CalPERS Honors Four for Corporate Governance Courage.

Business Editors/Government Writers

SACRAMENTO, Calif.--(BUSINESS WIRE)--May 16, 2000

Apple Computer, Inc., the Texas Instruments Incorporated Board of Directors, Time Warner's Chairman and CEO, and an independent director of General Motors have received a special honor from CalPERS, the corporate governance award of courage.

At a special event held at CalPERS headquarters Monday, each was presented with the honor and thanks from the 13-member CalPERS Board of Administration.

"We honor these companies and individuals for their courage and dedication to shareowner interests," said Dr. William D. Crist, President of CalPERS Board of Administration. "In each area, they represent shining examples of effective governance."

Apple Computer, formerly on the System's "Focus List" of underperformers, was honored for its striking turnaround, attributed to its formation of a new board of directors, a new senior management team, a new relationship with its arch-rival Microsoft, and the introduction of iMac. Since CalPERS' first contact with Apple in 1996, the company has earned a cumulative 512 percent return as of March 31, 2000. CalPERS owns more than 971,000 shares of Apple stock.

The board of directors of Texas Instruments (TI) was honored for its extensive good practices in corporate governance and for the company's financial performance.

The governance structure of TI's Board encourages active participation in the oversight and evaluation of the company's business affairs and management's strategic plans. It is a board composed of independent directors; has a strong committee structure that keeps the board informed and involved and shares leadership roles with different directors to meet the changing demands of the company. It keeps open lines of communication between itself and senior management to ensure the board does not rely exclusively on the CEO for information; provides adequate compensation, including stock-based compensation, to align directors' interests with those of shareowners; conducts board evaluations to improve the quality of its oversight; and has an established corporate governance training program for senior managers.

The company's one-year cumulative return was approximately 223 percent as of March 31, 2000, compared to a 146 percent return for its industry peers. CalPERS owns 3.8 million shares of Texas Instruments stock.

CalPERS cited Time Warner Chairman and CEO Gerald M. Levin for his responsiveness to shareowners. CalPERS on occasion has questioned certain aspects of the company's governance structure. Levin listened to the pension system's concerns and has recognized the value of an effective corporate-shareowner dialogue. Most recently, Time Warner and AOL announced one of the largest mergers in American business. Levin will become CEO of the new AOL Time Warner and Steve Case, currently chairman and CEO of America Online, will become chairman of the board. This combination of business talent and leadership, coupled with the split of authority, further demonstrates Levin's vision, courage and dedication to shareowner and corporate governance interests.

During the time Levin was Chairman of the Board in 1992 through March 31, 2000, Time Warner's stock price earned a compound annual return of approximately 30 percent versus an 18 percent compound annual return for the S&P 500 Index. CalPERS owns more than 5.6 million shares of Time Warner stock.

CalPERS honored General Motors' Independent Director John G. Smale for his work in leading General Motors' re-examination of fundamental governance processes, including CEO succession planning. Through the adoption of the now-renowned "GM Corporate Governance Guidelines," CalPERS officials said General Motors -- under the direction of Smale -- brought corporate governance into the mainstream. The "GM Corporate Governance Guidelines" have become a leading benchmark against which all other governance structures are judged. Smale also held the daunting role of Independent Chair of the GM Board, and guided GM through a CEO succession in that role.

General Motors has earned a one-year cumulative return of approximately 18 percent compared to the S&P Auto Index return of a negative 2.3 percent. CalPERS owns more than 3.3 million shares of General Motors stock.

CalPERS is the nation's largest public pension fund with assets totaling more than $175 billion. The System provides retirement and health benefits to more than 1 million state and local public employees and their families. For further information on CalPERS, check the System's Web site at www.calpers.ca.gov.