<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 8, 1995
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
GENERAL MOTORS CORPORATION
(Exact name of registrant as specified in its charter)
-------------------------
State of Delaware 38-0572515
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
767 Fifth Avenue, New York, New York 10153-0075; (212) 418-6100
3044 West Grand Boulevard, Detroit, Michigan 48202-3091; (313) 556-5000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
-------------------------
J. Michael Losh
Executive Vice President
General Motors Corporation
3044 West Grand Boulevard
Detroit, Michigan 48202-3091
(313) 556-3549
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
<TABLE>
<S> <C> <C>
Warren G. Andersen Robert S. Osborne, P.C. Gerry D. Osterland
General Motors Corporation Kirkland & Ellis Jones, Day, Reavis & Pogue
3031 West Grand Boulevard 200 East Randolph Drive 2300 Trammell Crow Center
Detroit, Michigan 48202-3091 Chicago, Illinois 60601-6636 2001 Ross Avenue
Dallas, Texas 75201
Robert L. Messineo Francis J. Morison
Weil, Gotshal & Manges Davis Polk & Wardwell
767 Fifth Avenue 450 Lexington Avenue
New York, New York 10153-0075 New York, New York 10017
</TABLE>
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
PROPOSED
MAXIMUM PROPOSED
TITLE OF EACH CLASS AMOUNT OFFERING MAXIMUM AMOUNT OF
OF SECURITIES TO BE PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class E Common Stock.......................... 42,550,000 shares $43.3125(1) $1,842,946,900(1) $635,503
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated in accordance with Rule 457 solely for the purpose of determining
the registration fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
EXPLANATORY NOTE
This Registration Statement relates to the offering of 37,000,000 shares of
Class E Common Stock (without giving effect to the Underwriters' over-allotment
option), of which 27,000,000 shares will be offered in the United States and
Canada, 7,000,000 shares will be offered internationally outside the United
States and Canada excluding Asia, and 3,000,000 shares will be offered in Asia.
The Registration Statement includes the U.S. Prospectus followed by alternate
front cover pages, underwriting sections and back cover pages for the
International Prospectus and the Asian Prospectus as indicated on each page.
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MAY 8, 1995
PROSPECTUS
GENERAL MOTORS CORPORATION
37,000,000 SHARES
CLASS E COMMON STOCK
------------------------
This Prospectus covers the resale of 37,000,000 shares of Class E Common
Stock, par value $0.10 per share ("Class E Common Stock"), of General Motors
Corporation, a Delaware corporation (together with its subsidiaries, "General
Motors," "GM" or the "Corporation"), by the General Motors Special Hourly
Employees Pension Trust (the "Hourly Plan Special Trust") under the General
Motors Hourly-Rate Employees Pension Plan (the "Hourly Plan") and a special
trust (the "Salaried Plan Special Trust") under the General Motors Retirement
Plan for Salaried Employees (the "Salaried Plan"). Each such trust is sometimes
referred to herein as a "Selling Stockholder" and, collectively, as the "Selling
Stockholders." See "Selling Stockholders." Of the 37,000,000 shares of Class E
Common Stock offered hereby, 27,000,000 are being offered in the United States
and Canada by the U.S. Underwriters, 7,000,000 are being offered internationally
outside the United States and Canada excluding Asia by the International
Underwriters, and 3,000,000 are being offered in Asia by the Asian Underwriters.
See "Underwriting." Class E Common Stock is one of three classes of General
Motors common stock. Under the General Motors Restated Certificate of
Incorporation, as amended, dividends on Class E Common Stock may be declared and
paid out of the assets of General Motors only to the extent of the sum of (i)
the paid in surplus attributable to the Class E Common Stock plus (ii) an
allocated portion of the earnings, determined as described herein, of General
Motors' indirectly wholly owned subsidiary, Electronic Data Systems Corporation
(together with its subsidiaries, "EDS"). General Motors, not EDS, is the issuer
of Class E Common Stock. For a description of dividend, voting and liquidation
rights and recapitalization provisions with respect to the Class E Common Stock,
see "Class E Common Stock" and "Description of Capital Stock -- Common Stock."
General Motors will not receive any of the proceeds from the sale of the
shares offered hereby. See "Selling Stockholders" and "Underwriting." The Class
E Common Stock is listed in the United States on the New York Stock Exchange
under the symbol GME. The closing sale price of the Class E Common Stock on the
New York Stock Exchange on May 5, 1995 was $42.50 per share.
United States Trust Company of New York is the trustee for the Hourly Plan
Special Trust (the "Hourly Plan Trustee") and Bankers Trust Company is the
trustee for the Salaried Plan Special Trust (the "Salaried Plan Trustee").
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
PROCEEDS TO
PRICE TO UNDERWRITING SELLING
PUBLIC DISCOUNTS(1) STOCKHOLDERS(2)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................................... $ $ $
- -----------------------------------------------------------------------------------------------------
Total(3).................................... $ $ $
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) General Motors and, to the extent permitted by applicable law, the Selling
Stockholders, have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses of the offerings, estimated to be $1,230,000,
payable by General Motors.
(3) The Hourly Plan Special Trust has granted the U.S. Underwriters,
International Underwriters and Asian Underwriters an option, exercisable
within 30 days after the date hereof, to purchase up to an aggregate of
5,550,000 additional shares of Class E Common Stock at the Price to Public
less Underwriting Discount for the purpose of covering overallotments, if
any. If the Underwriters exercise such option in full, the total Price to
Public, Underwriting Discount and Proceeds to Selling Stockholders will be
$ , $ and $ , respectively.
------------------------
Advisor to United States Trust Company of New York
WASSERSTEIN PERELLA & CO.
------------------------
The shares of Class E Common Stock are offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, and
subject to approval of certain legal matters by counsel for the Underwriters.
The Underwriters reserve the right to withdraw, cancel or modify such offer and
to reject orders in whole or in part. It is expected that delivery of the
certificates for the shares of Class E Common Stock will be made on or about
, 1995, in New York, New York.
------------------------
MERRILL LYNCH & CO. GOLDMAN, SACHS & CO. LEHMAN BROTHERS
CS FIRST BOSTON MORGAN STANLEY & CO. SALOMON BROTHERS INC
INCORPORATED
------------------------
JOINT GLOBAL COORDINATORS
MERRILL LYNCH & CO. GOLDMAN, SACHS & CO.
------------------------
The date of this Prospectus is , 1995.
<PAGE> 4
AVAILABLE INFORMATION
General Motors is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by General Motors with the Commission can
be inspected, and copies may be obtained, at the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates,
as well as at the following Regional Offices of the Commission: Seven World
Trade Center, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Reports, proxy statements and
other information concerning General Motors can also be inspected at the offices
of the New York Stock Exchange, Inc., 11 Wall Street, New York, New York 10005,
where the $1 2/3 Par Value Common Stock, Class E Common Stock and Class H Common
Stock of General Motors are listed and at the offices of the following other
stock exchanges where the $1 2/3 Par Value Common Stock is listed: the Chicago
Stock Exchange, Inc., One Financial Place, 440 South LaSalle Street, Chicago,
Illinois 60605; the Pacific Stock Exchange, Inc., 233 South Beaudry Avenue, Los
Angeles, California 90012 and 301 Pine Street, San Francisco, California 94104;
and the Philadelphia Stock Exchange, Inc., 1900 Market Street, Philadelphia,
Pennsylvania 19103.
General Motors has filed with the Commission a Registration Statement on
Form S-3 (as amended, including exhibits, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"), covering the
resale of the shares of Class E Common Stock offered hereby. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is hereby made to the
Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by General Motors with the
Commission, are incorporated herein by reference.
1. Annual Report on Form 10-K for the year ended December 31, 1994, as
amended on Forms 10-K/A dated March 17 and 24, 1995 (as amended, the "GM
1994 Form 10-K");
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1995 (the
"GM First Quarter 1995 Form 10-Q");
3. Current Reports on Form 8-K dated March 3, 13 and 24, 1995; and
4. The description of the Class E Common Stock set forth in Article Fourth
of General Motors' Restated Certificate of Incorporation, as amended to
May 26, 1994 (the "General Motors Certificate of Incorporation"), filed
as Exhibit 3(i) to the Current Report on Form 8-K dated May 26, 1994.
All documents filed by General Motors with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering made hereunder shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained herein
or in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
General Motors will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the documents which have been or
may be incorporated by reference in this Prospectus, other than exhibits to such
documents not specifically described above. Requests for such documents should
be directed to General Motors Corporation, Room 11-243, General Motors Building,
3044 West Grand Boulevard, Detroit, Michigan 48202-3091 (Telephone Number (313)
556-2044).
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS E COMMON
STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information contained elsewhere or incorporated by reference in this Prospectus.
This Prospectus relates to the resale by the Selling Stockholders of
37,000,000 shares of Class E Common Stock (plus up to 5,550,000 additional
shares of Class E Common Stock if the Underwriters' over-allotment option is
exercised in full). Class E Common Stock is one of three classes of General
Motors Common Stock. Dividends on Class E Common Stock may be declared and paid
out of the assets of General Motors only to the extent of the sum of (i) the
paid in surplus of General Motors attributable to the Class E Common Stock plus
(ii) an allocated portion of the earnings, determined as described below, of
General Motors' indirectly wholly owned subsidiary, EDS. Holders of Class E
Common Stock have no direct rights in the equity or assets of EDS, but rather
have rights in the equity and assets of General Motors (which includes 100% of
the stock of EDS). General Motors, not EDS, is the issuer of Class E Common
Stock. See "Class E Common Stock." General Motors will not receive any of the
proceeds from the sale of the shares of Class E Common Stock described herein.
See "Selling Stockholders."
GENERAL MOTORS
The major portion of General Motors' operations is derived from the
automotive products industry, consisting of the design, manufacture, assembly
and sale of automobiles, trucks and related parts and accessories. Primarily
through its wholly owned subsidiaries, EDS, General Motors Acceptance
Corporation ("GMAC") and Hughes Electronics Corporation (formerly known as GM
Hughes Electronics Corporation) ("Hughes"), General Motors also manufactures
products and provides services in other industry segments. See "General Motors
and EDS -- General Motors."
EDS
EDS is a world leader in applying information technology ("IT"), with over
30 years of experience in using advanced computer and communications
technologies to meet its clients' business needs. EDS' total revenues in 1994
were $10.05 billion. EDS currently employs approximately 84,000 persons and
serves clients in the United States and 39 other countries. See "Business of
EDS."
THE OFFERINGS
<TABLE>
<S> <C>
Class E Common Stock Offered Hereby(a)
U.S. Offering......................................... 27,000,000 shares
International Offering................................ 7,000,000 shares
Asian Offering........................................ 3,000,000 shares
-----------
Total......................................... 37,000,000 shares
===========
Class E Common Stock Outstanding after the 438,515,650 shares(c)
Offerings(b)..........................................
Class E Dividend Base(d)................................ 482,392,167
NYSE Symbol............................................. GME
</TABLE>
- ---------------
(a) Without giving effect to the over-allotment option granted by the Hourly
Plan Special Trust to the Underwriters.
(b) Used in calculating the weighted average number of shares of Class E Common
Stock outstanding, which is the numerator of the fraction used to allocate
a portion of EDS' earnings to amounts available for the payment of
dividends on Class E Common Stock. See "Class E Common Stock."
(c) Based on the number of shares of Class E Common Stock outstanding on March
31, 1995. The consummation of the Offerings will not change the number of
shares of Class E Common Stock outstanding. In addition, 44,881,366 shares
of Class E Common Stock have been reserved for issuance upon conversion of
currently outstanding General Motors Series C Convertible Preference Stock.
See "Description of Capital Stock -- Preference Stock -- Series C
Convertible Preference Stock."
(d) The denominator of the fraction used to allocate a portion of EDS' earnings
to amounts available for the payment of dividends on Class E Common Stock.
Neither the Class E Dividend Base nor the numerator of such fraction will
be affected by the sale by the Selling Stockholders of the shares being
offered hereby.
3
<PAGE> 6
GENERAL MOTORS AND EDS
GENERAL MOTORS
While the major portion of General Motors' operations is derived from the
automotive products industry segment, General Motors also has financing and
insurance operations and produces products and provides services in other
industry segments. The automotive products segment consists of the design,
manufacture, assembly, and sale of automobiles, trucks, and related parts and
accessories. The financing and insurance operations assist in the merchandising
of General Motors' products as well as other products. GMAC and its subsidiaries
offer financial services and certain types of insurance to dealers and
customers. In addition, GMAC and its subsidiaries are engaged in mortgage
banking and investment services. The other products segment consists of military
vehicles, radar and weapon control systems, guided missile systems, and defense
and commercial satellites; the design, installation and operation of business
information and telecommunication systems; as well as the design, development,
and manufacture of locomotives. For additional information on General Motors,
see the GM 1994 Form 10-K and the GM First Quarter 1995 Form 10-Q that are
incorporated herein by reference, as well as the other documents incorporated
herein by reference.
General Motors' principal executive offices are located at 3044 West Grand
Boulevard, Detroit, Michigan 48202-3091 (Telephone Number (313) 556-5000), and
767 Fifth Avenue, New York, New York 10153-0075 (Telephone Number (212)
418-6100).
EDS
EDS is a world leader in IT, with over 30 years of experience in using
advanced computer and communications technologies to meet its clients' business
needs. EDS' total revenues in 1994 were $10.05 billion. EDS currently employs
approximately 84,000 persons and serves clients in the United States and 39
other countries. See "Business of EDS."
EDS was incorporated under the laws of the State of Texas in 1962 and
became a wholly-owned subsidiary of General Motors in October 1984. EDS'
principal executive offices are located at 5400 Legacy Drive, Plano, Texas
75024-3105 (Telephone Number (214) 604-6000).
RELATIONSHIP BETWEEN GENERAL MOTORS AND EDS
EDS is responsible for substantially all of the worldwide data processing
and telecommunications activities of General Motors and its subsidiaries. See
"Business of EDS -- Services for General Motors." Approximately 35% of EDS'
total revenues in 1994 were attributable to General Motors and its subsidiaries.
The percentage of EDS' total revenues attributable to General Motors and its
subsidiaries has decreased significantly since 1985. While it is anticipated
that GM will continue to contribute a significant portion of EDS' total systems
and other contracts revenues, the percentage is expected to continue to decline
as non-GM revenues continue to increase. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations of EDS."
It is GM's policy that a standard of fair dealing govern the prices, terms
and conditions of commercial transactions between EDS and General Motors. The
Capital Stock Committee of the General Motors Board of Directors (the "General
Motors Board of Directors" or the "Board of Directors") is responsible for
reviewing, under general principles of Delaware corporation law, among other
things, (i) the principal business and financial relationships and transactions
among General Motors, EDS and Hughes, (ii) the dividend policies or practices of
General Motors and (iii) such other matters as have the potential to have
differing effects on holders of the three classes of General Motors common
stock, all to the extent such Committee may deem appropriate. The Capital Stock
Committee is comprised entirely of independent directors of General Motors. In
addition, a majority of the General Motors Board of Directors are independent
directors. See "Class E Common Stock -- Considerations Relating to Multi-Class
Common Stock Capital Structure."
The Board of Directors of EDS is comprised of executive officers of General
Motors and of EDS. Those directors of EDS who are also executive officers of
General Motors devote a substantial amount of their time to the business and
affairs of General Motors and its other subsidiaries or to the oversight
thereof. As the sole
4
<PAGE> 7
stockholder of EDS, General Motors controls the EDS Board of Directors and,
subject to Delaware law, is able to cause EDS to pay dividends and make advances
to or otherwise enter into such transactions with GM as GM deems desirable and
appropriate. General Motors reserves the right to cause EDS to pay dividends to
GM in such amounts as GM determines are desirable under the then prevailing
facts and circumstances. Such amounts may be the same as, greater than, or less
than the cash dividends paid by General Motors on the Class E Common Stock.
There is no fixed relationship, on a per share or aggregate basis, between the
cash dividends that may be paid by General Motors to holders of the Class E
Common Stock and the dividends or other amounts that may be paid by EDS to
General Motors. However, it has been the practice of the Board of Directors of
EDS to pay quarterly cash dividends on the outstanding shares of EDS common
stock in a per share amount equal to the quarterly dividends per share paid by
General Motors with respect to Class E Common Stock. The number of shares of
common stock of EDS issued and outstanding, all of which shares are owned by
General Motors through a wholly owned subsidiary, is adjusted from time to time
so as to remain equal to the denominator of the fraction used in allocating a
portion of EDS' earnings to the Class E Common Stock for dividend purposes as
described herein. EDS makes no payments on EDS common stock with respect to
dividend payments by General Motors on shares of General Motors Series C
Convertible Preference Stock (which are convertible pursuant to their terms into
shares of Class E Common Stock). See "Class E Common Stock -- Considerations
Relating to Multi-Class Common Stock Capital Structure" and "Description of
Capital Stock."
The managements of EDS and General Motors are engaged in discussions
concerning the most appropriate means of addressing EDS' strategic objectives,
including the possibility of a spin-off of EDS. These discussions have not
produced a definitive proposal as to the structure or terms of any transaction
or as to whether any transaction will be proposed to the board of directors of
GM or EDS or the stockholders of GM. Any spin-off of EDS would be proposed only
in a transaction determined by GM's Board of Directors to be fair to holders of
all classes of GM's capital stock and that would be tax free and would not
result in the recapitalization of Class E Common Stock into GM $1 2/3 Par Value
Common Stock at a 120% exchange ratio as currently provided for under certain
circumstances in the General Motors Certificate of Incorporation. See "Class E
Common Stock -- Recapitalization." The development of any such proposal would be
subject to the resolution of numerous matters and any subsequent implementation
of any such proposal would be subject to numerous conditions, including
appropriate board and stockholder approvals. In the event that any such spin-off
were proposed, General Motors and EDS would plan to enter into a long-term
agreement upon consummation of such transaction, with options for renewal by
General Motors, under which EDS would continue to provide to General Motors
substantially the same information technology services as it has provided in the
past. See "Business of EDS -- Services for General Motors." The development of
any such proposal and fulfillment of such conditions are uncertain and the
consummation of any such transaction would in any event involve substantial
periods of time. Due to the numerous uncertainties involved in these matters,
there can be no assurance that any spin-off of EDS will be proposed or
consummated.
5
<PAGE> 8
BACKGROUND OF THE OFFERINGS
On March 13, 1995, General Motors contributed to the Hourly Plan
173,163,187 shares of Class E Common Stock, having an aggregate fair market
value on such date of approximately $6.3 billion (determined by an independent
valuation expert retained by the Hourly Plan Trustee). In connection with making
such contribution, General Motors and the Pension Benefit Guaranty Corporation
(the "PBGC") entered into an agreement under which GM made $4.0 billion of
incremental cash contributions to the Hourly Plan and agreed to certain
limitations on the use of funding credits created by such contribution, and the
PBGC agreed to provide flexibility to GM by granting a release of EDS from
liability, if any, under Title IV of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), for GM's U.S. pension plans in the event EDS were
to leave the GM control group under certain circumstances. In connection with
such contribution, the Department of Labor also granted an exemption with
respect to, among other things, limits otherwise applicable under ERISA on the
amount of Class E Common Stock that could legally be held by the Hourly Plan.
All of the contributed shares, together with an additional approximately
16.9 million shares of Class E Common Stock held by the Hourly Plan Special
Trust, are subject to the restrictions on transfer in and other terms of a
Registration Rights Agreement dated March 12, 1995 between General Motors and
the Hourly Plan Trustee (including the exhibits thereto, the "Registration
Rights Agreement"). Under the Registration Rights Agreement, the Hourly Plan
Special Trust may only transfer shares of Class E Common Stock in certain types
of transactions and under certain circumstances, including "demand transfers"
(which are defined under the Registration Rights Agreement to include public
offerings and negotiated transactions, whether registered or not) and certain
transfers to employee benefit plans maintained by GM and its subsidiaries. The
Hourly Plan Special Trust is currently permitted two registered demand transfers
in any twelve-month period and an unlimited number of unregistered, negotiated
transfers. Upon consummation, the sale of the shares offered hereby will
constitute one of the two registered demand transfers by the Hourly Plan Special
Trust currently allowed in any twelve-month period under the Registration Rights
Agreement.
The Salaried Plan Special Trust owns approximately 9.1 million shares of
Class E Common Stock which are subject to the terms of an Exchange and
Registration Agreement, dated November 4, 1992 (the "Exchange Agreement") among
General Motors, the Hourly Plan Special Trust and the Salaried Plan Special
Trust. The Exchange Agreement was terminated with respect to the Hourly Plan
Special Trust pursuant to the Registration Rights Agreement. Under the Exchange
Agreement, the Salaried Plan Special Trust continues to have certain rights to
register the shares of Class E Common Stock held by it. In order to coordinate
the respective registration rights of the Hourly Plan Special Trust and the
Salaried Plan Special Trust, an Agreement dated March 12, 1995 (the "Salaried
Plan Agreement") was entered into among General Motors, the Hourly Plan Trustee
and the Salaried Plan Trustee. Pursuant to the Salaried Plan Agreement, the
Salaried Plan Special Trust has a right to include up to 3.0 million of the
shares of Class E Common Stock owned by it as of the date of such Agreement in
any public offering initiated by the Hourly Plan Special Trust under the
Registration Rights Agreement. The Salaried Plan Special Trust has elected to
exercise such right with respect to 2.0 million shares of Class E Common Stock
in connection with the Offerings.
The Selling Stockholders have agreed not to offer, sell or otherwise
dispose of any shares of Class E Common Stock or any securities convertible into
or exchangeable or exercisable for Class E Common Stock (other than transfers to
or for the benefit of employee benefit plans of GM or any of its affiliates,
including EDS) from the date of this Prospectus, in the case of the Hourly Plan
Special Trust, until December 31, 1995 and, in the case of the Salaried Plan
Special Trust, until 90 days after the date of this Prospectus, in each case,
without the prior written consent of Merrill Lynch & Co. and Goldman, Sachs &
Co. on behalf of the Representatives (as defined below). See "Underwriting."
SELLING STOCKHOLDERS
The Hourly Plan Special Trust is the owner of 35.0 million of the shares of
Class E Common Stock offered hereby and all of the shares subject to the
Underwriters' over-allotment option. The Salaried Plan Special Trust is the
owner of 2.0 million of the shares of Class E Common Stock offered hereby. The
Finance
6
<PAGE> 9
Committee of the General Motors Board of Directors is the named fiduciary of the
Hourly Plan and the Salaried Plan pursuant to the provisions of ERISA, and a
portion of the assets of the Hourly Plan and the Salaried Plan (not including
the shares of Class E Common Stock owned by the Hourly Plan Special Trust and
the Salaried Plan Special Trust) is subject to management by or under the
supervision of General Motors Investment Management Corporation, a wholly owned
subsidiary of General Motors.
Prior to the contribution of the 173,163,187 shares of Class E Common Stock
to the Hourly Plan Special Trust as described above, the Hourly Plan Trustee was
appointed to have ongoing responsibility, as a fiduciary within the meaning of
ERISA, to manage the shares of Class E Common Stock owned by the Hourly Plan
Special Trust. The Hourly Plan Trustee has retained Wasserstein Perella & Co.,
Inc. (the "Financial Advisor") to serve as its investment advisor regarding the
management and disposition of such shares of Class E Common Stock.
The Hourly Plan Trustee and the Salaried Plan Trustee have responsibility
to manage prudently the shares of Class E Common Stock held by the Hourly Plan
Special Trust and the Salaried Plan Special Trust, respectively, in a manner
consistent with maximizing the value of the applicable Special Trust's
respective investment in Class E Common Stock and in accordance with each
Trustee's determination of the extent to which the applicable Special Trust may
prudently continue to hold such shares consistent with the diversification and
related fiduciary requirements of ERISA. In accordance with the foregoing and,
in the case of the Hourly Plan Special Trust, in a manner consistent with the
limitations and terms of the Registration Rights Agreement, each Trustee has the
authority and discretion to cause the Special Trust of which it is trustee to
hold such shares or sell all or any portion thereof from time to time as it may
deem appropriate, and to direct the voting of and the exercise of all other
rights relating to such shares. The Hourly Plan Trustee and the Salaried Plan
Trustee intend to manage the disposition of such shares in a manner consistent
with maintaining an orderly market for the Class E Common Stock. The Department
of Labor exemption obtained at the time of the contribution of the shares of
Class E Common Stock to the Hourly Plan Special Trust as described above does
not impose any time constraints on the Hourly Plan Special Trust for any
dispositions of such shares. The compensation of the Hourly Plan Trustee and the
Financial Advisor is not contingent in any way on the sale or continued holding
of shares of Class E Common Stock by the Hourly Plan Special Trust.
As of March 31, 1995, the Hourly Plan Special Trust had beneficial
ownership of approximately 190.1 million shares of Class E Common Stock (which
does not include approximately 309,000 shares of Class E Common Stock and
approximately 278,000 shares of Class E Common Stock issuable upon conversion of
shares of General Motors Series C Convertible Preference Stock held for the
benefit of the Hourly Plan by investment managers other than the Hourly Plan
Trustee), representing approximately 43% of the Class E Common Stock
outstanding, and the Salaried Plan Special Trust had beneficial ownership of
approximately 9.1 million shares of Class E Common Stock (which does not include
approximately 240,000 shares of Class E Common Stock and approximately 200,000
shares of Class E Common Stock issuable upon conversion of shares of General
Motors Series C Convertible Preference Stock held for the benefit of the
Salaried Plan by investment managers other than the Salaried Plan Trustee),
representing approximately 2% of the Class E Common Stock outstanding (in each
case, based on the number of shares of Class E Common Stock outstanding as of
March 31, 1995). Following the consummation of the Offerings, the Hourly Plan
Special Trust will have beneficial ownership of approximately 155.1 million
shares (or, if the Underwriters' over-allotment option is exercised in full,
approximately 149.5 million shares) and the Salaried Plan Special Trust will
have beneficial ownership of approximately 7.1 million shares, of Class E Common
Stock. Such shares will represent approximately 35% (or, if the Underwriters'
over-allotment option is exercised in full, 34%) and 2%, respectively, of the
Class E Common Stock outstanding (in each case, based on the number of shares of
Class E Common Stock outstanding as of March 31, 1995). In addition, the Hourly
Plan and the Salaried Plan have beneficial ownership of other securities of
General Motors from time to time.
General Motors will not receive any of the proceeds of the sale of any of
the shares of Class E Common Stock offered hereby. All of such proceeds will be
for the account of the Selling Stockholders and for the benefit of employees and
retirees and their beneficiaries participating in the Hourly Plan and the
Salaried Plan, as appropriate.
7
<PAGE> 10
SELECTED FINANCIAL DATA OF GENERAL MOTORS AND EDS
The following data have been derived from General Motors' and EDS'
consolidated financial statements. Such data should be read in conjunction with
the consolidated financial statements, the notes thereto and Management's
Discussion and Analysis in the GM 1994 Form 10-K and the GM First Quarter 1995
Form 10-Q (which are incorporated herein by reference), including in each case
the information with respect to EDS in Exhibit 99(a) thereto. With respect to
EDS, see also "Management's Discussion and Analysis of Financial Condition and
Results of Operations of EDS" and the consolidated financial statements of EDS
included as Appendix A attached hereto. In the opinion of management, the
unaudited consolidated financial statements of General Motors and EDS for the
three months ended March 31, 1995 and 1994 include all adjustments (consisting
only of normal recurring adjustments, except as described in the notes hereto)
necessary to present fairly the financial information for such periods. Interim
results are not necessarily indicative of the results which may be expected for
any other interim period or for the full year. The GM financial data presenting
GMAC on an equity basis are unaudited.
GENERAL MOTORS
(IN MILLIONS)
<TABLE>
<CAPTION>
AS OF AND FOR THE
THREE MONTHS ENDED
MARCH 31, AS OF AND FOR THE YEARS ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1995 1994 1994(A) 1993 1992(B) 1991(C) 1990
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED GM OPERATIONS
OPERATING RESULTS
Total net sales and revenues........ $ 43,285.0 $ 37,495.4 $154,951.2 $138,219.5 $132,242.2 $123,108.8 $124,705.1
---------- ---------- ---------- ---------- ---------- ---------- ----------
Costs and expenses.................. 39,805.3 35,043.3 146,597.9 134,694.2 134,338.3 126,180.3 123,608.2
Special provision for scheduled
plant closings and other
restructurings.................... -- -- -- 950.0 1,237.0 2,820.8 3,314.0
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total costs and expenses...... 39,805.3 35,043.3 146,597.9 135,644.2 135,575.3 129,001.1 126,922.2
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) before cumulative
effect of accounting changes...... 2,154.0 1,611.8 5,658.7 2,465.8 (2,620.6) (4,992.0) (1,985.7)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)................... $ 2,154.0 $ 853.7 $ 4,900.6 $ 2,465.8 $(23,498.3) $ (4,452.8) $ (1,985.7)
========== ========== ========== ========== ========== ========== ==========
BALANCE SHEET DATA
Cash and marketable securities...... $ 16,021.2 $ 15,466.0 $ 16,075.6 $ 17,962.7 $ 15,107.7 $ 10,192.4 $ 7,821.4
Total assets........................ 205,559.6 191,727.6 198,598.7 188,200.9 190,196.0 184,074.6 180,236.5
Notes and loans payable............. 76,300.9 70,268.9 73,730.2 70,441.2 82,592.3 94,022.1 95,633.5
Stockholders' equity................ 21,366.5 6,936.5 12,823.8 5,597.5 6,225.6 27,327.6 30,047.4
GM OPERATIONS WITH GMAC ON AN
EQUITY BASIS
OPERATING RESULTS
Total net sales and revenues........ $ 39,450.1 $ 34,280.7 $141,576.0 $125,252.7 $118,571.6 $109,156.9 $110,797.3
---------- ---------- ---------- ---------- ---------- ---------- ----------
Costs and expenses.................. 36,523.6 32,147.4 134,815.3 122,812.1 121,420.0 112,719.3 110,893.3
Special provision for scheduled
plant closings and other
restructurings.................... -- -- -- 950.0 1,237.0 2,820.8 3,314.0
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total costs and expenses...... 36,523.6 32,147.4 134,815.3 123,762.1 122,657.0 115,540.1 114,207.3
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) before cumulative
effect of accounting changes...... 2,154.0 1,604.4 5,651.3 2,465.8 (2,903.2) (4,660.5) (1,985.7)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)................... $ 2,154.0 $ 853.7 $ 4,900.6 $ 2,465.8 $(23,498.3) $ (4,452.8) $ (1,985.7)
========== ========== ========== ========== ========== ========== ==========
BALANCE SHEET DATA
Cash and marketable securities...... $ 10,270.5 $ 9,546.6 $ 10,976.4 $ 10,485.0 $ 7,960.8 $ 4,419.4 $ 4,606.5
Total assets........................ 130,730.3 123,976.9 126,334.9 120,980.5 121,356.2 104,797.5 102,878.8
Long-term debt and capitalized
leases............................ 6,318.9 6,711.6 6,218.7 6,383.6 7,055.4 6,699.1 4,923.8
Stockholders' equity................ 21,366.5 6,936.5 12,823.8 5,597.5 6,225.6 27,327.6 30,047.4
Cumulative Amount Available for
Payment of Dividends(d)
Class E Common Stock............ $ 10,152.3 $ 3,398.6 $ 3,752.1 $ 3,243.8 $ 2,546.4 $ 1,753.0 $ 1,449.0
Class H Common Stock............ 2,259.1 1,971.7 2,169.3 1,886.7 1,582.9 1,218.5 1,106.6
$1 2/3 Par Value Common Stock... 10,494.5 5,757.7 9,013.8 4,870.0 3,487.7 23,264.1 26,801.2
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total......................... $ 22,905.9 $ 11,128.0 $ 14,935.2 $ 10,000.5 $ 7,617.0 $ 26,235.6 $ 29,356.8
========== ========== ========== ========== ========== ========== ==========
</TABLE>
8
<PAGE> 11
- -------------------------
(a) Effective January 1, 1994, GM adopted Statement of Financial Accounting
Standards ("SFAS") No. 112. The effect of this change on 1994 results was an
unfavorable cumulative effect on GMAC earnings of $7.4 million, an
unfavorable cumulative effect on GM operations with GMAC on an equity basis
of $750.7 million, and an unfavorable cumulative effect on consolidated GM
operations of $758.1 million.
(b) Effective January 1, 1992, GM adopted SFAS No. 106. The effect of this
change on 1992 earnings was an unfavorable cumulative effect on GMAC
earnings of $282.6 million, an unfavorable cumulative effect on GM
operations with GMAC on an equity basis of $20,555.1 million and an
unfavorable cumulative effect on consolidated GM operations of $20,837.7
million. Additionally, effective January 1, 1992, Hughes changed its revenue
recognition policy for certain commercial businesses. The effect of this
change on 1992 results was an unfavorable adjustment of $40.0 million.
(c) Effective January 1, 1991, accounting procedures were changed to include in
inventory general purpose spare parts previously charged directly to
expense. The effect of this change on 1991 earnings was a favorable
adjustment of $306.5 million. GM adopted SFAS No. 109, effective January 1,
1991. The effect of this change on 1991 results was a favorable cumulative
effect on GMAC earnings of $331.5 million, an unfavorable cumulative effect
on GM operations with GMAC on an equity basis of $98.8 million and a
favorable cumulative effect on consolidated GM operations of $232.7 million.
(d) Amount of funds legally available as of such date for the payment of
dividends on each class of GM common stock under the General Motors
Certificate of Incorporation. See "Description of Capital Stock -- Common
Stock -- Dividends."
On April 25, 1995, General Motors commenced a tender offer to purchase for
cash any and all of its (i) 44,300,000 outstanding depositary shares, each
representing one-fourth of a share of its Series B 9 1/8% Preference Stock, at a
purchase price of $27.50 per depositary share, (ii) 15,700,000 outstanding
depositary shares, each representing one-fourth of a share of its Series D 7.92%
Preference Stock, at a purchase price of $26.375 per depositary share, and (iii)
23,000,000 outstanding depositary shares, each representing one-fourth of a
share of its Series G 9.12% Preference Stock, at a purchase price of $28.25 per
depositary share. No offer has been made for General Motors' fourth series of
Preference Stock, the Series C Convertible Preference Stock, shares of which are
convertible into the Class E Common Stock. See "Description of Capital Stock."
9
<PAGE> 12
EDS
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
AS OF AND FOR THE
THREE MONTHS ENDED
MARCH 31, AS OF AND FOR THE YEARS ENDED DECEMBER 31,
-------------------- ---------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS
Revenues
Systems and other contracts
GM and affiliates..................... $ 898.0 $ 841.7 $ 3,547.2 $3,323.7 $3,348.5 $3,362.2 $3,234.2
Outside customers..................... 1,878.3 1,375.5 6,412.9 5,183.6 4,806.7 3,666.3 2,787.5
Interest and other income................. 8.7 22.1 92.3 54.5 63.7 70.5 87.1
-------- -------- --------- -------- -------- -------- --------
Total revenues........................ 2,785.0 2,239.3 10,052.4 8,561.8 8,218.9 7,099.0 6,108.8
Costs and expenses
Cost of revenues.......................... 2,176.1 1,710.6 7,529.4 6,390.6 6,205.8 5,415.1 4,639.0
Selling, general, and administrative...... 281.0 250.8 1,187.1 1,005.4 969.3 761.9 663.0
Interest expense.......................... 20.4 9.6 51.7 34.5 43.0 28.3 18.1
-------- -------- --------- -------- -------- -------- --------
Total costs and expenses.............. 2,477.5 1,971.0 8,768.2 7,430.5 7,218.1 6,205.3 5,320.1
-------- -------- --------- -------- -------- -------- --------
Income before income taxes.................. 307.5 268.3 1,284.2 1,131.3 1,000.8 893.7 788.7
Provision for income taxes.................. 110.7 96.6 462.3 407.3 365.3 330.7 291.8
Cumulative effect of accounting change(a)... -- -- -- -- -- (15.5) --
-------- -------- --------- -------- -------- -------- --------
Separate Consolidated Net Income............ $ 196.8 $ 171.7 $ 821.9 $ 724.0 $ 635.5 $ 547.5 $ 496.9
======== ======== ========= ======== ======== ======== ========
Average number of shares of Class E Common
Stock outstanding (Numerator)............. 300.0 257.9 260.3 243.0 209.1 195.3 187.1
Class E Dividend Base (Denominator)......... 482.4 481.2 481.7 480.6 479.3 478.1 478.6
Available Separate Consolidated Net
Income.................................... $ 122.4 $ 92.1 $ 444.4 $ 367.2 $ 278.4 $ 223.6 $ 194.4
Earnings attributable to Class E Common
Stock on a per share basis................ 0.42 0.36 1.71 1.51 1.33 1.14 1.04
Dividends per share of Class E Common
Stock..................................... 0.13 0.12 0.48 0.40 0.36 0.32 0.28
BALANCE SHEET DATA
Cash and marketable securities.............. $ 641.0 $ 753.9 $ 757.8 $ 607.5 $ 587.9 $ 415.8 $ 715.4
Current assets.............................. 3,465.5 2,665.1 3,354.1 2,506.8 2,157.0 1,945.6 1,716.4
Property and equipment, net................. 2,881.2 2,153.5 2,756.6 2,114.7 1,720.7 1,551.6 1,197.1
Total assets(b)............................. 9,158.0 7,289.6 8,786.5 6,942.1 6,123.5 5,703.2 4,565.3
Current liabilities......................... 2,832.2 2,138.3 2,873.2 2,160.4 1,903.1 2,396.7 1,653.9
Long-term debt.............................. 1,198.4 710.4 1,021.0 522.8 561.1 281.9 285.1
Stockholder's equity(b)(c).................. 4,414.5 3,761.9 4,232.5 3,617.4 3,063.4 2,610.3 2,181.8
OTHER DATA
Depreciation and amortization............... $ 231.0 $ 156.9 $ 741.3 $ 607.9 $ 603.2 $ 524.4 $ 495.7
Expenditures for property and equipment..... 263.8 156.3 1,120.9 799.4 639.0 673.2 514.8
</TABLE>
- -------------------------
(a) Effective January 1, 1991, the Company adopted SFAS No. 109. The cumulative
effect of this accounting change at January 1, 1991, was a charge of $15.5
million or $0.03 per share of Class E Common Stock. First quarter 1991
earnings were restated for the effect of the accounting change.
(b) Holders of Class E Common Stock have no direct rights in the equity or
assets of EDS, but rather have rights in the equity and assets of General
Motors (which includes 100% of the stock of EDS).
(c) General Motors' equity in its indirectly wholly owned subsidiary, EDS.
The portion of EDS' earnings that is included in the amount available for
the payment of dividends on Class E Common Stock (which amount is also used to
calculate earnings per share of Class E Common Stock) is determined by a
fraction, the numerator of which is a number equal to the weighted average
number of shares of Class E Common Stock outstanding and the denominator of
which was 482.4 million for the first quarter of 1995; provided, that such
fraction shall never be greater than one. The amount so allocated is referred to
in the General Motors Certificate of Incorporation as the "Available Separate
Consolidated Net Income" of EDS. For purposes of determining the approximate
earnings per share attributable to Class E Common Stock for financial reporting
purposes, an investor may divide the quarterly EDS earnings allocated to Class E
Common Stock (the "Available Separate Consolidated Net Income of EDS") by the
weighted average number of shares of Class E Common Stock outstanding during
such quarter, which is the numerator of the fraction described above.
Approximately the same mathematical result may be obtained by dividing the
quarterly EDS earnings used for computation of Available Separate Consolidated
Net Income (i.e., net income) by the denominator of the fraction described
above. The denominator is sometimes referred to herein as the "Class E Dividend
Base." See "Class E Common Stock."
The foregoing financial data for EDS should be read in conjunction with the
consolidated financial statements (including the notes thereto) of EDS included
as Appendix A attached hereto.
10
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF EDS
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
EDS signed new contracts with a total contract value of $2.6 billion during
the quarter ended March 31, 1995, compared to $2.2 billion during the same
period of 1994.
Total revenues rose $545.7 million over the comparable quarter in the prior
year to $2,785.0 million for the quarter ended March 31, 1995. Systems and other
contracts revenues for the quarter ended March 31, 1995 included $898.0 million
of revenues related to GM contracts.
The growth of base business (non-GM) revenues during the first quarter of
1995, when compared to the corresponding period in 1994, was 36.6%. This growth
results from several new contracts and improved performance of existing
contracts.
GM revenues increased 6.7% during the quarter ended March 31, 1995, when
compared with the same period in 1994. The percentage of EDS' total revenues
attributable to General Motors and its subsidiaries has decreased significantly
since 1985. While it is anticipated that GM will continue to contribute a
significant portion of total systems and other contracts revenues, the
percentage of revenues from GM and its subsidiaries is expected to continue to
decline as non-GM revenues continue to increase. In the first quarter of 1995,
32% of total revenues came from GM and its subsidiaries, compared with 38% for
the first quarter of 1994.
Cost of revenues as a percentage of systems and other contracts revenues
was 78% for the first quarter of 1995, compared with 77% for the first quarter
of 1994. Selling, general, and administrative expenses as a percentage of
systems and other contracts revenues were 10% for the first quarter of 1995,
compared with 11% for the first quarter of 1994.
For the quarter ended March 31, 1995, EDS' separate consolidated net income
increased 14.6% to $196.8 million, when compared to net income of $171.7 million
for the same period in 1994. Earnings per share of Class E Common Stock
increased from $0.36 to $0.42, or 16.7%, for the first quarter of 1995 when
compared to the first quarter of 1994. EDS' effective tax rate remained at 36%
for the quarter.
THREE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
General. EDS achieved record earnings in 1994, signing the largest base
business global outsourcing contract in its history and achieving more than $10
billion in total revenues. The total value of contracts sold during the year
also surpassed EDS' previous record year, 1993, continuing the trend of global
business expansion.
Total Revenues. 1994 was the first year in which more than a quarter of
total systems and other contracts revenues were generated outside the United
States. The total revenues of $10,052.4 million represented an increase of 17%
over total revenues in 1993. The comparable amounts for 1993 and 1992 were 4%
and 16%, respectively. The base (non-GM) portion of 1994 revenues grew 24% over
1993, to $6,505.2 million, while GM revenues grew 7% over the same period, to
$3,547.2 million. The growth in base business compares with 8% in 1993 and 30%
in 1992. GM revenues were relatively stable in 1993 and 1992.
Total U.S. base systems and other contracts revenues for 1994 increased
15%, or $606.7 million over 1993, to $4,611.2 million. This compares with U.S.
growth of 8% in 1993 and 23% in 1992. Base systems and other contracts revenues
from outside the United States were $1,801.7 million, or 28% of base systems and
other contracts revenues in 1994, compared with $1,179.1 million, or 23% in
1993. The increase in non-U.S. base revenues of $622.6 million was largely
attributable to growth in European business. European base revenues increased
$396.5 million, or 43%, in 1994 to $1,308.1 million, compared with $911.6
million in 1993 and $828.3 million in 1992. This increase was related to
business in the United Kingdom and Germany. Other non-U.S. base revenues were up
85% over 1993, to $493.6 million, compared with $267.5 million in 1993 and
$284.8 million in 1992. This growth was primarily due to business in Japan and
New Zealand.
11
<PAGE> 14
Systems and Other Contracts Revenues. Systems and other contracts revenues
for the year ended December 31, 1994, included $3,547.2 million of revenues
related to GM contracts, compared with $3,323.7 million and $3,348.5 million in
1993 and 1992, respectively. It is anticipated that GM will continue to
contribute a significant portion of systems and other contracts revenues.
However, as base revenues have continued to increase, the percentage of revenues
coming from GM and its subsidiaries continues to decline. In 1994, 35% of
revenues came from GM and its subsidiaries; in 1993, GM revenues were 39% of the
total, and in 1992 it was 41%. EDS expects this trend to continue as base
revenues grow.
Interest and Other Income. Interest and other income increased to $92.3
million in 1994, compared with $54.5 million in 1993 and $63.7 million in 1992.
The increase in 1994 occurred as EDS realized higher earnings and gains created
by a strong market for certain investments.
Cost of Revenues. Cost of revenues as a percentage of systems and other
contracts revenues was 76% in 1994, compared with 75% and 76% in 1993 and 1992,
respectively.
Selling, General, and Administrative Expenses. Selling, general, and
administrative expenses remained constant at 12% of systems and other contracts
revenues in 1994, 1993 and 1992.
Interest Expense. Interest expense of $51.7 million increased 50% from 1993
due to an overall increase in the average outstanding borrowings and an increase
in the average cost of borrowing. Interest expense of $34.5 million in 1993
represented a decrease of $8.5 million from 1992 due to an overall decline in
the average outstanding borrowings and a decline in the average cost of
borrowing.
Pretax Margin. EDS achieved strong revenues growth of 17% in 1994 and a
pretax margin of 12.8%. The 1993 pretax margin was 13.2% coupled with 4%
revenues growth in that year. The 1992 pretax margin was 12.2%.
Income Taxes. The effective income tax rate was 36.0% in 1994 and 1993,
down from 36.5% in 1992.
Net Income. EDS' separate consolidated net income increased 14% to $821.9
million in 1994, compared with $724.0 million in 1993 and $635.5 million in
1992. Return on stockholder's equity (General Motors' equity in its indirectly
wholly owned subsidiary, EDS) was 21% in 1994, compared with 22% in 1993 and
1992. Return on assets remained constant at 11% for 1994, 1993 and 1992.
LIQUIDITY AND CAPITAL RESOURCES
EDS' liquidity and capital structure changed during 1994 to reflect the
steady growth in significant customer relationships established in recent years.
Working capital increased from $346.4 million at December 31, 1993 to $480.9
million at December 31, 1994. Working capital was $633.3 million at March 31,
1995. The increase in 1995 was primarily related to increases in accounts
receivable and prepaid and other assets, as well as decreases in accounts
payable and accrued liabilities.
The current ratio remained relatively constant at 1.2-to-1 at March 31,
1995, December 31, 1994, and December 31, 1993. The ratio of noncurrent
debt-to-capital was 21% at March 31, 1995, 19% at December 31, 1994 and 13% at
December 31, 1993, indicating EDS currently meets most of its capital needs
internally. EDS' capital at March 31, 1995 consisted of $1,198.4 million in
noncurrent notes payable and $4,414.5 million in stockholder's equity (General
Motors' equity in its indirectly wholly owned subsidiary, EDS). Total debt was
$1,456.6 million at March 31, 1995, which consisted entirely of notes payable.
This compares with total debt of $1,224.4 million at December 31, 1994 and
$695.5 million at December 31, 1993. The long-term debt in 1994 and 1993 also
consisted entirely of notes payable. Debt, which consists largely of commercial
paper, has increased primarily to manage working capital needs and due to the
financing of non-U.S. acquisitions and the purchase of assets to support
significant long-term contracts. At March 31, 1995, EDS had unused, uncommitted
short-term lines of credit totaling $495.8 million and unused committed lines of
credit of $1,800.0 million. The total debt-to-capital ratio (which includes
current debt as a component of capital) was 24.8% at March 31, 1995, compared
with 22.4% at December 31, 1994 and 16.1% at December 31, 1993.
On April 4, 1995, Standard & Poor's Corporation ("S&P") raised its
commercial paper rating of EDS to A-1 from A-2, second highest within the four
investment grade ratings available from S&P for commercial
12
<PAGE> 15
paper, indicating a strong degree of safety regarding timely payments, and
removed the rating from CreditWatch, where it was placed on February 6, 1995. A
security rating is not a recommendation to buy, sell, or hold securities and may
be subject to revision or withdrawal at any time by the assigning rating
organization. Each rating should be evaluated independently of any other rating.
EDS continues to maintain a strong cash position, holding cash and cash
equivalents of $521.7 million at March 31, 1995. Cash flows from operations for
the three months ended March 31, 1995, were $93.1 million, down $275.2 million
from the same period for 1994 due primarily to changes in working capital items.
For the year ended December 31, 1994, cash flows from operations were $1,490.8
million, up $95.8 million from 1993. Net cash used in investing activities was
$373.9 million for the first quarter of 1995 compared to $291.9 million for the
first quarter of 1994. Additionally, net cash used in investing activities was
$1,485.6 million for the year ended December 31, 1994, compared with $1,049.7
million for 1993. These increases were primarily due to purchases of property
and equipment, as well as increased participation in business combinations and
other investments to support business growth. EDS made cash payments in
connection with 1994 acquisitions of $186.6 million, acquiring assets with a
fair value of $427.8 million, issuing debt of $94.9 million and assuming
liabilities of $146.3 million. EDS made net additions to software and certain
other intangibles of $96.7 million in 1994 and net additions to land held for
development of $3 million. Net cash provided by financing activities was $191.2
million for the first quarter of 1995 compared to $97.4 million for the first
quarter of 1994, an increase of $93.8 million due to the issuance of notes
payable. For the year ended December 31, 1994, net cash provided by financing
activities was $194.1 million compared with cash used in financing activities of
$370.2 million in 1993.
EDS paid cash dividends to GM totaling $62.6 million in the first quarter
of 1995 and $231.1 million during the year ended December 31, 1994.
EDS' capital expenditures for the calendar year 1995 are currently
projected at approximately $1.2 billion to $1.5 billion. EDS intends to finance
these investments through a combination of internally generated funds and
outside sources.
The competitive environment and changing market forces are increasing the
capital intensity of EDS' business. Increasing amounts of capital will be
required by EDS in order to make investments in acquisitions, joint ventures and
strategic alliances in other parts of the information industry and in new
product development. See "Business of EDS -- Competition." In addition,
information technology customer contracts frequently now require front-end
investments in computers and telecommunications equipment, software, and other
property, plant and equipment. For these reasons, EDS' ability to continue to
access the capital markets on an efficient basis will become increasingly
important to EDS' ability to compete effectively.
PRIVATE PLACEMENT OF NOTES
EDS expects to issue in the second quarter of 1995 up to $200,000,000 of
its five-year notes and $300,000,000 of its ten-year notes in a private
placement to investment banks for resale only to qualified institutional buyers
pursuant to Rule 144A under the Securities Act. The proceeds of such offering
are expected to be used for general corporate purposes, including repayment of
outstanding commercial paper borrowings and funding of acquisitions. Such notes
have not been and will not be registered under the Securities Act or any other
applicable securities laws and may not be offered, sold or otherwise transferred
unless registered pursuant to, or exempt from registration under, the Securities
Act and other applicable securities laws.
13
<PAGE> 16
BUSINESS OF EDS
SERVICES
EDS is a world leader in applying information technology, with over 30
years of experience in using advanced computer and communications technologies
to meet the business needs of its clients. EDS offers its clients a continuum of
services worldwide, including the management of computers, networks, information
systems, information processing facilities, business operations and related
personnel, providing to its clients advantages in cost-effectiveness, speed of
implementation and state-of-the-art technology. In delivering this continuum of
services, EDS generally performs one or more of five basic functions:
- Management Consulting Services. EDS Management Consulting Services
("MCS") delivers business, industry and technology advisory and
information services, including business process reengineering, strategic
planning, change management, resource management and technology strategy
and planning.
- Creation of IT Systems -- Systems Development. EDS designs, develops and
implements information systems or adds features that may increase the
capabilities of existing systems.
- Assembly of IT Platforms -- Systems Integration. EDS selects technologies
and assembles integrated systems that may include software, hardware,
telecommunications and systems support and maintenance.
- Management of IT Operations -- Systems Management. EDS assumes and
manages the operation of part or all of a client's IT operations, which
may include equipment, personnel, information processing systems and
communications networks.
- Management of Business Operations -- Process Management. EDS manages an
entire business function within the client's enterprise, which may
include IT operations as well as other activities such as remittance
processing, marketing, sales, customer service and training.
EDS is able to leverage its extensive technical infrastructure and other
numerous resources to offer IT services at clients' sites or through one of its
13 information processing centers worldwide. EDS' digital telecommunications
network, EDSNET(R), is capable of worldwide transmission of clients' voice,
digital and video data using the integrated fiber optic, microwave and satellite
facilities of what EDS believes is one of the world's largest digital
telecommunications networks, excluding government networks and common carriers.
EDS constantly examines and tests computer hardware and software offered by
suppliers worldwide as part of its efforts to assess and use in its operations,
and offer to EDS' clients, the technological changes that continuously occur
within the computer industry, including developments in distributed computing
and client/server architecture. EDS has developed computer-aided software
engineering ("CASE") tools to assist in generating new software to keep pace
with rapidly evolving strategies involving hardware technologies and information
processing theories and facilitate the rapid deployment of its products and
services to the market.
BUSINESS AREAS
EDS conducts its sales, marketing and service activities on a global basis
through business units that focus either geographically or vertically along the
lines of specified industries. By combining the skills of an industry-focused
business unit with a geographic business unit, EDS is able to respond to a
client's requirements with people who are knowledgeable about a specific
industry and the client's business.
Additionally, certain services provided by EDS to all clients are
concentrated in specific service units. These service units, called Centers of
Service, provide electronic transfer, microcomputer technology, computer
assisted design, manufacturing and engineering ("CAD," "CAM" and "CAE") and
other services to EDS' clients in coordination with the business units having
primary responsibility for a particular client.
The industry areas to which EDS provides IT services can be broadly
categorized as follows:
- Manufacturing -- EDS assists numerous manufacturing companies in their
worldwide operations and in their implementations of global competitive
strategies, providing them with advanced capabilities in
14
<PAGE> 17
information processing, information management and telecommunications.
EDS offers manufacturing clients expertise in electronic data
interchange, engineering information systems, integrated document
processing, inventory control, materials handling, process control,
synchronous manufacturing, artificial intelligence techniques and
capabilities in CAD, CAM and CAE on an integrated basis.
- Government -- EDS performs IT services for national, state and local
governments in the U.S. and around the world. At the national level, EDS
targets its services at both civil and defense organizations with
complex, large scale information needs. Within state and local
governments, key markets of EDS include health care, human services,
transportation, public safety and administration and finance. EDS' core
competency for managing complexity and its proven ability to leverage
process performance improvement techniques and technologies from the
private sector into the public sector has allowed EDS to expand its
government presence worldwide.
- Financial Services -- EDS offers a full range of IT services to the
global financial services industry. The industry's expansion of products
and services has led to an unprecedented dependence on IT and its
integration with a financial institution's business processes and
strategy. Through strategic alliances and acquisitions, EDS has
positioned itself to support a wide range of industry segments, including
commercial banks, consumer finance companies, investment banks, regional
and community banks, credit unions, brokerage and securities firms,
thrifts and mortgage lenders. EDS' services are augmented by a full range
of industry-specific products and services, including data processing,
automated teller machines ("ATMs"), debit and credit card services, voice
and teller automation, item and remittance processing, cross-border funds
transfer and currency exchange, consumer asset management, customer
service technology, remote/home banking, and business-process
improvement.
- Communications -- EDS offers a full spectrum of IT services to the global
communications market in addition to industry-specific technology
platforms tailored to the information needs of each industry segment.
These services include clearinghouse, roaming and billing services and
systems for the wireless industry, information management and billing
systems for the cable television industry, and operational support
systems and billing systems for the telecommunications industry. EDS also
offers multimedia-based services designed to satisfy the predicted demand
of emerging full service network operators within the interactive
multimedia segment.
- Insurance -- EDS offers IT services to companies in the insurance
industry, providing the management of information required in this highly
regulated industry in a rapidly-changing, record-intensive environment.
EDS' services go beyond traditional outsourcing and include solution sets
to improve specific business areas, including sales and marketing,
customer service and claims management.
- Travel and Transportation -- EDS' travel and transportation group offers
IT services to customers worldwide in the air transportation, freight,
computer reservation system, vehicle rental, travel agency, cruise line
and hospitality industries. EDS' IT services to these industries are
designed to meet customer requirements for reducing operating costs,
improving quality and increasing responsiveness to rapidly changing
market conditions.
- Energy -- EDS provides IT services on a global basis to companies in the
petroleum, natural gas, chemical, pharmaceutical, mining and utility
industries. EDS' services in the energy industry are intended to improve
inventory control, reduce time to market, lower product cost, improve
rate case approval, improve capacity planning and increase efficiency in
regulatory and environmental compliance.
In certain of these markets, EDS provides services, such as ATM and travel
related services, directly to individual consumers.
From time to time EDS has made acquisitions and entered into strategic
alliances in an effort to obtain a competitive advantage or a new or expanded
presence in targeted geographic or service markets. EDS believes that a
convergence of information industries, including computing, communications and
media/entertainment, is occurring and will continue. As a result, acquisitions,
joint ventures and strategic alliances are expected to be increasingly important
to EDS' ability to compete effectively. See "Competition."
15
<PAGE> 18
REVENUES
EDS receives fees for all aspects of its continuum of services. The fees
are generally paid pursuant to predetermined rates set forth in contracts.
Contracts with respect to non-General Motors business generally have terms of
one to 10 years. A substantial majority of the services EDS provides for General
Motors are covered by fixed-price, multi-year agreements. See "Services for
General Motors."
EDS' total revenues grew from $3.4 billion in 1985 (the first full year
following General Motors' acquisition of EDS) to $10.05 billion in 1994.
Although revenues attributable to General Motors have increased from 1985 to
1994, as a percentage of total revenues (including interest and other income),
revenues attributable to General Motors have decreased from approximately 70% in
1985 to approximately 35% in 1994 as a result of the rapid revenue growth of
EDS' base (non-General Motors) business. As a percentage of total revenues
(including interest and other income), revenues attributable to EDS' base
(non-General Motors) business have increased from approximately 30% in 1985 to
approximately 65% in 1994.
The following table sets forth the percentage of operating revenues for the
year ended December 31, 1994 derived by EDS from the identified principal
industry areas. Operating revenues equal total revenues less interest and other
income.
<TABLE>
<CAPTION>
PERCENTAGE OF
OPERATING REVENUES
FOR THE FISCAL YEAR
INDUSTRY AREA ENDED DECEMBER 31, 1994
---------------------------------------------------- -----------------------
<S> <C>
Manufacturing....................................... 47%
Government.......................................... 15
Financial Services.................................. 13
Communications...................................... 7
Insurance........................................... 5
Travel and Transportation........................... 4
Energy.............................................. 4
Other............................................... 5
---
Total............................................. 100%
===
</TABLE>
Other than General Motors, no one client accounted for more than 5% of EDS'
total revenues for 1994.
SERVICES FOR GENERAL MOTORS
Approximately 35% of EDS' total revenues in 1994 was attributable to
General Motors and its subsidiaries. EDS is responsible for substantially all of
the worldwide data processing and telecommunications activities of General
Motors and its subsidiaries, including integrated information systems for
payroll, health and benefits, office automation, communications and plant
automation functions. General Motors and EDS have entered into a master
agreement providing a framework for the negotiation of service agreements,
development agreements and other agreements between their respective
organizations. Within this framework, General Motors, with certain exceptions,
has committed to purchase substantially all of its data processing and
telecommunications requirements through EDS. Contracts with respect to General
Motors business may be terminated by either party in the event of a sale by
General Motors of all or substantially all of the assets or stock of EDS, other
than to an affiliate of General Motors. See "General Motors and EDS --
Relationship Between General Motors and EDS."
The pricing policy between EDS and General Motors contemplates three
alternative pricing methods. Under the first alternative, General Motors and EDS
operating units negotiate and utilize fixed-price contracts where the scope of
the work can be precisely defined. A substantial majority of the services that
EDS provides for General Motors are covered by multi-year agreements of this
type. The second alternative permits General Motors operating units to use a
cost-plus method of pricing for EDS' services. Under the third alternative,
commercially available products and services are provided to General Motors at
uniform, competitive rates.
16
<PAGE> 19
COMPETITION
EDS experiences competition in the IT industry and in the broader
information industry, which includes the computing, communications and
media/entertainment industries. Today, EDS' principal competitors in the IT
services industry include IBM, Andersen Consulting, Computer Sciences
Corporation and AT&T.
EDS has historically faced competition principally from other companies
providing information technology systems and service, as well as from current or
potential customers that choose to develop, utilize for themselves and offer to
others their own business information systems or services. As the markets for IT
services have grown and as the services demanded by customers have expanded and
increased in complexity, EDS' competitors have expanded from niche-oriented,
geographically-focused companies to include broader-based, global competitors.
EDS believes that a long-term trend of convergence is occurring in the
computing, communications and media/entertainment sectors of the information
industry. As this trend continues, companies historically involved in the
communications and media/entertainment sectors of the information industry, as
well as companies principally involved in other portions of the IT industry,
will increasingly seek to compete in the businesses in which EDS has
traditionally operated. For example, AT&T now offers services that combine
computing with communications. Similarly, EDS' strategy includes continuing to
leverage its expertise into other parts of the information industry.
The ability of EDS to remain competitive will depend in part upon its
continued ability to finance and acquire the resources necessary to offer
broad-based services and products on an efficient basis.
17
<PAGE> 20
CLASS E COMMON STOCK PRICE RANGE AND DIVIDENDS
The table below shows the range of reported per share sale prices on the
New York Stock Exchange Composite Tape for the Class E Common Stock for the
periods indicated, and the dividends paid per share on the Class E Common Stock
in such periods. A recent per share closing sale price, as reported on the New
York Stock Exchange, is set forth on the cover page of this Prospectus.
<TABLE>
<CAPTION>
CALENDAR YEAR HIGH LOW DIVIDENDS PAID
------------- ------ ------ --------------
<S> <C> <C> <C>
1993
First Quarter............................... $35.88 $27.63 $ 0.10
Second Quarter.............................. 33.38 28.25 0.10
Third Quarter............................... 32.50 26.00 0.10
Fourth Quarter.............................. 31.13 26.50 0.10
1994
First Quarter............................... $36.88 $27.50 $ 0.12
Second Quarter.............................. 38.00 32.88 0.12
Third Quarter............................... 38.50 33.00 0.12
Fourth Quarter.............................. 39.50 34.75 0.12
1995
First Quarter............................... $41.38 $36.88 $ 0.13
Second Quarter (through May 7, 1995)........ 43.88 38.38 --
</TABLE>
18
<PAGE> 21
CLASS E COMMON STOCK
INTRODUCTION
Class E Common Stock is one of three classes of General Motors common
stock. See "Description of Capital Stock -- Common Stock." Holders of Class E
Common Stock have no direct rights in the equity or assets of EDS, but rather
have rights in the equity and assets of General Motors (which includes 100% of
the stock of EDS). Class E Common Stock is designed to provide holders with
financial returns based on the performance of EDS. The intent of this design
objective is achieved through (i) allocations under the General Motors
Certificate of Incorporation of the earnings of EDS between amounts available
for the payment of dividends on Class E Common Stock and amounts available for
the payment of dividends on General Motors' $1 2/3 Par Value Common Stock and
(ii) the announced current dividend practices and policies of the General Motors
Board of Directors, all as more fully described herein. General Motors, not EDS,
is the issuer of Class E Common Stock. The General Motors Board of Directors is,
of course, free to change dividend practices and policies with respect to Class
E Common Stock, or any other class of General Motors common stock, at any time.
See "Description of Capital Stock -- Common Stock -- Dividends."
DIVIDEND POLICY
Subject to the rights of the holders of General Motors Preferred Stock (if
any) and General Motors Preference Stock, under the General Motors Certificate
of Incorporation, dividends on Class E Common Stock may be declared and paid out
of the assets of General Motors only to the extent of the sum of (i) the paid in
surplus of General Motors attributable to the Class E Common Stock plus (ii) an
allocated portion of the earnings, determined as described herein, of EDS earned
after General Motors' acquisition of EDS. The portion of EDS' earnings that is
included in the amount available for the payment of dividends on Class E Common
Stock (which amount is also used to calculate earnings per share of Class E
Common Stock) is determined by a fraction, the numerator of which is a number
equal to the weighted average number of shares of Class E Common Stock
outstanding and the denominator of which was 482.4 million for the first quarter
of 1995; provided, that such fraction shall never be greater than one. The
amount so allocated is referred to in the General Motors Certificate of
Incorporation as the "Available Separate Consolidated Net Income" of EDS.
For purposes of determining the approximate earnings per share attributable
to Class E Common Stock for financial reporting purposes, an investor may divide
the quarterly EDS earnings allocated to Class E Common Stock (the "Available
Separate Consolidated Net Income of EDS") by the weighted average number of
shares of Class E Common Stock outstanding during such quarter, which is the
numerator of the fraction described above. Approximately the same mathematical
result may be obtained by dividing the quarterly EDS earnings used for
computation of Available Separate Consolidated Net Income (i.e., net income) by
the denominator of the fraction described above. The denominator is sometimes
referred to herein as the "Class E Dividend Base."
Issuance of the shares of Class E Common Stock contributed to the Hourly
Plan as described above increased the number of outstanding shares of Class E
Common Stock by the number of shares so contributed, and thus increased the
numerator of the fraction used in determining the Available Separate
Consolidated Net Income of EDS. For the first quarter of 1995, the numerator of
such fraction was 300.0 million, which is a weighted average giving effect to
the contribution of 173,163,187 shares of Class E Common Stock to the Hourly
Plan on March 13, 1995. On March 31, 1995, there were 438,515,650 shares of
Class E Common Stock outstanding. While increasing the numerator of the fraction
used in determining the Available Separate Consolidated Net Income of EDS, the
contribution of shares of Class E Common Stock to the Hourly Plan had no effect
on the denominator of such fraction. Thus, the issuance of the shares of Class E
Common Stock contributed to the Hourly Plan was not dilutive of the earnings per
share attributable to Class E Common Stock for financial reporting purposes, but
rather reduced the portion of the earnings of EDS allocated to GM's $1 2/3 Par
Value Common Stock. The sale of the shares hereunder by the Selling Stockholders
will not increase the number of outstanding shares of Class E Common Stock and
thus will have no effect on the numerator of such fraction. Such sale will also
have no effect on the Class E Dividend Base and therefore there will be no
effect on the fraction described above.
19
<PAGE> 22
General Motors' Series C Convertible Preferred Stock is convertible into
shares of Class E Common Stock. The issuance of Series C Convertible Preference
Stock was not, and any conversion thereof into shares of Class E Common Stock
will not be, dilutive of earnings attributable to Class E Common Stock for
financial reporting purposes, as such shares affect the numerator but not the
denominator of the fraction used in determining Available Separate Consolidated
Net Income of EDS.
The denominator used in determining the Available Separate Consolidated Net
Income of EDS is adjusted as deemed appropriate by the GM Board of Directors to
reflect subdivisions or combinations of the Class E Common Stock and to reflect
certain transfers of capital to or from EDS. The Board of Directors' discretion
to make such adjustments is limited by criteria set forth in the General Motors
Certificate of Incorporation. In this regard, the Board of Directors has
generally caused the denominator to decrease as shares of Class E Common Stock
are purchased by EDS and to increase as shares of Class E Common Stock are used,
at EDS expense, for EDS employee benefit plans or acquisitions. See "Description
of Capital Stock -- Common Stock -- Dividends."
Dividend policy is one of the matters reviewed by the Capital Stock
Committee of the General Motors Board of Directors. See "General Motors and EDS
- -- Relationship Between General Motors and EDS" and "Considerations Relating to
Multi-Class Common Stock Capital Structure." The current dividend policy of the
General Motors Board of Directors is to pay quarterly dividends on Class E
Common Stock, when, as and if declared by the Board of Directors, at an annual
rate equal to approximately 30% of the Available Separate Consolidated Net
Income of EDS for the prior year. Under the current dividend policy, the
quarterly dividend on the Class E Common Stock for 1994 was $0.12 per share. In
February 1995, the Board of Directors increased the quarterly dividend on Class
E Common Stock from $0.12 per share to $0.13 per share.
Under Delaware law and the General Motors Certificate of Incorporation, the
General Motors Board of Directors is not required to declare dividends on any
class of General Motors common stock, including Class E Common Stock. If and to
the extent the General Motors Board of Directors chooses to declare dividends on
any or all of the classes of its common stock, neither Delaware law nor the
General Motors Certificate of Incorporation requires that there be any
proportionate or other fixed relationship between the amount of dividends
declared with respect to such different classes of common stock. The General
Motors Board of Directors reserves the right to reconsider from time to time its
practices and policies regarding dividends on all classes of GM common stock and
to increase or decrease the dividends paid on GM common stocks on the basis of
General Motors' consolidated financial position, including liquidity, and other
factors, including, with regard to Class E Common Stock, the earnings and
consolidated financial position of EDS. Under the current dividend practices and
policies of the General Motors Board of Directors, dividends on Class E Common
Stock are not materially affected by developments involving the performance
(operations, liquidity or financial condition) of General Motors (excluding
EDS). See "Description of Capital Stock -- Common Stock -- Dividends."
Information concerning General Motors and its consolidated financial
performance, including Management's Discussion and Analysis, may be found in the
documents incorporated herein by reference, including the GM 1994 Form 10-K and
the GM First Quarter 1995 Form 10-Q. There is no fixed relationship, on a per
share or aggregate basis, between the cash dividends that may be paid by General
Motors to holders of Class E Common Stock and cash dividends or other amounts
that may be paid by EDS to General Motors. However, it has been the practice of
the Board of Directors of EDS to pay quarterly cash dividends on the outstanding
EDS common stock in a per share amount equal to the quarterly dividends per
share paid by General Motors on Class E Common Stock. The number of shares of
common stock of EDS issued and outstanding, all of which shares are owned by
General Motors through a wholly owned subsidiary, is adjusted from time to time
so as to remain equal to the denominator of the fraction described above. EDS
makes no payments on EDS common stock with respect to dividend payments by
General Motors on shares of General Motors Series C Convertible Preference Stock
(which are convertible pursuant to their terms into shares of Class E Common
Stock). See "General Motors and EDS -- Relationship Between General Motors and
EDS."
20
<PAGE> 23
VOTING RIGHTS
Under the General Motors Certificate of Incorporation, holders of Class E
Common Stock may cast one-eighth of a vote per share on all matters submitted to
General Motors stockholders for a vote, while holders of $1 2/3 Par Value Common
Stock may cast one vote per share and holders of General Motors Class H Common
Stock may cast one-half of a vote per share. Holders of all three classes of
common stock vote together on all matters, except that separate class votes are
required for certain amendments to the General Motors Certificate of
Incorporation. See "Description of Capital Stock -- Common Stock -- Voting."
LIQUIDATION RIGHTS
In the event of the liquidation, dissolution or winding up of the business
of General Motors, whether voluntary or involuntary, the General Motors
Certificate of Incorporation provides that, after the holders of General Motors
Preferred Stock (if any) and Preference Stock receive the full preferential
amounts to which they are entitled, holders of Class E Common Stock and the
other two classes of General Motors common stock will receive the assets
remaining for distribution to the General Motors stockholders on a per share
basis in proportion to the respective per share liquidation units of such
classes and will have no direct claim against any particular assets of General
Motors or any of its subsidiaries. Subject to adjustment as described below,
each share of Class E Common Stock, $1 2/3 Par Value Common Stock and Class H
Common Stock would currently be entitled to liquidation units of approximately
one-eighth (0.125), one (1.0) and one-half (0.50), respectively. Holders of
Class E Common Stock have no direct rights in the equity or assets of EDS, but
rather have rights in the equity and assets of General Motors (which include
100% of the stock of EDS). See "Description of Capital Stock -- Common Stock --
Liquidation Rights."
RECAPITALIZATION
Under the General Motors Certificate of Incorporation, all outstanding
shares of Class E Common Stock may be recapitalized as shares of $1 2/3 Par
Value Common Stock (i) at any time, in the sole discretion of the General Motors
Board of Directors, subject to certain conditions based on the amount of
dividends paid on Class E Common Stock during the five full fiscal years prior
to the proposed recapitalization, or (ii) automatically, if at any time General
Motors disposes of substantially all of the business of EDS. In the event of
such a recapitalization, each holder of Class E Common Stock would receive
shares of $1 2/3 Par Value Common Stock having a market value, as of the
valuation date provided for in the General Motors Certificate of Incorporation,
equal to 120% of the market value of such holder's Class E Common Stock on such
valuation date. Based on the dividends paid on Class E Common Stock in 1990
through 1994, the conditions described in clause (i) above would be satisfied
during 1995. See "General Motors and EDS -- Relationship Between General Motors
and EDS" and "Description of Capital Stock -- Common Stock -- Recapitalization
by Exchange of Stock."
SUBDIVISION OR COMBINATION
If General Motors subdivides (by stock split or otherwise) or combines (by
reverse stock split or otherwise) the outstanding shares of the $1 2/3 Par Value
Common Stock or the Class E Common Stock, the voting and liquidation rights of
shares of Class E Common Stock relative to $1 2/3 Par Value Common Stock will be
appropriately adjusted. In the event of the issuance of shares of Class E Common
Stock as a dividend on shares of $1 2/3 Par Value Common Stock, the liquidation
rights of Class E Common Stock would be adjusted so that the relative aggregate
liquidation rights to each stockholder would not be changed as a result of such
dividend.
CONSIDERATIONS RELATING TO MULTI-CLASS COMMON STOCK CAPITAL STRUCTURE
Class E Common Stock is one of three classes of General Motors common
stock. The General Motors Certificate of Incorporation restricts the power of
the General Motors Board of Directors to declare and pay dividends on any one of
the three classes of common stock to certain defined amounts which are
attributable to each separate class of common stock and based on the legally
available retained earnings of General
21
<PAGE> 24
Motors. For dividend purposes, this restriction serves to preserve the interest
in retained earnings of holders of each class of GM common stock in relation to
the interests therein of holders of the other two classes. However, this
restriction does not result in a physical segregation of the assets of General
Motors, Hughes or EDS, nor does it result in the establishment of separate
accounts or dividend or liquidation preferences with respect to such assets for
the benefit of the holders of any of the three separate classes of General
Motors common stock. Holders of Class E Common Stock and Class H Common Stock
have no direct rights in the equity or assets of EDS or Hughes, but rather,
together with holders of $1 2/3 Par Value Common Stock, have certain liquidation
rights in the equity and assets of General Motors (which includes 100% of the
stock of both EDS and Hughes).
The existence of multiple classes of common stock with separate dividend
rights as provided for in the General Motors Certificate of Incorporation can
give rise to potential divergences among the interests of the holders of each of
the separate classes of General Motors common stock with respect to various
intercompany transactions and other matters. Because General Motors is
incorporated under the Delaware General Corporation Law, the laws of Delaware
govern the duties of the General Motors Board of Directors with respect to such
divergences. Under Delaware law, the General Motors Board of Directors owes an
equal fiduciary duty to all holders of General Motors common stock and must act
with due care and on an informed basis in the best interest of General Motors
and all such stockholders, regardless of class. In this regard, the General
Motors Board of Directors, in the discharge of its fiduciary duties, takes care,
principally through its Capital Stock Committee (comprised entirely of
independent directors of General Motors), to oversee the policies, programs and
practices of General Motors which may impact the potentially divergent interests
of the three classes of General Motors common stock.
The By-Laws of General Motors, in defining the role of the Capital Stock
Committee, provide that such Committee shall oversee those matters in which the
three classes of stockholders may have divergent interests, particularly as they
relate to: (a) the business and financial relationships between General Motors
or any of its units with EDS, General Motors or any of its units with Hughes,
and between EDS and Hughes; (b) dividends in respect of, disclosures to
stockholders and the public concerning, and transactions by GM or any of its
subsidiaries in, shares of Class E Common Stock or Class H Common Stock; and (c)
any matters arising in connection therewith, all to the extent the Committee may
deem appropriate, and to recommend such changes in such policies, programs and
practices as the Committee may deem appropriate. In performing this function,
the Capital Stock Committee's role is not to make decisions concerning matters
referred to its attention, but rather to oversee the process by which decisions
concerning such matters are made. The Committee does this with a view towards,
among other things, assuring a process of fair dealing among GM, EDS and Hughes
as well as fair consideration of the interests of all GM stockholders in the
resolution of such matters.
22
<PAGE> 25
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of General Motors, which may be issued upon
resolution of the Board of Directors, consists of 6,000,000 shares of Preferred
Stock, without par value, issuable in series; 100,000,000 shares of Preference
Stock, $0.10 par value, issuable in series; 2,000,000,000 shares of $1 2/3 Par
Value Common Stock; 1,000,000,000 shares of Class E Common Stock, $0.10 par
value; and 600,000,000 shares of Class H Common Stock, $0.10 par value. The
$1 2/3 Par Value Common Stock, the Class E Common Stock and the Class H Common
Stock are referred to collectively as the "Common Stock."
On March 31, 1995, the following shares of capital stock of General Motors
were outstanding: 11,075,000 shares of Series B 9 1/8% Preference Stock ("Series
B Preference Shares"), represented by 44,300,000 Depositary Shares; 3,188,050
shares of Series C Convertible Preference Stock ("Series C Preference Shares"),
represented by 31,880,498 Depositary Shares; 3,925,000 shares of Series D 7.92%
Preference Stock ("Series D Preference Shares"), represented by 15,700,000
Depositary Shares; 5,750,000 shares of Series G 9.12% Preference Stock ("Series
G Preference Shares"), represented by 23,000,000 Depositary Shares; 747,449,538
shares of $1 2/3 Par Value Common Stock; 438,515,650 shares of Class E Common
Stock; and 95,093,416 shares of Class H Common Stock. In addition, 44,881,366
shares of Class E Common Stock have been reserved for issuance upon conversion
of currently outstanding Series C Preference Shares. On April 25, 1995, General
Motors commenced a tender offer for any and all of the outstanding Series B
Preference Shares, Series D Preference Shares and Series G Preference Shares.
See "Selected Financial Data of General Motors and EDS -- General Motors."
PREFERRED STOCK
On May 1, 1993, General Motors exercised its option to redeem all
outstanding shares of Preferred Stock -- $5.00 Series for $120.00 per share plus
accrued dividends and to redeem all outstanding shares of Preferred Stock --
$3.75 Series for $100.00 per share plus accrued dividends. Consequently, there
are currently no outstanding shares of Preferred Stock and the General Motors
Board of Directors has no current intent to issue any Preferred Stock.
The General Motors Certificate of Incorporation authorizes the Board of
Directors to issue shares of Preferred Stock from time to time in distinctly
designated series, and each series of Preferred Stock would rank equally and be
identical in all respects to all other series except as to the dividend rate and
redemption price. Preferred Stock would rank senior to Preference Stock and
Common Stock with respect to payment of dividends and distributions in
liquidation. If any shares of Preferred Stock were issued, no cash dividends
could be paid on any class of Common Stock or any series of Preference Stock if
current assets of General Motors in excess of its current liabilities were less
than $75 per share of outstanding Preferred Stock.
As noted above, the Board of Directors has no current intent to issue
Preferred Stock, but if any shares were issued, they would not be entitled to
vote except that (i) they would vote together with the holders of Common Stock
on the disposition of General Motors' assets as an entirety; (ii) if General
Motors has defaulted in paying dividends on Preferred Stock for six months, the
holders of Preferred Stock, voting as a class, would be entitled to elect
one-quarter of the directors; and (iii) certain mortgaging or pledging of, or
the placing of certain liens upon, General Motors' property would require the
approval of the holders of three-fourths of any outstanding Preferred Stock.
PREFERENCE STOCK
Preference Stock would rank junior to Preferred Stock, if any were
outstanding, and ranks senior to Common Stock with respect to payment of
dividends and distributions in liquidation. Subject to these limitations, the
Board of Directors may from time to time authorize the issuance of shares of
Preference Stock in such series, and having such dividend and liquidation
preferences, voting rights, redemption prices, conversion rights, and other
terms and provisions as may be contained in the resolutions of the Board of
Directors providing for their issuance.
23
<PAGE> 26
General Motors currently has outstanding four series of Preference Stock.
Interests in each of such series of Preference Stock are held by the public in
the form of depositary shares, each of which represents a fractional interest in
one share of such Preference Stock. The fractional interest which a single
depositary share represents in relation to outstanding shares of the
corresponding series of Preference Stock is as follows: each Series B Depositary
Share, $25.00 per share stated value, represents a one-fourth (1/4) interest in
one Series B Preference Share, $100.00 per share stated value; each Series C
Depositary Share, $50.00 per share stated value, represents a one-tenth (1/10)
interest in one Series C Preference Share, $500.00 per share stated value; each
Series D Depositary Share, $25.00 per share stated value, represents a
one-fourth (1/4) interest in one Series D Preference Share, $100.00 per share
stated value; and each Series G Depositary Share, $25.00 per share stated value,
represents a one-fourth (1/4) interest in one Series G Preference Share, $100.00
per share stated value. The following discussion of each outstanding series of
Preference Stock is based on shares of Preference Stock rather than the
corresponding depositary shares.
SERIES B 9 1/8% PREFERENCE STOCK
Dividends. Subject to the rights of the holders of Preferred Stock, if any
were outstanding, dividends will be paid on the outstanding Series B Preference
Shares when, as and if declared by the Board of Directors out of General Motors'
assets legally available therefor. Dividends may be subject to restrictions
contained in any future debt agreements of General Motors and to limitations
contained in future series or classes of Preferred Stock or Preference Stock.
Holders of Series B Preference Shares will be entitled to receive
cumulative cash dividends, at the annual rate of 9 1/8% of the per share stated
value (equivalent to $9.125 per annum per Series B Preference Share), payable
quarterly for each of the quarters ending March, June, September and December of
each year, payable in arrears on the first day that is not a legal holiday of
each succeeding May, August, November and February, respectively. Each such
dividend will be paid to holders of record on each record date, which shall be
not less than 10 nor more than 50 days preceding the payment date, as fixed by
the Board of Directors. Dividends on the Series B Preference Shares, whether or
not declared, will be cumulative from the date of original issue of the Series B
Preference Shares. The amount of dividends payable for any period shorter than a
full quarterly dividend period will be determined on the basis of a 360-day year
consisting of twelve 30-day months. Accrued but unpaid dividends will not bear
interest.
Preferential dividends will accrue whether or not General Motors has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are declared. Dividends
accumulate to the extent they are not paid on the dividend payment date
following the calendar quarter for which they accrue. Accumulated preferential
dividends will not bear interest. Dividends will not be paid on any class of
Common Stock or other stock ranking junior to the Series B Preference Shares
(other than a dividend payable in shares of any class of Common Stock) and
General Motors will not redeem, repurchase or otherwise acquire any shares of
Common Stock or other stock ranking junior to the Series B Preference Shares
(other than a redemption or purchase of shares of Common Stock made in
connection with employee incentive or benefit plans of General Motors or its
subsidiaries), unless the full preferential dividends accumulated on all
outstanding Series B Preference Shares have been paid. Dividends will not be
declared on any series of Preference Stock for any prior dividend payment period
unless there shall have been declared on all outstanding shares of Preference
Stock ranking on a parity with such series, in respect of all dividend payment
periods of such parity stock terminating with or before such prior dividend
payment period, like proportionate dividends determined ratably in proportion to
the respective preferential dividends accumulated to date on such series and the
dividends accumulated on all such outstanding parity Preference Stock.
Conversion. The Series B Preference Shares are not convertible into shares
of any other class of capital stock of General Motors.
Redemption. The Series B Preference Shares may not be redeemed prior to
January 1, 1999. On or after January 1, 1999, General Motors may, at its option,
on not less than 35 nor more than 60 days' notice, redeem the Series B
Preference Shares, as a whole or in part, at any time or from time to time, for
cash in an amount
24
<PAGE> 27
equal to $100 per Series B Preference Share, plus an amount equal to all
dividends accrued and unpaid thereon to the date fixed for redemption. If less
than all outstanding Series B Preference Shares are to be redeemed, shares to be
redeemed will be selected by General Motors by lot or pro rata or by any other
method determined by General Motors in its sole discretion to be equitable.
Holders of Series B Preference Shares have no right to require redemption of
such shares.
Liquidation Preference. In the event of the liquidation, dissolution or
winding up of the business of General Motors, whether voluntary or involuntary,
the holders of Series B Preference Shares will be entitled to the liquidation
preference described below, after the holders of Preferred Stock, if any were
outstanding, receive the full preferential amounts to which they are entitled
and before any distribution to holders of Common Stock. The holders of the
Series B Preference Shares will be entitled to receive for each share $100 plus
an amount equal to all dividends accrued and unpaid thereon to the date of final
distribution to such holders (subject to the right of the holders of record of
any Series B Preference Share on a record date for payment of dividends thereon
to receive a dividend payable on the date of final distribution), but such
holders shall not be entitled to any further payment. If there are insufficient
assets to permit full payment to holders of the Series B Preference Shares and
the holders of any other series of Preference Stock which is on parity with the
Series B Preference Shares as to liquidation rights, then the holders of the
Series B Preference Shares and such other shares shall be paid ratably in
proportion to the full distributable amounts to which holders of all such parity
shares are respectively entitled upon such dissolution, liquidation or winding
up.
Voting. The Series B Preference Shares do not entitle holders thereof to
voting rights, except (i) with respect to any amendment or alteration of any
provision of the General Motors Certificate of Incorporation which would
adversely affect the powers, preferences or special rights of the Series B
Preference Shares, which requires the prior approval of the holders of at least
two-thirds of the outstanding Series B Preference Shares, and (ii) in the event
General Motors fails to pay accumulated preferential dividends on the Series B
Preference Shares in full for any six quarterly dividend payment periods,
whether or not consecutive, and all such dividends remain unpaid (a
"Preferential Dividend Default"), or as required by law. In the event of a
Preferential Dividend Default, the number of directors of General Motors will be
increased by two and the holders of the outstanding Series B Preference Shares,
voting together as a class with all other series of Preference Stock ranking
junior to or on a parity with the Series B Preference Shares and then entitled
to vote on the election of such directors, will be entitled to elect such two
additional directors until the full dividends accumulated on all outstanding
Series B Preference Shares have been paid.
SERIES C CONVERTIBLE PREFERENCE STOCK
Dividends. Subject to the rights of the holders of Preferred Stock, if any
were outstanding, dividends will be paid on the outstanding Series C Preference
Shares when, as and if declared by the Board of Directors out of General Motors'
assets legally available therefor. Dividends may be subject to restrictions
contained in any future debt agreements of General Motors and to limitations
contained in future series or classes of Preferred Stock or Preference Stock.
Holders of Series C Preference Shares will be entitled to receive
cumulative cash dividends from the date of original issue, accruing at the
annual rate of $32.50 per share, and no more, payable quarterly for each of the
quarters ending March, June, September and December of each year, payable in
arrears on the first day that is not a legal holiday of each succeeding May,
August, November and February, respectively. Each such dividend will be paid to
holders of record on each record date, which shall be not less than 10 nor more
than 50 days preceding the payment date, as fixed by the Board of Directors.
Dividends on the Series C Preference Shares, whether or not declared, will be
cumulative from the date of original issuance thereof. The amount of dividends
payable for any period shorter than a full quarterly dividend period will be
determined on the basis of a 360-day year consisting of twelve 30-day months.
Accrued but unpaid dividends will not bear interest.
Preferential dividends will accrue whether or not General Motors has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are declared. Dividends
accumulate to the extent they are not paid on the dividend payment date
following the calendar quarter for which they accrue. Accumulated preferential
dividends will not bear interest. Dividends will not be
25
<PAGE> 28
paid on any class of Common Stock or other stock ranking junior to the Series C
Preference Shares (other than a dividend payable in shares of any class of
Common Stock) and General Motors will not redeem, repurchase or otherwise
acquire any shares of Common Stock or other stock ranking junior to the Series C
Preference Shares (other than a redemption or purchase of shares of Common Stock
made in connection with employee incentive or benefit plans of General Motors or
its subsidiaries), unless the full preferential dividends accumulated on all
outstanding Series C Preference Shares have been paid. Dividends will not be
declared on any series of Preference Stock for any prior dividend payment period
unless there shall have been declared on all outstanding shares of Preference
Stock ranking on a parity with such series, in respect of all dividend payment
periods of such parity stock terminating with or before such prior dividend
payment period, like proportionate dividends determined ratably in proportion to
the respective preferential dividends accumulated to date on such series and the
dividends accumulated on all such outstanding parity Preference Stock.
Conversion. The Series C Preference Shares are convertible at any time at
the option of the holders thereof into shares of Class E Common Stock at a
conversion price of $35.52 per share of Class E Common Stock (equivalent to a
conversion rate of 14.078 shares of Class E Common Stock for each Series C
Preference Share), subject to adjustment as described below. For purposes of
such conversion, each Series C Preference Share will be valued at $500.00.
Notwithstanding the foregoing, if Series C Preference Shares are called for
redemption by General Motors as provided below, holders of those shares will not
have the right to convert such shares into Class E Common Stock after the close
of business on the effective date of such call for redemption. In order to
prevent dilution of conversion rights, the conversion price will be adjusted in
the event of (i) a dividend in shares of Class E Common Stock paid with respect
to the Class E Common Stock, (ii) the subdivision or combination of the
outstanding shares of Class E Common Stock, (iii) the issuance to holders of
Class E Common Stock of certain rights or warrants to purchase Class E Common
Stock at below market prices, or (iv) the conversion or exchange of all
outstanding shares of Class E Common Stock for any securities of General Motors
by a recapitalization or otherwise.
Redemption. At any time on or after February 19, 1996, General Motors may
at its option call for redemption, on not less than 15 nor more than 60 days'
notice, any or all of the outstanding Series C Preference Shares at the call
price set forth in the following paragraph, plus any accumulated and unpaid
preferential dividends.
The call price per Series C Preference Share shall be as follows, if the
effective date of the redemption occurs during the 12-month period beginning
February 19 of the years indicated, plus in each case accrued and unpaid
dividends on such shares to and including the effective date: 1996 -- $519.50;
1997 -- $516.25; 1998 -- $513.00; 1999 -- $509.75; 2000 -- $506.50; 2001 --
$503.25; 2002 and thereafter -- $500.00. General Motors may pay the call price
in cash, in shares of $1 2/3 Par Value Common Stock, or in a specified
combination thereof.
If fewer than all outstanding Series C Preference Shares are called by
General Motors, the shares to be so called shall be selected by lot or pro rata
or by any other method determined by General Motors in its sole discretion to be
equitable. Holders of Series C Preference Shares have no right to require
redemption of such shares.
Liquidation Preference. In the event of the liquidation, dissolution or
winding up of the business of General Motors, whether voluntary or involuntary,
after the holders of Preferred Stock, if any were outstanding, receive the full
preferential amounts to which they are entitled and before any distribution to
holders of Common Stock, the holders of Series C Preference Shares, together
with holders of all other currently outstanding shares of Preference Stock, will
be entitled to the respective liquidation preferences described below.
The holders of Series C Preference Shares shall be entitled to receive for
each share $500.00 plus an amount equal to all dividends accrued and unpaid
thereon to the date of final distribution to such holders, and no more. If there
are insufficient assets to permit full payment to holders of the Series C
Preference Shares and the holders of any other series of Preference Stock which
is on parity with the Series C Preference Shares as to liquidation rights, then
the holders of the Series C Preference Shares and such other shares shall be
paid
26
<PAGE> 29
ratably in proportion to the full distributable amounts to which holders of all
such parity shares are respectively entitled upon such dissolution, liquidation
or winding up.
Voting. The Series C Preference Shares do not entitle holders thereof to
voting rights, except (i) with respect to any amendment or alteration of any
provision of the General Motors Certificate of Incorporation which would
adversely affect the powers, preferences or special rights of the Series C
Preference Shares, which requires the prior approval of the holders of at least
two-thirds of the outstanding shares of such series, and (ii) in the event
General Motors fails to pay preferential dividends on the Series C Preference
Shares in full for any six quarterly dividend payment periods, whether or not
consecutive, and all such dividends remain unpaid (a "Preferential Dividend
Default"), or as required by law. In the event of a Preferential Dividend
Default, the number of directors of General Motors will be increased by two and
the holders of the outstanding Series C Preference Shares, voting together as a
class with all other series of Preference Stock then entitled to vote on the
election of directors, will be entitled to elect such two additional directors
until the full dividends accumulated on all outstanding Series C Preference
Shares are paid.
SERIES D 7.92% PREFERENCE STOCK
Dividends. Subject to the rights of the holders of Preferred Stock, if any
were outstanding, dividends will be paid on the outstanding Series D Preference
Shares when, as and if declared by the Board of Directors out of General Motors'
assets legally available therefor. Dividends may be subject to restrictions
contained in any future debt agreements of General Motors and to limitations
contained in future series or classes of Preferred Stock or Preference Stock.
Holders of Series D Preference Shares will be entitled to receive
cumulative cash dividends, at the annual rate of 7.92% of the per share stated
value (equivalent to $7.92 per annum per Series D Preference Share), payable
quarterly for each of the quarters ending March, June, September and December of
each year, payable in arrears on the first day that is not a legal holiday of
each succeeding May, August, November and February, respectively. Each such
dividend will be paid to holders of record on each record date, which shall be
not less than 10 nor more than 50 days preceding the payment date, as fixed by
the Board of Directors. Dividends on the Series D Preference Shares, whether or
not declared, will be cumulative from the date of original issue of the Series D
Preference Shares. The amount of dividends payable for any period shorter than a
full quarterly dividend period will be determined on the basis of a 360-day year
consisting of twelve 30-day months. Accrued but unpaid dividends will not bear
interest.
Preferential dividends will accrue whether or not General Motors has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are declared. Dividends
accumulate to the extent they are not paid on the dividend payment date
following the calendar quarter for which they accrue. Accumulated preferential
dividends will not bear interest. Dividends will not be paid on any class of
Common Stock or other stock ranking junior to the Series D Preference Shares
(other than a dividend payable in shares of any class of Common Stock) and
General Motors will not redeem, repurchase or otherwise acquire any shares of
Common Stock or other stock ranking junior to the Series D Preference Shares
(other than a redemption or purchase of shares of Common Stock made in
connection with employee incentive or benefit plans of General Motors or its
subsidiaries), unless the full preferential dividends accumulated on all
outstanding Series D Preference Shares have been paid. Dividends will not be
declared on any series of Preference Stock for any prior dividend payment period
unless there shall have been declared on all outstanding shares of Preference
Stock ranking on a parity with such series, in respect of all dividend payment
periods of such parity stock terminating with or before such prior dividend
payment period, like proportionate dividends determined ratably in proportion to
the respective preferential dividends accumulated to date on such series and the
dividends accumulated on all such outstanding parity Preference Stock.
Conversion. The Series D Preference Shares are not convertible into shares
of any other class of capital stock of General Motors.
Redemption. The Series D Preference Shares may not be redeemed prior to
August 1, 1999. On or after August 1, 1999, General Motors may, at its option,
on not less than 35 nor more than 60 days' notice, redeem
27
<PAGE> 30
the Series D Preference Shares, as a whole or in part, at any time or from time
to time, for cash in an amount equal to $100 per Series D Preference Share, plus
an amount equal to all dividends accrued and unpaid thereon to the date fixed
for redemption. If less than all outstanding Series D Preference Shares are to
be redeemed, shares to be redeemed will be selected by General Motors by lot or
pro rata or by any other method determined by General Motors in its sole
discretion to be equitable. Holders of Series D Preference Shares have no right
to require redemption of such shares.
Liquidation Preference. In the event of the liquidation, dissolution or
winding up of the business of General Motors, whether voluntary or involuntary,
the holders of Series D Preference Shares will be entitled to the liquidation
preference described below, after the holders of Preferred Stock, if any were
outstanding, receive the full preferential amounts to which they are entitled
and before any distribution to holders of Common Stock. The holders of the
Series D Preference Shares will be entitled to receive for each share $100 plus
an amount equal to all dividends accrued and unpaid thereon to the date of final
distribution to such holders (subject to the right of the holders of record of
any Series D Preference Shares on a record date for payment of dividends thereon
to receive a dividend payable on the date of final distribution), but such
holders shall not be entitled to any further payment. If there are insufficient
assets to permit full payment to holders of the Series D Preference Shares and
the holders of any other series of Preference Stock which is on parity with the
Series D Preference Shares as to liquidation rights, then the holders of the
Series D Preference Shares and such other shares shall be paid ratably in
proportion to the full distributable amounts to which holders of all such parity
shares are respectively entitled upon such dissolution, liquidation or winding
up.
Voting. The Series D Preference Shares do not entitle holders thereof to
voting rights, except (i) with respect to any amendment or alteration of any
provision of the General Motors Certificate of Incorporation which would
adversely affect the powers, preferences or special rights of the Series D
Preference Shares, which requires the prior approval of the holders of at least
two-thirds of the outstanding Series D Preference Shares, and (ii) in the event
General Motors fails to pay accumulated preferential dividends on the Series D
Preference Shares in full for any six quarterly dividend payment periods,
whether or not consecutive, and all such dividends remain unpaid (a
"Preferential Dividend Default"), or as required by law. In the event of a
Preferential Dividend Default, the number of directors of General Motors will be
increased by two and the holders of the outstanding Series D Preference Shares,
voting together as a class with all other series of Preference Stock ranking
junior to or on a parity with the Series D Preference Shares and then entitled
to vote on the election of such directors, will be entitled to elect such two
additional directors until the full dividends accumulated on all outstanding
Series D Preference Shares have been paid.
SERIES G 9.12% PREFERENCE STOCK
Dividends. Subject to the rights of the holders of Preferred Stock, if any
were outstanding, dividends will be paid on the outstanding Series G Preference
Shares when, as and if declared by the Board of Directors out of General Motors'
assets legally available therefor. Dividends may be subject to restrictions
contained in any future debt agreements of General Motors and to limitations
contained in future series or classes of Preferred Stock or Preference Stock.
Holders of Series G Preference Shares will be entitled to receive
cumulative cash dividends, at the annual rate of 9.12% of the per share stated
value (equivalent to $9.12 per annum per Series G Preference Share), payable
quarterly for each of the quarters ending March, June, September and December of
each year, payable in arrears on the first day that is not a legal holiday of
each succeeding May, August, November and February, respectively. Each such
dividend will be paid to holders of record on each record date, which shall be
not less than 10 nor more than 50 days preceding the payment date, as fixed by
the Board of Directors. Dividends on the Series G Preference Shares, whether or
not declared, will be cumulative from the date of original issue of the Series G
Preference Shares. The amount of dividends payable for any period shorter than a
full quarterly dividend period will be determined on the basis of a 360-day year
consisting of twelve 30-day months. Accrued but unpaid dividends will not bear
interest.
Preferential dividends will accrue whether or not General Motors has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are declared.
28
<PAGE> 31
Dividends accumulate to the extent they are not paid on the dividend payment
date following the calendar quarter for which they accrue. Accumulated
preferential dividends will not bear interest. Dividends will not be paid on any
class of Common Stock or other stock ranking junior to the Series G Preference
Shares (other than a dividend payable in shares of any class of Common Stock)
and General Motors will not redeem, repurchase or otherwise acquire any shares
of Common Stock or other stock ranking junior to the Series G Preference Shares
(other than a redemption or purchase of shares of Common Stock made in
connection with employee incentive or benefit plans of General Motors or its
subsidiaries), unless the full preferential dividends accumulated on all
outstanding Series G Preference Shares have been paid. Dividends will not be
declared on any series of Preference Stock for any prior dividend payment period
unless there shall have been declared on all outstanding shares of Preference
Stock ranking on a parity with such series, in respect of all dividend payment
periods of such parity stock terminating with or before such prior dividend
payment period, like proportionate dividends determined ratably in proportion to
the respective preferential dividends accumulated to date on such series and the
dividends accumulated on all such outstanding parity Preference Stock.
Conversion. The Series G Preference Shares are not convertible into shares
of any other class of capital stock of General Motors.
Redemption. The Series G Preference Shares may not be redeemed prior to
January 1, 2001. On or after January 1, 2001, General Motors may, at its option,
on not less than 35 nor more than 60 days' notice, redeem the Series G
Preference Shares, as a whole or in part, at any time or from time to time, for
cash in an amount equal to $100 per Series G Preference Share, plus an amount
equal to all dividends accrued and unpaid thereon to the date fixed for
redemption. If less than all outstanding Series G Preference Shares are to be
redeemed, shares to be redeemed will be selected by General Motors by lot or pro
rata or by any other method determined by General Motors in its sole discretion
to be equitable. Holders of Series G Preference Shares have no right to require
redemption of such shares.
Liquidation Preference. In the event of the liquidation, dissolution or
winding up of the business of General Motors, whether voluntary or involuntary,
the holders of Series G Preference Shares will be entitled to the liquidation
preference described below, after the holders of Preferred Stock, if any were
outstanding, receive the full preferential amounts to which they are entitled
and before any distribution to holders of Common Stock. The holders of the
Series G Preference Shares will be entitled to receive for each share $100 plus
an amount equal to all dividends accrued and unpaid thereon to the date of final
distribution to such holders (subject to the right of the holders of record of
any Series G Preference Share on a record date for payment of dividends thereon
to receive a dividend payable on the date of final distribution), but such
holders shall not be entitled to any further payment. If there are insufficient
assets to permit full payment to holders of the Series G Preference Shares and
the holders of any other series of Preference Stock which is on parity with the
Series G Preference Shares as to liquidation rights, then the holders of the
Series G Preference Shares and such other shares shall be paid ratably in
proportion to the full distributable amounts to which holders of all such parity
shares are respectively entitled upon such dissolution, liquidation or winding
up.
Voting. The Series G Preference Shares do not entitle holders thereof to
voting rights, except (i) with respect to any amendment or alteration of any
provision of the General Motors Certificate of Incorporation which would
adversely affect the powers, preferences or special rights of the Series G
Preference Shares, which requires the prior approval of the holders of at least
two-thirds of the outstanding Series G Preference Shares, and (ii) in the event
General Motors fails to pay accumulated preferential dividends on the Series G
Preference Shares in full for any six quarterly dividend payment periods,
whether or not consecutive, and all such dividends remain unpaid (a
"Preferential Dividend Default"), or as required by law. In the event of a
Preferential Dividend Default, the number of directors of General Motors will be
increased by two and the holders of the outstanding Series G Preference Shares,
voting together as a class with all other series of Preference Stock ranking
junior to or on a parity with the Series G Preference Shares and then entitled
to vote on the election of such directors, will be entitled to elect such two
additional directors until the full dividends accumulated on all outstanding
Series G Preference Shares have been paid.
29
<PAGE> 32
COMMON STOCK
General Motors has three classes of common stock: 1 2/3 Par Value Common
Stock, Class E Common Stock and Class H Common Stock.
Dividends. Subject to the rights of the holders of Preferred Stock, if any
were outstanding, and Preference Stock, dividends may be paid in cash or
otherwise, when, as and if declared by the Board of Directors, on the $1 2/3 Par
Value Common Stock, the Class E Common Stock and the Class H Common Stock out of
the assets of General Motors legally available therefor as provided below.
Dividends on the $1 2/3 Par Value Common Stock may be declared and paid
only to the extent of the assets of General Motors legally available therefor,
reduced by the amount available for dividends on the Class E Common Stock and
the Class H Common Stock. Dividends paid on the $1 2/3 Par Value Common Stock
and adjustments to surplus arising from the repurchase of shares of $1 2/3 Par
Value Common Stock or other appropriate circumstances will be charged to the
amount available for payment of dividends on $1 2/3 Par Value Common Stock.
General Motors' policy is to distribute dividends on the $1 2/3 Par Value
Common Stock based on the outlook and indicated capital needs of General Motors'
business. At the May 1, 1995 meeting of the General Motors Board of Directors,
the quarterly dividend on the $1 2/3 Par Value Common Stock was raised from
$0.20 per share to $0.30 per share. On November 2, 1992, the General Motors
Board of Directors had reduced the quarterly dividend from $0.40 per share to
$0.20 per share of $1 2/3 Par Value Common Stock, and on February 4, 1991, the
Board of Directors had reduced the quarterly dividend to $0.40 per share from
$0.75 per share.
Dividends on Class E Common Stock may be declared and paid out of assets of
General Motors legally available therefor only to the extent of the sum of (i)
the paid in surplus of General Motors attributable to Class E Common Stock plus
(ii) the Available Separate Consolidated Net Income of EDS earned after GM's
acquisition of EDS. The Available Separate Consolidated Net Income of EDS for
each quarterly accounting period is equal to (x) the separate consolidated net
income of EDS for that period, determined in accordance with generally accepted
accounting principles (without giving effect to any adjustment which would
result from accounting for the acquisition of EDS using the purchase method)
multiplied by (y) a fraction, the numerator of which is a number equal to the
weighted average number of shares of the Class E Common Stock outstanding during
that period and the denominator of which was 482.4 million for the first quarter
of 1995; provided that such fraction shall never be greater than one. The
denominator shall be adjusted from time to time as deemed appropriate by the
Board of Directors (i) to reflect subdivisions and combinations of the Class E
Common Stock and stock dividends payable in shares of Class E Common Stock to
holders of Class E Common Stock, (ii) to reflect the fair market value of
contributions of cash or property by General Motors or its subsidiaries to EDS
or its subsidiaries and to reflect such contributions or contributions of
General Motors capital stock by General Motors to, or for the benefit of,
employees of EDS or its subsidiaries in connection with employee benefit plans
or arrangements and (iii) to reflect payments by EDS to General Motors of
amounts applied to the repurchase by General Motors of shares of Class E Common
Stock and purchases by EDS of shares of Class E Common Stock. The Board of
Directors has determined the denominator will be automatically adjusted at the
end of each quarter to reflect on a weighted-average basis the number of shares
of Class E Common Stock acquired or sold by EDS during such quarter. For all
purposes, determination of the Available Separate Consolidated Net Income of EDS
will be in the sole discretion of the Board of Directors, subject to criteria
set forth in the General Motors Certificate of Incorporation.
Under the current dividend policy as adopted by the General Motors Board of
Directors, the annual per share dividends on the Class E Common Stock, when, as
and if declared by the Board of Directors in its sole discretion, will equal
approximately 30% of the Available Separate Consolidated Net Income of EDS for
the preceding year. Under the current dividend policy, the quarterly dividend on
the Class E Common Stock for 1994 was $0.12 per share. In February 1995, the
Board of Directors increased the quarterly dividend on Class E Common Stock from
$0.12 per share to $0.13 per share. Although such dividend policy is subject to
change in the sole discretion of the General Motors Board of Directors, it has
no present intention of doing so. However, it reserves the right to reconsider
this policy from time to time and to increase or decrease the
30
<PAGE> 33
dividends paid on the Class E Common Stock in light of the earnings and
financial position of EDS, General Motors' consolidated financial position,
including liquidity, and other factors. The Capital Stock Committee of the Board
of Directors is responsible for reviewing any dividend policy which may have
differing effects on holders of the three classes of General Motors common
stock.
The number of shares of common stock of EDS issued and outstanding, all of
which shares are owned by General Motors through a wholly owned subsidiary, is
adjusted from time to time so as to remain equal to the denominator of the
fraction described above. It is the policy of the Board of Directors of EDS to
pay quarterly dividends on such shares in a per share amount equal to the
dividends per share paid by General Motors with respect to the Class E Common
Stock. EDS makes no payments to General Motors or the holder of EDS common stock
with respect to dividend payments by General Motors on the Series C Preference
Shares.
Dividends on Class H Common Stock may be declared and paid out of assets of
General Motors legally available therefor only to the extent of the sum of (i)
the paid in surplus of General Motors attributable to Class H Common Stock plus
(ii) the Available Separate Consolidated Net Income of Hughes earned after
December 31, 1985, the date that General Motors acquired Hughes Aircraft Company
("HAC"). The Available Separate Consolidated Net Income of Hughes for each
quarterly accounting period is equal to (x) the separate consolidated net income
of Hughes for that period, determined in accordance with generally accepted
accounting principles (without giving effect to any adjustment which would
result from accounting for GM's acquisition of HAC using the purchase method)
multiplied by (y) a fraction, the numerator of which is a number equal to the
weighted average number of shares of Class H Common Stock outstanding during
that period and the denominator of which was 399.9 million for the first quarter
of 1995; provided that such fraction shall never be greater than one. The
denominator shall be adjusted from time to time as deemed appropriate by the
General Motors Board of Directors under circumstances that are generally similar
to those which would give rise to an adjustment of the denominator for the Class
E Common Stock, as described above. For all purposes, determination of the
Available Separate Consolidated Net Income of Hughes will be in the sole
discretion of the General Motors Board of Directors, subject to criteria set
forth in GM's Certificate of Incorporation.
Under the current dividend policy as adopted by the General Motors Board of
Directors, the annual per share dividends on the Class H Common Stock, when, as
and if declared by the Board of Directors in its sole discretion, will equal
approximately 35% of the Available Separate Consolidated Net Income of Hughes
for the preceding year. The dividends paid on the Class H Common Stock during
1994, 1993 and 1992 exceeded an annual rate based on 35% of the Available
Separate Consolidated Net Income of Hughes for the preceding year (excluding the
impact of a $749.4 million after-tax special Hughes restructuring charge
recorded in 1992). The quarterly dividend on the Class H Common Stock for 1994
was $0.20 per share and for 1993 and 1992 was $0.18 per share. In February 1995,
the Board of Directors increased the quarterly dividend on Class H Common Stock
from $0.20 per share to $0.23 per share (which is based on an annual rate of
approximately 35% of the Available Separate Consolidated Net Income of Hughes
for 1994). Although such dividend policy is subject to change in the sole
discretion of the Board of Directors, it has no present intention of doing so.
However, it reserves the right to reconsider this policy from time to time and
to increase or decrease the dividends paid on the Class H Common Stock in light
of the earnings and consolidated financial position of Hughes, General Motors'
consolidated financial position, including liquidity, and other factors. The
Capital Stock Committee of the Board of Directors is responsible for reviewing
any dividend policy which may have differing effects on holders of the three
classes of General Motors common stock.
The number of shares of common stock of Hughes issued and outstanding as of
December 31, 1994 was 1,000, all of which are owned by General Motors. It is the
policy of the Board of Directors of Hughes to pay quarterly dividends to General
Motors on such shares in an aggregate amount equal to the dividend per share
paid by General Motors with respect to the Class H Common Stock multiplied by
the denominator used to determine the Available Separate Consolidated Net Income
of Hughes.
Subject to the foregoing, the Board of Directors may declare dividends
payable exclusively to the holders of $1 2/3 Par Value Common Stock, payable
exclusively to the holders of Class E Common Stock, payable exclusively to the
holders of Class H Common Stock, or payable to the holders of any two or more of
such
31
<PAGE> 34
classes in equal or unequal amounts, notwithstanding the respective amounts of
surplus available for payment of dividends on each class, the respective voting
and liquidation rights of each class, the amount of any prior dividends declared
on each class, or any other factor.
Voting. Under the General Motors Certificate of Incorporation and subject
to adjustment as described below, holders of $1 2/3 Par Value Common Stock may
cast one vote per share on all matters submitted to General Motors' stockholders
for a vote, holders of Class E Common Stock may cast one-eighth of a vote per
share on all such matters, and holders of Class H Common Stock may cast one-half
of a vote per share on all such matters. Holders of $1 2/3 Par Value Common
Stock, Class E Common Stock and Class H Common Stock will vote together as a
single class on all matters, except that (i) any amendment to the Certificate of
Incorporation which adversely affects the rights, powers or privileges of any
class must also be approved by the holders of that class voting separately as a
class; (ii) any increase in the number of authorized shares of Class E Common
Stock must be approved by both (A) the holders of a majority of $1 2/3 Par Value
Common Stock, Class E Common Stock and Class H Common Stock voting together as a
single class and (B) the holders of a majority of Class E Common Stock voting
separately as a class; and (iii) any increase in the number of authorized shares
of Class H Common Stock must be approved by both (A) the holders of a majority
of $1 2/3 Par Value Common Stock, Class E Common Stock and Class H Common Stock
voting together as a single class and (B) the holders of a majority of Class H
Common Stock voting separately as a class.
Recapitalization by Exchange of Stock. The Board of Directors, in its sole
discretion, may recapitalize General Motors by exchanging all of the outstanding
shares of Class E Common Stock for shares of $1 2/3 Par Value Common Stock at
the Exchange Rate (as defined below). However, the Board of Directors may effect
such an exchange only if, during each of the five full fiscal years preceding
the exchange, the aggregate cash dividends on the Class E Common Stock have been
no less than the product of the Payout Ratio (as defined below) for such year
multiplied by the Available Separate Consolidated Net Income of EDS for the
prior fiscal year. If General Motors sells, transfers, assigns or otherwise
disposes of the business of EDS substantially as an entirety to a person, entity
or group of which General Motors is not a majority owner, all of the outstanding
shares of Class E Common Stock will automatically be exchanged for shares of
$1 2/3 Par Value Common Stock at the Exchange Rate. See "General Motors and
EDS -- Relationship Between General Motors and EDS."
At any time after December 31, 1995, the Board of Directors, in its sole
discretion, may recapitalize General Motors by exchanging all of the outstanding
shares of Class H Common Stock for shares of $1 2/3 Par Value Common Stock at
the Exchange Rate. However, the Board of Directors may effect such an exchange
only if, during each of the five full fiscal years preceding the exchange, the
aggregate cash dividends on the Class H Common Stock have been no less than the
product of the Payout Ratio for such year multiplied by the Available Separate
Consolidated Net Income of Hughes for the prior fiscal year. If General Motors
sells, transfers, assigns or otherwise disposes of substantially all of the
business of HAC, its subsidiaries and successors or of substantially all of the
other business of Hughes to a person, entity or group of which General Motors is
not a majority owner, all of the outstanding shares of Class H Common Stock will
automatically be exchanged for shares of $1 2/3 Par Value Common Stock at the
Exchange Rate.
The "Payout Ratio" equals the lesser of (A) 0.25 or (B) the quotient of (x)
the total cash dividends paid on $1 2/3 Par Value Common Stock for such fiscal
year, divided by (y) the net income of General Motors for such fiscal year,
minus the Available Separate Consolidated Net Income of EDS for such fiscal year
and the Available Separate Consolidated Net Income of Hughes for such fiscal
year.
The "Exchange Rate" per share of Class E Common Stock and Class H Common
Stock will equal 120% of the ratio of (i) the average market price per share of
Class E Common Stock or of Class H Common Stock, respectively, on a specified
valuation date to (ii) the average market price per share of $1 2/3 Par Value
Common Stock on such date.
No fractional shares of $1 2/3 Par Value Common Stock will be issued in any
such exchange. In lieu thereof, a holder of shares of Class E Common Stock or
Class H Common Stock, as the case may be, will receive cash equal to the product
of (A) the fraction of a share of $1 2/3 Par Value Common Stock to which the
32
<PAGE> 35
holder would otherwise have been entitled, multiplied by (B) the average market
price per share of $1 2/3 Par Value Common Stock on such valuation date.
Liquidation Rights. In the event of the liquidation, dissolution or winding
up of the business of General Motors, whether voluntary or involuntary, after
the holders of Preferred Stock, if any were outstanding, and Preference Stock
receive the full preferential amounts to which they are entitled, holders of the
$1 2/3 Par Value Common Stock, Class E Common Stock and Class H Common Stock
will receive the assets remaining for distribution to the General Motors
stockholders on a per share basis in proportion to the respective per share
liquidation units of such classes. Subject to adjustment as described below,
each share of $1 2/3 Par Value Common Stock, Class E Common Stock and Class H
Common Stock would currently be entitled to liquidation units of approximately
one (1.0), one-eighth (0.125) and one-half (0.50), respectively. Holders of
Class E Common Stock and Class H Common Stock have no direct rights in the
equity or assets of EDS or Hughes, respectively, but rather, together with
holders of $1 2/3 Par Value Common Stock, have certain liquidation rights in the
equity and assets of General Motors (which includes 100% of the stock of both
EDS and Hughes).
Subdivision or Combination. If General Motors subdivides (by stock split or
otherwise) or combines (by reverse stock split or otherwise) the outstanding
shares of the $1 2/3 Par Value Common Stock, the Class E Common Stock or the
Class H Common Stock, the voting and liquidation rights of shares of Class E
Common Stock and Class H Common Stock relative to $1 2/3 Par Value Common Stock
will be appropriately adjusted.
In the event of the issuance of shares of Class E Common Stock or Class H
Common Stock as a dividend on shares of $1 2/3 Par Value Common Stock, the
liquidation rights of the applicable class of Common Stock would be adjusted so
that the relative aggregate liquidation rights of each stockholder would not be
changed as a result of such dividend.
CERTAIN UNITED STATES FEDERAL TAX
CONSIDERATIONS FOR NON-U.S. HOLDERS
This is a general discussion of certain U.S. federal income and estate tax
consequences of the purchase, ownership and disposition of Class E Common Stock
by a "Non-U.S. Holder." A "Non-U.S. Holder" is a person or entity that, for U.S.
federal income tax purposes, is a nonresident alien individual, a foreign
corporation, a foreign partnership, or a nonresident fiduciary of a foreign
estate or trust.
This discussion is based on the Internal Revenue Code of 1986, as amended
(the "Code"), and administrative interpretations as of the date hereof, all of
which may be changed either retroactively or prospectively. This discussion does
not address all aspects of U.S. federal income and estate taxation that may be
relevant to Non-U.S. Holders in light of their particular circumstances
(including the direct or indirect ownership of more than 5% of the outstanding
Class E Common Stock) and does not address any tax consequences arising under
the laws of any state, local or foreign taxing jurisdiction.
The following summary does not constitute, and should not be considered as,
legal or tax advice to prospective investors. Prospective holders should consult
their tax advisers about the particular tax consequences to them of holding and
disposing of Class E Common Stock.
DIVIDENDS
Subject to the discussion below, dividends paid to a Non-U.S. Holder of
Class E Common Stock generally will be subject to withholding tax at a 30% rate
or such lower rate as may be specified by an applicable income tax treaty. For
purposes of determining whether tax is to be withheld at a 30% rate or at a
reduced rate as specified by an income tax treaty, General Motors ordinarily
will presume that dividends paid to an address in a foreign country are paid to
a resident of such country absent actual knowledge that such presumption is not
warranted. However, under proposed U.S. Treasury regulations which have not yet
been put into effect, to claim the benefits of a tax treaty, a Non-U.S. Holder
of Class E Common Stock would be required to file certain forms accompanied by a
statement from a competent authority of the treaty country.
33
<PAGE> 36
Dividends paid to a holder with an address within the United States
generally will not be subject to withholding tax, unless General Motors has
actual knowledge that the holder is a Non-U.S. Holder. Absent such actual
knowledge, dividends paid to a holder with a U.S. address may be subject to
backup withholding if the holder is not an exempt recipient as defined in
Section 6049(b)(4) of the Code (which includes corporations) and fails to
provide a correct tax identification number and other information to General
Motors.
Upon the filing of an Internal Revenue Service Form 4224 with General
Motors, there is no withholding tax on dividends that are effectively connected
with the Non-U.S. Holder's conduct of a trade or business within the United
States. Instead, the effectively connected dividends are subject to regular U.S.
income tax in the same manner as if the Non-U.S. Holder were a U.S. resident.
Effectively connected dividends received by a non-U.S. corporation may be
subject to an additional "branch profits tax" at a rate of 30% (or such lower
rate as may be specified by an applicable treaty) of its effectively connected
earnings and profits, subject to certain adjustments.
Generally, General Motors must report to the U.S. Internal Revenue Service
the amount of dividends paid, the name and address of the recipient, and the
amount, if any, of tax withheld. A similar report is sent to the holder.
Pursuant to tax treaties or other agreements, the U.S. Internal Revenue Service
may make its reports available to tax authorities in the recipient's country of
residence.
GAIN ON DISPOSITION
A Non-U.S. Holder generally will not be subject to U.S. federal income tax
with respect to gain realized on a sale or other disposition of Class E Common
Stock unless (i) the gain is effectively connected with a trade or business of
such holder in the United States or (ii) in the case of certain Non-U.S. Holders
who are nonresident alien individuals and hold Class E Common Stock as a capital
asset, such individuals are present in the United States for 183 or more days in
the taxable year of the disposition.
INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING
If the proceeds of a disposition of Class E Common Stock are paid over by
or through a U.S. office of a broker, the payment is subject to information
reporting and to backup withholding unless the disposing holder certifies as to
his name, address, and non-U.S. status or otherwise establishes an exemption.
Generally, U.S. information reporting and backup withholding will not apply to a
payment of disposition proceeds if the payment is made outside the United States
through a non-U.S. office of a non-U.S. broker. However, U.S. information
reporting requirements (but not backup withholding) will apply to a payment of
disposition proceeds outside the United States if (A) the payment is made
through an office outside the United States of a broker that is either (i) a
U.S. person, (ii) a foreign person which derives 50% or more of its gross income
for certain periods from the conduct of a trade or business in the United States
or (iii) a "controlled foreign corporation" for U.S. federal income tax purposes
and (B) the broker fails to maintain documentary evidence that the holder is a
Non-U.S. Holder and that certain conditions are met, or that the holder
otherwise is entitled to an exemption.
Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained, provided that the required information is furnished to the U.S.
Internal Revenue Service.
FEDERAL ESTATE TAX
An individual Non-U.S. Holder who is treated as the owner of or has made
certain lifetime transfers of an interest in Class E Common Stock will be
required to include the value thereof in his gross estate for U.S. federal
estate tax purposes, and may be subject to U.S. federal estate tax unless an
applicable estate tax treaty provides otherwise.
34
<PAGE> 37
UNDERWRITING
The U.S. Underwriters named below, acting through their U.S.
Representatives, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman,
Sachs & Co., Lehman Brothers Inc., CS First Boston Corporation, Morgan Stanley &
Co. Incorporated and Salomon Brothers Inc (the "U.S. Representatives"), have
severally agreed, subject to the terms and conditions of the U.S. Purchase
Agreement with General Motors and the Selling Stockholders (the "U.S. Purchase
Agreement"), to purchase from the Selling Stockholders, the aggregate number of
shares of Class E Common Stock set forth below opposite their respective names.
<TABLE>
<CAPTION>
NUMBER OF U.S. SHARES OF
U.S. UNDERWRITER CLASS E COMMON STOCK
- ----------------------------------------------------------------------- ------------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..............................................
Goldman, Sachs & Co. ..................................................
Lehman Brothers Inc....................................................
CS First Boston Corporation............................................
Morgan Stanley & Co. Incorporated......................................
Salomon Brothers Inc...................................................
----------
Total........................................................... 27,000,000
==========
</TABLE>
This offering is part of a worldwide offering that consists of the U.S.
Offering, the International Offering and the Asian Offering (collectively, the
"Offerings"). Merrill Lynch & Co. and Goldman, Sachs & Co. are acting as Joint
Global Coordinators for the Offerings.
In the U.S. Purchase Agreement, the U.S. Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all of the shares of
Class E Common Stock being sold pursuant to such Agreement if any of the shares
of Class E Common Stock being sold pursuant to such Agreement are purchased.
Under certain circumstances under such Agreement, the commitments of
non-defaulting U.S. Underwriters may be increased.
The U.S. Representatives of the U.S. Underwriters have advised General
Motors and the Selling Stockholders that they propose initially to offer the
shares to the public at the Price to Public set forth on the cover page of this
Prospectus, and to certain dealers at such price less a concession not in excess
of $ per share. The U.S. Underwriters may allow, and such dealers may reallow,
a discount not in excess of $ per share on sales to certain other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.
General Motors and the Selling Stockholders have also entered into an
International Purchase Agreement (the "International Purchase Agreement") with
certain underwriters (the "International Underwriters") for whom Merrill Lynch
International Limited, Goldman Sachs International, Lehman Brothers
International (Europe), CS First Boston Limited, Morgan Stanley & Co.
International Limited and Salomon Brothers International Limited are acting as
representatives (the "International Representatives") providing for a concurrent
International Offering. General Motors and the Selling Stockholders have also
entered into an Asian Purchase Agreement (the "Asian Purchase Agreement") with
certain underwriters (the "Asian Underwriters") for whom Merrill Lynch
International Limited, Goldman Sachs (Asia) L.L.C. and Lehman Brothers
Securities Asia Limited are acting as representatives (the "Asian
Representatives") providing for the concurrent Asian Offering. The U.S.
Underwriters, the International Underwriters and the Asian Underwriters are
collectively referred to as the "Underwriters" and the U.S. Representatives, the
International Representatives and the Asian Representatives are collectively
referred to as the "Representatives". The
35
<PAGE> 38
International Underwriters have agreed, subject to the terms and condition set
forth in the International Purchase Agreement, to purchase all of the shares of
Class E Common Stock being offered in the International Offering if any are
purchased and the Asian Underwriters have agreed, subject to the terms and
conditions set forth in the Asian Purchase Agreement, to purchase all of the
shares of Class E Common Stock being offered in the Asian Offering if any are
purchased. The closing of each of the Offerings is a condition to the closing of
each of the U.S. Offering, the International Offering and the Asian Offering.
The Underwriters have entered into an intersyndicate agreement (the
"Intersyndicate Agreement") that provides for the coordination of their
activities. Under the terms of the Intersyndicate Agreement, the Underwriters in
each geographic area have agreed not to offer to sell any shares of Class E
Common Stock in any other geographic area until the completion of the
distribution of the shares of Class E Common Stock in all of the Offerings.
Pursuant to the Intersyndicate Agreement, each of the U.S. Underwriters has
agreed or will agree that, as part of the distribution of the U.S. shares of
Class E Common Stock, subject to certain exceptions, (i) it is not purchasing
any shares of Class E Common Stock for the account of anyone other than a U.S.
Person (as defined below) or Canadian Person (as defined below) and (ii) it has
not offered or sold, and will not offer or sell, directly or indirectly, any
shares of Class E Common Stock or distribute any prospectus relating to the
shares of Class E Common Stock to any person outside the United States or Canada
or to anyone other than a U.S. Person or Canadian Person, or to any dealer who
does not so agree. Each of the International Underwriters and the Asian
Underwriters has agreed or will agree that, as part of the distribution of the
International shares of Class E Common Stock and Asian shares of Class E Common
Stock, respectively, subject to certain exceptions, (i) it is not purchasing any
shares of Class E Common Stock for the account of any U.S. Person or Canadian
Person and (ii) it has not offered or sold, and will not offer or sell, directly
or indirectly, any shares of Class E Common Stock or distribute any prospectus
relating to the shares of Class E Common Stock in the United States or Canada or
to any U.S. Person or Canadian Person or to any dealer who does not so agree.
The foregoing limitations do not apply to stabilization transactions or to
transactions between the U.S. Underwriters, the International Underwriters and
the Asian Underwriters pursuant to the Intersyndicate Agreement. As used in this
section, "United States" means the United States of America, its territories,
possessions and other areas subject to its jurisdiction; "Canada" means Canada,
its provinces, territories, possessions and other areas subject to its
jurisdiction; "Asia" means all countries in Asia, the Middle East, Australia and
New Zealand, and "U.S. Person" and "Canadian Person" mean (i) a citizen or
resident of the United States or Canada, respectively, (ii) a corporation,
partnership, trust or other entity created or organized in or under the laws of
the United States or Canada, respectively (other than a foreign branch of such
an entity), or (iii) an estate or trust, the income of which is subject to
United States federal income taxation or Canadian federal income taxation,
respectively, regardless of its source of income, and includes any United States
or Canadian branch of a person not included in any of clauses (i), (ii) and
(iii) of this sentence.
The Hourly Plan Special Trust has granted the Underwriters an option,
exercisable for 30 days after the date hereof, to purchase up to an additional
5,550,000 shares of Class E Common Stock at the Price to Public less the
Underwriting Discount for the purpose of covering over-allotments, if any. If
the Underwriters exercise such option in full, each of the Underwriters will
have a firm commitment, subject to certain conditions, to purchase approximately
the same percentage thereof which the number of shares of Class E Common Stock
to be purchased by it shown opposite their respective names in the table under
"Underwriting" in the relevant Prospectus is of the 37,000,000 shares of Class E
Common Stock initially offered by the Underwriters hereunder.
General Motors and (to the extent permitted under applicable law) the
Selling Stockholders have agreed to indemnify the Underwriters against certain
liabilities including liabilities under the Securities Act.
General Motors has agreed not to offer, sell or otherwise dispose of any
shares of Class E Common Stock or any securities convertible into or
exchangeable or exercisable for Class E Common Stock from the date of this
Prospectus until December 31, 1995, without the prior written consent of Merrill
Lynch & Co. and Goldman, Sachs & Co. on behalf of the Representatives, provided
that General Motors may issue and deliver such securities under specified
exceptions in connection with (i) the conversion, exercise or exchange of
36
<PAGE> 39
outstanding options or other securities pursuant to their terms, (ii) any
previously disclosed acquisition or other business combination and (iii)
employee benefit plans.
The Selling Stockholders have agreed not to offer, sell or otherwise
dispose of any shares of Class E Common Stock or any securities convertible into
or exchangeable or exercisable for Class E Common Stock (other than transfers to
or for the benefit of employee benefit plans of GM or any of its affiliates,
including EDS) from the date of this Prospectus, in the case of the Hourly Plan
Special Trust, until December 31, 1995 and, in the case of the Salaried Plan
Special Trust, until 90 days after the date of this Prospectus, in each case,
without the prior written consent of Merrill Lynch & Co. and Goldman, Sachs &
Co. on behalf of the Representatives.
LEGAL MATTERS
The legality of the shares of Class E Common Stock offered hereby will be
passed upon for General Motors by Warren G. Andersen, Attorney, Legal Staff of
General Motors. Certain matters relating to federal income tax considerations
will be passed on by Anton H. Zidansek, Assistant General Tax Counsel, Tax Staff
of General Motors. Mr. Andersen is the beneficial owner of shares, including
shares subject to options, of $1 2/3 Par Value Common Stock, Class E Common
Stock and Class H Common Stock. Mr. Zidansek is the beneficial owner of shares,
including shares subject to options, of $1 2/3 Par Value Common Stock and Class
E Common Stock. Certain legal matters related to this offering will be passed
upon for the Underwriters by Davis Polk & Wardwell, New York, New York. Davis
Polk & Wardwell acts as counsel to the Executive Compensation Committee of the
General Motors Board of Directors and has acted as counsel for General Motors
and its subsidiaries in various matters.
EXPERTS
The consolidated financial statements and the financial statement schedule
included in the General Motors 1994 Form 10-K, incorporated by reference herein,
have been audited by Deloitte & Touche LLP (as to financial statements and the
financial statement schedule of General Motors and as to financial statements of
Hughes) and KPMG Peat Marwick LLP (as to financial statements of EDS),
independent auditors, as stated in their respective reports appearing therein,
and have been so incorporated in reliance upon such reports given upon the
authority of such firms as experts in accounting and auditing.
The consolidated financial statements of EDS as of December 31, 1994 and
1993, and for each of the years in the three-year period ended December 31,
1994, included herein in Appendix A, have been audited by KPMG Peat Marwick LLP,
independent auditors, as stated in their report appearing therein, and have been
so included in reliance upon such report given upon the authority of that firm
as experts in accounting and auditing.
37
<PAGE> 40
APPENDIX A
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Electronic Data Systems Corporation:
We have audited the accompanying consolidated balance sheets of Electronic
Data Systems Corporation and subsidiaries as of December 31, 1994 and 1993, and
the related consolidated statements of income and cash flows for each of the
years in the three-year period ended December 31, 1994. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Electronic
Data Systems Corporation and subsidiaries at December 31, 1994 and 1993, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1994, in conformity with generally accepted
accounting principles.
/s/ KPMG PEAT MARWICK LLP
Dallas, Texas
January 25, 1995
A-1
<PAGE> 41
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEARS ENDED DECEMBER 31,
-------------------- ---------------------------------
1995 1994 1994 1993 1992
-------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Revenues
Systems and other contracts
GM and affiliates...................... $ 898.0 $ 841.7 $ 3,547.2 $3,323.7 $3,348.5
Outside customers...................... 1,878.3 1,375.5 6,412.9 5,183.6 4,806.7
Interest and other income................. 8.7 22.1 92.3 54.5 63.7
-------- -------- --------- -------- --------
Total revenues....................... 2,785.0 2,239.3 10,052.4 8,561.8 8,218.9
-------- -------- --------- -------- --------
Costs and expenses
Cost of revenues.......................... 2,176.1 1,710.6 7,529.4 6,390.6 6,205.8
Selling, general, and administrative...... 281.0 250.8 1,187.1 1,005.4 969.3
Interest (Note 9)......................... 20.4 9.6 51.7 34.5 43.0
-------- -------- --------- -------- --------
Total costs and expenses............. 2,477.5 1,971.0 8,768.2 7,430.5 7,218.1
-------- -------- --------- -------- --------
Income before income taxes.................. 307.5 268.3 1,284.2 1,131.3 1,000.8
Provision for income taxes (Note 11)........ 110.7 96.6 462.3 407.3 365.3
-------- -------- --------- -------- --------
Separate Consolidated Net Income............ $ 196.8 $ 171.7 $ 821.9 $ 724.0 $ 635.5
======== ======== ========= ======== ========
Available Separate Consolidated Net Income
Average number of shares of GM Class E
common stock outstanding (Note 1)
(Numerator)............................... 300.0 257.9 260.3 243.0 209.1
Class E dividend base (Denominator)......... 482.4 481.2 481.7 480.6 479.3
Available Separate Consolidated Net
Income.................................... $ 122.4 $ 92.1 $ 444.4 $ 367.2 $ 278.4
======== ======== ========= ======== ========
Earnings Attributable to GM Class E Common
Stock on a Per Share Basis (Note 1)....... $ 0.42 $ 0.36 $ 1.71 $ 1.51 $ 1.33
======== ======== ========= ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
A-2
<PAGE> 42
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
<TABLE>
<CAPTION>
DECEMBER 31,
MARCH 31, -------------------
1995 1994 1993
----------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents.................................... $ 521.7 $ 608.2 $ 383.4
Marketable securities (Note 3)............................... 119.3 149.6 224.1
Accounts receivable.......................................... 2,114.1 2,082.1 1,412.5
Accounts receivable from GM and affiliates................... 192.4 65.4 112.6
Inventories.................................................. 140.3 137.8 130.7
Prepaids and other........................................... 377.7 311.0 243.5
-------- -------- --------
Total current assets...................................... 3,465.5 3,354.1 2,506.8
-------- -------- --------
Property and equipment, at cost less accumulated depreciation
(Note 4)
Land......................................................... 126.8 125.3 121.6
Buildings and facilities..................................... 536.7 559.2 532.0
Computer equipment........................................... 1,993.9 1,871.0 1,275.5
Other equipment and furniture................................ 223.8 201.1 185.6
-------- -------- --------
Total property and equipment, net......................... 2,881.2 2,756.6 2,114.7
-------- -------- --------
Operating and other assets
Land held for development, at cost (Note 5).................. 98.3 97.4 94.4
Investment in leases and other (Note 6)...................... 1,435.9 1,308.8 1,159.9
Software, goodwill, and other intangibles, net (Notes 7 and
19)....................................................... 1,277.1 1,269.6 1,066.3
-------- -------- --------
Total operating and other assets.......................... 2,811.3 2,675.8 2,320.6
-------- -------- --------
Total Assets................................................... $9,158.0 $8,786.5 $6,942.1
======== ======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable............................................. $ 501.3 $ 571.1 $ 359.8
Accrued liabilities (Note 8)................................. 1,351.3 1,451.0 996.0
Deferred revenue............................................. 619.8 536.7 429.7
Income taxes (Note 11)....................................... 101.6 111.0 202.2
Notes payable (Note 9)....................................... 258.2 203.4 172.7
-------- -------- --------
Total current liabilities................................. 2,832.2 2,873.2 2,160.4
-------- -------- --------
Deferred income taxes (Note 11)................................ 712.9 659.8 641.5
-------- -------- --------
Notes payable (Note 9)......................................... 1,198.4 1,021.0 522.8
-------- -------- --------
Commitments and contingent liabilities (Notes 17 and 18)
Stockholder's equity (Notes 10 and 12)
Common stock, without par value; authorized 1,000.0 shares.
Issued and outstanding 482.4 shares at March 31, 1995, and
481.7 and 480.9 shares at December 31, 1994 and 1993,
respectively. ............................................ 506.4 455.1 421.2
Retained earnings............................................ 3,908.1 3,777.4 3,196.2
-------- -------- --------
Total stockholder's equity................................ 4,414.5 4,232.5 3,617.4
-------- -------- --------
Total Liabilities and Stockholder's Equity..................... $9,158.0 $8,786.5 $6,942.1
======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
A-3
<PAGE> 43
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
------------------ ----------------------------------
1995 1994 1994 1993 1992
------- ------- --------- --------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash Flows from Operating Activities
Net income....................................... $ 196.8 $ 171.7 $ 821.9 $ 724.0 $ 635.5
------- ------- --------- --------- --------
Adjustments to reconcile net income to net cash
provided by operating activities (net of
effects of acquired companies)
Depreciation and amortization.................. 231.0 156.9 741.3 607.9 603.2
Accretion of discount related to commercial
paper....................................... 14.6 3.8 30.9 13.4 8.3
(Increase) decrease in accounts receivable..... (45.1) 21.9 (585.0) (199.8) 18.6
(Increase) decrease in accounts receivable from
GM and affiliates........................... (123.1) 25.5 51.1 (56.0) 2.3
(Increase) decrease in inventories............. 0.2 (18.5) (1.9) (15.5) (22.3)
Increase in prepaids and other................. (65.3) (33.2) (57.0) (26.8) (29.8)
Increase (decrease) in accounts payable and
accrued liabilities......................... (230.6) 5.6 482.9 22.0 (181.4)
Increase (decrease) in deferred revenue........ 68.0 (11.5) 79.1 137.1 1.6
Increase (decrease) in income taxes............ (9.5) 10.5 (94.4) 138.9 (98.2)
Increase in deferred income taxes.............. 56.1 35.6 21.9 49.8 198.0
------- ------- --------- --------- --------
Total adjustments........................... (103.7) 196.6 668.9 671.0 500.3
------- ------- --------- --------- --------
Net cash provided by operating activities........ 93.1 368.3 1,490.8 1,395.0 1,135.8
------- ------- --------- --------- --------
Cash Flows from Investing Activities
Payments for purchase of available-for-sale
securities..................................... (10.8) (38.6) (248.9) (305.7) (291.2)
Proceeds from sale of available-for-sale
securities..................................... 64.0 70.3 370.0 247.4 277.9
Payments related to land held for development.... (0.9) (1.4) (3.0) (6.2) (16.6)
Payments for investment in leases and certain
other assets................................... (144.1) (257.2) (518.0) (293.5) (456.7)
Proceeds from investment in leases and certain
other assets................................... 27.6 96.8 318.5 348.8 406.7
Payments for purchase of software and certain
other intangibles.............................. (5.0) (4.8) (96.7) (119.0) (64.5)
Payments for purchase of property and
equipment...................................... (263.8) (156.3) (1,120.9) (799.4) (639.0)
Payments related to acquisitions, net of cash
acquired....................................... (40.9) (0.7) (186.6) (122.1) (30.2)
------- ------- --------- --------- --------
Net cash used in investing activities............ (373.9) (291.9) (1,485.6) (1,049.7) (813.6)
------- ------- --------- --------- --------
Cash Flows from Financing Activities
Net increase (decrease) in current notes payable
with maturities less than 90 days.............. 48.8 (43.6) (102.9) (99.0) (239.4)
Payments on notes payable........................ (62.6) (31.8) (197.2) (220.5) (800.2)
Proceeds from notes payable...................... 216.3 205.7 690.3 91.5 1,032.5
Proceeds from (payments on) advances from GM..... -- (0.3) 1.1 (5.4) (16.0)
Proceeds from issuance of common stock........... 51.3 25.1 33.9 55.3 42.5
Cash dividends paid to GM........................ (62.6) (57.7) (231.1) (192.1) (172.4)
------- ------- --------- --------- --------
Net cash provided by (used in) financing
activities..................................... 191.2 97.4 194.1 (370.2) (153.0)
------- ------- --------- --------- --------
Effect of Exchange Rate Changes on Cash and Cash
Equivalents...................................... 3.1 2.5 25.5 (13.6) (7.9)
------- ------- --------- --------- --------
Net Increase (Decrease) in Cash and Cash
Equivalents...................................... (86.5) 176.3 224.8 (38.5) 161.3
Cash and Cash Equivalents at Beginning of Period... 608.2 383.4 383.4 421.9 260.6
------- ------- --------- --------- --------
Cash and Cash Equivalents at End of Period......... $ 521.7 $ 559.7 $ 608.2 $ 383.4 $ 421.9
======= ======= ========= ========= ========
</TABLE>
See accompanying notes to consolidated financial statements.
A-4
<PAGE> 44
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
AND THREE MONTHS ENDED MARCH 31, 1995 AND 1994 (UNAUDITED)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERIM FINANCIAL INFORMATION
In the opinion of management, the unaudited interim consolidated financial
statements as of March 31, 1995 and for the three months ended March 31, 1995
and 1994, reflect all adjustments, consisting of only normal recurring items
(with the exception of the accounting change in 1994 to adopt Statement of
Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities), which are necessary for a fair presentation of the
results for the interim periods presented. The results for interim periods are
not necessarily indicative of results which may be expected for any other
interim period or for the full year.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Electronic
Data Systems Corporation and all majority-owned subsidiaries. As used herein,
the terms "EDS" and "the Company" refer to Electronic Data Systems Corporation
and its consolidated subsidiaries. EDS is a wholly owned subsidiary of General
Motors Corporation (GM). The Company's investments in companies in which it has
the ability to exercise significant influence over operating and financial
policies are accounted for under the equity method, with the remaining
investments carried at cost.
Earnings Attributable to GM Class E Common Stock on a Per Share Basis have
been determined based on the relative amounts available for the payment of
dividends to holders of GM Class E common stock. Holders of GM Class E common
stock have no direct rights in the equity or assets of EDS, but rather have
rights in the equity and assets of GM (which includes 100% of the stock of EDS).
Dividends on the GM Class E common stock are declared out of the Available
Separate Consolidated Net Income of EDS earned since the acquisition of EDS by
GM. The Available Separate Consolidated Net Income of EDS is determined
quarterly and is equal to the separate consolidated net income of EDS, excluding
the effects of purchase accounting adjustments arising from the acquisition of
EDS, multiplied by a fraction, the numerator of which is a number equal to the
weighted average number of shares of GM Class E common stock outstanding during
the period and the denominator of which was 482.4 million and 481.2 million for
the first quarter of 1995 and 1994, respectively. For the fourth quarter of
1994, the denominator was 481.7 million. Comparable denominators for the fourth
quarters of 1993 and 1992 were 480.6 million and 479.3 million, respectively.
On March 13, 1995, GM contributed approximately 173 million shares of GM
Class E common stock to its hourly pension plan. This contribution increased the
weighted average shares outstanding during the three months ended March 31,
1995.
GM Series C depositary shares represent ownership of one-tenth of a share
of GM Series C convertible preference stock. GM Series C depositary shares and
GM Series C preference stocks are convertible into GM Class E common stock and
are common stock equivalents for purposes of computing Earnings Attributable to
GM Class E Common Stock on a Per Share Basis. On November 2, 1992, GM Series
E-II and E-III preference stocks, previously held by the GM pension plans, were
converted to GM Class E common stock. In 1993 and 1992, GM Series E-1 preference
stock was converted to GM Class E common stock, or redeemed by GM. The issuances
and conversions of such preference stocks have no dilutive effect on the GM
Class E common stock, because to the extent that shares of GM Class E common
stock deemed to be outstanding would increase, such increased shares would
increase the numerator of the fraction used to determine Available Separate
Consolidated Net Income, but would have no effect on the denominator.
The denominator used in determining the Available Separate Consolidated Net
Income of EDS is adjusted as deemed appropriate by the GM Board of Directors to
reflect subdivisions or combinations of the GM Class E common stock and to
reflect certain transfers of capital to or from EDS. The Board's discretion
A-5
<PAGE> 45
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
to make such adjustments is limited by criteria set forth in GM's Certificate of
Incorporation. In 1994 and 1988, EDS initiated programs to repurchase 9.5
million and 11.0 million shares, respectively, of GM Class E common stock in
order to meet certain future requirements of the Company's employee benefit
plans. The GM Board has generally caused the denominator used in calculating the
Available Separate Consolidated Net Income of EDS to decrease as shares are
purchased and to increase as shares are used for the employee benefit plans.
The current GM Board policy is that the cash dividends on the GM Class E
common stock, when, as, and if declared by the GM Board in its sole discretion,
will equal approximately 30% of the Available Separate Consolidated Net Income
of EDS for the prior year.
CASH AND CASH EQUIVALENTS
The carrying amount approximates fair value because of the short maturity
of these instruments.
DEBT AND MARKETABLE EQUITY SECURITIES
Marketable securities at December 31, 1994 consist of securities issued by
the U.S. Treasury, states, and political subdivisions, as well as
mortgage-backed debt, corporate debt and corporate equity securities. The
Company adopted the provisions of Statement of Financial Accounting Standards
(SFAS) No. 115, Accounting for Certain Investments in Debt and Equity
Securities, effective January 1, 1994. Pursuant to SFAS No. 115, the provisions
of the Statement were not applied retroactively. The change had no material
cumulative effect on the Company's financial position or results of operations.
Prior to the adoption of SFAS No. 115, equity and debt securities were carried
at the lower of aggregate cost or market and on an amortized cost basis,
respectively. Under SFAS No. 115, the Company classifies all of its debt and
marketable equity securities as available-for-sale. Management determines the
appropriate classification of all securities at the time of purchase and
re-evaluates such designation as of each balance sheet date. Noncurrent
available-for-sale securities are reported within the balance sheet
classification Investment in Leases and Other. The Company's available-for-sale
securities are recorded at fair value. Unrealized holding gains and losses, net
of the related tax effect, are excluded from earnings and are reported as a
separate component of stockholder's equity until realized. A decline in the
market value of any available-for-sale security below cost that is deemed other
than temporary is charged to earnings, resulting in the establishment of a new
cost basis for the security.
INVENTORY VALUATION
Inventories are stated principally at the lower of cost or market using the
first-in, first-out method.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost. Depreciation of property and
equipment is calculated using the straight-line method over the lesser of the
asset's estimated useful life, the life of the related customer contract, or the
term of the lease in the case of leasehold improvements. The ranges of estimated
useful lives are as follows:
<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Buildings..................................... 20-40
Facilities.................................... 5-20
Computer equipment............................ 3-7
Other equipment and furniture................. 3-15
</TABLE>
A-6
<PAGE> 46
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
SOFTWARE, GOODWILL, AND OTHER INTANGIBLES
Software purchased by the Company and utilized in designing, installing,
and operating business information and communications systems is capitalized and
amortized on a straight-line basis over a five- to eight-year period. Costs of
developing and maintaining software systems are incurred primarily in connection
with customer contracts and are generally expensed as incurred. Software
development costs that meet the capitalization and recoverability requirements
of SFAS No. 86, Accounting for the Costs of Computer Software to be Sold,
Leased, or Otherwise Marketed, are capitalized and generally amortized on a
straight-line basis over three years. Such amounts were not significant.
Goodwill, which represents the excess of the purchase price over the fair
value of identifiable net assets acquired, is amortized on a straight-line basis
over the expected period of benefit, five to 40 years. The Company assesses the
recoverability of this intangible asset by determining whether its balance can
be recovered over its remaining life. The amount of goodwill impairment, if any,
is measured based on the expected undiscounted cash flows of the acquired
operation.
Other intangibles are amortized on a straight-line basis over the
anticipated period of benefit, which is generally five to 10 years.
REVENUE RECOGNITION
The Company provides services under level-of-effort and fixed-price
contracts, with the length of the Company's contracts ranging up to ten years.
For level-of-effort types of contracts, revenue is earned based on the
agreed-upon billing amounts as services are provided to the customer. For
certain fixed-price contracts, revenue is recognized on the
percentage-of-completion method. Revenue earned is based on the percentage that
incurred costs to date bear to total estimated costs after giving effect to the
most recent estimates of total cost. Deferred revenue of $536.7 million and
$429.7 million at December 31, 1994 and 1993, respectively, represents billings
in excess of costs and related profits on certain contracts. Included in
accounts receivable are unbilled receivables of $448.5 million and $314.9
million at December 31, 1994 and 1993, respectively. Such unbilled receivables
for certain contracts in progress represent costs and related profits in excess
of billings, and such amounts were not billable at the balance sheet date. These
billings on fixed-price contracts will be made in the future in accordance with
contractual agreements. Of the unbilled receivables at December 31, 1994,
billings to such customers amounting to $194.6 million are expected to be
collected in 1996 and thereafter.
CURRENCY TRANSLATION
Assets and liabilities of non-U.S. subsidiaries whose functional currency
is not the U.S. dollar are translated at current exchange rates. Revenue and
expense accounts are translated using an average rate for the period.
Translation gains and losses are not included in determining net income but are
reflected as a separate component of stockholder's equity. Nonfunctional
currency transaction gains (losses) are included in determining net income and
were $4.5 million, ($3.7) million, and ($1.5) million, net of income taxes, for
the years ended December 31, 1994, 1993, and 1992, respectively.
INCOME TAXES
The Company provides for deferred taxes under the asset and liability
method of SFAS No. 109, Accounting for Income Taxes. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered. The Company is included in the consolidated Federal tax returns filed
by GM. Current Federal
A-7
<PAGE> 47
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
income taxes are calculated on a separate return basis and remitted to GM. The
deferral method is used to account for investment tax credits.
STATEMENT OF CASH FLOWS
The Company uses the indirect method to present cash flows from operating
activities and considers certificates of deposit, as well as the following items
with original maturities of three months or less, to be cash equivalents:
commercial paper, repurchase agreements, and money market funds. (See Note 20.)
FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS No. 107, Disclosures about the Fair Value of Financial Instruments,
defines the fair value of a financial instrument as the amount at which the
instrument could be exchanged in a current transaction between willing parties.
All of the Company's financial instruments, including foreign exchange-forward
contracts disclosed at Note 15, are presented in the Consolidated Balance Sheets
at their fair values at December 31, 1994, with the exception of the following
(in millions):
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------
CARRYING FAIR
AMOUNT VALUE
-------- --------
<S> <C> <C>
Financial Assets (Note 6)
Investments in joint ventures and partnerships......................... $ 149.6 $ 172.0
Long-term securities................................................... 201.2 192.6
Noncurrent notes receivable............................................ 158.1 154.4
Financial liabilities
Notes payable (Note 9)................................................. 1,224.4 1,230.3
</TABLE>
Concentrations of credit risk with respect to accounts receivable are
limited due to the large number of customers comprising the Company's customer
base and their dispersion across different industry and geographic areas.
DERIVATIVES
Derivative financial instruments are used by the Company in the management
of its interest rate and foreign currency exposures. Net payments or receipts
under the Company's interest rate swap agreements are recorded as adjustments to
interest expense. Foreign exchange-forward contracts are recorded in the
Company's Consolidated Balance Sheets at fair value as of the reporting date.
Realized and unrealized changes in fair value are recognized in income, as other
income, in the period in which the changes occur.
NEW ACCOUNTING STANDARDS
The Financial Accounting Standards Board (FASB) has issued SFAS No. 118,
Accounting by Creditors for Impairment of a Loan-Income Recognition and
Disclosures, which will become effective for fiscal years beginning in 1995. The
effect of this Statement, if implemented currently, would not be material.
NOTE 2. NATIONAL HERITAGE INSURANCE COMPANY
National Heritage Insurance Company (NHIC), a wholly owned subsidiary of
EDS, acts as underwriter for claims benefit payments for the Medicaid welfare
program contract for the state of Texas. The state of Indiana awarded EDS a
fiscal agent contract for the Medicaid welfare program effective July 1, 1994,
which was previously underwritten by NHIC.
A-8
<PAGE> 48
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
The contracts provide that payments from the states be deposited in trust
accounts that are not included in the consolidated financial statements. Of such
payments received for the years ended December 31, 1994, 1993, and 1992,
$4,188.7 million, $4,453.4 million, and $3,664.1 million, respectively, were
designated for the payment of benefit claims or to be returned to the states. At
December 31, 1994 and 1993, $983.5 million and $1,316.3 million, respectively,
of such designated funds at amortized cost remained in the trust accounts.
Approximate market values of these invested funds at December 31, 1994 and 1993
were $975.2 million and $1,315.3 million, respectively. These investments
primarily consist of corporate and government bonds. NHIC intends to hold these
investments until their full face value can be realized. Gains and losses from
the sale of these investments held in trust accounts are combined with gains and
losses from the Company's other investments.
NOTE 3. DEBT AND MARKETABLE EQUITY SECURITIES
Following is a summary of available-for-sale securities as of December 31,
1994 (in millions):
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- ------
<S> <C> <C> <C> <C>
Current:
U.S. government and agency obligations............... $ 31.9 $ -- $0.6 $ 31.3
Other debt securities................................ 94.9 0.2 4.7 90.4
------- ---- ---- ------
Total debt securities............................. 126.8 0.2 5.3 121.7
Equity securities.................................... 29.2 -- 1.3 27.9
------- ---- ---- ------
Total current available-for-sale securities............ $ 156.0 $0.2 $6.6 $149.6
======= ==== ==== ======
Non-Current (Note 6)
Other debt securities................................ $ 0.6 $ -- $ -- $ 0.6
Equity securities.................................... 60.5 -- 2.4 58.1
------- ---- ---- ------
Total noncurrent available-for-sale securities.... $ 61.1 $ -- $2.4 $ 58.7
======= ==== ==== ======
</TABLE>
The amortized cost and estimated fair value of debt and marketable equity
securities at December 31, 1994, by contractual maturity, are shown below (in
millions). Expected maturities will differ from contractual maturities because
the issuers of the securities may have the right to repay obligations without
prepayment penalties.
<TABLE>
<CAPTION>
DECEMBER 31, 1994
-------------------
AMORTIZED FAIR
COST VALUE
--------- ------
(IN MILLIONS)
<S> <C> <C>
Debt securities
Due in one year or less................................... $ 41.6 $ 41.1
Due after one year through five years..................... 51.8 50.8
Due after five years through 10 years..................... 7.1 7.0
Due after 10 years........................................ 13.5 13.3
Mortgage-backed securities................................ 13.4 10.1
------- ------
Total debt securities.................................. 127.4 122.3
Equity securities........................................... 89.7 86.0
------- ------
Total available-for-sale securities.................... $ 217.1 $208.3
======= ======
</TABLE>
A-9
<PAGE> 49
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Proceeds from sales of available-for-sale securities (excluding gains,
losses, amortization of related discount or premium, effects of foreign currency
translation, and acquisitions) were $370.0 million. Without these adjustments,
proceeds from sales of available-for-sale securities during 1994 were $387.6
million. Gross gains of $17.4 million and gross losses of ($4.1) million were
realized during 1994 on sales of available-for-sale securities. Realized gains
and losses in 1993 and 1992 were not significant. Specific identification was
used to determine cost in computing realized gain or loss.
NOTE 4. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
ACCUMULATED
COST DEPRECIATION NET
-------- ------------ --------
(IN MILLIONS)
<S> <C> <C> <C>
DECEMBER 31, 1994
Land.......................................................... $ 125.3 $ -- $ 125.3
Buildings and facilities...................................... 878.7 319.5 559.2
Computer equipment............................................ 3,967.6 2,096.6 1,871.0
Other equipment and furniture................................. 465.9 264.8 201.1
-------- -------- --------
Total.................................................... $5,437.5 $2,680.9 $2,756.6
======== ======== ========
DECEMBER 31, 1993
Land.......................................................... $ 121.6 $ -- $ 121.6
Buildings and facilities...................................... 815.1 283.1 532.0
Computer equipment............................................ 3,158.6 1,883.1 1,275.5
Other equipment and furniture................................. 425.1 239.5 185.6
-------- -------- --------
Total.................................................... $4,520.4 $2,405.7 $2,114.7
======== ======== ========
</TABLE>
NOTE 5. LAND HELD FOR DEVELOPMENT
Land held for development at December 31, 1994 consists of approximately
2,222 acres located throughout the Dallas metropolitan area. Approximately 1,590
acres of land, site of a commercial real estate development, are located in
Plano, Texas.
A-10
<PAGE> 50
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 6. INVESTMENT IN LEASES AND OTHER
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1993
-------- --------
(IN MILLIONS)
<S> <C> <C>
Lease contracts receivable (net of principal and interest on nonrecourse
debt).................................................................. $ 384.5 $ 396.8
Estimated residual values of leased assets (not guaranteed).............. 339.0 337.7
Unearned income, including deferred investment tax credits............... (260.6) (271.3)
-------- --------
Investment in leveraged leases (excluding deferred taxes of $284.7 and
$307.4 at December 31, 1994 and 1993, respectively)................. 462.9 463.2
Investment in securities, joint ventures, and partnerships............... 357.2 249.9
Investment in direct financing leases, net of unearned income............ 153.8 158.6
Noncurrent notes receivable.............................................. 158.1 118.1
GM Class E common stock held for benefit plans........................... 54.7 62.4
Investment in tax benefit transfers...................................... 38.6 40.9
Other.................................................................... 83.5 66.8
-------- --------
Total............................................................... $1,308.8 $1,159.9
======== ========
</TABLE>
The fair values of certain long-term investments are estimated based on
quoted market prices for these or similar investments. For other investments, a
variety of methods are used to estimate fair value, including external
valuations and discounted cash flows. At December 31, 1994, the fair values of
investments in joint ventures and partnerships (accounted for using the cost
method), long-term securities, and noncurrent notes receivable were estimated to
be $172.0 million, $192.6 million, and $154.4 million, respectively, with
carrying amounts of $149.6 million, $201.2 million, and $158.1 million,
respectively. At December 31, 1993, the fair values of investments in joint
ventures and partnerships (accounted for using the cost method), long-term
securities, and noncurrent notes receivable were estimated to be $275.0 million,
$152.8 million, and $114.9 million, respectively, with carrying amounts of
$241.1 million, $128.5 million, and $118.1 million, respectively. Long-term
securities include GM Class E common stock and other securities. The carrying
value of the GM Class E common stock, which was less than the market value, was
utilized to estimate the investment's fair value shown above because the stock
will be used to satisfy future benefit plan obligations.
Financing leases that are financed with nonrecourse borrowings at lease
inception are accounted for as leveraged leases. Such borrowings are secured by
substantially all of the lessor's rights under the lease plus the residual value
of the asset. For Federal income tax purposes, the Company receives the
investment tax credit (if available) at lease inception and has the benefit of
tax deductions for depreciation on the leased asset and for interest on the
nonrecourse debt. A portion of the Company's leveraged lease portfolio is
concentrated within the airline industry. The Company historically has not
experienced credit losses from these transactions, and the portfolio is
diversified among unrelated lessees.
A-11
<PAGE> 51
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 7. SOFTWARE, GOODWILL, AND OTHER INTANGIBLES
<TABLE>
<CAPTION>
ACCUMULATED
COST AMORTIZATION NET
-------- ------------ --------
(IN MILLIONS)
<S> <C> <C> <C>
DECEMBER 31, 1994
Software...................................................... $ 876.0 $462.1 $ 413.9
Goodwill...................................................... 833.9 80.4 753.5
Other intangibles............................................. 312.8 210.6 102.2
-------- ------ --------
Total.................................................... $2,022.7 $753.1 $1,269.6
======== ====== ========
DECEMBER 31, 1993
Software...................................................... $ 791.5 $374.2 $ 417.3
Goodwill...................................................... 595.8 58.4 537.4
Other intangibles............................................. 235.2 123.6 111.6
-------- ------ --------
Total.................................................... $1,622.5 $556.2 $1,066.3
======== ====== ========
</TABLE>
NOTE 8. ACCRUED LIABILITIES
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1993
-------- ------
(IN MILLIONS)
<S> <C> <C>
Contract related........................................................ $ 880.9 $368.6
Payroll related......................................................... 196.4 286.8
Operating expenses...................................................... 196.1 205.2
Property, sales, and franchise taxes.................................... 100.1 82.5
Claims settlement (Note 2).............................................. 21.3 30.1
Other................................................................... 56.2 22.8
-------- ------
Total.............................................................. $1,451.0 $996.0
======== ======
</TABLE>
NOTE 9. NOTES PAYABLE
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1993
-------- ------
(IN MILLIONS)
<S> <C> <C>
Commercial paper, 5.5% to 6.3%.......................................... $ 933.0 $398.6
Lines of credit, variable rate 6.5% to 10.3%, due 1995.................. 48.7 135.7
Notes, variable rate 5.7% to 12.5%, due 1995 to 2006.................... 91.2 85.1
Notes, fixed rate 2.8% to 12.95%, due 1995 to 2003...................... 151.5 76.1
-------- ------
Total.............................................................. 1,224.4 695.5
Less current maturities classified as notes payable................ 203.4 172.7
-------- ------
Noncurrent notes payable........................................... $1,021.0 $522.8
======== ======
</TABLE>
Commercial paper is classified as noncurrent debt as it is intended to be
maintained on a long-term basis with ongoing credit availability provided by the
Company's revolving, committed lines of credit. During 1994, the Company revised
its agreement with a syndicate of banks, which increased to $1,800.0 million its
committed lines of credit, of which $900.0 million expires in 1995 with the
option to convert any outstanding amounts under these lines into term loans that
mature in 1997. The remaining $900.0 million expires in 1999.
A-12
<PAGE> 52
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Upon expiration of the commitment periods, the lenders and EDS have the option
to extend the commitment. In addition, as of December 31, 1994, the Company had
available another $15.5 million in committed lines of credit, of which $2.2
million remained unused. The Company also had available $529.9 million in
uncommitted short-term lines of credit, of which $494.5 million remained unused
at December 31, 1994. These lines of credit do not require material commitment
fees, compensating balances, or collateral. Under the terms of the $1,800.0
million agreement, the Company is required to maintain a consolidated net worth
of $2,631.8 million, increasing quarterly by 50 percent of the Company's
consolidated net income after June 30, 1994.
Notes payable relate to land held for development, property and equipment,
acquisitions, and other items. These notes are generally unsecured, with certain
notes secured by assets of a majority-owned subsidiary.
At December 31, 1994, the Company had no interest rate swap agreements
outstanding. At December 31, 1993, the Company had interest rate swap agreements
outstanding that effectively converted the variable interest rates on an
aggregate notional amount of $54.4 million to fixed interest rates ranging from
5.3% to 8.1%. At December 31, 1993, the estimated fair value of such contracts
was ($0.8) million.
Maturities of notes payable for years subsequent to December 31, 1994 are
as follows (in millions):
<TABLE>
<S> <C>
1995......................................... $203.4
1996......................................... 43.3
1997......................................... 940.4
1998......................................... 5.4
1999......................................... 13.3
Thereafter................................... 18.6
</TABLE>
For the years ended December 31, 1994, 1993, and 1992, interest costs of
$1.2 million, $5.4 million, and $18.1 million, respectively, were capitalized,
which, if charged to expense, would have resulted in reductions in net income of
$0.7 million, $3.5 million, and $11.9 million, respectively.
The fair value of notes payable is estimated based on the current rates
offered to the Company for the same remaining maturities. At December 31, 1994
and 1993, the estimated fair value was $1,230.3 million and $703.5 million,
respectively.
A-13
<PAGE> 53
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 10. STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
COMMON STOCK CURRENCY MARKET
---------------- TRANS. VALUE RETAINED STOCKHOLDER'S
(IN MILLIONS EXCEPT PER SHARE AMOUNTS) SHARES AMOUNT ADJUST. ADJUST. EARNINGS EQUITY
- ------------------------------------------------- ------ ------ -------- ------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1991..................... 478.0 $323.4 $ (0.2) $ -- $2,287.1 $ 2,610.3
Separate consolidated net income............... -- -- -- -- 635.5 635.5
Cash dividends declared -- $0.36 per share -- -- -- -- (172.4) (172.4)
Stock option and award transactions............ 1.3 42.5 -- -- -- 42.5
Currency translation adjustment................ -- -- (52.5) -- -- (52.5)
----- ------ ------ ------ -------- ---------
Balance at December 31, 1992..................... 479.3 365.9 (52.7) -- 2,750.2 3,063.4
Separate consolidated net income............... -- -- -- -- 724.0 724.0
Cash dividends declared -- $0.40 per share..... -- -- -- -- (192.1) (192.1)
Stock option and award transactions............ 1.6 55.3 -- -- -- 55.3
Currency translation adjustment................ -- -- (33.2) -- -- (33.2)
----- ------ ------ ------ -------- ---------
Balance at December 31, 1993..................... 480.9 421.2 (85.9) -- 3,282.1 3,617.4
Separate consolidated net income............... -- -- -- -- 821.9 821.9
Cash dividends declared -- $0.48 per share..... -- -- -- -- (231.1) (231.1)
Stock option and award transactions............ 0.8 33.9 -- -- -- 33.9
Currency translation adjustment................ -- -- (3.0) -- -- (3.0)
Unrealized loss on securities, net (Note 3).... -- -- -- (6.6 ) -- (6.6)
----- ------ ------ ------ -------- ---------
Balance at December 31, 1994..................... 481.7 $455.1 $(88.9) $(6.6 ) $3,872.9 $ 4,232.5
===== ====== ====== ====== ======== =========
</TABLE>
As the sole stockholder of EDS, GM is able to cause EDS to pay cash
dividends and make advances to or otherwise enter into transactions with GM as
GM deems desirable and appropriate. GM reserves the right to cause EDS to pay
cash dividends to GM in such amounts as GM determines are desirable under the
then prevailing facts and circumstances. Such amounts may be the same as,
greater than, or less than the cash dividends paid by GM on its Class E common
stock. There is no fixed relationship, on a per share or aggregate basis,
between the cash dividends that may be paid by GM to holders of its Class E
common stock and the cash dividends or other amounts that may be paid by EDS to
GM.
NOTE 11. INCOME TAXES
The current and deferred income tax liabilities (assets) are summarized as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1994 1993
------ ------
(IN MILLIONS)
<S> <C> <C>
Current payable.............................................. $ 49.3 $ 66.3
Current deferred............................................. 61.7 135.9
------ ------
Total income taxes -- current........................... 111.0 202.2
Noncurrent deferred.......................................... 659.8 641.5
------ ------
Total current and noncurrent income taxes............... $770.8 $843.7
====== ======
</TABLE>
A-14
<PAGE> 54
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
The provision for income tax expense is summarized as follows:
<TABLE>
<CAPTION>
U.S. U.S.
YEAR ENDED FEDERAL NON-U.S. STATE TOTAL
- ------------------------------------------------------------ ------- -------- ----- ------
(IN MILLIONS)
<S> <C> <C> <C> <C>
DECEMBER 31, 1994
Current..................................................... $ 279.0 $167.9 $32.6 $479.5
Deferred.................................................... 15.8 (33.0) -- (17.2)
------- ------ ----- ------
Total.................................................. $ 294.8 $134.9 $32.6 $462.3
======= ====== ===== ======
DECEMBER 31, 1993
Current..................................................... $ 130.1 $ 77.8 $17.0 $224.9
Deferred.................................................... 161.0 21.4 -- 182.4
------- ------ ----- ------
Total.................................................. $ 291.1 $ 99.2 $17.0 $407.3
======= ====== ===== ======
DECEMBER 31, 1992
Current..................................................... $ 113.9 $ 97.3 $21.0 $232.2
Deferred.................................................... 145.0 (11.9) -- 133.1
------- ------ ----- ------
Total.................................................. $ 258.9 $ 85.4 $21.0 $365.3
======= ====== ===== ======
</TABLE>
Income before income taxes included the following components:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1994 1993 1992
-------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C>
U.S. income...................................... $ 963.5 $ 886.1 $ 781.9
Non-U.S. income.................................. 320.7 245.2 218.9
-------- -------- --------
Total....................................... $1,284.2 $1,131.3 $1,000.8
======== ======== ========
</TABLE>
A reconciliation of income tax expense using the statutory Federal income
tax rate of 35.0% for 1994 and 1993 and 34.0% for 1992 to the actual income tax
expense follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1994 1993 1992
-------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C>
Income before income taxes..................................... $1,284.2 $1,131.3 $1,000.8
======= ======= =======
Statutory Federal income tax................................... $ 449.5 $ 395.9 $ 340.3
Non-U.S. taxes, net of credit.................................. 18.9 13.4 10.3
U.S. State income tax, net..................................... 21.2 11.1 13.8
Investment tax credit -- leveraged leases...................... (3.1) (4.4) (2.8)
Research and experimentation credits........................... (11.3) (8.8) (5.2)
Other.......................................................... (12.9) 0.1 8.9
-------- -------- --------
Total..................................................... $ 462.3 $ 407.3 $ 365.3
======= ======= =======
Effective income tax rate...................................... 36.0% 36.0% 36.5%
</TABLE>
A-15
<PAGE> 55
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
The tax effects of temporary differences and carryforwards, which result in
a significant portion of the deferred tax assets and liabilities, are as
follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1993
---------------------- ---------------------
ASSETS LIABILITIES ASSETS LIABILITIES
------- ----------- ------ -----------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Basis differences attributable to leasing activities.... $ 2.5 $ 504.8 $ 6.4 $ 515.3
Adjustments necessary to convert accruals to a tax
basis................................................. 111.9 215.1 76.8 200.1
Employee benefit plans.................................. 32.0 25.9 17.5 27.0
Accumulated tax depreciation/amortization versus
accumulated financial statement
depreciation/amortization............................. 18.7 211.2 26.1 186.0
Effect on deferred taxes of carryforwards............... 102.9 -- 110.0 --
Other................................................... 232.1 153.5 126.0 119.5
------- ---------- ------ ----------
Subtotal........................................... 500.1 1,110.5 362.8 1,047.9
Less valuation allowance........................... (111.1) -- (92.3) --
------- ---------- ------ ----------
Total deferred taxes............................... $ 389.0 $ 1,110.5 $270.5 $ 1,047.9
======= ========== ====== ==========
</TABLE>
The net changes in the total valuation allowance for the years ended
December 31, 1994 and 1993 were increases of $18.8 million and $43.7 million,
respectively. Certain of the Company's foreign subsidiaries have net operating
loss carryforwards which expire over an indefinite period. A majority of such
carryforwards are included in the valuation allowance.
NOTE 12. STOCK PURCHASE AND INCENTIVE PLANS
The 1984 Electronic Data Systems Corporation Employee Stock Purchase Plan
(Purchase Plan) enables EDS employees to purchase up to 80.0 million shares of
GM Class E common stock at 85% of the quoted market price through payroll
deductions of up to 10% of their compensation. Shares of GM Class E common stock
purchased under the Purchase Plan may not be sold or transferred within two
years of the date of purchase unless they are first offered to GM or EDS at the
lesser of the original purchase price or the fair market value on the date of
sale. The number of shares available for future sale under the Purchase Plan was
59.5 million shares at December 31, 1994.
The 1984 Electronic Data Systems Corporation Stock Incentive Plan (1984
Plan) covers up to 160.0 million shares of GM Class E common stock. The 1984
Plan, which was scheduled to expire on October 17, 1994, was amended to change
the expiration date to October 17, 2004, thus extending the term for an
additional 10 years. During the 20-year life of the 1984 Plan, shares and rights
or options to acquire shares, which may be subject to restrictions, may be
granted or sold. The maximum number of shares for which additional shares,
rights, or options may be granted or sold under the provisions of the 1984 Plan
was 99.6 million shares at December 31, 1994.
The EDS Incentive and Compensation Committee (the Committee) has granted
the right to purchase a total of 27.6 million shares of GM Class E common stock,
at prices of $0.0125 and $0.025 per share, to key employees under the provisions
of the 1984 Plan. These shares will vest over various periods up to 10 years
from the date of grant. The difference between the quoted market price as of the
date of grant and the purchase price of shares granted is charged to operations
over the vesting period. Expense for these awards amounted to $13.3 million,
$16.3 million, and $14.9 million for the years ended December 31, 1994, 1993,
and 1992, respectively.
As of December 31, 1989, the Company had purchased 11.0 million shares of
GM Class E common stock to be distributed to key employees under the provisions
of the 1984 Plan. In 1994, 1991, and 1988, the
A-16
<PAGE> 56
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
Committee approved restricted stock unit grants. The 1994 grant, totaling 9.5
million shares of GM Class E common stock, will be distributed to key employees
under the provisions of the 1984 Plan. The right to receive shares is a
restricted stock unit. All units granted are generally scheduled to vest over a
period of 10 years. The 1994 units are scheduled to vest beginning March 1995.
The 1991 grant began vesting in March 1992, while the 1988 grant began vesting
in March 1989. The quoted market price as of the date of grant is charged to
operations over the vesting period.
The Company has a bonus plan under which awards are granted to key
executives and employees. Bonus expense amounted to $86.6 million, $49.8
million, and $44.6 million for the years ended December 31, 1994, 1993, and
1992, respectively. Included in bonus expense is $48.7 million, $17.5 million,
and $15.5 million relating to the restricted stock unit grants for the years
ended December 31, 1994, 1993, and 1992, respectively.
NOTE 13. DEFERRED COMPENSATION PLAN
The EDS Deferred Compensation Plan (Plan) provides a long-term savings
program for participants. The Plan allows eligible employees to contribute a
percentage of their compensation to a savings program and to defer income taxes
until the time of distribution.
NOTE 14. SEGMENT INFORMATION
INDUSTRY SEGMENTS
The Company's business involves operations in principally one industry
segment: designing, installing, and operating business information and
communications systems. Revenues from GM contributed approximately 36%, 39%, and
41% of gross revenues for the years ended December 31, 1994, 1993, and 1992,
respectively.
GEOGRAPHIC SEGMENTS
The following presents information about the Company's operations in
different geographic areas:
As of and for the Year Ended December 31, 1994
<TABLE>
<CAPTION>
U.S. EUROPE OTHER TOTAL
-------- -------- ------ --------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Systems and other contracts revenue
GM and affiliates..................................... $2,764.4 $ 523.4 $259.4 $3,547.2
Outside customers..................................... 4,611.2 1,308.1 493.6 6,412.9
-------- -------- ------ --------
Total systems and other contracts revenue............... $7,375.6 $1,831.5 $753.0 $9,960.1
======== ======== ====== ========
Operating income........................................ $1,008.6 $ 168.3 $ 66.7 $1,243.6
======== ======== ====== ========
Identifiable assets..................................... $6,618.0 $1,573.8 $594.7 $8,786.5
======== ======== ====== ========
</TABLE>
A-17
<PAGE> 57
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
As of and for the Year Ended December 31, 1993
<TABLE>
<CAPTION>
U.S. EUROPE OTHER TOTAL
-------- -------- ------ --------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Systems and other contracts revenue
GM and affiliates..................................... $2,574.5 $ 511.2 $238.0 $3,323.7
Outside customers..................................... 4,004.5 911.6 267.5 5,183.6
-------- -------- ------ --------
Total systems and other contracts revenue............... $6,579.0 $1,422.8 $505.5 $8,507.3
======== ======== ====== ========
Operating income........................................ $ 906.5 $ 148.7 $ 56.1 $1,111.3
======== ======== ====== ========
Identifiable assets..................................... $5,350.6 $1,185.9 $405.6 $6,942.1
======== ======== ====== ========
</TABLE>
As of and for the Year Ended December 31, 1992
<TABLE>
<CAPTION>
U.S. EUROPE OTHER TOTAL
-------- -------- ------ --------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Systems and other contracts revenue
GM and affiliates..................................... $2,562.9 $ 546.5 $239.1 $3,348.5
Outside customers..................................... 3,693.6 828.3 284.8 4,806.7
-------- -------- ------ --------
Total systems and other contracts revenue............... $6,256.5 $1,374.8 $523.9 $8,155.2
======== ======== ====== ========
Operating income........................................ $ 773.3 $ 131.3 $ 75.5 $ 980.1
======== ======== ====== ========
Identifiable assets..................................... $4,750.3 $1,008.7 $364.5 $6,123.5
======== ======== ====== ========
</TABLE>
NOTE 15. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company operates on a global basis, receiving revenues and incurring
expenses in many different countries. As a result of these activities, the
Company has exposure to market risks arising from changes in interest rates and
foreign exchange rates. Derivative financial instruments are used by the Company
for the purpose of hedging against these risks, to which the Company is exposed
in the normal course of business, by creating offsetting market exposures. The
Company's use of such instruments in relation to such risks is explained below.
The Company does not hold or issue financial instruments for trading purposes.
The notional amounts of derivatives contracts are summarized below as part
of the description of the instruments utilized. The notional amounts do not
represent the amounts exchanged by the parties, and thus are not a measure of
the exposure of the Company through its use of derivatives. The amounts
exchanged by the parties are normally based upon the notional amounts and the
other terms of the derivatives. The Company is not a party to leveraged
derivatives.
INTEREST RISK MANAGEMENT
The Company has historically entered into interest rate swap agreements in
order to reduce the impact of changes in interest rates upon its floating-rate
debt. As of December 31, 1994, all such contracts had matured and the Company
had no outstanding interest rate swap agreements.
FOREIGN EXCHANGE RISK MANAGEMENT
The Company uses derivative financial instruments, particularly foreign
exchange-forward contracts, to hedge transactions denominated in different
currencies on a continuing basis. The purpose of the Company's hedging
activities is to reduce the levels of risk to which it is exposed resulting from
exchange-rate movements. At December 31, 1994 and 1993, the Company had forward
exchange contracts maturing in the following year to purchase various foreign
currencies in the amount of $289.0 million and $276.9 million,
A-18
<PAGE> 58
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
respectively, and to sell $766.5 million and $286.0 million, respectively. The
estimated fair value of forward exchange contracts is based on quoted market
prices. At December 31, 1994, the estimated fair value of outstanding contracts
in a gain position was $3.3 million and the estimated fair value of outstanding
contracts in a loss position was ($4.2) million. At December 31, 1993, the
estimated fair value of outstanding contracts in a gain position was $2.7
million and the estimated fair value of outstanding contracts in a loss position
was ($3.3) million. The Company recognizes realized and unrealized gains and
losses on foreign exchange contracts by marking to market all outstanding
forward exchange contracts.
The Company is exposed to credit risk in the event of nonperformance by
counterparties to foreign exchange contracts, but because the Company deals only
with major commercial banks with high quality credit, the Company does not
anticipate nonperformance by any of these counterparties.
NOTE 16. RETIREMENT PLANS
The Company has pension plans (the Plans) covering substantially all of its
employees, the majority of which are noncontributory. In general, employees
become fully vested upon attaining five years of service, and benefits are based
on years of service and earnings. The actuarial cost method currently used is
the projected unit credit cost method. The Company's U.S. funding policy is to
contribute amounts that fall within the range of deductible contributions for
Federal income tax purposes.
The weighted average assumptions used for the Plans are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Discount rate........................................................ 8.9% 7.7 % 9.1 %
Rate of increase in compensation levels.............................. 5.7% 5.9 % 5.3 %
Long-term rate of return on assets................................... 10.0% 9.8 % 9.7 %
</TABLE>
Net pension cost consisted of the following components:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1994 1993 1992
------ ------- ------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost of the current period................................. $ 96.1 $ 72.6 $ 67.8
Interest cost on projected benefit obligation...................... 82.3 69.8 62.0
Actual return on assets............................................ (22.3) (121.3) (19.3)
Net amortization and deferral...................................... (37.9) 75.2 (24.1)
------ ------- ------
Net pension cost................................................... $118.2 $ 96.3 $ 86.4
====== ======= ======
</TABLE>
At December 31, 1994 and 1993, the Plans' assets consisted principally of
marketable securities. Accrued and/or prepaid pension cost is included in
Accrued Liabilities and Prepaids and Other in the Company's Consolidated Balance
Sheets.
A-19
<PAGE> 59
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
The following is a reconciliation of the funded status of the Plans (in
millions):
<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1993
-------------------- --------------------
ASSETS ACCUM. ASSETS ACCUM.
EXCEED BENEFITS EXCEED BENEFITS
ACCUM. EXCEED ACCUM. EXCEED
BENEFITS ASSETS BENEFITS ASSETS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Plans' assets at fair value.............................. $ 918.3 $ -- $ 671.0 $ 6.1
======= ======== ======== ========
Actuarial present value of benefit obligation
Vested benefits........................................ $ 485.9 $ 56.1 $ 472.6 $ 50.8
Nonvested benefits..................................... 57.6 11.2 69.1 17.9
------- -------- -------- --------
Accumulated benefit obligation........................... 543.5 67.3 541.7 68.7
Effect of projected future salary increases.............. 326.4 25.5 368.6 44.1
------- -------- -------- --------
Projected benefit obligation (PBO)....................... $ 869.9 $ 92.8 $ 910.3 $ 112.8
======= ======== ======== ========
Excess (deficiency) of Plans' assets over PBO............ $ 48.4 $ (92.8) $ (239.3) $ (106.7)
Unrecognized net (gain) loss............................. (28.3) (35.3) 150.9 (5.8)
Unrecognized net (asset) obligation at date of
adoption............................................... (9.6) 23.4 (6.8) 26.5
Unrecognized prior service cost.......................... 12.8 (1.0) 32.8 0.9
Additional minimum liability............................. -- -- -- (3.7)
------- -------- -------- --------
Net prepaid (accrued) pension cost....................... $ 23.3 $ (105.7) $ (62.4) $ (88.8)
======= ======== ======== ========
</TABLE>
NOTE 17. COMMITMENTS AND RENTAL EXPENSE
Commitments for rental payments under noncancellable operating leases for
each of the next five years ending December 31 and thereafter for computer
equipment, software, and facilities are as follows (in millions):
<TABLE>
<S> <C>
1995................................................... $339.1
1996................................................... 233.5
1997................................................... 175.7
1998................................................... 131.1
1999................................................... 114.7
Thereafter............................................. 720.1
</TABLE>
Total rentals under cancellable and noncancellable leases, principally
computer equipment and software, included in costs and charged to expenses were
$524.3 million, $564.9 million, and $614.6 million for the years ended December
31, 1994, 1993, and 1992, respectively.
NOTE 18. CONTINGENT LIABILITIES
There are various claims and pending actions against the Company arising in
the ordinary course of the conduct of its business. Certain of these actions
seek damages in significant amounts. The amount of liability on these claims and
actions at December 31, 1994 was not determinable, but in the opinion of
management, the ultimate liability, if any, will not have a material adverse
effect on the Company's consolidated operations or financial position.
A-20
<PAGE> 60
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 19. ACQUISITIONS
The Company made various acquisitions during the years ended December 31,
1994 and 1993, none of which had a material effect on the Company's financial
position or results of operations. In conjunction with those acquisitions,
assets were acquired and liabilities were assumed as follows:
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
------------------
1994 1993
------ ------
(IN MILLIONS)
<S> <C> <C>
Fair value of assets acquired.............................. $427.8 $319.8
Less: Cash paid for stock and assets, net of cash
acquired................................................. 186.6 122.1
Debt issued for stocks and assets..................... 94.9 91.2
------ ------
Liabilities assumed...................................... $146.3 $106.5
====== ======
</TABLE>
NOTE 20. SUPPLEMENTARY FINANCIAL INFORMATION
The following summarizes certain costs charged to expense for the years
indicated:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1994 1993 1992
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Depreciation of property and equipment................ $577.5 $465.6 $457.9
====== ====== ======
Amortization.......................................... $163.8 $142.3 $145.3
====== ====== ======
</TABLE>
Supplemental cash flow information is presented below:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1994 1993 1992
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Cash paid for
Income taxes, net of refunds........................ $465.6 $183.8 $252.6
====== ====== ======
Interest, net of amount capitalized................. $ 49.7 $ 40.2 $ 46.8
====== ====== ======
</TABLE>
A-21
<PAGE> 61
ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONCLUDED
NOTE 21. QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- --------
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1994
Revenues.............................................. $2,239.3 $2,334.0 $2,564.9 $2,914.2
Gross profit from operations.......................... 506.6 584.1 602.1 737.9
Income before income taxes............................ 268.3 308.2 338.1 369.6
Separate Consolidated Net Income...................... 171.7 197.3 216.4 236.5
Available Separate Consolidated Net Income............ $ 92.1 $ 106.5 $ 117.3 $ 128.5
Earnings Attributable to GM Class E Common Stock on a
Per Share Basis..................................... $ 0.36 $ 0.41 $ 0.45 $ 0.49
Stock price range of GM Class E Common Stock
High................................................ $ 36.88 $ 38.00 $ 38.50 $ 39.50
Low................................................. $ 27.50 $ 32.88 $ 33.00 $ 34.75
YEAR ENDED DECEMBER 31, 1993
Revenues.............................................. $2,073.2 $2,090.5 $2,084.3 $2,313.8
Gross profit from operations.......................... 490.1 501.3 525.0 600.3
Income before income taxes............................ 236.6 278.2 299.4 317.1
Separate Consolidated Net Income...................... 151.4 178.1 191.6 202.9
Available Separate Consolidated Net Income............ $ 74.1 $ 87.7 $ 98.4 $ 107.0
Earnings Attributable to GM Class E Common Stock on a
Per Share Basis..................................... $ 0.32 $ 0.37 $ 0.40 $ 0.42
Stock price range of GM Class E Common Stock
High................................................ $ 35.88 $ 33.38 $ 32.50 $ 31.13
Low................................................. $ 27.63 $ 28.25 $ 26.00 $ 26.50
</TABLE>
A-22
<PAGE> 62
------------------------------------------------------
------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
CORPORATION, THE SELLING STOCKHOLDERS OR THE UNDERWRITERS. THIS PROSPECTUS SHALL
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE DELIVERY
OF THIS PROSPECTUS AT ANY TIME OR ANY SALE MADE HEREUNDER DOES NOT IMPLY THAT
THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Prospectus Summary.................... 3
The Offerings......................... 3
General Motors and EDS................ 4
Background of the Offerings........... 6
Selling Stockholders.................. 6
Selected Financial Data of General
Motors and EDS...................... 8
Management's Discussion and Analysis
of Financial Condition and Results
of Operations of EDS................ 11
Business of EDS....................... 14
Class E Common Stock Price Range and
Dividends........................... 18
Class E Common Stock.................. 19
Description of Capital Stock.......... 23
Certain United States Federal Tax
Considerations for Non-U.S.
Holders............................. 33
Underwriting.......................... 35
Legal Matters......................... 37
Experts............................... 37
Appendix A: EDS Consolidated Financial
Statements.......................... A-1
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
GENERAL MOTORS
CORPORATION
37,000,000 SHARES
CLASS E COMMON STOCK
---------------------------
PROSPECTUS
---------------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
CS FIRST BOSTON
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
, 1995
------------------------------------------------------
------------------------------------------------------
<PAGE> 63
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
ALTERNATE FRONT COVER FOR INTERNATIONAL PROSPECTUS
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MAY 8, 1995
PROSPECTUS
GENERAL MOTORS CORPORATION
37,000,000 SHARES
CLASS E COMMON STOCK
------------------------
This Prospectus covers the resale of 37,000,000 shares of Class E Common
Stock, par value $0.10 per share ("Class E Common Stock"), of General Motors
Corporation, a Delaware corporation (together with its subsidiaries, "General
Motors," "GM" or the "Corporation"), by the General Motors Special Hourly
Employees Pension Trust (the "Hourly Plan Special Trust") under the General
Motors Hourly-Rate Employees Pension Plan (the "Hourly Plan") and a special
trust (the "Salaried Plan Special Trust") under the General Motors Retirement
Plan for Salaried Employees (the "Salaried Plan"). Each such trust is sometimes
referred to herein as a "Selling Stockholder" and, collectively, as the "Selling
Stockholders". See "Selling Stockholders." Of the 37,000,000 shares of Class E
Common Stock offered hereby, 27,000,000 are being offered in the United States
and Canada by the U.S. Underwriters, 7,000,000 are being offered internationally
outside the United States and Canada excluding Asia by the International
Underwriters, and 3,000,000 are being offered in Asia by the Asian Underwriters.
See "Underwriting." Class E Common Stock is one of three classes of General
Motors common stock. Under the General Motors Restated Certificate of
Incorporation, as amended, dividends on Class E Common Stock may be declared and
paid out of the assets of General Motors only to the extent of the sum of (i)
the paid in surplus attributable to the Class E Common Stock plus (ii) an
allocated portion of the earnings, determined as described herein, of General
Motors' indirectly wholly owned subsidiary, Electronic Data Systems Corporation
(together with its subsidiaries, "EDS"). General Motors, not EDS, is the issuer
of Class E Common Stock. For a description of dividend, voting and liquidation
rights and recapitalization provisions with respect to the Class E Common Stock,
see "Class E Common Stock" and "Description of Capital Stock -- Common Stock."
General Motors will not receive any of the proceeds from the sale of the
shares offered hereby. See "Selling Stockholders" and "Underwriting." The Class
E Common Stock is listed in the United States on the New York Stock Exchange
under the symbol GME. The closing sale price of the Class E Common Stock on the
New York Stock Exchange on May 5, 1995 was $42.50 per share.
United States Trust Company of New York is the trustee for the Hourly Plan
Special Trust (the "Hourly Plan Trustee") and Bankers Trust Company is the
trustee for the Salaried Plan Special Trust (the "Salaried Plan Trustee").
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
====================================================================================================
PROCEEDS TO
PRICE TO UNDERWRITING SELLING
PUBLIC DISCOUNTS(1) STOCKHOLDERS(2)
- ----------------------------------------------------------------------------------------------------
Per Share.................................... $ $ $
- ----------------------------------------------------------------------------------------------------
Total(3)..................................... $ $ $
====================================================================================================
</TABLE>
(1) General Motors and, to the extent permitted by applicable law, the Selling
Stockholders, have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses of the offerings, estimated to be $1,230,000,
payable by General Motors.
(3) The Hourly Plan Special Trust has granted the U.S. Underwriters,
International Underwriters and Asian Underwriters an option, exercisable
within 30 days after the date hereof, to purchase up to an aggregate of
5,550,000 additional shares of Class E Common Stock at the Price to Public
less Underwriting Discount for the purpose of covering overallotments, if
any. If the Underwriters exercise such option in full, the total Price to
Public, Underwriting Discount and Proceeds to Selling Stockholders will be
$ , $ and $ , respectively.
------------------------
Advisor to United States Trust Company of New York
WASSERSTEIN PERELLA & CO.
------------------------
The shares of Class E Common Stock are offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them,
and subject to approval of certain legal matters by counsel for the
Underwriters. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the certificates for the shares of Class E Common Stock will be
made on or about , 1995, in New York, New York.
------------------------
MERRILL LYNCH INTERNATIONAL GOLDMAN SACHS INTERNATIONAL LEHMAN BROTHERS
LIMITED
<TABLE>
<S> <C> <C>
CS FIRST BOSTON MORGAN STANLEY & CO. SALOMON BROTHERS INTERNATIONAL
INTERNATIONAL LIMITED
</TABLE>
------------------------
JOINT GLOBAL COORDINATORS
MERRILL LYNCH & CO. GOLDMAN, SACHS & CO.
------------------------
The date of this Prospectus is , 1995.
<PAGE> 64
ALTERNATE PAGES FOR INTERNATIONAL PROSPECTUS
UNDERWRITING
The International Underwriters named below, acting through their
International Representatives, Merrill Lynch International Limited, Goldman
Sachs International, Lehman Brothers International (Europe), CS First Boston
Limited, Morgan Stanley & Co. International Limited and Salomon Brothers
International Limited (the "International Representatives"), have severally
agreed, subject to the terms and conditions of the International Purchase
Agreement with General Motors and the Selling Stockholders (the "International
Purchase Agreement"), to purchase from the Selling Stockholders, the aggregate
number of shares of Class E Common Stock set forth below opposite their
respective names.
<TABLE>
<CAPTION>
NUMBER OF INTERNATIONAL SHARES OF
INTERNATIONAL UNDERWRITER CLASS E COMMON STOCK
------------------------- ---------------------------------
<S> <C>
Merrill Lynch International Limited..............................
Goldman Sachs International .....................................
Lehman Brothers International (Europe)...........................
CS First Boston Limited..........................................
Morgan Stanley & Co. International Limited.......................
Salomon Brothers International Limited...........................
---------
Total..................................................... 7,000,000
=========
</TABLE>
This offering is part of a worldwide offering that consists of the U.S.
Offering, the International Offering and the Asian Offering (collectively, the
"Offerings"). Merrill Lynch & Co. and Goldman, Sachs & Co. are acting as Joint
Global Coordinators for the offerings.
In the International Purchase Agreement, the International Underwriters
have agreed, subject to the terms and conditions set forth therein, to purchase
all of the shares of Class E Common Stock being sold pursuant to such Agreement
if any of the shares of Class E Common Stock being sold pursuant to such
Agreement are purchased. Under certain circumstances under such Agreement, the
commitments of non-defaulting International Underwriters may be increased.
The International Representatives of the International Underwriters have
advised General Motors and the Selling Stockholders that they propose initially
to offer the shares to the public at the Price to Public set forth on the cover
page of this Prospectus, and to certain dealers at such price less a concession
not in excess of $ per share. The International Underwriters may allow, and
such dealers may reallow, a discount not in excess of $ per share on sales to
certain other dealers. After the initial public offering, the public offering
price, concession and discount may be changed.
General Motors and the Selling Stockholders have also entered into a U.S.
Purchase Agreement (the "U.S. Purchase Agreement") with certain underwriters
(the "U.S. Underwriters") for whom Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman, Sachs & Co., Lehman Brothers Inc., CS First Boston
Corporation, Morgan Stanley & Co. Incorporated and Salomon Brothers Inc are
acting as representatives (the "U.S. Representatives") providing for a
concurrent U.S. Offering. General Motors and the Selling Stockholders have also
entered into an Asian Purchase Agreement (the "Asian Purchase Agreement") with
certain underwriters (the "Asian Underwriters") for whom Merrill Lynch
International Limited, Goldman Sachs (Asia) L.L.C. and Lehman Brothers
Securities Asia Limited are acting as representatives (the "Asian
Representatives") providing for the concurrent Asian Offering. The U.S.
Underwriters, the International Underwriters and the Asian Underwriters are
collectively referred to as the "Underwriters," and the U.S.
<PAGE> 65
Representatives, the International Representatives and the Asian Representatives
are collectively referred to as the "Representatives." The International
Underwriters have agreed, subject to the terms and condition set forth in the
International Purchase Agreement, to purchase all of the shares of Class E
Common Stock being offered in the International Offering if any are purchased
and the Asian Underwriters have agreed, subject to the terms and conditions set
forth in the Asian Purchase Agreement, to purchase all of the shares of Class E
Common Stock being offered in the Asian Offering if any are purchased. The
closing of each of the Offerings is a condition to the closing of each of the
U.S. Offering, the International Offering and the Asian Offering.
The Underwriters have entered into an intersyndicate agreement (the
"Intersyndicate Agreement") that provides for the coordination of their
activities. Under the terms of the Intersyndicate Agreement, the Underwriters in
each geographic area have agreed not to offer to sell any shares of Class E
Common stock in any other geographic area until the completion of the
distribution of the shares of Class E Common Stock in all of the Offerings.
Pursuant to the Intersyndicate Agreement, each of the U.S. Underwriters has
agreed or will agree that, as part of the distribution of the U.S. shares of
Class E Common Stock, subject to certain exceptions, (i) it is not purchasing
any shares of Class E Common Stock for the account of anyone other than a U.S.
Person (as defined below) or Canadian Person (as defined below) and (ii) it has
not offered or sold, and will not offer or sell, directly or indirectly, any
shares of Class E Common Stock or distribute any prospectus relating to the
shares of Class E Common Stock to any person outside the United States or Canada
or to anyone other than a U.S. Person or Canadian Person, or to any dealer who
does not so agree. Each of the International Underwriters and the Asian
Underwriters has agreed or will agree that, as part of the distribution of the
International shares of Class E Common Stock and Asian shares of Class E Common
Stock, respectively, subject to certain exceptions, (i) it is not purchasing any
shares of Class E Common Stock for the account of any U.S. Person or Canadian
Person and (ii) it has not offered or sold, and will not offer or sell, directly
or indirectly, any shares of Class E Common Stock or distribute any prospectus
relating to the shares of Class E Common Stock in the United States or Canada or
to any U.S. Person or Canadian Person or to any dealer who does not so agree.
The foregoing limitations do not apply to stabilization transactions or to
transactions between the U.S. Underwriters, the International Underwriters and
the Asian Underwriters pursuant to the Intersyndicate Agreement. As used in this
section, "United States" means the United States of America, its territories,
possessions and other areas subject to its jurisdiction; "Canada" means Canada,
its provinces, territories, possessions and other areas subject to its
jurisdiction; "Asia" means all countries in Asia, the Middle East, Australia and
New Zealand, and "U.S. Person" and "Canadian Person" mean (i) a citizen or
resident of the United States or Canada, respectively, (ii) a corporation,
partnership, trust or other entity created or organized in or under the laws of
the United States or Canada, respectively (other than a foreign branch of such
an entity), or (iii) an estate or trust, the income of which is subject to
United States federal income taxation or Canadian federal income taxation,
respectively, regardless of its source of income, and includes any United States
or Canadian branch of a person not included in any of clauses (i), (ii) and
(iii) of this sentence.
Each International Underwriter and Asian Underwriter represents and agrees
in the Intersyndicate Agreement that (i) it has not offered or sold and will not
offer or sell any shares of Class E Common Stock in the United Kingdom by means
of any document (other than in circumstances which do not constitute an offer to
the public within the meaning of the Companies Act 1985); (ii) it has complied
and will comply with all applicable provisions of the Financial Services Act
1986 with respect to anything done by it in relation to the shares of Class E
Common Stock in, from or otherwise involving the United Kingdom; and (iii) it
has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issuance of the
shares of Class E Common Stock to any person of a kind described in Article 9(3)
of the Financial Services Act 1988, or to any person to whom the document may
otherwise lawfully be issued or passed.
Each International Underwriter and Asian Underwriter has agreed that it has
not offered or sold, and it will not offer or sell, directly or indirectly, any
of the shares of Class E Common Stock in Japan or to residents of Japan or to
any persons for reoffering or resale, directly or indirectly, in Japan or to any
resident of Japan except pursuant to an exemption from the registration
requirements of the Securities and Exchange Law available thereunder and in
compliance with the other relevant laws of Japan.
<PAGE> 66
In addition, each International Underwriter and Asian Underwriter has
agreed that (i) it has not offered or sold and will not offer or sell in Hong
Kong, by means of any document, any shares of Class E Common Stock other than to
persons whose ordinary business it is to buy or sell shares or debentures
whether as principal or agent, or in circumstances which do not constitute an
offer to the public within the meaning of the Companies Ordinance (Cap. 32) of
Hong Kong and (ii) it has not issued and will not issue any invitation or
advertisement relating to the shares of Class E Common Stock in Hong Kong
(except if permitted to do so under the securities laws of Hong Kong) other than
with respect to shares of Class E Common Stock intended to be disposed of to
persons outside Hong Kong or to be disposed of in Hong Kong only to persons
whose business involves the acquisition, disposal, or holding of securities,
whether as principal or agent.
The Hourly Plan Special Trust has granted the Underwriters an option,
exercisable for 30 days after the date hereof, to purchase up to an additional
5,550,000 shares of Class E Common Stock at the Price to Public less the
Underwriting Discount for the purpose of covering over-allotments, if any. If
the Underwriters exercise such option in full, each of the Underwriters will
have a firm commitment, subject to certain conditions, to purchase approximately
the same percentage thereof which the number of shares of Class E Common Stock
to be purchased by it shown opposite their respective names in the table under
"Underwriting" in the relevant Prospectus is of the 37,000,000 shares of Class E
Common Stock initially offered by the Underwriters hereunder.
General Motors and (to the extent permitted under applicable law) the
Selling Stockholders have agreed to indemnify the Underwriters against certain
liabilities including liabilities under the Securities Act.
General Motors has agreed not to offer, sell or otherwise dispose of any
shares of Class E Common Stock or any securities convertible into or
exchangeable or exercisable for Class E Common Stock from the date of this
Prospectus until December 31, 1995, without the prior written consent of Merrill
Lynch & Co. and Goldman, Sachs & Co. on behalf of the Representatives, provided
that General Motors may issue and deliver such securities under specified
exceptions in connection with (i) the conversion, exercise or exchange of
outstanding options or other securities pursuant to their terms, (ii) any
previously disclosed acquisition or other business combination and (iii)
employee benefit plans.
The Selling Stockholders have agreed not to offer, sell or otherwise
dispose of any shares of Class E Common Stock or any securities convertible into
or exchangeable or exercisable for Class E Common Stock (other than transfers to
or for the benefit of employee benefit plans of GM or any of its affiliates,
including EDS) from the date of this Prospectus, in the case of the Hourly Plan
Special Trust, until December 31, 1995 and, in the case of the Salaried Plan
Special Trust, until 90 days after the date of this Prospectus, in each case,
without the prior written consent of Merrill Lynch & Co. and Goldman, Sachs &
Co. on behalf of the Representatives.
Any prospective purchaser of shares of Class E Common Stock offered hereby
that is an employee benefit plan subject to Title I of ERISA or Section 4975 of
the Code should purchase such shares pursuant to the U.S. Offering unless, upon
the advice of counsel, it concludes that such plan is permitted to purchase such
shares in the International Offering or Asian Offering, as the case may be.
Accordingly, all such plans are advised to consult with counsel before
purchasing shares of Class E Common Stock outside the United States and Canada.
<PAGE> 67
ALTERNATE BACK COVER FOR INTERNATIONAL PROSPECTUS
------------------------------------------------------
------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
CORPORATION, THE SELLING STOCKHOLDERS OR THE UNDERWRITERS. THIS PROSPECTUS SHALL
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE DELIVERY
OF THIS PROSPECTUS AT ANY TIME OR ANY SALE MADE HEREUNDER DOES NOT IMPLY THAT
THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Prospectus Summary.................... 3
The Offerings......................... 3
General Motors and EDS................ 4
Background of the Offerings........... 6
Selling Stockholders.................. 6
Selected Financial Data of General
Motors and EDS...................... 8
Management's Discussion and Analysis
of Financial Condition and Results
of Operations of EDS................ 11
Business of EDS....................... 14
Class E Common Stock Price Range and
Dividends........................... 18
Class E Common Stock.................. 19
Description of Capital Stock.......... 23
Certain United States Federal Tax
Considerations for Non-U.S.
Holders............................. 33
Underwriting.......................... 35
Legal Matters......................... 37
Experts............................... 37
Appendix A: EDS Consolidated Financial
Statements.......................... A-1
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
GENERAL MOTORS
CORPORATION
37,000,000 SHARES
CLASS E COMMON STOCK
---------------------------
PROSPECTUS
---------------------------
MERRILL LYNCH INTERNATIONAL
LIMITED
GOLDMAN SACHS INTERNATIONAL
LEHMAN BROTHERS
CS FIRST BOSTON
MORGAN STANLEY & CO.
INTERNATIONAL
SALOMON BROTHERS INTERNATIONAL
LIMITED
, 1995
------------------------------------------------------
------------------------------------------------------
<PAGE> 68
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
ALTERNATE FRONT COVER FOR ASIAN PROSPECTUS
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MAY 8, 1995
PROSPECTUS
GENERAL MOTORS CORPORATION
37,000,000 SHARES
CLASS E COMMON STOCK
------------------------
This Prospectus covers the resale of 37,000,000 shares of Class E Common
Stock, par value $0.10 per share ("Class E Common Stock"), of General Motors
Corporation, a Delaware corporation (together with its subsidiaries, "General
Motors," "GM" or the "Corporation"), by the General Motors Special Hourly
Employees Pension Trust (the "Hourly Plan Special Trust") under the General
Motors Hourly-Rate Employees Pension Plan (the "Hourly Plan") and a special
trust (the "Salaried Plan Special Trust") under the General Motors Retirement
Plan for Salaried Employees (the "Salaried Plan"). Each such trust is sometimes
referred to herein as a "Selling Stockholder" and, collectively, as the "Selling
Stockholders". See "Selling Stockholders." Of the 37,000,000 shares of Class E
Common Stock offered hereby, 27,000,000 are being offered in the United States
and Canada by the U.S. Underwriters, 7,000,000 are being offered internationally
outside the United States and Canada excluding Asia by the International
Underwriters, and 3,000,000 are being offered in Asia by the Asian Underwriters.
See "Underwriting." Class E Common Stock is one of three classes of General
Motors common stock. Under the General Motors Restated Certificate of
Incorporation, as amended, dividends on Class E Common Stock may be declared and
paid out of the assets of General Motors only to the extent of the sum of (i)
the paid in surplus attributable to the Class E Common Stock plus (ii) an
allocated portion of the earnings, determined as described herein, of General
Motors' indirectly wholly owned subsidiary, Electronic Data Systems Corporation
(together with its subsidiaries, "EDS"). General Motors, not EDS, is the issuer
of Class E Common Stock. For a description of dividend, voting and liquidation
rights and recapitalization provisions with respect to the Class E Common Stock,
see "Class E Common Stock" and "Description of Capital Stock -- Common Stock."
General Motors will not receive any of the proceeds from the sale of the
shares offered hereby. See "Selling Stockholders" and "Underwriting." The Class
E Common Stock is listed in the United States on the New York Stock Exchange
under the symbol GME. The closing sale price of the Class E Common Stock on the
New York Stock Exchange on May 5, 1995 was $42.50 per share.
United States Trust Company of New York is the trustee for the Hourly Plan
Special Trust (the "Hourly Plan Trustee") and Bankers Trust Company is the
trustee for the Salaried Plan Special Trust (the "Salaried Plan Trustee").
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
===================================================================================================
PROCEEDS TO
PRICE TO UNDERWRITING SELLING
PUBLIC DISCOUNTS(1) STOCKHOLDERS(2)
- ---------------------------------------------------------------------------------------------------
Per Share................................. $ $ $
- ---------------------------------------------------------------------------------------------------
Total(3).................................. $ $ $
===================================================================================================
</TABLE>
(1) General Motors and, to the extent permitted by applicable law, the Selling
Stockholders, have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses of the offerings, estimated to be $1,230,000,
payable by General Motors.
(3) The Hourly Plan Special Trust has granted the U.S. Underwriters,
International Underwriters and Asian Underwriters an option, exercisable
within 30 days after the date hereof, to purchase up to an aggregate of
5,550,000 additional shares of Class E Common Stock at the Price to Public
less Underwriting Discount for the purpose of covering overallotments, if
any. If the Underwriters exercise such option in full, the total Price to
Public, Underwriting Discount and Proceeds to Selling Stockholders will be
$ , $ and $ , respectively.
------------------------
Advisor to United States Trust Company of New York
WASSERSTEIN PERELLA & CO.
------------------------
The shares of Class E Common Stock are offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them,
and subject to approval of certain legal matters by counsel for the
Underwriters. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the certificates for the shares of Class E Common Stock will be made
on or about , 1995, in New York, New York.
------------------------
MERRILL LYNCH GOLDMAN SACHS LEHMAN BROTHERS
INTERNATIONAL LIMITED (ASIA) L.L.C.
------------------------
JOINT GLOBAL COORDINATORS
MERRILL LYNCH & CO. GOLDMAN, SACHS & CO.
------------------------
The date of this Prospectus is , 1995.
<PAGE> 69
ALTERNATE PAGES FOR ASIAN PROSPECTUS
UNDERWRITING
The Asian Underwriters named below, acting through their Asian
Representatives, Merrill Lynch International Limited, Goldman Sachs (Asia)
L.L.C. and Lehman Brothers Securities Asia Limited (the "Asian
Representatives"), have severally agreed, subject to the terms and conditions of
the Asian Purchase Agreement with General Motors and the Selling Stockholders
(the "Asian Purchase Agreement"), to purchase from the Selling Stockholders, the
aggregate number of shares of Class E Common Stock set forth below opposite
their respective names.
<TABLE>
<CAPTION>
NUMBER OF ASIAN SHARES
OF
ASIAN UNDERWRITER CLASS E COMMON STOCK
- ----------------------------------------------------------------------- ------------------------
<S> <C>
Merrill Lynch International Limited....................................
Goldman Sachs (Asia) L.L.C. ...........................................
Lehman Brothers Securities Asia Limited................................
---------
Total........................................................... 3,000,000
=========
</TABLE>
This offering is part of a worldwide offering that consists of the U.S.
Offering, the International Offering and the Asian Offering (collectively, the
"Offerings"). Merrill Lynch & Co. and Goldman, Sachs & Co. are acting as Joint
Global Coordinators for the offerings.
In the Asian Purchase Agreement, the Asian Underwriters have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
shares of Class E Common Stock being sold pursuant to such Agreement if any of
the shares of Class E Common Stock being sold pursuant to such Agreement are
purchased. Under certain circumstances under such Agreement, the commitments of
non-defaulting Asian Underwriters may be increased.
The Asian Representatives of the Asian Underwriters have advised General
Motors and the Selling Stockholders that they propose initially to offer the
shares to the public at the Price to Public set forth on the cover page of this
Prospectus, and to certain dealers at such price less a concession not in excess
of $ per share. The Asian Underwriters may allow, and such dealers may reallow,
a discount not in excess of $ per share on sales to certain other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.
General Motors and the Selling Stockholders have also entered into a U.S.
Purchase Agreement (the "U.S. Purchase Agreement") with certain underwriters
(the "U.S. Underwriters") for whom Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman, Sachs & Co., Lehman Brothers Inc., CS First Boston
Corporation, Morgan Stanley & Co. Incorporated and Salomon Brothers Inc are
acting as representatives (the "U.S. Representatives"). General Motors and the
Selling Stockholders have also entered into an International Purchase Agreement
(the "International Purchase Agreement") with certain underwriters (the
"International Underwriters") for whom Merrill Lynch International Limited,
Goldman Sachs International, Lehman Brothers International (Europe), CS First
Boston Limited, Morgan Stanley & Co. International Limited and Salomon Brothers
International Limited are acting as representatives (the "International
Representatives") providing for a concurrent International Offering. The U.S.
Underwriters, the International Underwriters and the Asian Underwriters are
collectively referred to as the "Underwriters," and the U.S. Representatives,
the International Representatives and the Asian Representatives are collectively
referred to as the "Representatives." The U.S. Underwriters have agreed, subject
to the terms and condition set forth in the U.S. Purchase Agreement, to purchase
all of the shares of Class E Common Stock being offered in the U.S. Offering if
any are purchased and the International Underwriters have agreed, subject to the
terms and conditions set forth in
<PAGE> 70
the International Purchase Agreement, to purchase all of the shares of Class E
Common Stock being offered in the International Offering if any are purchased.
The closing of each of the Offerings is a condition to the closing of each of
the U.S. Offering, the International Offering and the Asian Offering.
The Underwriters have entered into an intersyndicate agreement (the
"Intersyndicate Agreement") that provides for the coordination of their
activities. Under the terms of the Intersyndicate Agreement, the Underwriters in
each geographic area have agreed not to offer to sell any shares of Class E
Common stock in any other geographic area until the completion of the
distribution of the shares of Class E Common Stock in all of the Offerings.
Pursuant to the Intersyndicate Agreement, each of the U.S. Underwriters has
agreed or will agree that, as part of the distribution of the U.S. shares of
Class E Common Stock, subject to certain exceptions, (i) it is not purchasing
any shares of Class E Common Stock for the account of anyone other than a U.S.
Person (as defined below) or Canadian Person (as defined below) and (ii) it has
not offered or sold, and will not offer or sell, directly or indirectly, any
shares of Class E Common Stock or distribute any prospectus relating to the
shares of Class E Common Stock to any person outside the United States or Canada
or to anyone other than a U.S. Person or Canadian Person, or to any dealer who
does not so agree. Each of the International Underwriters and the Asian
Underwriters has agreed or will agree that, as part of the distribution of the
International shares of Class E Common Stock and Asian shares of Class E Common
Stock, respectively, subject to certain exceptions, (i) it is not purchasing any
shares of Class E Common Stock for the account of any U.S. Person or Canadian
Person and (ii) it has not offered or sold, and will not offer or sell, directly
or indirectly, any shares of Class E Common Stock or distribute any prospectus
relating to the shares of Class E Common Stock in the United States or Canada or
to any U.S. Person or Canadian Person or to any dealer who does not so agree.
The foregoing limitations do not apply to stabilization transactions or to
transactions between the U.S. Underwriters, the International Underwriters and
the Asian Underwriters pursuant to the Intersyndicate Agreement. As used in this
section, "United States" means the United States of America, its territories,
possessions and other areas subject to its jurisdiction; "Canada" means Canada,
its provinces, territories, possessions and other areas subject to its
jurisdiction; "Asia" means all countries in Asia, the Middle East, Australia and
New Zealand, and "U.S. Person" and "Canadian Person" mean (i) a citizen or
resident of the United States or Canada, respectively, (ii) a corporation,
partnership, trust or other entity created or organized in or under the laws of
the United States or Canada, respectively (other than a foreign branch of such
an entity), or (iii) an estate or trust, the income of which is subject to
United States federal income taxation or Canadian federal income taxation,
respectively, regardless of its source of income, and includes any United States
or Canadian branch of a person not included in any of clauses (i), (ii) and
(iii) of this sentence.
Each International Underwriter and Asian Underwriter represents and agrees
in the Intersyndicate Agreement that (i) it has not offered or sold and will not
offer or sell any shares of Class E Common Stock in the United Kingdom by means
of any document (other than in circumstances which do not constitute an offer to
the public within the meaning of the Companies Act 1985); (ii) it has complied
and will comply with all applicable provisions of the Financial Services Act
1986 with respect to anything done by it in relation to the shares of Class E
Common Stock in, from or otherwise involving the United Kingdom; and (iii) it
has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issuance of the
shares of Class E Common Stock to any person of a kind described in Article 9(3)
of the Financial Services Act 1988, or to any person to whom the document may
otherwise lawfully be issued or passed.
Each International Underwriter and Asian Underwriter has agreed that it has
not offered or sold, and it will not offer or sell, directly or indirectly, any
of the shares of Class E Common Stock in Japan or to residents of Japan or to
any persons for reoffering or resale, directly or indirectly, in Japan or to any
resident of Japan except pursuant to an exemption from the registration
requirements of the Securities and Exchange Law available thereunder and in
compliance with the other relevant laws of Japan.
In addition, each International Underwriter and Asian Underwriter has
agreed that (i) it has not offered or sold and will not offer or sell in Hong
Kong, by means of any document, any shares of Class E Common Stock other than to
persons whose ordinary business it is to buy or sell shares or debentures
whether as principal or agent, or in circumstances which do not constitute an
offer to the public within the meaning of the Companies Ordinance (Cap. 32) of
Hong Kong and (ii) it has not issued and will not issue any invitation or
<PAGE> 71
advertisement relating to the shares of Class E Common Stock in Hong Kong
(except if permitted to do so under the securities laws of Hong Kong) other than
with respect to shares of Class E Common Stock intended to be disposed of to
persons outside Hong Kong or to be disposed of in Hong Kong only to persons
whose business involves the acquisition, disposal, or holding of securities,
whether as principal or agent.
The Hourly Plan Special Trust has granted the Underwriters an option,
exercisable for 30 days after the date hereof, to purchase up to an additional
5,550,000 shares of Class E Common Stock at the Price to Public less the
Underwriting Discount for the purpose of covering over-allotments, if any. If
the Underwriters exercise such option in full, each of the Underwriters will
have a firm commitment, subject to certain conditions, to purchase approximately
the same percentage thereof which the number of shares of Class E Common Stock
to be purchased by it shown opposite their respective names in the table under
"Underwriting" in the relevant Prospectus is of the 37,000,000 shares of Class E
Common Stock initially offered by the Underwriters hereunder.
General Motors and (to the extent permitted under applicable law) the
Selling Stockholders have agreed to indemnify the Underwriters against certain
liabilities including liabilities under the Securities Act.
General Motors has agreed not to offer, sell or otherwise dispose of any
shares of Class E Common Stock or any securities convertible into or
exchangeable or exercisable for Class E Common Stock from the date of this
Prospectus until December 31, 1995, without the prior written consent of Merrill
Lynch & Co. and Goldman, Sachs & Co. on behalf of the Representatives, provided
that General Motors may issue and deliver such securities under specified
exceptions in connection with (i) the conversion, exercise or exchange of
outstanding options or other securities pursuant to their terms, (ii) any
previously disclosed acquisition or other business combination and (iii)
employee benefit plans.
The Selling Stockholders have agreed not to offer, sell or otherwise
dispose of any shares of Class E Common Stock or any securities convertible into
or exchangeable or exercisable for Class E Common Stock (other than transfers to
or for the benefit of employee benefit plans of GM or any of its affiliates,
including EDS) from the date of this Prospectus, in the case of the Hourly Plan
Special Trust, until December 31, 1995 and, in the case of the Salaried Plan
Special Trust, until 90 days after the date of this Prospectus, in each case,
without the prior written consent of Merrill Lynch & Co. and Goldman, Sachs &
Co. on behalf of the Representatives.
Any prospective purchaser of shares of Class E Common Stock offered hereby
that is an employee benefit plan subject to Title I of ERISA or Section 4975 of
the Code should purchase such shares pursuant to the U.S. Offering unless, upon
the advice of counsel, it concludes that such plan is permitted to purchase such
shares in the International Offering or Asian Offering, as the case may be.
Accordingly, all such plans are advised to consult with counsel before
purchasing shares of Class E Common Stock outside the United States and Canada.
<PAGE> 72
ALTERNATE BACK COVER FOR ASIAN PROSPECTUS
------------------------------------------------------
------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
CORPORATION, THE SELLING STOCKHOLDERS OR THE UNDERWRITERS. THIS PROSPECTUS SHALL
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE DELIVERY
OF THIS PROSPECTUS AT ANY TIME OR ANY SALE MADE HEREUNDER DOES NOT IMPLY THAT
THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Prospectus Summary.................... 3
The Offerings......................... 3
General Motors and EDS................ 4
Background of the Offerings........... 6
Selling Stockholders.................. 6
Selected Financial Data of General
Motors and EDS...................... 8
Management's Discussion and Analysis
of Financial Condition and Results
of Operations of EDS................ 11
Business of EDS....................... 14
Class E Common Stock Price Range and
Dividends........................... 18
Class E Common Stock.................. 19
Description of Capital Stock.......... 23
Certain United States Federal Tax
Considerations for Non-U.S.
Holders............................. 33
Underwriting.......................... 35
Legal Matters......................... 37
Experts............................... 37
Appendix A: EDS Consolidated Financial
Statements.......................... A-1
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
GENERAL MOTORS
CORPORATION
37,000,000 SHARES
CLASS E COMMON STOCK
---------------------------
PROSPECTUS
---------------------------
MERRILL LYNCH
INTERNATIONAL LIMITED
GOLDMAN SACHS (ASIA) L.L.C.
LEHMAN BROTHERS
, 1995
------------------------------------------------------
------------------------------------------------------
<PAGE> 73
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
General Motors is paying the expenses of the Offerings. The amounts set
forth below, except for the Securities and Exchange Commission registration fee,
are estimated:
<TABLE>
<CAPTION>
Securities and Exchange Commission registration fee.................... $ 635,503
<S> <C>
Legal fees............................................................. 160,000
Printing and engraving expenses........................................ 350,000
Auditors' fees......................................................... 65,000
Blue sky fees.......................................................... 10,000
Miscellaneous.......................................................... 9,497
----------
Total................................................................ $1,230,000
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the Delaware Corporation Law, General Motors is
empowered to indemnify its directors and officers in the circumstances therein
provided.
General Motors Certificate of Incorporation, as amended, provides that no
directors shall be personally liable to General Motors or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to General
Motors, or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174, or any successor provision thereto, of the Delaware Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit.
Under Article V of its By-Laws, General Motors shall indemnify and advance
expenses to every director and officer (and to such person's heirs, executors,
administrators or other legal representatives) in the manner and to the full
extent permitted by applicable law as it presently exists, or may hereafter be
amended, against any and all amounts (including judgments, fines, payments in
settlement, attorneys' fees and other expenses) reasonably incurred by or on
behalf of such person in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "proceeding"), in which such director or officer was or is made
or is threatened to be made a party or is otherwise involved by reason of the
fact that such person is or was a director, officer, employee, fiduciary or
member of any other corporation, partnership, joint venture, trust, organization
or other enterprise. General Motors shall not be required to indemnify a person
in connection with a proceeding initiated by such person if the proceeding was
not authorized by the Board of Directors of General Motors. General Motors shall
pay the expenses of directors and officers incurred in defending any proceeding
in advance of its final disposition ("advancement of expenses"); provided,
however, that the payment of expenses incurred by a director or officer in
advance of the final disposition of the proceeding shall be made only upon
receipt of an undertaking by the director or officer to repay all amounts
advanced if it should be ultimately determined that the director or officer is
not entitled to be indemnified under Article V of the By-Laws or otherwise. If a
claim for indemnification or advancement of expenses by an officer or director
under Article V of the By-Laws is not paid in full within ninety days after a
written claim therefor has been received by General Motors, the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action General Motors shall have the burden of proving that the
claimant was not entitled to the requested indemnification or advancement of
expenses under applicable law. The rights conferred on any person by Article V
of the By-Laws shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of General Motors
Certificate of Incorporation or By-Laws, agreement, vote of stockholders or
disinterested directors or otherwise.
II-1
<PAGE> 74
General Motors is insured against liabilities which it may incur by reason
of Article V of its By-Laws. In addition, directors and officers are insured, at
GM's expense, against some liabilities which might arise out of their employment
and not be subject to indemnification under Article V of the By-Laws.
Pursuant to a resolution adopted by the Board of Directors on December 1,
1975, General Motors to the fullest extent permissible under law will indemnify,
and has purchased insurance on behalf of, directors or officers of General
Motors, or any of them, who incur or are threatened with personal liability,
including expense, under the Employee Retirement Income Security Act of 1974, as
amended, or any amendatory or comparable legislation or regulation thereunder.
ITEM 16. EXHIBITS.
Except as otherwise indicated, the following documents have been filed as
exhibits to the Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- ----------------------------------------------------------------------------------
<S> <C>
1 Form of U.S. Purchase Agreement.*
4(a) Restated Certificate of Incorporation of General Motors Corporation as amended to
May 26, 1994, incorporated by reference to Exhibit 3(i) to the Current Report on
Form 8-K of General Motors dated May 26, 1994, and Amendment to Article Fourth of
the Certificate of Incorporation -- Division III -- Preference Stock, by reason of
the Certificates of Designations filed with the Secretary of State of the State of
Delaware on September 14, 1987 and the Certificate of Decrease filed with the
Secretary of State of the State of Delaware on September 29, 1987, incorporated by
reference to Exhibit 19 to the Quarterly Report on Form 10-Q of General Motors for
the quarter ended June 30, 1990 in the Form SE of General Motors dated August 6,
1990; as further amended by the Certificate of Designations filed with the
Secretary of State of the State of Delaware on June 28, 1991, incorporated by
reference to Exhibit 4(a) to Form S-8 Registration Statement of General Motors
dated November 6, 1991 (Registration No. 33-43744) in the Form SE of General
Motors dated November 1, 1991; as further amended by the Certificate of
Designations filed with the Secretary of State of the State of Delaware on
December 9, 1991, incorporated by reference to Exhibit 4(a) to Form S-3
Registration Statement of General Motors dated January 27, 1992 (Registration No.
33-45216) in the Form SE of General Motors dated January 27, 1992; as further
amended by the Certificate of Designations filed with the Secretary of State of
the State of Delaware on February 14, 1992, incorporated by reference to Exhibit
3(a) to the Annual Report on Form 10-K of General Motors for the year ended
December 31, 1991 in the Form SE of General Motors dated March 20, 1992; as
further amended by the Certificate of Designations filed with the Secretary of
State of the State of Delaware on July 15, 1992, incorporated by reference to
Exhibit 3(a)(2) to the Quarterly Report on Form 10-Q of General Motors for the
quarter ended June 30, 1992 in the Form SE of General Motors dated August 10,
1992; and as further amended by the Certificate of Designations filed with the
Secretary of State of the State of Delaware on December 15, 1992, incorporated by
reference to Exhibit 4(a) to Form S-3 Registration Statement of General Motors
dated January 25, 1993 (Registration No. 33-49309) in the Form SE of General
Motors dated January 25, 1993.
4(b) By-Laws of General Motors Corporation as amended to December 5, 1994, incorporated
by reference to Exhibit 3(ii) to the Current Report on Form 8-K of General Motors
dated December 5, 1994.
</TABLE>
- ---------------
* To be filed by amendment.
II-2
<PAGE> 75
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- ----------------------------------------------------------------------------------
<S> <C>
5 Opinion of Warren G. Andersen, Esq.
8 Opinion of Anton H. Zidansek, Esq.
23(a) Consent of Deloitte & Touche LLP, independent auditors.
23(b) Consent of KPMG Peat Marwick LLP, independent auditors.
23(c) Consents of counsel (included in Exhibits 5 and 8 above).
99(a) Registration Rights Agreement, dated as of March 12, 1995, by and between General
Motors and the Trustee, for the account and on behalf of the Hourly Plan,
including all exhibits thereto, incorporated by reference to Exhibit 10(h) to the
Current Report on Form 8-K of General Motors dated March 3, 1995.
99(b) Agreement, dated March 12, 1995, by and among the Hourly Plan Trustee, as trustee
of the Hourly Plan, the Salaried Plan Trustee, as trustee of the Salaried Plan,
and General Motors.
99(c) Exchange and Registration Agreement, dated November 4, 1992, among General Motors,
the Hourly Plan and the Salaried Plan (without schedules).
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
1. For purposes of determining any liability under the Securities Act of
1933 (the "Securities Act"), each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
2. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
3. For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of the
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of the Registration
Statement as of the time it was declared effective.
4. For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-3
<PAGE> 76
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on May 8, 1995.
GENERAL MOTORS CORPORATION
By: /s/ JOHN F. SMITH, JR.
----------------------------------------
(John F. Smith, Jr.
Chief Executive Officer, President and Director)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on May 8, 1995 by the following persons
in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------------------- ---------------------------------
<S> <C> <C>
/s/ JOHN G. SMALE Chairman of the Board of Directors
- ----------------------------------------
(John G. Smale)
/s/ JOHN F. SMITH, JR. Chief Executive Officer, President
- ---------------------------------------- and Director
(John F. Smith, Jr.)
/s/ J. MICHAEL LOSH Executive Vice President and Chief
- ---------------------------------------- Financial Officer
(J. Michael Losh)
/s/ LEON J. KRAIN Vice President and Group Executive (Principal
- ---------------------------------------- Financial
(Leon J. Krain) Officers)
/s/ HEIDI KUNZ Vice President and Treasurer
- ----------------------------------------
(Heidi Kunz)
/s/ WALLACE W. CREEK Comptroller
- ----------------------------------------
(Wallace W. Creek) (Principal
Accounting
/s/ JAMES H. HUMPHREY Chief Accounting Officer Officers)
- ----------------------------------------
(James H. Humphrey)
</TABLE>
II-4
<PAGE> 77
SIGNATURES
(CONCLUDED)
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------------------- ----------
<S> <C>
/s/ ANNE L. ARMSTRONG Director
- ----------------------------------------
(Anne L. Armstrong)
/s/ JOHN H. BRYAN Director
- ----------------------------------------
(John H. Bryan)
/s/ THOMAS E. EVERHART Director
- ----------------------------------------
(Thomas E. Everhart)
/s/ CHARLES T. FISHER, III Director
- ----------------------------------------
(Charles T. Fisher, III)
/s/ J. WILLARD MARRIOTT, JR. Director
- ----------------------------------------
(J. Willard Marriott, Jr.)
/s/ ANN D. McLAUGHLIN Director
- ----------------------------------------
(Ann D. McLaughlin)
/s/ PAUL H. O'NEILL Director
- ----------------------------------------
(Paul H. O'Neill)
/s/ EDMUND T. PRATT, JR. Director
- ----------------------------------------
(Edmund T. Pratt, Jr.)
/s/ LOUIS W. SULLIVAN Director
- ----------------------------------------
(Louis W. Sullivan)
/s/ DENNIS WEATHERSTONE Director
- ----------------------------------------
(Dennis Weatherstone)
/s/ THOMAS H. WYMAN Director
- ----------------------------------------
(Thomas H. Wyman)
</TABLE>
II-5
<PAGE> 78
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION OF DOCUMENT NUMBER
- ------- ------------------------------------------------------------------------- ----------
<S> <C> <C>
1 Form of U.S. Purchase Agreement.*
4(a) Restated Certificate of Incorporation of General Motors Corporation as
amended to May 26, 1994, incorporated by reference to Exhibit 3(i) to the
Current Report on Form 8-K of General Motors dated May 26, 1994, and
Amendment to Article Fourth of the Certificate of Incorporation --
Division III -- Preference Stock, by reason of the Certificates of
Designations filed with the Secretary of State of the State of Delaware
on September 14, 1987 and the Certificate of Decrease filed with the
Secretary of State of the State of Delaware on September 29, 1987,
incorporated by reference to Exhibit 19 to the Quarterly Report on Form
10-Q of General Motors for the quarter ended June 30, 1990 in the Form SE
of General Motors dated August 6, 1990; as further amended by the
Certificate of Designations filed with the Secretary of State of the
State of Delaware on June 28, 1991, incorporated by reference to Exhibit
4(a) to Form S-8 Registration Statement of General Motors dated November
6, 1991 (Registration No. 33-43744) in the Form SE of General Motors
dated November 1, 1991; as further amended by the Certificate of
Designations filed with the Secretary of State of the State of Delaware
on December 9, 1991, incorporated by reference to Exhibit 4(a) to Form
S-3 Registration Statement of General Motors dated January 27, 1992
(Registration No. 33-45216) in the Form SE of General Motors dated
January 27, 1992; as further amended by the Certificate of Designations
filed with the Secretary of State of the State of Delaware on February
14, 1992, incorporated by reference to Exhibit 3(a) to the Annual Report
on Form 10-K of General Motors for the year ended December 31, 1991 in
the Form SE of General Motors dated March 20, 1992; as further amended by
the Certificate of Designations filed with the Secretary of State of the
State of Delaware on July 15, 1992, incorporated by reference to Exhibit
3(a)(2) to the Quarterly Report on Form 10-Q of General Motors for the
quarter ended June 30, 1992 in the Form SE of General Motors dated August
10, 1992; and as further amended by the Certificate of Designations filed
with the Secretary of State of the State of Delaware on December 15,
1992, incorporated by reference to Exhibit 4(a) to Form S-3 Registration
Statement of General Motors dated January 25, 1993 (Registration No.
33-49309) in the Form SE of General Motors dated January 25, 1993.
4(b) By-Laws of General Motors Corporation as amended to December 5, 1994,
incorporated by reference to Exhibit 3(ii) to the Current Report on Form
8-K of General Motors dated December 5, 1994.
5 Opinion of Warren G. Andersen, Esq.
8 Opinion of Anton H. Zidansek, Esq.
23(a) Consent of Deloitte & Touche LLP, independent auditors.
23(b) Consent of KPMG Peat Marwick LLP, independent auditors.
23(c) Consents of counsel (included in Exhibits 5 and 8 above).
99(a) Registration Rights Agreement, dated as of March 12, 1995, by and between
General Motors and the Trustee, for the account and on behalf of the
Hourly Plan, including all exhibits thereto, incorporated by reference to
Exhibit 10(h) to the Current Report on Form 8-K of General Motors dated
March 3, 1995.
99(b) Agreement, dated March 12, 1995, by and among the Hourly Plan Trustee, as
trustee of the Hourly Plan, the Salaried Plan Trustee, as trustee of the
Salaried Plan, and General Motors.
99(c) Exchange and Registration Agreement, dated November 4, 1992, among
General Motors, the Hourly Plan and the Salaried Plan (without
schedules).
</TABLE>
- -------------------------
* To be filed by amendment.
<PAGE> 1
EXHIBIT 5
GENERAL MOTORS CORPORATION
LEGAL STAFF
FACSIMILE TELEPHONE
313/974-0685 313/974-1528
May 8, 1995
General Motors Corporation
3044 West Grand Boulevard
Detroit, Michigan 48202
Ladies and Gentlemen:
I refer to the proposed sales by the General Motors Special Hourly Employees
Pension Trust under the General Motors Hourly-Rate Employees Pension Plan and a
special trust under the General Motors Retirement Program for Salaried Employees
(collectively, the "Selling Stockholders"), of 42,550,000 shares of Class E
Common Stock, $0.10 par value per share (the "Class E Common Stock"), of General
Motors Corporation, a Delaware corporation ("General Motors"), as described in a
Registration Statement on Form S-3 (the "Registration Statement") filed on the
date hereof with the Securities and Exchange Commission under the Securities Act
of 1933, as amended.
I, in my capacity as an attorney on the Legal Staff of General Motors, am
familiar with the proceedings to date with respect to the proposed sale of the
Class E Common Stock to be sold by the Selling Stockholders pursuant to the
Registration Statement and have examined such records, documents and matters of
law and satisfied myself as to such matters of fact as I have considered
relevant for the purposes of this opinion.
I am of the opinion that:
1. General Motors is a corporation validly existing under the laws of the State
of Delaware.
2. The issuance of the shares of Class E Common Stock to be sold by the Selling
Stockholders pursuant to the Registration Statement were duly authorized by
all necessary corporate action of General Motors and such shares were legally
issued and are fully paid and nonassessable.
I do not find it necessary for the purposes of this opinion, and accordingly I
do not purport to cover herein, the application of the securities or "Blue Sky"
laws of the various states to the sale of the Class E Common Stock.
I am admitted to practice in the State of Michigan, and express no opinion with
the respect to the laws of any jurisdiction other than the laws of the State of
Michigan, the General Corporation Law of the State of Delaware, and the federal
laws of the United States.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name under the caption "Legal Matters" in the
Prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ WARREN G. ANDERSEN
Attorney
<PAGE> 1
EXHIBIT 8
May 8, 1995
General Motors Corporation
3044 West Grand Boulevard
Detroit, Michigan 48202
Dear Sirs/Mesdames:
In connection with the proposed sale by the General Motors Special Hourly
Employees Pension Trust under the General Motors Hourly-Rate Employees Pension
Plan and a special trust under the General Motors Retirement Plan for Salaried
Employees of General Motors Corporation's Class E Common Stock (the "Shares"),
pursuant to this Registration Statement filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, you have requested my
legal opinion concerning certain United States Federal income tax consequences
of ownership of the Shares to holders of the Shares who are nonresident alien
individuals, foreign corporations, foreign partnerships, or nonresident
fiduciaries of a foreign estate or trust ("Non-U.S. Holders"). I have examined
the Registration Statement and such other documents and such legal authorities
as I have deemed relevant for purposes of expressing the opinions contained
herein.
My opinion is based upon the applicable provisions of the Internal Revenue
Code of 1986, as amended through the date hereof, Treasury regulations
promulgated and proposed thereunder, current positions of the Internal Revenue
Service (the "IRS") contained in published Revenue Rulings and Revenue
Procedures and existing judicial decisions. No tax rulings have been or will be
sought from the IRS with respect to any of the matters discussed herein.
Based on the foregoing, and subject to the discussion set forth under the
caption "Certain United States Federal Income Tax Considerations for Non-U.S.
Holders" in the Prospectus forming part of the Registration Statement, my
opinion as to the material Federal income tax consequences of the purchase,
ownership and disposition of the Shares to Non-U.S. Holders is as follows:
1. Dividends paid on the Shares will be subject to withholding tax at
a 30% rate (or such lower rate as may be specified by an applicable income
tax treaty), unless such dividends are effectively connected with the
Non-U.S. Holder's conduct of a trade or business within the United States.
2. Dividends which are effectively connected with the Non-U.S.
Holder's conduct of a trade or business within the United States will be
subject to regular United States income tax in the same manner as if the
Non-U.S. Holder were a United States resident. Such dividends received by a
non-U.S. corporation also may be subject to an additional "branch profits
tax" at a 30% rate (or such lower rate as may be specified by an applicable
income tax treaty) of its effectively connected earnings and profits,
subject to certain adjustments.
3. A Non-U.S. Holder generally will not be subject to United States
Federal income tax with respect to gain realized on a sale or other
disposition of the Shares, unless (i) the gain is effectively connected
with the Non-U.S. Holder's conduct of a trade or business within the United
States, or (ii) in the case of certain Non-U.S. Holders who are nonresident
alien individuals and hold such Shares as a capital asset, the holder is
present in the United States for 183 or more days in the taxable year of
the disposition.
4. An individual Non-U.S. Holder who is treated as the owner of Shares
or has made certain lifetime transfers of Shares will be required to
include the value thereof in his gross estate for United States Federal
estate tax purposes, and may be subject to United States Federal estate tax
unless an applicable estate tax treaty provides otherwise.
5. The discussion set forth under the caption "Certain United States
Federal Income Tax Considerations for Non-U.S. Holders" in the Prospectus
forming part of the Registration Statement is based upon reasonable
interpretations of existing law.
<PAGE> 2
There can be no assurance that these views will not be successfully
challenged by the IRS or significantly altered by new legislation, changes in
IRS positions or judicial decisions, any of which challenges or alterations may
be applied retroactively with respect to completed transactions.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the use of my name under the caption "Legal Matters"
in the Prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ Anton H. Zidansek
--------------------------------------
Anton H. Zidansek
Assistant Tax Counsel
2
<PAGE> 1
EXHIBIT 23(A)
CONSENT OF INDEPENDENT AUDITORS
GENERAL MOTORS CORPORATION:
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of General Motors Corporation of our reports dated January 30, 1995
appearing in the Annual Report on Form 10-K of General Motors Corporation for
the year ended December 31, 1994 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Detroit, Michigan
May 8, 1995
<PAGE> 1
EXHIBIT 23(B)
CONSENT OF INDEPENDENT AUDITORS
THE BOARDS OF DIRECTORS
ELECTRONIC DATA SYSTEMS CORPORATION
GENERAL MOTORS CORPORATION:
We hereby consent to the use of our reports included and incorporated
herein by reference and to the reference to our firm under the heading "Experts"
in the Prospectus.
/s/ KPMG PEAT MARWICK LLP
Dallas, Texas
May 8, 1995
<PAGE> 1
EXHIBIT 99(B)
AGREEMENT
THIS AGREEMENT is made this 12th day of March, 1995, by and among United
States Trust Company of New York ("U.S. Trust"), as trustee and investment
manager of a trust established under the General Motors Hourly-Rate Employees
Pension Plan (the "Hourly Plan"), Bankers Trust Company ("Bankers Trust"), as
trustee and investment manager of a trust established under the General Motors
Retirement Program for Salaried Employees (the "Salaried Plan"), and General
Motors Corporation, a Delaware corporation ("General Motors"), with reference to
the following facts:
A. At the date hereof, U.S. Trust has investment management responsibility
for approximately 190 million shares of Class E common stock, par value $0.10
per share ("Class E Common Stock"), of General Motors held by the Hourly Plan
and has on this date entered into a registration rights agreement with General
Motors (the "U.S. Trust Rights Agreement") that, among other things, permits
U.S. Trust to require General Motors to register the Class E Common Stock held
by the Hourly Plan for sale pursuant to underwritten public offerings.
B. At the date hereof, Bankers Trust has investment management
responsibility for approximately 9.1 million shares of Class E Common Stock held
by the Salaried Plan and has entered into an exchange and registration rights
agreement dated November 4, 1992 (the "Bankers Trust Rights Agreement"), which
permits Bankers Trust to require General Motors to register the Class E Common
Stock held by the Salaried Plan for sale pursuant to underwritten public
offerings.
C. U.S. Trust, Bankers Trust and General Motors are entering into this
Agreement to coordinate the rights of U.S. Trust and Bankers Trust pursuant to
their respective registration rights agreements so that the exercise by one
party of its registration rights will not adversely affect the exercise by the
other party of its registration rights.
IN CONSIDERATION of the foregoing and the mutual agreements set forth
below, U.S. Trust, Bankers Trust and General Motors agree as follows:
1. Meaning of Certain Terms. (a) As used in this Agreement, the term "Class
E Common Stock" includes any securities issued or issuable with respect to the
Class E Common Stock in connection with any stock dividend, stock split (forward
or reverse), combination of shares, recapitalization, merger, consolidation,
redemption, exchange of securities or other reorganization or reclassification
after the date of this Agreement. In the event of any of the foregoing with
respect to the Class E Common Stock or similar transaction affecting the Class E
Common Stock, all references in this Agreement to the designation "Class E
Common Stock" and to any specific number of shares of Class E Common Stock will
be appropriately adjusted to give effect thereto and will include reference to
all securities of the same class regardless of whether any such securities were
issued or issuable with respect to the securities that previously constituted
the Class E Common Stock.
(b) As used in this Agreement, the term "General Motors" includes any
successor issuer of the Class E Common Stock that is bound by the U.S. Trust
Rights Agreement.
2. Grant of Piggyback Rights. In the event that U.S. Trust proposes to make
a demand under the U.S. Trust Rights Agreement on General Motors to register
under the Securities Act of 1933, as amended (the "Act"), any shares of Class E
Common Stock held by the Hourly Plan in an underwritten public offering to the
general public (other than pursuant to U.S. Trust's exercise of its piggyback
registration rights under the U.S. Trust Rights Agreement), U.S. Trust will give
Bankers Trust written notice of the demand simultaneously with its written
demand to General Motors. Bankers Trust will give U.S. Trust and General Motors
written notice within 15 days thereafter of the number of shares of Class E
Common Stock (up to a maximum of 3,000,000 shares), if any, it desires to sell,
and the noticed shares will be included in such registration. If such offering
is to be made pursuant to a shelf registration statement under the U.S. Trust
Rights Agreement, U.S. Trust agrees that the time periods applicable to such
offering under the U.S. Trust Rights Agreement will be extended in order to
permit the shares to be sold by Bankers Trust as contemplated under this
<PAGE> 2
Agreement to be included in such registration statement. U.S. Trust may select
the lead underwriter and the co-manager or co-managers to administer the
offering as described in the U.S. Trust Rights Agreement, and Bankers Trust will
have no rights with respect thereto. Nothing in this Agreement will limit the
right of General Motors under the U.S. Trust Rights Agreement to postpone or the
right of U.S. Trust to withdraw or cancel a demand registration or any offering
pursuant to a demand registration (without regard to whether a registration
statement has been filed or has been declared effective), and Bankers Trust will
be bound by U.S. Trust's decision. U.S. Trust will use its best efforts to cause
the underwriting agreement to provide that all obligations of the selling
shareholders are several, and not joint and several, in proportion to the amount
of securities being sold by each of them, except that if U.S. Trust decides to
cancel the offering, U.S. Trust will be solely responsible for such decision.
Notwithstanding any notice by Bankers Trust as provided above to have any shares
included in a registration statement, Bankers Trust may, without liability to
U.S. Trust, elect not to sell any such shares at any time until the underwriting
agreement covering such shares has been executed by Bankers Trust.
3. Holdback Period. (a) Except for the exercise of its piggyback rights as
set forth in paragraph 2 above, Bankers Trust agrees that it will not make any
public sale, transfer or other disposition in the United States (including
without limitation any sale pursuant to Rule 144 under the Act) of any Class E
Common Stock (or securities convertible into or exchangeable or exercisable for
Class E Common Stock) held by or on behalf of the Salaried Plan during the
period beginning with the date of any written notice from U.S. Trust of U.S.
Trust's proposal to register Class E Common Stock held by the Hourly Plan and
ending on the 90th day after the effectiveness pursuant to the Act of the
registration statement filed in connection with such registration or, in the
case of a shelf registration statement, the 90th day after the commencement of
the distribution in connection with such registered offering, unless, in either
such case, the underwriter administrating such offering agrees to a shorter time
period. If U.S. Trust decides not to proceed with a proposed registration with
respect to which it has given notice to Bankers Trust under paragraph 2 above,
it will promptly notify Bankers Trust, and upon receipt of such notification,
Bankers Trust will be relieved of the restrictions of this paragraph 3(a).
(b) Bankers Trust will give U.S. Trust written notice of its intention to
cause General Motors to register under the Act pursuant to the Bankers Trust
Rights Agreement any shares of Class E Common Stock held by the Salaried Plan
simultaneously with its written demand to General Motors for such registration.
U.S. Trust agrees that it will not make any public sale, transfer or other
disposition in the United States (including without limitation any sale pursuant
to Rule 144 under the Act) of any Class E Common Stock (or securities
convertible into or exchangeable or exercisable for Class E Common Stock) held
by the Hourly Plan during the period beginning with the date of any written
notice from Bankers Trust of Bankers Trust's proposal to so register Class E
Common Stock held by the Salaried Plan and ending on the 90th day after the
effectiveness pursuant to the Act of the registration statement filed in
connection with such registration or, in the case of a shelf registration
statement, the 90th day after the commencement of the distribution in connection
with such registered offering unless the underwriter administering such offering
agrees to a shorter time period, without the written consent of Bankers Trust.
If Bankers Trust decides not to proceed with a proposed registration with
respect to which it has given notice to U.S. Trust under this paragraph 3(b), it
will promptly notify U.S. Trust, and upon receipt of such notification, U.S.
Trust will be relieved of the restrictions of this paragraph 3(b).
4. Agreement of General Motors. General Motors and Bankers Trust agree that
the exercise by Bankers Trust of its piggyback rights under paragraph 2 of this
Agreement will be considered the equivalent of a demand registration under
Section 7 of the Bankers Trust Rights Agreement and that, except as expressly
otherwise provided herein, all of the terms of the Bankers Trust Rights
Agreement will remain in full force and effect. With respect to any such
registration in which Bankers Trust and the Salaried Plan participate, General
Motors also agrees to indemnify Bankers Trust and the Salaried Plan to the same
extent as provided in Section 7 of the Bankers Trust Rights Agreement.
5. Termination of Agreement. This Agreement will terminate upon the
earliest of (i) the date that the Salaried Plan no longer holds any shares of
Class E Common Stock that were held on the date of this Agreement determined on
a "first-in, first-out" basis, (ii) the date on which the Hourly Plan holds less
than 2% of the aggregate number of shares of Class E Common Stock then
outstanding or (iii) the date, if any, on
2
<PAGE> 3
which the Salaried Plan receives shares of capital stock of Electronic Data
Systems Corporation that are registered under the Act in exchange for its shares
of Class E Common Stock.
6. Cooperation. Each party to this Agreement will take such further action
and execute such additional documents as may be reasonably requested by any
other party in order to carry out the purposes of this Agreement.
7. Miscellaneous. (a) All notices provided for or permitted in this
Agreement will be in writing and will be made by hand delivery, by registered or
certified first-class mail, return receipt requested, overnight courier or
facsimile transmission:
(i) If to U.S. Trust:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Senior Vice President and
General Counsel
Telephone: (212) 852-1302
Facsimile: (212) 852-1310
with copies to:
UST Fiduciary Services, Ltd.
Suite 1080 East
1300 Eye Street N.W.
Washington, D.C 20005
Attention: Norman P. Goldberg
Senior Vice President
Telephone: (202) 326-7510
Facsimile: (202) 326-7515
(ii) If to Bankers Trust:
Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attention: Arnold Shindler
Vice President
Telephone: (212) 250-9866
Facsimile: (212) 250-9857
with copies to:
Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attention: Blu Putnam
Managing Director
Telephone: (212) 250-2737
Facsimile: (212) 250-0900
3
<PAGE> 4
(iii) If to General Motors:
General Motors Corporation
767 Fifth Avenue
New York, New York 10153
Attention: Treasurer
Telephone: (212) 418-3500
Facsimile: (212) 418-3695
With copies to:
General Motors Corporation
Legal Staff
3031 West Grand Boulevard
Detroit, Michigan 48202
Attention: Warren G. Andersen, Esq.
Telephone: (313) 974-1528
Facsimile: (313) 974-0685
All notices will be deemed to have been duly given and received: when delivered
by hand, if hand delivered; the fifth business day after being deposited in the
mail, registered or certified, return receipt requested, first class postage
prepaid, or earlier business day actually received, if mailed; the first
business day after being deposited with an overnight courier, postage prepaid,
if by overnight courier; upon oral confirmation of receipt, if by facsimile
transmission. Each party agrees to confirm promptly the receipt of all notices.
(b) This Agreement may be executed in counterparts and will be deemed to
have been duly executed and delivered by the parties when each party has
executed a counterpart of the Agreement and delivered an original or facsimile
copy to the other parties. Each such counterpart will be deemed to be an
original, and all counterparts together will constitute one and the same
instrument.
(c) This Agreement will be binding upon and will inure to the benefit of
and be enforceable by each of the parties and their successors, including
without limitation the successor trustees or investment managers of the Hourly
Plan and the Salaried Plan acting with respect to the Class E Common Stock held
by the Hourly Plan and the Salaried Plan, respectively. In addition, General
Motors agrees to cause this Agreement to be binding upon a successor issuer and
to be included in the Succession Agreement described in Section 12(a) of the
U.S. Trust Rights Agreement. Except for assignment to a successor issuer,
trustee or investment manager as stated above, none of the rights or obligations
under this Agreement will be assigned by a party without the consent of the
other parties.
(d) This Agreement is for the sole and exclusive benefit of General Motors
and of the Hourly Plan and the Salaried Plan and their respective trustees and
investment managers acting upon behalf of such Plans and any other persons
entitled to rights under the U.S. Trust Rights Agreement or the Bankers Trust
Rights Agreement with respect to the Class E Common Stock. Nothing in this
Agreement will be construed to give any other person any legal or equitable
right, remedy or claim under this Agreement.
(e) This Agreement may not be amended, modified or supplemented except by a
writing signed by all parties.
(f) All questions concerning the construction, validity and interpretation
of this Agreement will be governed by the internal laws (and not the laws of
conflict) of the State of New York, except to the extent that the laws of the
state or jurisdiction of incorporation or organization of the issuer of the
Class E Common Stock from time to time specifically apply to questions
concerning the relative rights of the issuer of the Class E Common Stock and the
stockholders of the issuer in their capacities as such.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee of the General
Motors Corporation Hourly-Rate
Employees Pension Plan
By /s/ NORMAN P. GOLDBERG
--------------------------------
Name: Norman P. Goldberg
Authorized Agent
BANKERS TRUST COMPANY, as Trustee of
the General Motors Corporation
Retirement Program for Salaried
Employees
By /s/ FRANK SALERNO
--------------------------------
Name: Frank Salerno
Managing Director
GENERAL MOTORS CORPORATION
By /s/ HEIDI KUNZ
--------------------------------
Name: Heidi Kunz
Vice President and
Treasurer
5
<PAGE> 1
EXHIBIT 99(C)
EXCHANGE AND REGISTRATION AGREEMENT
AGREEMENT, dated November 4, 1992, among General Motors Corporation
("General Motors"), the General Motors Hourly-Rate Employees Pension Plan (the
"Hourly Plan") and the General Motors Retirement Program for Salaried Employees
(the "Salaried Plan"). The Hourly Plan and the Salaried Plan are referred to
herein collectively as the "Plans."
WHEREAS, the Plans are the owners of (i) an aggregate of 3,262,306 shares
of Series E-II Preference Stock, $0.10 par value per share, of General Motors
(the "Series E-II Shares") and (ii) an aggregate of 3,262,306 shares of Series
E-III Preference Stock, $0.10 par value per share, of General Motors (the
"Series E-III Shares" and, together with the Series E-II Shares, the "Series E
Preference Shares");
WHEREAS, the Series E Preference Shares are managed on behalf of the Plans
by The Prudential Insurance Company of America ("Prudential") pursuant to an
Investment Management Agreement dated October 5, 1987; and
WHEREAS, Prudential has directed Bankers Trust Company, as trustee of the
Plans (the "Trustee"), to exchange the Series E Preference Shares for certain
newly issued shares of Class E Common Stock, $0.10 par value per share, of
General Motors ("Class E Common Stock") and a cash payment as provided below;
NOW, THEREFORE, in consideration thereof and the mutual agreements
hereinafter contained, the parties hereto agree as follows:
1. Exchange of Shares. The Plans hereby agree to sell and transfer to
General Motors the Series E Preference Shares in exchange for the issuance by
General Motors to the Plans of 26,098,448 shares of Class E Common Stock (the
"Class E Shares") and the payment of cash referred to in Section 2. General
Motors hereby agrees to issue and sell to the Plans the Class E Shares in
exchange for the transfer by the Plans to General Motors of the Series E
Preference Shares. Such exchange shall take place at 10:00 a.m., New York City
Time, on November 3, 1992 at the New York offices of General Motors (or at such
other time, date and place as the parties shall agree) (the "Closing"). At the
Closing the Plans shall deliver to General Motors certificate(s) representing
the Series E Preference Shares, duly endorsed for transfer or accompanied by
stock transfer power(s) duly executed in blank. After the Closing the Plans
shall have no rights in respect of the Series E Preference Shares. At the
Closing General Motors shall deliver to the Plans certificates representing the
Class E Shares, registered in the names and in the denominations specified in
Schedule 1 attached hereto.
2. Cash Payment. At the Closing, General Motors shall pay to the Plans an
aggregate of $6,100,000 by wire transfer of immediately available funds, in the
amounts and to the accounts specified in Schedule 2 attached hereto, against the
receipt of certificates representing the Series E Preference Shares.
3. Representations and Warranties of the Plans. Each Plan represents and
warrants to General Motors as follows:
(a) the making and performance of this Agreement have been duly
authorized by all necessary action of such Plan;
(b) this Agreement has been duly executed and delivered by such Plan
and constitutes a valid and binding agreement of such Plan enforceable
against it in accordance with its terms;
(c) such Plan has (and at the Closing such Plan will have) valid title
to the Series E Preference Shares to be transferred by it at the Closing
free and clear of all claims, liens, charges, encumbrances and security
interests, and upon delivery of and payment for the Series E Preference
Shares General Motors will acquire good title to the Series E Preference
Shares, free and clear of any claims, liens, charges, encumbrances or
security interests; and
<PAGE> 2
(d) such Plan acknowledges that the acquisition of the Class E Shares
by it pursuant to Section 1 hereof will not be registered under the
Securities Act of 1933, as amended (the "1933 Act"), in reliance upon the
exemption afforded by Section 4(2) thereof for transactions by an issuer
not involving a public offering. Such Plan is an "accredited investor" as
that term is defined in Regulation D promulgated under the 1933 Act and is
purchasing the Class E Shares solely for its own account, for investment
purposes only, and not with a view to the distribution thereof. Such Plan
will not sell or otherwise dispose of such securities except in compliance
with the registration requirements or exemption provisions under the 1933
Act and the rules and regulations thereunder and, prior to any sale or
other disposition of any such securities other than in a sale registered
under the 1933 Act, will deliver to General Motors an opinion of counsel
reasonably satisfactory to General Motors to the effect that such
registration is unnecessary. Upon original issuance thereof, and until such
time as it is no longer required under the applicable requirements of the
1933 Act, the certificates representing the Class E Shares and any
instruments or certificates issued in exchange therefor or upon transfer
thereof, shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY
STATE SECURITIES LAW. THEY MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND SUCH LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS SET FORTH IN THE EXCHANGE AND REGISTRATION AGREEMENT DATED
NOVEMBER 4, 1992 AMONG THE GENERAL MOTORS HOURLY-RATE EMPLOYEES PENSION
PLAN, THE GENERAL MOTORS RETIREMENT PROGRAM FOR SALARIED EMPLOYEES, AND
GENERAL MOTORS CORPORATION, A COPY OF WHICH MAY BE OBTAINED FROM GENERAL
MOTORS CORPORATION AT ITS PRINCIPAL EXECUTIVE OFFICES."
4. Representations and Warranties of General Motors. General Motors
represents and warrants to each of the Plans as follows:
(a) the making and performance of this Agreement have been duly
authorized by all necessary corporate action of General Motors and will not
violate any provision of General Motors' Certificate of Incorporation or
By-laws and will not violate, conflict with or result in a default under
any statute, regulation, contract, commitment, agreement, arrangement or
restriction of any kind to which General Motors is subject or is a party or
by which it is bound;
(b) this Agreement has been duly executed and delivered by General
Motors and constitutes a valid and binding agreement of General Motors
enforceable against it in accordance with its terms;
(c) the Class E Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and nonassessable; and
(d) the Class E Shares are "qualifying employer securities" within the
meaning of Section 407(d) (5) of the Employee Retirement Income Security
Act of 1974, an amended ("ERISA") and, immediately following the
consummation of the transactions contemplated by Section 1 above, will
satisfy the requirements of Section 407(f)(1) of ERISA.
5. Restriction on Transfer of Class E Shares. Each Plan agrees that it will
not offer to sell, sell, contract to sell or otherwise dispose of any Class E
Shares, without the prior written consent of General Motors, prior to July 31,
1993; provided that such restriction shall not apply if Prudential or another
fiduciary with authority to manage the Plans' Class E Share portfolio (each, an,
"Authorized Fiduciary") determines that the disposition of all or a portion of
the Class E Shares acquired pursuant to this Agreement is required in order to
comply with ERISA and certifies such determination to General Motors in writing.
6. Incidental Registration of Class E Shares.
(a) If at any time prior to July 31, 1993 General Motors proposes to file a
registration statement under the 1933 Act with respect to an underwritten
offering by General Motors for its own account of shares of
2
<PAGE> 3
Class E Common Stock (other than a registration statement on Form S-4 or S-8 (or
similar registration forms that may hereafter be adopted), a registration
statement filed in connection with an exchange offer or an offering of
securities solely to General Motors' existing stockholders or a registration
statement covering securities convertible into or exchangeable for Class E
Common Stock), General Motors shall in each case give written notice of such
proposed filing to Prudential and the Plans as soon as practicable (but in no
event less than ten Business Days) before the anticipated filing date and such
notice shall offer the Plans the opportunity to register such number of Class E
Shares as the Plans may request up to an aggregate maximum of the greater of (i)
2,600,000 or (ii) a number equal to 10% of the total number of shares of Class E
Common Stock proposed to be registered by General Motors as specified in such
notice (such registration an "Incidental Registration").
(b) If a Plan accepts such offer by giving General Motors written notice
thereof within seven Business Days of receipt of the offer, the aggregate number
of Class E Shares specified by the Plans (subject to the aforesaid maximum)
shall be included in such offering on the same terms and conditions as the
shares of Class E Common Stock of General Motors included therein.
Notwithstanding the foregoing, if the managing underwriter or underwriters of
any such offering advise the Plans that because of the size of the offering
which the Plans and General Motors intend to make, the success of the offering
would be materially and adversely affected, then the amount of securities to be
offered for the account of the Plans and for the account of General Motors shall
be reduced on a pro rata basis to the extent necessary to reduce the total
amount of securities to be included in such offering to the amount recommended
by such managing underwriter or underwriters, unless and to the extent that
General Motors, in its sole discretion, shall elect instead to reduce the number
of shares to be offered by it in the offering. Any election by a Plan to
participate in an Incidental Registration shall be irrevocable; provided that a
Plan may revoke its election to participate by delivering notice of such
revocation to General Motors no later than ten Business Days before the
scheduled effective date of such Incidental Registration, together with an
Authorized Fiduciary's written certification of its determination that
revocation of the election is required in order to comply with ERISA. General
Motors, in its sole discretion, shall control all matters relating to the
conduct of an Incidental Registration (including, without limitation, the
timing, pricing and/or abandonment of the offering and the selection of
underwriters) and shall ensure that such Incidental Registration and the sale of
Class E Shares pursuant thereto comply with all applicable laws. General Motors
shall pay all of its expenses and all out-of-pocket expenses reasonably incurred
by Prudential and the Plans in connection with any Incidental Registration other
than underwriting discounts, brokerage commissions and applicable transfer taxes
relating to the sale of the Class E Shares included in an Incidental
Registration.
(c) If any Class E Shares are included in an Incidental Registration, (i)
each of General Motors and the Plans agrees to execute and deliver an
underwriting agreement in customary form, (ii) General Motors agrees to
indemnify and provide contribution to the Plans and the underwriters in
customary form, (iii) General Motors agrees to indemnify and provide
contribution to the Plans and their representatives (including Prudential and
the Trustee) for any and all reasonable expenses or liabilities, including
attorneys' fees, arising from any violation of ERISA caused by the acts or
omissions of General Motors in the conduct of such Incidental Registration, and
(iv) each of General Motors and the Plans agrees to provide such other
information and take such other action as is reasonably necessary or advisable
to effect such Incidental Registration or to facilitate the exercise of the
rights granted hereunder.
(d) Each Plan agrees that if General Motors offers the Plans by written
notice delivered in accordance with Section 6(a) the opportunity to participate
in an Incidental Registration that is initially filed with the Securities and
Exchange Commission (the "Commission") on or prior to July 31, 1993 and proceeds
with an offering contemplated thereby, then such Plans will not offer to sell,
sell, contract to sell or otherwise dispose of any Class E Shares during the 90
day period beginning on the date of the effectiveness under the 1933 Act of the
registration statement relating to the proposed Incidental Registration,
regardless of whether such Plan has elected to participate in the Incidental
Registration, without the prior written consent of the managing underwriter(s)
for such offering. At the request of the underwriters or General Motors, each
Plan will execute a writing on or prior to such effectiveness acknowledging its
agreement under this Section 6. The provisions of this Section 6 are in addition
to the restrictions on transfer set forth in Section 5.
3
<PAGE> 4
7. Demand Registration of Class E Shares.
(a) At any time after July 31, 1993 (or such earlier date as an Authorized
Fiduciary for the Plans delivers General Motors a certification of the type
contemplated by the proviso set forth in Section 5), upon the written request of
one or more holders of Class E Shares to register for public offering and sale
under the 1933 Act at least 2,609,845 Class E Shares (which amount shall be
appropriately adjusted to account for any stock split, combination or
reclassification involving the Class E Common Stock after the date hereof),
General Motors shall (i) promptly notify each other holder, if any, of Class E
Shares that General Motors will prepare and file a registration statement under
the 1933 Act with respect to the public offering and sale of Class E Shares and
that, at the request of the holder, such Class E Shares which are then held by
the holder will be included within the coverage of such registration statement,
(ii) as soon as practicable prepare and file with the Commission a registration
statement under the 1933 Act covering all of the Class E Shares held by such
holder or holders which such holder or holders have requested be registered on
the terms and conditions provided below, and (iii) take the other actions in
connection therewith required below. The audited financial statements which
General Motors shall be required to include in such registration statement shall
only be the fiscal year-end financial statements of General Motors. If the
request for registration is received within two months prior to the commencement
of a fiscal year of General Motors, General Motors may delay the preparation and
filing of such registration statement for a period of not more than ninety (90)
days following the commencement of such fiscal year in order to prepare and
include in such registration statement audited financial statements for the
immediately preceding fiscal year. General Motors shall use its best efforts to
cause each such registration statement to become effective and to remain
effective and to include a current prospectus with respect to the Class E Shares
so registered for an aggregate period of ninety (90) days (exclusive of any
period during which the prospectus included therein shall not meet the
requirements of Section 10 of the 1933 Act), but such registration statement
shall not cover a delayed or continuous offering pursuant to Rule 415
promulgated under the 1933 Act without the written consent of General Motors.
Notwithstanding the foregoing, General Motors shall be obligated to so prepare
and file a registration statement under the 1933 Act for holders of Class E
Shares pursuant to this Section 7 only on two (2) occasions in any period of
four (4) consecutive months and on not more than twelve (12) occasions in the
aggregate; provided that, if any such registration statement is withdrawn for
any reason prior to its having been effective for ninety (90) days (exclusive of
any periods during which the prospectus included therein does not meet the
requirements of Section 10 of the 1933 Act), then such occasion shall not count
towards such limitation and, so long as the conditions hereinabove set forth are
satisfied, General Motors shall so prepare and file a registration statement
under the 1933 Act on an additional occasion. Notwithstanding the other
provisions of this Section 7, General Motors shall not be obliged to prepare and
file a registration statement under the 1933 Act as to any holder of Class E
Shares in any case where such holder, upon requesting that a registration
statement be prepared and filed as provided in this Section 7, shall have
received from counsel to General Motors who is reasonably satisfactory to such
holder a written opinion of counsel, in form and substance satisfactory to the
holder, to the effect that registration under the 1933 Act of the Class E Shares
held by such holder is not required for the public offering and sale of such
shares or that such holder has the right, pursuant to the provisions of Rule 144
under the 1933 Act or any successor provision of law or otherwise, to sell
within any three-month period all Class E Shares then held by such holder. Any
holder of Class E Shares which shall have received such an opinion shall not be
counted for purposes of determining the holders of Class E Shares which have
requested registration of their shares under the 1933 Act as required by this
Section 7.
(b) Whenever General Motors is required pursuant to the provisions of this
Section 7 to register Class E Shares under the 1933 Act General Motors shall (i)
furnish Prudential, each Plan and each holder of Class E Shares requesting
registration and each underwriter of such Class E Shares and each broker or
dealer participating in the distribution of such shares with such copies of a
current prospectus, including the preliminary prospectus, conforming to the
requirements of Section 10 of the 1933 Act (and such other documents as each
such person may reasonably request) as such holder(s), underwriter(s), brokers
and dealers may reasonably require in order to effectuate the offer and sale of
such Class E Shares, (ii) use its best efforts to register or qualify such Class
E Shares under the blue sky laws (to the extent applicable) of such jurisdiction
or jurisdictions as such holders and underwriters reasonably shall request and
(iii) take such other
4
<PAGE> 5
actions as may be customary and reasonably necessary or advisable to enable such
holders and such underwriters to consummate the sale or distribution in such
jurisdiction or jurisdictions in which such holders shall have reasonably
requested that such Class E Shares be sold; provided, however, that General
Motors shall not be required to qualify as a foreign corporation or
broker-dealer in any jurisdiction or to file a consent to service of process in
any jurisdiction in any action other than one arising out of the offering or
sale of such Class E Shares.
(c) General Motors shall pay all of its expenses and all out-of -pocket
expenses reasonably incurred by a holder of Class E Shares in connection with
any registration under the 1933 Act or other action taken by General Motors
pursuant to the provisions of this Section 7, other than underwriting discounts,
brokerage commissions and applicable transfer taxes relating to the sale of the
Class E Shares.
(d) General Motors will indemnify the holders of Class E Shares which are
registered under the 1933 Act pursuant to this Section 7 and any underwriter
acting on behalf of such holders substantially to the same extent as General
Motors would customarily indemnify an underwriter of any securities offering
agreed to between an underwriter and General Motors, and such holders (other
than a holder which is an employee benefit plan of General Motors) will
indemnify General Motors (and any underwriters of the Class E Shares) with
respect to information furnished by them in writing to General Motors for
inclusion in the registration statement substantially to the same extent as the
underwriter would customarily indemnify General Motors in connection with an
offering agreed to between General Motors and such underwriter. Receipt by
General Motors of such an indemnity by holders of Class E Shares (other than a
holder which is an employee benefit plan of General Motors) shall be a condition
to General Motors' obligation to cause a registration statement prepared in
accordance with this Section 7 to become effective under the 1933 Act.
8. Miscellaneous.
(a) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented except
by a writing signed by General Motors and the Plans.
(b) Notices. All notices and other communications provided for or permitted
hereunder shall be in writing and shall be made by hand delivery, by registered
or certified first-class mail, return receipt requested, or by facsimile
transmission:
(i) if to the Plans:
The Prudential Insurance Company of America
c/o Prudential Specialized Finance Group
4 Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Attn: President
with copies to:
Bankers Trust Company, as Trustee
280 Park Avenue, 8-W
New York, New York 10017
Attn: Christoph Brun
(ii) if to General Motors:
General Motors Corporation
767 Fifth Avenue
New York, New York 10153
Attention: Treasurer
Telephone: 212-418-3500
Facsimile: 212-418-3632
5
<PAGE> 6
with copies to:
General Motors Corporation
3031 West Grand Boulevard
Detroit, Michigan 48202
Attention: Warren G. Andersen
(c) Third Party Rights and Obligations. Nothing in this Agreement shall be
construed to give any person or entity other than (i) the Plans and General
Motors, and their successors, (ii) purchasers of Class E Shares, with respect to
demand registration rights as provided in Section 8(f) below, and (iii)
Prudential, and any successor to Prudential, as Manager under the Investment
Management Agreement, any legal or equitable right, remedy or claim under this
Agreement, and this Agreement shall be for the sole and exclusive benefit of
such persons.
(d) Descriptive Headings. The headings of the sections of this Agreement
are inserted for convenience only and shall not constitute a part hereof.
(e) Cooperation. Each party hereto shall take such further action, and
execute such additional documents as may be reasonably requested by any other
party hereto in order to consummate the transactions contemplated by this
Agreement.
(f) Binding Effect; Assignment. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by each of the parties and
their successors. None of the rights or obligations under this Agreement shall
be assigned by the Plans without the consent of General Motors by General Motors
without the consent of the Plans; provided that the Plans (and any purchaser to
which registration rights have been assigned in accordance with this proviso)
may assign, without the consent of General Motors, the registration rights
provided in Section 7 to a purchaser of Class E Shares who purchases such shares
from a Plan (or from such purchaser) in a transaction exempt from registration
under the 1933 Act.
(g) Counterparts. This Agreement may be executed in any number of
counterparts, and shall be deemed to have been duly executed and delivered by
all parties when each party has executed a counterpart hereof and delivered an
original or facsimile copy thereof to the other parties. Each such counterpart
hereof shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal law, and not the law of conflicts, of the State of
New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GENERAL MOTORS CORPORATION
By /s/ JAMES R. GIERTZ
-------------------------------
Name: James R. Giertz
Title: Assistant Treasurer
BANKERS TRUST COMPANY, as Trustee of
the General Motors Hourly-Rate Employees
Pension Plan and the General Motors
Retirement Program for Salaried
Employees
By /s/ GEFFREY G. MULLEN
-------------------------------
Name: Geffrey G. Mullen
Title: Vice President
6
