4th Oct 2006 07:00
GM Board Amends Bylaws and Corporate Governance Policies Changes Include Majority Voting in Director Elections DETROIT, Oct. 5 -- General Motors Corp. (NYSE: GM) today announcedthat its Board of Directors voted to amend the company's Bylaws and corporategovernance policies to address stockholder views raised at this year's AnnualMeeting. The changes include adoption of the majority voting standard for theelection of directors and a stronger policy to recover unearned incentivecompensation from executive officers in cases of fraud, misconduct ornegligence. The amendments are effective immediately. "Earlier this year, our stockholders expressed a desire for change surroundingthe election of directors and a more defined policy of accountability forsenior officers," GM Chairman and Chief Executive Officer Rick Wagoner said."We listened to their views, and after careful consideration, the Board votedto make changes to certain Bylaws and corporate governance policies that are inline with stockholders' input." The Board agreed to adopt a majority voting standard in uncontested electionsof directors, when the number of nominees does not exceed the number ofdirectors to be elected. Majority voting requires that nominees to the Boardreceive more than 50 percent of the votes cast to be elected. Abstentions willnot be included towards counting a majority. Directors were previously electedby plurality in uncontested elections. In accordance with the majority voting Bylaw, the Board will require directornominees to submit irrevocable resignations as a condition to being nominated.The Board could accept these resignations if a director does not receive amajority of the votes cast. Under a related governance policy, the Board willaccept the resignation of an unsuccessful incumbent absent a compelling reasonto reject the resignation, in accordance with criteria set out in the policy.The Bylaws were also amended to fix the number of directors at the currentlevel of twelve, subject to future change by the Board. The majority voting standard received 59 percent of the affirmative vote atGM's Annual Meeting in June. Shortly after the meeting, the DelawareLegislature amended the state's corporation law to better facilitate majorityvoting. The Board chose not to adopt cumulative voting, which was the subject of astockholder proposal that was supported by 54 percent of votes cast. The Boardbelieves that a director has the fiduciary duty to represent all stockholdersand is concerned that cumulative voting could lead to the election ofconstituency directors who feel a duty to the electorate forming theirconstituency. Also, in a company with majority voting, the addition ofcumulative voting would raise the possibility of accumulating "withhold" or"against" votes. This could create the potential for small groups ofstockholders to overcome the interests of the majority. The Board also adopted a corporate policy under which the company may requirereimbursement of bonus or incentive compensation that may have been paid toexecutive officers in the event it is later determined that fraud, misconductor negligence significantly contributed to a restatement of financial resultsthat led to the awarding of unearned incentive compensation. A stockholderproposal on this issue was supported by 42 percent of the shares voted at theAnnual Meeting. Although this proposal did not receive majority support, theBoard voted to respond to the stockholders' desire to see a policy thatreflects the robust manner in which GM has and would deal with suchcircumstances. In addition to these governance actions, the Board has amended the Bylaws tospecify the procedures applicable to consent solicitations initiated bystockholders, which complements the existing procedures for stockholderinitiatives at meetings. These changes also provide a framework for the conductof solicitations in accordance with Delaware law. The amended Bylaws and corporate governance policies will be filed today withthe U.S. Securities and Exchange Commission. General Motors Corp., the world's largest automaker, has been the globalindustry sales leader for 75 years. Founded in 1908, GM today employs about327,000 people around the world. With global headquarters in Detroit, GMmanufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM carsand trucks were sold globally under the following brands: Buick, Cadillac,Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn andVauxhall. More information on GM can be found at http://www.gm.com . SOURCE General Motors Corporation 10/04/2006 P /NOTE TO EDITORS: For additional media information visit http://media.gm.com ./ /CONTACT: Gina Proia, +1-212-418-6389, +1-914-714-9166 mobile, or ReneeRashid-Merem, +1-313-665-3128, +1-586-899-0971 mobile, both of General MotorsCorporation/ /Web site: http://media.gm.com http://www.gm.com / (GM)GENERAL MOTORS CORPRelated Shares:
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