin on January 1st and terminate on
December 31st in each year.
6.6. Annual Report.
At least fifteen days in advance of the annual meeting of stockholders, the
board of directors shall publish and submit to the stockholders consolidated
financial statements for the previous fiscal year. The board of directors shall
also publish consolidated financial statements for each of the first three
quarters of each fiscal year.
6.7. Notice.
Any notice required to be given by these by-laws may be given personally or in
writing by delivery to the United States postal system in a postpaid envelope
directed to such address as appears in the records of the corporation, or, in
default of other address, to the general post office in Wilmington, New Castle
County, Delaware. Such notice shall be deemed to be given at the time of
mailing, except as otherwise provided in these by-laws. In addition, except as
otherwise required by law or these by-laws, notice need not be given of any
adjourned meeting other than by announcement at the meeting which is being
adjourned.
6.8. Waiver of Notice.
Whenever any notice is required to be given, a waiver thereof in writing, signed
by the person or persons entitled to the notice, whether before or after the
time stated therein, shall be deemed equivalent thereto. Attendance of a person
at a meeting shall constitute a waiver of notice of such meeting, except when
the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders,
directors, or members of a committee of directors need be specified in any
written waiver of notice.
6.9. Voting of Stocks Owned by the Corporation.
The board of directors, the finance committee or the chairman of the board may
authorize any person, and delegate to one or more other officers, the authority
to authorize any person in behalf of the corporation to attend, vote
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and grant proxies to be used at any meeting of stockholders of any corporation
in which General Motors Corporation may hold stock.
6.10. Form of Records.
Any records maintained by the corporation in the regular course of its business,
including its stock ledger, books of account, and minute books, may be kept on,
or be in the form of, punch cards, magnetic tape, photographs, microphotographs,
or any other information storage device, provided that the records so kept can
be converted into clearly legible form within a reasonable time. The corporation
shall so convert any records so kept upon the request of any person entitled to
inspect the same.
6.11. Amendment of By-Laws.
The board of directors shall have power to adopt, amend or repeal the by-laws at
any regular or special meeting of the directors. The stockholders shall also
have power to adopt, amend or repeal the by-laws at any annual or special
meeting, subject to compliance with the notice provisions provided in section
2.11.
6.12. Anti-Greenmail.
(a) Vote Required for Certain Acquisitions of Securities. Except as set forth in
Subsection (b) hereof, in addition to any affirmative vote of stockholders
required by any provision of law, the certificate of incorporation or by-laws of
the corporation, or any policy adopted by the board of directors, neither the
corporation nor any subsidiary shall knowingly effect any direct or indirect
purchase or other acquisition of any GM Equity Security of any class or classes
issued by the corporation at a price which is in excess of the highest Market
Price of such GM Equity Security on the largest principal national securities
exchange in the United States on which such security is listed for trading on
the date that the understanding to effect such transaction is entered into by
the corporation (whether or not such transaction is concluded or a written
agreement relating to such transaction is executed on such date, such date to be
conclusively established by determination of the board of directors), from any
Interested Person (i.e., any person who is the direct or indirect beneficial
owner of more than three percent (3%) of the aggregate voting power of the
Voting Shares of the corporation) who has beneficially owned such GM Equity
Securities for less than two years prior to such date, without the affirmative
vote of the holders of the Voting Shares which represent at least a majority of
the aggregate voting power of the corporation, excluding Voting Shares
beneficially owned by such Interested Person, voting together as a single class.
Such affirmative vote shall be required notwithstanding the fact that no vote
may be required, or that a lesser percentage may be specified, by law or any
agreement with any national securities exchange, or otherwise.
(b) When A Vote Is Not Required. The provisions of Section (a) hereof shall
not be applicable with respect to:
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(i) any purchase, acquisition, redemption or exchange of GM Equity
Securities, the purchase, acquisition, redemption or exchange of which,
at the time any such transaction is entered into, is provided for in
the corporation's certificate of incorporation (including any
resolution or resolutions of the board of directors providing for the
issuance of Preferred Stock or Preference Stock by the corporation);
(ii) any purchase or other acquisition of GM Equity Securities made as
part of a tender or exchange offer by the corporation to purchase
securities of the same class made on the same terms to all holders of
such securities and complying with the applicable requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the rules and regulations thereunder (or any successor provisions to
such Act, rules or regulations);
(iii) any purchase or acquisition of GM Equity Securities made pursuant
to an open market purchase program which has been approved by the board
of directors; or
(iv) any purchase or acquisition of GM Equity Securities made from, or
any purchase or acquisition of GM Equity Securities made pursuant to or
on behalf of, an employee benefit plan maintained by the corporation,
or any subsidiary or any trustee of, or fiduciary with respect to any
such plan when acting in such capacity.
(c) Interpretation of This By-Law. The board of directors shall have the
exclusive right and power to interpret the provisions of this by-law, including,
without limitation, the adoption of written definitions of terms used in this
by-law (any such definitions shall be filed with the Secretary, and such
definitions as may prevail shall be made available to any stockholder upon
written request); any such interpretation made in good faith shall be binding
and conclusive upon all holders of GM Equity Securities.
6.13. Gender Pronouns.
Whenever the masculine pronoun is used herein it shall be deemed to refer to
either the masculine or the feminine gender.
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DEFINITIONS OF CERTAIN TERMS
USED IN
AND
GUIDELINES FOR THE APPLICATION
OF
BY-LAW 2.12
OF
GENERAL MOTORS CORPORATION
Certain Definitions.
For the purposes of Section 2.12 of the By-Laws of General Motors Corporation,
(the "Corporation") the board of directors has adopted the following
definitions, effective January 7, 1991.
(i) "Affiliate" of a person, or a person "affiliated with," a specified
person, shall mean a person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with, the specified person.
(ii) The term "control" (including the terms "controlling," "controlled
by" and "under common control with") shall mean the possession, direct
or indirect, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, by contract, or otherwise; provided, however, that a
person shall not be deemed to control another person solely because he
or she is a director of such other person.
(iii) "GM Equity Security" shall mean any security described in Section
3(a)(11) of the Exchange Act, as of the effective date hereof, which is
issued by GM and traded on a national securities exchange or the NASDAQ
National Market System.
(iv) A "subsidiary" of the Corporation shall mean any corporation a
majority of the voting stock of which is owned, directly or indirectly
through one or more other subsidiaries, by the Corporation.
(v) The employment of a person by the Corporation or its subsidiaries
shall be deemed to be in an "executive capacity" during the period that
such person (A) served as an elected officer of the Corporation or one
of its subsidiaries, or (B) reported directly to a person who served as
an elected officer of the Corporation or one of its subsidiaries.
(vi) A person shall be deemed to be, or to be affiliated with, a
company or firm that is a "significant advisor or consultant to the
corporation or its subsidiaries" if he, she or it, as the case may be,
received or would receive fees or similar compensation from the
Corporation or a subsidiary of the Corporation in excess of the lesser
of (A) three percent (3%) of the consolidated gross revenues
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which the Corporation and its subsidiaries received for the sale of
their products and services during the last fiscal year of the
Corporation; (B) five percent (5%) of the gross revenues of the person
during the last calendar year, if such person is a self-employed
individual, or (C) five percent (5%) of the consolidated gross revenues
received by such company or firm for the sale of its products and
services during its last fiscal year, if the person is a company or
firm; provided, however, that directors' fees and expense
reimbursements shall not be included in the gross revenues of an
individual for purposes of this determination.
(vii) A "significant customer of the corporation and its subsidiaries"
shall mean a customer from which the Corporation and its subsidiaries
collectively in the last fiscal year of the Corporation received
payments in consideration for the products and services of the
Corporation and its subsidiaries which are in excess of three percent
(3%) of the consolidated gross revenues of the Corporation and its
subsidiaries during such fiscal year.
(viii) A "significant supplier of the corporation and its subsidiaries"
shall mean a supplier to which the Corporation and its subsidiaries
collectively in the last fiscal year of the Corporation made payments
in consideration for the supplier's products and services in excess of
three percent (3%) of the consolidated gross revenues of the
Corporation and its subsidiaries during such fiscal year.
(ix) The Corporation and its subsidiaries shall be deemed a
"significant customer of a company" if the Corporation and its
subsidiaries collectively were the direct source during such company's
last fiscal year of in excess of five percent (5%) of the gross
revenues which such company received for the sale of its products and
services during that year.
(x) The Corporation and its subsidiaries shall be deemed a "significant
supplier of a company" if the Corporation and its subsidiaries
collectively received in such company's last fiscal year payments from
such company in excess of five percent (5%) of the gross revenues which
such company received during that year for the sale of its products and
services.
(xi) A person shall be deemed to have "significant personal services
contract(s) with the corporation or its subsidiaries" if the fees and
other compensation received by the person pursuant to personal services
contract(s) with the Corporation or its subsidiaries exceeded or would
exceed five percent (5%) of his or her gross revenues during the last
calendar year.
(xii) A tax-exempt entity shall be deemed to receive "significant
contributions" from the Corporation or its subsidiaries if such
tax-exempt entity received during its last fiscal year, or expects to
receive during its current fiscal year, contributions from the
Corporation or its subsidiaries in excess of the lesser of either (A)
three percent (3%) of the consolidated gross revenues of the
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Corporation and its subsidiaries during its last fiscal year, or (B)
five percent (5%) of the contributions received by the tax-exempt
entity during its last fiscal year.
Guidelines for Application.
(i) For purposes of identifying payments for products and services
contemplated by the definitions set forth above, and performing the
related calculations, the board of directors may exclude payments such
as those described in paragraph 2 of the Instructions to Paragraph (b)
of Item 404 of Regulation S-K, as promulgated by the Securities and
Exchange Commission as of the effective date hereof.
(ii) The board of directors shall be entitled to rely upon the
completeness and accuracy of directors' responses to written
questionnaires circulated for the purpose of enabling the board of
directors to make the determinations of independence required by the
provisions of By-Law 2.12.
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SECURITIES ACT AND EXCHANGE ACT
PARAGRAPH 2 OF INSTRUCTIONS TO
PARAGRAPH (b) OF ITEM 404 OF REGULATION S-K
AS IN EFFECT ON JANUARY 7, 1991
(REFERRED TO IN PARAGRAPH (i) OF
GUIDELINES FOR APPLICATION OF BY-LAW 2.12 OF
GENERAL MOTORS CORPORATION)
2. In calculating payments for property and services the following may be
excluded:
A. Payments where the rates or charges involved in the transaction are
determined by competitive bids, or the transaction involves the
rendering of services as a common contract carrier, or public utility,
at rates or charges fixed in conformity with law or governmental
authority;
B. Payments that arise solely from the ownership of securities of
the registrant and no extra or special benefit not shared on a pro
rata basis by all holders of the class of securities is received; or
C. Payments made or received by subsidiaries other than significant
subsidiaries as defined in Rule 1-02(v) of Regulation S-X, provided
that all such subsidiaries making or receiving payments, when
considered in the aggregate as a single subsidiary, would not
constitute a significant subsidiary as defined in Rule 1-02(v).*
- ---------------------------
* The General Motors Legal Staff notes that Rule 1-02(v) of Regulation
S-X provides, generally, that a significant subsidiary of General
Motors Corporation would be one which, together with its subsidiaries,
meets any of the following conditions:
(1) General Motors' and its other subsidiaries' investments in and
advances to the subsidiary exceed ten percent (10%) of the total assets
of General Motors and its consolidated subsidiaries.
(2) General Motors' and its other subsidiaries' proportionate share of
the total assets (after intercompany eliminations) of the subsidiary
exceeds ten percent (10%) of the total assets of General Motors and its
consolidated subsidiaries.
(3) General Motors' and its other subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle of the subsidiary
exceeds ten percent (10%) of such income of General Motors and its
consolidated subsidiaries.
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DEFINITION OF CERTAIN TERMS
USED IN BY-LAW 6.12
OF
GENERAL MOTORS CORPORATION
Certain Definitions.
For the purposes of Section 6.12 of the By-Laws of General Motors Corporation,
the board of directors has adopted the following definitions, effective March 5,
1990:
(i) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on January 1, 1990.
(ii) "Beneficial Owner" and "Beneficial Ownership" shall have the
meanings ascribed to such terms in Rule 13d-3 and Rule 13d-5 of the
General Rules and Regulations under the Exchange Act, as in effect on
January 1, 1990.
(iii) "GM Equity Security" shall mean any security described in Section
3(a) (11) of the Exchange Act, as in effect on January 1, 1990, which
is issued by GM and traded on a national securities exchange or the
NASDAQ National Market System.
(iv) "Interested Person" shall mean any person (other than the
Corporation or any Subsidiary) that is the direct or indirect
Beneficial Owner of more than three percent (3%) of the aggregate
voting power of the Voting Shares, and any affiliate or associate of
any such person. For the purpose of determining whether a Person is an
Interested Person, the outstanding Voting Shares shall include unissued
shares of voting stock of the corporation of which the Interested
Person is the Beneficial Owner, but shall not include any other shares
of voting stock of the corporation which may be issuable pursuant to
any agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise, to any Person who
is not the Interested Person.
(v) "Market Price" of shares of a class of GM Equity Security on any
day shall mean the highest sale price (regular way) of shares of such
class of GM Equity Security on such day, or, if that day is not a
trading day, on the trading day immediately preceding such day, on the
largest principal national securities exchange on which such class of
stock is then listed or admitted to trading, or if not listed or
admitted to trading on any national securities exchange, then the
highest reported sale price for such shares in the
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over-the-counter market as reported on the NASDAQ National Market
System, or if such sale prices shall not be reported thereon, the
highest bid price so reported, or, if such price shall not be reported
thereon, as the same shall be reported by the National Quotation Bureau
Incorporated; in the case of any GM Equity Security which is the
Preferred Stock or Preference Stock of the corporation (of any series),
the Market Price thereof shall be the Market Price, as hereinabove
defined, of the Voting Shares which the holder of such Preferred Stock
or Preference Stock may then acquire by reason of the redemption,
exchange, conversion or exercise of other rights as may be provided for
in the terms of such securities.
(vi) "Person" shall mean any individual, partnership, firm,
corporation, association, trust, unincorporated organization or other
entity, as well as any syndicate or group deemed to be a person
pursuant to Section 13(d)(3) of the Exchange Act, as in effect on
January 1, 1990.
(vii) "Subsidiary" shall mean any company of which the corporation
owns, directly or indirectly, (A) a majority of the outstanding shares
of equity securities, or (B) shares having a majority of the voting
power represented by all of the outstanding voting stock of such
company. For the purpose of determining whether a company is a
Subsidiary, the outstanding voting stock and shares of equity
securities thereof shall include unissued shares of which the
corporation is the Beneficial Owner but, except for the purpose of
determining whether a company is a Subsidiary for purposes of the
definition of Interested Person as used in By-Law Section 6.12, shall
not include any other shares which may be issuable pursuant to any
agreement, arrangement or understanding, or upon the exercise of
conversion rights, warrants or options, or otherwise, to any Person who
is not the corporation.
(viii) "Voting Shares" shall mean the outstanding shares of capital
stock of the corporation entitled to vote generally in the election of
directors.
vi
