UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
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ACT OF 1934
For the fiscal year ended December 31, 2002
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OR
TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
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ACT OF 1934
For the transition period from to
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Commission file number 2-14960
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GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
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(Full title of the plan)
General Motors Corporation
300 Renaissance Center, Detroit, Michigan 48265-3000
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(Name of issuer of the securities held pursuant to
the plan and the address of its principal
executive offices)
Registrant's telephone number, including area code (313)-556-5000
Notices and communications from the Securities and
Exchange Commission relative to this report should
be forwarded to:
Peter R. Bible
Chief Accounting Officer
General Motors Corporation
300 Renaissance Center.
Detroit, Michigan 48265-3000
- 1 -
FINANCIAL STATEMENTS AND EXHIBIT
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(a) FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES Page No.
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General Motors Savings-Stock Purchase
Program for Salaried Employees in the United States:
Independent Auditors' Report. . . . . . . . . . . . . . . 3
Statements of Assets Available for Benefits, as of
December 31, 2002 and 2001. . . . . . . . . . . . . . . 4
Statements of Changes in Assets Available for
Benefits for the Years Ended December 31, 2002 and 2001 5
Notes to Financial Statements . . . . . . . . . . . . . . 6
Supplemental schedules are omitted because of the
absence of the conditions under which they are
required.
(b) EXHIBIT
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Exhibit 23 - Independent Auditors' Consent . . . . . . . . . 14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this annual report to be signed on its behalf by the
undersigned, hereunto duly authorized.
General Motors Savings-Stock
Purchase Program for Salaried
Employees in the United States
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(Name of plan)
Date June 26, 2003 By:
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/s/G. Richard Wagoner, Jr.
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(G. Richard Wagoner, Jr., Chairman
of the Board of Directors)
- 2 -
INDEPENDENT AUDITORS' REPORT
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General Motors Savings-Stock Purchase Program
for Salaried Employees in the United States:
We have audited the accompanying statements of assets available for benefits of
the General Motors Savings-Stock Purchase Program for Salaried Employees in the
United States (the "Program") as of December 31, 2002 and 2001, and the related
statements of changes in assets available for benefits for the years then ended.
These financial statements are the responsibility of the Program's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the assets available for benefits of the Program as of December 31,
2002 and 2001, and the changes in assets available for benefits for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
/s/DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Detroit, Michigan
June 5, 2003
- 3 -
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2002 AND 2001
2002 2001
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(Dollars in Thousands)
ASSETS:
Investment in the General Motors Savings
Plans Master Trust (Note D) $10,567,065 $12,627,048
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Total assets 10,567,065 12,627,048
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ASSETS AVAILABLE FOR BENEFITS $10,567,065 $12,627,048
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Reference should be made to the Notes to Financial Statements.
- 4 -
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
2002 2001
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(Dollars in Thousands)
ADDITIONS-
Contributions:
Employer 49,580 135,917
Participants 378,130 397,894
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Total contributions 427,710 533,811
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Total additions 427,710 533,811
DEDUCTIONS:
Net investment losses from the General
Motors Savings Plans Master Trust (Note D) (1,597,287) (790,423)
Distributions to participants (890,333) (813,071)
Net Transfers (Note E) (73) (2,804)
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Total deductions (2,487,693) (1,606,298)
NET DECREASE (2,059,983) (1,072,487)
ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 12,627,048 13,699,535
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End of year $10,567,065 $12,627,048
========== ==========
Reference should be made to the Notes to Financial Statements.
- 5 -
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002 AND 2001
A. THE PROGRAM
GENERAL - General Motors Corporation (the "Corporation" or "GM") has
established the General Motors Savings-Stock Purchase Program for Salaried
Employees in the United States (the "Program"), a defined contribution plan.
Eligibility is restricted to regular employees of the Corporation who have
completed six months of employment and who are compensated fully or partly by
salary and/or commission, but who are not represented by a labor organization
(unless they are eligible through understandings reached between the
Corporation and their collective bargaining representatives). Employees
classified as part-time employees, regular employees, temporary assignment,
flexible service employees, temporary employees, or cooperative student
employees (hired prior to January 1, 1999)are eligible to participate in the
Program upon the completion of six months of employment. The Investment Funds
Committee of the Corporation's Board of Directors acts as the Program
fiduciary and, along with various officers, employees, and committees, with
authority delegated from the Program fiduciary, controls and manages the
operation and administration of the Program subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended (ERISA). The
following brief description of the Program is provided for general information
purposes only. Participants should refer to the Program document and
prospectus for a complete description of the Program's provisions.
CONTRIBUTIONS - An eligible participant employed by the Corporation (an
"Employee") may elect to contribute to the Program as follows:
o on an after-tax basis (regular savings), up to 40% for 2002 and 20% for
2001 of an Employee's eligible salary as defined in the Program.
o on a tax-deferred basis (deferred savings), an amount of eligible salary
which is the lesser of (1) $11,000 and $10,500 for 2002 and 2001,
respectively or (2) up to 40% and 20% for 2002 and 2001, respectively of
the Employee's eligible salary for a calendar year.
o in lieu of receiving a distribution from The General Motors Enhanced
Variable Pay Plan for Salaried Employees in the United States (the
"Variable Pay Plan"), an Employee may elect to have the Corporation
contribute, as deferred savings to the extent permissible under tax law,
up to 100%, in 10% increments, of any such amount, which vests
immediately.
o in lieu of receiving a flexible compensation payment from the Corporation,
an Employee may elect to have the Corporation contribute 100% of the
flexible compensation payment as deferred savings until the tax deferral
legal limit is reached and then any remaining portion of such payment will
be contributed as regular savings to the extent permissible under tax law.
In addition, an Employee also may elect to combine the first two contribution
methods disclosed above, provided that the sum of these contributions does
not total more than 20% through December 31, 2001 and 40% thereafter of
eligible monthly base salary for any calendar year. The sum of all four of
the above-described methods of contribution may only exceed the above
percentages of eligible salary by an amount equal to the payout under the
Variable Pay Plan and/or the flexible compensation payment. As defined in the
Program document, the Corporation's total matching contribution is limited to
80% of basic savings through February 28, 2001, 60% of basic savings through
December 31, 2001 and 20% thereafter. Basic savings as defined by the Program
is Employee savings up to 6% of an Employee's eligible monthly base salary.
- 6 -
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
An Employee age 50 or older, or who will attain age 50 by the end of the
calendar year, and who is contributing at least 6% of their eligible monthly
base salary to their account, is eligible to make "catch-up" contributions to
their account. A catch-up contribution may only be made on a "pre-tax" basis
up to the annual limit set forth by the IRS, and only after the 401K annual
contribution limit has been met.
The Corporation's matching contribution is invested entirely in the GM $1-2/3
par value Common Stock Fund and such contributions must remain invested in
this fund during the period January through December 31, of the calendar year
in which the contributions were made. This period is referred to as the
"required retention period".
An Employee hired on or after January 1, 1993 will automatically have a
Corporation contribution amount equal to 1% of the Employee's eligible
monthly base salary credited each pay period to such Employee's account upon
attainment of eligibility. This contribution is provided because such
Employee will receive different post-retirement benefit treatment from the
Corporation than Employees hired prior to January 1, 1993. Such contribution
will be credited to the Employee's account whether or not the Employee elects
to participate in the Program. This contribution is invested in the GM $1-2/3
Par Value Common Stock Fund, and such contribution must remain invested in
this fund during the required retention period.
VESTING - Assets derived from employee contributions and related Corporation
contributions and earnings thereon vest immediately on allocation to the
employee's account except for employees with less than three years of
credited service for whom Corporation contributions and related earnings vest
on January 1 following the calendar year in which such contributions or
earnings are credited. Forfeitures are used to offset future employer
contributions.
FUND EXCHANGES - Participants may exchange funds between investment options
on any business day on which the New York Stock Exchange is open ("Business
Day"). This provision does not apply to Employee contributions and
Corporation contributions required to be invested in Corporation common stock
funds during the required retention period. Employee contributions required
to be invested in the Corporation's Common Stock Funds may be exchanged only
between the Corporation's Common Stock Funds during the required retention
period. Corporation contributions may not be exchanged until completion of
the required retention period.
PARTICIPANT WITHDRAWALS - A participant may withdraw funds in their account
at any time after attaining age 59-1/2. Prior to age 59-1/2, employee
deferred savings may only be withdrawn because of termination of employment,
death, total and permanent disability, or financial hardship. Prior to
receiving a withdrawal for financial hardship, a participant previously must
have taken all available asset distributions, withdrawals, and loans under
all applicable plans maintained by the Corporation. The amount that may be
withdrawn for a financial hardship is limited as defined in the Program. The
funds that represent a financial hardship withdrawal must conform to
conditions required by the Internal Revenue Service (the "IRS"). A
participant who receives a hardship distribution shall have his or her
contributions to the Program suspended for a period of 12 months following
the distribution.
INVESTMENT OPTIONS - The Corporation's contributions are invested in the GM
$1-2/3 par value Common Stock Fund. One-half of an Employee's Basic Savings
up to 6% is required to be invested, in 10% increments, in either one or both
of the Corporation's Common Stock Funds: (1) GM $1-2/3 par value Common Stock
Fund; or (2) GM Class H, $0.10 Par Value Common Stock Fund. The remainder of
an Employee's contributions will be invested at the Employee's direction, in
10% increments, in any of the following investment options:
- 7 -
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
o General Motors $1-2/3 par value Common Stock Fund,
o General Motors Class H, $0.10 Par Value Common Stock Fund
o Promark Funds
o Mutual Funds
Certain costs of Program administration are paid by the Corporation.
DESCRIPTION OF INVESTMENT OPTIONS:
General Motors Common Stock Funds: $1-2/3 Par Value and Class H, $0.10 Par
Value - Under these investment options, contributions are invested by the
Trustee primarily in the respective General Motors common stock. Each unit
represents a proportionate interest in all of the assets of the respective GM
Common Stock Funds. The number of units credited to each participant's
account within an applicable plan will be determined by the amount of the
participant's contributions and the purchase price of a unit in the
respective GM Common Stock Fund. The value of each participant's account is
determined each Business Day by the number of units to the participant's
credit, multiplied by the current unit value. The return on a participant's
investment is based on the value of units, which, in turn, is determined by
the market price of the respective GM common stock, the amount of any
dividends paid thereon, and by interest earned on short-term investments held
by each fund.
Each participant directs the Trustee how to vote common stock shares
allocated to his or her account. The Trustee will exercise voting rights with
respect to those shares for which direction has not been received by the
required deadline.
Promark Funds - There are seventeen Promark funds as investment options for
participants in the Program. These funds have a variety of investment
strategies, and the funds are managed by General Motors Trust Company
Corporation (GMTC), a wholly-owned subsidiary of General Motors, and a
party-in-interest. GMTC selects and monitors investment advisors for each
fund. Participants should refer to the Prospectus for further information
about the investment strategy of each fund, and the risks associated with
each fund.
Assets invested in the Promark funds are expressed in terms of units. The
number of units credited to a participant's account within an applicable plan
will be determined by the amount of participant's contributions and the
current value of each unit in the respective Promark fund. The value of each
participant's account is determined each Business Day by the number of units
to the participant's credit, multiplied by the current unit value.
Mutual Funds - This investment option is comprised of many different mutual
funds, which are managed by Fidelity Investments, Neuberger Berman Management
Inc., Domini Social Investments LLC and SSgA Funds Management, Inc. Each
mutual fund has a different objective and investment strategy. To pursue
their objectives, the mutual fund managers invest in a wide variety of
investments. Complete information about each mutual fund's objectives and
investments is contained in that fund's prospectus.
- 8 -
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
Other Investments:
EDS Common Stock Fund - Effective June 7, 1996, the net assets of Electronic
Data Systems ("EDS") were split-off from the net assets of the Corporation.
As a result, the Class E Common Stock Fund was changed to the EDS Common
Stock Fund. No new contributions, loan repayments, or exchanges may be made
into the EDS Common Stock Fund. Dividends, if any, paid on EDS common stock
held by the Plan will be invested in an Income Fund investment option.
Assets held in this fund are expressed in terms of units and not shares of
stock. Each unit represents a proportionate interest in all of the assets of
this fund. The value of each participant's account is determined each
Business Day by the number of units to the participant's credit, multiplied
by the current unit value. The return on a participant's investment is based
on the value of units, which, in turn, is determined by the market price of
EDS common stock and by the interest earned on short-term investments held by
the fund.
Delphi Common Stock Fund - On May 28, 1999, GM completed the spin-off of
Delphi Corporation (Delphi). In connection with that spin-off, Delphi common
stock was distributed to holders of GM $1-2/3 par value common stock. Such
distribution required the addition of the Delphi Common Stock Fund as an
investment option. The Delphi Common Stock Fund will remain as an investment
option; however, no further contributions or exchanges from any other
investment option into the Delphi Common Stock Fund will be permitted.
Assets held in this fund are expressed in terms of units and not shares of
stock. Each unit represents a proportionate interest in all of the assets of
this fund. The value of each participant's account is determined each
Business Day by the number of units to the participant's credit, multiplied
by the current unit value. The return on a participant's investment is based
on the value of units, which, in turn, is determined by the market price of
Delphi common stock and by the interest earned on short-term investments held
by the fund.
Raytheon Class A Common Stock Fund - Effective December 17, 1997, GM spun-off
the defense electronics business of Hughes Electronics Corporation, a GM
subsidiary (Hughes Defense), to holders of GM $1-2/3 par value and Class H
common stock, which was immediately followed by the merger of Hughes Defense
with Raytheon Company. In connection with the above transaction, Raytheon
Class A common stock was distributed to holders of GM $1-2/3 par value and
Class H common stocks.
Such distribution required the addition of the Raytheon Class A Common Stock
Fund as an investment option. No new contributions or exchanges from any
other investment options into the Raytheon Class A Common Stock Fund are
permitted. Dividends, if any, paid on Raytheon Class A common stock held by
the Program will be invested in an Income Fund investment option prior to
allocation to participant's accounts.
Assets held in this fund are expressed in terms of units and not shares of
stock. Each unit represents a proportionate interest in all of the assets of
this fund. The value of each participant's account is determined each
Business Day by the number of units to the participant's credit, multiplied
by the current unit value. The return on a participant's investment is based
on the value of units, which, in turn, is determined by the market price of
Raytheon Class A common stock and by the interest earned on short-term
investments held by the fund.
- 9 -
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
GM has chosen to invest the General Motors Common Stock Funds, the EDS Common
Stock Fund, the Raytheon Class A Common Stock Fund, and the Delphi Common
Stock Fund in commingled funds managed by State Street Bank and Trust ("State
Street"). State Street is responsible for anticipating liquidity needs and
maintaining sufficient cash levels to process participant transactions,
determining the daily number of shares of each individual common stock to be
purchased or sold, and obtaining the best prices for any purchases or sales.
PARTICIPANT LOANS - Participants may borrow once per year from both their
tax-deferred and after-tax savings assets (excluding Corporation
contributions, and earnings thereon subject to the required retention
period). The amount and terms of the loans are limited under the Program. The
loan interest rate will be established once each quarter at a rate equal to
the prevailing prime lending rate as of the previous quarter and will apply
to all new loans issued. Repayment of loans is generally made through
after-tax payroll deductions and are invested in the same discretionary
investment options that the Participant selected for their savings
contributions. Interest paid on the loans is credited back to the borrowing
employee's account in the Program. Partial and total prepayment of loans is
permitted at any time, without penalty. Loans not repaid within the loan term
are deemed to be distributions from participants' accounts. Balances of
participant loans were $260,581,319 and $289,215,172 for 2002 and 2001,
respectively.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed in the preparation of the
accompanying financial statements are as follows:
o The financial statements of the Program are prepared under accounting
principles generally accepted in the United States of America using the
accrual method of accounting.
o Investments are stated at fair value, except for investment contracts,
which are stated at contract value. Fair values are calculated by
reference to published market quotations, where available; where not
available for certain common & collective trusts, various bases, including
cost, are used in determining estimates of fair values. Contract value
represents contributions made under the investment contracts, plus
interest, less withdrawals and administrative expenses charged by the
issuer of the contract.
o Security transactions are recorded on the trade date.
o Investment income is recognized as earned based on the terms of the
investments and the periods during which the investments are owned by the
Program.
- 10 -
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect amounts reported
therein. Due to the inherent uncertainty involved in making estimates, actual
results reported in future periods may differ from those estimates. The
Program utilizes various investment instruments including U.S. Government
Securities, corporate debt instruments, and corporate stocks. Investment
securities, in general, are exposed to various risks, such as interest rate,
credit, and overall market volatility. Due to the level of risk associated
with certain investment securities, it is reasonably possible that changes in
the values of investment securities will occur in the near term and that such
changes could materially affect the amounts reported in the financial
statements.
C. INVESTMENTS
All of the investments in the Program are held in the General Motors Savings
Plans Master Trust (the "Master Trust") as more fully described in Note D.
The investment in the Master Trust is both participant-directed and
nonparticipant-directed.
The guaranteed investment contracts ("contracts") owned by the Plan and held
in the Master Trust matured during 2002 and no additional contracts were
purchased during 2002. The average annualized yield on the contracts for the
period held during 2002 and for the year ended December 31, 2001 was 5.95%
and 5.0%, respectively. The contract value of the contracts owned by the Plan
and held in the Master trust as of December 31, 2001 exceeded fair value by
approximately $5.6 million. The weighted average of the annualized crediting
interest rate for the contracts for the period held during 2002 and for the
year ended December 31, 2001 was 5.51% and 5.7%, respectively.
D. THE MASTER TRUST
The Corporation established the Master Trust pursuant to a trust agreement
among the Corporation, Saturn Corporation, and State Street, as trustee of
the funds, in order to permit the commingling of trust assets of several
employee benefit plans for investment and administrative purposes. The assets
of the Master Trust are held by State Street.
Employee benefit plans participating in the Master Trust as of December 31,
2002 include the following:
o General Motors Savings-Stock Purchase Program for Salaried Employees in
the United States
o General Motors Personal Savings Plan for Hourly-Rate Employees in the
United States
o Saturn Individual Savings Plan for Represented Members
o General Motors Income Security Plan for Hourly-Rate Employees
Each participating employee benefit plan has an undivided interest in the net
assets and changes therein of each of the Master Trust investment funds in
which the respective plan participates.
The net investment income of the commingled Master Trust investment funds
(the GM Common Stock Funds, the EDS Common Stock Fund, the Raytheon Class A
Common Stock Fund, the Delphi Common Stock Fund, and the Promark Funds) is
allocated by the trustee to each participating plan based on that plan's
interest in each commingled Master Trust investment fund, as compared with
the total interest of all the participating plans, in each commingled Master
Trust investment fund at the beginning of the month. For all other investment
options, the net investment income is separately earned by the respective
employee benefit plan, and is thus recorded separately in the accounting
records of the respective plan.
- 11 -
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Continued
As of December 31, 2002 and 2001, the Program had approximately a 60% and 62%
interest in the Master Trust, respectively.
The net assets available for benefits of all participating plans in the
Master Trust at December 31, 2002 and 2001 are summarized as follows (dollars
in thousands):
ASSETS: 2002 2001
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Investments:
General Motors Corporation $1-2/3 par
value common stock $2,799,227 $3,276,889
General Motors Corporation Class H
$0.10 par value common stock 444,377 641,826
Electronic Data Systems common stock 52,182 213,904
Delphi Corporation common stock 172,688 323,553
Raytheon Class A common stock 79,089 92,154
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Total Common Stock 3,547,563 4,548,326
Mutual funds 4,954,961 6,360,525
Common and collective trusts 8,336,148 7,244,303
Guaranteed investment contracts 0 886,307
Loan funds 681,457 723,272
Fixed income fund 0 447,355
Other 40 25,961
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Total investments 17,520,169 20,236,049
Receivables:
Accrued investment income 25 316
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Total receivables 25 316
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Total assets $17,520,194 $20,236,365
========== ==========
LIABILITIES:
Due to broker for securities purchased 1,331 1,322
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NET ASSETS AVAILABLE FOR BENEFITS $17,518,863 $20,235,043
========== ==========
The net investment earnings of all participating plans in the Master Trust
for the years ended December 31, 2002 and 2001 are summarized as follows
(dollars in thousands):
2002 2001
--------- ---------
Interest $49,170 $61,216
Dividends 145,357 137,147
Net (depreciation) appreciation in fair
value of investments:
General Motors Corporation $1-2/3 par
value common stock (760,290) (103,711)
Mutual funds (1,140,939) (1,208,360)
Common and collective trusts (501,491) (363,975)
Other (110,426) 176,462
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Total net depreciation (2,513,146) (1,499,584)
--------- ---------
Total investment losses $(2,318,619) $(1,301,221)
========= =========
- 12 -
GENERAL MOTORS SAVINGS-STOCK PURCHASE PROGRAM
FOR SALARIED EMPLOYEES IN THE UNITED STATES
NOTES TO FINANCIAL STATEMENTS - Concluded
E. TRANSFER TO DELPHI
On April 12, 1999, the GM Board of Directors approved the complete separation
of Delphi by means of a spin-off, which was completed on May 28, 1999. Prior
to the spin-off, GM established the Delphi Savings-Stock Purchase Program
(the "Delphi Program"), modeled after the GM Program. On May 28, 1999, for
those employees whom elected to do so, assets representing Delphi
participants' holdings in the Program were transferred and reinvested under
the corresponding investment options in the Delphi Program. As a result of
the separation, the Delphi Program was separated from the GM Program, and is
now administered by Delphi as a separate plan. During 2001 and 2002
additional participants elected to transfer their holdings between the Delphi
and GM Programs resulting in a net transfer out of the GM Program of
approximately $73 thousand and $2.8 million in 2002 and 2001, respectively.
F. TERMINATION OF THE PLAN
Although it has not expressed any intent to do so, the Corporation has the
right to terminate the Program subject to the provisions of ERISA. Such
termination of the Program, if any, would not affect a participant's interest
in assets already in the Program.
G. FEDERAL INCOME TAXES
By letter dated April 3, 2000, the Internal Revenue Service has determined
and informed the Corporation that the Program is a tax-qualified employee
benefit plan, meeting the requirements of Sections 401(a), 401(k), and
4975(e)(7)of the Internal Revenue Code of 1986, as amended (the "Code"), and
the Trust established thereunder was determined to be exempt from United
States Federal income taxes under Section 501(a) of the Code. The Program's
fiduciary and tax counsel believe that the Program is designed and currently
being operated in compliance with the applicable requirements of the Code,
and therefore no provision for income taxes has been included in the
Program's financial statements.
H. RELATED PARTY TRANSACTIONS
The Program and Master Trust enter into certain related party transactions.
These generally include investments with trustees, fund managers, the
Corporation and its subsidiaries. Such transactions are within the scope of
the investment guidelines.
I. SUBSEQUENT EVENTS
Effective January 1, 2003, GM's matching contributions to the Program were
increased to 50% (previously 20%) of basic savings contributed up to the
first 6% of eligible monthly base salary.
Effective June 1, 2003, a redemption fee charging participants 1% of the
value of any units redeemed within 30 days of being acquired will be assessed
on Promark International Equity or Promark Emerging Market Equity funds.
-13-