SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
General Motors Corporation
.................................................................
(Name of Registrant as Specified In Its Charter
General Motors Corporation
.................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
.............................................................
2) Aggregate number of securities to which transaction applies:
.............................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
4) Proposed maximum aggregate value of transaction:
.............................................................
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
..............................................................
2) Form, Schedule or Registration Statement No.:
..............................................................
3) Filing Party:
..............................................................
4) Date Filed:
..............................................................
<PAGE>
GENERAL MOTORS
Notice of Annual Meeting
of Stockholders
and Proxy Statement
[LOGO]
Annual Meeting
June 1, 1998
Hotel du Pont
11th & Market Streets
Wilmington, Delaware
4000-PS-98
<PAGE>
GENERAL MOTORS CORPORATION
NOTICE OF ANNUAL MEETING
April 20, 1998
Dear Stockholder:
We are pleased to invite you to attend the annual meeting of General Motors
stockholders which will be held at 10:00 a.m. local time on Monday, June 1,
1998, at the Hotel du Pont, 11th & Market Streets, Wilmington, Delaware.
PURPOSE OF THE MEETING -- As set forth in the attached Proxy Statement, the
meeting will be held for the following purposes:
ITEM NO. 1--to elect 15 directors;
ITEM NO. 2--to ratify the selection of independent public accountants for
1998;
ITEMS NO. 3 THROUGH 7--to act upon five stockholder proposals (if they are
properly presented at the meeting).
VOTING -- If you are a holder of record of Common Stock, $1 2/3 par value
("Common Stock"), or Class H Common Stock, $0.10 par value ("Class H Common
Stock"), as of the close of business on April 2, 1998, you are entitled to vote
at the meeting. Please read the attached Proxy Statement carefully for
information on the matters that the meeting will consider and vote on.
For this year's annual meeting, General Motors is providing you the
additional options of voting your proxy by telephone or the Internet.
Stockholders can vote by calling a toll-free number or by using the Internet or
you can choose to mail your signed proxy card to GM's tabulator in the envelope
provided. If you choose to vote electronically, your voting instructions will be
confirmed before your telephone or Internet connections terminate.
Delaware law requires that a list of all stockholders entitled to vote at
the 1998 annual meeting must be available for examination. Such a list will be
available at the offices of Richards, Layton & Finger, One Rodney Square, 920
King Street, 2nd Floor, Wilmington, Delaware, for ten days before the meeting,
between 9:00 a.m. and 5:00 p.m., and during the annual meeting.
FORMAT OF THE 1998 ANNUAL MEETING -- We plan to conduct a short meeting
focused on business items, including electing directors, voting on management
and stockholder proposals, and related discussion. After that, we will provide
time for your questions and comments.
If you and your immediate family members plan to attend the annual meeting,
please enclose a note with your proxy indicating the number of tickets you will
need. If you have voted electronically and wish to attend the annual meeting,
please use the return envelope provided to order your tickets but do not enclose
your proxy. Please include your return address so that we can mail the
admittance tickets to you. If you do not receive your tickets by mail, you may
request tickets at the door. However to make certain that there is enough room
for everyone who wants to attend, we strongly urge you to obtain your tickets in
advance.
STOCKHOLDER COMMUNICATIONS -- In addition to the annual meeting, we will
continue to hold our regional Stockholder Forums throughout the year. These
meetings, held in various locations around the country, provide a less formal
way for you to discuss General Motors with top management. The 1999 series of
Forums will be announced in the September issue of StockHolder News. Also, we
will continue to provide you with information about the Corporation as well as
your individual accounts through our toll-free number (1-800-331-9922). You can
also receive information about your GM stock and the Corporation on GM's home
page on the Internet, www.gm.com.
IF YOU ARE GOING TO VOTE BY MAIL, PLEASE SPECIFY YOUR CHOICES BY MARKING
THE APPROPRIATE BOXES ON THE ENCLOSED PROXY/VOTING INSTRUCTION CARD. IF YOUR
VOTE IS THE SAME AS THE BOARD OF DIRECTORS' RECOMMENDATIONS, YOU DO NOT HAVE TO
MARK ANY BOXES. JUST SIGN AND DATE THE PROXY/VOTING INSTRUCTION CARD AND RETURN
IT IN THE ENCLOSED ENVELOPE.
Cordially,
/s/ Nancy E. Polis /s/ John F Smith Jr
Secretary Chairman, Chief Executive Officer and President
<PAGE>
TABLE OF CONTENTS
General Information for Stockholders Page
Proxy Procedure...................................................... ii
Proxy Statement Proposals............................................ ii
Directors............................................................ iii
Selecting Candidates to Serve on the Board of Directors.............. iii
Director Compensation................................................ iii
Committees of the Board of Directors................................. iv
Proxy Statement
ITEM NO. 1--Nomination and Election of Directors..................... 2
Information about Nominees for Directors............................. 2
Report of the Executive Compensation Committee....................... 11
Executive Compensation Tables........................................ 16
ITEM NO. 2-- Ratification of the selection of Deloitte & Touche LLP
as independent public accountants for the year 1998... 24
ITEM NO. 3-- Stockholder proposal to limit director service........ 24
ITEM NO. 4-- Stockholder proposal to provide for cumulative
voting................................................ 26
ITEM NO. 5-- Stockholder proposal regarding greenhouse gas
emissions............................................. 28
ITEM NO. 6-- Stockholder proposal regarding dealings with China
and the former Soviet Union........................... 31
ITEM NO. 7-- Stockholder proposal to limit board memberships....... 33
Expenses of Solicitation............................................. 35
Other Matters........................................................ 35
i
<PAGE>
GENERAL INFORMATION FOR STOCKHOLDERS
PROXY PROCEDURE
Although you may not be able to attend the annual meeting in person, you
have the opportunity to vote by using the proxy solicited by the Board of
Directors which is enclosed with this document. After you sign and return your
proxy form or vote by telephone or the Internet, the Proxy Committee will vote
your shares according to your instructions. You can indicate your choices by
marking the enclosed proxy. If you sign and return your proxy and do not specify
a choice, your shares will be voted as the Board of Directors has recommended.
If you prefer, you may also vote by ballot at the annual meeting, which will
cancel any proxy you previously gave.
By signing and returning the proxy forms or by voting electronically, you
will authorize the Proxy Committee to vote your shares of common stock as you
direct and on any matters that General Motors does not know about now but that
may be presented properly at the meeting. The Proxy Committee is composed of
three executive officers of the Corporation; J. F. Smith, Jr., H. J. Pearce, and
J. M. Losh, each of whom is authorized to act on behalf of the Committee.
As a matter of policy General Motors believes your vote should be private.
Therefore, we use an independent specialist to receive, inspect, count, and
tabulate proxies. Representatives of the independent specialist also act as
judges at the annual meeting.
PROXY STATEMENT PROPOSALS
At the annual meeting, the Board of Directors will submit its nominees for
election as directors. In addition, GM's By-laws require that at each annual
meeting the stockholders approve the independent public accountants selected by
the Audit Committee of the Board of Directors. The Board of Directors also may
submit other matters for your approval at the annual meeting.
In addition to these matters presented by the Board of Directors, you may
be asked to vote on one or more stockholder proposals. We have been asked from
time to time why the Board opposes the stockholder proposals included in the
Proxy Statement.
THE BOARD DOES NOT DISAGREE WITH ALL STOCKHOLDER PROPOSALS SUBMITTED TO THE
CORPORATION. WHEN WE AGREE WITH A PROPOSAL AND THINK IT IS IN THE BEST INTERESTS
OF THE CORPORATION AND ITS STOCKHOLDERS, IT USUALLY CAN BE IMPLEMENTED WITHOUT A
STOCKHOLDER VOTE. THE STOCKHOLDER PROPOSALS THAT APPEAR IN THE PROXY STATEMENT
ARE ONLY THOSE WITH WHICH THE BOARD OF DIRECTORS DISAGREES AND BELIEVES IT MUST
OPPOSE IN FULFILLING ITS OBLIGATIONS TO REPRESENT AND SAFEGUARD THE BEST
INTERESTS OF STOCKHOLDERS AS A WHOLE.
The Corporation, over the years, has adopted a number of stockholder
proposals and other suggestions. For 1998, Mr. Nick Rossi of Boonville,
California submitted a proposal on appointing independent directors to all key
Board Committees. Based on the receipt of further information concerning GM's
governance practices, Mr. Rossi withdrew his proposal.
The deadline for including a proposal in the Corporation's Proxy Statement
for the 1999 Annual Meeting is December 21, 1998. Any proposals intended to be
presented at the 1999 meeting must be received by the Corporation on or before
that date.
ii
<PAGE>
DIRECTORS
The Board of Directors held a total of 12 meetings in 1997. It is currently
composed of 16 members, one of whom is not standing for reelection. As provided
under the Director Retirement Policy, Mrs. Anne L. Armstrong will be retiring as
of the date of the 1998 annual meeting. At the request of the Board of
Directors, Mr. John G. Smale will stand for election as an exception to the
Director Retirement Policy. If you elect all 15 nominees at the 1998 annual
meeting, the Board will be composed of 13 directors who have never been employed
by General Motors and two who are currently officers of the Corporation.
In addition to being members of the Board, most directors served on one or
more of its seven standing Committees, which cover a total of 45 memberships.
(Please refer to "Committees of the Board of Directors" commencing on page iv
for information concerning each Committee's responsibility and current
membership.) Directors spend a considerable amount of time preparing for Board
and Committee meetings and from time to time are called upon for their counsel
between meetings. In 1997, average attendance at Board and Committee meetings
was 92%.
SELECTING CANDIDATES TO SERVE ON THE BOARD OF DIRECTORS
Under the Corporation's By-laws, each year prior to the annual meeting of
stockholders the Committee on Director Affairs recommends the Board's nominees
to serve as GM directors for the next year. The Board is soliciting proxies to
elect these individuals. Except for John F. Smith, Jr. and Harry J. Pearce, who
are employees of the Corporation, all candidates nominated by the Board of
Directors have been determined to be "Independent Directors" as defined under
Section 2.12 of the Corporation's By-laws. (If you would like a copy of GM's
By-laws, please write to the Secretary, General Motors Corporation, 100
Renaissance Center, P.O. Box 100, Detroit, Michigan 48265-1000.)
To recommend an individual for Board membership, write to the Secretary at
the address given above. If you intend to nominate a candidate for director at
the annual meeting or to introduce any other matter (aside from a stockholder
proposal under Rule 14a-8 of the Securities and Exchange Commission's proxy
rules, which is discussed on page ii), you must give the Corporation written
notice. Such notice must be received by the Secretary of the Corporation not
more than 180 days and not less than 120 days before the date of the annual
meeting. For the 1999 Annual Meeting, such notice must be received between
December 9, 1998 and February 7, 1999.
DIRECTOR COMPENSATION
Only non-employee directors receive payment for serving on the Board. Since
Messrs. Smith and Pearce are employees of the Corporation, they do not receive
director fees. Non-employee directors are not eligible to participate in the
executive incentive program, Savings-Stock Purchase Program or the Retirement
Programs for certain General Motors employees. Other than as described in this
section, there are no separate benefit plans for directors. The fees paid to
non-employee directors are as follows:
iii
<PAGE>
<TABLE>
<CAPTION>
Fee Per Meeting
Annual Retainer Attended Stock Based Compensation
--------------- --------------- -------------------------------------
<S> <C> <C> <C>
$14,000 Restricted Stock Unit grant
Board........................ $26,000 $ 1,000 (a)
Committees (Excluding the
Executive Committee)
Chair................... $11,000 $ 750
Member.................. $ 6,000 $ 750
Executive Committee.......... x $ 750
Special per diem (b)......... x $ 1,000
Annual Stock Grant (c)....... $10,000 Restricted Stock Unit grant
OR 1,000 share stock option grant
</TABLE>
(a) Non-employee directors are required to defer $14,000 of their annual
retainer in units of GM common stocks under the General Motors Deferred
Compensation Plan for Non-Employee Directors. In addition, under this plan
directors may also elect to defer all or a portion of their remaining
compensation in cash or units of GM common stocks.
(b) Fee for special services and assignments requiring a director's attendance
outside the scope of ordinary Board and Committee activities.
(c) Under the GM Non-Employee Director Long-Term Stock Incentive Plan, eligible
non-employee directors annually elect to receive either a stock option for
1,000 shares of Common Stock or Restricted Stock Units for $10,000 of Common
Stock. Beginning January 1, 1999, stock options and Restricted Stock Units
will be split 90% Common Stock and 10% Class H Common Stock.
Restricted Stock Units under both the Deferred Compensation and Stock
Incentive Plans are credited with dividend equivalents in the form of additional
stock units of the same class. Amounts deferred under either plan are generally
not available until after the director retires from the Board at age 70. After
the director leaves the Board, payment under both plans will be made in cash
based on the number of stock units and the market price of the related GM stock
at the time of payment.
Mr. John G. Smale is Chair of the Board's Executive Committee, for which he
is paid $200,000 annually. In this capacity he serves as an ex-officio member of
each of the standing committees of the Board; he does not receive additional
compensation for ex-officio service.
COMMITTEES OF THE BOARD OF DIRECTORS
AUDIT COMMITTEE met four times in 1997. The Committee reviews the scope and
results of the audits, the notice and application of accounting principles, and
the effectiveness of internal controls. In its oversight role, it assures that
management fulfills its responsibilities in preparing the financial statements.
<TABLE>
<S> <C> <C> <C>
Membership: Dennis Weatherstone (Chair) John H. Bryan John G. Smale
Anne L. Armstrong Ann D. McLaughlin Louis W. Sullivan
Percy N. Barnevik Eckhard Pfeiffer
</TABLE>
iv
<PAGE>
CAPITAL STOCK COMMITTEE met five times in 1997. The Committee oversees the
relationship between General Motors and its wholly owned subsidiary Hughes
Electronics Corporation to ensure that transactions between the two companies
are in the best interests of each corporation and are fair to the holders of
both classes of GM's common stock.
<TABLE>
<S> <C> <C> <C>
Membership: Thomas H. Wyman (Chair) Ann D. McLaughlin John G. Smale
John H. Bryan Eckhard Pfeiffer Dennis Weatherstone
George M. C. Fisher
</TABLE>
COMMITTEE ON DIRECTOR AFFAIRS met two times in 1997. The Committee
researches and recommends candidates for membership on the Board and conducts
continuing studies of the size and composition of the Board. The Committee is
also responsible for periodically reviewing GM's guidelines for corporate
governance and proposing improvements.
<TABLE>
<S> <C> <C> <C>
Membership: J. Willard Marriott, Jr. (Chair) Thomas E. Everhart John G. Smale
Anne L. Armstrong Charles T. Fisher III Thomas H. Wyman
</TABLE>
EXECUTIVE COMMITTEE met three times in 1997. The members of the Committee
are the chairs of the other standing Committees, plus the chair of the
Committee, who is designated by the Board and cannot be the chair of any other
standing Committee. The chair is also an ex-officio member of each of the other
standing Committees of the Board. Between Board meetings, the Committee can
exercise all of the powers and authority of the entire Board.
<TABLE>
<S> <C> <C> <C>
Membership: John G. Smale (Chair) J. Willard Marriott, Jr. Dennis Weatherstone
John H. Bryan Ann D. McLaughlin Thomas H. Wyman
</TABLE>
EXECUTIVE COMPENSATION COMMITTEE met seven times in 1997. The Committee
determines the compensation of senior executives, including all officers of the
Corporation, and approves any benefit or incentive compensation plan of the
Corporation or its major subsidiaries. The members of the Committee are not
eligible to participate in any of the compensation plans or programs it
administers.
<TABLE>
<S> <C> <C> <C>
Membership: John H. Bryan (Chair) J. Willard Marriott, Jr. Dennis Weatherstone
George M. C. Fisher John G. Smale Thomas H. Wyman
</TABLE>
INVESTMENT FUNDS COMMITTEE met three times in 1997. The Committee serves as
the named fiduciary of all GM's and its subsidiaries' benefit plans governed by
the Employee Retirement Income Security Act (ERISA).
<TABLE>
<S> <C> <C>
Membership: Thomas H. Wyman (Chair) John G. Smale
Charles T. Fisher III John F. Smith, Jr.
J. Willard Marriott, Jr.
</TABLE>
PUBLIC POLICY COMMITTEE met six times in 1997. The Committee fosters GM's
commitment to operate its business worldwide in a manner consistent with the
rapidly changing demands of society. Matters reviewed by this Committee include
research and development, automotive safety, environmental matters, diversity,
health care, trade, and economic development. The Committee provides public
policy guidance to management to support GM's progress in growing the business
globally within the framework of GM's core values.
<TABLE>
<S> <C> <C> <C>
Membership: Ann D. McLaughlin (Chair) Thomas E. Everhart John G. Smale
Anne L. Armstrong Charles T. Fisher III Louis W. Sullivan
Percy N. Barnevik
</TABLE>
v
<PAGE>
GENERAL MOTORS CORPORATION
100 RENAISSANCE CENTER, P.O. BOX 100, DETROIT, MICHIGAN 48265-1000
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 1, 1998
This Proxy Statement is provided in connection with soliciting, by order of
the Board of Directors of General Motors Corporation, proxies to be used at the
annual meeting of stockholders of the Corporation. The accompanying proxy card
enclosed with this Statement represents your holdings of Common Stock and Class
H Common Stock in the registered account name shown. We expect that this Proxy
Statement and the enclosed proxy will be mailed on or after Monday, April 20,
1998, to each stockholder entitled to vote.
The proxy card permits you to specify your intent to grant or withhold
authority to vote for election of all the Board of Directors' nominees, or any
individual nominee, and your intent to vote for or against, or abstain from
voting upon, each of the six proposals. After you have signed and returned the
enclosed proxy card, you may revoke it at any time until it is voted at the
annual meeting, either by sending a written notice of revocation or a subsequent
proxy card, or by voting in person at the annual meeting. The shares represented
by a proxy will be voted unless the proxy card is received late or in a form
that cannot be voted.
If you participate in General Motors' stock plans for employees -- the
General Motors Savings-Stock Purchase Program for Salaried Employees in the
United States (the "GM S-SPP"), the General Motors Personal Savings Plan for
Hourly-Rate Employees in the United States (the "GM PSP"), the General Motors
Canadian Savings-Stock Purchase Program, the Hughes Aircraft Company Salaried
Employees' Thrift and Savings Plan, the Hughes Aircraft Company Tucson
Bargaining Employees' Thrift and Savings Plan, the Hughes Aircraft Company
California Hourly Employees' Thrift and Savings Plan, the Hughes Thrift and
Savings Plan, the Saturn Individual Savings Plan for Represented Members, the
Saturn Personal Choices Savings Plan for Non-Represented Members (the "Saturn
PCSP"), or the GMAC Mortgage Corporation Savings Incentive Plan, your proxy card
will also serve as a voting instruction for the trustees, plan committees or
independent fiduciaries of those plans. If you do not provide instructions via
your proxy card with respect to stock in the GM S-SPP, the GM PSP, the Saturn
Individual Savings Plan for Represented Members and the Saturn PCSP, those
shares may be voted by the trustee, plan committee or independent fiduciary at
their discretion. For all the other plans named above, the shares will not be
voted unless you sign and return the proxy card.
If you participate in any of these plans or maintain other accounts under
more than one name (e.g., with and without a middle initial), you may receive
more than one set of proxy materials. To be sure that all shares are counted,
you must sign and return every proxy card you receive or alternatively vote all
these shares by telephone or the Internet.
Brokers, dealers, banks, voting trustees, and their nominees who want a
supply of the Corporation's proxy soliciting material to send to beneficial
owners should write to:
General Motors Corporation
c/o Morrow & Co., Inc.
909 Third Avenue, 20th Floor
New York, NY 10022-4799.
1
<PAGE>
The Board of Directors designated April 2, 1998, as the record date for
determining stockholders entitled to vote at the annual meeting. On that date,
the Corporation had 668,430,118 shares of Common Stock and 104,637,584 shares of
Class H Common Stock outstanding and entitled to vote. Each share of Common
Stock entitles the holder to one vote and each share of Class H Common Stock
entitles the holder to 0.6 vote.
Except for Item 1, each proposal in this Proxy Statement will be approved
if it receives a majority of the votes present, either in person or by proxy, at
the meeting. Item 1, the election of directors, is somewhat different; the 15
candidates who receive the most votes will be elected to the 15 available
memberships on the Board. If you return a signed proxy form or attend the
meeting but choose to abstain from voting on any proposal, you will be
considered present at the meeting and not voting in favor of the proposal. Since
most proposals pass only if they receive favorable votes from a majority of
votes present at the meeting, the fact that you are abstaining and not voting in
favor of a proposal will have the same effect as if you had voted against the
proposal. (In contrast, a "broker non-vote," where a broker withholds authority
to cast a vote as to a certain proposal, is deemed not present at the meeting
with regard to that proposal.)
ITEM NO. 1
Nomination and Election of Directors
The Proxy Committee will vote your shares for the 15 nominees described in
the following section unless you withhold such authority. Each director will
serve until the next annual election of directors and until a successor is
elected and qualified or until the director's earlier resignation or removal. If
any nominees for directors become unavailable, which we do not anticipate, the
Board of Directors may decrease the number of directors to be elected or
designate substitute nominees, who would receive the votes of the Proxy
Committee.
Pursuant to the Director Retirement Policy of the Board of Directors, Mrs.
Anne L. Armstrong is not standing for re-election. Mrs. Armstrong joined the
Board in 1977 following service as U.S. Ambassador to Great Britain. She is
currently a member of the Audit, Director Affairs and Public Policy Committees.
Ms. Karen Katen is the only nominee who was elected a director of General
Motors since the last annual meeting of stockholders.
INFORMATION ABOUT NOMINEES FOR DIRECTORS
The following information about each nominee's principal occupation or
employment and other affiliations and about the Common Stock and Class H Common
Stock beneficially owned at February 28, 1998, has been furnished to the
Corporation by the nominees for directors. In addition to the affiliations
mentioned on the following pages, the nominees are active in many local and
national cultural, charitable, professional, and trade organizations.
2
<PAGE>
PERCY N. BARNEVIK
AGE 57 JOINED GM BOARD 1996 COMMITTEES -- Audit, Public
Policy
Chairman, ABB Asea Brown Boveri Ltd., Zurich, Switzerland,
serving electric power generation, transmission, and
distribution customers as well as industrial, environmental
control, and mass transit markets
DIRECTORSHIPS -- ABB Asea Brown Boveri Ltd., E. I. du Pont de
Nemours and Company; Chairman of Investor AB and Chairman of
Sandvik AB
AFFILIATIONS -- Co-Chairman, the U.S.-Europe-Poland
Commission; Member of the Foreign Investment Council to the
Prime Minister of Russia, Board of World Economic Forum
Foundation, European Round Table of Industrialists, the
Advisory Board of the Council on Foreign
Relations, the Center for Strategic and International Studies,
Advisory Councils at the Graduate School of Stanford
University, Wharton School of Business Administration, and
Humboldt University (Berlin)
JOHN H. BRYAN
AGE 61 JOINED GM BOARD 1993 COMMITTEES -- Executive
Compensation (Chair), Audit,
Capital Stock, Executive
Chairman and Chief Executive Officer, Sara Lee Corporation,
Chicago, IL
DIRECTORSHIPS -- Sara Lee Corporation, Amoco Corporation,
First Chicago NBD Corporation and its subsidiary, First
National Bank of Chicago
AFFILIATIONS -- Member of The Business Roundtable and The
Business Council, President's Committee on the Arts and
Humanities; Member of the Board and past Chairman of Catalyst;
Trustee of the University of Chicago and the Committee for
Economic Development; Vice Chairman of the Art Institute of
Chicago
THOMAS E. EVERHART
AGE 66 JOINED GM BOARD 1989 COMMITTEES -- Director
Affairs, Public Policy
President Emeritus and Professor of Electrical Engineering and
Applied Physics, California Institute of Technology, Pasadena,
CA
DIRECTORSHIPS -- Hewlett-Packard Corporation, Saint-Gobain
Corporation, Reveo, Inc., and Raytheon Corporation
AFFILIATIONS -- Member of the Board of the Corporation for
National Research Initiatives; Senior Scientific Advisor to
the Chair of the W. M. Keck Foundation; Member of National
Academy of Engineering Council and Executive Committee,
Council on Competitiveness; Former Chairman
of General Motors Science Advisory Committee
3
<PAGE>
CHARLES T. FISHER III
AGE 68 JOINED GM BOARD 1972 COMMITTEES -- Director Affairs,
Investment Funds, Public
Policy
Retired Chairman and President of NBD Bancorp, Inc. and its
subsidiary NBD Bank, N.A., Detroit, MI
DIRECTORSHIPS -- Hughes Electronics Corporation, AMR
Corporation and its subsidiary American Airlines, Inc., First
Chicago NBD Corporation and its subsidiary First National Bank
of Chicago
AFFILIATIONS -- Trustee of Citizens Research Council of
Michigan
GEORGE M. C. FISHER
AGE 57 JOINED GM BOARD 1996 COMMITTEES -- Capital Stock,
Executive Compensation
Chairman and Chief Executive Officer, Eastman Kodak Company,
Rochester, NY, since December 1, 1993. Held additional office
of President (December 1993-96); Chairman and Chief Executive
Officer, Motorola, Inc. (1990-93)
DIRECTORSHIPS -- Eastman Kodak Company and AT&T Corporation
AFFILIATIONS -- Chairman of the Boards of University of
Illinois Foundation and the U.S. China Business Council;
Member of The Business Roundtable and Vice Chairman of The
Business Council; Member of the Advisory Council for Trade
Policy and Negotiations (ACTPN)
KAREN KATEN
AGE 48 JOINED GM BOARD 1997
President of the Pfizer U.S. Pharmaceuticals Group, the
principal operating division of Pfizer, Inc. New York, NY,
since 1995, and Executive Vice President of the global Pfizer
Pharmaceuticals Group (1993-95) and Corporate Vice President
(since 1992)
DIRECTORSHIPS -- Harris Corporation
AFFILIATIONS -- Member of the Council of the Graduate School
of Business, University of Chicago, Board of the National
Coalition of Hispanic Health and Human Services Organizations,
the American Bureau for Medical Advancement in China, the
Women's Forum, Inc., the National Pharmaceutical Council, and
the United Way Tri-State
4
<PAGE>
J. WILLARD MARRIOTT, JR.
AGE 66 JOINED GM BOARD 1989 COMMITTEES -- Director Affairs
(Chair), Executive, Executive
Compensation, Investment Funds
Chairman and Chief Executive Officer, Marriott International,
Inc., Washington, DC, since October 1993; President (October
1993-March 1997); Chairman, President and Chief Executive
Officer, Marriott Corporation (1985-93)
DIRECTORSHIPS -- Marriott International, Inc., Host Marriott
Corporation and Host Marriott Services Corporation
AFFILIATIONS -- Director of the U.S.-Russia Business Council;
Serves on Board of Trustees of National Geographic Society and
Georgetown University; Member of The Business Council and The
Business Roundtable
ANN D. MCLAUGHLIN
AGE 56 JOINED GM BOARD 1990 COMMITTEES -- Public Policy
(Chair), Audit, Capital Stock,
Executive
Chairman, The Aspen Institute; Former U.S. Secretary of Labor
(1987-89); President, Federal City Council, Washington, DC
(1990-95)
DIRECTORSHIPS -- AMR Corporation and its subsidiary American
Airlines, Inc., Fannie Mae, Harman International Industries,
Host Marriott Corporation, Donna Karan International, Inc.,
Kellogg Company, Nordstrom, Potomac Electric Power Company,
Sedgwick Group plc, Union Camp Corporation and Vulcan
Materials Company
AFFILIATIONS -- The Public Agenda Foundation and The
Conservation Fund
HARRY J. PEARCE
AGE 55 JOINED GM BOARD 1996
Vice Chairman, Board of Directors since January 1, 1996, with
responsibility for Public Policy Center, the Enterprise
Activities Group, Global Human Resources and the GM
University, Diversity Initiatives, Information Systems &
Services, Worldwide Communications, Office of the Secretary,
GM Locomotive Group, Allison Transmission Division and Hughes
Electronics Corporation; Executive Vice President (1994-95);
Executive Vice President and General Counsel (1992-94), Vice
President and General Counsel (1987-92); Joined General Motors
Corporation in 1985
DIRECTORSHIPS -- Hughes Electronics Corporation, Marriott
International, Inc. and MDU
Resources Group, Inc.
AFFILIATIONS -- Member of The Conference Board, Northwestern
University School of Law Dean's Advisory Council, and Board of
Visitors, United States Air Force Academy; Trustee, Howard
University
5
<PAGE>
ECKHARD PFEIFFER
AGE 56 JOINED GM BOARD 1996 COMMITTEES -- Audit, Capital
Stock
President and Chief Executive Officer (since October 1991),
Compaq Computer Corporation, Houston, Texas; Executive Vice
President and Chief Operating Officer (January-October 1991);
President, Europe and International Division (1989-90)
DIRECTORSHIPS -- Compaq, Bell Atlantic Corporation, and Hughes
Electronics Corporation
AFFILIATIONS -- Serves on Advisory Board of Deutsche Bank;
Member of the Board of Trustees, Southern Methodist
University, Executive Board of the Cox School of Business-SMU,
The Business Council and M. D. Anderson Cancer Center
JOHN G. SMALE
AGE 70 JOINED GM BOARD 1982 COMMITTEES -- Executive (Chair),
ex-officio member of Audit,
Capital Stock, Director Affairs,
Executive Compensation,
Investment Funds, Public Policy
Chairman of the Executive Committee of General Motors
Corporation since January 1, 1996; Former Chairman, General
Motors Corporation (November 2, 1992-December 31, 1995);
Retired Chairman and Chief Executive of The Procter & Gamble
Company
AFFILIATIONS -- Board of Governors of The Nature Conservancy;
Emeritus Trustee of Kenyon College
JOHN F. SMITH, JR.
AGE 60 JOINED GM BOARD 1990 COMMITTEE -- Investment Funds
Chairman, General Motors Corporation since January 1, 1996,
and Chief Executive Officer and President since 1992, Vice
Chairman, Board of Directors (1990-92); Joined General Motors
Corporation in 1961
DIRECTORSHIPS -- Hughes Electronics Corporation and The
Procter & Gamble Company
AFFILIATIONS -- Co-Chairman of The Business Roundtable and
member of The Business Council, U.S.-Japan Business Council,
Catalyst, the Chancellor's Executive Committee of the
University of Massachusetts; Board of Trustees, Boston
University; Member of Board of Overseers of Memorial
Sloan-Kettering Cancer Center; Board of Governors of The
Nature Conservancy and Member of Board of Polish-American
Enterprise Fund
6
<PAGE>
LOUIS W. SULLIVAN
AGE 64 JOINED GM BOARD 1993 COMMITTEES -- Audit, Public
Policy
President, Morehouse School of Medicine, Atlanta, Georgia,
since January 21, 1993; U.S. Secretary of Health and Human
Services (1989-93)
DIRECTORSHIPS -- Georgia Pacific, 3M Corporation, Household
International Inc., CIGNA Corporation, Bristol-Myers Squibb
Company, and Equifax Corporation
AFFILIATIONS -- United Way of America, Boy Scouts of America,
and Little League Foundation
DENNIS WEATHERSTONE
AGE 67 JOINED GM BOARD 1986 COMMITTEES -- Audit (Chair),
Capital Stock, Executive,
Executive Compensation
Retired Chairman of J. P. Morgan & Co., Incorporated and its
subsidiary Morgan Guaranty Trust Company of New York
DIRECTORSHIPS -- J. P. Morgan & Co., Incorporated and its
subsidiary Morgan Guaranty Trust Company of New York, L'Air
Liquide, and Merck & Co., Inc.
AFFILIATIONS -- Member of J. P. Morgan & Co., Inc.
International Council and The Business Council; President and
Trustee of the Royal College of Surgeons Foundation, Inc., New
York; Trustee of the Alfred P. Sloan Foundation; Independent
member of the Board of Banking Supervision of the Bank of
England; Director of the Institute for International Economics
THOMAS H. WYMAN
AGE 68 JOINED GM BOARD 1985 COMMITTEES -- Capital Stock
(Chair), Investment Funds
(Chair), Director Affairs,
Executive, Executive
Compensation
Former Chairman, President and Chief Executive Officer, CBS
Inc., New York, Senior Advisor, SBC Warburg Inc., (1996-97)
and Chairman S. G. Warburg & Co. Inc., New York (1992-96)
DIRECTORSHIPS -- Hughes Electronics Corporation, AT&T
Corporation, AGCO Corporation, and Zeneca Group PLC (London)
AFFILIATIONS -- Member of the Advisory Board of Nestle USA,
Inc., International Advisory Group of Toshiba Corporation
(Tokyo); Member of The Business Council; Trustee Emeritus of
The Ford Foundation and The Aspen Institute; Chairman Emeritus
of Amherst College
7
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS, NAMED EXECUTIVE OFFICERS, AND CERTAIN OTHERS
The beneficial ownership of all classes of common stock of the Corporation
for each nominee for Director, each Named Executive Officer, and all current
directors and officers of the Corporation as a group is shown in the following
table. All information is as of February 28, 1998.
Each of the individuals/groups listed below owns less than one percent of
the outstanding shares and voting power of any class of common stock of the
Corporation, except as follows:
* The Capital Group Companies, Inc. is the parent of six investment management
companies which beneficially own 6.7% of the outstanding shares and voting
power of the Class H Common Stock (0.6% of the combined voting power of the
Common Stock and Class H Common Stock). No management account by itself owns
5% or more of the Class H Common Stock.
* Bankers Trust New York Corporation, its wholly owned subsidiary Bankers Trust
Company (acting as trustee for various trusts and employee benefit plans),
and certain of its indirect wholly owned subsidiaries that act as investment
advisors beneficially own an aggregate of 15.6% of the outstanding shares and
voting power of the Class H Common Stock (1.3% of the combined voting power
of the Common Stock and Class H Common Stock).
* State Street Bank and Trust Company (acting as trustee for various trusts and
employee benefit plans) beneficially owns 11.3% of the outstanding shares and
voting power of the Common Stock (10.3% of the combined voting power of the
Common Stock and Class H Common Stock).
In most cases, each individual has sole voting and investment power with
respect to the shares he or she beneficially owns. Where this is not the case,
any difference will be footnoted. The shares listed below do not include any
Common Stock or Class H Common Stock held by the pension and profit sharing
plans or endowment funds of other corporations or by educational and charitable
institutions of which certain directors and officers serve as directors or
trustees.
<TABLE>
<CAPTION>
Shares Deferred
Beneficially Owned Stock Units Total Shares
-------------------------- -------------------- --------------------------
Class H Class H Class H
Common Common Common Common Common Common
Directors Stock Stock Stock Stock Stock Stock
- ------------------------------- ----------- ----------- -------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
# # # # # #
P. N. Barnevik (c)............. 10,000 -0- 440 -0- 10,440 -0-
J. H. Bryan (c)................ 2,000 -0- 4,934 -0- 6,934 -0-
T. E. Everhart (c)............. 400 -0- 9,101 8,627 9,501 8,627
C. T. Fisher III (d)(e)........ 3,388 58 9,523 8,341 12,911 8,399
G. M. C. Fisher (c)............ 5,000 -0- 602 -0- 5,602 -0-
K. Katen....................... 1,000 -0- -0- -0- 1,000 -0-
J. W. Marriott, Jr. (c)........ 1,000 -0- 6,745 5,110 7,745 5,110
A. D. McLaughlin (c)........... 2,372 -0- 1,857 1,769 4,229 1,769
<CAPTION>
Total Value Stock Options(b)
of Common -----------------------
and Class H
Class H Common Common
Directors Shares(a) Stock Stock
- ------------------------------- -------------- ----------- --------
<S> <C> <C> <C>
$ # #
P. N. Barnevik (c)............. 719,734 -0- -0-
J. H. Bryan (c)................ 478,030 1,084 -0-
T. E. Everhart (c)............. 1,012,502 1,084 -0-
C. T. Fisher III (d)(e)........ 1,238,139 1,084 -0-
G. M. C. Fisher (c)............ 386,202 1,084 -0-
K. Katen....................... 68,940 -0- -0-
J. W. Marriott, Jr. (c)........ 745,699 -0- -0-
A. D. McLaughlin (c)........... 364,855 -0- -0-
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Shares Deferred
Beneficially Owned Stock Units Total Shares
-------------------------- -------------------- --------------------------
Class H Class H Class H
Common Common Common Common Common Common
Directors Stock Stock Stock Stock Stock Stock
- ------------------------------- ----------- ----------- -------- -------- ----------- -----------
# # # # # #
<S> <C> <C> <C> <C> <C> <C>
H. J. Pearce (f)............... 21,782 27,298 23,321 11,306 45,103 38,604
E. Pfeiffer (d)................ 6,000 -0- 1,787 532 7,787 532
J. G. Smale (c)................ 16,000 200 5,813 105 21,813 305
J. F. Smith, Jr. (f)........... 124,606 24,536 51,218 17,745 175,824 42,281
L. W. Sullivan (c)............. 100 -0- 2,548 844 2,648 844
D. Weatherstone (c)............ 6,000 -0- 17,970 9,745 23,970 9,745
T. H. Wyman (d)................ 1,000 250 6,364 5,466 7,364 5,716
<CAPTION>
Other Named Executives
- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. T. Battenberg III (f)....... 22,993 5,099 14,014 4,762 37,007 9,861
L. R. Hughes (f)............... 18,818 10,133 23,428 8,727 42,246 18,860
G. R. Wagoner, Jr. (f)......... 25,262 8,620 23,137 8,727 48,399 17,347
All directors and officers of
the Corporation as a group... 805,696 182,036 397,429 96,171 1,203,125 278,207
The Capital Group
Companies, Inc............... -0- 7,017,840 -0- -0- -0- 7,017,840
333 South Hope Street
Los Angeles, CA 90071
Bankers Trust New York
Corporation.................. -0- 16,318,581 -0- -0- -0- 16,318,581
101 Liberty Street
New York, NY 10006
State Street Bank and Trust
Company...................... 76,684,789 -0- -0- -0- 76,684,789 -0-
225 Franklin Street
Boston, MA 02110
<CAPTION>
Total Value Stock Options(b)
of Common -----------------------
and Class H
Class H Common Common
Directors Shares(a) Stock Stock
- ------------------------------- -------------- ----------- --------
$ # #
<S> <C> <C> <C>
H. J. Pearce (f)............... 4,709,151 240,397 70,684
E. Pfeiffer (d)................ 558,882 -0- -0-
J. G. Smale (c)................ 1,516,427 1,084 -0-
J. F. Smith, Jr. (f)........... 13,873,431 662,906 -0-
L. W. Sullivan (c)............. 217,528 -0- -0-
D. Weatherstone (c)............ 2,056,325 -0- -0-
T. H. Wyman (d)................ 744,545 1,084 -0-
<CAPTION>
Other Named Executives
- -------------------------------
<S> <C> <C> <C>
J. T. Battenberg III (f)....... 2,959,902 128,431 -0-
L. R. Hughes (f)............... 3,693,998 249,543 -0-
G. R. Wagoner, Jr. (f)......... 4,055,487 325,027 -0-
All directors and officers of
the Corporation as a group... 94,472,336 5,041,573 113,100
The Capital Group
Companies, Inc............... 290,819,290 -0- -0-
333 South Hope Street
Los Angeles, CA 90071
Bankers Trust New York
Corporation.................. 676,241,997 -0- -0-
101 Liberty Street
New York, NY 10006
State Street Bank and Trust
Company...................... 5,286,649,354 -0- -0-
225 Franklin Street
Boston, MA 02110
<FN>
(a) The total value is based on the February 27, 1998 closing market prices of
$68.94 for Common Stock and $41.44 for Class H Common Stock.
(b) This column reports the number of shares that may be acquired through
exercise of stock options within 60 days from February 28, 1998. The shares
reported in this column reflect adjustments to the original option grants to
reflect the
</FN>
9
<PAGE>
<FN>
recapitalization resulting from the Hughes Transactions approved by
stockholders in December 1997. Additional information regarding stock
options is provided on pages 18 and 19.
(c) Deferred Stock Units -- These amounts have been deferred under the General
Motors Deferred Compensation Plan for Non-Employee Directors and the
Director's Long-Term Stock Incentive Plan. For more information about these
plans, please refer to the section on Director Compensation on page iv.
(d) Deferred Stock Units -- Includes amounts under the General Motors Deferred
Compensation Plan for Non-Employee Directors and the Director's Long-Term
Stock Incentive Plan (see footnote (c)) as well as amounts deferred under
the Hughes Electronics Deferred Compensation Plan for Non-Employee
Directors. The only material difference between the Hughes plan and the
General Motors Deferred Compensation Plan for Non-Employee Directors is that
all stock amounts are exclusively in Class H Common Stock.
(e) Shares beneficially owned includes 1,688 shares of Common Stock held in two
trusts in which Mr. Fisher has a one-seventh remainderman interest and 500
shares of Common Stock held in a trust of which Mr. Fisher is a co-trustee
and the beneficiary is a relative of Mr. Fisher.
(f) Shares beneficially owned includes shares credited under the General Motors
Savings-Stock Purchase Program ("GM S-SPP"). This program is available to
all salaried employees and provides that participants may contribute up to
15% (20% effective 1/1/98) of eligible salary, subject to maximum limits
established by the Internal Revenue Code ("IRC"). Deferred Stock Units
include shares under the General Motors Benefit Equalization Plan-Savings
("BEP-S"). This Plan is a non-qualified "excess benefit" plan that is exempt
from ERISA and the IRC limitations and provides executives with the full GM
matching contribution without regard to the IRC limitations. Amounts
credited under the Plan are maintained in share units of the Corporation's
Common Stock. Following termination of employment, an employee may, at any
time, elect to receive a complete distribution of amounts in the BEP-S
account, which will be paid in cash. Deferred stock units also include
undelivered incentive awards which will vest upon the occurrence of certain
events and which are subject to forfeiture under certain circumstances.
</FN>
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Federal securities law requires that the individuals and groups listed in
the preceding table must report to the SEC and the Corporation, within certain
periods, how many shares of the Corporation's equity securities they own and if
they conducted any transactions in that stock. Based upon information furnished
by these stockholders, the Corporation believes that all required filings for
1997 and prior years have been made. In 1997, E. Pfeiffer, a director of the
Corporation, and P. H. Hanenberger, an officer of the Corporation, each
inadvertently filed one monthly report after the due date. All transactions have
now been reported.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Compensation Committee consists of Messrs. Bryan, G. M. C.
Fisher, Marriott, Smale,
Weatherstone, and Wyman. Mr. Marriott is the Chairman and Chief Executive
Officer of Marriott International, Inc. Harry J. Pearce, an executive officer of
the Corporation, is a director of Marriott International, Inc.
10
<PAGE>
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
This is a report on the compensation paid to the Corporation's executives,
including the Named Executive Officers. The Named Executive Officers for 1997
all serve on the President's Council. They are:
John F. Smith, Jr.......... Chairman of the Board of Directors, Chief
Executive Officer ("CEO"), and President
Harry J. Pearce............ Vice Chairman of the Board of Directors
J. T. Battenberg III....... Executive Vice President of the Corporation
Louis R. Hughes............ Executive Vice President of the Corporation
G. Richard Wagoner, Jr..... Executive Vice President of the Corporation
COMPENSATION PHILOSOPHY -- General Motors' executive compensation program is
based on the belief that the interests of executives should be closely aligned
with those of GM's stockholders. The philosophies of the Corporation's major
subsidiaries are in most respects similar to the GM philosophy. Under this
philosophy:
* A meaningful portion of each executive's total compensation is linked
directly to accomplishing specific, measurable results which are intended to
create value for the stockholders in both the short-and long-term.
* Executives are motivated to improve the overall performance and profitability
of the Corporation, as well as the business sector to which each is assigned,
and they will be rewarded only when specific, measurable goals previously
established by the Committee have been achieved.
* Each executive's individual performance and contribution will be reflected
through salary adjustments and the amount of incentive awards paid, if any.
* Any long-term incentive awards are paid in GM common stocks to reinforce
further the bond between the executives' interests and your interests.
* In years of strong performance, executives can earn a highly competitive
level of compensation. As a result, the Corporation will be able to attract,
retain, and motivate the leadership talent it needs to maintain and grow its
businesses successfully. Conversely, in years of below average performance,
an executive will receive compensation that is less than competitive
benchmarks.
STOCK OWNERSHIP GUIDELINES -- The Corporation feels strongly that the best way
to enforce the link between the executives' interests and your interests is to
require that executives own a significant amount of GM stock. As a result, the
11
<PAGE>
Committee has established formal stock ownership guidelines for the Named
Executive Officers, as well as all corporate officers and other select senior
executives. The guidelines are as follows:
<TABLE>
<CAPTION>
Minimum Aggregate Value
Position Equivalent
------------------------------------------------------ ----------------------------
<S> <C>
* GM Chairman........................................ 3.5 times base salary
* Other members of the President's Council........... 2.5 times base salary
* Vice President and Group Executives................ 1.5 times base salary
* Vice Presidents.................................... 1.0 times base salary
</TABLE>
As of February 28, 1998, all Named Executive Officers owned more than their
respective guideline amounts.
COMPENSATION DEDUCTIBILITY POLICY -- In 1997, the stockholders approved a new
incentive program effective until 2002. This program includes provisions that
allow the Corporation to comply with the regulations under Section 162(m) of the
Internal Revenue Code ("IRC"). As a result, the Corporation will be able to take
a tax deduction for compensation in excess of $1 million per taxable year paid
to each of the Named Executive Officers. Since the IRC does not permit companies
to take a tax deduction for salary paid in excess of $1 million, the portion of
Mr. Smith's salary which exceeds $1 million will be deferred until after he
retires. If complying with Section 162(m) rules conflicts with the Corporation's
compensation philosophy or what is believed to be the best interests of the
Corporation and its stockholders, the Committee may conclude that the payment of
non-deductible compensation is more consistent with the compensation philosophy
and in the Corporation's and your best interests.
TYPES OF COMPENSATION -- Aside from benefits, which will be reviewed in the
tables following this report, there are three major components to an executive's
total compensation package:
* Base Salary
* Annual Incentives
* Long-Term Incentives
In calculating the proper amount for each of the three components of
compensation, the Committee reviewed the compensation paid for similar positions
at a group of large industrial companies with which GM competes for executive
talent. Since the job market for these executives is not limited to the auto
industry alone, a group consisting of several large, global industrial/service
corporations, including both Ford and Chrysler, was identified as our
"comparator group." Each year, the Committee reviews the compensation paid at
these companies as well as their corporate performance, and this becomes one of
the factors we consider in determining the appropriate performance measures and
compensation levels for executives.
Base Salary -- In connection with the incentive program approved last year,
base salaries for GM executives are targeted to be at the upper end of the third
quartile of the salaries paid for similar positions at our comparator group of
companies. The base salaries of individual executives can and do vary from this
salary benchmark based on such factors as individual performance, potential for
future advancement, responsibilities, and length of time in their current
position.
12
<PAGE>
The Committee believes that continuity in the Corporation's senior
leadership group serves the Corporation best. To encourage continuity, each
named executive has agreed that if he leaves the Corporation he will not work
for a competitor for the next two years. This is the Corporation's only
contractual arrangement with these executive officers.
Annual Incentives -- Annual incentives were awarded under the General
Motors 1997 Annual Incentive Plan which the stockholders approved at the 1997
annual meeting. Payment of awards for the Named Executive Officers is based on
GM's overall performance against objectives established in advance by the
Committee. We reserve the right to make adjustments to awards to reflect the
impact of unplanned events and Management's individual performance.
When the Committee established the target award and performance objectives,
we also set a minimum performance level which must be achieved before any awards
can be paid. If this minimum level is not met, there will be no annual incentive
payout. At the same time, we also set a maximum level beyond which we will not
increase the amount of any payout. The size of final awards depends on the
actual level of performance achieved. When we establish this payout range, we
assess the degree of performance necessary to achieve the target objective by
reviewing both past and projected budget performance levels, as well as external
marketplace conditions such as the economic outlook, projected size of
automotive industry volumes, and expected market share projections. The
Committee does not assign a specified weight to these factors, but rather we use
our judgment to establish a targeted performance level and related payout range
that we believe are in your best interests.
For 1997, Management recommended that the Committee continue to set tough
financial targets. We agreed and tied the payment of annual incentive awards to
meeting specific levels of net income, Return On Net Assets ("RONA"), and
quality, which are based upon the Corporation's budget and business plans. After
a review with Management, we used our discretion in setting the specific
profitability and quality targets.
At the end of the year, the Committee reviewed the Corporation's overall
operating performance and evaluated that performance in light of the impact of
several unplanned events. Financial results for net income, RONA, and quality
exceeded the target levels we had established. Considering that 1997 represented
an all-time record level of net income, we determined that 1997 annual incentive
awards would reflect the overall performance of management in achievement of
such results, as well as the specific performance objectives we had previously
established. The annual incentive awards were determined and paid in cash in
early 1998.
Stock Options -- Options were granted under the provisions of the Amended
1987 Stock Incentive Plan. They are granted to stress the importance of
improving stock value to you, our stockholders, over the long-term and to
encourage executives to own GM stock. Stock options are granted at 100% of the
average price of the stock on the date of grant. In this way executives can be
rewarded only if the stock price goes up, which will benefit both you and the
executive.
When the Committee grants options, we follow competitive long-term
incentive compensation practices. The size of these grants and other long-term
awards discussed below is intended to place executives at the upper end of the
third quartile of long-term incentives granted to similar executive positions at
survey companies. We consider the number of option shares each executive has
already been granted when we determine the size of new grants to each Named
Executive Officer. In addition to his responsibilities at GM, Mr. Pearce also
has oversight responsibility for Hughes and,
13
<PAGE>
therefore, we determined that his grant would be denominated partially in Common
Stock and partially in Class H Common Stock.
Other Long-Term Incentives -- Unlike stock options which reward executives
for enhancing stockholder value by improving the prices of GM common stocks, the
GM Performance Achievement Plan is designed to encourage executives to focus on
accomplishing important strategic business objectives which require more than
one year to complete.
Similar to annual incentive awards, long-term target awards are typically
made annually; however, payout depends upon the achievement of predetermined
targets over a three-year plan period as outlined in the Corporation's strategic
business plan for the award period. Whether the Company actually pays any awards
relating to the 1997-1999 grants will depend on reaching the predetermined RONA
level established for GM's business plan. The Committee will determine the
percentage of each target award, if any, that eventually will be distributed to
participants. The Corporation will not pay any awards if cumulative performance
falls below a minimum or threshold level. In any event, final awards will not
exceed 200% of target. All awards, if paid, are denominated in common stocks.
Management and the Committee both believe that RONA forces the Corporation
to focus on how we are doing with the money you, the stockholders, have invested
in us. RONA performance correlates closely with improvements in our stock prices
and focus on this measure is critical to our future success. In order to
emphasize this, in 1997 the Committee approved a special one-time RONA grant to
employees eligible for annual incentive awards. Payment of these awards is
contingent upon reaching a 12.5% Corporate RONA goal. There are no threshold or
maximum amounts associated with this special grant. If the specified cumulative
RONA level is achieved over a period of four consecutive calendar quarters,
awards will be paid in the form of GM Common Stock. If the goal is realized,
payment will be made as soon as possible. If the goal is not realized by
year-end 2000, the award will expire and no payment will be made.
AWARDS TO CHIEF EXECUTIVE OFFICER
In late 1997, the Committee met to determine the compensation levels for
Mr. Smith. In addition to the accomplishments noted below, we recognized Mr.
Smith's highly effective leadership and his commitment to the Corporation's
priorities of running common, thinking lean and running fast, competing on a
global basis, and growing the business and all of its sectors. The Committee
determined Mr. Smith's compensation as follows:
Base Salary -- 1997 salary was unchanged from 1996. However, in recognition
of his continued strong leadership and performance, Mr. Smith's salary was
increased to $1,950,000 effective January 1, 1998, after an interval of 24
months.
Annual Incentives -- For 1998 the Committee established the individual
award target for Mr. Smith in line with the Corporation's compensation
philosophy. If the target performance level is met, target bonus will be paid.
For maximum performance, his individual award will be paid at 225% of target;
for threshold performance, the award will be paid at 40% of target. Reflecting
the Corporation's overall continuing favorable performance, including record
1997 earnings of $6.7 billion or $8.70 per share, a 25% increase in the
quarterly dividend rate, completion of a $5 billion buyback program
(representing 11.0% of outstanding shares), and completion of the Hughes
Transactions and, after evaluating
14
<PAGE>
Mr. Smith's individual performance, the Committee established his 1997 annual
incentive award between the target and maximum payout levels.
Stock Options -- As part of the review process which led to the revised
incentive program, it was determined that the amount of stock options granted to
Mr. Smith was not competitive with his peers at other companies in the
comparator group. After considering the number of options previously granted to
him, it was determined to increase the size of his grant for 1997 to 275,000
shares.
Other Long-Term Incentives -- The PAP target awards are disclosed on page
19. The regular award covers the three-year period 1997-1999. The size of the
target award was developed in line with the methodology discussed above. Mr.
Smith's 1997-99 award was denominated in cash and will be paid in GM Common and
Class H Common stocks in two installments, if it is earned. With respect to the
special one-time RONA grant made in 1997, Mr. Smith's award (also disclosed on
page 19) was determined in cash and, if earned, will be paid in GM Common Stock.
The cumulative GM RONA for the 1995-97 performance period which concluded at
year-end 1997 was above the threshold level but below target. This result
reflected an extremely aggressive target performance level established by the
Committee in early 1995 for the three-year period. As a result, the final award
for Mr. Smith was paid below target. The decision to pay the 1995-97 grant at a
level below target was in accordance with the Committee's philosophy of
continuing to raise the bar for Corporate performance.
During 1997, the Committee met with the Board of Directors in an executive
session to review the Corporation's performance and the performance of the CEO
and other members of the President's Council, including the Named Executive
Officers. We explained the compensation determinations for these executives, and
the Board agreed with our decisions.
EXECUTIVE COMPENSATION COMMITTEE
John H. Bryan, Chair John G. Smale
George M. C. Fisher Dennis Weatherstone
J. Willard Marriott, Jr. Thomas H. Wyman
15
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below shows the pre-tax compensation paid to the Chairman, CEO &
President Mr. J. F. Smith, Jr. and each of the four other most highly
compensated executive officers during 1995, 1996, and 1997. The 1995 data in the
tables include amounts related to General Motors Class E Common Stock. Effective
June 7, 1996, Electronic Data Systems (EDS), which was previously a wholly owned
subsidiary of the Corporation, was split off from General Motors and shares of
General Motors Class E stock were exchanged for shares of EDS stock on a
one-for-one basis.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------------- -------------------------
Other Awards Payouts
Annual Long-Term All Other
Name and Compen- Stock Incentive Compen-
Principal Position Year Salary Bonus(1) sation Options(2) Payouts(3) sation(4)
- ------------------------- --------- ------------- ------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ $ $ Class # Shares $ $
J. F. Smith, Jr.
Chairman, CEO &
President......... 1997 1,750,000 2,450,000 N.A. Com. 275,000 1,036,000 82,863
1996 1,750,000 1,600,000 69,875 Com. 200,000 2,310,000 52,000
1995 1,500,000 1,750,000 54,181 Com. 150,000 2,300,000 33,750
H. J. Pearce
Vice Chairman....... 1997 950,000 1,070,000 N.A. Com. 82,500 550,000 41,610
Cl. H 26,300
1996 950,000 840,000 N.A. Com. 101,300 1,155,000 28,500
Cl. H 31,400
1995 850,000 900,000 N.A. Com. 40,000 1,100,000 19,125
Cl. E 22,300
Cl. H 25,000
J. T. Battenberg III*
Executive VP........ 1997 887,000 1,020,000 53,448 Com. 100,000 475,000 38,112
L. R. Hughes
Executive VP........ 1997 925,000 1,020,000 N.A. Com. 100,000 518,000 37,740
1996 925,000 825,000 N.A. Com. 100,000 1,155,000 27,750
1995 850,000 900,000 N.A. Com. 80,000 1,100,000 19,125
G. R. Wagoner, Jr.
Executive VP........ 1997 925,000 1,020,000 N.A. Com. 100,000 518,000 36,723
1996 925,000 825,000 N.A. Com. 100,000 1,155,000 27,750
1995 850,000 900,000 N.A. Com. 80,000 1,100,000 19,125
<FN>
* Mr. Battenberg became a Named Executive Officer in 1997.
(1) Bonus
* 1997 awards were granted under the General Motors 1997 Annual Incentive
Plan. They were paid in cash in one installment in early 1998.
* 1995 and 1996 awards were granted under the General Motors Amended
1987 Stock Incentive Plan under which the awards, made as Restricted
Stock Units ("RSUs"), were equivalent to shares of the Corporation's
common stocks and paid in cash. The 1996 RSU grant was equivalent to
both Common and Class H shares and was paid in one installment in
early 1997. The 1995 RSU grant was equivalent to Common, Class E, and
Class H shares and
</FN>
16
<PAGE>
<FN>
was paid in two installments. The first installment vested on the day it
was granted, and the second installment vested on December 31, 1996
and was paid in early 1997. When the Corporation made the grant for
1995, it was anticipated EDS would be split-off in mid-1996. As a
result, all the Class E shares in the 1995 grant vested on the date of
grant and were paid in the first installment. Dividend equivalents
were paid on the unvested Common and Class H shares in the second
installment.
(2) The shares in this column are as granted. These shares were adjusted to
reflect the recapitalization resulting from the Hughes Transactions approved
by stockholders in December 1997.
(3) Long-term incentive payouts under the General Motors 1992 Performance
Achievement Plan.
* Performance periods (3 year) -- 1993-95, 1994-96 and 1995-97.
* Form of payment -- shares of Common and Class H stocks, except that
the 1993-95 award included shares of Class E stock.
* Vesting -- The awards for the named executives vest in four equal
installments -- the first installment vests at the time the final
award is determined, the second and third at the end of the same
and following year, and the fourth installment subsequent to
retirement. The 1993-95 award included shares of Class E stock.
However, as was the case with the 1995 annual bonus award, in view
of the anticipated EDS split-off, the Class E shares in the 1993-95
PAP grant vested on the date of grant and were paid simultaneously
with the first installment.
* Dividend equivalents are paid on unvested shares.
</FN>
</TABLE>
The following table sets forth the number of shares which were vested and
paid and the number of shares which remain unvested and unpaid as of February
28, 1998:
<TABLE>
<CAPTION>
Second Installment of 1994-96 Grant
1995-97 Grant and Third Installment of 1993-95 Grant
---------------------------------- ----------------------------------------
Shares Vested Shares Shares Vested Value of Shares Shares Unvested
in 1998 Unvested Dec. 31, 1997 Vested Dec. 31, 1997 Dec. 31, 1997
--------------- ---------------- ---------------- --------------------- -----------------
Com. Cl. H Com. Cl. H Com. Cl. H Com. Cl. H Com. Cl. H
------ ------ ------- ------ ------- ------ ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$60.75 $36.94
# # # # # # $ $ # #
J. F. Smith, Jr.......... 3,470 1,422 10,410 4,264 16,588 6,641 1,007,721 245,319 32,945 13,479
H. J. Pearce............. 1,727 944 5,181 2,829 6,687 4,700 406,235 173,618 14,435 8,477
J. T. Battenberg III..... 1,591 652 4,773 1,955 6,984 2,791 424,278 103,100 6,610 2,827
L. R. Hughes............. 1,735 711 5,205 2,132 8,107 3,251 492,500 120,092 16,105 6,595
G. R. Wagoner, Jr........ 1,735 711 5,205 2,132 8,107 3,251 492,500 120,092 16,105 6,595
(4) This column shows contributions by the Corporation under various savings
plans and imputed income for endorsement split-dollar life insurance. In the
event of death, the Corporation would be reimbursed for its premiums from
the life insurance policy. Additional information regarding the savings
plans will be found in footnote (f) on page 10. The following table details
the savings and split-dollar amounts.
</TABLE>
<TABLE>
<CAPTION>
J. F. Smith, Jr. H. J. Pearce J. T. Battenberg III L. R. Hughes G. R. Wagoner, Jr.
---------------- ------------ -------------------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Savings Plans.......... $ 63,000 $ 34,200 $ 31,950 $ 33,300 $ 33,300
Split-dollar life...... 19,863 7,410 6,162 4,440 3,423
</TABLE>
17
<PAGE>
OPTIONS AND SAR GRANTS IN 1997
The following table shows the stock options granted to the Named Executive
Officers in 1997. They were granted in a combination of non-qualified and
Incentive Stock Options (ISOs) on February 3, 1997. These options become
exercisable in three equal annual installments commencing on the first
anniversary of the date of grant. The ISOs expire ten years from the date of
grant, and the non-qualified options expire two days later.
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------
Number of % of Total
Securities Options
Underlying Granted to Grant Date
Options Employees Exercise Expiration Present
Name Granted(1) in 1997 Price Date Value(2)
- ------------------------------ --------- ------------- ----------- ------------ -------------
# Shares % $/Share $
$1- 2/3 Par
Common Stock Options
- ------------------------------
<S> <C> <C> <C> <C> <C>
J. F. Smith, Jr............... 275,000 3.06 58.32 2/4/07 3,856,000
H. J. Pearce.................. 82,500 0.92 58.32 2/4/07 1,157,000
J. T. Battenberg III.......... 100,000 1.11 58.32 2/4/07 1,402,000
L. R. Hughes.................. 100,000 1.11 58.32 2/4/07 1,402,000
G. R. Wagoner, Jr............. 100,000 1.11 58.32 2/4/07 1,402,000
<CAPTION>
Class H Stock Options
- ------------------------------
<S> <C> <C> <C> <C> <C>
H. J. Pearce.................. 26,300 0.37 60.88 2/4/07 532,000
<FN>
(1) The shares in this column are as granted. These shares were adjusted to
reflect the recapitalization resulting from the Hughes Transactions approved
by stockholders in December 1997.
(2) These values were determined based on the Black-Scholes option pricing model
at the time of grant. The following assumptions were used in the
calculation:
* Expected price volatility -- 25% (33% for the Class H grant).
* Options will be exercised in the fifth year (seventh year for Class
H).
* An interest rate based upon the corresponding yield of a government
bond maturing five years (seven years for Class H) from the date of
grant.
* Dividends at the rate in effect on the date of grant.
* No adjustments for nontransferability.
</FN>
</TABLE>
The fact that we use the Black-Scholes model does not necessarily mean we
believe or acknowledge that it can accurately determine the value of options.
The ultimate value of the option, if any, will depend on the future market price
of the Corporation's common stocks and the optionee's individual investment
decisions, neither of which can be predicted with any degree of certainty.
18
<PAGE>
AGGREGATE OPTION/SAR EXERCISES IN 1997 AND
OPTION/SAR VALUES AT DECEMBER 31, 1997
The following table provides information concerning the options exercised
by each of the Named Executive Officers in 1997 as well as the value of options
held by such executives at the end of the year. The year-end value is based on
the closing prices of General Motors common stocks on December 31, 1997 (Common
- -- $60.75; Class H -- $36.94). No SARs may be granted under the General Motors
Stock Incentive Plans.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Dec. 31, 1997 Dec. 31, 1997
Shares
Class of Acquired Value Exercisable/ Exercisable/
Name Stock on Exercise Realized Unexercisable Unexercisable
- ------------------------ -------------- -------------- ----------- ---------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
# Shares $ # Shares $
J. F. Smith, Jr......... Common 89,076 1,801,852 556,014 / 497,268 10,839,484 / 5,039,490
H. J. Pearce............ Common 9,215 277,924 144,430 / 207,526 2,206,930 / 2,155,422
Class H -0- -0- 46,819 / 48,101 634,821 / 242,325
J. T. Battenberg III.... Common 29,958 727,804 70,566 / 151,892 854,320 / 1,304,748
L. R. Hughes............ Common 50,025 1,323,377 186,251 / 209,755 3,057,484 / 2,273,081
G. R. Wagoner, Jr....... Common -0- -0- 226,273 / 209,755 4,153,585 / 2,273,081
</TABLE>
LONG-TERM INCENTIVE AWARDS
The following table shows target long-term incentive awards granted to
Named Executive Officers in 1997. The award covering the 1997-99 performance
period was granted under the General Motors 1992 Performance Achievement Plan.
If the minimum or threshold performance level is met or exceeded, the percentage
of the target award that will eventually be paid to participants will depend on
the extent to which the established RONA target for the three-year performance
period is achieved. If the minimum performance level is not met, no awards will
be paid. A special one-time RONA grant was made under the 1997 Performance
Achievement Plan. If the RONA target is met on or before December 31, 2000,
the awards will be paid in GM Common Stock. If the RONA target is not met, the
award will expire on December 31, 2000 and no payment will be made. There are
no maximums or minimums for this award.
<TABLE>
<CAPTION>
Number of Estimated Future Payouts
Shares, Units Under Non-Stock Price-Based Plans Special
or Performance ------------------------------------------ One-Time
Name Other Rights Period Threshold Target Maximum RONA Grant
- ------------------------- -------------- -------------- ------------ ------------ ------------ ------------
# Shs. $ $ $ $
<S> <C> <C> <C> <C> <C> <C>
J. F. Smith, Jr.......... N.A. 1997-99 800,000 2,000,000 4,000,000 1,750,000
H. J. Pearce............. N.A. 1997-99 380,000 950,000 1,900,000 750,000
J. T. Battenberg III..... N.A. 1997-99 370,000 925,000 1,850,000 700,000
L. R. Hughes............. N.A. 1997-99 370,000 925,000 1,850,000 700,000
G. R. Wagoner, Jr........ N.A. 1997-99 370,000 925,000 1,850,000 700,000
</TABLE>
19
<PAGE>
RETIREMENT PROGRAM
The retirement program for General Motors executives in the United States
consists of the General Motors Retirement Program for Salaried Employees as well
as two non-qualified plans. Together, these plans are referred to here as the
"GM Salaried Program."
The General Motors Retirement Program for Salaried Employees is a
tax-qualified plan subject to the requirements of the Employee Retirement Income
Security Act (ERISA). The contributory portion (known as Part B) of this tax-
qualified plan provides benefits under a formula based on Years of Part B
Credited Service and upon the average of the highest five years' of base salary
received during the final ten years of service, subject to certain Internal
Revenue Code limitations which may change from time to time. Part B of the
tax-qualified plan also provides employees with an annual retirement benefit
which is equal to the sum of 100% of the Part B contributions they make after
October 1, 1979, and smaller percentages of the contributions they made before
that date. If employees elect not to contribute to Part B of the tax-qualified
plan, they are entitled to receive only basic retirement benefits equal to a
flat dollar amount per year of credited service (essentially equivalent to the
General Motors Hourly-Rate Employees Pension Plan). Benefits under the
tax-qualified plan vest after five years of credited service and are payable at
the normal retirement age of 65, either in the form of a single life annuity or
in a reduced amount in joint and survivor form.
Supplemental Executive Retirement Program (SERP). If an executive makes
Part B contributions to the tax-qualified plan, the executive may also be
eligible to receive a non-qualified Regular SERP benefit. The sum of the
tax-qualified plan's benefits plus the Regular SERP benefit will provide an
eligible executive with total annual retirement benefits under the GM Salaried
Program that are equal to 2% times Years of Part B Credited Service times
Average Annual Base Salary, less 2% times years of credited service times the
maximum annual Social Security benefit in the year of retirement payable to a
person retiring at age 65 ($16,104 for a 65 year old retiring in 1998).
Table I shows the regular form of the estimated total annual retirement
benefit payable under the GM Salaried Program (based on Average Annual Base
Salary as of December 31, 1997) that would be paid in 12 equal monthly
installments per year as a single life annuity to executives retiring in 1998 at
age 65. If the executive elects to receive such benefits in the form of a 60%
joint and survivor annuity, the single life annuity amounts shown would
generally be reduced by from 5% to 7.5%, depending upon the age differential
between spouses.
20
<PAGE>
TABLE I
PROJECTED TOTAL ANNUAL RETIREMENT BENEFITS FROM ALL PARTS OF THE GM SALARIED
PROGRAM
ASSUMING AN EXECUTIVE QUALIFIES FOR REGULAR SERP BENEFITS (A)
<TABLE>
<CAPTION>
Years of Part B Credited Service
Average Annual -------------------------------------------------
Base Salary(b) 15 25 35 45
- --------------- ------- --------- --------- ---------
<S> <C> <C> <C> <C>
$ $ $ $ $
650,000 190,169 316,948 443,727 570,506
940,000 277,169 461,948 646,727 831,506
1,230,000 364,169 606,948 849,727 1,092,506
1,520,000 451,169 751,948 1,052,727 1,353,506
1,810,000 538,169 896,948 1,255,727 1,614,506
2,100,000 625,169 1,041,948 1,458,727 1,875,506
</TABLE>
(a) The Average Annual Base Salary and the Years of Part B Credited Service
(shown in parenthesis) as of December 31, 1997 for each of the Named
Executive Officers were as follows; John F. Smith, Jr. - $1,575,000
(37 years); Harry J. Pearce - $847,500 (20 years); J. T. Battenberg III -
$653,083 (35 years); Louis R. Hughes - $837,500 (30 years); and G. Richard
Wagoner, Jr. - $835,000 (20 years). The Annual Base Salary for the most
recent year(s) considered in the calculation reported here are shown in the
Summary Compensation Table on page 16 in the column labeled "Salary."
(b) Average Annual Base Salary means the average of the highest five years of
base salary paid during the final ten years of service.
Executives may be eligible to receive an Alternative SERP benefit in lieu
of the Regular SERP benefit if they satisfy certain criteria, including not
working for any competitor or otherwise acting in any manner which is not in the
best interests of the Corporation. An eligible executive will receive the
greater of the Regular SERP benefit or the Alternative SERP benefit. The sum of
the tax-qualified plan's benefits plus the Alternative SERP benefit will provide
an eligible executive with total annual retirement benefits under the GM
Salaried Program that are equal to 1.5% times Eligible Years of Part B Credited
Service (up to a maximum of 35 years) times the executive's Average Annual Total
Direct Compensation, less 100% of the maximum annual Social Security benefit in
the year of retirement payable to a person age 65.
Table II shows the alternative form of the estimated total annual
retirement benefit payable under the GM Salaried Program (based upon Average
Annual Total Direct Compensation as of December 31, 1997) that would be paid in
12 equal monthly installments per year as a single life annuity to executives
retiring in 1998 at age 65. The amounts shown would be reduced in the same way
as under the regular form if the executive were to elect joint and survivor
benefits.
21
<PAGE>
TABLE II
PROJECTED TOTAL ANNUAL RETIREMENT BENEFITS FROM ALL PARTS OF THE GM SALARIED
PROGRAM
ASSUMING EXECUTIVE QUALIFIES FOR ALTERNATIVE SERP BENEFITS(A)
<TABLE>
<CAPTION>
Average Annual Eligible Years of Part B Credited Service
Total Direct -------------------------------------------------------------------
Compensation(b) 15 20 25 30 35
- ---------------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ $ $ $ $ $
1,300,000 276,396 373,896 471,396 568,896 666,396
2,050,000 445,146 598,896 752,646 906,396 1,060,146
2,800,000 613,896 823,896 1,033,896 1,243,896 1,453,896
3,550,000 782,646 1,048,896 1,315,146 1,581,396 1,847,646
4,300,000 951,396 1,273,896 1,596,396 1,918,896 2,241,396
5,050,000 1,120,146 1,498,896 1,877,646 2,256,396 2,635,146
</TABLE>
(a) The Average Annual Total Direct Compensation and the Eligible Years of Part
B Credited Service (shown in parenthesis) which may be considered in the
Alternative SERP calculation as of December 31, 1997 for each of the Named
Executive Officers was as follows: John F. Smith, Jr. - $3,270,000 (35
years); Harry J. Pearce - $1,677,100 (20 years); J. T. Battenberg III -
$1,339,483 (35 years); Louis R. Hughes - $1,639,100 (30 years); and
G. Richard Wagoner, Jr. - $1,616,600 (20 years). The Annual Total Direct
Compensation for the most recent year(s) considered in the calculation
reported here will be found in the Summary Compensation Table on Page 16 in
the columns labeled "Salary" and "Bonus."
(b) Average Annual Total Direct Compensation means the sum of Average Annual
Base Salary plus the average of the highest five Annual Incentive Awards
earned in respect of the final ten calendar years of service prior to an
executive's retirement.
In addition, the Board of Directors has delegated to the Committee
discretionary authority to grant additional eligible years of credited service
to selected key executives under such terms and conditions as the Committee
shall determine for purposes of computing the regular and alternative forms of
SERP for such executives. The regular or alternative form of the SERP benefit is
provided under a program which is non-qualified for tax purposes and not pre-
funded. SERP benefits under the regular and alternative form can be reduced or
eliminated for both retirees and active employees by the Committee and/or the
Board of Directors.
22
<PAGE>
PERFORMANCE PRESENTATION
The graph below compares the cumulative return to stockholders for GM
Common stock with the Standard & Poor's (S&P) 500 Composite Stock Index and Ford
Motor Company and Chrysler Corporation for the last five years. Each line
represents an assumed initial investment of $100 on January 1, 1993 and
reinvestment of dividends over the period. GM Class H Common Stock was
registered under Section 12 of the Exchange Act in late December 1997 and is not
shown due to its limited trading history.
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
GENERAL MOTORS COMMON STOCK,
S&P 500 INDEX, FORD AND CHRYSLER
Date GM Common Stock S&P 500 Ford and Chrysler
---- --------------- ------- -----------------
1/1/93 100 100 100
1/1/94 173 110 160
1/1/95 135 112 146
1/1/96 174 153 164
1/1/97 189 188 197
12/31/97 225 251 271
23
<PAGE>
ITEM NO. 2
The By-laws of the Corporation provide that the selection of independent
public accountants by the Audit Committee shall be submitted for ratification by
the stockholders at the annual meeting. In accordance with the By-laws, the
Committee has selected and engaged the firm of Deloitte & Touche LLP as
independent public accountants for the year 1998 and this selection is being
presented to you for ratification. Representatives of Deloitte & Touche LLP will
attend the annual meeting and will have the opportunity to make a statement if
they desire to do so. They will also be available to answer any questions that
you may have.
Deloitte & Touche LLP has audited the Corporation's books annually since
1918. It has offices or affiliates in or convenient to most of the localities in
the United States and other countries where the Corporation operates and is
considered to be well qualified. The firm uses the work and reports of other
independent auditors who have examined the financial statements of subsidiaries
or investments included in the financial statements of the Corporation. Deloitte
& Touche LLP rotates its personnel assigned to General Motors at least once
every five years. The Audit Committee reviews and approves in advance any
instance where the supervising partner responsible for the General Motors
account is assigned for more than three years. If you do not ratify the
selection of Deloitte & Touche LLP as independent public accountants, the Audit
Committee will seek other accountants. However, because of the difficulty and
expense of making any change in public accountants so long after the beginning
of the current year, it is likely that the appointment would stand for 1998
unless the Committee found other good reason for making a change.
During the 1997 calendar year, Deloitte & Touche LLP provided GM with
extensive audit and other services. Fees for all services totaled approximately
$72 million.
THE BOARD OF DIRECTORS FAVORS A VOTE FOR THE PROPOSAL TO RATIFY THE
SELECTION, BY THE AUDIT COMMITTEE OF THE CORPORATION, OF DELOITTE & TOUCHE LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS TO AUDIT THE BOOKS, RECORDS, AND ACCOUNTS OF
THE CORPORATION AND ITS SUBSIDIARIES FOR THE YEAR 1998. PROXIES SOLICITED BY THE
BOARD OF DIRECTORS WILL BE VOTED FOR THIS PROPOSAL UNLESS YOU SPECIFY A
DIFFERENT CHOICE.
ITEM NO. 3
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue,
N.W., Suite 215, Washington, DC 20037, owner of 102 shares of Common Stock and 4
shares of Class H Common Stock, has given notice that she intends to present for
action at the annual meeting the following resolution:
"RESOLVED: 'That the stockholders of General Motors recommend that the Board
take the necessary steps so that future outside directors shall not serve for
more than six years.'
"REASONS: 'The President of the U.S.A. has a term limit, so do Governors of many
states.'
'Newer directors may bring in fresh outlooks and different approaches with
benefits to all shareholders.'
'No director should be able to feel that his or her directorship is until
retirement.'
24
<PAGE>
'Last year the owners of 21,790,160 shares, representing approximately 4.4% of
shares voting, voted FOR this proposal.'
'If you AGREE, please mark your proxy FOR this resolution.' "
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF THIS PROPOSAL FOR
THE FOLLOWING REASONS:
The Board of Directors has carefully reviewed the issue of term limits and
has expressed its position in the Board's Corporate Governance Guidelines. As
explained in Guideline 11, the Board believes that although term limits may
provide some potential benefits, those benefits are outweighed by the
disadvantages of "losing the contribution[s] of Directors who have . . .
developed, over a period of time, increasing insight into the company and its
operations and, therefore, provide an increasing contribution to the board as a
whole." Continuity of service permits directors to acquire a depth of knowledge
concerning the Corporation that enhances their capability. Term limits could
force the untimely exit of good directors and make it more difficult to recruit
effective candidates.
At the same time, the Board believes that a directorship should not be
viewed as a lifetime position. To ensure that fresh ideas and viewpoints are
available to the Board as necessary, the following practices are followed:
* Directors are elected each year to hold office only until the next annual
meeting or until their successors have been elected and qualified. They are not
entitled to automatic renomination for another term. Reviewing candidates for
the Board and the overall composition of the Board are continuing
responsibilities of the Committee on Director Affairs. In recommending the
nominees for election by the stockholders at the annual meeting, the Committee
considers many factors including the expertise, experience, reputation, and
other personal attributes and qualifications of the incumbents as compared to
other potential candidates, as well as the overall needs of the Corporation.
* Every five years the Committee on Director Affairs conducts a formal
review that specifically addresses each Director's continuation on the Board.
(Guideline 11)
* Directors who change the responsibility they held when elected to the
Board are asked to submit a letter of resignation, to give the Board, via the
Committee on Director Affairs, an opportunity to review the continued
appropriateness of Board service. (Guideline 10)
* The Director Retirement Policy provides that employee directors resign
from the Board when they retire as employees at age 65 or earlier. Any other
director is generally ineligible for reelection for a term commencing subsequent
to his or her 70th birthday. As noted on page iii of this Proxy Statement, Mr.
John G. Smale will stand for election as an exception to this policy. (Guideline
12)
The Board believes that cumulatively these practices provide a beneficial
means of ensuring both continuity of service and the opportunity for obtaining
fresh viewpoints.
A copy of the Guidelines is available from the Secretary upon request.
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 3. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
25
<PAGE>
ITEM NO. 4
Mr. John J. Gilbert and the estate of Lewis D. Gilbert, 29 East 64th
Street, New York, NY 10021-7043, each the owner of record of 100 shares of
Common Stock and 10 shares of Class H Common Stock, Margaret R. Gilbert and John
J. Gilbert, co-trustees under the will of Samuel Rosenthal, owners of 200 shares
of Common Stock, and both representing additional family ownership of 200 shares
of Common Stock have given notice that they intend to present for action at the
annual meeting the following resolution:
"RESOLVED: That the stockholders of General Motors Corporation, assembled in
annual meeting in person and by proxy, hereby request the Board of Directors to
take the steps necessary to provide for cumulative voting in the election of
directors, which means each stockholder shall be entitled to as many votes as
shall equal the number of shares he or she owns, multiplied by the number of
directors to be elected, and he or she may cast all of such votes for a single
candidate, or any two or more of them as he or she may see fit.
"REASONS
"Continued very strong support along the lines we suggest were shown at the last
annual meeting when 28%, an increase over the previous year, 53,176 owners of
138,371,961 shares, were cast in favor of this proposal. The vote against
included 81,801 unmarked proxies.
"California law still requires that unless stockholders have voted not to have
cumulative voting they will have it. Ohio also has the same provision.
"The National Bank Act provides for cumulative voting. In many cases companies
get around it by forming holding companies without cumulative voting. Banking
authorities have the right to question the capability of directors to be on
banking boards. In many cases authorities come in after and say the director or
directors were not qualified. We were delighted to see the SEC has finally taken
action to prevent bad directors from being on boards of public companies. The
SEC should have hearings to prevent such persons becoming directors before they
harm investors.
"Many successful corporations have cumulative voting. Example, Pennzoil defeated
Texaco in that famous case. Texaco's recent problems might have also been
prevented with cumulative voting, getting directors on the board to prevent such
things. Ingersoll-Rand, also having cumulative voting, won two awards. FORTUNE
magazine ranked it second in its industry as 'America's Most Admired
Corporations' and the WALL STREET TRANSCRIPT noted 'on almost any criteria used
to evaluate management, Ingersoll-Rand excels.' In 1994 and 1995 they raised
their dividend.
"Lockheed-Martin, as well as VWR Corporation, now have a provision that if
anyone has 40% or more of the shares cumulative voting applies; it does apply at
the latter company.
"In 1995 American Premier adopted cumulative voting. Alleghany Power System
tried to take away cumulative voting, as well as put in a stagger system of
electing directors, and stockholders defeated it, showing stockholders are
interested in their rights. Hewlett Packard, a very successful company, also has
cumulative voting.
"If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain."
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THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF THIS PROPOSAL
FOR THE FOLLOWING REASONS:
The Board of Directors believes that cumulative voting would threaten to
undermine effective Board functioning in at least two respects. First,
cumulative voting introduces the possibility of partisanship among Board members
that could impair their ability to work together, a requirement essential to the
effective functioning of any board of directors. Second, it is the Board's duty
to represent all of the stockholders. To do so, each Director must feel a
responsibility toward all the stockholders, without any special loyalty to any
one group. From this perspective, cumulative voting is undesirable since
directors so elected might be principally concerned about representing and
acting in the interest of special groups of stockholders rather than in the
interests of all stockholders. At General Motors, all of our stockholders are
minority owners, although some stockholders have more extensive holdings than
others. The Board does not believe that some minority of stockholders should be
advantaged--or disadvantaged--compared with all other stockholders.
A similar proposal for cumulative voting was rejected by General Motors
stockholders at the 1997 meeting and on thirteen other occasions. The
possibility of factionalism that cumulative voting presents has led to a trend
against its adoption. Many companies have eliminated cumulative voting over the
years. Overall, its presence has declined. The State of California, considered
among the most protective of stockholder interests, amended its state laws to
permit corporations to repeal cumulative voting in 1989. In supporting the
change, the Committee on Corporations of the Business Law Section of the State
Bar of California argued:
"While a healthy diversity of opinion and experience, as
represented by independent directors, is desirable, factionalism
is not appropriate in the board's essential executive function.
The principal objective of a business enterprise should be profit
and gain for its shareholders, not political accommodation of
competing interests . . . Practical experience has shown that
effective management of a corporation requires candor and
consensus in the Boardroom, (not) rancor and contention."
No reason is given, and the Board of Directors knows of none, why the
present method of voting should not continue to work as successfully in the
future as it has in the past. Thirteen of General Motors' 15 Board members are
independent, non-employee directors and are all nominated for the Board by
General Motors' Committee on Director Affairs which consists entirely of
independent directors. This guarantees the continued independence of the Board
in representing all of the stockholders.
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 4. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
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ITEM NO. 5
Mr. Brent Blackwelder, 3517 Rodam St. NW, Washington, DC 20008, owner of 40
shares of GM Common Stock, and other filers have given notice that they intend
to present for action at the annual meeting the following resolution:
"GLOBAL WARMING
"WHEREAS:
"The overwhelming majority of independent, peer-reviewed atmospheric
scientists agree that global warming, or climate change, is not hypothetical but
a real, existing problem posing serious challenges for modern civilization;
"The Intergovernmental Panel on Climate Change (IPCC), composed of
scientists nominated and reviewed by governments, warns that global warming
caused by burning fossil fuels and emitting greenhouse gases is already under
way. The IPCC anticipates that climate change will result in:
"* global warming over the next century exceeding that over the whole last
100 centuries:
"* (with the World Health Organization) increased spread of infectious
diseases, like malaria spreading northward into the United States, and more
frequent and deadly heat waves;
"* sea-level rises, putting 92 million people at risk in low-lying coastal
areas, and stronger storm surges, exacerbating the damage from hurricanes and
tropical storms;
"* and a more vigorous hydrological cycle, likely causing stronger
precipitation, increased flooding in some areas, greater drought in others, and
greater intensity and force of storms.
"WE BELIEVE:
"Climate change is currently costing the U.S. taxpayers billions of dollars
to subsidize fossil fuels through federal appropriations and the Tax Code;
advertising which flies in the face of overwhelming scientific evidence harms
the company's reputation.
"British Petroleum has taken leadership among oil companies in recognizing
the problem of climate change, saying, 'The time to consider the policy
dimensions of climate change is . . . when the possibility cannot be discounted
. . . We in BP have reached that point.' John Browne, Group Chief Executive,
British Petroleum (Stanford, 5/19/97). If a major international oil company is
now taking steps to address and reduce climate change, do we want to be left
behind?
"RESOLVED: that the shareholders of General Motors request that the Board of
Directors make a report (at reasonable costs and omitting proprietary
information), available to shareholders by August 1998, on the greenhouse gas
emissions from our company's own operations or from its products, including
(with dollar amounts where relevant) (i) what our company is doing in research
and/or action to reduce those emissions and ameliorate the problem, (ii) the
financial exposure of our company and its shareholders due to the likely costs
of reducing those emissions and potential liability for damages associated with
climate change, and (iii) actions by our company, or by the industry
associations to which it pays dues, promoting the view that the issue of climate
change is exaggerated or not real."
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The following statement was submitted in support of such resolution:
"SUPPORTING STATEMENT
"We believe that General Motors is not only exposing its shareholders to
financial risk by continuing to emit greenhouse gases as the problem of climate
change become more severe, more widely understood, and more likely to lead to
legislation that will penalize greenhouse gas emitters. Furthermore, we believe
that our company is incurring costs for advertising and lobbying to suggest that
the problem is exaggerated, not real, or too costly to deal with; and thus using
our prestige and influence to delay any lessening of climate change. To express
your concern about climate change, vote YES."
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF THIS PROPOSAL
FOR THE FOLLOWING REASONS:
GM recognizes the significant challenges presented by the global climate
issue and appreciates that GM, along with other global entities, must take
action to address it. The Corporation has a commitment to protecting human
health, natural resources, and the global environment. This commitment is
expressed in the GM Environmental Principles, which were approved by the GM
Board of Directors in 1991, and apply to our operations and products worldwide.
These principles provide a disciplined framework for all our employees regarding
GM's environmental direction and reflect GM's many years of commitment to
environmental stewardship. Information about specific GM initiatives that
demonstrate this commitment can be found in the reports referenced below.
The GM Environmental Health & Safety Report, which is published annually,
contains comprehensive environmental performance data, including greenhouse gas
emissions. This report follows the Coalition for Environmentally Responsible
Economies (CERES) report protocol, which is a standardized format for
environmental disclosure. CERES, a non-profit membership organization, is a
diverse coalition composed of leading environmental organizations and leaders in
the investment community. The GM Environmental Health and Safety Report is
publicly available and can be obtained from the Secretary or can be found on the
Internet at www.gm.com.
GM also compiles a voluntary report on annual greenhouse gas emissions and
emission reductions and submits it to the U.S. Department of Energy. This report
is made in accordance with the Department of Energy's Voluntary Reporting of
Greenhouse Gas Emissions under Section 1605(b) of the Energy Policy Act of 1992.
GM was the first vehicle manufacturer to make this submittal and has
participated in this program since its inception. The report, which is publicly
available, demonstrates the progress that GM is making in reducing greenhouse
gas emissions.
GM participates in groups with diverse perspectives to promote
understanding and to find common ground on sound public policy approaches. For
example, GM is a member of the Climate Task Force of the President's Council on
Sustainable Development (PCSD). In this capacity, GM participated in the
formation of a set of climate policy principles which represent a consensus
statement from industry, environmental, citizen, and state and local leaders.
The PCSD Principles call for early action, international commitments,
accountability, flexibility, strong measures to encourage technology, and
fairness. GM's policy direction with respect to the global climate issue is
guided by these PCSD
29
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Principles. Thoughtful, measured analysis and action is required because of the
global scope and the need for a global response.
In another cooperative initiative, GM, the World Resources Institute, and
other major global companies have joined together to develop public policy
solutions addressing the global climate issue. The objective is to reduce the
risks of global climate change, while minimizing the disruptions in overall
energy availability and protecting the economic health of nations and
businesses. On January 12, 1998, GM and the World Resources Institute announced
a collaboration that began last year to identify measures to reduce greenhouse
gas emissions while protecting the economy.
We agree that the potential consequences of global climate require
responsible actions. For GM, we believe that the key to acting responsibly is
technology development, and we are working on new technologies that will enable
us to meet our environmental and economic goals. A few of these initiatives
include the following:
* GM is pursuing the development and implementation of new technologies to
increase the fuel economy of our vehicles, thus reducing greenhouse gas
emissions. Since 1974, we have improved the average fuel economy of new
passenger cars and light trucks in the U.S. by approximately 130% and
75%, respectively, with similar improvements in our European vehicles.
* GM currently has available to the public two electric vehicles that emit
no greenhouse gases, the EV1 and the S10 electric pickup truck. GM is
continuing the development of electric vehicles, addressing both the
technology and market challenges associated with these zero-emission
vehicles.
* In January 1998, GM unveiled four advanced technology vehicles,
including a compressed natural gas version of the EV1, two hybrid
propulsion system cars, and a fuel cell-powered vehicle. The major
investments in these initiatives demonstrate GM's efforts to explore all
potential solutions to the global climate issue.
* GM has joined with the Federal government, Ford, and Chrysler in the
Partnership for a New Generation of Vehicles (PNGV). This project is a
collaborative effort to reach for a "supercar" by early in the next
century. We participate in a similar effort in Europe called EUCAR.
* GM is also working with major oil companies to develop cleaner fuels for
the current fleet of vehicles as well as advanced technology vehicles.
GM has concluded that there is enough evidence linking global climate
change to man-made greenhouse gases to have cause for concern, and we've said
so. Having said so, we accept certain responsibilities with respect to our
products and manufacturing processes. However, if we act precipitously, the
economic costs could go well beyond most people's ability to pay regardless of
their commitment to the environment. GM is working toward solutions that both
meet market demands and protect the environment. We must be judicious in our
actions to ensure that we have identified the most viable technological
solutions without disrupting the economic foundation necessary for this
development work to continue.
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 5. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
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ITEM NO. 6
Mark J. Seidenberg, P.O. Box 6102, Woodland Hills, CA 91365, owner of 60
shares of Common Stock and 2 shares of Class H Common Stock, has given notice
that he intends to present for action at the annual meeting the following
resolution:
"The stockowners hereby recommend that the Board of Directors adopt the
following policies for all dealings with China and the former Soviet Union:
"1. Goods or services produced in whole or part by slave or forced labor
shall not be acceptable for delivery to the corporation, its subsidiaries,
affiliates, or joint ventures. A suitable certificate of origin shall be
required.
"2. Goods provided by the corporation, its subsidiaries, affiliates, or
joint ventures shall not be sold to or otherwise provided to any facility
utilizing slave or forced labor. A suitable certificate of use shall be
required.
"3. The right of on-site inspection to determine the existence of slave or
forced labor shall be vigorously pursued.
"4. The corporation shall cooperate promptly, energetically, and fully with
the United States government and any international organization in their laws or
policies to discourage the use of slave or forced labor.
"For purposes of this resolution, the term 'former Soviet Union' shall mean
the countries of, and any combination thereof, Russia, Ukraine, Kazakhstan,
Georgia, Armenia, Azerbaijan, Uzbekistan, Belarus (Byelorussia), Kyrgyzstan
(Kirghizia), Moldova (Moldavia), Tajikistan (Tadzhikistan), and Turkmenistan
(Turkmenia)."
The following statement was submitted in support of such resolution:
"Supporting Statement:
"The outrageous arrest and jailing of American Harry Wu by the Chinese
Communist regime put the spotlight again on the immense Chinese 'laogai' forced
labor system. Mr. Wu has exposed this hideous system for years.
"Slave and forced labor are widespread in China and, to a lesser extent, in
the former Soviet Union. China's 1100 laogai camps and factories include about
8,000,000 slave and forced laborers, and the gulags of the former Soviet Union
have not been eliminated.
"These slave and forced labor facilities produce a wide range of products,
including sophisticated machinery and electronics, and much of it is intended
for export. This vast problem has prompted the state of California to pass a law
refusing to buy slave-made goods from overseas.
"GM has billion dollar deals with China and the former Soviet Union. In
China GM has a $1.6 billion joint venture with a Chinese government company to
produce 100,000 Buicks per year in Shanghai; a $100 million joint venture with
another Chinese company to produce S-10 trucks; a $40 million deal for 5
technology training institutes; $250 million in investments by GM's Delphi
Automotive Systems; and major deals with GM Hughes to provide satellites and
communication services. GM lobbied for Chinese most-favored-nation status
despite the $40 billion annual U.S.-China trade deficit. In the former Soviet
Union, GM has established a joint venture to produce 10,000 Chevrolet Blazers
per year with the expectation of growing to 45,000 per year by the end of 1998.
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"Current U.S. law does not cover the billions of dollars of GM activities
overseas for use or sale overseas. It also does not prohibit the sale of goods
to slave labor facilities overseas.
"I think GM can do without slave labor. If you can imagine any convincing
argument against this policy, I can't. But, believe me, GM's board will think of
something. Please read the board's argument thoroughly to see if it has any
substance, and then vote with your best judgment."
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF THIS PROPOSAL
FOR THE FOLLOWING REASONS:
General Motors opposes the use of slave or forced labor and does not
knowingly enter into agreements with parties who use such practices. As
confirmation of this position, in 1993 GM Worldwide Purchasing adopted a policy
of refusing to purchase goods produced with slave or forced labor--thereby
addressing the principal concern of this proposal, which is the purchase of
goods from entities using slave or forced labor in the People's Republic of
China and the former Soviet Union.
Compliance procedures are in place supporting this policy. For example,
through its supplier development process, Worldwide Purchasing representatives
normally visit the production facilities of potential suppliers. These visits
give the GM representatives the opportunity to observe the workforce and
interview management. Any observations on GM's part or responses by supplier
management that indicate the possible use of slave or forced labor will prompt
further review of the relationship. Further, GM requests for quotes and purchase
orders now include a clause, for any goods to be imported into the U.S. by GM or
a GM-controlled affiliate, that the seller represents that goods purchased under
this order were not produced with forced labor (as defined in 19 U.S.C. 1307)
either by the seller or the seller's suppliers. Finally, the Customs Section of
the GM Tax Staff monitors publications by the U.S. Customs Service which may
identify companies using slave or forced labor and notifies Worldwide Purchasing
if any GM suppliers are so identified. Worldwide Purchasing would then take
appropriate action, including terminating any current orders with such suppliers
unless the supplier takes immediate remedial action to GM's satisfaction.
Because of this policy and related procedures, the Board of Directors does not
consider it necessary or effective to adopt further policies to address this
issue.
More broadly, given the global society in which GM operates, the Board of
Directors also believes international business and trade dealings in compliance
with relevant laws can provide an avenue of growth and prosperity for the
Corporation. Furthermore, business dealings in the People's Republic of China
and the former Soviet Union by GM and other U.S. corporations can have a
positive impact on the well being of the people of those countries.
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 6. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
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<PAGE>
ITEM NO. 7
Lee Krimm, 23701 Nadir Street, West Hills, CA 913043019, owner of 49 shares
of Class H Common Stock has given notice that he intends to present for action
at the annual meeting the following resolution:
"RESOLVED: General Motors shareholders request the Board of Directors take
the necessary steps to amend the company's governing instruments, including
the corporate by-laws, to limit the outside board memberships of GM
directors. This includes the requirement that changing these limits on
outside board memberships can be instituted only with a majority vote of
shareholders as a separate issue."
The following statement was submitted in support of such resolution:
"This board limit is the standard issued by the National Association of
Corporate Directors:
"1) Employed directors should sit on no more than 3 boards.
"2) Retired directors should sit on no more than 6 boards.
"This limit responds to key points in the Business Week December 8, 1997
cover story. 'The Best & the Worst Boards'
"1) GM has overextended directors.
"2) GM's Ann McLaughlin has 13 board seats--stretched too thin?
"3) The best boards continue to raise the bar, convinced that a stronger
board can only help improve competitiveness.
"4) After a decade in which seemingly strong companies stumbled--including
General Motors--corporate governance experts are now focused on
stopping corporate downfalls before they happen.
"5) Business Week measured director quality by awarding points if fully
employed directors sit on no more than 3 corporate boards and retired
directors sit on no more than 6 boards.
"Limits are particularly important for GM Directors because:
"1) Outside GM directors have limited experience in key areas of GM
business--automotive and aerospace.
"2) GM directors have extensive responsibilities as trustees, directors and
chairpersons for outside foundations, universities, institutions and
professional organizations.
"3) GM is engaged in an extremely complex transactions such as the Hughes
Electronics sell-off. The mere summation of this complex transaction
given to shareholders was 300 pages of technical language.
"Issues requiring heightened GM board attention include these news reports:
"GM stock fell as analysts focused on the decline in profitability at its
Delphi auto parts division. Analysts concluded that Delphi was less likely
to be partly spun off soon.
New York Times October 15, 1997
"Hughes DIRECTV growth is flat, said Paine Webber Securities analyst John
Modzelewski.
USA Today October 21, 1997
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<PAGE>
"GM Hires Whitewater prosecutor Kenneth Starr's firm to argue against
whistleblowers to the U.S. Supreme Court.
USA Today October 6, 1997
"Pickups and sport-utility vehicles are particularly deadly when they hit
cars in the side because they are higher and more likely to hit car
occupants in the head and chest.
New York Times September 24, 1997
"GM Class H Shareholders sue GM for cheating them out of the 20% premium
they were promised if GM sold any or all of Hughes Electronics.
Detroit News February 25, 1997
"For the best GM board to give detail attention to these issues:
"LIMIT BOARD MEMBERSHIPS
"YES ON 7
"---End of Resolution - - -"
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF THIS PROPOSAL
FOR THE FOLLOWING REASONS:
The Board believes that each of the General Motors directors is fully
committed to doing whatever is necessary, including spending sufficient time, to
fulfill his or her fiduciary obligations to its stockholders.
GM Board's Corporate Governance Guideline concerning Board membership
criteria (No. 1) makes the Board's Committee on Director Affairs responsible for
annually reviewing with the Board the appropriate skills and characteristics
required of Directors in the context of the current make-up of the Board. This
assessment considers issues of diversity, age, skills such as understanding of
manufacturing technologies, international background, etc. -- to determine the
current needs of the Board. In addition, before recommending Director candidates
to the Board, the Committee examines each individual's ability to devote the
time required to be an effective representative of the stockholders. This review
includes evaluating the demands on the potential nominees' time from present
employment as well as service on other boards. The Committee recommends only
those candidates fully able to meet the necessary commitment to GM and its
stockholders. In addition, under the GM Board's Corporate Governance Guideline
No. 10, independent Directors must advise the Chairman of the Board and the
Chairman of the Committee on Director Affairs in advance of accepting an
invitation to serve on another board.
Finally, the Board believes that the experience Directors gain by serving
on other boards is an asset, not a liability, to General Motors. By limiting the
number of other corporations' boards on which a GM Director can serve (even
though this proposal does not specify a number), this proposal would limit the
pool of candidates who could serve on the Board and could reduce the diversity
of experience of members of the Board. Moreover, General Motors and its
stockholders could lose the experience and knowledge of valuable Directors if
they fail to resign from a requisite number of other boards. The Corporation and
its stockholders are best served through the Board and the Committee on Director
Affairs
34
<PAGE>
continuing to consider each person's ability to devote sufficient time to Board
matters on an individual basis rather than according to an arbitrary, inflexible
rule.
THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THIS STOCKHOLDER PROPOSAL,
ITEM NO. 7. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY A DIFFERENT CHOICE.
EXPENSES OF SOLICITATION
The Corporation will pay the cost of this solicitation of proxies. General
Motors will solicit proxies by mail and the directors, officers, and employees
of GM may also solicit proxies by telephone, telegram, or personal contact.
These persons will not receive any additional compensation for such services. In
addition, General Motors has retained Morrow & Co., Inc., to assist in
soliciting proxies for a fee of up to $50,000, plus reasonable out-of-pocket
expenses. The Corporation will reimburse brokers and other stockholders of
record for their expenses in forwarding proxy material to beneficial owners.
OTHER MATTERS
The enclosed proxy gives the Proxy Committee discretionary authority to
vote your shares in accordance with its best judgment with respect to all
additional matters which might come before the annual meeting. In addition to
the scheduled items of business, the meeting may consider stockholder proposals
omitted from the Proxy Statement and form of proxy pursuant to the Proxy Rules
of the Securities and Exchange Commission and matters related to the conduct of
the meeting. At the time this Proxy Statement went to press, the Board of
Directors was not aware of any such matter which would be presented for action
at the meeting.
IF YOU ARE GOING TO VOTE BY MAIL, WE ENCOURAGE YOU TO SPECIFY YOUR CHOICES
BY MARKING THE APPROPRIATE BOXES ON THE ENCLOSED PROXY CARD. HOWEVER, YOU DO NOT
NEED TO MARK ANY BOXES IF YOU WISH TO VOTE ACCORDING TO THE BOARD OF DIRECTORS'
RECOMMENDATIONS; JUST SIGN, DATE AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE.
IF YOU ARE GOING TO VOTE YOUR PROXY BY TELEPHONE OR THE INTERNET, SIMPLY FOLLOW
THE INSTRUCTIONS ON THE ENCLOSED FORM. THANK YOU FOR YOUR COOPERATION AND YOUR
PROMPT RESPONSE.
By order of the Board of Directors,
NANCY E. POLIS, Secretary
April 20, 1998
35
<PAGE>
- --------------------------------------------------------------------------------
RESULTS OF THE ANNUAL MEETING
The results of the voting at the annual meeting will be provided to all
stockholders. To obtain a transcript of the meeting, stockholders should write
to General Motors Corporation, Mail Code 482-111-238, General Motors Building,
Detroit, Michigan 48202.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
ENVIRONMENTAL, HEALTH & SAFETY REPORT
If you would like a copy of the General Motors Environmental, Health &
Safety Report, you may obtain it by writing to General Motors Corporation,
Mail Code 482-111-239, General Motors Building, Detroit, Michigan 48202 or on
GM's Internet site, www.gm.com. This report provides information on the
environmental aspects of GM's products and operations.
- --------------------------------------------------------------------------------
<PAGE>
LOGO
IMPORTANT!
If you are going to vote by mail, you are en-
couraged to specify your choices by marking the
appropriate boxes on the enclosed proxy. How-
ever, if you wish to vote in accordance with the
Board of Directors' recommendations, it is not
necessary to mark any boxes. Merely sign, date
and return the proxy in the enclosed envelope.
LOGO Printed on recycled paper
<PAGE>
GM GENERAL MOTORS CORPORATION
- ---- PROXY/VOTING INSTRUCTION CARD
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS
HOTEL DU PONT, 11TH & MARKET STREETS, WILMINGTON, DELAWARE
MONDAY, JUNE 1, 1998, 10:00 A.M. LOCAL TIME
The undersigned authorizes John F. Smith, Jr., Harry J. Pearce, and
J. Michael Losh and each of them as the Proxy Committee, to vote the COMMON
STOCK AND CLASS H COMMON STOCK of the undersigned upon the nominees for
Director (P. N. Barnevik, J. H. Bryan, T. E. Everhart, C. T. Fisher III,
G. M. C. Fisher, K. Katen, J. W. Marriott, Jr., A. D. McLaughlin, H. J. Pearce,
E. Pfeiffer, J. G. Smale, J. F. Smith, Jr., L. W. Sullivan, D. Weatherstone,
T. H. Wyman), upon the other Items shown on the reverse side, which are
described on the pages identified in the Table of Contents to the Proxy
Statement (page i), and upon all other matters which may come before the 1998
Annual Meeting of Stockholders of General Motors Corporation, or any
adjournment thereof.
This card also provides voting instructions for shares held in the various
employee savings plans of General Motors and its subsidiaries as described in
the Proxy Statement. IF YOUR REGISTRATIONS ARE NOT IDENTICAL, YOU MAY RECEIVE
MORE THAN ONE SET OF PROXY MATERIALS. PLEASE SIGN AND RETURN ALL CARDS YOU
RECEIVE.
TO VOTE BY TELEPHONE / INTERNET -- SEE ENCLOSED INSTRUCTIONS.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
(SEE REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
---------------
SEE REVERSE
SIDE
---------------
<PAGE>
PLEASE MARK
/X/ YOUR VOTE
WITH AN X.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1-2 AND "AGAINST" ITEMS 3-7
This proxy/voting instruction card will be voted "FOR" Items 1-2 if no choice
is specified.
FOR WITHHELD
1. Election of Directors / / / /
----------------------------------------
For, except vote withheld from the above
nominee(s):
FOR AGAINST ABSTAIN
2. Ratify selection / / / / / /
of Independent
Accountants
THIS PROXY/ VOTING INSTRUCTION CARD REPRESENTS YOUR HOLDINGS OF COMMON
STOCK AND CLASS H COMMON STOCK.
- --------------------------------------------------------------------------------
TO VOTE BY TELEPHONE / INTERNET -- SEE INSTRUCTIONS.
This proxy/voting instruction card will be voted
"AGAINST" Items 3-7 if no choice is specified.
FOR AGAINST ABSTAIN
3. Stockholder / / / / / /
proposal
to limit
director
service
4. Stockholder / / / / / /
proposal on
cumulative
voting
5. Stockholder / / / / / /
proposal on
greenhouse
gas emissions
6. Stockholder / / / / / /
proposal
dealing with
China and
former Soviet
Union
7. Stockholder / / / / / /
proposal
limiting
board
memberships
- --------------------------------------------------------------------------------
SIGNATURE(S) DATE
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY/VOTING INSTRUCTION
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
NOTE: Please add your title if you are signing as Attorney, Administrator,
Executor, Guardian, Trustee or in any other representative capacity.
<PAGE>
GM GENERAL MOTORS CORPORATION
- ---- PROXY/VOTING INSTRUCTION CARD COMMON
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS
HOTEL DU PONT, 11TH & MARKET STREETS, WILMINGTON, DELAWARE
MONDAY, JUNE 1, 1998, 10:00 A.M. LOCAL TIME
The undersigned authorizes John F. Smith, Jr., Harry J. Pearce, and
J. Michael Losh and each of them as the Proxy Committee, to vote the COMMON
STOCK of the undersigned upon the nominees for Director (P. N. Barnevik,
J. H. Bryan, T. E. Everhart, C. T. Fisher III, G. M. C. Fisher, K. Katen,
J. W. Marriott, Jr., A. D. McLaughlin, H. J. Pearce, E. Pfeiffer, J. G. Smale,
J. F. Smith, Jr., L. W. Sullivan, D. Weatherstone, T. H. Wyman), upon the
other Items shown on the reverse side, which are described on the pages
identified in the Table of Contents to the Proxy Statement (page i), and upon
all other matters which may come before the 1998 Annual Meeting of Stockholders
of General Motors Corporation, or any adjournment thereof.
This card also provides voting instructions for shares held in the various
employee savings plans of General Motors and its subsidiaries as described in
the Proxy Statement. IF YOUR REGISTRATIONS ARE NOT IDENTICAL, YOU MAY RECEIVE
MORE THAN ONE SET OF PROXY MATERIALS. PLEASE SIGN AND RETURN ALL CARDS YOU
RECEIVE.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
(SEE REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
---------------
SEE REVERSE
SIDE
---------------
<PAGE>
PLEASE MARK
/X/ YOUR VOTE
WITH AN X. COMMON
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1-2 AND "AGAINST" ITEMS 3-7
This proxy/voting instruction card will be voted "FOR" Items 1-2 if no choice
is specified.
FOR WITHHELD
1. Election of Directors / / / /
----------------------------------------
For, except vote withheld from the above
nominee(s):
FOR AGAINST ABSTAIN
2. Ratify selection / / / / / /
of Independent
Accountants
THIS PROXY/ VOTING INSTRUCTION CARD REPRESENTS YOUR HOLDINGS OF COMMON
STOCK.
- --------------------------------------------------------------------------------
This proxy/voting instruction card will be voted
"AGAINST" Items 3-7 if no choice is specified.
FOR AGAINST ABSTAIN
3. Stockholder / / / / / /
proposal
to limit
director
service
4. Stockholder / / / / / /
proposal on
cumulative
voting
5. Stockholder / / / / / /
proposal on
greenhouse
gas emissions
6. Stockholder / / / / / /
proposal
dealing with
China and
former Soviet
Union
7. Stockholder / / / / / /
proposal
limiting
board
memberships
- --------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY/VOTING INSTRUCTION CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
NOTE: Please add your title if you are signing as Attorney, Administrator,
Executor, Guardian, Trustee or in any other representative capacity.
Signature: ____________________________________________ Date ______________
Signature: ____________________________________________ Date ______________
<PAGE>
GM GENERAL MOTORS CORPORATION
- ---- PROXY/VOTING INSTRUCTION CARD CLASS H
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS
HOTEL DU PONT, 11TH & MARKET STREETS, WILMINGTON, DELAWARE
MONDAY, JUNE 1, 1998, 10:00 A.M. LOCAL TIME
The undersigned authorizes John F. Smith, Jr., Harry J. Pearce, and
J. Michael Losh and each of them as the Proxy Committee, to vote the CLASS H
COMMON STOCK of the undersigned upon the nominees for Director (P. N. Barnevik,
J. H. Bryan, T. E. Everhart, C. T. Fisher III, G. M. C. Fisher, K. Katen,
J. W. Marriott, Jr., A. D. McLaughlin, H. J. Pearce, E. Pfeiffer, J. G. Smale,
J. F. Smith, Jr., L. W. Sullivan, D. Weatherstone, T. H. Wyman), upon the
other Items shown on the reverse side, which are described on the pages
identified in the Table of Contents to the Proxy Statement (page i), and upon
all other matters which may come before the 1998 Annual Meeting of Stockholders
of General Motors Corporation, or any adjournment thereof.
This card also provides voting instructions for shares held in the various
employee savings plans of General Motors and its subsidiaries as described in
the Proxy Statement. IF YOUR REGISTRATIONS ARE NOT IDENTICAL, YOU MAY RECEIVE
MORE THAN ONE SET OF PROXY MATERIALS. PLEASE SIGN AND RETURN ALL CARDS YOU
RECEIVE.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
(SEE REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
---------------
SEE REVERSE
SIDE
---------------
<PAGE>
PLEASE MARK
/X/ YOUR VOTE
WITH AN X. CLASS H
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1-2 AND "AGAINST" ITEMS 3-7
This proxy/voting instruction card will be voted "FOR" Items 1-2 if no choice
is specified.
FOR WITHHELD
1. Election of Directors / / / /
----------------------------------------
For, except vote withheld from the above
nominee(s):
FOR AGAINST ABSTAIN
2. Ratify selection / / / / / /
of Independent
Accountants
THIS PROXY/VOTING INSTRUCTION CARD REPRESENTS YOUR HOLDINGS OF CLASS H
COMMON STOCK.
- --------------------------------------------------------------------------------
This proxy/voting instruction card will be voted
"AGAINST" Items 3-7 if no choice is specified.
FOR AGAINST ABSTAIN
3. Stockholder / / / / / /
proposal
to limit
director
service
4. Stockholder / / / / / /
proposal on
cumulative
voting
5. Stockholder / / / / / /
proposal on
greenhouse
gas emissions
6. Stockholder / / / / / /
proposal
dealing with
China and
former Soviet
Union
7. Stockholder / / / / / /
proposal
limiting
board
memberships
- --------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY/VOTING INSTRUCTION CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
NOTE: Please add your title if you are signing as Attorney, Administrator,
Executor, Guardian, Trustee or in any other representative capacity.
Signature: ____________________________________________ Date ______________
Signature: ____________________________________________ Date ______________
<PAGE>
VOTE BY TELEPHONE OR INTERNET
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE PROXY COMMITTEE TO VOTE YOUR
SHARES IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
VOTE BY TELEPHONE: THERE IS NO CHARGE TO YOU FOR THIS CALL
CALL TOLL FREE * ON A TOUCH-TONE TELEPHONE
1-888-457-2961 ANYTIME.
YOU WILL BE ASKED TO ENTER THE 13-DIGIT CONTROL NUMBER
LOCATED ABOVE YOUR NAME AND ADDRESS ON THE PROXY/VOTING
INSTRUCTION CARD.
Option A: To vote as the Board of Directors recommends on ALL items,
press 1.
Option B: If you choose to vote on each item separately, press 0.
You will hear these instructions:
Item 1: To vote FOR ALL nominees, press 1; to WITHHOLD FROM
ALL nominees, press 9.
To WITHHOLD FROM AN INDIVIDUAL nominee, press 0 and
listen to the instructions.
Nominees: (01) P. N. Barnevik; (02) J. H. Bryan; (03) T. E. Everhart;
(04) C. T. FisherIII; (05) G. M. C. Fisher; (06) K. Katen;
(07) J. W. Marriott, Jr.; (08) A. D. McLaughlin;
(09) H. J. Pearce; (10) E. Pfeiffer; (11) J. G. Smale;
(12) J. F. Smith, Jr.; (13) L. W. Sullivan;
(14) D. Weatherstone; (15) T. H. Wyman.
Item 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN,
press 0. The instructions are the same for all
remaining items to be voted.
When asked, you must confirm your vote by pressing 1.
VOTE BY INTERNET: THE WEB ADDRESS IS http://gm.proxyvoting.com
THANK YOU FOR VOTING
