General Motors 2010 Annual Report Download - page 268

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Long-Term Incentive Plan
In 2010 we granted RSUs to certain global executives under the 2009 GMLTIP. We granted 15 million RSUs valued at the grant
date fair value of our common stock in the year ended December 31, 2010 and no RSUs under this plan in the period June 10, 2009
through December 31, 2009. Awards granted under the 2009 GMLTIP will generally vest over a three year service period.
Compensation cost for these awards are recorded on a straight-line basis over the vesting period. Our policy is to issue new shares
upon settlement of RSUs.
The awards for the Top 25 highest compensated employees will settle three years from the grant date in 25% increments in
conjunction with each 25% of our Troubled Asset Relief Program (TARP) obligations that are repaid. The awards for the non-top 25
highest compensated employees will settle after three years in 25% increments in conjunction with each 25% of the U.S. and
Canadian government loans that are repaid. The U.S. and Canadian government loans were fully repaid in April 2010, thus these
awards will be settled upon completion of the remaining three year service period.
Retirement eligible participants that are non-top 25 highest compensated employees who retire during the service period will retain
and vest in a pro-rata portion of RSUs earned. The vested award will be payable on the third anniversary date of the grant.
Compensation cost for these employees is recognized on a straight-line basis over the requisite service period.
Prior to our public offering, all RSU awards were classified as liability awards as they were payable in cash. On November 18,
2010 we reclassified all of the RSU liability awards to equity for those awards that became payable in shares in accordance with the
plan terms.
Salary Stock
In November 2009 we initiated a salary stock program for certain global executives under the GMSSP whereby, a portion of each
participant’s total annual compensation was accrued and converted to RSUs at each salary payment date. In 2010 a portion of each
participant’s salary accrued on each salary payment date converted to RSUs on a quarterly basis. Our policy is to issue new shares
upon settlement of these awards.
The awards are fully vested and nonforfeitable upon grant, therefore compensation cost is fully recognized on the date of grant. The
awards are settled quarterly over a three year period commencing on the first anniversary date of grant. Under the terms of the plan,
each installment is now redeemable one year earlier from the original settlement date as we have repaid the financial assistance we
received from the UST under the TARP program in 2010. Prior to our public offering, all RSU awards were classified as liability
awards as they were payable in cash. On November 18, 2010 we reclassified all of the RSU liability awards to equity for those awards
that became payable in shares in accordance with the plan terms.
The compensation cost of each RSU granted under the 2009 GMLTIP and GMSSP that will be settled in equity is based on the fair
value of our common stock on the date of grant or, for those RSUs reclassified from liability to equity-based awards, the fair value of
our common stock as of the date of the public offering.
266 General Motors Company 2010 Annual Report