e Provide to Treasury an annual disclosure of any perquisite whose total value for GMAC’s
fiscal year exceeds $25,000 for each of the Covered Employees, as well as a narrative
description of the amount and nature of these perquisites, the recipient of these
perquisites and a justification for offering these perquisites (including a justification for
offering the perquisite, and not only for offering the perquisite with a value that exceeds
$25,000). Id. § 30.11(b).

«Ensure that any incentive award paid to a Covered Employee is subject to a clawback if
the award was based on materially inaccurate financial statements (which includes, but is
not limited to, statements of earnings, revenues, or gains) or any other materially
inaccurate performance metric criteria) GMAC must exercise its clawback rights except
to the extent that it is unreasonable to do so. /d. § 30.8.

¢ GMAC was required to adopt an excessive or luxury expenditures policy, provide that
policy to the Treasury, and post it on GMAC’s website. If GMAC’s board of directors
makes any material amendments to this policy, within ninety days of the adoption of the
amended policy, the board of directors must provide the amended policy to Treasury and
post the amended policy on its Internet website. /d. § 30.12.

e Except as explicitly permitted under the Rule, GMAC is prohibited from providing
(formally or informally) tax gross-ups to any of the Covered Employees. /d. § 30.11(d).

¢ GMAC’s chief executive officer and chief financial officer must provide written
certification of the Company’s compliance with the various requirements of section 111
of EESA. The precise nature of the required certification is identified in the Rule.
Id. § 30.15 Appx. B.

VI. CONCLUSION

The Special Master has reviewed the Proposed Structures for the Covered Employees for
2010 in light of the principles described in the 2009 Determinations, which in turn reflect the
Public Interest Standard. On the basis of that review, the Special Master has determined that the
Proposed Structures submitted by GMAC are largely consistent with the 2009 Determinations
but require certain modifications in order to meet the Public Interest Standard.

The Special Master has separately reviewed the compensation structures set forth in
Exhibits I and IT in light of the principles set forth at 31 C.F.R. § 30.16(b). Pursuant to the
authority vested in the Special Master by the Rule, and in accordance with Section 30.16(a)(3)
thereof, the Special Master hereby determines that the compensation structures set forth in
Exhibits I and IT, including the amounts payable or potentially payable under such compensation
structures, will not result in payments that are inconsistent with the purposes of section 111 of
EESA or TARP, and will not otherwise be contrary to the public interest.

Pursuant to the Interim Final Rule, GMAC may, within 30 days of the date hereof,
request in writing that the Special Master reconsider the determinations set forth in this
Determination Memorandum. The request for reconsideration must specify a factual error or

All


of EESA or TARP, or are otherwise contrary to the public interest.” 31 C.F.R. § 30.16(a)(3).
The 2009 Determinations applied only to those individuals identified by the Company as subject
to the Special Master’s mandatory jurisdiction to review and approve compensation structures
and payments, see id., for 2009 and only with respect to compensation for services provided to
GMAC for 2009.!

On December 14, 2009, the Special Master requested from each remaining Exceptional
Assistance Recipient, including GMAC, certain data and documentary information necessary to
facilitate the Special Master’s review of the Company’s 2010 compensation structures. The
request required GMAC to submit data describing its proposed compensation structures, and the
payments that would result from the proposals, concerning each Covered Employee.

In addition, the Rule authorizes the Special Master to request information from an
Exceptional Assistance Recipient “under such procedures as the Special Master may determine.”
Id. § 30.16(d). GMAC was required to submit competitive market data indicating how the
amounts payable under GMAC’s proposed compensation structures relate to the amounts paid to
persons in similar positions or roles at similar entities. GMAC was also required to submit a
range of documentation, including information related to proposed performance metrics, internal
policies designed to curb excessive risk, and certain previously existing compensation plans and
agreements.

GMAC submitted this information to the Office of the Special Master on January 15,
2010. Following a preliminary review of the submission, the Office of the Special Master
requested and received additional information from GMAC. On February 12, 2010, the Special
Master determined that GMAC’s submission was substantially complete for purposes of the
Rule. /d. § 30.16(a)(3)(i). The Office of the Special Master then commenced a formal review of
GMAC’s proposed compensation structures for the Covered Employees. The Rule provides that
the Special Master is required to issue a compensation determination within 60 days of receipt of
a substantially complete submission. Jd.

The Office of the Special Master’s review of the Company’s proposals was aided by
analysis from a number of internal and external sources, including:

e Treasury personnel detailed to the Office of the Special Master, including executive
compensation specialists with significant experience in reviewing, analyzing, designing
and administering executive compensation plans, and attorneys with experience in
matters related to executive compensation;

"On November 16, 2009, GMAC filed a report with the Securities Exchange Commission announcing it had named
anew chief executive officer, Mr. Michael Carpenter (the “CEO”). In the report, the company noted that Mr.
Carpenter would cease receiving compensation for his service as a GMAC board member, and that GMAC intended
to submit a proposed compensation package for Mr. Carpenter to the Office of the Special Master. GMAC did so on
December 22, 2009, after discussions on the substance of the proposal with the Office of the Special Master. The
Special Master subsequently issued a written determination on December 23, 2009 approving, subject to certain
conditions, the proposed compensation structure. See Letter to Drema M. Kalajian (December 23, 2009), available
at http:/Awww. financialstability.gov/docs/20091223%20GMAC%20Suppiemental%20Determination%20Letter.pdf.

A2


Accordingly, the Proposed Structures generally conformed to the requirements provided in the
2009 Determinations and set forth above.

The Proposed Structures for certain Covered Employees also included a $9,000 benefit to
partially replace the benefits under a company car program that was discontinued by GMAC as a
cost-saving measure. GMAC characterized this benefit as cash salary. Although the
restructuring of the benefit constitutes an overall compensation decrease for the affected
employees, the Special Master has concluded that a fixed, $9,000 increase to cash salary based
on historical participation in the plan does not satisfy the principle that a “compensation
structure, and amount payable. ..should reflect the current or prospective contributions of an
employee to the value of the [Company],” id. § 30.16(b)(1)(vi), and that such a payment is more
appropriately considered a perquisite. See id. § 30.16(b)(1)(iii). As a result, the cash salaries
that the Special Master has determined to be consistent with the Public Interest Standard, as set
forth in Exhibit I, do not include the $9,000 replacement benefit. GMAC’s payment of any such
amount to a Covered Employee will be consistent with the Public Interest Standard only to the
extent it does not exceed the limit on perquisites set forth in Part IV.B.4. below.

2. Stock Salary

The Special Master reviewed the amount of stock salary GMAC proposed to pay the
Covered Employees in light of the principles that compensation structures should generally be
comparable to “compensation structures and amounts for persons in similar positions or roles at
similar entities,” id. § 30.16(b)(1)(v), and that a “compensation structure, and amount
payable...should reflect the current or prospective contributions of an employee to the value of
the [Company],” id. § 30.16(b)(1)(vi). For employees who were covered by the 2009
Determinations, the Special Master has concluded that stock salary rates approved therein
continue to satisfy the principles described in the previous sentence. As a result, (with the
exception of the CEO, who is covered separately in Part IV.B.7. below) the stock salaries that the
Special Master has determined are consistent with the Public Interest Standard for such
employees for 2010, as set forth in Exhibit I, do not include GMAC’s proposed increases.

For employees who were not covered by the 2009 Determinations, the Special Master
found that the amounts of stock salary proposed by GMAC were excessive in comparison to
payments provided to persons in similar positions or roles at similar entities, and that such
payments would be inconsistent with the Public Interest Standard. The stock salaries that the
Special Master has determined are consistent with the Public Interest Standard for such
employees for 2010 are set forth in Exhibit I.

The Special Master also reviewed the structure of GMAC’s stock salary proposal in light
of the principles that compensation structures should align performance incentives with long-
term value creation rather than short-term profits, see id. § 30.16(b)(1)(i), and that an
appropriate portion of compensation should be “performance-based over a relevant performance
period,” id. § 30.16(b)(1)(iv). The Special Master has concluded that GMAC’s proposal to allow
stock salary to become redeemable only in five equal, annual installments beginning on the first
anniversary of grant provides a sufficient alignment with long-term value creation, extended over
a period designed to reflect performance. Accordingly, the Special Master has determined that
the structure of stock salary described in Exhibit I will not result in payments that would be

AT


(4) Performance-based compensation. An appropriate portion of the compensation should
be performance-based over a relevant performance period. Performance-based
compensation should be determined through tailored metrics that encompass individual
performance and/or the performance of the Exceptional Assistance Recipient or a
relevant business unit taking into consideration specific business objectives.

Performance metrics may relate to employee compliance with relevant corporate policies.
In addition, the likelihood of meeting the performance metrics should not be so great that
the arrangement fails to provide an adequate incentive for the employee to perform, and

performance metrics should be measurable, enforceable, and actually enforced if not met.

Id. § 30.16(b)(1)(iv).

(5) Comparable structures and payments. The compensation structure, and amounts payable
where applicable, should be consistent with, and not excessive taking into account,
compensation structures and amounts for persons in similar positions or roles at similar
entities that are similarly situated, including, as applicable, entities competing in the same
markets and similarly situated entities that are financially distressed or that are
contemplating or undergoing reorganization. Id. § 30.16(b)(1)(v).

(6) Employee contribution to TARP recipient value. The compensation structure and amount
payable should reflect the current or prospective contributions of an employee to the
value of the Exceptional Assistance Recipient, taking into account multiple factors such
as revenue production, specific expertise, compliance with company policy and
regulation (including risk management), and corporate leadership, as well as the role the
employee may have had with respect to any change in the financial health or competitive
position of the recipient. /d. § 30.16(b)(1)(vi).

The Rule provides that the Special Master shall have discretion to determine the
appropriate weight or relevance of a particular principle depending on the facts and
circumstances surrounding the compensation structure or payment for a particular employee. Jd.
§ 30.16(b). To the extent two or more principles may appear inconsistent in a particular
situation, the Rule requires that the Special Master exercise his discretion in determining the
relative weight to be accorded to each principle. /d.

The Rule provides that the Special Master may, in the course of applying these principles,
take into account other compensation structures and other compensation earned, accrued, or paid,
including compensation and compensation structures that are not subject to the restrictions of
section 111 of EESA. For example, the Special Master may consider payments obligated to be
made by the Company pursuant to certain legally binding rights under valid written employment
contracts entered into prior to enactment of the statute and the accompanying Rule. /d.

§ 30.16(a)(3).

TV. COMPENSATION STRUCTURES AND PAYMENTS

A. GMAC Proposals

GMAC has provided the Office of the Special Master with detailed information
concerning its proposed 2010 compensation structures for the Covered Employees, including

A4


¢ Competitive market data provided by the Company in connection with its submission to
the Office of the Special Master;

e External information on comparable compensation structures extracted from the U.S.
Mercer Benchmark Database-Executive; and

e External information on comparable compensation structures extracted from Equilar’s
Executivelnsight database (which includes information drawn from publicly filed proxy
statements) and Equilar’s Top 25 Survey Summary Report (which includes information
from a survey on the pay of highly compensated employees).

The Special Master considered these sources, in light of the statutory and regulatory
standards described in Part III below, when evaluating the Company’s proposed compensation
structures for the Covered Employees for 2010.

IIL. STATUTORY AND REGULATORY STANDARDS

The Rule requires that the Special Master determine for each of the Covered Employees
whether GMAC’s proposed compensation structure, including amounts payable or potentially
payable under the compensation structure, “will or may result in payments that are inconsistent
with the purposes of section 111 of EESA or TARP, or are otherwise contrary to the public
interest.” 31 C.F.R. § 30.16(a)(3) (as applied to Covered Employees of Exceptional Assistance
Recipients, the “Public Interest Standard”). The Rule requires that the Special Master consider
six principles when making these compensation determinations:

(1) Risk. The compensation structure should avoid incentives that encourage employees to
take unnecessary or excessive risks that could threaten the value of the Exceptional
Assistance Recipient, including incentives that reward employees for short-term or
temporary increases in value or performance; or similar measures that may undercut the
long-term value of the Exceptional Assistance Recipient. Compensation packages should
be aligned with sound risk management. /d. § 30.16(b)(1)(i).

(2) Taxpayer return. The compensation structure and amount payable should reflect the
need for the Exceptional Assistance Recipient to remain a competitive enterprise, to
retain and recruit talented employees who will contribute to the recipient’s future success,
so that the Company will ultimately be able to repay its TARP obligations. Id.

§ 30.16(b)(1)(ii).

(3) Appropriate allocation. The compensation structure should appropriately allocate the
components of compensation such as salary and short-term and long-term performance
incentives, as well as the extent to which compensation is provided in cash, equity, or
other types of compensation such as executive pensions, or other benefits, or perquisites,
based on the specific role of the employee and other relevant circumstances, including the
nature and amount of current compensation, deferred compensation, or other
compensation and benefits previously paid or awarded. /d. § 30.16(b)(1)(iii).

A3


4. “Other”? Compensation and Perquisites

GMAC proposed payments of “other” compensation, as well as perquisites, to the
Covered Employees. These proposed payments varied in value.

5. Non-Qualified Deferred Compensation

GMAC also proposed, consistent with the 2009 Determinations, that Covered Employees
would not accrue additional amounts under “non-qualified deferred compensation” plans for
2010 (with the exception of employee-funded elective deferrals).

B. Determinations of the Special Master

The Special Master has reviewed the Proposed Structures in detail by application of the
principles set forth in the Rule and described in Part ITI above. The Special Master’s review also
made use of the resources described in Part II. In light of this review, the Special Master has
determined that the principles established for 2009, which reflect the Public Interest Standard
and are set forth in the 2009 Determinations, must continue to govern compensation in 2010.

After reviewing the Proposed Structures, the Special Master has concluded that they are
consistent with the general principles established in the 2009 Determinations; however, certain
aspects of the Proposed Structures and amounts potentially payable under the Proposed
Structures require modification to ensure that they are consistent with the Public Interest
Standard.

The Special Master has determined, in light of the considerations that follow, that the
compensation structures described in Exhibits I and I to this Determination Memorandum will
not, by virtue of either their structural design or the amounts potentially payable under them,
result in payments inconsistent with the Public Interest Standard.

1. Cash Salary

The Special Master reviewed GMAC’s proposal with respect to cash salary in light of the
principle that compensation structures should generally be comparable to “compensation
structures and amounts for persons in similar positions or roles at similar entities,” 31 C.F.R.

§ 30.16(b)(1)(v). Based in part upon this principle, the Special Master concluded in 2009 that
cash salaries generally should not target a level above the 50th percentile as compared to persons
in similar positions or roles at similar entities, because such levels of cash salaries balance the
need to attract and retain talent with the need for compensation structures that reflect the
circumstances of Exceptional Assistance Recipients.

The Special Master also reviewed GMAC’s proposal with respect to cash salary in light
of the principle that compensation structures should be “performance-based over a relevant
performance period,” id. § 30.16(b)(1){iv). Based in part upon this principle, the 2009
Determinations concluded that cash salary generally should not exceed $500,000, other than in
exceptional cases for good cause shown. Subsequent to its initial submission, GMAC proposed
reducing the salaries of the two Covered Employees with cash salaries exceeding $500,000.

A6


DEPARTMENT OF THE TREASURY

WASHINGTON, D.C. 20220

March 23, 2010

Drema M. Kalajian, Esquire

General Motors Acceptance Corporation Financial Services
200 Renaissance Center

MC-B09-B11

Detroit, MI 48265

Re: Proposed Compensation Payments and Structures for Senior
Executive Officers and Most Highly Compensated Employees
(“Covered Employees I-25”)

Dear Ms. Kalajian:

Pursuant to the Department of the Treasury’s Interim Final Rule on TARP Standards for
Compensation and Corporate Governance, the Office of the Special Master has completed its
review of your 2010 compensation submission on behalf of the senior executive officers and next
20 most highly compensated employees (“Covered Employees 1-25”) of General Motors
Acceptance Corporation Financial Services (“GMAC”). Attached as Annex A is a
Determination Memorandum (accompanied by Exhibits I and I) providing the determinations
of the Special Master with respect to 2010 compensation for those employees. 31 C.F.R.

§ 30.16(a)(3)(i).

The Interim Final Rule requires the Special Master to determine whether the
compensation structure for each Covered Employee 1-25 “will or may result in payments that
are inconsistent with the purposes of section 111 of EESA or TARP, or are otherwise contrary to
the public interest.” Jd, On October 22, 2009, the Special Master issued a Determination
Memorandum containing principles designed to ensure that 2009 compensation for GMAC’s
Covered Employees 1-25 satisfies this public interest standard.

The principles established for 2009 must continue to govern compensation at the five
remaining recipients of exceptional assistance in 2010. GMAC’s 2010 submission is largely
consistent with these important principles, which are detailed in the attached Determination
Memorandum. Generally, these principles require that:

e There can be no guarantee of any “bonus” or “retention” awards among the compensation
structures approved by the Special Master.

e Base salary paid in cash should not exceed $500,000 per year, except in appropriate cases
for good cause shown. The majority of each individual’s base salary will be paid in the
form of stock that will immediately vest, in accordance with the Interim Final Rule, but


incentives based on its assessments of individual employee performance, with the amount
granted to any individual Covered Employee not to exceed the lesser of one third of such
employee’s annual compensation and the target incentive proposed for such employee under the
Proposed Structures. Thus, any additional incentives will require subsequent review prior to the
final approval of the the Special Master. The structure and amount of grants of long-term
restricted stock that the Special Master has determined, as of the date hereof, to be consistent
with the Public Interest Standard are set forth in Exhibits I and IT.

4. “Other” Compensation and Perquisites

The 2009 Determinations generally require that perquisites and “other” compensation
provided to a Covered Employee be limited to $25,000 on an annual basis, and the Proposed
Structures are consistent with this requirement. For the reasons provided in the 2009
Determinations, and as described in Exhibit IT, any exceptions to this limitation will require that
the Company provide to the Office of the Special Master an independent justification for the
payment that is satisfactory to the Special Master. To the extent that payments exceeding this
limitation have already been made to a Covered Employee in 2010, those amounts should be
promptly returned to the Company.

5. Non-Qualified Deferred Compensation

For the reasons provided in the 2009 Determinations, and as proposed by GMAC,
Covered Employees will not accrue in 2010 additional amounts under supplemental executive
retirement plans and other “non-qualified deferred compensation” plans, as described in
Exhibit I.

6. Severance Plans

For the reasons provided in the 2009 Determinations, the Company must ensure that 2010
compensation structures for these employees do not result in an increase in the amounts payable
pursuant to these arrangements.

7. CEO Compensation

In a December 23, 2009, Supplemental Determination, the Special Master approved a
compensation package for GMAC’s newly hired CEO. See supra note |. In its 2010
submission, GMAC proposed an increase to the CEO’s stock salary rate and 2010 annual long-
term incentive opportunity. As described with respect to other Covered Employees in
Part IV.B.2. above, the Special Master has concluded that increases to the rates of stock-based
compensation approved in the 2009 are unwarranted. Following discussions between the Office
of the Special Master and GMAC regarding the foregoing conclusion, GMAC proposed a
restructured compensation package for the CEO, with the same overall amount approved by the
Special Master in 2009 provided solely in a combination of stock salary and an annual long-term
incentive award. The terms and conditions of the stock salary and annual long-term incentive
award proposed for the CEO are the same as for other Covered Employees.

The Special Master assessed the revised proposal for the CEO in light of the principle
that “in the case of an executive or other senior level position a significant portion of the overall

AQ


inconsistent with the Public Interest Standard, provided that GMAC also restructures the stock
salary approved for each Covered Employee in 2009 under the 2009 Determinations to the
structure set forth in Exhibit II.

3. Annual Long-Term Incentive Awards

The Special Master reviewed GMAC’s proposed annual long-term incentive awards in
light of the principle that performance-based compensation should be payable “over a relevant
performance period,” id, Based in part upon this principle, the 2009 Determinations require
long-term incentives to be paid in the form of long-term restricted stock, and permit such awards
to be paid if, and only if, objective performance metrics are achieved and the employee continues
to provide services to the company for three years following the date of grant.

The structure of GMAC’s proposed annual long-term incentives is generally consistent
with the 2009 Determinations. Under the Proposed Structures, annual long-term incentives for
2010 would be granted only upon the achievement of specified, objective performance criteria
that have been provided to the Office of the Special Master. GMAC’s proposed target amounts
were equal to approximately, but not more than, one third of total direct compensation, with the
exception of the CEO, whose target amount is covered separately in Part IV.B.7., and two
Covered Employees for whom no long-term incentives were proposed. In addition, as required
by the Rule, these awards may only be redeemed in 25% installments for each 25% of GMAC’s
TARP obligations that are repaid.

The Special Master reviewed the proposed amounts of long-term restricted stock grants
in light of the principle that the criteria for such incentives should “encompass individual
performance and/or the performance of the TARP recipient...” Jd. § 30.16(b)(1)(iv). The
Special Master has concluded that for 2010, in addition to the achievement of individual
objective performance measures, a portion of the aggregate amount of incentives available for
allocation to the Covered Employees should depend on Company-wide performance over the
course of 2010. Accordingly, the Special Master has determined that an aggregate amount of
$12,500,000 of long-term restricted stock may be granted to the Covered Employees based
solely upon the achievement of specified, objective performance criteria—with the amount
granted to any individual Covered Employee not to exceed the lesser of one third of such
employee’s annual compensation (as defined in the Rule) and the target incentive proposed for
such employee under the Proposed Structures. No additional amount of long-term restricted
stock may be granted without GMAC’s achievement of overall performance goals.

Following additional discussion with the Office of the Special Master, GMAC proposed
that the remainder of the aggregate target incentives for Covered Employees be approved for
2010 only if the Company achieves positive income from continuing operations (before taxes
and certain other items). The Special Master has concluded in principle that the grant incentives
to Covered Employees following GMAC’s achievement of its proposed performance goal—in
addition to each individual employee’s objective performance metrics—would not result in
payments inconsistent with the Public Interest Standard. However, the Special Master’s final
determination regarding 2010 incentive grants to Covered Employees will not be made prior to
the certification by GMAC’s compensation committee that the proposed company-wide
performance goal has been achieved, and that the compensation committee has allocated

A8&


amounts proposed to be paid under the compensation structure for each Covered Employee (the
“Proposed Structures”).

GMAC supported its proposal with detailed assessments of each Covered Employee's
tenure and responsibilities at the Company and historical compensation structure. The
submission also included market data that, according to the Company, indicated that the amounts
potentially payable to each employee were comparable to the compensation payable to persons
in similar positions or roles at a “peer group” of entities selected by the Company. Of the
employees listed as Covered Employees for 2009, 16 remain on the list of Covered Employees
for 2010, and 8 employees are new entrants to the group.

1. Cash Salary

GMAC proposed cash salaries in amounts ranging from $400,000 to $500,000 for
employees new to the Covered Employee group. For employees remaining in the Covered
Employee group from 2009, cash salaries were proposed at either the rate approved by the
Special Master in 2009, or the 2009 rate plus a $9,000 increase to replace a portion of the value
of a discontinued company car program.

2. Stock Salary

GMAC proposed stock salaries in amounts ranging from $900,000 to $4,937,500 for
employees new to the Covered Employee group. For employees remaining in the Covered
Employee group from 2009, stock salaries were proposed at the rate approved by the Special
Master in 2009 for ten employees, and at increased rates for seven employees, with the
additional annual amounts ranging from $86,128 to $1,968,000. As required by the Rule, the
stock units proposed to be used for stock salary would be fully vested upon grant.

Consistent with the 2009 Determinations, GMAC initially proposed that stock would
only be redeemable in three equal, annual installments beginning on the second anniversary of
grant, with each installment redeemable one year earlier if GMAC repays its TARP obligations.
Subsequently, following discussions with the Office of the Special Master in which GMAC
described unique difficulties balancing an appropriate allocation of long-term compensation and
the delivery of a reasonable amount of liquidity to Covered Employees, GMAC requested
consideration for a structure under which stock salary would instead only be redeemable in five,
equal annual installments beginning on the first anniversary of grant.

3. Annual Long-Term Incentive Awards

GMAC proposed that most Covered Employees be eligible to receive annual long-term
incentive awards representing up to one third of their total 2010 compensation, payable in long-
term restricted stock units that generally would vest only if the Covered Employee remains
employed by the Company on the third anniversary of the grant date. As required by the Rule,
these awards would be paid only in 25% installments for each 25% of GMAC’s TARP
obligations that are repaid.

AS


ANNEX A
DETERMINATION MEMORANDUM

I. INTRODUCTION

The Emergency Economic Stabilization Act of 2008, as amended by the American
Recovery and Reinvestment Act of 2009 (“EESA”), requires the Secretary of the Treasury to
establish standards related to executive compensation and corporate governance for institutions
receiving financial assistance under the Troubled Asset Relief Program (“TARP”). Through the
Department of the Treasury’s Interim Final Rule on TARP Standards for Compensation and
Corporate Governance (the “Rule”), the Secretary delegated to the Office of the Special Master
for TARP Executive Compensation (the “Office of the Special Master”) responsibility for
reviewing compensation structures of certain employees at institutions that received exceptional
financial assistance under TARP (“Exceptional Assistance Recipients”). 31 C.F.R. § 30.16(a);
id. § 30.16(a)(3). For these employees, the Special Master must determine whether the
compensation structure will or may result in payments “inconsistent with the purposes of section
111 of EESA or TARP, or...otherwise contrary to the public interest.” /d. § 30.16(a)(3)(i).

General Motors Acceptance Corporation Financial Services (“GMAC” or the
“Company”), one of five remaining Exceptional Assistance Recipients, has submitted to the
Special Master proposed 2010 compensation structures (the “Proposed Structures”) for review
pursuant to Section 30.16(a)(3)(i) of the Rule. These compensation structures apply to five
employees that the Company has identified for 2010 as senior executive officers (the “Senior
Executive Officers,” or “SEOs”) for purposes of the Rule, and 20 employees the Company has
identified as among the most highly compensated employees of the Company for purposes of the
Rule (the “Most Highly Compensated Employees,” and, together with the SEOs, the “Covered
Employees”).

The Special Master has completed the review of the Company’s Proposed Structures for
the Covered Employees pursuant to the principles set forth in the Rule. /d. § 30.16(b)(1). This
Determination Memorandum sets forth the determinations of the Special Master, pursuant to
Section 30.16(a)(3)(i) of the Rule, with respect to the Covered Employees.

II. BACKGROUND

On June 15, 2009, the Department of the Treasury (“Treasury”) promulgated the Rule,
creating the Office of the Special Master and delineating its responsibilities. The Rule requires
that each Exceptional Assistance Recipient submit proposed compensation structures for each
Senior Executive Officer and Most Highly Compensated Employee. 31 C.F.R. § 30.16(a)(3)(i).

On October 22, 2009, after reviewing submissions of proposed compensation structures
from the Company, the Special Master issued determinations regarding 2009 compensation
structures, and amounts potentially payable thereunder, for GMAC’s senior executive officers
and certain most highly compensated employees (the “2009 Determinations”). The 2009
Determinations included principles designed to ensure that 2009 compensation for the applicable
employees would not “result in payments that are inconsistent with the purposes of section 111

Al


relevant new information not previously considered, and must demonstrate that such error or lack
of information resulted in a material error in the initial determinations. If GMAC does not
request reconsideration within 30 days, the determinations set forth herein will be treated as final
determinations. Jd. § 30.16(c)(1).

The foregoing determinations are limited to the compensation structures and employees
described in Exhibits I and II, and shall not be relied upon with respect to any other employee.
The determinations are limited to the authority vested in the Special Master by Section
30.16(a)(3)(i) of the Rule, and shall not constitute, or be construed to constitute, the judgment of
the Office of the Special Master or Treasury with respect to the compliance of any compensation
structure with any other provision of the Rule. Moreover, this Determination Memorandum has
relied upon, and is qualified in its entirety by, the accuracy of the materials submitted by the
Company to the Office of the Special Master, and the absence of any material misstatement or
omission in such materials.

Finally, the foregoing determinations are limited to the compensation structures described
herein, and no further compensation of any kind payable to any Covered Employee without the
prior approval of the Special Master would be consistent with the Public Interest Standard.

Al2


EXHIBIT I
TERMS AND CONDITIONS OF PAYMENTS AND STRUCTURES
CONSISTENT WITH THE PUBLIC INTEREST STANDARD

The following general terms and conditions shall govern the compensation structures described in Exhibit I. The
Special Master’s determination that those structures are consistent with the Public Interest Standard is qualified in its entirety by
the Company’s adherence to these terms and conditions.

« Salary payments. Cash and stock base salaries reflect the annual rate for the employee and are effective as of January 1,
2010, and in the case of stock salary are payable on a nunc pro tunc basis from that date. To the extent the Special Master's
determinations for 2010 reduce an employee’s previous cash or stock salary rate, payments in excess of that rate prior to the
date hereof must be offset by reductions to prospective 2010 cash salary payments or to any stock salary payable with
respect to 2010.

¢ Stock compensation generally. For purposes of the Determination Memorandum, “stock” compensation includes common
stock and stock units. Notwithstanding any transferability restrictions applicable to any stock compensation described in
the Determination Memorandum, (1) an amount of stock sufficient to cover an employee’s tax withholding obligations may
become immediately transferable to the extent necessary to satisfy the employee’s obligations, and (2) to the extent
permitted by the Rule, stock may become immediately transferable upon an employee’s death or separation from service
resulting from disability, as defined in the Company’s broad-based long-term disability plan.

¢ Stock salary. Stock salary must be determined as a dollar amount through the date salary is earned, be accrued at the same
time or times as the salary would otherwise be paid in cash, and vest immediately upon grant, with the number of shares
based on the fair market value on the date of award. Stock granted as stock salary may only be redeemed in five equal,
annual installments as described in the Determination Memorandum. Whether a nunc pro tunc grant or payment that is
labeled stock salary is considered salary or a bonus for purposes of the Rule is determined based on all the facts and
circumstances.

¢ Long-term restricted stock. Long-term restricted stock may only be granted upon the achievement of, as applicable,
individual and company-wide objective performance criteria developed and reviewed in consultation with the Office of the
Special Master, and, for amounts in excess of the $12,500,000 long-term restricted stock pool, upon subsequent Special
Master approval. The compensation committee must certify (1) the achievement of such criteria, and (2) that the grant of
incentives is appropriate in light of GMAC’s overall circumstances at the time. Such stock must be forfeited unless
conditioned upon the employee’s continued employment through the third anniversary of grant, unless a termination of
employment results from death or disability; provided, however, that all or a portion of such stock (or similar stock granted
with respect to 2009 service) may, for good cause certified by the Company’s compensation committee, continue to vest if
the employee retires on or after the second anniversary of the grant date. The term “retirement” must meet an objective
standard established in consultation with the Office of the Special Master.

© Other compensation and perquisites. No more than $25,000 in total other compensation and perquisites may be provided
to any Covered Employee, absent exceptional circumstances for good cause shown, as defined by pertinent SEC
regulations.

© Supplemental executive retirement plans and non-qualified deferred compensation plans. No amounts may be accrued
under supplemental executive retirement plans, and no Company contributions may be made to other “non-qualified
deferred compensation” plans, as defined by pertinent SEC regulations, for 2010. For the avoidance of doubt, neither the
foregoing limitation nor the corresponding limitation in the 2009 Determinations (1) applies to employee-funded elective
deferral arrangements, or (2) precludes continuing recognition of age and service credit for Company employees for the
purposes of vesting in previously accrued benefits under any plans referred to in this paragraph.

¢ = Qualified Plans. For the avoidance of doubt, the Special Master has determined that participation by the Covered
Employees in broad-based, tax-qualified retirement and health and welfare plans is consistent with the Public Interest
Standard, and amounts payable under such plans are not counted against the $25,000 limit on other compensation and
perquisites.

E2


additional incentive grants, if any, will be determined, subject to Special Master approval,
at the conclusion of the year based on the Company’s overall 2010 performance.

As described in the attached Determination Memorandum, GMAC must also continue to
observe the following prescriptions described in the Special Master’s 2009 determinations:

e The achievement of any performance objectives must be certified by the compensation
committee of GMAC’s Board of Directors, which is composed solely of independent
directors. These performance objectives must be reviewed and approved by the Office of
the Special Master.

e The employees will be prohibited from engaging in any hedging or derivative
transactions involving GMAC stock that would undermine the long-term performance
incentives created by the compensation structures.

¢ GMAC may not provide a tax “gross up” of any kind to these employees.

These requirements are described in detail in the attached Determination Memorandum.

Pursuant to the Interim Final Rule, GMAC may, within 30 days of the date hereof,
request in writing that the Special Master reconsider the determinations set forth in the
Determination Memorandum. If the Company does not request reconsideration within 30 days,
these initial determinations will be treated as final determinations. /d. § 30.16(c)(1).

Very tryly ygurs, .

Kerreth R. Feinberg
Office of the Special Master
for TARP Executive Compensation

Enclosures

ce: Mr. Kim Fennebresque
William B. Solomon, Jr., Esquire


will only be redeemable in three equal, annual installments beginning on the second
anniversary of the date stock salary is earned, with each installment redeemable one year
early if GMAC repays its TARP obligations.

Total compensation for each individual must be appropriate when compared with total
compensation provided to persons in similar positions or roles at similar entities, and
should generally target the 50th percentile of total compensation for such similarly
situated employees.

If — and only if — grants of incentives are appropriate in light of GMAC’s
circumstances at the end of 2010 and a particular Covered Employee achieves objective
performance metrics developed and reviewed in consultation with the Office of the
Special Master, the employee may be eligible for a long-term incentive grant. These
incentives must be granted in restricted stock that will be forfeited unless the employee
stays with GMAC for at least three years following grant, and may only be redeemed in
25% installments for each 25% of GMAC’s TARP obligations that are repaid. Long-
term incentive grants must not exceed one third of a Covered Employee’s annual
compensation.

Any and all incentive compensation paid to these employees will be subject to recovery
or “clawback” if the payments are based on materially inaccurate financial statements,
any other materially inaccurate performance metrics, or due to the employee’s
misconduct.

“Other” compensation and perquisites, and supplemental executive retirement plans,
must remain subject to the limitations described in the 2009 determinations.

Although GMAC’s submissions are generally consistent with these important principles,

some modifications are required to make certain that compensation for GMAC’s Covered
Employees 1-25 satisfies the public interest standard. Accordingly, the compensation structures
approved by the Special Master vary in the following respects from GMAC’s proposals:

The CEO’s compensation package will be restructured, with a greater allocation to stock
salary and no cash salary. As a result of this restructuring, and an additional voluntary
restructuring, no Covered Employee will receive a cash salary exceeding $500,000.

Stock salaries for certain employees who are new to the Covered Employees 1-25 group
will be reduced to levels more appropriate in light of their historical overall compensation
levels and in comparison with total compensation of comparable employees at similarly
situated companies.

Cash salaries and stock salaries for other employees who remained in the Covered
Employees 1-25 group from 2009 will be frozen at the levels previously approved by the
Special Master.

The approved aggregate amount of incentives payable to Covered Employees will be
reduced from the Company’s proposal of $29,445,000 to $12,500,000. Approval of


compensation should be long-term compensation that aligns the interest of the employee with the
interests of shareholders and taxpayers.” /d. § 30.16(b)(1)(iii). Although the revised proposal
included an increased rate of stock salary, the Special Master has concluded that a compensation
structure in which the CEO’s opportunity for wealth accumulation depends entirely on the long-
term equity value of the Company best aligns his interests with those of the taxpayers, and such a
structure, as described in Exhibits I and IT, is consistent with the Public Interest Standard.

8. Departing Employee

Following its submission, GMAC informed the Office of the Special Master that one
Senior Executive Officer announced his intent to depart the Company. With respect to this
employee, the Special Master has determined that the payment of stock salary and cash salary at
the rate in effect on January 1, 2010, through the date of the termination of employment, and
payment of up to $25,000 in perquisites and “other” compensation are consistent with the Public
Interest Standard. No other payments to this employee of any kind would be consistent with the
Public Interest Standard. Any exceptions to this limitation will require that the Company
provide to the Office of the Special Master an independent justification for the payment that is
satisfactory to the Special Master.

V. CORPORATE GOVERNANCE

As noted in Part III above, the Rule requires the Special Master to consider the extent to
which compensation structures are “performance-based over a relevant performance period,” 31
C.F.R. § 30.16(b)(1)(iv). In light of the importance of this principle, the Special Master required
as part of the 2009 Determinations that GMAC take certain corporate governance steps to ensure
that the compensation structures for the Covered Employees, and the amounts payable or
potentially payable under those structures, are consistent with the Public Interest Standard.

The Special Master has determined that these same corporate governance requirements,
which are detailed in Section V of the 2009 Determinations, must continue to apply in 2010.
Among other requirements, GMAC must:

e Ensure that employees are prohibited from engaging in any derivative or similar
transaction with respect to GMAC stock that would undermine the long-term
performance incentives created by the compensation structures set forth in Exhibits I and
i.

e Maintain a compensation committee comprised exclusively of independent directors,
which must discuss, evaluate, and review with GMAC’s senior risk officers any risks that
could threaten the value of GMAC. Jd. § 30.4; id. § 30.5.

e Ensure that the compensation committee discloses to Treasury an annual narrative
description of whether GMAC, its board of directors, or the committee has engaged a
compensation consultant during the past three years; and, if so, the types of services
provided by the compensation consultant or any affiliate, including any “benchmarking”
or comparisons employed to identify certain percentile levels of pay. [d. § 30.11(c).

Al0


EXHIBIT I

COVERED EMPLOYEES
2010 Compensation
Company Name: GMAC Financial Services
Stock Salary Long-Term Restricted Stock
(Performance based: The | (Performance based: Awarded Total Direct
stock vests at grant and is based on achievement of Compensation
redeemable in five equal, objective performance goals. (Cash salary + stock
annual installments Generally vests after 3 years of salary; excluding
beginning on the Ist service. Transferability potential long-term
Employee ID Cash Salary anniversary of grant.) _ [dependent on TARP repayment.) restricted stock.)
280677 $0 $8,000,000 $8,000,000,
151695 $500,000) $1,858,333 $2,358,333
166144 $500,000 $900,000) $1,400,000
197253 $500,000 $1,941,667, $2,441,667
250095 $500,000: $4,437,500 $4,937,500.
265967 $500,000 $2,350,000. $2,850,000)
339212 $500,000) $4,437,500 $4,937,500!
354392 $450,000) $1,000,000 $1,450,000
391076 $450,000) $1,133,333 $1,583,333
501828 $450,000) $1,850,000) $2,300,000
509014 $400,000 $852,278 $1,252,278.
513416 $450,000 $880,000 $1,330,000.
546145 $500,000 $1,641,667 $2,141,667,
555076 $480,000) $1,029,167 $1,509,167
567303 $400,000, $1,300,000 $1,700,000,
682168 $500,000} $3,183,333 $3,683,333
707713 $400,000. $1,000,000 $1,400,000.
710047 $500,000: $1,300,000 $1,800,000.
725547 $450,000 $1,220,833 $1,670,833
746382 $400,000 $1,000,000 $1,400,000
805106 $500,000) $2,208,333 $2,708,333
921597 $400,000) $1,149,872 $1,549,872
936790, $400,000. $1,141,667 $1,541,667
964006 $450,000 $2,391,667 $2,841,667,

Comparison of 2010 Compensation to Prior Year Compensation

. Long-term Restricted Stock: The compensation committee may grant up to $12.5M of incentives to employees for
achievement of objective individual performance goals. Additional long-term restricted stock for incentive grants,
if any, will be determined at the conclusion of the year based on Company performance, subject to Special Master approval

. Overall: Annualized overall cash compensation decreased by $8.8M or 45%. Approved total direct compensation, including
the $12.5M long-term restricted stock pool, decreased by 14% from 2009.

. The 16 executives remaining in the Top 25 from 2009: Annualized overall cash compensation decreased by $1,050,000 or
13%. Currently allocated total direct compensation decreased by at least 30% from 2009 levels. Depending on Company
and individual performance, these employees could earn up to the entire long-term restricted stock pool.

. The 8 executives new to the Top 25 in 2010: Annualized overall cash compensation decreased by $7.8M or 68%.
Currently allocated total direct compensation decreased by 28% from 2009 levels. Depending on Company and individual
performance, these employees could earn up to $8.5M of the long-term restricted stock pool.

Note 1: Amounts reflected in this Exhibit do not include amounts the Company has asserted to be payable pursuant to legally binding
rights under valid employment contracts, see 31 C.P.R. § 30.10(¢ (2).

Note 2: The total number of Covered Employees may be less than 25 because of separations from service since January 1. 2010.

El