EXHIBIT 99.1
AGREEMENT & RELEASE
Xxxx X. Xxxxxx and General Motors Corporation have reached the following
Agreement. This Agreement is intended to memorialize the understandings of the
parties concerning the following aspects of Xx. Xxxxxx'x retirement from General
Motors Corporation, its subsidiaries, affiliates, and divisions (hereinafter
GM), effective as of June 1, 2006.
1. Supplemental Executive Retirement Program (SERP) - Subject to all other
terms of the SERP, Xx. Xxxxxx will be eligible for SERP benefits based on
his five years and six months of service as of June 1, 2006. As a key
employee under Internal Revenue Code 409(A) rules, any SERP or other GM
deferred compensation will not be payable to Xx. Xxxxxx until six months
after retirement.
2. Replacement Pension Benefit - In December 2000 Xx. Xxxxxx signed an
agreement providing for make up of a previous employer's pension benefit
that he lost as a result of his GM employment. That agreement was restated
in December 2005, and the restated agreement remains in effect.
3. Personal Umbrella Liability Insurance (PULI) - Subject to all plan terms,
Xx. Xxxxxx will be provided PULI coverage in retirement at a level of
coverage consistent with other retired executives. Xx. Xxxxxx understands
that there will be imputed income associated with this coverage.
4. Endorsement Split Dollar Life Insurance - Ownership of the existing
Endorsement Split Dollar Life Insurance Policy covering Xx. Xxxxxx will be
transferred to Xx. Xxxxxx six months following date of retirement. GM will
pay no further premiums on the policy. Xx. Xxxxxx understands that
transfer of the policy will be a taxable event for him, and he will be
responsible for all such taxes.
5. Stock Performance Plan (SPP) - Subject to the terms of the plan, Xx.
Xxxxxx will be eligible to receive a pro-rata amount of his 2004-2006
and 2005-2007 outstanding SPP grants. The pro-rata share will be based
on the number of months Xx. Xxxxxx was active during the performance
period prior to retirement compared to the entire performance period.
All remaining installments on vested grants, if payable, will be paid
at the regularly scheduled payment dates. It is understood that all
final SPP award payouts, if any, will be based on the level of Company
and GM stock performance as set forth in the plan. The SPP grants are
subject to the conditions precedent described in paragraph 9 below. Xx.
Xxxxxx'x 2006-2008 SPP grant will terminate under plan provisions
because the 12-month vesting period will not have been met.
6. Outstanding Option Grants - Subject to the terms of the plan, Xx. Xxxxxx
will retain his option grants that become vested prior to retirement. This
includes his 2006 option grant for which the Executive Compensation
Committee of the GM Board of Directors approved vesting. The option grants
are subject to the conditions precedent described in paragraph 9 below.
7. Annual Incentives - Xx. Xxxxxx will be eligible to receive a prorated
portion (5/12ths) of his 2006 Annual Incentive, in accordance with plan
language, providing such incentive is determined to be payable, and
adjusted for Corporate, Sector, and Individual performance.
8. Xx. Xxxxxx understands that his cooperation may be needed by GM in
connection with litigation in which GM is or may become a party and he
agrees to make himself reasonably available to do so. GM agrees that
his appearance as a witness in any government initiated proceeding will
not give rise to any claim by GM that he has acted contrary to his
undertakings in this Agreement. Xx. Xxxxxx agrees not to voluntarily
make any statement for publication or to the media regarding GM without
GM's prior approval.
9. Xx. Xxxxxx fully understands and acknowledges that the exercise of
stock options, the receipt of unpaid installments, if any, of SPP
awards and the payment of Alternative formula SERP are contingent upon
the conditions precedent as set forth in Section 3(a) of the General
Motors 2002 Long-Term Incentive Plan, Section 6(a) of the General
Motors 2002 Annual Incentive Plan, Section 5(c) of the General Motors
2002 Stock Incentive Plan, and Section IV(e) of the General Motors
Supplemental Executive Retirement Program as amended through October
18, 2005 that Xx. Xxxxxx: (1) refrain from engaging at any time in
activity which, in the opinion of the Executive Compensation Committee
of the GM Board of Directors (the Committee), is competitive with any
activity of GM and from otherwise acting in any manner inimical or in
any way contrary to the best interests of GM; and (2) furnish GM such
information with respect to the satisfaction of the foregoing condition
precedent as the Committee shall reasonably request.
10. Xx. Xxxxxx agrees and acknowledges that during the course of his
employment with GM he had access and was privy to information,
documents, and/or materials relating to GM that are of a confidential
and/or proprietary nature or which constitute or contain trade secrets,
privileged information, or matters subject to attorney-client privilege
or which are related work product, the disclosure of which will cause
irreparable harm to GM. As part of this Agreement, Xx. Xxxxxx agrees
not to retain and to return such information, documents or other
materials at the time of his separation which is in his possession or
control, and that, except as required by applicable law, he will not
discuss or disclose to any person or entity any trade secret,
confidential and/or proprietary information or matters subject to an
attorney-client privilege or which are related work product without the
permission of GM.
11. Xx. Xxxxxx agrees that for a period of two (2) years from the time of
retirement he will not, without the prior written consent of the Chief
Executive Officer of General Motors, engage in or perform any services
for any business anywhere in the world which designs, manufactures,
develops, promotes, finances or sells any automobiles or trucks in
competition with General Motors Corporation or any of its subsidiaries
or any joint ventures to which General Motors Corporation or any of its
subsidiaries is a party. Further, Xx. Xxxxxx agrees that for a period
of two (2) years following retirement, he will not, directly or
indirectly, induce any of the employees of GM to leave the employ of GM
for participation, directly or indirectly, with any existing or future
business venture associated with Xx. Xxxxxx. In the event that any of
the above provisions of this paragraph should be deemed by a court of
proper jurisdiction to exceed the time, product, or geographic
limitations permitted by applicable laws and thus cause this paragraph
to be unenforceable as written, then such court shall be authorized by
the parties to interpret and enforce this paragraph with such
modification or modifications and scope as shall enable such court to
determine that the paragraph as so modified is enforceable. With
respect to this paragraph 11, if Xx. Xxxxxx invests or is otherwise
involved with supply, distribution, or other non-OEM auto-related
companies, he will not be able to call on GM as a representative of
such companies for two years after June 1, 2006, and GM would not
regard such involvement as a competitive activity. With respect to any
investments or activities with any dealer holding company, GM would
need to determine whether the dealer group is exclusively non-GM and,
hence, competitive.
12. Xx. Xxxxxx has been given a sufficient period to review and consider this
Agreement before signing it and has been advised to consult an attorney.
13. Xx. Xxxxxx understands that in the future GM may amend its salaried policy
and benefit programs and make available different retirement or severance
benefits for which he will not be eligible. Nothing in this Agreement
limits GM's right to amend, modify, or terminate any of its employee
benefit programs or policies.
14. This Agreement shall be construed in accordance with the laws of the State
of Michigan.
/s/ /s/
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Xxxx X. Xxxxxx General Motors Corporation
Dated: May 30, 2006 Dated: May 30, 2006
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