SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported) August 6, 2002
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GENERAL MOTORS CORPORATION
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(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 1-143 38-0572515
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
300 Renaissance Center, Detroit, Michigan 48265-3000
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313)-556-5000
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ITEM 5. OTHER EVENTS
On August 6, 2002, General Motors Corporation (GM) announced it would
endorse new corporate accountability initiatives. The announcement is as
follows:
GM Endorses New Corporate Accountability Initiatives
Employee stock options to be expensed beginning in 2003
CEO, CFO plan to certify SEC filings unconditionally by Aug. 14
Board Governance Guidelines in place since 1994
DETROIT - General Motors, long recognized as a leader in good corporate
governance practices, today said it will unconditionally comply with the new
Securities and Exchange Commission (SEC) requirement for key officers to certify
its financial reporting, and will expense options granted to employees beginning
January 2003. The company today also endorsed the new Corporate Accountability
and Listing Standards approved by the New York Stock Exchange (NYSE) and
expressed support for the Sarbanes/Oxley Act recently signed into law.
"The GM Board of Directors, which provides active oversight on behalf of
stockholders, has been a leader in defining and adopting corporate governance
standards," said GM Chairman Jack Smith. The GM Board adopted its Corporate
Governance Guidelines in 1994.
The GM Board of Directors is composed of 12 members, 10 of whom are independent
directors. The GM Board's Audit Committee, Executive Compensation Committee, and
Committee on Director Affairs are composed solely of independent directors. The
appointment of GM's independent outside auditor, Deloitte & Touche, is ratified
annually by GM stockholders.
"No single action is enough to restore investor confidence in this current
climate of concern over corporate accountability," said GM President and Chief
Executive Officer Rick Wagoner. "We have to earn investor confidence day in and
day out by running our business with integrity and honesty. We have worked hard
over the years at General Motors to set the right tone at the top. We have a
healthy system of appropriate checks and balances, and we've placed a priority
on clear, consistent and truthful communication about our performance.
"GM has a long practice of conservative accounting and accurate reporting of our
financial condition and performance - and we look forward to this opportunity to
enhance that tradition," he said.
Wagoner and GM Vice Chairman and Chief Financial Officer John Devine plan to
file unqualified sworn statements with the SEC next week, affirming the veracity
of GM's SEC filings this year, including its 2001 Annual Report on Form 10-K,
first and second quarter 2002 Form 10-Qs, and numerous Form 8-Ks. These
statements will be filed following a new internal certification process to take
a second look at GM's SEC filings this year and to affirm their adequacy and
accuracy. The new certification process was reviewed by the GM Board's audit
committee on Monday.
General Motors recently augmented its internal processes for financial controls
in support of the personal certification statements to be filed by Wagoner and
Devine.
"We started with an excellent process for ensuring rigor and integrity in our
accounting and auditing practices at General Motors. This year, we are adding
even more clarity and control to make sure that there is complete understanding
throughout the organization of the expectation of appropriate behavior and
thorough, truthful disclosure," said Devine.
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GM will expense the fair market value of stock options granted to employees
beginning in January 2003, under guidelines of the Financial Accounting
Standards Board (FASB) rule, SFAS No. 123. In 2003, GM expects the expense
associated with stock options will be about $85 million, or $0.15 per share of
GM $1-2/3 par value common stock for the year. SFAS No. 123 calls for amortizing
the expense of options over their vesting period. The full cost of GM's annual
option grants would grow to about $130 million, or $0.24 per share, in the year
2005.
Since 1997, GM has included information about the cost of options in its annual
report. Stock options are currently held by approximately 53,000 GM employees
worldwide, who received them as part of a compensation program focused on
improving the company's long-term business and financial performance.
"While we are enthusiastic about taking steps such as this to restore investor
confidence in business, it is important to point out that current valuation
methods available for expensing stock options are not ideal. We urge the
accounting community and regulators to improve valuation methodologies to find a
more accurate way to determine the value of stock options. We continue to
believe stock options are an appropriate and valuable part of compensation that
encourages employees to focus on shareholder return," Devine said.
GM has had a stock ownership policy for senior executives since 1993 as a way to
reinforce the link between interests of executives and stockholders. The policy
requires that all corporate officers and other senior executives own a
significant amount of stock. For example, the chairman, president and CEO, and
vice chairmen must hold GM stock equivalent in value to five times their base
salary. In all, about 450 executives are subject to stock ownership requirements
ranging from one to five times their base salary.
GM today expressed support of initiatives for corporate accountability reform,
such as the NYSE's proposed new Corporate Accountability and Listing Standards
and the Sarbanes/Oxley Act.
"We believe that these standards, applied universally to the companies that
trade on the exchange or conduct business in the United States, will go a long
way toward achieving the objective of enhancing accountability, integrity and
transparency," Wagoner said. General Motors (NYSE: GM), the world's largest
vehicle manufacturer, designs, builds and markets cars and trucks worldwide, and
has been the global automotive sales leader since 1931. GM employs about 355,000
people around the world. More information on GM can be found at www.gm.com.
GM Corporate Governance Guidelines can be viewed at the website: www.gm.com/
company/investor_information/stockholder_info/corp_gov/guidelines.htm.
The NYSE's guidelines can be viewed on its website:
www.nyse.com/pdfs/corp_govreport.pdf.
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In this press release and related comments by General Motors management, our use
of the words "outlook," "expect," "anticipate," "estimate," "forecast,"
"project," "likely," "objective," "plan," "designed," "goal," "target," and
similar expressions is intended to identify forward looking statements. While
these statements represent our current judgment on what the future may hold, and
we believe these judgments are reasonable, actual results may differ materially
due to numerous important factors that are described in GM's most recent report
on SEC Form 10-K (at page II-15, 16) which may be revised or supplemented in
subsequent reports on SEC Forms 10-Q and 8-K. Such factors include, among
others, the following: changes in economic conditions, currency exchange rates
or political stability; shortages of fuel or interruptions in transportation
systems, labor strikes or work stoppages; market acceptance of the corporation's
new products; significant changes in the competitive environment; changes in
laws, regulations and tax rates; and the ability of the corporation to achieve
reductions in cost and employment levels to realize production efficiencies and
implement capital expenditures at levels and times planned by management.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
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(Registrant)
Date August 6, 2002
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By
s/Peter R. Bible
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(Peter R. Bible,
Chief Accounting Officer)
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