General Motors 2013 Annual Report Download - page 120

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GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
calculating diluted earnings per share in the year ended December 31, 2013. In the years ended December 31, 2012 and 2011, we were
required to use the two-class method for calculating earnings per share as the applicable market value of our common stock was
below $33.00 per common share. Under the two-class method for computing earnings per share, undistributed earnings are allocated
to common stock and the Series B Preferred Stock according to their respective participation rights in undistributed earnings, as if all
the earnings for the period had been distributed. This allocation to the Series B Preferred Stock holders reduced Net income
attributable to common stockholders, resulting in a lower basic and dilutive earnings per share amount. The impact on diluted
earnings per share was an increase of $0.13 in the year ended December 31, 2013 using the if-converted as compared to the two-class
method. Our calculation of earnings per share varied from period to period depending on whether the two-class or if-converted
method was required.
The application of the two-class method resulted in an allocation of undistributed earnings to our Series B Preferred Stock holders
and, accordingly, 152 million common stock equivalents from the assumed conversion of the Series B Preferred Stock are not
considered outstanding for purposes of determining the weighted-average common shares outstanding in the computation of diluted
earnings per share for December 31, 2012 and 2011.
In the years ended December 31, 2013, 2012 and 2011 warrants to purchase 46 million shares were not included in the computation
of diluted earnings per share because the warrants’ exercise price was greater than the average market price of the common shares.
Note 23. Stock Incentive Plans
Our stock incentive plans consist of the 2009 Long-Term Incentive Plan and the Salary Stock Plan. Both plans are administered by
the Executive Compensation Committee of our Board of Directors. The aggregate number of shares with respect to which awards may
be granted under these amended plans shall not exceed 75 million.
Long-Term Incentive Plan
We granted 7 million, 7 million and 5 million RSUs in the years ended December 31, 2013, 2012 and 2011. These awards granted
either cliff vest or ratably vest generally over a three-year service period, as defined in the terms of each award. Our policy is to issue
new shares upon settlement of RSUs.
The 2013 awards granted to the Top 25 highest compensated employees will settle on the second and third anniversary dates of
grant in 25% increments consistent with the terms of the 2009 Long-Term Incentive Plan. The awards for the Next 75 highest
compensated employees will settle on the second and third anniversary dates of grant. The awards for the non-Top 100 highest
compensated employees will settle on the first, second and third anniversary dates of grant. Vesting and subsequent settlement will
generally occur based upon employment at the end of each specified service period.
The 2012 awards granted to the Top 25 highest compensated employees will settle on the second and third anniversary dates of
grant in 25% increments consistent with the terms of the 2009 Long-Term Incentive Plan. The awards for the non-Top 25 highest
compensated employees will vest and settle on the second and third anniversary dates of grant. Vesting and subsequent settlement will
generally occur based upon employment at the end of each specified service period.
The 2011 awards granted to the Top 25 highest compensated employees will settle three years from the grant date in 25%
increments consistent with the terms of the 2009 Long-Term Incentive Plan. The awards for the Next 75 highest compensated
employees will settle either: (1) three years from the date of grant; or (2) on the first and third anniversary dates of grant. The awards
to the non-Top 100 highest compensated employees will settle on the first, second and third anniversary dates of grant. Vesting and
subsequent settlement will generally occur based upon employment at the end of each specified service period.
Retirement eligible participants that are non-Top 100 highest compensated employees who retire in the first twelve months
following the grant will retain and vest a pro-rata portion of RSUs earned and those who retire after the first anniversary of the grant
will retain and vest the full RSU grant. The vested award will be payable on the settlement date.
118
2013 ANNUAL REPORT