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GENERAL MOTORS CORPORATION
FORM 8-K
CURRENT REPORT
DATE OF REPORT - MARCH 3, 1995
FILED PURSUANT TO SECTION 13
OF THE
SECURITIES EXCHANGE ACT OF 1934
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported) March 3, 1995
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GENERAL MOTORS CORPORATION
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(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 1-143 38-0572515
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(State or other jurisdiction (Commission File Number) (I.R.S Employer
of incorporation) Identification No.)
767 Fifth Avenue, New York, New York 10153-0075
3044 West Grand Boulevard, Detroit, Michigan 48202-3091
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313)-556-5000
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
Exhibit 10(g) Agreement made as of March 3, 1995, By and Between
General Motors Corporation and The Pension Benefit
Guaranty Corporation
10(h) Registration Rights Agreement By and Between General
Motors Corporation and United States Trust Company of
New York as Trustee of the General Motors Hourly-Rate
Employees Pension Plan
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
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(Registrant)
Date March 17, 1995 By
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s/Wallace W. Creek
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(Wallace W. Creek, Comptroller)
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EXHIBIT 10(g)
AGREEMENT
MADE AS OF MARCH 3, 1995, BY AND BETWEEN
GENERAL MOTORS CORPORATION
AND
THE PENSION BENEFIT GUARANTY CORPORATION
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CONTENTS
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Section 1: Definitions .............................. 2
Actuarial Valuation Report ............................. 2
Adjusted Fair Market Value ............................. 2
Applicable Percentage .................................. 2
Cash Credit Balance .................................... 2
Code ................................................... 3
Contributed Shares ..................................... 3
Contributed Value ...................................... 3
Contributing Sponsor ................................... 3
Contribution Credit Balance ............................ 3
Contribution Date ...................................... 3
Controlled Group ....................................... 4
Designated Cash ........................................ 4
Dividend Base Fraction For GM Class E Stock ............ 5
EDS .................................................... 5
EDS Future Affiliates .................................. 5
EDS Plans .............................................. 5
EDS Releasees .......................................... 5
EDS Subsidiaries ....................................... 6
EDS Transferee ......................................... 7
Effective Date ......................................... 7
ERISA .................................................. 7
ERISA Limits ........................................... 8
Employer Security ...................................... 8
Excessive Transfer ..................................... 8
Exchanged Shares ....................................... 8
Extraordinary Contribution ............................. 9
Extraordinary Contribution Provision ................... 9
Extraordinary Items .................................... 9
Fair Market Value ...................................... 9
Final Order ............................................ 9
Funding Interest Rate .................................. 10
Funding Standard Account ............................... 10
GAAP ................................................... 10
GM ..................................................... 10
GM Class E Stock ....................................... 10
GM's Adjusted Net Income ............................... 10
GM's Cash .............................................. 11
GM's North American Operations ......................... 11
GM Pension Liability ................................... 12
GM Pension Plans ....................................... 12
GM Share ............................................... 12
GM Subsidiary .......................................... 13
Hourly Plan ............................................ 13
Independent Fiduciary .................................. 13
Intended Beneficiaries ................................. 13
IRS .................................................... 13
Labor Secretary ........................................ 13
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<TABLE>
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Material Transfer ...................................... 13
Named Fiduciary ........................................ 14
Net Charges ............................................ 14
Net Credits ............................................ 15
NewSub ................................................. 15
Non-Employer Security .................................. 15
PBGC ................................................... 16
Plan Year .............................................. 16
Qualified EDS Transaction .............................. 16
Restructuring Charges .................................. 17
Sold Stock Credit Balance .............................. 18
Statutory Funding Requirements ......................... 18
Stock Credit Balance ................................... 18
Then-Current Fair Market Value ......................... 19
Transaction Date ....................................... 19
Treasury Secretary ..................................... 19
Unsold Contributed Shares .............................. 19
Unsold Shares .......................................... 19
Value Received ......................................... 20
Section 2: GM's Extraordinary Contribution ............. 21
(a) Total Value Contributed ........................... 21
(b) Variation in Number of Shares Contributed ......... 21
(c) Timing of the Extraordinary Contribution .......... 23
(d) Security Regarding Final $2 Billion of
Designated Cash ................................... 23
(e) Conditions to GM's Obligation to Make the
Extraordinary Contribution ........................ 24
(f) Obligation to Negotiate in Good Faith if
Shares of GM Class E Stock are Not Contributed
in One Tranche .................................... 26
Section 3: No Effect on Statutory Funding Requirements
or Enforcement .............................. 27
(a) Minimum Funding and Its Enforcement ............... 27
(b) Notice to Funding Enforcement Agencies ............ 28
(c) Remedies Respecting Statutory Funding
Requirements ...................................... 30
Section 4: Use of Contribution Credit Balance .......... 32
Section 5: Integration With New Law .................... 36
Section 6: Financial Flexibility ....................... 38
(a) General Rule ...................................... 38
(b) Certain Changes in the Composition of GM's
North American Operations ......................... 39
</TABLE>
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<TABLE>
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Section 7: Employer Securities ......................... 41
(a) Twenty-Five Percent Holdback ...................... 41
(b) General Rules Regarding Sold Stock
Credit Balance .................................... 42
(c) Sold Stock ........................................ 44
(d) Unsold Stock ...................................... 44
(e) Independent Fiduciary ............................. 45
Section 8: Enforcement of Contribution Credit
Balance Restrictions ........................ 47
(a) Notice of Alleged Violation ....................... 47
(b) 60-day Period ..................................... 49
(c) Collateral ........................................ 49
Section 9: Releases and Covenants Not to Sue ........... 53
(a) Initial Release and Covenant Not to Sue
Respecting EDS Releasees and GM ................... 53
(b) Initial Release and Covenant not to Sue
Respecting EDS Transferees and GM ................. 53
(c) PBGC's Obligation to Deliver Specific Releases
and Covenants Not to Sue .......................... 53
(d) Certification Process ............................. 60
(e) Limitation on Excessive Transfers ................. 62
(f) Resolution or Waiver in the Event of an
Excessive Transfer ................................ 66
(g) Suspension of PBGC's Obligation to Deliver
Specific Releases and Covenants Not to Sue ........ 71
(h) Procedures for Resolving Disputes Over
Whether an Excessive Transfer Has Occurred ........ 72
(i) PBGC's Duty to Execute and Deliver to GM
Additional, Specific Releases in the Future ....... 79
(j) PBGC's Further Assurances ......................... 79
(k) No Release From Liability Respecting
the EDS Plans ..................................... 80
(l) Effect of Reentry into GM Controlled Group ........ 80
(m) Extension of Time Periods ......................... 80
(n) Irreparable Injury ................................ 81
(o) Certain New Subsidiaries .......................... 81
Section 10: Intended Beneficiaries ...................... 83
Section 11: Representations and Warranties of GM ........ 84
(a) Organization ...................................... 84
(b) Authorization ..................................... 84
(c) No Legal Bar ...................................... 84
(d) Enforceability .................................... 85
(e) Opinion of Counsel ................................ 85
(f) GM Pension Plans .................................. 86
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<TABLE>
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(g) Material Transfers ................................ 86
Section 12: Representations and Warranties of PBGC ...... 87
(a) Organization ...................................... 87
(b) Authorization ..................................... 87
(c) No Legal Bar ...................................... 87
(d) Enforceability .................................... 88
(e) Opinion of Counsel ................................ 88
Section 13: GM's Reporting Obligations .................. 89
(a) Income and Cash Schedules ......................... 89
(b) Actuarial Valuation Reports ....................... 90
(c) Annual Report (Form 5500) ......................... 91
(d) Asset Trust Statements ............................ 91
(e) Notice of Missed Funding Contributions ............ 92
(f) Use of Contribution Credit Balance ................ 92
(g) Additional Information ............................ 93
(h) Transfer of Controlling Interest .................. 93
(i) Independent Accountant Procedures ................. 95
(j) Termination of Reporting Obligations .............. 96
Section 14: Fees and Expenses ........................... 97
Section 15: Certain Transfers by GM to a New Parent ..... 98
(a) General ........................................... 98
(b) New Parent's Required Agreement ................... 98
(c) Definitions ....................................... 99
(d) New Parent's Rights and Defenses, and
Termination of New Parent's Obligations ........... 100
Section 16: General Provisions .......................... 101
(a) Limitation of Rights .............................. 101
(b) Severability ...................................... 101
(c) Notices ........................................... 101
(d) Business Days ..................................... 103
(e) Change of Plan Year ............................... 103
(f) Counterparts ...................................... 104
(g) Entire Agreement .................................. 104
(h) No Admission of Liability ......................... 104
(i) Survival of Representations and Warranties ........ 105
(j) No Reliance ....................................... 105
(k) Amendments and Waivers ............................ 105
(l) Headings .......................................... 106
(m) Governing Law ..................................... 106
(n) Binding Effect .................................... 106
(o) Construction ...................................... 106
(p) Reservation of Rights ............................ 107
(q) Confidential Information .......................... 107
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<TABLE>
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(r) Assignment ........................................ 110
(s) No Change to Governing Plan Documents or
Plan Administration ............................... 110
(t) Role of Named Fiduciary ........................... 111
</TABLE>
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AGREEMENT
This Agreement ("Agreement") is made as of March 3, 1995, by and
between General Motors Corporation, a Delaware corporation, and the Pension
Benefit Guaranty Corporation, a United States government corporation.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is acknowledged by each party hereto, GM and PBGC agree as
follows.
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SECTION 1: DEFINITIONS
"Actuarial Valuation Report" has the meaning set forth in section
13(b) of this Agreement.
"Adjusted Fair Market Value" of an Unsold Share means, on any date,
the Unsold Share's Fair Market Value on that date plus accumulated dividends
paid on such Unsold Share (including in the case of an Unsold Exchanged Share
dividends paid on the Contributed Share that was exchanged or redeemed for, or
converted into, the Exchanged Share) from the date such Share was contributed
to the Hourly Plan through the date such Share's Adjusted Fair Market Value is
determined.
"Applicable Percentage" means an amount equal to one minus a fraction,
the numerator of which fraction equals the number of shares of GM Class E Stock
(or Exchanged Shares but only if the Exchanged Shares represent an equity
interest in EDS) held by the Hourly Plan on the Transaction Date, and the
denominator of which fraction equals the total number of shares of that same
class of stock outstanding on the Transaction Date.
"Cash Credit Balance" means the credit balance in the Funding Standard
Account resulting from the Designated Cash portion of the Extraordinary
Contribution, including interest computed at the Funding Interest Rate.
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"Code" means the Internal Revenue Code of 1986, as amended, 26 U.S.C.
Section 1, et seq., and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of the Code shall be construed to refer also to any
successor or substantially related sections of similar import.
"Contributed Shares" means those shares of GM Class E Stock
contributed pursuant to section 2 of this Agreement. Contributed Shares do not
include Exchanged Shares.
"Contributed Value" with respect to a security or other asset is the
Fair Market Value of that security or asset as of the date on which the
security or asset is received by the Hourly Plan.
"Contributing Sponsor" has the meaning set forth in section
4001(a)(13) of ERISA.
"Contribution Credit Balance" means the sum of (i) the Cash Credit
Balance and (ii) the Stock Credit Balance, including the cash, if any,
contributed pursuant to section 2(b) of this Agreement.
"Contribution Date" with respect to a security or asset means the date
as of which that security or asset is deemed
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contributed to the Hourly Plan pursuant to section 302 of ERISA and section 412
of the Code.
"Controlled Group" has the meaning set forth in section 4001(a)(14) of
ERISA.
"Designated Cash" means any cash contributed to the Hourly Plan on or
before September 30, 1995, that GM designates as being in full or partial
satisfaction of section 2(a)(ii) of this Agreement by delivering to the
Independent Fiduciary and to PBGC a writing in the form of Appendix D1 hereto
by the later of (i) 90 days after the date such cash is contributed to the
Hourly Plan, or (ii) 45 days from the date on which GM makes a contribution of
GM Class E Stock to the Hourly Plan that results in the Hourly Plan exceeding
the 10% limit set forth in section 407(a)(2) of ERISA. Cash contributed to the
Hourly Plan shall not constitute Designated Cash, and hence shall not be
subject to this Agreement, unless (i) the cash is in excess of the contribution
determined by the Hourly Plan's enrolled actuary to be otherwise required under
section 302 of ERISA and section 412 of the Code for the Plan Year for which
such cash is contributed, and (ii) GM designates such cash as being in full or
partial satisfaction of section 2(a)(ii) of this Agreement. Subject to the
foregoing, GM may treat as Designated Cash (but shall not be required to treat
as such)
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any amounts contributed to the Hourly Plan on or after May 9, 1994.
"Dividend Base Fraction For GM Class E Stock" means the fraction
provided for in ARTICLE FOURTH, DIVISION I:(a)(5) of GM's Restated Certificate
of Incorporation, as amended, and as such fraction and Certificate of
Incorporation are in effect at the last Contribution Date for the Contributed
Shares.
"EDS" means Electronic Data Systems Corporation, a Texas corporation
that currently is a wholly-owned subsidiary of RGR Holdings, Inc., a
corporation that in turn is a wholly-owned subsidiary of GM.
"EDS Future Affiliates" means any person that becomes a member of a
Controlled Group with EDS after the Transaction Date, other than a person that
is or was at any time a member of GM's Controlled Group.
"EDS Plans" means the Electronic Data Systems Corporation Retirement
Plan, and every other defined benefit pension plan (if any) covered by Title IV
of ERISA for which EDS, an EDS Subsidiary or an EDS Releasee is a Contributing
Sponsor.
"EDS Releasees" means EDS plus RGR Holdings, Inc., a Delaware
corporation, plus the EDS Subsidiaries plus the EDS
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Future Affiliates, plus any person identified in part (i) or (ii) of the
definition of EDS Subsidiaries that is not in EDS's Controlled Group as of the
Transaction Date but is transferred in whole or in part to a third party in
conjunction with a Qualified EDS Transaction or in a transaction reasonably
related to or reasonably necessary to effect a Qualified EDS Transaction, plus
each and all of the agents, advisors, legal counsels, partners, joint
venturers, officers, directors and assigns of any of the foregoing persons or
any of them. Notwithstanding the foregoing, "EDS Releasees" shall not include
(i) GM or any other person that was a member of GM's Controlled Group before
the Transaction Date and continues without interruption to be a member of GM's
Controlled Group immediately following the Transaction Date, or (ii) if GM
elects to receive alternative Releases and Covenants Not to Sue pursuant to
section 9(f)(i)(D)(ii) of the Agreement, the corporations (if any) that are not
released under section 9(f)(i)(D)(ii) of the Agreement.
"EDS Subsidiaries" means
(i) the persons listed on Appendix S to this Agreement, all of which
are owned, directly or indirectly, by EDS as of the Effective Date,
plus
(ii) the additional persons, if any, in which EDS acquires a
"controlling interest" within the meaning of Treas. Reg. Section
1.414(c)-(2)(b)(2) after the Effective Date and on or before the
Transaction Date,
provided that those persons are members of EDS's Controlled Group as of the
Transaction Date.
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"EDS Transferee" means any purchaser or other direct or indirect
transferee of any or all of the stock or assets of any of the EDS Releasees, by
way of purchase, sale, assignment, pledge, exchange, conversion, merger,
consolidation, amalgamation or otherwise, and each of their parent
organizations, subsidiary organizations, successors and assigns (whether
present or future), or any of them (whether or not incorporated), and each and
all of their agents, advisors, legal counsels, fiduciaries, partners, joint
venturers, officers, directors and assigns, or any of them, but specifically
excluding (i) any person who is, after the Transaction Date, a member of GM's
Controlled Group, and (ii) if GM elects to receive alternative Releases and
Covenants Not to Sue pursuant to section 9(f)(i)(D)(ii) of the Agreement, the
corporations (if any) that are not released under section 9(f)(i)(D)(ii) of the
Agreement, and (iii) any GM Subsidiary that is not a member of EDS's Controlled
Group immediately after the Transaction Date.
"Effective Date" means the first date stated on page one of this
Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, 29 U.S.C. Section 1001, et seq., and any successor statute of similar
import, together with the regulations thereunder, in each case as in effect
from time
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to time. References to sections of ERISA shall be construed to refer also to
any successor or substantially related sections of similar import.
"ERISA Limits" means, with respect to Employer Securities held by the
Hourly Plan at the time application of the term "ERISA Limits" is at issue,
that: (1) the aggregate fair market value of all Employer Securities held by
the Hourly Plan does not exceed 10 percent of the fair market value of the
assets of the Hourly Plan at such time; (2) no more than 25 percent of the
aggregate amount of stock of the same class of Employer Securities issued and
outstanding is held by the Hourly Plan at such time; and (3) at least 50
percent of the aggregate amount of stock of the same class of Employer
Securities issued and outstanding is held by persons independent of the issuer
at such time.
"Employer Security" has the meaning set forth in section 407(d)(1) of
ERISA.
"Excessive Transfer" has the meaning set forth in section 9(e) of this
Agreement.
"Exchanged Shares" means shares, if any, received by the Hourly Plan
in exchange for, or upon the conversion or redemption of, the Contributed
Shares.
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"Extraordinary Contribution" means the GM Class E Stock (including
cash in lieu of stock, if any) and the Designated Cash contributed to the
Hourly Plan in accordance with section 2 of this Agreement.
"Extraordinary Contribution Provision" means GM's contribution of the
Class E Stock (including cash in lieu of stock, if any) and the Designated Cash
described in section 2(c)(i) and 2(c)(ii) of this Agreement (or in the case of
section 2(c)(ii), GM's providing the other consideration described in section
2(d) of this Agreement).
"Extraordinary Items" means those gains or losses that are
extraordinary items under GAAP.
"Fair Market Value" means the fair market value of an asset as
determined by the Independent Fiduciary. In determining Fair Market Value, the
Independent Fiduciary may take into consideration the opinion of an independent
financial advisor to the Independent Fiduciary. This definition does not apply
for purposes of determining "fair value" under section 9 of the Agreement or
for purposes of determining "Fair Value" under section 15 of the Agreement.
"Final Order" means an order that has not been reversed, stayed,
modified or amended, and (a) as to which any right to an appeal or to seek
reconsideration, certiorari, or review has been waived, or (b) as to which time
to appeal or to seek
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reconsideration, certiorari, or review has expired, and as to which no motion
for reconsideration, appeal, or petition for certiorari or review is pending.
"Funding Interest Rate" means the interest rate used by the Hourly
Plan's enrolled actuary for purposes of section 412(b)(5)(A) of the Code and
section 302(b)(5)(A) of ERISA.
"Funding Standard Account" means the funding standard account
maintained for the Hourly Plan pursuant to section 302 of ERISA and section 412
of the Code.
"GAAP" means generally accepted accounting principles as in effect at
the time the application of those principles is at issue.
"GM" means General Motors Corporation, a Delaware corporation.
"GM Class E Stock" means General Motors Corporation Class E Common
Stock, $0.10 par value.
"GM's Adjusted Net Income" for a Plan Year means the consolidated net
income of GM's North American Operations determined under GAAP as of December
31 of the calendar year (as shown in the Management Discussion and Analysis
section of GM's Form 10-K for such period) that ends during that Plan Year,
plus
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(1) the amount (on an after-tax basis) of one-time accounting
transition charges (i.e., the cumulative effect of accounting
changes pursuant to the adoption of a new, revised, amended or
restated accounting standard in accordance with GAAP),
Extraordinary Items and Restructuring Charges for that
calendar year, minus
(2) one-fifth per year for five years, of one-time Restructuring
Charges (on an after-tax basis) beginning in the year the
Restructuring Charges are first recognized.
"GM's Cash" for a Plan Year means U.S. Automotive (GMC Account) cash
and marketable securities owned by GM, measured as of December 31 of the
calendar year that ends during the Plan Year, under GAAP. For this purpose,
U.S. Automotive (GMC) Account means the set of GM corporate accounts that
reflect all the cash balances relating to GM's U.S. Automotive Operations and
GM corporate activities, and shall include but not be limited to the accounts
through which all U.S. automotive receipts and disbursements flow, the accounts
from which all GM dividend disbursements, debt repayments, equity issuances,
U.S. cash pension contributions and other corporate expenses are paid, and the
accounts into which flow all dividends from GM Overseas Operations, EDS, GM
Hughes Electronics Corporation, and the General Motors Acceptance Corporation.
"GM's North American Operations" means all of those operations whose
financial results are included in the Results for the North American Automotive
Operations of GM
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("NAO") as set forth in the GM Annual Report on Form 10-K, as last filed with
the U.S. Securities and Exchange Commission as of the time application of this
term may be at issue for purposes of this Agreement.
"GM Pension Liability" means any and all liabilities or obligations
now existing, or hereafter arising, to PBGC (on its own behalf, as trustee for
any plan, or in any other capacity) or to the GM Pension Plans under Title IV
of ERISA with respect to the GM Pension Plans or the termination of the GM
Pension Plans, including without limitation any liability under section 302 of
Title I of ERISA or under Title IV of ERISA (including without limitation, any
lien, liability, or obligation under section 4042, 4062, 4068 or 4069 of ERISA,
29 U.S.C. Section 1342, 1362, 1368 or 1369).
"GM Pension Plans" means every defined benefit pension plan covered by
Title IV of ERISA for which GM or a GM Subsidiary is a Contributing Sponsor as
of or at any time prior to or at any time after the Transaction Date, provided,
however, that GM Pension Plans shall not include any plans for which EDS or an
EDS Subsidiary is a Contributing Sponsor.
"GM Share" means an equity security issued by GM, including without
limitation a share of GM Class E Stock.
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GM Shares do not include shares or securities issued by persons other than GM
that are received in exchange for, or upon conversion or redemption of, GM
Shares.
"GM Subsidiary" means each and every person that is or was at any time
on or after May 9, 1994, a member of GM's Controlled Group, except for EDS, RGR
Holdings, Inc., and the EDS Subsidiaries listed on Appendix S to this
Agreement.
"Hourly Plan" means the General Motors Hourly-Rate Employees Pension
Plan (Employer Identification number 38-0572515, plan number 003).
"Independent Fiduciary" means U.S. Trust Company of New York in its
capacity as independent fiduciary of the Hourly Plan, or a successor
independent fiduciary of the Hourly Plan appointed pursuant to section 7(e) of
this Agreement.
"Intended Beneficiaries" has the meaning set forth in section 10 of
this Agreement.
"IRS" means the United States Internal Revenue Service.
"Labor Secretary" means the United States Secretary of Labor.
"Material Transfer" means any individual payment or transfer, from May
9, 1994 through the Transaction Date, from GM or a GM Subsidiary that is a
member of GM's Controlled
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Group and not a direct or indirect subsidiary of EDS at the time of such
transfer or payment to or into EDS, RGR Holdings, Inc., or an EDS Subsidiary
that (i) is not in the ordinary course of business of GM or EDS, and (ii)
consists of assets, operations or stock having a fair value, on the date the
payment or transfer is made, of not less than $50 million. In the case of a
transfer described above consisting of stock of a single GM Subsidiary made in
more than one transaction, all such stock transfers with respect to that GM
Subsidiary shall be aggregated for purposes of applying this definition of
Material Transfer, and the value of such stock shall be determined as of the
date of each such transfer; provided, however, that if the single GM Subsidiary
ceases to be a member of GM's Controlled Group as a result of a Qualified EDS
Transaction, value shall be determined as of the date the GM Subsidiary ceases
to be a member of GM's Controlled Group.
"Named Fiduciary" means the Finance Committee of the Board of
Directors of GM in its capacity as the named fiduciary designated in section 4
of the Hourly Plan and any successor Named Fiduciary.
"Net Charges" with respect to a Plan Year means the sum of the amounts
charged to the Funding Standard Account of the Hourly Plan for that Plan Year
pursuant to section 302 of ERISA and section 412 of the Code.
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"Net Credits" with respect to a Plan Year means the sum of the amounts
credited to the Funding Standard Account of the Hourly Plan for that Plan Year
pursuant to section 302 of ERISA and section 412 of the Code, excluding any
credit balance and any amount considered contributed to or under the Hourly
Plan for that Plan Year (together with any interest thereon at the Funding
Interest Rate).
"NewSub" means a corporation (i) that is organized after the Effective
Date as a result of a reorganization of a GM Subsidiary that was in existence
as of May 9, 1994, that was not a direct or indirect subsidiary of EDS at the
time of such reorganization, and that had a fair value greater than $1 billion
at the time of such reorganization, (ii) where assets, operations or
subsidiaries of that reorganized GM Subsidiary are transferred to such
newly-organized corporation, (iii) where, at any time during the
three-consecutive-year period ending on the Transaction Date, such
newly-organized corporation is part of GM's Controlled Group but is not owned
by the reorganized GM Subsidiary, and (iv) where the reorganized GM Subsidiary
did not receive fair value for the newly-organized corporation.
"Non-employer Security" means any security that is not an Employer
Security.
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"PBGC" means the Pension Benefit Guaranty Corporation, a U.S.
government corporation established under section 4002 of ERISA.
"Plan Year" means a plan year of the Hourly Plan. The 1993 Plan Year,
for example, means the plan year that begins October 1, 1993 and ends September
30, 1994. If, consistent with applicable law, GM elects to change the plan
year of the Hourly Plan, "Plan Year" means the plan year of the Hourly Plan as
changed, and the provisions of section 16(e) of this Agreement shall apply.
"Qualified EDS Transaction" means any transaction or series of
transactions (including without limitation any transaction or series of
transactions by which GM Class E Stock is exchanged, converted or redeemed for
capital stock of EDS) by which EDS ceases to be a member of GM's Controlled
Group, unless, immediately after the Transaction Date (i) more than 2.5% of the
Then- Current Fair Market Value of the Hourly Plan's assets consists of
Contributed Shares or Exchanged Shares that are GM Shares, and (ii) more than
5% of the Then-Current Fair Market Value of the Hourly Plan's assets consists
of Employer Securities. Notwithstanding the foregoing, even if immediately
after the Transaction Date, more than 2.5% of the Then-Current Fair Market
Value of the Hourly Plan's Assets consists of Contributed Shares or Exchanged
Shares that are GM Shares, and more than 5% of the
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Then-Current Fair Market Value of the Hourly Plan's assets consists of Employer
Securities, such transaction nonetheless will become a Qualified EDS
Transaction if and upon any later date that falls not more than 120 days after
the Transaction Date either (i) no more than 2.5% of the Then-Current Fair
Market Value of the Hourly Plan's assets consists of Contributed Shares or
Exchanged Shares that are GM Shares, or (ii) no more than 5% of the
Then-Current Fair Market Value of the Hourly Plan's assets consists of Employer
Securities. For purposes of this definition of Qualified EDS Transaction, in
determining whether the 5% limit is exceeded, any security that would otherwise
constitute an Employer Security and that is contributed to the Hourly Plan
after the last Contribution Date for the Contributed Shares shall be deemed to
be a Non-employer Security if (i) the contribution of such security is within
the ERISA Limits, and (ii) the credit balance in the Funding Standard Account
resulting from the contribution of such security is unused on the Transaction
Date.
"Restructuring Charges" means those liabilities incurred on or after
the Effective Date recognized in order to reflect the future cost associated
with restructuring activities involving GM's North American Operations (such as
the closing or downsizing of a facility that is part of GM's North American
Operations), less expected net realizable value from
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<PAGE> 24
related asset dispositions, as recorded in accordance with GAAP.
"Sold Stock Credit Balance" means an amount determined for purposes of
this Agreement that is equal to (i) the portion of the Stock Credit Balance
attributable to shares of GM Class E Stock contributed pursuant to this
Agreement that are subsequently sold (including Exchanged Shares, if any, that
are subsequently sold), adjusted as necessary under section 7(c) of this
Agreement, plus (ii) the cash contributed pursuant to section 2(b) of this
Agreement, if any, with interest thereon at the Funding Interest Rate. For
this purpose, the Sold Stock Credit Balance will include interest at the
Funding Interest Rate from the date of contribution, based on the Fair Market
Value at the time contributed, provided, however, that from the date of sale
such interest shall run on the value as adjusted under section 7(c) of this
Agreement.
"Statutory Funding Requirements" means the minimum funding
requirements for the Hourly Plan under section 302 of ERISA and section 412 of
the Code.
"Stock Credit Balance" means the credit balance in the Funding
Standard Account resulting from the stock portion of the Extraordinary
Contribution, including (i) the cash, if
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<PAGE> 25
any, contributed pursuant to section 2(b) of this Agreement, and (ii) interest
computed at the Funding Interest Rate.
"Then-Current Fair Market Value" of a Contributed Share as of a date
means the Fair Market Value of that Share as of that date. "Then-Current Fair
Market Value" of any other asset as of a date means the fair market value of
that asset as of that date. This definition does not apply for purposes of
determining "fair value" under section 9 of the Agreement or for purposes of
determining "Fair Value" under section 15 of the Agreement.
"Transaction Date" with respect to the Qualified EDS Transaction
(including a transaction that becomes a Qualified EDS Transaction) means the
date on which EDS ceases to be a member of GM's Controlled Group.
"Treasury Secretary" means the United States Secretary of Treasury or
his or her delegate as defined in section 7701(a)(12)(A)(i) of the Code.
"Unsold Contributed Shares" means, on any date, those Contributed
Shares that have not been sold by or on behalf of the Hourly Plan.
"Unsold Shares" means, on any date, Contributed Shares or Exchanged
Shares that have not been sold by or on behalf of the Hourly Plan.
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<PAGE> 26
"Value Received" means with respect to a Contributed Share or an
Exchanged Share the value received upon sale of such Share plus accumulated
dividends declared on such Share from the date such Share was contributed to
the Hourly Plan (or, in the case of an Exchanged Share, from the date the
Contributed Share that was exchanged or redeemed for, or converted into, such
Exchanged Share was contributed to the Hourly Plan) and through the date of the
Share's sale.
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<PAGE> 27
SECTION 2: GM'S EXTRAORDINARY CONTRIBUTION
(a) Total Value Contributed. Subject to satisfaction (or express
written waiver by GM) of the conditions set forth in section 2(e) of this
Agreement, GM shall make an extraordinary contribution to the Hourly Plan (in
excess of the contribution otherwise determined by the Hourly Plan's enrolled
actuary to be required under section 302 of ERISA and section 412 of the Code
for the Plan Year(s) for which the contribution is made, calculated without
regard to the contribution described in this section 2(a)) consisting of: (i)
177 million shares of GM Class E Stock (or a lesser number of shares, so long
as GM meets the requirements of section 2(b) of this Agreement, subject to
section 2(f) of this Agreement); and (ii) Designated Cash of $4 billion. GM
and PBGC shall be bound by sections 1, 2 and 10 through 12 and sections 14 and
16 of this Agreement immediately upon the Effective Date and without any
condition whatsoever. If GM satisfies the Extraordinary Contribution
Provision, then GM and PBGC shall be bound by sections 3 through 9 and sections
13 and 15 of this Agreement as well, immediately from the date on which GM
satisfies the Extraordinary Contribution Provision.
(b) Variation in Number of Shares Contributed. GM may include in
the Extraordinary Contribution fewer than 177 million shares of GM Class E
Stock, provided that,
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<PAGE> 28
immediately after the last contribution of such GM Class E Stock, GM will have
included in the Extraordinary Contribution the number of shares of GM Class E
Stock that, when added to --
(i) the number of shares of GM Class E Stock outstanding on the
date of such last contribution, and
(ii) the 44,881,508 shares of GM Class E Stock reserved for
possible issuance upon a conversion of GM Series C Convertible
Preference Stock pursuant to the Certificate of Designation
for such Stock, and
(iii) the number of shares of GM Class E Stock that, as of the last
contribution of such Stock, are reserved or committed (as
Treasury shares or otherwise) for employee benefit plans,
stock bonus plans or employee stock programs that were
maintained as of March 16, 1994, by members of GM's Controlled
Group or agreements related thereto,
will equal the denominator of the Dividend Base Fraction for GM Class E Stock,
and provided further that, if fewer than 177 million shares of GM Class E Stock
are included in the Extraordinary Contribution, then GM shall include in the
Extraordinary Contribution an additional amount of cash equal to the product of
(A) and (B) below:
(A) The sum of the Contributed Values for all shares of GM Class E
Stock contributed pursuant to this Agreement divided by the number of
shares of GM Class E Stock contributed pursuant to this Agreement.
(B) The difference between 177 million and the number of shares of GM
Class E Stock contributed pursuant to this Agreement.
The additional cash contribution determined under this section 2(b), if any,
shall be treated as part of the Extraordinary Contribution and the resulting
credit to the
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<PAGE> 29
Funding Standard Account shall be treated as part of the Sold Stock Credit
Balance.
(c) Timing of the Extraordinary Contribution. The timing of the
Extraordinary Contribution shall be as follows:
(i) the contribution to the Hourly Plan of the shares of GM Class
E Stock described in section 2(a)(i) of this Agreement, or the
contribution to the Hourly Plan of the shares of GM Class E
Stock and the additional cash described in section 2(b) of
this Agreement, shall be completed as soon as reasonably
practicable after the satisfaction (or express written waiver
by GM) of the conditions set forth in section 2(e) of this
Agreement, but in no event later than September 30, 1995, and
a payment or payments totalling at least $2 billion of the
Designated Cash described in section 2(a)(ii) of this
Agreement shall be contributed at the same time or earlier;
and
(ii) the balance of the Designated Cash described in section
2(a)(ii) of this Agreement shall be contributed to the Hourly
Plan by September 30, 1995.
(d) Security Regarding Final $2 Billion of Designated Cash. For
purposes of section 9 of this Agreement, GM shall be deemed to have contributed
the Designated Cash described in section 2(c)(ii) of this Agreement if and
when, GM posts for the benefit of the Hourly Plan collateral consistent with
the provisions of sections 8(c)(ii) and 8(c)(iii) of this Agreement to secure
payment of any unpaid portion of the Designated Cash described in section
2(c)(ii) of this Agreement (the "Designated Cash Security"). PBGC may enforce
the Hourly Plan's interest in the Designated Cash Security provided under this
section 2(d) if the Designated Cash
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<PAGE> 30
described in section 2(c)(ii) of this Agreement is not contributed to the
Hourly Plan by September 30, 1995. Any and all Designated Cash Security shall
immediately be released upon receipt by the Hourly Plan of the Designated Cash
described in section 2(c)(ii) of this Agreement, plus interest (if any) at the
Funding Interest Rate from September 30, 1995 to the date of receipt by the
Hourly Plan.
(e) Conditions to GM's Obligation to Make the Extraordinary
Contribution. GM shall be bound to make the Extraordinary Contribution,
subject to satisfaction (or express written waiver by GM) of the following
conditions:
(i) GM shall have received by September 30, 1995 governmental
rulings satisfactory to GM concerning the proposed
contribution of GM Class E Stock;
(ii) GM shall have received an opinion letter from each of Kirkland
& Ellis and Weil, Gotshal & Manges, each in form and substance
reasonably acceptable to GM, substantially to the effect that
GM Class E Stock is capital stock of GM and therefore no gain
would be recognized by GM on the contribution of shares of
Class E Stock to the Hourly Plan (the "Contribution Opinions")
and such Contribution Opinions shall not have been withdrawn,
conditioned, qualified or otherwise modified in a manner
adverse to GM;
(iii) GM shall have no reason to believe that the assumptions of
fact and its representations as set forth in the Contribution
Opinions are not true and correct;
(iv) the Treasury Secretary shall not have issued any interpretive
guidance or regulation that in GM's reasonable opinion would
subject GM to the excise tax under section 4972 of the Code as
a result of the Extraordinary Contribution;
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<PAGE> 31
(v) GM shall have reached an agreement, in form and substance
reasonably satisfactory to GM, with the Independent Fiduciary
regarding the valuation of all shares of Class E Stock to be
included in the Extraordinary Contribution;
(vi) no court of competent jurisdiction or other governmental
authority shall have issued an order, decree, ruling or
judgment that is still in effect restraining, enjoining or
otherwise prohibiting the Extraordinary Contribution (or any
portion of the Extraordinary Contribution);
(vii) no action, proceeding or investigation by any governmental
authority shall be pending that (A) seeks to enjoin or delay
consummation of the Extraordinary Contribution (or any portion
of the Extraordinary Contribution) or to impose any material
restriction or requirement on the Extraordinary Contribution
(or any portion of the Extraordinary Contribution) or on GM,
any of its subsidiaries or affiliates or the Hourly Plan
(other than the restrictions and requirements specifically set
forth herein) if the Extraordinary Contribution (or any
portion of the Extraordinary Contribution) is made or (B) is
reasonably likely to have a material adverse effect on the
business, assets, liabilities, results of operations,
condition (financial or otherwise) or prospects of GM and its
subsidiaries, taken as a whole, if GM makes the Extraordinary
Contribution (or any portion of the Extraordinary
Contribution);
(viii) no action shall have been taken, and no statute, rule,
regulation or executive order shall have been enacted,
entered, promulgated or enforced by any governmental authority
that, individually or in the aggregate, is reasonably likely
to (A) prevent or materially hinder the consummation of the
Extraordinary Contribution (or any portion of the
Extraordinary Contribution), (B) impose any material
restriction or requirement on the Extraordinary Contribution
(or any portion of the Extraordinary Contribution) or on GM,
any of its subsidiaries or affiliates or the Hourly Plan
(other than the restrictions and requirements specifically set
forth herein) if the Extraordinary Contribution (or any
portion of the Extraordinary Contribution) is made or (C) have
a material adverse effect on the business, assets,
liabilities, results of operations, condition
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<PAGE> 32
(financial or otherwise) or prospects of GM and its
subsidiaries, taken as a whole, if GM makes the Extraordinary
Contribution (or any portion of the Extraordinary
Contribution);
(ix) the accounting treatment under GAAP of the Extraordinary
Contribution shall be satisfactory to GM's Board of Directors;
and
(x) the Board of Directors of GM shall not have become aware of
any fact of which it was not aware as of the date of this
Agreement, and no event shall have occurred and no
circumstances shall have changed (including but not limited to
any developments in pending litigation) after the date of this
Agreement, such that the Board of Directors of GM has
determined, in its sole discretion, that making the
Extraordinary Contribution (or any portion of the
Extraordinary Contribution) is no longer in the best interests
of GM and its stockholders.
(f) Obligation to Negotiate in Good Faith if Shares of GM Class E
Stock are Not Contributed in One Tranche. If GM determines to contribute the
shares of GM Class E Stock described in section 2(a)(i) of this Agreement in
more than one tranche, and if, after GM contributes one or more tranches of
such shares of GM Class E Stock, the facts and circumstances that caused the
conditions set forth in section 2(e) of the Agreement to be satisfied or waived
by GM have changed, then sections 2(a)(i) and 2(b) of this Agreement shall not
apply and GM and PBGC shall negotiate in good faith such modifications to the
Agreement as are reasonable and appropriate to carry out the purposes of this
Agreement.
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<PAGE> 33
SECTION 3: NO EFFECT ON STATUTORY FUNDING REQUIREMENTS OR ENFORCEMENT
(a) Minimum Funding and Its Enforcement. This Agreement does not
alter in any way the determination of the Statutory Funding Requirements for
the Hourly Plan, including without limitation the determination of credit
balance amounts and charges and credits to the Funding Standard Account under
section 302 of ERISA and section 412 of the Code. Nor does this Agreement
grant or expand any right to enforce the Statutory Funding Requirements, except
to the limited extent provided in section 3(b)(iii) below. Rather, with regard
to funding of the Hourly Plan, this Agreement sets forth agreed-upon
restrictions that contractually limit for certain purposes and for specified
periods the availability of certain credit balance amounts in the Funding
Standard Account resulting from the Extraordinary Contribution, and those
agreed-upon restrictions thus may result in annual contributions to the Hourly
Plan with respect to certain periods that exceed the annual contributions that
otherwise would be required with respect to those periods under the Statutory
Funding Requirements. Consequently, nothing in this Agreement shall alter the
values, methods and procedures that may be used by GM or the enrolled actuary
for the Hourly Plan to determine the Statutory Funding Requirements.
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<PAGE> 34
(b) Notice to Funding Enforcement Agencies. If PBGC believes that
the enrolled actuary for the Hourly Plan has failed to calculate credits and
charges to the Funding Standard Account in accordance with the Statutory
Funding Requirements, then, except as provided in the last sentence of section
3(c) below, PBGC's sole recourse shall be as follows:
(i) PBGC may request in writing that the Treasury Secretary
request that the Labor Secretary consider bringing suit
pursuant to sections 502(b)(1) and (a)(5) of ERISA respecting
the alleged failure to comply with the Statutory Funding
Requirements identified by PBGC. At least ten days before
making such request to the Treasury Secretary, PBGC shall
advise GM in writing that PBGC is making such a request and
shall identify the grounds upon which such request is based.
PBGC shall furnish to GM a copy of each and every writing that
it submits to the Treasury Secretary in connection with PBGC's
request at the same time such writing(s) are submitted to the
Treasury Secretary by PBGC. Similarly, GM shall provide to
PBGC a copy of any writings it submits to the Treasury
Secretary under this section 3(b)(i) at the same time such
writings are submitted to the Treasury Secretary.
(ii) If the Labor Secretary brings the action requested by the
Treasury Secretary based upon and limited to the grounds
identified by PBGC to GM, as described in section 3(b)(i) of
this Agreement, GM will not interpose as a defense that,
because there is or was no deficiency in the Funding Standard
Account because of the Contribution Credit Balance, the Labor
Secretary does not have a claim or right to enforce the
Statutory Funding Requirements.
(iii) Notwithstanding section 3(a) of this Agreement, if the Labor
Secretary's action respecting the Statutory Funding
Requirements identified in paragraph (ii) above is dismissed
for lack of subject matter jurisdiction on the grounds that
there is or was no deficiency in the Funding Standard Account
because of the Contribution Credit Balance, then
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<PAGE> 35
(A) compliance with that portion of the Statutory Funding
Requirements as to which the Labor Secretary alleged
a violation based upon and limited to the grounds
identified by PBGC to GM shall become a requirement
of this Agreement applicable solely to the act or
omission that the Labor Secretary, upon request by
the Treasury Secretary, alleged constituted the
violation, and
(B) the additional requirement of this Agreement
designated in the preceding clause shall be
enforceable by PBGC, and only by PBGC. PBGC may
immediately file an action in an appropriate court to
enforce such requirement.
Any statute of limitations respecting an action by PBGC under
this section 3(b)(iii) shall be tolled upon the filing of an
action by the Labor Secretary under section 3(b)(i).
(iv) Nothing in this section 3(b) of the Agreement shall preclude
the Treasury Secretary from requesting, or the Labor Secretary
from bringing, an action based on issues not identified by
PBGC.
(v) If the Labor Secretary or PBGC prevails in whole or in part in
an action brought pursuant to section 3(b)(i) or (iii) of this
Agreement, PBGC shall serve upon GM a notice recalculating
GM's minimum funding as provided in the court's order. GM
retains all rights under applicable law to appeal and
otherwise to seek review of any court order issued in an
action brought pursuant to section 3(b)(i) or (iii), and to
seek a stay of enforcement of any such order(s) pending appeal
or review. If enforcement is not stayed (because, for
example, the order becomes a Final Order or GM elects not to
post the security, if any, required by the court as a
condition for obtaining a stay), GM shall, within 60 days of
the date on which PBGC serves notice under this section
3(b)(v), and provided that no application for a stay of
enforcement of the court's order remains pending before a
court of competent jurisdiction, defray the resulting
additional minimum funding either by making an additional
contribution to the Hourly Plan or by drawing down the credit
balance in the Funding Standard Account, or both. If
enforcement of the court's order is stayed by a court, or if
an application by GM for stay of enforcement of the
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<PAGE> 36
court's order is pending before a court of competent
jurisdiction, GM shall have no obligation to defray the
resulting additional minimum funding under the foregoing
sentence until 20 days after the later of (i) the date on
which all such stays of the court's order cease to be in
effect, or (ii) the date on which all such applications for a
stay of the court's order have been denied.
If GM does not defray the resulting additional
minimum funding contribution (if any) required under this
section 3(b)(v) by making an additional contribution to the
Hourly Plan, GM shall automatically be deemed to have defrayed
such additional minimum funding contribution in whole by
drawing down the credit balance in the Funding Standard
Account. If GM elects to defray the additional required
minimum funding in whole or in part by drawing down the credit
balance, if any, GM shall serve on PBGC a notice or revised
notice under section 13(f) of this Agreement specifically
noting the additional use of the credit balance for the period
or periods at issue. If PBGC determines that, as a result of
GM's drawing down the credit balance, GM has violated a
restriction on the use of the Contribution Credit Balance set
forth in this Agreement, then PBGC may provide the notice
required under section 8(a) of this Agreement and shall
proceed only as provided in section 8 of this Agreement,
except that PBGC may file an action under section 8(b) as
early as the fifth business day following PBGC's notice under
section 8(a), rather than the 61st day following such notice.
(c) Remedies Respecting Statutory Funding Requirements. This
Agreement does not add to or detract from the Statutory Funding Requirements.
Except to the limited extent that compliance with a Statutory Funding
Requirement may be incorporated by reference as a requirement of this Agreement
pursuant to section 3(b)(iii) above, this Agreement does not give PBGC any
right to enforce the Statutory Funding Requirements, either directly or
indirectly. If PBGC
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<PAGE> 37
acquires or has acquired authority to enforce the Statutory Funding
Requirements as a result of a law of general applicability, PBGC may elect to
pursue either the remedies granted under such law or the procedures set forth
in section 3(b) of this Agreement, but not both.
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<PAGE> 38
SECTION 4: USE OF CONTRIBUTION CREDIT BALANCE
The Contribution Credit Balance shall be taken into account under the
terms and conditions set forth in sections 4, 5, 6 and 7 of this Agreement.
The application of certain of those terms and conditions is illustrated in
Appendix C1 to this Agreement.
(a) For purposes of determining the amount required to be
contributed to the Hourly Plan for any period through the end of the 1995 Plan
Year, no portion of the Contribution Credit Balance shall be taken into
account, except that at GM's sole discretion interest on the Cash Credit
Balance at the Funding Interest Rate may be taken into account with immediate
effect from the Contribution Date(s) of the corresponding Designated Cash.
(b) In addition to the foregoing, and subject to section 7(a) of
this Agreement, for purposes of determining the amount required to be
contributed to the Hourly Plan for the 1996 Plan Year and subsequent Plan
Years, up to the entire amount of the Cash Credit Balance may be taken into
account, with immediate effect from the first day of the 1996 Plan Year.
(c) In addition to the foregoing, for purposes of determining the
amount required to be contributed to the Hourly Plan for the 1998 Plan Year and
subsequent Plan Years,
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<PAGE> 39
up to $1.45 billion of the amount of the Stock Credit Balance may be taken into
account for each such Plan Year from the first day of each such Plan Year,
subject to the limitations on the availability of the Stock Credit Balance set
forth in section 7 of this Agreement.
(d) Nothing in this Agreement shall be construed to require that
all portions of the Contribution Credit Balance made available under one or
more of sections 4(a), 4(b), 4(c), 5 or 6 of this Agreement be applied for
purposes of reducing the amount that is contributed to the Hourly Plan for any
Plan Year. Further, any portion of the Contribution Credit Balance made
available under one or more of sections 4(a), 4(b), 4(c) or 5 of this Agreement
that is not used for purposes of reducing the amount that is contributed to the
Hourly Plan for a given Plan Year (either because GM elected not to use such
portion or because an insufficient number of shares of GM Class E Stock have
been sold by the Hourly Plan) shall be carried forward with interest (computed
at the Funding Interest Rate) to future years and may be used in addition to
any amounts or credits otherwise allowed by this Agreement.
(e) Notwithstanding any other restriction in this Agreement
(excepting the restriction in section 7(a), which shall cease to apply, or not,
as provided in that section), for purposes of determining the amount required
to be
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<PAGE> 40
contributed to the Hourly Plan for the 2003 Plan Year and subsequent Plan
Years, the entire amount of the Contribution Credit Balance as reflected in the
Funding Standard Account may be taken into account with immediate effect from
the first day of the 2003 Plan Year.
(f) Notwithstanding any other provision of this Agreement, the
Extraordinary Contribution shall, from the Contribution Date(s) of the
Designated Cash and Contributed Shares, respectively, be treated as an asset of
the Hourly Plan for all purposes under ERISA and the Code. As a result, and
without limiting the foregoing, the entire amount of the Contribution Credit
Balance shall, to the extent required by the law in effect at the time, be
taken into account in determining the amount of the Hourly Plan's unfunded
current liability under section 302(d)(8)(A) of ERISA and section 412(l)(8)(A)
of the Code for all purposes, including without limitation, the determination
of whether there are any additional funding requirements under those sections
and the determination of premiums under ERISA section 4006.
(g) The required installments (within the meaning of section
302(e) of ERISA and section 412(m) of the Code) for the Hourly Plan for any
Plan Year shall be determined under the Statutory Funding Requirements.
However, only the portion of the Contribution Credit Balance that is available
for the Plan Year under sections 4 through 7 of this
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<PAGE> 41
Agreement may be applied to satisfy any required installment payment.
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<PAGE> 42
SECTION 5: INTEGRATION WITH NEW LAW
Subject to the limitations set forth in section 7 of this Agreement,
if with respect to the 1995 Plan Year or any subsequent Plan Year, as a result
of any legislation that Congress enacts after May 9, 1994, there is an increase
in the difference between (i) Net Charges for that Plan Year and (ii) Net
Credits for that Plan Year, above what that difference would have been for that
Plan Year under the law in effect on May 9, 1994, then, for purposes of
determining the amount required to be contributed for each such Plan Year, an
additional amount of the Contribution Credit Balance may be taken into account,
with immediate effect from the first day of such Plan Year, equal to the lesser
of the following two amounts (the "Legislative Cap"):
(a) the amount by which such legislation increased the difference
between Net Charges and Net Credits for such Plan Year; and
(b) $750 million for each of the 1995 through 1999 Plan Years, and
$950 million for the 2000 Plan Year and for each of the Plan
Years thereafter through the 2002 Plan Year.
Consistent with section 4(d) of this Agreement, any portion of the Legislative
Cap that is not used for a Plan Year may be carried forward with interest at
the Funding Interest Rate to subsequent Plan Years. In the event an amount is
carried forward to a subsequent Plan Year pursuant to the foregoing sentence,
then the amount of the Legislative Cap that otherwise would apply in such
subsequent Plan Year shall be
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<PAGE> 43
increased by the amount carried forward, provided, however, that under no
circumstance shall the additional amount of the Contribution Credit Balance
that may be used to determine the amount required to be contributed for any
such subsequent Plan Year (including amounts carried forward from prior Plan
Years) as a result of this section 5 of the Agreement exceed the amount by
which the legislation increased the difference between Net Charges and Net
Credits for such subsequent Plan Year. Any legislation that Congress enacts
after May 9, 1994 that has a substantially similar effect to that described in
this section (by, for example, imposing additional funding requirements other
than through the operation of the funding standard account), shall be treated
under this section as if it increased the difference between Net Credits and
Net Charges.
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<PAGE> 44
SECTION 6: FINANCIAL FLEXIBILITY
(a) General Rule. Subject to the limitations set forth in
section 7 of this Agreement, for each Plan Year beginning with the 1996 Plan
Year, if any, in which GM's Adjusted Net Income is negative by at least $1.5
billion and GM's Cash is less than $3 billion, up to $1 billion annually of the
Contribution Credit Balance, in addition to the amount of the Contribution
Credit Balance made available under sections 4 and 5 of this Agreement, may be
taken into account with immediate effect from the first day of such Plan Year
for purposes of reducing the amount required to be contributed to the Hourly
Plan for such Plan Year, provided that:
(i) whenever an additional amount is taken into account pursuant
to this section 6, an equal amount shall be deducted from the
amount of the Contribution Credit Balance otherwise made
available pursuant to sections 4 and 5 of this Agreement with
respect to the earlier of (A) the first day of the first
ensuing Plan Year in which GM's Adjusted Net Income is
positive by $1 billion or more, or (B) the first day of the
fifth Plan Year beginning after the Plan Year in which such
additional amount is taken into account pursuant to this
section 6, except that, as provided under section 4(e) of this
Agreement, no such deduction shall be made for periods
beginning on or after the first day of the 2003 Plan Year; and
(ii) additional amounts equal to no more than $2 billion in total
may be taken into account pursuant to this section 6 with
respect to any five consecutive Plan Years.
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<PAGE> 45
(b) Certain Changes in the Composition of GM's North American
Operations.
(i) Sales of Ongoing Operations. If, for any fiscal year
beginning after December 31, 1993, GM excludes from the
composition of GM's North American Operations any operations
(including subsidiaries) of GM that were included in the
composition of GM's North American Operations as of December
31, 1993, due to the sale of such operations as an ongoing
business to an unrelated party, and those operations
contributed more than five percent of net sales and revenues
of GM's North American Operations for the year prior to the
year the operations were excluded, then, prior to GM utilizing
any credits under section 6(a) of the Agreement, and prior to
GM deducting from the amount of the available Contribution
Credit Balance pursuant to section 6(a)(i) above, GM and PBGC
shall negotiate in good faith whether adjustments to the
negative $1.5 billion Adjusted Net Income threshold set forth
in the first sentence of section 6(a) of this Agreement and
the positive $1 billion threshold set forth in paragraph (i)
of section 6(a) of this Agreement are necessary to fairly
reflect the operations' exclusion from GM's North American
Operations.
(ii) Reconfiguration of Ongoing Operations. If for any fiscal
year beginning after December 31, 1993, GM includes in the
composition of GM's North American Operations any operations
(including subsidiaries) of GM that were excluded from the
composition of GM's North American Operations as of December
31, 1993 or GM excludes from the composition of GM's North
American Operations any operations (including subsidiaries) of
GM that were included in the composition of GM's North
American Operations as of December 31, 1993, and if GM still
owns and continues the operations at issue and those
operations contributed (or would have contributed had they
been included) more than five percent of the net sales and
revenues of GM's North American Operations in the year prior
to the year in which GM's North American Operations are
reconfigured (a "Reconfiguration"), then PBGC has the right to
require GM to recompute GM's Adjusted Net Income as if such
Reconfiguration had not occurred in the fiscal year in which
the Reconfiguration occurs and the succeeding fiscal year.
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<PAGE> 46
In the case of any Reconfiguration described in the
foregoing paragraph, for fiscal years other than those for
which PBGC has a right under the foregoing paragraph to
require GM to recompute GM's Adjusted Net Income, and prior to
GM utilizing any credits under section 6(a) of the Agreement,
and prior to GM deducting from the amount of the available
Contribution Credit Balance pursuant to section 6(a)(i) above,
GM and PBGC shall negotiate in good faith whether any
adjustments in the negative $1.5 billion Adjusted Net Income
threshold set forth in the first sentence of section 6(a) of
this Agreement and the positive $1 billion threshold set forth
in subparagraph (i) of section 6(a) of this Agreement are
necessary to fairly reflect the Reconfiguration of GM's North
American Operations.
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<PAGE> 47
SECTION 7: EMPLOYER SECURITIES
(a) Twenty-Five Percent Holdback. Notwithstanding any provision
in section 3, 4, 5 or 6 of this Agreement, GM shall maintain in the Funding
Standard Account a Cash Credit Balance, or a Sold Stock Credit Balance, or a
combination of the two, in an amount equal to or greater than 25% of the sum of
the Contributed Value of the Contributed Shares to the extent such shares (or
any Exchanged Shares) are still held by the Plan, until the first day of a
continuous nine-month period beginning on any day after GM completes the
Extraordinary Contribution, during which, on each day within that period, the
Hourly Plan satisfies (i), (ii) and (iii) below:
(i) the Then-Current Fair Market Value of the Contributed
Shares (including Exchanged Shares, if any) still
held by the Hourly Plan represents no more than 10%
of the Then-Current Fair Market Value of the Hourly
Plan's assets; and
(ii) the Hourly Plan holds no more than 25% of the total
number of shares of GM Class E Stock (or of Exchanged
Shares, if any) issued and outstanding; and
(iii) at least 50% of the class of GM Class E Stock (or of
the Exchanged Shares, if any) issued and outstanding
are held by parties independent of GM.
If as of October 1, 2003, or any date thereafter, all shares of GM Class E
Stock held by the Hourly Plan are, or previously have been, exchanged or
redeemed for, or converted into, securities that are or become Non-employer
Securities,
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<PAGE> 48
then the requirements of this section 7(a) shall cease to apply as of such
date.
(b) General Rules Regarding Sold Stock Credit Balance.
(i) Except as provided in sections 7(b)(ii) and (iii) of this
Agreement, the amount of any Stock Credit Balance that becomes
available pursuant to sections 4(c), 4(d), 5, or 6 of this
Agreement is limited to the Sold Stock Credit Balance.
(ii) Notwithstanding section 7(b)(i) of this Agreement, if,
(A) the lesser of the Contributed Value
of the Contributed Shares (or
Exchanged Shares that are Employer
Securities) then held by the Hourly
Plan (plus interest at the Funding
Interest Rate), or the Then-Current
Fair Market Value of the Contributed
Shares (or Exchanged Shares that are
Employer Securities, if any) then
held by the Hourly Plan; plus
(B) the Then-Current Fair Market Value
of other Employer Securities then
held by the Hourly Plan; minus
(C) the Then-Current Fair Market Value
of other Employer Securities then
held by the Hourly Plan which
securities the Labor Secretary
permits to be excluded pursuant to
his or her authority under ERISA
section 408,
falls within the ERISA Limits, and the Contributed
Shares (or Exchanged Shares that are Employer
Securities) are qualifying
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<PAGE> 49
employer securities within the meaning of sections 407(d)(5)
and 407(f) of ERISA (determined without regard to other
Employer Securities to the extent permitted to be excluded by
the Labor Secretary pursuant to his or her authority under
ERISA section 408) then the amount of the Stock Credit Balance
available under sections 4(c), 4(d), 5 or 6 of this Agreement
shall be limited to the Sold Stock Credit Balance plus the
Stock Credit Balance attributable to 75% of the Unsold
Contributed Shares (or of such Exchanged Shares, if any, that
are Employer Securities still held by the Hourly Plan).
(iii) Notwithstanding section 7(b)(i) of this Agreement, if shares
of GM Class E Stock have been exchanged or redeemed for, or
converted into, securities that are or become Non-employer
Securities, then the amount of the Stock Credit Balance
available for use, subject to the limitations of sections
4(c), 4(d), 5, or 6 of this Agreement, shall be the Sold Stock
Credit Balance plus the Stock Credit Balance attributable to
75% of the Exchanged Shares that are Non-employer
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<PAGE> 50
Securities and still held by the Hourly Plan, provided that
the total value of the Stock Credit Balance attributable to
unsold Exchanged Shares that are Non-employer Securities and
made available under this section 7(b)(iii) shall not exceed
10% of the Then-Current Fair Market Value of the Hourly Plan's
assets.
(c) Sold Stock. When the Hourly Plan sells Contributed Shares or
Exchanged Shares, then the amount of the available Stock Credit Balance
attributable to such shares shall be adjusted to the Value Received upon the
sale of such shares if the Value Received is less than the Contributed Value of
such shares plus interest at the Funding Interest Rate. If the Value Received
upon the sale of such shares is greater than the Contributed Value of such
shares plus interest at the Funding Interest Rate, then the amount of the
available Stock Credit Balance attributable to such shares shall not be
adjusted. Nothing in this section 7(c) shall affect creation or amortization
of actuarial gain or loss bases under section 302 of ERISA and section 412 of
the Code.
(d) Unsold Stock. If an amount of the Stock Credit Balance
related to Unsold Shares is taken into account in determining the amount
required to be contributed for a Plan Year, then the amount of the available
Stock Credit Balance
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<PAGE> 51
attributable to each such share of Unsold Shares, if any, shall equal the
lesser of (i) the Contributed Value of such share plus interest computed at the
Funding Interest Rate, and (ii) the Adjusted Fair Market Value of the share as
of the date the Credit Balance is taken into account. If GM utilizes the
available Stock Credit Balance associated with any Unsold Share, and such Share
is later sold and the Value Received for such Share is less than the available
Stock Credit Balance (determined pursuant to the preceding sentence of this
section 7(d)) that was taken into account for that share, then an amount of the
remaining available Stock Credit Balance equal to any loss (offset by any
unamortized gains related to any Contributed Shares or Exchanged Shares that
have been sold by the Hourly Plan) which has not been previously amortized
shall become unavailable and shall remain so until the first day of the 2003
Plan Year. For this purpose only, gains shall be limited to realized stock
appreciation and dividends paid. Nothing in this section 7(d) shall affect
creation or amortization of actuarial gain or loss bases under section 302 of
ERISA and section 412 of the Code.
(e) Independent Fiduciary. The Independent Fiduciary shall have
exclusive control over the Contributed Shares and the Exchanged Shares, if any.
The Named Fiduciary may replace the Independent Fiduciary with a successor
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<PAGE> 52
independent fiduciary if the successor independent fiduciary is acceptable to
PBGC in PBGC's sole discretion. A proposed successor independent fiduciary is
deemed acceptable to PBGC if (i) PBGC does not notify the Named Fiduciary in
writing of PBGC's rejection of the proposed successor independent fiduciary
within 30 days after PBGC receives from the Named Fiduciary a writing proposing
that successor independent fiduciary and (ii) PBGC does not deliver to the
Named Fiduciary a writing stating its reason(s) for rejecting the proposed
successor independent fiduciary within 15 days after notifying the Named
Fiduciary of the rejection. GM and the Named Fiduciary shall use their best
efforts to maintain the confidentiality of any such written statement of
reasons provided by PBGC.
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<PAGE> 53
SECTION 8: ENFORCEMENT OF CONTRIBUTION CREDIT BALANCE RESTRICTIONS
If PBGC determines that the Contribution Credit Balance restrictions
in sections 4 through 7 of this Agreement have been violated, PBGC's sole
recourse shall be as follows:
(a) Notice of Alleged Violation. PBGC shall first serve upon GM a
written notice specifying the nature and extent of GM's alleged violation of
this Agreement's Contribution Credit Balance restrictions for a Plan Year.
PBGC's notice shall include a certification signed by an enrolled actuary
specifying the manner and amount by which, in that actuary's opinion, GM has
violated the Agreement's credit balance restrictions. The actuary may be an
employee of the PBGC or an outside actuary. With respect to the 1994, 1995,
1996, 1997 and 1998 Plan Years, the notice described in this section 8(a) must
be delivered to GM no later than one year from the date PBGC receives, with
respect to the Plan Year for which the alleged violation occurs, the
information described in sections 13(b), 13(c) and 13(f) of this Agreement, and
to the extent applicable, the information described in section 13(a) of this
Agreement. With respect to the 1999 Plan Year and subsequent Plan Years, the
notice described in this section 8(a) must be delivered to GM no later than two
years from the date PBGC receives, with respect to the Plan Year for which the
alleged violation
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<PAGE> 54
occurs, the information described in sections 13(b), 13(c) and 13(f) of this
Agreement, and to the extent applicable, the information described in section
13(a) of this Agreement. If GM elects to defray additional required funding in
whole or in part by drawing down the credit balance as provided in section
3(b)(v) of this Agreement, the one- or two-year period described above that is
applicable to the Plan Year at issue shall not begin to run earlier than the
date on which PBGC received the notice or revised notice under section 13(f),
as provided in section 3(b)(v) of this Agreement. If no notice is delivered by
PBGC with respect to a Plan Year within the applicable one- or two-year period
specified above, then PBGC shall be estopped forever from asserting or claiming
that GM has violated the Agreement's Contribution Credit Balance restrictions
applicable to such Plan Year. PBGC shall be estopped pursuant to the preceding
sentence with respect to any alleged violation of the Agreement's Contribution
Credit Balance restrictions for a Plan Year and, to the extent (if any) that
such alleged violations have an effect on the determination of charges or
credits to the Funding Standard Account in future Plan Years, from claiming or
seeking any monetary relief with respect to such effects in future Plan Years;
provided, however, that if an alleged violation is repeated anew in a
subsequent Plan Year, PBGC may pursue relief under this section 8 with respect
to such
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<PAGE> 55
new violation within the one- or two-year period that applies to such
subsequent Plan Year.
(b) 60-Day Period. For a period of 60 days following PBGC's
notice under section 8(a) of this Agreement, PBGC and GM shall attempt in good
faith to resolve the issue raised in PBGC's notice. If PBGC and GM do not
resolve the issue as provided in the preceding sentence, PBGC, on or after the
61st day (or the fifth business day, if section 3(b)(v) applies) following
PBGC's notice under section 8(a), may file an action in an appropriate court
seeking to enforce this Agreement with respect to the issue in dispute. PBGC
agrees that, in any such action, it shall not seek a money judgment against GM
but may seek any other form of relief, including without limitation, injunctive
relief directing GM to pay money into the Plan. GM retains any and all
defenses and claims it may have in response to any such PBGC action.
(c) Collateral. If, pursuant to section 8(b) of this Agreement,
PBGC commences a lawsuit respecting GM's alleged violation of the Contribution
Credit Balance restrictions in sections 4 through 7 of this Agreement, and if
PBGC alleges in its complaint that there remains in dispute between PBGC and GM
an amount (the "Disputed Amount") that exceeds $300 million, GM shall provide
security for the benefit of the Hourly Plan and enforceable by PBGC, as
follows:
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<PAGE> 56
(i) Except to the extent its obligation to post collateral is
excused under subparagraph (vii) below, GM shall, within 60 days
following the commencement of such lawsuit, post collateral reasonably
acceptable to PBGC (the "Section 8 Collateral"). The value of the
Section 8 Collateral shall be not less than the Disputed Amount. On
or before the 61st day following commencement of such lawsuit, GM
shall provide PBGC with a certification from the custodian as to the
amount and type(s) of collateral posted.
(ii) The following unencumbered security shall automatically be
acceptable to the PBGC as Section 8 Collateral:
1. U.S. Treasury Securities;
2. Securities issued by U.S. Government Agencies;
3. Securities issued by municipalities in the
U.S. with a credit rating of not less than
Aa, MIG-1/SP-1;
4. Securities issued by domestic and foreign
corporations (other than GM or members of
GM's Controlled Group) with a maturity of
less than two years with a credit rating of
not less than A-1/P-1 and A/A2;
5. Cash (i.e., certificates of deposit (CDs) and
time deposits (TDs) of domestic and
overseas-based banks, bankers acceptances and
Bank Holding Company Commercial Paper)
invested with domestic banks and U.S.
subsidiaries of foreign-based banks regulated
by the Federal Reserve having a Thomson
Bankwatch Inc. credit rating of not less than
B; and
6. Letter of credit/performance bond provided by
domestic banks and U.S. subsidiaries of
foreign- based banks regulated by the Federal
Reserve with a Thomson Bankwatch credit
rating of not less than B.
(iii) If for any reason GM elects not to satisfy the requirements of
section 8(c)(i) by posting collateral in a form described in sections
8(c)(ii)(1) - (6) above, GM
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<PAGE> 57
and PBGC shall negotiate other forms of collateral that are reasonably
acceptable to PBGC.
(iv) The Section 8 Collateral shall be held in the U.S. by a
custodian, if applicable, with a credit rating of not less than
A-1/P-1 or A/A2.
(v) Every month after the initial posting of the collateral
referred to in sections 8(c)(ii)(1)-(4), GM will cause either the
custodian holding the security or GM's independent auditor (currently
Deloitte & Touche) to identify and value such collateral and, if
applicable, to specify the credit rating of the issuer of the
collateral. If the value of collateral provided declines below the
Disputed Amount, GM within five business days shall provide additional
collateral sufficient to bring the value of all Section 8 Collateral
to an amount not less than the Disputed Amount. In addition, if any
collateral posted by GM fails to meet the credit rating requirements
of this section 8(c) of the Agreement, GM shall replace such
collateral within 5 business days after GM receives notice from the
custodian holding the collateral or from GM's independent auditor that
such collateral fails to meet such credit rating requirements. GM
will direct the custodian or independent auditor (A) to provide to
PBGC copies of all notices under this section 8(c)(v) at the same time
they are provided to GM and (B) to confirm the amount and type(s) of
any additional or substituted collateral.
(vi) If GM fails to comply with a Final Order directing GM to
satisfy the Disputed Amount (or a greater or a lesser amount), the
PBGC may enforce the Hourly Plan's interest in the Section 8
Collateral up to the amount specified in the Final Order. If the
court hearing PBGC's action enters a Final Order disallowing PBGC's
claim in whole or in part, GM shall thereafter be obligated to provide
Section 8 Collateral only in an amount equal to the amount of PBGC's
claim, if any, that is allowed by the court and any Collateral in
excess of that amount shall immediately be released.
(vii) The Section 8 Collateral, if any, that GM is required to post
at any time shall be reduced by $1 for each $1 of credit balance in
the Hourly Plan's Funding Standard Account at that time, including the
Contribution Credit Balance that PBGC reasonably agrees is available
at the time, provided, however, that the required amount of Section 8
Collateral shall not be reduced by any portion of the Contribution
Credit
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<PAGE> 58
Balance that is unavailable as a result of the Contribution Credit
Balance restrictions in Sections 4 through 7 of this Agreement.
(d) The provisions of this section 8 apply solely to a PBGC
determination that the provisions of sections 4 through 7 of this Agreement
have been violated. Nothing in this section shall limit either party's rights
and remedies with respect to a violation of any other provision of this
Agreement.
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<PAGE> 59
SECTION 9: RELEASES AND COVENANTS NOT TO SUE
(a) Initial Release and Covenant Not to Sue Respecting EDS
Releasees and GM. Within ten days after PBGC is notified by GM that GM has
satisfied the Extraordinary Contribution Provision, and provided that GM has
satisfied the Extraordinary Contribution Provision, PBGC shall execute and
deliver to GM a Release and Covenant Not to Sue in the form of Appendix R1
hereto.
(b) Initial Release and Covenant Not to Sue Respecting EDS
Transferees and GM. Within ten days after PBGC is notified by GM that GM has
satisfied the Extraordinary Contribution Provision, and provided that GM has
satisfied the Extraordinary Contribution Provision, PBGC shall execute and
deliver to EDS a Release and Covenant Not to Sue in the form of Appendix R1
hereto.
(c) PBGC's Obligation to Deliver Specific Releases and Covenants
Not to Sue.
(1) Subject to any suspension of PBGC's obligations pursuant to
section 9(g) of the Agreement, and provided that GM has satisfied the
Extraordinary Contribution Provision, PBGC shall have an obligation to do
either (A) or (B) below:
(A) deliver to an escrow agent selected as provided for in section
9(d)(v) of the Agreement, within two business days of the
expiration of the 21-calendar-day period after the date of
receipt by PBGC of the items
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<PAGE> 60
described in paragraph (2) below, that quantity of executed
Releases and Covenants Not to Sue in the form of appendices R2
and R3 to the Agreement (or R4 and R5 if GM elects, in its
sole discretion, to resolve an Excessive Transfer by
implementing the alternative described in section
9(f)(i)(D)(i) or (ii) of the Agreement, provided that only R4
shall be delivered in the event that section 9(f)(i)(D)(iii)
applies) as may reasonably be requested by GM at the time.
The escrow agent shall be instructed to deliver the executed
Releases and Covenants Not to Sue to GM and EDS in accordance
with and subject to the provisions of section 9(c)(3) of the
Agreement; or
(B) deliver to GM a notice of disagreement in the form described
in section 9(d)(iii) of the Agreement within the
21-calendar-day period after the date of receipt by PBGC of
the items described in paragraph (2) below. If PBGC delivers
a notice of disagreement, GM shall have the right, in its sole
discretion, to (i) initiate an action against PBGC to enforce
PBGC's obligation to deliver the executed Releases and
Covenants Not to Sue described in this section 9(c), and/or
(ii) alter the terms of the transaction or other factors and
resubmit to PBGC the relevant certificates and statements
referred to in (2) below, whereupon PBGC shall be obligated,
within ten calendar days of the receipt of such items, to
either deliver to the escrow agent such executed Releases and
Covenants Not to Sue, or deliver to GM a further notice of
disagreement.
Subject to any suspension of PBGC's obligations pursuant to section 9(g) of the
Agreement, if PBGC pursues neither option (A) nor option (B) above within the
time allowed, or if PBGC pursues option (B) and a Qualified EDS Transaction
occurs, then PBGC shall have an obligation, enforceable under this Agreement,
to deliver to GM and EDS the executed Releases and Covenants Not to Sue in the
forms of appendices R2 and R3 to
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<PAGE> 61
the Agreement (or R4 and R5 if GM elects, in its sole discretion, to resolve an
Excessive Transfer by implementing the alternative described in section
9(f)(i)(D)(i) or (ii) of the Agreement, provided that only R4 shall be
delivered in the event that section 9(f)(i)(D)(iii) applies) within two
business days after PBGC's receipt of the information described in section
9(c)(3) below.
(2) The items described in this paragraph (2) are the following:
(A) A certificate in the form of Appendix Q hereto
stating GM's conclusion that a transaction or
proposed transaction involving EDS constitutes or
will constitute a Qualified EDS Transaction.
(B) A statement from each of the Hourly Plan's master
trustees (currently Bankers Trust, Mellon Bank and
Chase Manhattan) and from the Independent Fiduciary
showing the fair market value of Plan assets under
their respective control, provided that together the
statements shall set forth the fair market value of
all Hourly Plan assets. Separate values shall be
shown for assets that constitute Employer Securities
and for assets that constitute Contributed Shares or
Exchanged Shares that are Employer Securities. If
the certificate is furnished at least 15 calendar
days after a month's end, the statements will show
the fair market value as of the end of such month.
If the certificate is furnished fewer than 15
calendar days after a month's end, the statements
will show fair market value as of the end of the
month immediately preceding such month.
(C) A statement from a GM officer or attorney indicating
that EDS is no longer a member of GM's Controlled
Group or will cease to be a member of GM's Controlled
Group if and when
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<PAGE> 62
the proposed Qualified EDS Transaction is
consummated, together with a description of how the
transaction qualifies or will qualify as a Qualified
EDS Transaction.
(D) A list of each Material Transfer (if any) effected
through the date of GM's statement, together with
documentation that reasonably identifies the date,
nature and fair value of each such Material Transfer.
(E) A statement from a GM officer certifying that the
list of each Material Transfer (if any) provided to
PBGC pursuant to (D) above is complete and accurate
and certifying either (i) that there has been no
Excessive Transfer, as that term is defined in
section 9(e) below, or (ii) if there has been an
Excessive Transfer, that such Excessive Transfer has
been or will be resolved in accordance with the
provisions of section 9(f) below, together with a
description of how such resolution was or will be
achieved.
(F) A statement from an EDS officer certifying that the
list of each Material Transfer (if any) provided to
PBGC by GM is complete and accurate.
(G) A report from GM's independent auditor describing the
procedures, consistent with Appendix T hereto, that
it has performed, and its findings as a result
thereof, in order to assist PBGC in evaluating any
list furnished to PBGC by GM pursuant to item (D)
above. The report will be based upon periodic,
timely reviews as determined by the independent
auditor in its professional discretion.
(H) Copies of the principal executed documents (e.g.,
memoranda of understanding or definitive agreements)
that formed or will form the basis of the EDS
transaction.
(I) A statement from a GM officer certifying that neither
GM nor any GM Subsidiary intends to effect (or
complete) any Material Transfers from the last date
included on the list described in item (D) above
through the Transaction Date, or if any Material
Transfer is anticipated, a projected date, nature and
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<PAGE> 63
fair value for each such anticipated Material
Transfer.
(3) If PBGC has delivered executed Releases and Covenants Not to Sue
to the escrow agent, the escrow agent shall be instructed to deliver the
executed Releases and Covenants Not to Sue to GM and EDS immediately upon the
escrow agent's receipt of an executed certificate in the form of Appendix E1
hereto from an officer or attorney for GM certifying that a Qualified EDS
Transaction has occurred and receipt of a written statement in the form of
Appendix E2 from an officer or attorney for PBGC authorizing delivery of the
Releases and Covenants Not to Sue. Subject to any suspension of PBGC's
obligations pursuant to section 9(g) of this Agreement, PBGC shall be required
to deliver such written statement to the escrow agent within two business days
after the last date determined under (i) and (ii)(A) below, or seven business
days after the last date determined under (i) and (ii)(B) below, whichever is
applicable; provided, however, that the seven business days shall be fourteen
calendar days if any of the Material Transfers identified under (ii)(B)(I)
below had not been identified in the statement furnished to PBGC under section
9(c)(2)(I) above. In the event PBGC has delivered to the escrow agent executed
Releases and Covenants Not to Sue in the forms of appendices R2 and R3 to the
Agreement, and GM subsequently elects, in its sole discretion, to resolve an
Excessive
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<PAGE> 64
Transfer by implementing the alternative described in section 9(f)(i)(D)(i) or
(ii) of the Agreement, PBGC shall deliver executed Releases and Covenants Not
to Sue in the form of appendices R4 and R5 (provided that only R4 shall be
delivered in the event that section 9(f)(i)(D)(iii) of the Agreement applies)
to GM and EDS within the time specified above for PBGC to deliver a written
statement to the escrow agent, and PBGC shall instruct the escrow agent to
return the executed Releases and Covenants Not to Sue in the form of appendices
R2 and R3 to PBGC.
(i) The date on which GM provides the PBGC with either:
(A) certified copies of corporate documents or records
evidencing that EDS is no longer a member of GM's Controlled
Group and that all shares of GM Class E Stock held by the
Hourly Plan have been exchanged or redeemed for, or converted
into, shares or securities that are Non-employer Securities
with respect to the Hourly Plan as of a date on or after the
Transaction Date (but no more than 120 days after the
Transaction Date); or
(B) certified copies of corporate documents or records
evidencing that EDS is no longer a member of GM's Controlled
Group, together with unaudited reports from each of the master
trustees and the Independent Fiduciary showing that as of a
date on or after the Transaction Date (but no more than 120
days after the Transaction Date) either --
(I) the Fair Market Value of Contributed
Shares or Exchanged Shares that
constitute Employer Securities that
are held by the Hourly Plan
represents no more than 2.5% of the
Then- Current Fair Market Value of
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<PAGE> 65
the Hourly Plan's assets as reflected
in such reports, or
(II) no more than 5% of the Then-Current
Fair Market Value of the Hourly
Plan's assets as reflected in such
reports consists of Employer
Securities;
(ii) the date on which GM provides the PBGC with (A) or (B) below,
whichever is applicable:
(A) a statement from a GM officer and a statement from an
EDS officer affirming that no Material Transfers were
effected from the date of the certificate described
in section 9(c)(2)(E) of the Agreement through the
Transaction Date; or
(B) the following items:
(I) a list of each Material Transfer effected (or
completed) since the date of the certificate
described in section 9(c)(2)(E) of the
Agreement and through the Transaction Date;
(II) a statement from a GM officer certifying that
the lists of each Material Transfer provided
by GM under (I) above and under section
9(c)(2)(D) together constitute a complete and
accurate list of each Material Transfer;
(III) a statement from a GM officer certifying
either that there has been no Excessive
Transfer, as that term is defined in section
9(e) below, or if there has been an Excessive
Transfer, that such Excessive Transfer has
been resolved in accordance with the
provisions of section 9(f) below, together
with a description of how such resolution was
achieved and supporting documentation; and
(IV) a statement from an EDS officer certifying
that the list(s) of each Material Transfer
(if any) provided to PBGC is complete and
accurate.
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<PAGE> 66
(d) Certification Process. Provided that GM has satisfied the
Extraordinary Contribution Provision, and without conditioning or otherwise
limiting PBGC's obligations under sections 9(a), 9(b) and 9(c) of this
Agreement, GM may in its sole discretion obtain certification that a proposed
transaction constitutes, or will constitute, a Qualified EDS Transaction
through the following certification process:
(i) GM Initiates Process. At least 60 calendar days before the
date on which GM estimates it will consummate a proposed
Qualified EDS Transaction (or at such other time as the
parties may mutually and reasonably agree), GM shall deliver
to PBGC the certificates, statements and reports listed in
section 9(c)(2)(A) through (I) of the Agreement.
(ii) PBGC's Right to Inspect Documents. At any time during the 14
calendar day period beginning immediately upon its receipt of
the material described in section 9(d)(i) of this Agreement,
PBGC may request that GM produce for inspection more current
statements of the type described in section 9(c)(2)(B) of this
Agreement showing asset values as of the most recent month's
end, to the extent such additional statements have become
available under the time constraints set forth in section
9(c)(2)(B). If PBGC timely makes such a request, GM shall be
obligated to produce such statements for PBGC's inspection
within 10 calendar days of such request.
(iii) PBGC's Notice of Disagreement with GM. If PBGC disagrees
with GM's determination that a transaction proposed by GM
constitutes or will constitute a Qualified EDS Transaction,
PBGC shall deliver to GM a written notice stating the
reason(s) for such disagreement, identifying the specific
facts and sources of such facts underlying the reason(s), and
identifying the changes that, in PBGC's view, would be
required to eliminate PBGC's disagreement and the
documentation that, in PBGC's view, would be required to
establish that such changes had occurred. Such notice shall
be delivered within 21 calendar days after GM provides
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<PAGE> 67
all of the material described in section 9(d)(i) of the
Agreement.
(iv) Options Available to GM if PBGC Issues Notice of Disagreement.
If PBGC timely delivers a written notice of its disagreement
as described in section 9(d)(iii), GM shall nevertheless have
the right to do either or both of the following:
(A) alter the terms of the proposed transaction or other
relevant factors, and resubmit its certificate and
statements as provided in section 9(d)(i) of this
Agreement, together with documentation of the changes
made, whereupon PBGC shall be obligated to follow the
procedures and timing requirements set forth in
sections 9(d)(iii) with respect to such certificate
and statements, except that the 21-day period
described in section 9(d)(iii) shall be shortened to
10 days; and
(B) consummate the proposed transaction.
In either case, both parties shall be subject to their
respective obligations under this Agreement and, to the extent
not inconsistent with this Agreement, under applicable law,
and both parties shall retain their respective rights and
remedies under this Agreement and, to the extent not
inconsistent with this Agreement, under applicable law.
(v) Delivery of Releases to Escrow Agent. If no written
notice of disagreement is delivered to GM pursuant to section
9(d)(iii) of this Agreement (or if a notice of disagreement
has been delivered to GM and GM thereafter alters the terms of
the proposed transaction or other relevant factors such that
no subsequent notice of disagreement is delivered to GM
pursuant to section 9(d)(iii) of the Agreement), then, subject
to any suspension of PBGC's obligation pursuant to section
9(g) of the Agreement, PBGC shall, not later than two business
days after the applicable 21- or ten-day period under section
9(d)(iii) or section 9(d)(iv)(A) expires, execute and deliver
to an escrow agent that is mutually and reasonably acceptable
to both GM and PBGC, that quantity of duly executed Releases
and Covenants Not to Sue in the form of
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Appendices R2 and R3 to this Agreement (or R4 and R5 if GM
elects to resolve an Excessive Transfer by implementing in its
sole discretion the alternative described in section
9(f)(i)(D)(i) or (ii) of the Agreement, provided that only R4
shall be delivered in the event that section 9(f)(i)(D)(iii)
applies) as may reasonably be requested by GM at the time.
(vi) Delivery of Releases to GM and EDS Through Escrow Agent. If
PBGC has delivered executed Releases and Covenants Not to Sue
to the escrow agent, the escrow agent shall be instructed to
deliver the executed Releases and Covenants Not to Sue to GM
and EDS in accordance with and subject to the provisions of
section 9(c)(3) of this Agreement.
(e) Limitation on Excessive Transfers.
(1) In the event of any Material Transfers that have an aggregate
fair value, on the date(s) of such Material Transfer(s), of
more than $3 billion ("Excessive Transfer"), GM shall resolve
the Excessive Transfer or waive PBGC's obligations as provided
under section 9(f) of this Agreement. No payments or
transfers other than Material Transfers shall be considered in
determining whether an Excessive Transfer has occurred.
Further, none of the following Material Transfers shall be
considered in determining whether there is an Excessive
Transfer, nor shall any such Material Transfers be taken into
account in applying the $3 billion aggregate limit set forth
in the first sentence of this section 9(e):
(A) any Material Transfer of assets or operations (but
not stock) to the extent it is in exchange for fair
value;
(B) any Material Transfer of stock of a corporation that
is not in GM's Controlled Group at the time of any
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such Material Transfer to the extent it is in
exchange for fair value;
(C) any Material Transfer of stock of a corporation that
is a member of GM's Controlled Group at the time of
such Material Transfer and that remains a member of
GM's Controlled Group immediately after such Material
Transfer to the extent it is in exchange for fair
value;
(D) any Material Transfer that is effected to implement a
strategic acquisition by EDS pursuant to a joint plan
of GM and EDS in which GM acquires either the stock,
assets, operations, or any combination thereof, of a
corporation not theretofore in GM's Controlled Group,
in exchange for consideration consisting of either
newly issued securities or property (including cash
or stock of any type), or any combination thereof,
and contributes to EDS in conjunction therewith the
stock, assets and operations so acquired in exchange
for the aforementioned consideration; and
(E) any Material Transfer to the extent that it is made
with PBGC's consent.
The proceeds received by GM or a GM Subsidiary in connection with any Material
Transfer of stock of a corporation that was a member of GM's Controlled Group
immediately before such Material Transfer and that is not a member of GM's
Controlled Group immediately after the Transaction Date shall be applied to
reduce the amount of any other Material Transfers for purposes of determining
whether there is an Excessive Transfer under this section 9(e)(1) or for the
purposes of resolving an Excessive Transfer under section 9(f)(i).
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(2) To the extent that EDS and/or any of the EDS Subsidiaries
makes payments or transfers of assets, operations or stock to or into GM and/or
any GM Subsidiary in exchange for less than fair value, whether by dividends or
otherwise (but excluding regular quarterly dividends not in excess of regular
quarterly dividends paid to GM's Class E Stockholders), at any time on or after
the Effective Date through the Transaction Date, such payments or transfers by
EDS and/or any of the EDS Subsidiaries shall be applied to reduce the amount of
Material Transfer(s) (if any) for purposes of determining whether there is an
Excessive Transfer and applying the $3 billion aggregate limit described in the
first sentence of this section 9(e) of the Agreement. Notwithstanding the
preceding sentence, no such payments or transfers by EDS and/or any of the EDS
Subsidiaries shall be applied to reduce the amount of a Material Transfer
consisting of stock of any single GM Subsidiary that has a fair value greater
than $3 billion if that GM Subsidiary is not a member of GM's Controlled Group
and is a member of EDS's Controlled Group on the Transaction Date; provided
however, that such payments or transfers shall be applied to reduce the amount
of all other Material Transfer(s) (if any).
(3) For purposes of this section 9 of the Agreement and for
purposes of the definition of Material Transfer, a
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payment or transfer is conclusively presumed to be in the ordinary course of
business of GM or EDS if it is--
(A) made under or in connection with the Master Agreement between
GM and EDS (including any amendments or successor agreements
thereto), or
(B) made under or in connection with any other contracts or
arrangements entered into by GM or EDS for the provision of
goods or services between or among GM or any GM Subsidiaries
and EDS or any EDS Subsidiaries.
In addition, a payment or transfer is in the ordinary course of business of GM
or EDS if it is determined in good faith to be in the ordinary course of
business of GM or EDS consistent with reasonable business judgment.
(4) In the case of any payment or transfer of assets, operations
or stock, including without limitation any Material Transfer(s), if GM's Board
of Directors has determined that fair value was received in exchange therefor
based upon the opinion of an investment banking firm that is among the ten
largest such firms doing business in the United States (determined by combining
the two most recent annual ranking tables published by Securities Data Company
showing the dollar value of completed transactions involving merger and
acquisition targets in the United States), such determination of fair value
shall conclusively be presumed to be for fair value for purposes of this
section 9 of the Agreement.
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(f) Resolution or Waiver in the Event of an Excessive Transfer.
In the event of an Excessive Transfer, as defined in and determined in
accordance with section 9(e) of this Agreement, GM shall, in its sole
discretion, either resolve the Excessive Transfer by implementing, as
appropriate, one or more of the alternatives set forth in section 9(f)(i) below
such that the aggregate fair value of the unresolved Material Transfers is
reduced below $3 billion, or waive, pursuant to section 9(f)(ii) below, PBGC's
obligation to execute and/or deliver Specific Releases and Covenants Not to Sue
under sections 9(c) and 9(d) of the Agreement. Solely with regard to section
9(f)(i), the unresolved portion of a Material Transfer shall be taken into
account in determining whether an Excessive Transfer has been resolved even if
the unresolved portion of such Material Transfer is less than the $50 million
threshold set forth in the definition of Material Transfer. Further, GM
retains sole discretion as to the selection and implementation of one or more
of the applicable alternatives; provided, however, that in the event of a
Material Transfer consisting of the stock of any single GM Subsidiary if such
GM Subsidiary has a fair value greater than $3 billion, if immediately after
the Transaction Date that GM Subsidiary is not a member of GM's Controlled
Group and is a member of EDS's Controlled Group, the only alternatives
available to GM (without PBGC's consent) to resolve such Material Transfer
shall be either a return of
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such transferred GM Subsidiary to the GM Controlled Group or provision by PBGC
of alternative Releases and Covenants Not to Sue under section 9(f)(i)(D)(ii)
and 9(f)(i)(D)(iii) below that expressly provide that the EDS Releasees and EDS
Transferees do not include such transferred GM Subsidiary, and the EDS
Transferees shall receive no Release and Covenant Not to Sue.
(i) Resolutions Available. The alternatives available to GM to
address individual Material Transfer(s) and thereby to resolve an
Excessive Transfer are as follows:
(A) GM may cause assets and/or operations to be returned to GM or
the GM Subsidiary (or enter into a binding agreement to cause
assets and/or operations to be returned).
(B) GM may cause some or all of the transferred stock that made up
one or more of the Material Transfer(s) to be returned to GM
or the GM Subsidiary (or enter into a binding agreement to
cause some or all of such stock to be returned).
(C) GM may post collateral in a form reasonably acceptable to PBGC
having value not less than the Applicable Percentage of the
aggregate fair value of any Material Transfer(s), or portions
thereof, that GM elects to resolve under this section
9(f)(i)(C). This collateral shall only be available to
satisfy any claim that PBGC establishes under section 4062 of
ERISA if the Hourly Plan is terminated under Title IV of ERISA
within five years after the Transaction Date. If the Hourly
Plan has not terminated under Title IV of ERISA within the
period specified above, the collateral shall be released and
returned to GM. If, before the Transaction Date, section
4069(a) of ERISA is amended to specify a finite number of
years other than five, such other number of years shall be
substituted wherever "five" appears in this paragraph (C),
provided, however, that in all
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events such period shall run continuously from the Transaction
Date.
(D) GM may elect by notifying PBGC in writing to receive
alternative Releases and Covenants Not to Sue in the forms of
Appendices R4 and R5 hereto. Such alternative Releases and
Covenants Not to Sue shall expressly provide that the EDS
Releasees and EDS Transferees are released from the GM Pension
Liability, if any, except:
(i) if GM elects to resolve Material Transfers, or
portions thereof, under this section 9(f)(i)(D)(i),
the EDS Releasees shall receive a release in the form
of Appendix R4 that does not release the EDS
Releasees from potential liability in an amount not
to exceed the Applicable Percentage of the aggregate
fair value of the Material Transfers, or portions
thereof, that GM elects to resolve under this section
9(f)(i)(D)(i) and the EDS Transferees shall receive a
release of all GM Pension Liability in the form of
Appendix R5; and/or
(ii) if GM elects to resolve Material Transfers or
portions thereof under this section 9(f)(i)(D)(ii),
the EDS Releasees shall receive a release in the form
of Appendix R4 that excludes from the group of EDS
Releasees that are released from the GM Pension
Liability any corporations that were included in a
Material Transfer that GM elects to resolve under
this section 9(f)(i)(D)(ii), and the EDS Transferees
shall receive a release of all GM Pension Liability
in the form of Appendix R5.
(iii) Notwithstanding items (i) and (ii), above, if
there has been a Material Transfer consisting of
stock of any single GM Subsidiary that has a fair
value greater than $3 billion and that is no longer a
member of GM's Controlled Group and is a member of
EDS's Controlled Group on the Transaction Date, the
EDS Releasees shall receive a release in the form of
Appendix R4 that excludes such GM Subsidiary from the
group of EDS Releasees that are released and the EDS
Transferees shall receive no release.
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Any potential liability as to an EDS Releasee or EDS
Transferee, shall attach, if at all, only if the Hourly Plan
is terminated under Title IV of ERISA within five years after
the Transaction Date and only if PBGC establishes that the EDS
Releasees or EDS Transferees are otherwise liable therefor
under Title IV of ERISA without regard to this Agreement. In
this regard, the EDS Releasees, EDS Transferees and any such
corporations referenced in (ii) above retain all claims,
rights and defenses available under law. Such alternative
Releases and Covenants Not to Sue shall be delivered in lieu
of the Releases and Covenants Not to Sue in the forms of
Appendices R2 and R3 hereto. If, before the Transaction Date,
section 4069(a) of ERISA is amended to specify a finite number
of years other than five, such other number of years shall be
substituted wherever "five" appears in this paragraph (D),
provided, however, that in all events such period shall run
continuously from the Transaction Date.
(E) GM may take such other action as PBGC reasonably agrees is
sufficient to resolve the Excessive Transfer.
(ii) Waiver of PBGC's Obligation. In lieu of implementing one
or more of the available alternatives set forth in section 9(f)(i)
above, GM may elect, by notifying PBGC in writing, to waive PBGC's
obligation to execute and/or deliver Specific Releases and Covenants
Not to Sue under section 9(c) and 9(d) of the Agreement.
(iii) PBGC's Right to Terminate. Except as expressly provided
in this section 9 of the Agreement and/or the Releases and Covenants
Not to Sue under section 9(f)(i)(D) of the Agreement, nothing in this
Agreement shall preclude PBGC from exercising its rights
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under Title IV of ERISA, if any, with respect to any person if any
single GM Subsidiary that has a fair value greater than $3 billion
(other than a GM Subsidiary that is transferred in a Material Transfer
described in section 9(e)(1)(D) of this Agreement) is not or will no
longer be a member of GM's Controlled Group as a result of a Qualified
EDS Transaction, provided that, if such GM Subsidiary is not a member
of EDS's Controlled Group on the Transaction Date, GM shall have no
obligation to resolve such Material Transfer under this section 9(f)
if PBGC initiates or pursues an action to terminate any of the GM
Pension Plans under section 4042 of ERISA, 29 U.S.C. Section 1342, or
threatens or asserts an intention to pursue any such proceeding, or to
seek any equitable relief by reason of such Material Transfer
("Termination Actions"). If GM proposes to PBGC in writing to resolve
such Material Transfer under section 9(f)(i), and if PBGC does not
within ten business days object in writing to GM's proposal and advise
GM of its intention to initiate termination proceedings under section
4042 of ERISA, then PBGC shall thereafter be forever estopped from
initiating or pursuing any Termination Actions as a result of such
Material Transfer. For purposes of this paragraph (iii), an informal,
unauthorized statement by a PBGC employee shall not be considered a
Termination Action, provided that PBGC upon written request by GM
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notifies GM in writing immediately that it disavows such statements
and disclaims any intention to initiate or pursue Termination Actions
as a result of the Material Transfer.
(g) Suspension of PBGC's Obligation to Deliver Specific Releases and
Covenants Not to Sue. The obligations of PBGC to deliver the executed Releases
and Covenants Not to Sue as required and described by sections 9(c)(1)(A) and
9(d)(v) of this Agreement, and/or to deliver the written statement as required
and described in sections 9(c)(3) and 9(d)(vi) of this Agreement, shall
automatically be suspended if PBGC timely initiates the procedure described in
section 9(h) below. Such obligations shall remain suspended until the earlier
of:
(A) the date on which there is a final and binding determination
by the investment banking firm under section 9(h) below that
there is no Excessive Transfer that remains unresolved; or
(B) if there is a final and binding determination by the
investment banking firm under section 9(h) below that is
within $250 million of the GM List as described in section
9(h)(iii) below, the date that GM resolves any such remaining
Excessive Transfer; or
(C) if there is a determination by the investment banking firm
under section 9(h) below that is more than $250 million
greater than the GM List as described in section 9(h)(iii)
below, either (I) the date that GM resolves any such remaining
Excessive Transfer, or (II) the date that a Final Order is
entered in any litigation commenced under section 9(h)(iv)
below holding that no Excessive Transfer remains unresolved;
or
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(D) the date on which the investment banker's report is due under
section 9(h)(v) if, by such date, no report regarding the
range of fair values for each Material Transfer identified for
review by PBGC as provided under section 9(h) below has been
provided to GM and PBGC.
Notwithstanding the preceding sentence, if PBGC timely initiates arbitration or
litigation as provided for in section 9(h)(vi) below, PBGC's obligations to
deliver the executed Releases and Covenants Not to Sue as required and
described by sections 9(c)(1)(A) and 9(d)(v) of this Agreement, and/or to
deliver the written statement as required and described in sections 9(c)(3) and
9(d)(vi) of this Agreement, shall remain suspended until the date on which a
final award is rendered by the arbitration panel under section 9(h)(vi) below,
or a Final Order is entered in the litigation, whichever is applicable.
(h) Procedures for Resolving Disputes Over Whether an Excessive
Transfer Has Occurred. This section 9(h) of the Agreement sets forth the
sole and exclusive procedure for addressing a dispute between GM and PBGC as to
the amount of a Material Transfer in the event of an Excessive Transfer
(including the extent to which any Excessive Transfer has been resolved
pursuant to section 9(f)(i) of the Agreement) and any other matter arising
under section 9(e) or 9(f) of the Agreement that PBGC wishes to dispute.
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(i) Determination By Nationally-Recognized Investment Banking
Firm. If one or more of the Material Transfer(s) set forth
on the list and updated lists furnished to PBGC pursuant to
sections 9(c)(2)(D) and 9(c)(3)(ii)(B) of this Agreement has
not been valued in accordance with section 9(e)(4) or PBGC
disputes the fair value of a transaction that GM identifies to
resolve an Excessive Transfer if that Material Transfer had
not been valued in accordance with section 9(e)(4), and
provided that the aggregate value of all the Material
Transfer(s) as stated by GM on such list exceeds $3 billion,
then PBGC may request that a nationally recognized investment
banking firm named and selected under the procedures in
section 9(h)(ii) below review and deliver a report setting
forth its views on the range of fair value for each Material
Transfer identified by PBGC as in dispute, to the extent such
Material Transfer(s) are to be taken into account in
determining whether an Excessive Transfer has occurred under
section 9(e) above and/or remains unresolved under section
9(f)(i) above. Where a Material Transfer has been made in
exchange for fair value conclusively determined under section
9(e)(4) of this Agreement, PBGC shall not dispute fair value
reported by GM for such Material Transfer as determined in
accordance with section 9(e)(4).
(ii) Selection of Investment Banking Firm. The investment
banking firm responsible for preparing the report under
section 9(h) of the Agreement shall be selected by PBGC from
among the ten largest such firms doing business in the United
States determined by combining the two most recent annual
ranking tables published by Securities Data Company showing
the dollar value of completed transactions involving merger
and acquisition targets in the United States. If, after a
good-faith effort, PBGC is unable to engage a firm or firms
that satisfies the requirements of the preceding sentence,
PBGC shall select a firm or firms, acceptable to GM, from
among nationally recognized and reputable investment banking
firms that specialize in the largest mergers and acquisitions
in the industry or industries within which the Material
Transfer(s) at issue occurred. Upon written request by PBGC,
GM shall notify PBGC as soon as practical of any relationship
GM has with any such firm(s) that GM knows to be financially
significant to such firm(s) and of any
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firm described in the preceding sentence that is not
acceptable to GM. The investment banking firm selected under
the procedure noted above shall be directed to report its
independent professional view regarding the range of fair
value attributable to each Material Transfer in dispute under
sections 9(h)(i) of the Agreement, to the extent such Material
Transfer is to be taken into account in determining whether an
Excessive Transfer has occurred or remains unresolved under
sections 9(e) and 9(f)(i) above. Such range of fair value
shall be determined without giving effect to any possible
interest of PBGC in such range of values being high or any
possible interest of GM in such range of values being low.
(iii) Effect of Determination. If the aggregate fair value, as
determined by GM, of all of the Material Transfer(s)
identified by PBGC for evaluation under (i) above ("Reviewed
Material Transfers") is within the range of fair values for
such Transfers as determined by the investment banking firm
selected under (ii) above, then the fair value of each
Reviewed Material Transfer shall be conclusively deemed to be
the value as determined by GM (the "GM List"). If the
aggregate fair value of all of the Reviewed Material
Transfer(s) as determined by GM is within $250 million of the
lowest aggregate value for such Transfers as determined by the
investment banking firm, then the fair value of each Reviewed
Material Transfer shall be conclusively deemed to be the
lowest value as determined by the investment banking firm (the
"Substitute List"). If the aggregate fair value of all of the
Reviewed Material Transfer(s) as determined by GM is not
within $250 million of the lowest aggregate value of all of
the Reviewed Material Transfer(s) as determined by the
investment banking firm, then the provisions of section
9(h)(iv) shall apply. The parties agree that the value
conclusively deemed to be the value of each Reviewed Material
Transfer pursuant to this section (iii) shall constitute a
final and binding determination. In such circumstances, the
parties expressly and knowingly waive any right they may have
to seek judicial review of a determination of the GM List or
the Substitute List (as applicable), and any other Material
Transfers set forth on the list and updated list furnished to
PBGC pursuant to 9(c)(2)(D) and 9(c)(3)(ii)(B)(I) of this
Agreement as to which PBGC has not timely initiated the
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dispute resolution process under this section 9(h), pursuant
to Title 9 of the United States Code or otherwise, and shall
be forever estopped from seeking or claiming a right to seek
judicial review of such GM List or Substitute List.
(iv) Litigation. If the aggregate fair value of all of the
Reviewed Material Transfer(s) as determined by GM is not
within $250 million of the lowest aggregate fair value of all
of the Reviewed Material Transfer(s) as determined by the
investment banking firm, either PBGC or GM may file suit in an
appropriate court for a determination as to the fair value of
each Reviewed Material Transfer set forth on GM's List that is
in dispute. The parties agree that the investment banking
firm's report(s), together with any other fairness or
valuation reports prepared by or on behalf of GM in connection
with the Reviewed Material Transfer(s) at issue, shall be
admissible into evidence in any such action and that the court
may assign such weight to the report(s) as the court deems
appropriate, but that no deference shall be accorded to the
views of either party or any investment banking firm or other
advisor. Notwithstanding the above, GM may elect to resolve
any Excessive Transfer by resolving the Reviewed Material
Transfers to the extent required using the investment banking
firm's lowest fair value for each such Reviewed Material
Transfer (a) at any time prior to the time at which GM files
suit, (b) at any time that an order in favor of GM is
outstanding, or (c) if PBGC files suit, at any time that an
order in favor of PBGC is not outstanding.
(v) Time for Initiating Determination Process and GM's Obligations
Thereunder. The determination process described in section
9(h) of the Agreement must be initiated by PBGC (by PBGC's
delivery to GM of a written notice that it has engaged, or
intends to engage, an investment banking firm as provided in
section 9(h)(ii) above) no later than 21 calendar days after
PBGC receives from GM the items described in sections
9(c)(2)(A) through (I) above; provided, however, that if GM
furnishes to PBGC the items described in section
9(c)(3)(ii)(B), PBGC shall have until seven business days or
14 calendar days (whichever applies, as determined under
section 9(c)(3) above) after PBGC receives such updated lists
and certifications to initiate (or recommence) the process.
If PBGC timely initiates
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the determination process described in this section 9(h) of
the Agreement, the investment banking firm shall be engaged by
PBGC no later than 20 calendar days after such initiation by
PBGC; provided however, that in the event after good-faith
efforts PBGC is unable to engage an acceptable investment
banking firm within the 20 calendar days, PBGC shall
immediately notify GM and PBGC and GM shall confer and
together attempt to select within five additional calendar
days a mutually and reasonably acceptable investment banking
firm; provided further however, that if PBGC and GM are unable
mutually to agree upon an investment banking firm within such
5-day period, GM shall thereafter unilaterally select an
investment banking firm from among the investment banking
firms described in either of the first two sentences of
section 9(h)(ii) that does not have a relationship with GM
that is financially significant to such firm. GM shall upon
reasonable request by the selected investment banking firm,
immediately make available to that firm all financial books
and records of GM and of members of GM's Controlled Group
reasonably requested, to the same extent that those books and
records are made available to GM's independent auditor,
currently Deloitte & Touche, and subject to reasonable
arrangements for protecting the confidentiality of such books
and records. Once engaged, the selected investment banking
firm shall have until the later of --
(A) 25 calendar days after GM has provided the
firm access to the materials described in the
preceding portion of this sentence, or
(B) 60 calendar days from PBGC's initiation of
the procedure described in this section 9(h)
if PBGC engages the investment banker within
the 20 calendar day period described in this
section 9(h)(v), or
(C) 65 calendar days from PBGC's initiation of
the procedure described in this section 9(h)
if PBGC and GM mutually select the investment
banker during the five-day period immediately
following the 20-calendar-day period
described in this section 9(h)(v), or
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(D) 40 calendar days from GM's selection of the
investment banker if GM unilaterally selects
the investment banker after the five-day
period immediately following the
20-calendar-day period described in this
section 9(h)(v),
within which to make the determination called for by this
section 9(h) of the Agreement.
If the aggregate fair value of all of the Reviewed
Material Transfer(s) as determined by GM is within the range
of fair values for such Transfers as determined by the
investment banking firm, PBGC shall pay for the investment
banker's fees and costs. If the aggregate fair value of all
of the Reviewed Material Transfer(s) as determined by GM is
not within the range of fair values for such Transfers as
determined by the investment banking firm, GM shall reimburse
PBGC for the investment banker's fees and costs except for any
fees and costs related to any Material Transfer(s) as to which
GM prevails in litigation. Notwithstanding the preceding, if
GM selects the investment banking firm unilaterally as
provided in the second sentence of this section 9(h)(v), GM
shall pay for the investment banker's fees and costs.
(vi) (A) If PBGC disputes any matter arising under section
9(e) or 9(f) other than a valuation issue described
in section 9(h)(i) above, and provided that the
aggregate value of all the Material Transfer(s) as
stated by GM on the list and updated lists furnished
to PBGC pursuant to sections 9(c)(2)(D) and
9(c)(3)(ii)(B) of this Agreement exceeds $3 billion,
PBGC shall, within the time specified in the first
sentence of section 9(h)(v) above, notify GM of the
dispute in writing. The writing shall identify the
specific issue(s) and provision(s) of the Agreement
that are in dispute, the factual grounds upon which
PBGC bases its dispute, the relief sought and the
name of a reputable and recognized expert in the
field in which the dispute arises whom PBGC proposes
to have serve as a neutral arbitrator to resolve the
dispute. Within 14 calendar days of receiving such
notice, GM will advise PBGC whether GM agrees, in its
sole discretion, to resolve the
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dispute through arbitration and, if so, GM shall
either agree to the arbitrator proposed by PBGC or
select a second reputable and recognized expert
within that field and immediately notify PBGC in
writing of GM's selection. If GM selects a second
arbitrator, the two experts shall, within 14 calendar
days thereafter, select a third expert, and the three
experts (or the single arbitrator proposed by PBGC,
if GM agrees) shall constitute the arbitration panel
authorized to decide the dispute for the parties. An
expert selected under this paragraph (A) need not be
on a panel of arbitrators maintained by the American
Arbitration Association or otherwise.
(B) The parties shall meet with the arbitration panel to
establish a timetable and procedures for the
arbitration. The arbitration panel, if composed of
three arbitrators, shall decide the dispute by
majority vote. The arbitration panel shall issue its
award within 10 calendar days after the panel
receives all evidence deemed necessary by the panel
to resolve the dispute, unless the parties agree
otherwise. The award of the arbitration panel shall
be final and binding to the extent provided in Title
9, United States Code. Each party shall bear its own
costs together with one-half of the arbitration
panel's fees and one- half of the cost the
proceeding.
(C) If GM, in its sole discretion, does not agree to
arbitration pursuant to paragraph (A) above, then
each party retains such rights and remedies as it has
under applicable law.
(D) If PBGC does not timely raise under this section
9(h)(vi) any matter arising under section 9(e) or
9(f) (other than a matter described in section
9(h)(i)), PBGC shall be required to deliver the
executed Releases and Covenants Not to Sue as
required and described by section 9(c)(1)(A) and
9(d)(v) of this Agreement, and/or to deliver the
written statements as required and described under
sections 9(c)(3) and 9(d)(vi) of this Agreement, and
shall be forever estopped from challenging the
validity of such Releases and Covenants Not to Sue,
but without limiting the rights and remedies of PBGC
as specifically
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preserved therein, and subject to suspension of
PBGC's obligations under section 9(g).
(i) PBGC's Duty to Execute and Deliver to GM Additional, Specific
Releases in the Future. After the Transaction Date, and notwithstanding
delivery of the Releases and Covenants Not to Sue described in sections 9(a),
9(b), 9(c), 9(d) and 9(f)(i)(D) of this Agreement, PBGC may be required to
provide to GM or EDS, upon request, an additional release or additional
releases in the form(s) of Appendix R2 and/or Appendix R3 or Appendix R4 and/or
Appendix R5 to this Agreement (whichever is applicable, if any), provided,
however, that after the Transaction Date PBGC shall be required to provide such
releases only on three separate occasions and provided the requesting party
pays PBGC $5000 on each such occasion.
(j) PBGC's Further Assurances. At any time on or after the
Transaction Date, upon the request of GM, PBGC shall certify and deliver to GM
or EDS, any additional copies of the releases in the forms of Appendix R1,
Appendix R2, Appendix R3, Appendix R4, or Appendix R5 hereto, or otherwise, to
further evidence the release of GM, EDS, any and all EDS Releasees, any and all
EDS Transferees or any other person described in this section 9 who shall be
released upon the Transaction Date of a Qualified EDS Transaction, provided
that the requesting party shall pay
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PBGC the agency's standard costs and charges for copying and production of
documents in response to requests under the Freedom of Information Act. Such
additional copies shall each be accompanied by a certificate, executed by a
duly-authorized officer of PBGC, that the attached release is a true and
correct copy of a release and covenant not to sue that was duly executed and
delivered to GM and EDS pursuant to this Agreement.
(k) No Release From Liability Respecting the EDS Plans. Nothing
in the Releases and Covenants Not to Sue described in this section 9 shall be
construed to release any of the EDS Releasees or EDS Transferees from their
obligations and liabilities, if any, respecting the EDS Plans.
(l) Effect of Reentry into GM Controlled Group. Once released
from the GM Pension Liability as a result of the releases or covenants
described in this section 9 of the Agreement, any EDS Releasee that reenters
GM's Controlled Group and any EDS Transferee that enters or reenters GM's
Controlled Group may, by reentering or entering the GM Controlled Group, become
subject to the GM Pension Liability to the extent otherwise provided by law.
(m) Extension of Time Periods. The parties acknowledge that
any failure by GM to satisfy one or more of the time periods noted within
section 9 of the Agreement
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shall not void or terminate PBGC obligations or the processes described in
section 9. Rather, any such failure shall extend the remaining time periods
set forth in section 9 by the number of days the process was delayed by GM.
(n) Irreparable Injury. The parties acknowledge that failure
by PBGC to deliver the Releases and Covenants Not to Sue as required and
described in sections 9(a), 9(b), 9(c), 9(d) and 9(f)(i)(D) of the Agreement or
the statement described in sections 9(c)(3) and 9(d)(vi) of this Agreement will
cause GM and EDS and members of their respective Controlled Groups irreparable
injury for which damages will be incalculable and as to which there will be no
adequate remedy at law.
(o) Certain New Subsidiaries. If, during the
three-consecutive-year period ending on the Transaction Date, there are
Material Transfers consisting of stock of NewSubs that have an aggregate fair
value greater than $6 billion and that, immediately after the Transaction Date,
are no longer member(s) of GM's Controlled Group and are members of EDS's
Controlled Group, then all such Material Transfers shall be aggregated and
treated the same as a Material Transfer consisting of stock of a single GM
Subsidiary that has a fair value greater than $3 billion and that is not a
member of GM's Controlled Group and is a member of EDS's Controlled Group on
the Transaction Date for purposes of sections
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9(e)(2) and 9(f), including section 9(f)(i)(D) and 9(f)(iii), of the Agreement.
Any Material Transfers consisting of stock of NewSubs that are not made during
the three-consecutive-year period noted above shall not be aggregated and
treated as provided for in the preceding sentence, nor shall such Material
Transfers be taken into account in applying the $6 billion threshold set forth
in the preceding sentence, but such Material Transfers shall be treated as
Material Transfers to the extent otherwise provided under this Agreement. If
the period beginning May 9, 1994, and ending on the Transaction Date is shorter
than three years, then such shorter period shall be substituted for the
three-consecutive-year period described above.
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SECTION 10: INTENDED BENEFICIARIES
The parties to the Agreement are PBGC and GM. No persons other than
GM and PBGC are intended to have enforceable rights or remedies under or
arising under this Agreement, except that --
(i) EDS (or any successor thereto by reason of merger,
consolidation or reorganization, or any assignee of all or
substantially all of the business or assets of EDS) shall be
an intended beneficiary of, and shall be entitled to enforce,
the obligation of PBGC to deliver such executed Releases and
Covenants Not to Sue as GM and EDS shall be entitled to
receive under this Agreement; provided however, that EDS shall
have rights under this section 10(i) of the Agreement only to
the extent the Releases and Covenants Not to Sue are
consistent with such certifications GM has made pursuant to
section 9(c) of this Agreement and such determinations and
related actions as GM may have elected in its sole discretion
to make under section 9(f) of this Agreement, if any, and
(ii) all persons in GM's Controlled Group on the Transaction Date,
all EDS Releasees, all EDS Transferees, plus each of the
successors and assigns, or any of them (whether or not
incorporated) of any of the foregoing persons, and each and
all of their parent organizations, subsidiary organizations,
successors and assigns or any of them, shall be entitled to
enforce the express provisions of the Releases and Covenants
Not to Sue in accordance with the terms in the forms of
appendices R1, and R2 and R3, or appendices R4 and R5 (if and
as modified pursuant to section 9(f)) whichever is applicable,
if and when such Releases and Covenants Not to Sue are
executed and delivered to GM and the EDS Releasees.
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SECTION 11: REPRESENTATIONS AND WARRANTIES OF GM
GM hereby represents and warrants to PBGC that each of the following
representations and warranties is true and correct as of the Effective Date.
(a) Organization. GM is duly organized under the laws of the
state of Delaware and is qualified to do business under the laws of any state
where a failure so to qualify would have a material adverse effect on its
operations. GM has full power and authority to enter into and perform its
obligations under the Agreement and to carry out and consummate the
transactions contemplated by the Agreement.
(b) Authorization. GM's execution, delivery and performance of
the Agreement and any other documents to be executed by GM in connection with
the Agreement have been duly authorized by all necessary corporate action.
(c) No Legal Bar. GM's execution and delivery of the Agreement
and any other documents to be executed and delivered by GM in connection with
the Agreement, GM's performance of its obligations under the Agreement, GM's
consummation of the transactions contemplated by the Agreement, and GM's
compliance with the terms and provisions of the Agreement (i) will not violate
in any material respect any law applicable to GM or any of its properties, the
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consequences of which violation could reasonably be expected to have a material
adverse effect on the ability of GM to perform its obligations under the
Agreement; and (ii) will not violate any provision of the Certificate of
Incorporation or By-Laws of GM, or any material contract or agreement which is
binding on GM or its properties, or result in a breach of or constitute (with
due notice, lapse of time or both) a default under any indenture, agreement,
lease or other instrument to which GM is a party, and will not result in or
require the creation of any lien, security interest or other charge or
encumbrance upon or with respect to any of its properties.
(d) Enforceability. This Agreement and any other documents to be
executed and delivered by GM pursuant to the Agreement shall be duly executed
by authorized officers or other representatives of GM. In addition, this
Agreement shall constitute a legal, valid and binding contract and agreement of
GM enforceable by PBGC, and only by PBGC (except that the Labor Secretary may
enforce GM's obligations to the extent provided in section 3(b) of the
Agreement, as applicable), against GM in accordance with its terms.
(e) Opinion of Counsel. Upon the Effective Date of this
Agreement, GM shall deliver to PBGC an opinion of counsel in the form of
Appendix O1 hereto concerning GM's authority to enter into, deliver and perform
this Agreement.
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(f) GM Pension Plans. Appendix P to this Agreement lists all of
the GM Pension Plans as of the Effective Date, except that it may exclude
certain GM Pension Plans that together account for less than 2 percent of the
present value of the GM Pension Plans' combined liabilities as determined by
the enrolled actuary(s) for the GM Pension Plans.
(g) Material Transfers. Between May 9, 1994 and the Effective
Date there have been no Material Transfers. If GM discovers on or before the
Transaction Date that, notwithstanding the preceding sentence, a Material
Transfer occurred between May 9, 1994 and the Effective Date, GM shall identify
such Material Transfers on the list or updated list (if any) furnished to PBGC
pursuant to section 9(c)(2)(D) and 9(c)(3)(ii)(B)(I) of this Agreement, and
having identified such Material Transfer, shall be deemed not to have breached
this representation and warranty.
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SECTION 12: REPRESENTATIONS AND WARRANTIES OF PBGC
PBGC hereby represents and warrants to GM that each of the following
representations and warranties is true and correct as of the Effective Date.
(a) Organization. PBGC is a wholly-owned United States government
corporation established under Title IV of ERISA. PBGC has full power and
authority to enter into and perform its obligations under the Agreement and to
carry out and consummate the transactions contemplated by the Agreement.
(b) Authorization. PBGC's execution, delivery and performance of
the Agreement and any other documents to be executed by PBGC in connection with
the Agreement have been duly authorized by all necessary corporate action and
are within PBGC's statutory authorization and authority.
(c) No Legal Bar. PBGC's execution and delivery of the Agreement
and any other documents to be executed and delivered by PBGC in connection with
the Agreement, PBGC's performance of its obligations under the Agreement or any
other documents to be executed by PBGC in connection with the Agreement, PBGC's
consummation of the transactions contemplated by the Agreement and PBGC's
compliance with the terms and provisions of the Agreement (i) will not violate
in any material respect any law applicable to PBGC or any of its
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properties; and (ii) will not violate any provision of Title IV of ERISA or
PBGC's By-Laws, other applicable statutes, regulations and rules governing
PBGC, or any material contract or agreement which is binding on PBGC or its
properties.
(d) Enforceability. This Agreement and any other documents to be
executed and delivered by PBGC pursuant to this Agreement shall be duly
executed by authorized officers or other representatives of PBGC. This
Agreement shall constitute a legal, valid and binding contract and agreement of
PBGC enforceable against PBGC in accordance with its terms.
(e) Opinion of Counsel. Upon the Effective Date of this
Agreement, PBGC shall deliver to GM an opinion of counsel in the form of
Appendix O2 hereto concerning PBGC's authority to enter into, deliver and
perform this Agreement.
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SECTION 13: GM's REPORTING OBLIGATIONS
(a) Income and Cash Schedules. For any Plan Year through the 2002
Plan Year for which GM takes into account an additional portion of the
Contribution Credit Balance pursuant to section 6 of this Agreement, GM shall
furnish to PBGC a schedule or schedules showing GM's Adjusted Net Income and
GM's Cash for that Plan Year and for each subsequent Plan Year through and
including the Plan Year in which the condition in subsection 6(a)(i) of this
Agreement occurs, but in no event later than the 2002 Plan Year. The schedule
showing GM's Adjusted Net Income shall include consolidated net income of GM's
North American Operations (as shown in the Management Discussion and Analysis
section of GM's Annual Report on Form 10-K), one-time transition charges,
extraordinary items and restructuring charges. The schedule showing GM's
Adjusted Net Income shall be accompanied by (i) a letter from GM's Chief
Financial Officer certifying that nothing came to his/her attention that caused
him/her to believe that the numbers are inconsistent with GM's Adjusted Net
Income as defined in this Agreement (except as may be noted in such letter),
and (ii) if applicable, notification of any sales or Reconfiguration described
in section 6(b)(i) or 6(b)(ii) of this Agreement. The schedule showing GM's
Cash shall be accompanied by a statement from GM's
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independent auditor confirming the accuracy of the schedule. In addition, GM
shall furnish, upon request by the PBGC:
(A) For each Plan Year in which GM takes into account an additional
portion of the Contribution Credit Balance pursuant to section 6 of
this Agreement, the amount of Restructuring Charges included in any of
GM's financial statements, if and to the extent those Charges were
used to determine the amount of GM's Adjusted Net Income; and
(B) A report from GM's independent auditor describing agreed upon
procedures it has performed in order to assist PBGC in evaluating any
assertion furnished to PBGC by GM management pursuant to clause (A)
above, such report to be prepared following such reasonable procedures
as may be agreed to by such auditor, GM and PBGC under an agreed-upon
procedures engagement of the type provided for in Statement on
Standard for Attestation Engagements No. 3, of the American Institute
for Certified Public Accountants.
(b) Actuarial Valuation Reports. Provided that GM first shall
have contributed the GM Class E Stock described in section 2(a) of this
Agreement, for each Plan Year ending after the Effective Date of this Agreement
until and including the Plan Year determined under section 13(j) of this
Agreement, GM shall furnish to PBGC a copy of the Actuarial Valuation Report
for the Hourly Plan in the same form as that Report is furnished by the Hourly
Plan's enrolled actuary to GM. GM shall furnish each such Report no later than
30 days after the date the Report is provided to GM in final form, but in no
event later than the last day of the eleventh month of such Plan Year. Each
Actuarial Valuation Report shall contain substantially the same type of
information for a Plan Year as is contained in the actuarial
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report for the Hourly Plan dated October 1, 1992. Each Actuarial Valuation
Report also shall contain such additional information, if any, as the enrolled
actuary for the Hourly Plan determines may be appropriate to calculate the
Statutory Funding Requirements applicable to such Plan Year.
(c) Annual Report (Form 5500). Provided that GM first shall have
contributed the GM Class E Stock described in section 2(a) of this Agreement,
for each Plan Year ending after the Effective Date of this Agreement until and
including the Plan Year determined under section 13(j) of this Agreement, GM
shall furnish to PBGC a copy of the Hourly Plan's Annual Report (Form 5500,
including all attachments and schedules thereto).
(d) Asset Trust Statements. If and as requested by PBGC from time
to time beginning after the Effective Date of this Agreement, GM shall provide
for a Plan Year preliminary and unaudited trust statement(s) showing the total
value, on the last day of such Plan Year, of the Hourly Plan's assets and of
those portions of the Hourly Plan's assets attributable to Employer Securities.
Any trust statement requested by PBGC pursuant to this section 13(d) of the
Agreement shall be provided by the later of (i) 60 days after the end of the
Plan Year to which it pertains or (ii) 30 days after the request. The last
date on which PBGC may request an asset trust statement with respect to a Plan
Year is the
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date on which PBGC receives the Annual Report (Form 5500, including all
schedules and attachments) for that Plan Year. GM makes no representations or
warranties regarding the accuracy or completeness of the trust statements to be
provided pursuant to this section 13(d), nor shall such asset trust statements
be used as a basis for or as evidence in any action under section 3(b) or 8 of
this Agreement.
(e) Notice of Missed Funding Contributions. For each Plan Year
beginning after the Effective Date of this Agreement until and including the
Plan Year determined under section 13(j) of this Agreement, GM shall provide
PBGC written notice of any failure to make a required funding contribution to
the Hourly Plan within 10 days after the due date of such contribution. In
addition, if requested by PBGC following the due date of a contribution, GM
will confirm whether a required contribution has been made.
(f) Use of Contribution Credit Balance. For each Plan Year
beginning after the Effective Date of this Agreement until and including the
Plan Year determined under section 13(j) of this Agreement, GM shall furnish to
PBGC information showing the following amounts as determined by the Hourly
Plan's enrolled actuary:
(i) a worksheet showing the balance and use of the Contribution
Credit Balance for that Plan Year;
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(ii) the limitation (if applicable) on the Stock Credit Balance
attributable to Unsold Contributed Shares (or Unsold
Exchanged Shares); and
(iii) the amounts of the Stock Credit Balance and the Sold Stock
Credit Balance as of the first and last dates of that Plan
Year.
The information required with respect to a Plan Year by this section 13(f) of
the Agreement shall be furnished to PBGC no later than the last day of the
eleventh month of the following Plan Year.
(g) Additional Information. If and as requested by PBGC from
time to time, GM also shall furnish to PBGC the following information:
(i) a true copy of amendments to the Hourly Plan;
(ii) a true copy of the restated Hourly Plan documents; and
(iii) a true copy of portions of any collective bargaining agreement
that refer or relate to the Hourly Plan.
(h) Transfer of Controlling Interest. At least ten calendar days
before a Transaction Date, GM shall notify PBGC in writing if any single GM
Subsidiary having a fair value greater than $3 billion will no longer be in
GM's Controlled Group as a result of a Qualified EDS Transaction, provided,
however, that GM shall have no obligation under this section 13(h) with respect
to any transfer that, at least ten calendar days prior to the date such notice
would be required--
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<PAGE> 100
(i) was reported by GM in a press release delivered by GM to a
nationally-distributed wire service; or
(ii) was described in a proxy statement distributed to GM
stockholders; or
(iii) was reported by GM in a public filing with the U.S. Securities
and Exchange Commission; or
(iv) was reported in the Wall Street Journal, the New York Times,
Bloomberg News or Reuters.
If GM fails to provide the notice required under this section 13(h), PBGC's
obligation to deliver the Releases and Covenants Not to Sue under section 9 of
this Agreement (or to deliver the written statement as required and described
by sections 9(c)(3) and 9(d)(vi) of this Agreement) shall be suspended unless
and until EDS or an EDS Subsidiary returns stock to GM or a GM Subsidiary such
that the transferred GM Subsidiary is once again a member of GM's Controlled
Group. Nothing in this section 13(h) establishes, implies, or shall be
cited as evidence that any person has any obligation to PBGC other than as
expressly provided in this section 13(h). If, during the
three-consecutive-year period ending on the Transaction Date, there are
Material Transfers consisting of stock of NewSubs that have an aggregate fair
value greater than $6 billion and that are no longer member(s) of GM's
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Controlled Group on the Transaction Date, then all such Material Transfers
shall be aggregated and treated the same as a Material Transfer consisting of
stock of a single GM Subsidiary that has a fair value greater than $3 billion
and that will no longer be in GM's Controlled Group immediately after the
Transaction Date for purposes of this section 9(h) of the Agreement. Any
Material Transfers consisting of stock of NewSubs that are not made during the
three-consecutive-year period noted above shall not be aggregated and treated
as provided for in the preceding sentence, nor shall such Material Transfers be
taken into account in applying the $6 billion threshold set forth in the
preceding sentence, but such Material Transfers shall be treated as Material
Transfers to the extent otherwise provided under this Agreement. If the period
beginning May 9, 1994, and ending on the Transaction Date is shorter than three
years, then such shorter period shall be substituted for the
three-consecutive-year period described above.
(i) Independent Accountant Procedures. No later than December 31,
1995, GM shall furnish to PBGC a draft of the specific procedures referred to
in the second paragraph of Appendix T and a copy of the letter or letters from
the Comptroller of GM referenced in Appendix T. For a period of 21 calendar
days after such draft is furnished to PBGC, PBGC may comment on those
procedures, provided however that PBGC
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shall have no right to approve, disapprove or amend those procedures, and
provided further that nothing in this Agreement shall prevent GM's independent
auditor from recommending additional procedures to be performed, and provided
further the independent auditor shall provide to PBGC a draft of any such
recommended additional procedures.
(j) Termination of Reporting Obligations. Notwithstanding any
other provision within this Agreement, the last Plan Year for which any of the
Reporting Obligations described in this section 13 shall apply is the later of:
(A) the 2002 Plan Year; or
(B) the Plan Year during which the restrictions of section 7(a)
cease to apply.
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SECTION 14: FEES AND EXPENSES
Except as otherwise expressly provided herein, each of GM and PBGC
shall pay its own respective costs, fees and expenses as incurred by it in
connection with the Agreement and the transactions described in the Agreement.
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SECTION 15: CERTAIN TRANSFERS BY GM TO A NEW PARENT.
(a) General. Any claim that PBGC has under this Agreement may be
asserted only against GM and not against any GM Subsidiaries or EDS Releasees.
If GM becomes the direct or indirect subsidiary of another corporation ("New
Parent"), and if GM or a GM Subsidiary makes Covered Transfers to the New
Parent that in the aggregate have a Fair Value, determined as of the date of
the respective Covered Transfers, that exceeds $3 billion, then GM shall cause
New Parent to agree with GM that: (i) New Parent (but not any other person,
including its direct and indirect subsidiaries) will, subject to the
limitations in sections 15(b), 15(c) and 15(d) below, satisfy GM's financial
obligations, if any, under sections 8(b) and 8(c) of this Agreement (i.e., any
obligation imposed by a court to pay money into the Hourly Plan pursuant to the
procedures set forth in section 8(b) of the Agreement and any obligation to
post collateral pursuant to section 8(c) of the Agreement); and (ii) such
agreement shall be enforceable by PBGC. Any such obligation to cause the New
Parent to enter into an agreement pursuant to this section 15 shall terminate
on the last day that GM may be required to post collateral under section 8(c)
of this Agreement.
(b) New Parent's Required Agreement. The agreement that GM shall
cause New Parent, if any, to enter into
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pursuant to this section 15 of the Agreement shall provide, and GM and PBGC
hereby agree, that --
(i) New Parent shall have no liability under the agreement unless
and until GM fails to comply with a material financial
requirement of section 8(b) or 8(c) of this Agreement, PBGC
has notified New Parent of such failure in writing, and 30
days have elapsed following such notice; and
(ii) New Parent's liability under the agreement shall in no event
exceed the lesser of --
(A) the dollar amount of GM's obligations under
sections 8(b) and 8(c) that are not satisfied by GM,
and
(B) the Fair Value, determined as of the date New
Parent is called upon to fulfill GM's financial
obligations under sections 8(b) and 8(c), of
(I) the assets received by New Parent in a
Covered Transfer and still owned by New
Parent, plus
(II) the proceeds of any assets received by
New Parent in a Covered Transfer but no
longer owned by New Parent, minus
(III) $3 billion.
(c) Definitions. For purposes of this section 15 of the Agreement
- --
(i) "Covered Transfer" means a transfer from GM or a GM Subsidiary
to New Parent of assets having a fair value, on the date the
Covered Transfer is made, of not less than $50 million;
provided, however, that a "Covered Transfer" shall not include
(1) any transfer of GM Shares, (2) any regular, special or
extraordinary dividends paid to New Parent by GM or a GM
Subsidiary not in excess of the amount of dividends paid out
by New Parent to its stockholders during the same quarter or
any one of the immediately following four quarters, (3) any
payment or transfer of assets made in the ordinary course of
business of GM or EDS, and (4) any payment or transfer of
assets determined by the
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Board of Directors of GM or New Parent, as the case may be, to
be for Fair Value, as provided in section 15(c)(ii), below.
(ii) For purposes of this section 15 of the Agreement, "Fair Value"
means the value established by the Board of Directors of GM
(or if New Parent exists, of New Parent) based upon the
opinion of a nationally recognized and reputable financial
advisor.
(d) New Parent's Rights and Defenses, and Termination of New
Parent's Obligations. Nothing herein shall preclude New Parent from asserting
any claim, right or defense available to GM or New Parent under this Agreement
or under law. Any obligation acquired by New Parent pursuant to this section
15 of the Agreement shall terminate at the same time that the corresponding
obligation of GM expires or would expire under this Agreement.
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SECTION 16: GENERAL PROVISIONS
(a) Limitation of Rights. This Agreement is intended to be and is
for the sole and exclusive benefit of GM, PBGC and, to the limited extent
provided in section 10 of this Agreement, the additional persons specified
therein. Nothing expressed or mentioned in or to be implied from the Agreement
gives any person other than GM and PBGC any legal or equitable right, remedy or
claim against GM or PBGC under or in respect of this Agreement, except to the
limited extent provided in section 10 of this Agreement.
(b) Severability. If any provision of this Agreement shall be
invalid, inoperative or unenforceable as applied in any particular case, this
shall not have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance. If any provision of this
Agreement shall be invalid, inoperative or unenforceable in all cases, this
shall not have the effect of rendering any other provision of the Agreement
invalid, inoperative, or unenforceable. The invalidity of any portion of this
Agreement shall not affect the remaining portions of the Agreement.
(c) Notices. All notices, demands, instructions and other
communications required or permitted under the Agreement to any party to the
Agreement shall be in writing
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and shall be personally delivered or sent by registered, certified or express
mail, postage prepaid, return receipt requested; telefacsimile (which shall be
immediately followed by the original of such communication); or pre-paid
overnight delivery service with confirmed receipt; and shall be deemed to be
given for purposes of this Agreement on the date the writing is received by the
intended recipient, or in the case of telefacsimile, on the date transmitted to
the intended recipient. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this section, notices,
demands, instructions and other communications in writing shall be sent to the
parties as indicated below:
<TABLE>
<S> <C>
To GM: Treasurer
General Motors Corporation
767 Fifth Avenue
New York, NY 10153
Telephone: 212-418-3500
Telefacsimile: 212-418-3632;
with copies to Office of General Counsel
General Motors Corporation
New Center One Building
3031 West Grand Boulevard
P.O. Box 33122
Detroit, MI 48232
Attn: Francis S. Jaworski
Telephone: (313) 974-1640
Telefacsimile: (313) 974-0210
and
Gary M. Ford, Esq.
Groom and Nordberg, Chartered
1701 Pennsylvania Avenue, N.W.
Suite 1200
</TABLE>
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<PAGE> 109
<TABLE>
<S> <C>
Washington, D.C. 20006
Telephone: (202) 857-0620
Telefacsimile: (202) 659-4503
To PBGC: General Counsel
Pension Benefit Guaranty Corporation
1200 K Street, N.W.
Washington, D.C. 20005-4026
Telephone: 202-326-4020
Telefacsimile: 202-326-4112
Director
Corporate Finance
and Negotiations Department
Pension Benefit Guaranty Corporation
1200 K Street, N.W.
Washington, D.C. 20005-4026
Telephone: 202-326-4070
Telefacsimile: 202-842-2643
To EDS: General Counsel
Electronic Data Systems Corporation
5400 Legacy Drive
H3-3A-05
Plano, Texas 75024
Telephone: (214) 605-5584
Telefacsimile (214) 605-5610
</TABLE>
(d) Business Days. If the last date (whether measured by calendar
days or business days) for performing any act or exercising any right provided
for in the Agreement falls on a Saturday, Sunday, or federal holiday, unless
otherwise expressly provided in this Agreement, the act may be performed or the
right exercised on the next day that is not a Saturday, Sunday or federal
holiday with the same force and effect as if done on the date provided in the
Agreement.
(e) Change of Plan Year. If, consistent with applicable law, GM
changes the Plan Year of the Hourly Plan,
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<PAGE> 110
the costs and benefits of this Agreement, including the amount and timing of
GM's contributions to the Hourly Plan after application of this Agreement,
shall to the extent reasonably possible be preserved (but not accelerated) as
if the plan year change had not occurred.
(f) Counterparts. This Agreement may be executed in one or more
counterparts and by different parties on separate counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
(g) Entire Agreement. This Agreement and its Appendices contain
the complete and exclusive statement of the agreement and understanding by and
among the parties hereto and supersede all prior agreements, understandings,
commitments, representations, communications, and proposals, oral or written,
between the parties relating to the subject matter of this Agreement. This
Agreement may not be amended, modified, or supplemented except by an instrument
in writing executed by the parties to this Agreement.
(h) No Admission of Liability. This Agreement is not and shall
not be construed as or deemed to be an admission or concession by or on the
part of any party of any liability in connection with any matter described in
the Agreement, and each party expressly denies any liability whatsoever. The
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<PAGE> 111
basis for this Agreement is the desire of the parties to resolve the
controversy between them without litigation.
(i) Survival of Representations and Warranties. All
representations and warranties in this Agreement shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any party.
(j) No Reliance. Except for the representations and warranties of
the parties stated in sections 11 and 12 of this Agreement, each party to the
Agreement has made its own independent inquiry concerning the matters, facts
and circumstances material to the settlement embodied in the Agreement,
including without limitation, the legal, tax and accounting aspects of the
transactions contemplated in the Agreement and any related transactions. No
party to the Agreement has relied and no party will rely upon any other party
to the Agreement, or any other party's legal counsel or financial or actuarial
advisors, for any information or advice of any kind in connection with any of
the transactions contemplated in the Agreement or with any related
transactions.
(k) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the amendment is in writing and signed by the
parties hereto. The failure of any party to the Agreement to enforce a
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<PAGE> 112
provision of the Agreement shall not constitute a waiver of the party's right
to enforce that provision of the Agreement.
(l) Headings. The section headings contained in this Agreement
are for convenience only and shall not affect the meaning or interpretation of
this Agreement.
(m) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the District of Columbia
and by ERISA, the Code and other laws of the United States to the extent they
preempt District of Columbia law.
(n) Binding Effect. This Agreement shall be binding upon GM and
PBGC and their respective successors, if any (and to the extent provided in
section 10, shall inure to the benefit of the Intended Beneficiaries and in
each case to their respective heirs, legal representatives, successors and
assigns).
(o) Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any party hereto or
the Intended Beneficiaries. Nor shall any rule of construction that favors a
non-draftsman or a government agency be applied. A reference to any statute
shall be deemed also to
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<PAGE> 113
refer to all rules and regulations promulgated under the statute, unless the
context requires otherwise.
(p) Reservation of Rights. Subject to the provisions of
sections 3, 8 and 16(q) of this Agreement, and to the releases and covenants
not to sue described in section 9 of this Agreement, nothing in this Agreement
shall preclude PBGC from exercising its regulatory, enforcement, litigation or
other authority as set forth in ERISA and the Code with respect to any person,
other than as a result of a Qualified EDS Transaction. Except as expressly
provided herein, nothing in this Agreement constitutes or reflects a waiver or
modification by GM of any claim, right or defense that GM has under law.
(q) Confidential Information. All documents and other
information furnished pursuant to the requirements of sections 9 and 13 of this
Agreement ("Confidential Information") shall be held confidential in accordance
with the following specific requirements:
(i) Except as may be required by law or as provided in section
16(q)(v) below, PBGC agrees not to disclose the Confidential
Information to anyone other than those Executive Branch
Officials, and PBGC employees and consultants who have a need
to know the Confidential Information as part of their job
responsibilities. PBGC shall inform all such Executive Branch
officials to whom Confidential Information is disclosed of the
need to maintain the confidentiality of such Confidential
Information. Before
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<PAGE> 114
providing Confidential Information to any consultant, PBGC
shall first obtain that consultant's written agreement to
abide by the terms of this section 16(q) of the Agreement with
respect to the Confidential Information.
(ii) Before furnishing any document that constitutes Confidential
Information to PBGC, GM shall affix the words "CONFIDENTIAL"
to the first page of that document. In addition, within 30
days after the Effective Date, PBGC shall furnish a copy of
this section 16(q) of the Agreement to PBGC's disclosure
officer under 29 C.F.R. Section 1603.2(a).
(iii) PBGC shall treat all Confidential Information as confidential,
proprietary information. Specifically, the Confidential
Information constitutes, and has been designated by GM as,
non-public information that constitutes trade secret and
commercial or financial information that currently is
privileged or confidential under 5 U.S.C. Section 552(b)(4)
and 29 C.F.R. Part 2603. PBGC expressly agrees with that
designation and acknowledges that such designation will not
expire until 10 years after the confidential information is
submitted to PBGC. Disclosure of such confidential
information may cause GM competitive harm. In addition, PBGC
acknowledges that the Confidential Information may include
information that is material and non-public information
relating to the financial condition of GM, and, as such, a
person who trades in the securities of GM based upon such
information or who transmits such information to a person who
so trades would subject himself or herself to possible
liability under federal securities laws. PBGC shall assert
all permissible exemptions from or privileges against
disclosure of the Confidential Information.
(iv) Unless otherwise required by law, PBGC (a) shall notify GM of
any request for the Confidential Information, including but
not limited to, any requests made under the Freedom of
Information Act or in connection with any court,
administrative or legislative proceedings in which disclosure
of such information may be compelled, and (b) further shall
afford GM and its affiliates the timely
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<PAGE> 115
opportunity to seek a protective order or take such other
legal actions as GM deems appropriate to preserve the
confidentiality of the Confidential Information; provided,
however, that in the case of a request for Confidential
Information made by a chair of any Congressional committee or
subcommittee on behalf of such committee or subcommittee
("Congressional Request"), PBGC shall notify GM in writing of
such request at least five business days before PBGC furnishes
such Confidential Information to the requesting party, and
further provided, however, that in the case of a written
Congressional Request signed by a chair of any Congressional
committee or subcommittee on behalf of such committee or
subcommittee, which Request asks that the PBGC respond in less
than five days, PBGC shall send GM a copy of such written
request by telefacsimile and overnight mail immediately upon
receipt thereof, and in any event before furnishing such
Confidential Information to the requesting party. In the case
of any Congressional Request (whether written or not) PBGC
shall (a) inform the requesting party, not later than the time
the Confidential Information is provided to such party, that
GM has indicated that the Confidential Information is
nonpublic, proprietary information the disclosure of which
would be damaging to GM, and (b) request, not later than the
time the Confidential Information is provided to such party,
that the confidential nature of the Confidential Information
be preserved.
(v) PBGC shall not use Confidential Information, or any summaries,
analyses and reformulations of the Confidential Information,
as evidence in any court or administrative proceeding, except
that PBGC may use such Information as evidence in a proceeding
brought by one party against the other under this Agreement.
If and to the extent PBGC uses Confidential Information as
evidence in a
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<PAGE> 116
proceeding under this Agreement, PBGC shall use its best
efforts to have placed under seal any Confidential Information
that PBGC submits to the court or agency that presides over
the proceeding.
(vi) The requirements of this section 16(q) do not apply to
information that is available to the general public,
information that was available to PBGC prior to its disclosure
to PBGC by GM (and not otherwise required to be treated as
confidential), or information that becomes available to PBGC
on a non-confidential basis provided that the information is
not subject to a confidentiality agreement with or for the
benefit of GM actually known to PBGC.
(vii) Nothing in this Agreement waives or modifies the requirements
of any other confidentiality agreement entered into between
PBGC and GM with respect to information provided to PBGC under
any such agreement. Nothing in this Agreement limits or
affects in any way PBGC's investigatory authority under
section 4003 of ERISA, including PBGC's authority to subpoena
witnesses and require the production of records.
(r) Assignment. This Agreement may not be assigned in whole
or in part by either party without the express written consent of the other
party.
(s) No Change to Governing Plan Documents or Plan Administration.
This Agreement is not a document or instrument governing the Hourly Plan, nor
does anything in this Agreement amend, supplement or derogate from the
documents and instruments governing the Hourly Plan. Further, nothing in this
Agreement alters, amends or
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<PAGE> 117
otherwise modifies the operation or administration of the Hourly Plan.
(t) Role of Named Fiduciary. The Named Fiduciary of the Hourly
Plan shall be furnished copies of all materials furnished to the GM Board of
Directors that report on the funded status of the Hourly Plan (other than
materials relating to future pension funding matters) or on GM's compliance
with this Agreement (other than materials regarding the status of litigation,
claims or potential or actual disputes raised by PBGC under this Agreement, or
any materials subject to a valid privilege belonging to GM, a GM Subsidiary, an
EDS Releasee, or the respective counsels of any such persons) within 10
business days of the time those materials are furnished to the GM Board of
Directors. GM shall in no way seek to restrict the Named Fiduciary from
advising the PBGC about or conferring with the PBGC concerning compliance with
this Agreement; it being understood that nothing contained in this Agreement
shall require the Named Fiduciary to make, or prevent the Named Fiduciary from
making, any inquiry or analysis respecting GM's compliance with this Agreement.
In deciding whether or not to communicate with the PBGC regarding this
Agreement, or the compliance by GM therewith, the Named Fiduciary may rely upon
the accuracy and completeness of the information disclosed in the materials
provided to it by GM. The Named
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<PAGE> 118
Fiduciary shall have no rights or obligations relating to the enforcement of
this Agreement; provided, however, that nothing contained herein shall limit it
in acting as provided in this section 16(t) or as otherwise required or
permitted by law.
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<PAGE> 119
GENERAL MOTORS CORPORATION
By: /s/ HEIDI KUNZ
------------------------
HEIDI KUNZ
Its Treasurer
PENSION BENEFIT GUARANTY CORPORATION
By: /s/ MARTIN SLATE
------------------------
MARTIN SLATE
Its Executive Director
<PAGE> 120
APPENDICES TO AGREEMENT
Made as of March 3, 1995, By and Between
General Motors Corporation
and
The Pension Benefit Guaranty Corporation
<PAGE> 121
CONTENTS
Appendix C1 Illustration of Sections 7(c) and
7(d) of Agreement
Appendix D1 Designated Cash Notice
Appendix E1 GM's Certificate to Escrow Agent
that Qualified EDS Transaction has
Occurred
Appendix E2 PBGC's Statement to Escrow Agent
Appendix O1 Opinion of Counsel for GM
Appendix O2 Opinion of Counsel for PBGC
Appendix P List of GM Pension Plans (subject to
de minimis rule in section 11(f)
of Agreement)
Appendix Q GM Certificate indicating that
transaction or proposed transaction
will constitute a Qualified EDS
Transaction
Appendix R1 Initial Release and Covenant Not to
Sue Respecting EDS Releasees, EDS
Transferees and GM Controlled Group
Appendix R2 Specific Release and Covenant Not
to Sue Respecting EDS Releasees and
GM Controlled Group
Appendix R3 Specific Release and Covenant Not
to Sue Respecting EDS Transferees
and GM Controlled Group
Appendix R4 Alternative Form of Specific
Release and Covenant Not to Sue
Respecting EDS Releasees and GM
Controlled Group
Appendix R5 Alternative Form of Specific
Release and Covenant Not to Sue
Respecting EDS Transferees and GM
Controlled Group
Appendix S List of EDS Subsidiaries as of
Effective Date
Appendix T Deloitte & Touche Procedures
i
<PAGE> 122
APPENDIX C1
ILLUSTRATION OF SECTION 7(c) AND 7(d) OF AGREEMENT
For purposes of this Illustration, the following simplifications were
made:
* In the Illustration asterisked asset values are measured at fair
market value. Value for DRC and FSA will actually be
determined using GM's normal asset valuation method.
** Where noted the Illustration disregards the additional
restrictions in Sections 4, 7(a) and 7(b) on the availability
of the Stock Credit Balance. The Illustration also assumes no
dividends were paid on the stock during this period. If
dividends were paid, certain values such as the values of
sold stock and actuarial gains would be adjusted upward to
reflect the additional value of dividends paid.
7/1/94 Contributed Value = 177 MM x $30 = $5,310 MM
Funding Interest Rate is 9%.
10/1/94 Unsold 177 MM x $31 = $5,487 MM
Sold O x $31 = 0
-----
Total $5,487 MM
Asset Value (FMV)* = $5,487 MM
Reduced by Statutory Credit Balance
for purposes of DRC to the extent
required under the law in effect at the time.
9/30/95 (A) Facts
Unsold 147 MM x $34 = $4,998 MM
Sold (9/30/95) 30 MM x $34 = $1,020 MM
---------
Total $6,018 MM
Asset Value (FMV)* = $6,018 MM
Reduced by Statutory Credit Balance
for purposes of DRC Calculation to the extent
required under the law in effect at the time.
(B) Review of Available Stock Credit Balance**
(1) If Not Used on 9/30/95:
1.25
Sold 9/30/95: 30 MM x $30 x (1.09) = $1,002.4 MM
1.25
Unsold 9/30/95: 147 MM x $30 x (1.09) = $4,911.6 MM
------------
Total $5,914.0 MM
Page 1 of 4
<PAGE> 123
(2) Available for Use on 9/30/95:
1.25
Sold 9/30/95: 30 MM x $30 x (1.09) = $1,002.4 MM
1.25
Unsold 9/30/95: 147 MM x $30 x (1.09) = $4,911.6 MM
-----------
Total $5,914.0 MM
(C) Review on a "Per Share" Basis
Actual Value Received per Share = $34.00
10/1/94 Value, plus Interest
per Share = $31 x 1.09 = $33.79
Contributed Value, plus Interest
1.25
per Share = $30 x (1.09) $33.41
Gain not Previously Recognized
($34.00 - $33.79) x 30 MM = $6.3 MM
Under Section 7(c), $6.3 million will show up as an
actuarial gain in the FSA, but the available Stock
Credit Balance will not be adjusted.
The increased value of the remaining 147 MM shares [147 MM
x ($34.00 - $33.79)] will also show up as an actuarial
gain in the FSA.
The amortization of these gains will result in credits
under normal ERISA rules.
(D) Review on an Aggregate Basis
Total gain on sold shares = 30 MM x ($34 - $30) = $120 MM
This gain will be reflected in two ways:
- The expected appreciation increases the Stock Credit
1.25
Balance = 30 MM x ($30 x 1.09 - $30) = $102.4 MM.
- The unexpected appreciation of $17.6 MM appears as
an actuarial gain in the FSA, which will be amortized
under normal ERISA funding rules. (Some of this was
recognized on 10/1/94, and some on 10/1/95.)
- The unexpected appreciation on the remaining 147 MM
shares also appears as an actuarial gain in the FSA.
(Some of this was recognized on 10/1/94, and some on
10/1/95.)
9/30/96 (A) Facts
Of the remaining 147 MM unsold shares:
Sold 9/30/96, 10 MM @ $30 = $ 300 MM
Unsold 137 MM @ $30 = $4,110 MM
Page 2 of 4
<PAGE> 124
Scenario I:
(B) Additional Facts
GM did not previously use any sold or unsold Stock
Credit Balance. In addition, GM does not use any in
this year.
(C) Review of Available Stock Credit Balance:**
(1) If Not Used on 9/30/96:
2.25
Sold 9/30/95: 30 MM x $30(1.09) = $1,092.6 MM
Sold 9/30/96: 10 MM x $30 = $ 300.0 MM
2.25
Unsold: 137 MM x $30 (1.09) = $4,989.4 MM
-----------
Total $6,382.0 MM
(2) Available for Use on 9/30/96:
2.25
Sold 9/30/95: 30 MM x $30 (1.09) = $1,092.6 MM
Sold 9/30/96: 10 MM x $30 = $ 300.0 MM
Unsold: 137 MM x $30 = $4,110.0 MM
-----------
$5,502.6 MM
Scenario II:
(B) Additional Facts
Used all Stock Credit Balance from 30 MM shares sold
1.25
9/30/95 (i.e., 30 MM x $30 x 1.09 ). On 9/30/95,
also used 20 MM shares' worth of unsold Stock Credit
1.25
Balance (i.e., 20 MM x $30 x 1.09 ) when shares were
worth $34.
(C) Review of Available Stock Credit Balance:**
(1) If Not Used on 9/30/96:
2.25
Unsold, unused 9/30/96:127 MM x $30 x(1,09) = $4,625.2 MM
Section 7(d) adjustment (see below) -52.2 MM
-----------
Adjusted unused $4,573.0 MM
This conforms to the credit balance rolled forward from
earlier years as follows:
Initial Credit Balance 7/1/94 $5,310.0 MM
Rolled forward to 9/30/95 5,914.0 MM
1.25
(5,310 MM X 1.09 )
Applied on 9/30/95 -1,670.6 MM
----------
1.25
(50 MM x $30 x 1.09 )
Remaining Balance on 9/30/95 $4,243.4 MM
Rolled forward to 9/30/96 4,625.2 MM
Section 7(d) adjustment (see below) - 52.2 MM
----------
$4,573.0 MM
Page 3 of 4
<PAGE> 125
(2) Available for Use on 9/30/96:
Unsold, unused 9/30/96: 127 MM x $30 = $3,810.0 MM
Section 7(d) adjustment ( see below) - 52.2 MM
-------------
$3,757.8 MM
(D) Computation of Section 7(d) Adjustment:
- 20 MM unsold shares were used and the Stock Credit
Balance taken into account for those shares was
$668.2 MM (i.e.,
1.25
$30 x 1.09 x 20 MM).
- 10 MM of these shares were sold on 9/30/96 for only
$30 per share. (The other 10 MM have not yet been
sold.)
- Because the sales proceeds ($300 MM) were less than
the Stock Credit Balance taken into account for those
sold shares, the available Stock Credit Balance must
be adjusted until the expiration of the Stock Credit
Balance restrictions in the Agreement. This
adjustment is
2.25
(i) The loss of $64.2 MM [i.e., 10 MM x ($30 x 1.09 -
$30)] which represents the updated value of the 10 MM
shares as credited to the FSA, as compared to the
sale value, minus
(ii) The $12 MM "unamortized gains" that have arisen on
previously sold shares.
- The total "gains" realized on sold shares were realized on
10/1/95 when 30 MM shares were sold at $34/share. The
"gain" realized then was $17.6 MM [30 MM x ($34 - $30 x
1.25
1.09 )]. Actuarial gains on unsold shares are not
applied in determining the offset to the loss.
- The remaining unamortized portion of this "gain" is $12.0 MM,
determined as follows:
- "Gain" reflected 10/1/94 is $10.4 MM [30 MM x ($31 - $30 x
.25
1.09 )]
- "Gain" reflected 10/1/95 is $6.3 MM [30 MM x ($34 - $31 x
1.09)]
- Remaining unamortized portion of these "gains" is $6.8 MM
and $5.2 MM, respectively.
Page 4 of 4
<PAGE> 126
APPENDIX D1
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Re: General Motors Corporation Hourly Rate
Employees Pension Plan
Ladies and Gentlemen:
Please be advised that the contribution of $__________ made by General
Motors Corporation ("GM") to the General Motors Corporation Hourly-Rate
Employees Pension Plan on [Date] constitutes "Designated Cash" within the
meaning of the Agreement made as of March 3, 1995, by and between GM and the
Pension Benefit Guaranty Corporation.
Sincerely,
General Motors Corporation
cc: [PBGC's General Counsel
PBGC's Director, Corporate Finance and
Negotiations Department]
<PAGE> 127
APPENDIX E1
[Escrow Agent]
Dear Sir or Madame:
This is to certify that, as of your receipt of this writing, a
"Qualified EDS Transaction," as that term is defined in the Agreement made as
of March 3, 1995, by and between General Motors Corporation and the Pension
Benefit Guaranty Corporation, has occurred.
Sincerely,
General Motors Corporation
<PAGE> 128
APPENDIX E2
[Escrow Agent]
Dear Sir or Madam:
The Pension Benefit Guaranty Corporation ("PBGC") hereby authorizes
you to deliver to GM and EDS the Releases and Covenants Not to Sue that PBGC
delivered to you on [date], copies attached.
Sincerely,
Pension Benefit Guaranty Corporation
<PAGE> 129
APPENDIX O1
March 3, 1995
Pension Benefit Guaranty Corporation
1200 K Street, N.W.
Washington, D.C. 20005
Ladies and Gentlemen:
I am General Counsel of General Motors Corporation ("GM"), a Delaware
corporation. This opinion is delivered to you pursuant to section 11(e) of the
Agreement ("Agreement") made as of March 3, 1995, by and between GM and the
Pension Benefit Guaranty Corporation ("PBGC") Agreement.
In connection with this opinion, I or attorneys working under my
supervision have examined and relied upon the original or executed copies,
certified or otherwise identified to our satisfaction, of the Agreement
delivered by GM of even date herewith, and originals or copies certified or
otherwise identified to our satisfaction of such records, agreements and
instruments and certificates, as we have deemed necessary and relevant to form
the basis for the opinions herein. In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals, the conformity to originals of all documents submitted to us
as copies, the authenticity of the originals of such latter documents, the
legal capacity of all natural persons, and that the Agreement is binding upon
and enforceable against PBGC as a party thereto.
The opinions herein are also subject to the following assumptions and
qualifications:
(a) I express no opinion as to the enforceability of any provision
of the Agreement to the extent such provision may be
<PAGE> 130
Pension Benefit Guaranty Corporation
March 3, 1995
Page 2
subject to, or affected by, applicable bankruptcy, insolvency, reorganization,
moratorium or other state or federal laws affecting the rights and remedies of
creditors generally (including, without limitation, fraudulent transfer laws).
(b) In rendering the opinions relating to enforceability set forth
in paragraph 2 below, I have assumed that PBGC will seek to enforce its rights
under the Agreement only in good faith and in a commercially reasonable manner.
(c) I express no opinion concerning any laws other than federal
laws of the United States of America and the laws of Delaware. I am not
admitted to practice law in the State of Delaware, but an attorney working
under my supervision whom I have relied upon in giving this opinion is familiar
with the laws of that State in the ordinary course of his practice.
(d) I have assumed there was no misrepresentation, omission or
deceit by any person in connection with the execution, delivery or performance
of the Agreement or any of the transactions contemplated by the Agreement.
Based upon and subject to the foregoing assumptions and
qualifications, it is my opinion that:
1. GM is duly organized under the laws of Delaware and is
qualified to do business under the laws of any state where failure to do so
qualify would have a material adverse effect on its operations. GM has the
power and authority to enter into and perform its obligations under the
Agreement and to carry out and consummate the transactions contemplated
thereby.
2. GM's execution, delivery and performance of the Agreement and
any other documents to be executed by GM in connection with the Agreement have
been duly authorized by all necessary corporate action.
3. GM's execution and delivery of the Agreement and any other
documents to be executed and delivered by GM in connection with the Agreement,
GM's performance of its obligations under the Agreement, GM's consummation of
the transactions contemplated by the Agreement, and GM's compliance with the
terms and provisions of the Agreement (i) will not violate in any material
respect any law applicable to GM or any of its properties, the consequences of
which violation could reasonably be expected to have a material adverse effect
on the ability of GM to perform its obligations under the Agreement; and (ii)
will not violate any provision of the Certificate of Incorporation or By-Laws
of GM,
<PAGE> 131
Pension Benefit Guaranty Corporation
March 3, 1995
Page 3
or any material contract or agreement which is binding on GM or its properties,
or result in a breach of or constitute (with due notice, lapse of time or both)
a default under any indenture, agreement, lease or other instrument to which GM
is a party, and will not result in or require the creation of any lien,
security interest or other charge or encumbrance upon or with respect to any of
its properties, except as specifically provided for in the Agreement.
4. The Agreement has been duly executed and delivered by GM and
constitutes a legal, valid and binding contract and obligation of GM
enforceable against GM in accordance with its terms.
5. I am not aware of any actions, suits or proceedings pending
or threatened in writing against GM or any of its property in any court or
before any arbitrator or mediator or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality which, if adversely determined, would have a materially adverse
effect on GM's ability to perform its obligations contemplated by the Agreement
or the validity or enforceability thereof, with the possible exception of the
following:__________________.
6. GM has obtained all necessary approvals, consents and
authorizations, and has made all registrations, qualifications or filings with
all relevant governmental authorities required on the part of GM in connection
with the execution and delivery by GM of the Agreement.
This opinion is intended solely for your use in connection with the
transactions occurring today and with any Qualified EDS Transaction (as that
term is defined in the Agreement) and is not to be made available to or relied
upon by other persons without our express prior written consent. This opinion
is limited to the state of the law and facts and circumstances existing as of
the date hereof, and I do not undertake to update this opinion for events or
changes in the law occurring after the date hereof.
Sincerely,
Thomas Gottschalk
General Counsel
<PAGE> 132
APPENDIX O2
March 3, 1995
General Motors Corporation
767 Fifth Avenue
New York, NY 10153
Ladies and Gentlemen:
I am General Counsel of the Pension Benefit Guaranty Corporation ("PBGC"),
a United States government corporation established under Section 4002 of the
Employee Retirement Income Security Act of 1974, as amended. This opinion is
delivered to you pursuant to section 12(e) of the Agreement made as of March 3,
1995, by and between General Motors Corporation and PBGC (the "Agreement").
In connection with this opinion, I or attorneys working under my
supervision have examined and relied upon originals or executed copies,
certified or otherwise identified to our satisfaction, of the Agreement
executed and delivered by PBGC of even date herewith, and originals or copies
certified or otherwise identified to our satisfaction of such records,
agreements and instruments and certificates of public officials and employees
of the PBGC, as we have deemed necessary and relevant to form the basis for the
opinions herein. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as copies, the
authenticity of the originals of such latter documents, the legal capacity of
all natural persons, and that the Agreement is binding upon and enforceable
against GM as a party thereto.
The opinions herein are also subject to the following assumptions and
qualifications:
(a) I express no opinion as to the enforceability of any provision
of the Agreement to the extent such provision may be subject to, or affected
by, applicable bankruptcy, insolvency, reorganization, moratorium or other
state or federal laws affecting the rights and remedies of creditors generally
(including, without limitation, fraudulent transfer laws).
<PAGE> 133
General Motors Corporation
March 3, 1995
Page 2
(b) I express no opinion with respect to the enforceability of
provisions in the Agreement providing for (i) specific performance, injunctive
relief or other equitable remedies, regardless of whether such enforceability
is sought in a proceeding in equity or at law, or (ii) waiver of rights by the
PBGC which under applicable law may not be waived; provided, however, that
nothing in part (ii) of this qualification should be construed to detract from
the opinions set forth in paragraphs 1 and 2 below.
(c) In rendering the opinions relating to enforceability set
forth in paragraph 2 below, I have assumed that GM and the Intended
Beneficiaries will seek to enforce any rights under the Agreement only in good
faith and in a commercially reasonable manner.
(d) I express no opinion concerning any laws other than the
federal laws of the United States of America.
(e) I have assumed there was no misrepresentation, omission or
deceit by any person in connection with the execution, delivery or performance
of the Agreement or any of the transactions contemplated by the Agreement.
Based upon and subject to the foregoing assumptions and
qualifications, it is my opinion that:
1. The PBGC is a United States government corporation established
under Section 4002 of ERISA. The PBGC has the power and authority to execute
and perform its obligations under the Agreement and to carry out and consummate
the transactions contemplated thereby, including without limitation, the
execution and delivery of the releases and covenants not to sue described in
section 9 of the Agreement.
2. All necessary action has been taken by the PBGC to authorize
the execution, delivery and performance by it of the Agreement. The Agreement
has been duly executed and delivered by PBGC and constitutes a legal, valid and
binding obligation of PBGC, enforceable against the PBGC in accordance with its
terms. PBGC is authorized to grant the releases and covenants not to sue
provided for in section 9 of the Agreement. If and when those releases and
covenants not to sue are executed and delivered, they will be enforceable
against PBGC in accordance with their terms.
3. The execution and delivery by the PBGC of, and the performance
by the PBGC of its obligations under, the Agreement,
<PAGE> 134
General Motors Corporation
March 3, 1995
Page 3
do not conflict with Title IV of ERISA or PBGC's Bylaws.
4. I am not aware of any actions, suits or proceedings pending
or threatened in writing against the PBGC or any of its property in any court
or before any arbitrator or mediator or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality which, if adversely determined, would have a materially
adverse effect on the PBGC's ability to perform its obligations contemplated by
the Agreement or the validity or enforceability thereof.
5. The PBGC has obtained all necessary approvals, consents and
authorizations, and has made all registrations, qualifications or filings with
all relevant governmental authorities required on the part of the PBGC in
connection with the execution and delivery by the PBGC of the Agreement.
This opinion is intended solely for your use in connection with the
transactions occurring today and with any Qualified EDS Transaction (as that
term is defined in the Agreement) and is not to be made available to or relied
upon by other persons without our express prior written consent. This opinion
is limited to the state of the law and facts and circumstances existing as of
the date hereof, and I do not undertake to update this opinion for events or
changes in law occurring after the date hereof.
Very truly yours,
Carol Connor Flowe
General Counsel
<PAGE> 135
APPENDIX P
General Motors Retirement Program for Salaried Employees
General Motors Hourly Rate Employees Pension Plan
Saturn Personal Choices Retirement Plan for Non-Represented Team Members
Employees Retirement Plan for GMAC Mortgage Corporation
NAVCO Corporation Pension Plan
Hughes Non-Bargaining Retirement Plan
Hughes Bargaining Retirement Plan
Hughes Subsidiary Retirement Plan
<PAGE> 136
APPENDIX Q
Director, Corporate Finance and
Negotiations Department
and
General Counsel
Pension Benefit Guaranty Corporation
1200 K Street, N.W.
Washington, D.C. 20005-4026
Re: Certificate of Qualified EDS Transaction
Ladies and Gentlemen:
Please be advised that General Motors Corporation intends to enter
into [has entered into] a transaction with an estimated effective date of
[date] (the "Proposed Transaction") that GM concludes will constitute a
"Qualified EDS Transaction" within the meaning of the Agreement made as of
March 3, 1995 by and between GM and the Pension Benefit Guaranty Corporation
(the "Agreement"). As shown by the enclosed statement from [name of GM officer
or attorney], the Proposed Transaction, if and when consummated, will result in
EDS ceasing to be a member of GM's "controlled group." Enclosed in this regard
are statements from the Master Trustees and Independent Fiduciary of the
General Motors Corporation Hourly Employees Pension Plan ("Hourly Plan")
showing the value of the Hourly Plan's assets, and the values of GM Class E
Stock and/or other Employer Securities held by the Hourly Plan as of [date].
Sincerely,
General Motors Corporation
Enclosures
<PAGE> 137
[APPENDIX R1]
RELEASE AND COVENANT NOT TO SUE
1. In consideration of the terms, conditions, mutual covenants
and agreements set forth in the Agreement made as of March 3, 1995 (the
"EFFECTIVE DATE"), by and between General Motors Corporation ("GM") and the
Pension Benefit Guaranty Corporation ("PBGC") (the "AGREEMENT"), the adequacy
and sufficiency of which are hereby acknowledged, the PBGC, a wholly-owned
United States government corporation created by section 4002(b) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. Section
1302(b), on its own behalf and in every other capacity in which it may now or
in the future act, releases and forever discharges each of the EDS RELEASEES
and EDS TRANSFEREES from any claim whatsoever with respect to any and all of
the GM PENSION LIABILITY and from all actions, causes of action, suits, debts,
dues, sums of money, expenses, accounts, reckonings, bonds, bills, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages,
costs, judgments, executions, obligations, losses, liabilities, claims and
demands whatsoever, whether in law or equity, whether direct or indirect,
whether for indemnity or contribution, whether fixed or contingent, whether
such be presently known or unknown, suspected or unsuspected, whether or not
hidden or concealed, which PBGC and its successors and assigns ever had, now
have, or may have in the future against any of the EDS RELEASEES and EDS
TRANSFEREES with respect to such GM PENSION LIABILITY,
<PAGE> 138
immediately upon the TRANSACTION DATE and provided there has been no EXCESSIVE
TRANSFER under section 9(e) of the AGREEMENT that remains unresolved under
section 9(f) of the AGREEMENT; provided, however, that there shall be no
release to the extent specified in section 13(h) of the Agreement or in the
event of an Excessive Transfer where GM waives releases pursuant to section
9(f)(ii) of the Agreement; provided further, that there shall be no release of
the EDS TRANSFEREES in the event of a MATERIAL TRANSFER consisting of stock of
any single GM SUBSIDIARY that has a fair value greater than $3 billion (other
than a GM SUBSIDIARY that is transferred in a MATERIAL TRANSFER described in
section 9(e)(1)(D) of the AGREEMENT) and that is not a member of GM's
CONTROLLED GROUP and is a member of EDS's CONTROLLED GROUP on the TRANSACTION
DATE; and provided further, that there shall be no release of the EDS RELEASEES
for an amount and to the extent specified in section 9(f)(i)(D) of the
AGREEMENT if GM elects Releases and Covenants Not to Sue under section
9(f)(i)(D)(i) of the Agreement.
2. PBGC covenants never to initiate or pursue against any person
(including without limitation, the EDS RELEASEES, EDS TRANSFEREES, GM, all
persons within GM's CONTROLLED GROUP, the GM PENSION PLANS, and the fiduciaries
and administrators of the GM PENSION PLANS) any administrative, judicial or
other proceeding, specifically including without limitation any proceeding
under section 4042 or 4069 of ERISA, 29 U.S.C. Section 1342 or 1369, or to
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<PAGE> 139
threaten or assert an intention to initiate any such proceeding, or to seek any
other equitable or legal relief, by reason of (i) any QUALIFIED EDS
TRANSACTION, (ii) any transaction in a series of transactions that constitutes,
is reasonably related to, or is reasonably necessary to effect, a QUALIFIED EDS
TRANSACTION, or (iii) any transfer from GM or a GM SUBSIDIARY of assets,
operations or securities (including stock of any type) to or into EDS or an EDS
SUBSIDIARY, that occurs prior to the TRANSACTION DATE or in conjunction with a
QUALIFIED EDS TRANSACTION; provided, however, that PBGC's Covenant Not To Sue
under this paragraph 2 shall not (A) extend to, or restrict PBGC's rights under
Title IV of ERISA, if any, to the extent such rights are not released pursuant
to paragraph 1 above, and subject to section 9(f)(iii) of the Agreement, if any
single GM SUBSIDIARY that has a fair value greater than $3 billion is not or
will no longer be a member of GM's CONTROLLED GROUP immediately after the
TRANSACTION DATE and is not or will no longer be a member of EDS's CONTROLLED
GROUP immediately after the TRANSACTION DATE, or (B) extend to, or restrict
PBGC's exercise of, any rights or remedies PBGC may have with respect to an
EXCESSIVE TRANSFER that has not been resolved under section 9(f)(i) of the
Agreement to the extent such rights or remedies are expressly provided under
section 9(h) of the AGREEMENT, or (C) extend to, or restrict PBGC's exercise of
its rights under Title IV of ERISA, if any, including its rights, if any, under
section 4069(a) of ERISA, 29 U.S.C. Section 1369(a), after the
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<PAGE> 140
TRANSACTION DATE, against the EDS RELEASEES for an amount and to the extent
specified in section 9(f)(i)(D) if GM elects Releases and Covenants Not To Sue
under section 9(f)(i)(D)(i) of the Agreement, or (D) extend to, or restrict
PBGC's exercise of its rights under Title IV of ERISA, if any, including its
rights, if any, under section 4069(a) of ERISA, 29 U.S.C. Section 1369(a),
after the TRANSACTION DATE to the extent specified in section 9(f)(i)(D) of the
AGREEMENT as against the corporation(s), if any, that GM elects not to include
as an EDS RELEASEE under section 9(f)(i)(D)(ii) if GM elects Releases and
Covenants Not To Sue under section 9(f)(i)(D)(ii) of the AGREEMENT, or (E)
extend to, or restrict PBGC's exercise of its rights under Title IV of ERISA,
if any, including its rights, if any, under section 4069(a) of ERISA, 29 U.S.C.
Section 1369(a), against any person other than the EDS RELEASEES if any single
GM Subsidiary that has a fair value greater than $3 billion (other than a GM
SUBSIDIARY that is transferred in a MATERIAL TRANSFER described in section
9(e)(1)(D) of the AGREEMENT) is not or will no longer be a member of GM's
CONTROLLED GROUP immediately after the TRANSACTION DATE and is or will be a
member of EDS's CONTROLLED GROUP immediately after the TRANSACTION DATE, or (F)
extend to or restrict PBGC's exercise of its rights, if any, against any person
in the event of an Excessive Transfer under section 9(e) of the AGREEMENT where
GM waives releases pursuant to section 9(f)(ii) of the AGREEMENT, or (G) extend
to or restrict PBGC's exercise of its
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<PAGE> 141
rights, if any, to the extent specified in section 13(h) of the AGREEMENT.
3. If, during the three-consecutive-year period ending on the
TRANSACTION DATE, there are MATERIAL TRANSFERS consisting of stock of NEWSUBS
that have an aggregate fair value greater than $6 billion and that, immediately
after the TRANSACTION DATE, are no longer member(s) of GM's CONTROLLED GROUP
and are members of EDS's CONTROLLED GROUP, then all such MATERIAL TRANSFERS
shall be aggregated and treated the same as a MATERIAL TRANSFER consisting of
stock of a single GM SUBSIDIARY that has a fair value greater than $3 billion
and that is not a member of GM's CONTROLLED GROUP on the TRANSACTION DATE and
is a member of EDS's CONTROLLED GROUP on the TRANSACTION DATE for purposes of
paragraph 2(E) above. Any MATERIAL TRANSFERS consisting of stock of NEWSUBS
that are not made during the three-consecutive-year period noted above shall
not be aggregated and treated as provided for in the preceding sentence, nor
shall such MATERIAL TRANSFERS be taken into account in applying the $6 billion
threshold set forth in the preceding sentence, but such MATERIAL TRANSFERS
shall be treated as MATERIAL TRANSFERS to the extent otherwise provided under
the AGREEMENT. If the period beginning May 9, 1994, and ending on the
TRANSACTION DATE is shorter than three years, then such shorter period shall be
substituted for the three-consecutive-year period described above.
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<PAGE> 142
4. CONTRIBUTED SHARES means those shares of GM Class E Stock
contributed pursuant to section 2 of the AGREEMENT. CONTRIBUTED SHARES do not
include EXCHANGED SHARES.
5. CONTRIBUTING SPONSOR has the meaning set forth in section
4001(a)(13) of ERISA.
6. CONTRIBUTION DATE with respect to a security or asset means
the date as of which that security or asset is deemed contributed to the HOURLY
PLAN pursuant to section 302 of ERISA and section 412 of the Internal Revenue
Code of 1986, as amended ("CODE").
7. CONTROLLED GROUP has the meaning set forth in section
4001(a)(14) of ERISA.
8. EDS means Electronic Data Systems Corporation, a Texas
corporation that currently is a wholly-owned subsidiary of RGR Holdings, Inc.
("RGR HOLDINGS, INC."), a Delaware corporation that in turn is a wholly-owned
subsidiary of GM.
9. EDS FUTURE AFFILIATES means any person that becomes a member
of a CONTROLLED GROUP with EDS after the TRANSACTION DATE, other than a person
that is or was at any time a member of GM's CONTROLLED GROUP.
10. EDS PLANS means the Electronic Data Systems Corporation
Retirement Plan, and every other defined benefit pension plan (if
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<PAGE> 143
any) covered by Title IV of ERISA for which EDS, an EDS SUBSIDIARY or an EDS
RELEASEE is a CONTRIBUTING SPONSOR.
11. EDS RELEASEES means EDS plus RGR HOLDINGS, INC., plus the EDS
SUBSIDIARIES plus the EDS FUTURE AFFILIATES, plus any person identified in part
(i) or (ii) of the definition of EDS SUBSIDIARIES that is not in EDS's
CONTROLLED GROUP as of the TRANSACTION DATE but is transferred in whole or in
part to a third party in conjunction with a QUALIFIED EDS TRANSACTION or in a
transaction reasonably related to or reasonably necessary to effect a QUALIFIED
EDS TRANSACTION, plus each and all of the agents, advisors, legal counsel,
partners, joint venturers, officers, directors and assigns of any of the
foregoing persons or any of them. Notwithstanding the foregoing, the term "EDS
RELEASEES" shall not include (i) GM or any other person that was a member of
GM's CONTROLLED GROUP before the TRANSACTION DATE and continues without
interruption to be a member of GM's CONTROLLED GROUP immediately following the
TRANSACTION DATE, or (ii) if GM elects to receive alternative Releases and
Covenants Not to Sue pursuant to section 9(f)(i)(D)(ii) of the AGREEMENT, the
corporation(s), if any, that are not released under section 9(f)(i)(D)(ii) of
the AGREEMENT.
12. EDS SUBSIDIARIES means
(i) the persons listed on Appendix S to the AGREEMENT, all of
which are owned, directly or indirectly, by EDS as of the
EFFECTIVE DATE plus
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<PAGE> 144
(ii) the additional persons, if any, in which EDS acquires a
"controlling interest" within the meaning of Treas. Reg.
Section 1.414(c)-(2)(b)(2) after the EFFECTIVE DATE and on or
before the TRANSACTION DATE
provided that those persons are members of EDS's CONTROLLED GROUP as of the
TRANSACTION DATE.
13. EDS TRANSFEREE means any purchaser or other direct or indirect
transferee of any or all of the stock or assets of any of the EDS RELEASEES, by
way of purchase, sale, assignment, pledge, exchange, conversion, merger,
consolidation, amalgamation or otherwise, and each of their parent
organizations, subsidiary organizations, successors and assigns (whether
present or future), or any of them (whether or not incorporated), and each and
all of their agents, advisors, legal counsel, fiduciaries, partners, joint
venturers, officers, directors and assigns, or any of them, but specifically
excluding (i) any person who is, after the TRANSACTION DATE, a member of GM's
CONTROLLED GROUP, and (ii) if GM elects to receive alternative Releases and
Covenants Not to Sue pursuant to section 9(f)(i)(D)(ii) of the AGREEMENT, the
corporation(s), if any, determined under section 9(f)(i)(D)(ii) of the
AGREEMENT, and (iii) any GM SUBSIDIARY that is not a member of EDS's CONTROLLED
GROUP immediately after the TRANSACTION DATE.
14. EMPLOYER SECURITY has the meaning set forth in section
407(d)(1) of ERISA.
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<PAGE> 145
15. ERISA LIMITS means, with respect to EMPLOYER SECURITIES held
by the HOURLY PLAN at the time application of the term "ERISA LIMITS" is at
issue, that: (i) the aggregate fair market value of all EMPLOYER SECURITIES
held by the HOURLY PLAN does not exceed 10 percent of the fair market value of
the assets of the HOURLY PLAN at such time; (ii) no more than 25 percent of the
aggregate amount of stock of the same class of EMPLOYER SECURITIES issued and
outstanding is held by the HOURLY PLAN at such time; and (iii) at least 50
percent of the aggregate amount of stock of the same class of EMPLOYER
SECURITIES issued and outstanding is held by persons independent of the issuer
at such time.
16. EXCESSIVE TRANSFER has the meaning set forth in section 9(e)
of the AGREEMENT.
17. EXCHANGED SHARES means shares, if any, received by the HOURLY
PLAN in exchange for, or upon conversion or redemption of, the CONTRIBUTED
SHARES.
18. FUNDING STANDARD ACCOUNT means the funding standard account
maintained for the HOURLY PLAN pursuant to section 302 of ERISA and section 412
of the CODE.
19. GM PENSION LIABILITY means any and all liabilities or
obligations now existing, or hereafter arising, to PBGC (on its own behalf, as
trustee for any plan, or in any other capacity) or to the GM PENSION PLANS
under Title IV of ERISA with respect to
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<PAGE> 146
the GM PENSION PLANS or the termination of the GM PENSION PLANS, including
without limitation any liability under section 302 of Title I of ERISA or under
Title IV of ERISA (including without limitation, any lien, liability, or
obligation under section 4042, 4062, 4068 or 4069 of ERISA, 29 U.S.C. Section
1342, 1362, 1368 or 1369).
20. GM PENSION PLANS means every defined benefit pension plan
covered by Title IV of ERISA for which GM or a GM SUBSIDIARY is a CONTRIBUTING
SPONSOR as of or at any time prior to or at any time after the TRANSACTION
DATE, provided, however, that GM PENSION PLANS shall not include any plans for
which EDS or an EDS SUBSIDIARY is a CONTRIBUTING SPONSOR.
21. GM SHARE means an equity security issued by GM, including
without limitation a share of GM Class E Stock. GM SHARES do not include
shares or securities issued by persons other than GM that are received in
exchange for, or upon conversion or redemption of, GM SHARES.
22. GM SUBSIDIARY means each and every person that is or was at
any time on or after May 9, 1994, a member of GM's CONTROLLED GROUP, except for
EDS, RGR HOLDINGS, INC., and the EDS SUBSIDIARIES listed on Appendix S to the
AGREEMENT.
23. HOURLY PLAN means the General Motors Hourly-Rate Employees
Pension Plan (Employer Identification number 38-0572515, plan number 003).
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<PAGE> 147
24. MATERIAL TRANSFER has the meaning set forth in the AGREEMENT.
25. NEWSUB has the meaning set forth in the AGREEMENT.
26. QUALIFIED EDS TRANSACTION means any transaction or series of
transactions (including without limitation any transaction or series of
transactions by which GM Class E Stock is exchanged, converted or redeemed for
capital stock of EDS) by which EDS ceases to be a member of GM's CONTROLLED
GROUP, unless, immediately after the TRANSACTION DATE (i) more than 2.5% of the
Then-Current Fair Market Value of the HOURLY PLAN's assets consists of
CONTRIBUTED SHARES or EXCHANGED SHARES that are GM SHARES, and (ii) more than
5% of the Then-Current Fair Market Value of the HOURLY PLAN's assets consists
of EMPLOYER SECURITIES. Notwithstanding the foregoing, even if immediately
after the TRANSACTION DATE, more than 2.5% of the Then-Current Fair Market
Value of the HOURLY PLAN's assets consists of CONTRIBUTED SHARES or EXCHANGED
SHARES that are GM Shares and more than 5% of the Then- Current Fair Market
Value of the Hourly Plan's assets consists of EMPLOYER SECURITIES, such
transaction nonetheless will become a QUALIFIED EDS TRANSACTION if and upon any
later date that falls not more than 120 days after the TRANSACTION DATE either
(i) no more than 2.5% of the Then-Current Fair Market Value of the HOURLY
PLAN's assets consists of CONTRIBUTED SHARES or EXCHANGED SHARES that are GM
SHARES, or (ii) no more than 5% of the Then-Current Fair Market Value of the
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<PAGE> 148
HOURLY PLAN's assets consists of EMPLOYER SECURITIES. For purposes of this
definition of QUALIFIED EDS TRANSACTION, in determining whether the 5% limit is
exceeded, any security that would otherwise constitute an EMPLOYER SECURITY and
that is contributed to the HOURLY PLAN after the last CONTRIBUTION DATE for the
CONTRIBUTED SHARES shall be deemed to be a Non-employer Security if (i) the
contribution of such security is within the ERISA LIMITS, and (ii) the credit
balance in the FUNDING STANDARD ACCOUNT resulting from the contribution of such
security is still unused on the TRANSACTION DATE.
27. TRANSACTION DATE with respect to the QUALIFIED EDS TRANSACTION
(including a transaction that becomes a QUALIFIED EDS TRANSACTION) means the
date on which EDS ceases to be a member of GM's CONTROLLED GROUP.
28. This Release and Covenant Not to Sue shall not be affected by
(i) any amendment, modification, termination, or waiver of the AGREEMENT,
except as specifically provided in a written amendment to this Release and
Covenant Not to Sue executed by GM and PBGC on or before the TRANSACTION DATE,
or in a written amendment to this Release and Covenant Not to Sue executed by
GM, PBGC and EDS after the TRANSACTION DATE, (ii) any determination with
respect to the AGREEMENT, including without limitation any determination that
said AGREEMENT is not valid or enforceable in whole or in part, so long as the
material provisions of sections 4 through 7 of the AGREEMENT are not
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<PAGE> 149
invalidated by a court of law before the TRANSACTION DATE or, if they are
invalidated in whole or in part by a court of law before the TRANSACTION DATE,
GM in its sole discretion agrees, in a writing enforceable by the PBGC to the
same extent as provided in the Agreement, to abide by those provisions, or
(iii) any breach by GM or PBGC of the AGREEMENT.
29. Except to the extent expressly provided in paragraphs 1, 2 and
3 above, this Release and Covenant Not to Sue shall not affect the rights, if
any, of any party with respect to, or under, or to enforce the provisions of,
the AGREEMENT.
30. This Release and Covenant Not to Sue shall be governed by the
laws of the District of Columbia and by ERISA, the CODE and other laws of the
United States to the extent they preempt District of Columbia law.
31. Nothing in this Release and Covenant Not to Sue shall be
construed as an admission by or on behalf of any person identified herein that
any liabilities or obligations are now owed to PBGC or a GM PENSION PLAN, or
may be owed to PBGC or a GM PENSION PLAN in the future, by that person.
Nothing in this Release and Covenant Not to Sue shall be construed as an
admission by any person that PBGC has, or will have, rights to legal or
equitable relief in connection with any transaction involving EDS, regardless
of whether such transaction is a QUALIFIED EDS TRANSACTION.
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<PAGE> 150
32. Notwithstanding anything in this Release and Covenant Not to
Sue, once released from the GM PENSION LIABILITY as a result of this Release
and Covenant Not to Sue, any EDS RELEASEE that reenters GM's CONTROLLED GROUP
and any EDS TRANSFEREE that enters or reenters GM's CONTROLLED GROUP may, by
reentering or entering the GM CONTROLLED GROUP, become subject to the GM
PENSION LIABILITY to the extent otherwise provided by law.
33. Nothing in this Release and Covenant Not to Sue shall be
construed to restrict, enlarge or otherwise affect PBGC's rights, if any,
against any person (including any EDS RELEASEE or any EDS TRANSFEREE) with
respect to transactions or events occurring after the TRANSACTION DATE and not
in connection with a QUALIFIED EDS TRANSACTION.
34. Nothing in this Release and Covenant Not to Sue shall be
construed to release any of the EDS RELEASEES, EDS SUBSIDIARIES or EDS
TRANSFEREES from their obligations, if any, respecting the EDS PLANS.
35. The undersigned represents and warrants that he has full power
and authority to execute this Release and Covenant Not to Sue on behalf of
PBGC, and to make the following representations on behalf of PBGC. PBGC is a
wholly-owned United States government corporation established under Title IV of
ERISA. PBGC has full power and authority to enter into and perform its
obligations under this Release and Covenant Not to
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<PAGE> 151
Sue. PBGC's execution and delivery of this Release and Covenant Not to Sue,
and PBGC's performance of its obligations under this Release and Covenant Not
to Sue, have been duly authorized by all necessary corporate action and are
within PBGC's statutory authorization and authority. PBGC's execution and
delivery of this Release and Covenant Not to Sue, and PBGC's performance of its
obligations under this Release and Covenant Not to Sue: (i) will not violate in
any material respect any law applicable to PBGC or any of its properties; and
(ii) will not violate any provision of Title IV of ERISA or PBGC's By-Laws,
other applicable statutes, regulations and rules governing PBGC, or any
material contract or agreement which is binding on PBGC or its properties.
PENSION BENEFIT GUARANTY CORPORATION
By:
---------------------------------
MARTIN SLATE
Its Executive Director
SUBSCRIBED AND SWORN TO
BEFORE ME THIS ____ DAY OF
____________, 1995
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<PAGE> 152
[APPENDIX R2]
RELEASE AND COVENANT NOT TO SUE
1. In consideration of the terms, conditions, mutual covenants
and agreements set forth in the Agreement made as of March 3, 1995 (the
"EFFECTIVE DATE"), by and between General Motors Corporation ("GM") and the
Pension Benefit Guaranty Corporation ("PBGC") (the "AGREEMENT"), the adequacy
and sufficiency of which are hereby acknowledged, the PBGC, a wholly-owned
United States government corporation created by section 4002(b) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. Section
1302(b), on its own behalf and in every other capacity in which it may now or
in the future act, releases and forever discharges each of the EDS RELEASEES
from any claim whatsoever with respect to any and all of the GM PENSION
LIABILITY and from all actions, causes of action, suits, debts, dues, sums of
money, expenses, accounts, reckonings, bonds, bills, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, costs,
judgments, executions, obligations, losses, liabilities, claims and demands
whatsoever, whether in law or equity, whether direct or indirect, whether for
indemnity or contribution, whether fixed or contingent, whether such be
presently known or unknown, suspected or unsuspected, whether or not hidden or
concealed, which PBGC and its successors and assigns ever had, now have, or may
have in the future against any of the EDS RELEASEES with respect to such GM
PENSION LIABILITY.
<PAGE> 153
2. PBGC covenants never to initiate or pursue against any person
(including without limitation, the EDS RELEASEES, EDS TRANSFEREES, GM, all
persons within GM's CONTROLLED GROUP, the GM PENSION PLANS, and the fiduciaries
and administrators of the GM PENSION PLANS) any administrative, judicial or
other proceeding, specifically including without limitation any proceeding
under section 4042 or 4069 of ERISA, 29 U.S.C. Section 1342 or 1369, or to
threaten or assert an intention to initiate any such proceeding, or to seek any
other equitable or legal relief, by reason of (i) any QUALIFIED EDS
TRANSACTION, (ii) any transaction in a series of transactions that constitutes,
is reasonably related to, or is reasonably necessary to effect, a QUALIFIED EDS
TRANSACTION, or (iii) any transfer from GM or a GM SUBSIDIARY of assets,
operations or securities (including stock of any type) to or into EDS or an EDS
SUBSIDIARY, that occurs prior to the TRANSACTION DATE or in conjunction with a
QUALIFIED EDS TRANSACTION; provided, however, that PBGC's Covenant Not to Sue
under this paragraph 2 shall not extend to or restrict PBGC's exercise of its
rights, if any, against GM with respect to a material misrepresentation by GM
in a certification described in section 9(c)(2)(A), 9(c)(2)(E), 9(c)(3)(ii)(A),
9(c)(3)(ii)(B)(II) or 9(c)(3)(ii)(B)(III) of the Agreement where such material
misrepresentation was reasonably relied upon by PBGC and resulted in material
prejudice to PBGC, provided such claim is asserted in a lawsuit filed against
GM within the nine-
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<PAGE> 154
month period beginning on the later of the TRANSACTION DATE or the date a
transaction becomes a QUALIFIED EDS TRANSACTION.
3. CONTRIBUTED SHARES means those shares of GM Class E Stock
contributed pursuant to section 2 of the AGREEMENT. CONTRIBUTED SHARES do not
include EXCHANGED SHARES.
4. CONTRIBUTING SPONSOR has the meaning set forth in section
4001(a)(13) of ERISA.
5. CONTRIBUTION DATE with respect to a security or asset means
the date as of which that security or asset is deemed contributed to the HOURLY
PLAN pursuant to section 302 of ERISA and section 412 of the Internal Revenue
Code of 1986, as amended ("CODE").
6. CONTROLLED GROUP has the meaning set forth in section
4001(a)(14) of ERISA.
7. EDS means Electronic Data Systems Corporation, a Texas
corporation that currently is a wholly-owned subsidiary of RGR Holdings, Inc.
("RGR HOLDINGS, INC."), a Delaware corporation that in turn is a wholly-owned
subsidiary of GM.
8. EDS FUTURE AFFILIATES means any person that becomes a member
of a CONTROLLED GROUP with EDS after the TRANSACTION DATE, other than a person
that is or was at any time a member of GM's CONTROLLED GROUP.
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<PAGE> 155
9. EDS PLANS means the Electronic Data Systems Corporation
Retirement Plan, and every other defined benefit pension plan (if any) covered
by Title IV of ERISA for which EDS, an EDS SUBSIDIARY or an EDS RELEASEE is a
CONTRIBUTING SPONSOR.
10. EDS RELEASEES means EDS plus RGR HOLDINGS, INC., plus the EDS
SUBSIDIARIES plus the EDS FUTURE AFFILIATES, plus any person identified in part
(i) or (ii) of the definition of EDS SUBSIDIARIES that is not in EDS's
CONTROLLED GROUP as of the TRANSACTION DATE but is transferred in whole or in
part to a third party in conjunction with a QUALIFIED EDS TRANSACTION or in a
transaction reasonably related to or reasonably necessary to effect a QUALIFIED
EDS TRANSACTION, plus each and all of the agents, advisors, legal counsel,
partners, joint venturers, officers, directors and assigns of any of the
foregoing persons or any of them. Notwithstanding the foregoing, the term "EDS
RELEASEES" shall not include GM or any other person that was a member of GM's
CONTROLLED GROUP before the TRANSACTION DATE and continues without interruption
to be a member of GM's CONTROLLED GROUP immediately following the TRANSACTION
DATE.
11. EDS SUBSIDIARIES means
(i) the persons listed on Appendix S to the AGREEMENT, all of
which are owned, directly or indirectly, by EDS as of the
EFFECTIVE DATE plus
(ii) the additional persons, if any, in which EDS acquires a
"controlling interest" within the meaning of Treas. Reg.
Section 1.414(c)-(2)(b)(2) after the EFFECTIVE DATE and on or
before the TRANSACTION DATE
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<PAGE> 156
provided that those persons are members of EDS's CONTROLLED GROUP as of the
TRANSACTION DATE.
12. EDS TRANSFEREE means any purchaser or other direct or indirect
transferee of any or all of the stock or assets of any of the EDS RELEASEES, by
way of purchase, sale, assignment, pledge, exchange, conversion, merger,
consolidation, amalgamation or otherwise, and each of their parent
organizations, subsidiary organizations, successors and assigns (whether
present or future), or any of them (whether or not incorporated), and each and
all of their agents, advisors, legal counsel, fiduciaries, partners, joint
venturers, officers, directors and assigns, or any of them, but specifically
excluding (i) any person who is, after the TRANSACTION DATE, a member of GM's
CONTROLLED GROUP, and (ii) any GM SUBSIDIARY that is not a member of EDS's
CONTROLLED GROUP immediately after the TRANSACTION DATE.
13. EMPLOYER SECURITY has the meaning set forth in section
407(d)(1) of ERISA.
14. ERISA LIMITS means, with respect to EMPLOYER SECURITIES held
by the HOURLY PLAN at the time application of the term "ERISA LIMITS" is at
issue, that: (i) the aggregate fair market value of all EMPLOYER SECURITIES
held by the HOURLY PLAN does not exceed 10 percent of the fair market value of
the assets of the HOURLY PLAN at such time; (ii) no more than 25 percent of the
aggregate amount of stock of the same class of EMPLOYER
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<PAGE> 157
SECURITIES issued and outstanding is held by the HOURLY PLAN at such time; and
(iii) at least 50 percent of the aggregate amount of stock of the same class of
EMPLOYER SECURITIES issued and outstanding is held by persons independent of
the issuer at such time.
15. EXCHANGED SHARES means shares, if any, received by the HOURLY
PLAN in exchange for, or upon conversion or redemption of, the CONTRIBUTED
SHARES.
16. FUNDING STANDARD ACCOUNT means the funding standard account
maintained for the HOURLY PLAN pursuant to section 302 of ERISA and section 412
of the CODE.
17. GM PENSION LIABILITY means any and all liabilities or
obligations now existing, or hereafter arising, to PBGC (on its own behalf, as
trustee for any plan, or in any other capacity) or to the GM PENSION PLANS
under Title IV of ERISA with respect to the GM PENSION PLANS or the termination
of the GM PENSION PLANS, including without limitation any liability under
section 302 of Title I of ERISA or under Title IV of ERISA (including without
limitation, any lien, liability, or obligation under section 4042, 4062, 4068
or 4069 of ERISA, 29 U.S.C. Section 1342, 1362, 1368 or 1369).
18. GM PENSION PLANS means every defined benefit pension plan
covered by Title IV of ERISA for which GM or a GM SUBSIDIARY is a CONTRIBUTING
SPONSOR as of or at any time prior to or at any
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<PAGE> 158
time after the TRANSACTION DATE, provided, however, that GM PENSION PLANS shall
not include any plans for which EDS or an EDS SUBSIDIARY is a CONTRIBUTING
SPONSOR.
19. GM SHARE means an equity security issued by GM, including
without limitation a share of GM Class E Stock. GM SHARES do not include
shares or securities issued by persons other than GM that are received in
exchange for, or upon conversion or redemption of, GM SHARES.
20. GM SUBSIDIARY means each and every person that is or was at
any time on or after May 9, 1994, a member of GM's CONTROLLED GROUP, except for
EDS, RGR HOLDINGS, INC., and the EDS SUBSIDIARIES listed on Appendix S to the
AGREEMENT.
21. HOURLY PLAN means the General Motors Hourly-Rate Employees
Pension Plan (Employer Identification number 38-0572515, plan number 003).
22. QUALIFIED EDS TRANSACTION means any transaction or series of
transactions (including without limitation any transaction or series of
transactions by which GM Class E Stock is exchanged, converted or redeemed for
capital stock of EDS) by which EDS ceases to be a member of GM's CONTROLLED
GROUP, unless, immediately after the TRANSACTION DATE (i) more than 2.5% of the
Then-Current Fair Market
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<PAGE> 159
Value of the HOURLY PLAN's assets consists of CONTRIBUTED SHARES or EXCHANGED
SHARES that are GM SHARES, and (ii) more than 5% of the Then-Current Fair
Market Value of the HOURLY PLAN's assets consists of EMPLOYER SECURITIES.
Notwithstanding the foregoing, even if immediately after the TRANSACTION DATE,
more than 2.5% of the Then-Current Fair Market Value of the HOURLY PLAN's
assets consists of CONTRIBUTED SHARES or EXCHANGED SHARES that are GM Shares
and more than 5% of the Then- Current Fair Market Value of the Hourly Plan's
assets consists of EMPLOYER SECURITIES, such transaction nonetheless will
become a QUALIFIED EDS TRANSACTION if and upon any later date that falls not
more than 120 days after the TRANSACTION DATE either (i) no more than 2.5% of
the Then-Current Fair Market Value of the HOURLY PLAN's assets consists of
CONTRIBUTED SHARES or EXCHANGED SHARES that are GM SHARES, or (ii) no more than
5% of the Then-Current Fair Market Value of the HOURLY PLAN's assets
consists of EMPLOYER SECURITIES. For purposes of this definition of QUALIFIED
EDS TRANSACTION, in determining whether the 5% limit is exceeded, any security
that would otherwise constitute an EMPLOYER SECURITY and that is contributed to
the HOURLY PLAN after the last CONTRIBUTION DATE for the CONTRIBUTED SHARES
shall be deemed to be a Non-employer Security if (i) the contribution of such
security is within the ERISA LIMITS, and (ii) the credit balance in the FUNDING
STANDARD ACCOUNT resulting from the contribution of such security is still
unused on the TRANSACTION DATE.
23. TRANSACTION DATE with respect to the QUALIFIED EDS TRANSACTION
(including a transaction that becomes a QUALIFIED EDS
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<PAGE> 160
TRANSACTION) means [insert the date on which EDS ceases to be a member of GM's
CONTROLLED GROUP, if known, or if not known, insert the following: "the date on
which EDS ceases to be a member of GM's CONTROLLED GROUP"].
24. This Release and Covenant Not to Sue shall not be affected by
(i) any amendment, modification, termination, or waiver of the AGREEMENT, (ii)
any determination with respect to the AGREEMENT, including without limitation
any determination that said AGREEMENT is not valid or enforceable in whole or
in part, or (iii) any breach by GM or PBGC of the AGREEMENT.
25. Except to the extent expressly provided in paragraphs 1 and 2
above, this Release and Covenant Not to Sue shall not affect the rights, if
any, of any party with respect to, or under, or to enforce the provisions of,
the AGREEMENT.
26. This Release and Covenant Not to Sue shall be governed by the
laws of the District of Columbia and by ERISA, the CODE and other laws of the
United States to the extent they preempt District of Columbia law.
27. Nothing in this Release and Covenant Not to Sue shall be
construed as an admission by or on behalf of any person identified herein that
any liabilities or obligations are now owed to PBGC or a GM PENSION PLAN, or
may be owed to PBGC or a GM PENSION PLAN in the future, by that person.
Nothing in this Release and Covenant Not to Sue shall be construed as an
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<PAGE> 161
admission by any person that PBGC has, or will have, rights to legal or
equitable relief in connection with any transaction involving EDS, regardless
of whether such transaction is a QUALIFIED EDS TRANSACTION.
28. Notwithstanding anything in this Release and Covenant Not to
Sue, once released from the GM PENSION LIABILITY as a result of this Release
and Covenant Not to Sue, any EDS RELEASEE that reenters GM's CONTROLLED GROUP
and any EDS TRANSFEREE that enters or reenters GM's CONTROLLED GROUP may, by
reentering or entering the GM CONTROLLED GROUP, become subject to the GM
PENSION LIABILITY to the extent otherwise provided by law.
29. Nothing in this Release and Covenant Not to Sue shall be
construed to restrict, enlarge or otherwise affect PBGC's rights, if any,
against any person (including any EDS RELEASEE or any EDS TRANSFEREE) with
respect to transactions or events occurring after the TRANSACTION DATE and not
in connection with a QUALIFIED EDS TRANSACTION.
30. Nothing in this Release and Covenant Not to Sue shall be
construed to release any of the EDS RELEASEES, EDS SUBSIDIARIES or EDS
TRANSFEREES from their obligations, if any, respecting the EDS PLANS.
31. This Release and Covenant Not to Sue, together with the
Release and Covenant Not to Sue in the form of Appendix R3 to the AGREEMENT
executed by the undersigned, supersede the Release and
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<PAGE> 162
Covenant Not to Sue executed by the undersigned on [insert date], a copy of
which is attached hereto as Appendix R1.
32. The undersigned represents and warrants that he has full power
and authority to execute this Release and Covenant Not to Sue on behalf of
PBGC, and to make the following representations on behalf of PBGC. PBGC is a
wholly-owned United States government corporation established under Title IV of
ERISA. PBGC has full power and authority to enter into and perform its
obligations under this Release and Covenant Not to Sue. PBGC's execution and
delivery of this Release and Covenant Not to Sue, and PBGC's performance of its
obligations under this Release and Covenant Not to Sue, have been duly
authorized by all necessary corporate action and are within PBGC's statutory
authorization and authority. PBGC's execution and delivery of this Release and
Covenant Not to Sue, and PBGC's performance of its obligations under this
Release and Covenant Not to Sue: (i) will not violate in any material respect
any law applicable to PBGC or any of its properties; and (ii) will not violate
any provision of Title IV of ERISA or PBGC's By-Laws, other applicable
statutes, regulations and rules governing PBGC, or any material contract or
agreement which is binding on PBGC or its properties.
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<PAGE> 163
PENSION BENEFIT GUARANTY CORPORATION
By:
---------------------------------
MARTIN SLATE
Its Executive Director
SUBSCRIBED AND SWORN TO
BEFORE ME THIS ____ DAY OF
____________, 1995
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<PAGE> 164
[APPENDIX R3]
RELEASE AND COVENANT NOT TO SUE
1. In consideration of the terms, conditions, mutual covenants
and agreements set forth in the Agreement made as of March 3, 1995 (the
"EFFECTIVE DATE"), by and between General Motors Corporation ("GM") and the
Pension Benefit Guaranty Corporation ("PBGC") (the "AGREEMENT"), the adequacy
and sufficiency of which are hereby acknowledged, the PBGC, a wholly-owned
United States government corporation created by section 4002(b) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. Section
1302(b), on its own behalf and in every other capacity in which it may now or
in the future act, releases and forever discharges each of the EDS TRANSFEREES,
including without limitation [INSERT NAMES OF SPECIFIC EDS TRANSFEREES, IF ANY,
IDENTIFIED BY GM AT THE TIME OF EXECUTION AND DELIVERY], from any claim
whatsoever with respect to any and all of the GM PENSION LIABILITY and from all
actions, causes of action, suits, debts, dues, sums of money, expenses,
accounts, reckonings, bonds, bills, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, costs, judgments,
executions, obligations, losses, liabilities, claims and demands whatsoever,
whether in law or equity, whether direct or indirect, whether for indemnity or
contribution, whether fixed or contingent, whether such be presently known or
unknown, suspected or unsuspected, whether or not hidden or concealed, which
PBGC and its successors and assigns ever had, now have, or
<PAGE> 165
may have in the future against any of the EDS TRANSFEREES, including without
limitation [INSERT NAMES OF SPECIFIC EDS TRANSFEREES, IF ANY, IDENTIFIED BY GM
AT THE TIME OF EXECUTION AND DELIVERY], with respect to such GM PENSION
LIABILITY.
2. PBGC covenants never to initiate or pursue against any person
(including without limitation, the EDS RELEASEES, EDS TRANSFEREES, GM, all
persons within GM's CONTROLLED GROUP, the GM PENSION PLANS, and the fiduciaries
and administrators of the GM PENSION PLANS) any administrative, judicial or
other proceeding, specifically including without limitation any proceeding
under section 4042 or 4069 of ERISA, 29 U.S.C. Section 1342 or 1369, or to
threaten or assert an intention to initiate any such proceeding, or to seek any
other equitable or legal relief, by reason of (i) any QUALIFIED EDS
TRANSACTION, (ii) any transaction in a series of transactions that constitutes,
is reasonably related to, or is reasonably necessary to effect, a QUALIFIED EDS
TRANSACTION, or (iii) any transfer from GM or a GM SUBSIDIARY of assets,
operations or securities (including stock of any type) to or into EDS or an EDS
SUBSIDIARY, that occurs prior to the TRANSACTION DATE or in conjunction with a
QUALIFIED EDS TRANSACTION; provided, however, that PBGC's Covenant Not to Sue
under this paragraph 2 shall not extend to or restrict PBGC's exercise of its
rights, if any, against GM with respect to a material misrepresentation by GM
in a certification described in section 9(c)(2)(A), 9(c)(2)(E), 9(c)(3)(ii)(A),
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<PAGE> 166
9(c)(3)(ii)(B)(II) or 9(c)(3)(ii)(B)(III) of the Agreement where such material
misrepresentation was reasonably relied upon by PBGC and resulted in material
prejudice to PBGC, provided such claim is asserted in a lawsuit filed against
GM within the nine-month period beginning on the later of the TRANSACTION DATE
or the date a transaction becomes a QUALIFIED EDS TRANSACTION.
3. CONTRIBUTED SHARES means those shares of GM Class E Stock
contributed pursuant to section 2 of the AGREEMENT. CONTRIBUTED SHARES do not
include EXCHANGED SHARES.
4. CONTRIBUTING SPONSOR has the meaning set forth in section
4001(a)(13) of ERISA.
5. CONTRIBUTION DATE with respect to a security or asset means
the date as of which that security or asset is deemed contributed to the HOURLY
PLAN pursuant to section 302 of ERISA and section 412 of the Internal Revenue
Code of 1986, as amended ("CODE").
6. CONTROLLED GROUP has the meaning set forth in section
4001(a)(14) of ERISA.
7. EDS means Electronic Data Systems Corporation, a Texas
corporation that currently is a wholly-owned subsidiary of RGR Holdings, Inc.
("RGR HOLDINGS, INC."), a Delaware corporation that in turn is a wholly-owned
subsidiary of GM.
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<PAGE> 167
8. EDS FUTURE AFFILIATES means any person that becomes a member
of a CONTROLLED GROUP with EDS after the TRANSACTION DATE, other than a person
that is or was at any time a member of GM's CONTROLLED GROUP.
9. EDS PLANS means the Electronic Data Systems Corporation
Retirement Plan, and every other defined benefit pension plan (if any) covered
by Title IV of ERISA for which EDS, an EDS SUBSIDIARY or an EDS RELEASEE is a
CONTRIBUTING SPONSOR.
10. EDS RELEASEES means EDS plus RGR HOLDINGS, INC., plus the EDS
SUBSIDIARIES plus the EDS FUTURE AFFILIATES, plus any person identified in part
(i) or (ii) of the definition of EDS SUBSIDIARIES that is not in EDS's
CONTROLLED GROUP as of the TRANSACTION DATE but is transferred in whole or in
part to a third party in conjunction with a QUALIFIED EDS TRANSACTION or in a
transaction reasonably related to or reasonably necessary to effect a QUALIFIED
EDS TRANSACTION, plus each and all of the agents, advisors, legal counsel,
partners, joint venturers, officers, directors and assigns of any of the
foregoing persons or any of them. Notwithstanding the foregoing, the term "EDS
RELEASEES" shall not include GM or any other person that was a member of GM's
CONTROLLED GROUP before the TRANSACTION DATE and continues without interruption
to be a member of GM's CONTROLLED GROUP immediately following the TRANSACTION
DATE.
11. EDS SUBSIDIARIES means
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<PAGE> 168
(i) the persons listed on Appendix S to the AGREEMENT, all of
which are owned, directly or indirectly, by EDS as of the
EFFECTIVE DATE plus
(ii) the additional persons, if any, in which EDS acquires a
"controlling interest" within the meaning of Treas. Reg.
Section 1.414(c)-(2)(b)(2) after the EFFECTIVE DATE and on or
before the TRANSACTION DATE
provided that those persons are members of EDS's CONTROLLED GROUP as of the
TRANSACTION DATE.
12. EDS TRANSFEREE means any purchaser or other direct or indirect
transferee of any or all of the stock or assets of any of the EDS RELEASEES, by
way of purchase, sale, assignment, pledge, exchange, conversion, merger,
consolidation, amalgamation or otherwise, and each of their parent
organizations, subsidiary organizations, successors and assigns (whether
present or future), or any of them (whether or not incorporated), and each and
all of their agents, advisors, legal counsel, fiduciaries, partners, joint
venturers, officers, directors and assigns, or any of them, but specifically
excluding (i) any person who is, after the TRANSACTION DATE, a member of GM's
CONTROLLED GROUP, and (ii) any GM SUBSIDIARY that is not a member of EDS's
CONTROLLED GROUP immediately after the TRANSACTION DATE.
13. EMPLOYER SECURITY has the meaning set forth in section
407(d)(1) of ERISA.
14. ERISA LIMITS means, with respect to EMPLOYER SECURITIES held
by the HOURLY PLAN at the time application of the term "ERISA LIMITS" is at
issue, that: (i) the aggregate fair market
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<PAGE> 169
value of all EMPLOYER SECURITIES held by the HOURLY PLAN does not exceed 10
percent of the fair market value of the assets of the HOURLY PLAN at such time;
(ii) no more than 25 percent of the aggregate amount of stock of the same class
of EMPLOYER SECURITIES issued and outstanding is held by the HOURLY PLAN at
such time; and (iii) at least 50 percent of the aggregate amount of stock of
the same class of EMPLOYER SECURITIES issued and outstanding is held by persons
independent of the issuer at such time.
15. EXCHANGED SHARES means shares, if any, received by the HOURLY
PLAN in exchange for, or upon conversion or redemption of, the CONTRIBUTED
SHARES.
16. FUNDING STANDARD ACCOUNT means the funding standard account
maintained for the HOURLY PLAN pursuant to section 302 of ERISA and section 412
of the CODE.
17. GM PENSION LIABILITY means any and all liabilities or
obligations now existing, or hereafter arising, to PBGC (on its own behalf, as
trustee for any plan, or in any other capacity) or to the GM PENSION PLANS
under Title IV of ERISA with respect to the GM PENSION PLANS or the termination
of the GM PENSION PLANS, including without limitation any liability under
section 302 of Title I of ERISA or under Title IV of ERISA (including without
limitation, any lien, liability, or obligation under section
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<PAGE> 170
4042, 4062, 4068 or 4069 of ERISA, 29 U.S.C. Section 1342, 1362, 1368 or
1369).
18. GM PENSION PLANS means every defined benefit pension plan
covered by Title IV of ERISA for which GM or a GM SUBSIDIARY is a CONTRIBUTING
SPONSOR as of or at any time prior to or at any time after the TRANSACTION
DATE, provided, however, that GM PENSION PLANS shall not include any plans for
which EDS or an EDS SUBSIDIARY is a CONTRIBUTING SPONSOR.
19. GM SHARE means an equity security issued by GM, including
without limitation a share of GM Class E Stock. GM SHARES do not include
shares or securities issued by persons other than GM that are received in
exchange for, or upon conversion or redemption of, GM SHARES.
20. GM SUBSIDIARY means each and every person that is or was at
any time on or after May 9, 1994, a member of GM's CONTROLLED GROUP, except for
EDS, RGR HOLDINGS, INC., and the EDS SUBSIDIARIES listed on Appendix S to the
AGREEMENT.
21. HOURLY PLAN means the General Motors Hourly-Rate Employees
Pension Plan (Employer Identification number 38-0572515, plan number 003).
22. QUALIFIED EDS TRANSACTION means any transaction or series of
transactions (including without limitation any transaction or series of
transactions by which GM Class E Stock
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<PAGE> 171
is exchanged, converted or redeemed for capital stock of EDS) by which EDS
ceases to be a member of GM's CONTROLLED GROUP, unless, immediately after the
TRANSACTION DATE (i) more than 2.5% of the Then-Current Fair Market Value of
the HOURLY PLAN's assets consists of CONTRIBUTED SHARES or EXCHANGED SHARES
that are GM SHARES, and (ii) more than 5% of the Then-Current Fair Market Value
of the HOURLY PLAN's assets consists of EMPLOYER SECURITIES. Notwithstanding
the foregoing, even if immediately after the TRANSACTION DATE, more than 2.5%
of the Then-Current Fair Market Value of the HOURLY PLAN's assets consists of
CONTRIBUTED SHARES or EXCHANGED SHARES that are GM Shares and more than 5% of
the Then-Current Fair Market Value of the Hourly Plan's assets consists of
EMPLOYER SECURITIES, such transaction nonetheless will become a QUALIFIED EDS
TRANSACTION if and upon any later date that falls not more than 120 days after
the TRANSACTION DATE either (i) no more than 2.5% of the Then-Current Fair
Market Value of the HOURLY PLAN's assets consists of CONTRIBUTED SHARES or
EXCHANGED SHARES that are GM SHARES, or (ii) no more than 5% of the
Then-Current Fair Market Value of the HOURLY PLAN's assets consists of EMPLOYER
SECURITIES. For purposes of this definition of QUALIFIED EDS TRANSACTION, in
determining whether the 5% limit is exceeded, any security that would otherwise
constitute an EMPLOYER SECURITY and that is contributed to the HOURLY PLAN
after the last CONTRIBUTION DATE for the CONTRIBUTED SHARES shall be deemed to
be a Non-employer Security if (i) the contribution of such security is within
the
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<PAGE> 172
ERISA LIMITS, and (ii) the credit balance in the FUNDING STANDARD ACCOUNT
resulting from the contribution of such security is still unused on the
TRANSACTION DATE.
23. TRANSACTION DATE with respect to the QUALIFIED EDS TRANSACTION
(including a transaction that becomes a QUALIFIED EDS TRANSACTION) means
[insert the date on which EDS ceases to be a member of GM's CONTROLLED GROUP,
if known, or if not known, insert the following: "the date on which EDS ceases
to be a member of GM's CONTROLLED GROUP"].
24. This Release and Covenant Not to Sue shall not be affected by
(i) any amendment, modification, termination, or waiver of the AGREEMENT, (ii)
any determination with respect to the AGREEMENT, including without limitation
any determination that said AGREEMENT is not valid or enforceable in whole or
in part, or (iii) any breach by GM or PBGC of the AGREEMENT.
25. Except to the extent expressly provided in paragraphs 1 and 2
above, this Release and Covenant Not to Sue shall not affect the rights, if
any, of any party with respect to, or under, or to enforce the provisions of,
the AGREEMENT.
26. This Release and Covenant Not to Sue shall be governed by the
laws of the District of Columbia and by ERISA, the CODE and other laws of the
United States to the extent they preempt District of Columbia law.
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<PAGE> 173
27. Nothing in this Release and Covenant Not to Sue shall be
construed as an admission by or on behalf of any person identified herein that
any liabilities or obligations are now owed to PBGC or a GM PENSION PLAN, or
may be owed to PBGC or a GM PENSION PLAN in the future, by that person.
Nothing in this Release and Covenant Not to Sue shall be construed as an
admission by any person that PBGC has, or will have, rights to legal or
equitable relief in connection with any transaction involving EDS, regardless
of whether such transaction is a QUALIFIED EDS TRANSACTION.
28. Notwithstanding anything in this Release and Covenant Not to
Sue, once released from the GM PENSION LIABILITY as a result of this Release
and Covenant Not to Sue, any EDS RELEASEE that reenters GM's CONTROLLED GROUP
and any EDS TRANSFEREE that enters or reenters GM's CONTROLLED GROUP may, by
reentering or entering the GM CONTROLLED GROUP, become subject to the GM
PENSION LIABILITY to the extent otherwise provided by law.
29. Nothing in this Release and Covenant Not to Sue shall be
construed to restrict, enlarge or otherwise affect PBGC's rights, if any,
against any person (including any EDS RELEASEE or any EDS TRANSFEREE) with
respect to transactions or events occurring after the TRANSACTION DATE and not
in connection with a QUALIFIED EDS TRANSACTION.
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<PAGE> 174
30. Nothing in this Release and Covenant Not to Sue shall be
construed to release any of the EDS RELEASEES, EDS SUBSIDIARIES or EDS
TRANSFEREES from their obligations, if any, respecting the EDS PLANS.
31. This Release and Covenant Not to Sue, together with the
Release and Covenant Not to Sue in the form of Appendix R2 to the AGREEMENT
executed by the undersigned, supersede the Release and Covenant Not to Sue
executed by the undersigned on [insert date], a copy of which is attached
hereto as Appendix R1.
32. The undersigned represents and warrants that he has full power
and authority to execute this Release and Covenant Not to Sue on behalf of
PBGC, and to make the following representations on behalf of PBGC. PBGC is a
wholly-owned United States government corporation established under Title IV of
ERISA. PBGC has full power and authority to enter into and perform its
obligations under this Release and Covenant Not to Sue. PBGC's execution and
delivery of this Release and Covenant Not to Sue, and PBGC's performance of its
obligations under this Release and Covenant Not to Sue, have been duly
authorized by all necessary corporate action and are within PBGC's statutory
authorization and authority. PBGC's execution and delivery of this Release and
Covenant Not to Sue, and PBGC's performance of its obligations under this
Release and Covenant Not to Sue: (i) will not violate in any material respect
any law applicable to PBGC or any of its properties; and (ii) will not violate
any
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<PAGE> 175
provision of Title IV of ERISA or PBGC's By-Laws, other applicable statutes,
regulations and rules governing PBGC, or any material contract or agreement
which is binding on PBGC or its properties.
PENSION BENEFIT GUARANTY CORPORATION
By:
---------------------------------
MARTIN SLATE
Its Executive Director
SUBSCRIBED AND SWORN TO
BEFORE ME THIS ____ DAY OF
____________, 1995
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<PAGE> 176
[APPENDIX R4]
RELEASE AND COVENANT NOT TO SUE
1. In consideration of the terms, conditions, mutual covenants
and agreements set forth in the Agreement made as of March 3, 1995 (the
"EFFECTIVE DATE"), by and between General Motors Corporation ("GM") and the
Pension Benefit Guaranty Corporation ("PBGC") (the "AGREEMENT"), the adequacy
and sufficiency of which are hereby acknowledged, the PBGC, a wholly-owned
United States government corporation created by section 4002(b) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. Section
1302(b), on its own behalf and in every other capacity in which it may now or
in the future act, releases and forever discharges each of the EDS RELEASEES
from any claim whatsoever with respect to any and all of the GM PENSION
LIABILITY and from all actions, causes of action, suits, debts, dues, sums of
money, expenses, accounts, reckonings, bonds, bills, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, costs,
judgments, executions, obligations, losses, liabilities, claims and demands
whatsoever, whether in law or equity, whether direct or indirect, whether for
indemnity or contribution, whether fixed or contingent, whether such be
presently known or unknown, suspected or unsuspected, whether or not hidden or
concealed, which PBGC and its successors and assigns ever had, now have, or may
have in the future against any of the EDS RELEASEES with respect to such
<PAGE> 177
GM PENSION LIABILITY, except that: [insert (i) or (ii) below,
or both, as applicable]:
[(i) the EDS RELEASEES are not released from a potential liability, if
any, in an amount of not more than [insert amount, determined under
section 9(f)(i)(D)(i) of the AGREEMENT], which potential liability, if
any, shall attach, if at all, only if the HOURLY PLAN is terminated
under Title IV of ERISA within five years after the TRANSACTION DATE
and only if PBGC establishes that the EDS RELEASEES are otherwise
liable therefor under Title IV of ERISA without regard to the
AGREEMENT; and/or
(ii) the EDS RELEASEES do not include [insert name(s) of
corporation(s), if any, determined under section 9(f)(i)(D)(ii) of the
AGREEMENT].]
In this regard, the EDS RELEASEES [and] [insert name(s) of corporation(s), if
any, determined under section 9(f)(i)(D)(ii) of the AGREEMENT] retain all
claims, rights and defenses available under law. If, before the TRANSACTION
DATE, section 4069(a) of ERISA is amended to specify a finite number of years
other than five, such other number of years shall be substituted wherever
"five" appears above, provided, however, that in all events such period shall
run continuously from the TRANSACTION DATE.
<PAGE> 178
2. PBGC covenants never to initiate or pursue against any person
(including without limitation, the EDS RELEASEES, EDS TRANSFEREES, GM, all
persons within GM's CONTROLLED GROUP, the GM PENSION PLANS, and the fiduciaries
and administrators of the GM PENSION PLANS) any administrative, judicial or
other proceeding, specifically including without limitation any proceeding
under section 4042 or 4069 of ERISA, 29 U.S.C. Section 1342 or 1369, or to
threaten or assert an intention to initiate any such proceeding, or to seek any
other equitable or legal relief, by reason of (i) any QUALIFIED EDS
TRANSACTION, (ii) any transaction in a series of transactions that constitutes,
is reasonably related to, or is reasonably necessary to effect, a QUALIFIED
EDS TRANSACTION, or (iii) any transfer from GM or a GM SUBSIDIARY of assets,
operations or securities (including stock of any type) to or into EDS or an EDS
SUBSIDIARY, that occurs prior to the TRANSACTION DATE or in conjunction with a
QUALIFIED EDS TRANSACTION; provided, however, that PBGC's Covenant Not to Sue
under this paragraph 2 shall not (A) extend to or restrict PBGC's exercise of
its rights, if any, against GM with respect to a material misrepresentation by
GM in a certification described in section 9(c)(2)(A), 9(c)(2)(E),
9(c)(3)(ii)(A), 9(c)(3)(ii)(B)(II), or 9(c)(3)(ii)(B)(III) of the Agreement
where such material misrepresentation was reasonably relied upon by PBGC and
resulted in material prejudice to PBGC, provided such claim is asserted in a
lawsuit filed against GM within the nine-month period beginning on the later of
the TRANSACTION DATE or
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<PAGE> 179
the date a transaction becomes a QUALIFIED EDS TRANSACTION, or [insert (B),
(C), (D) or (E) below, or a combination thereof, as determined under the
Agreement, including in the case of paragraph (C) below, section 9(f)(iii) of
the Agreement]
[(B) extend to, or restrict PBGC's exercise of its rights under Title
IV of ERISA, if any, including its rights, if any, under section 4069
of ERISA, 29 U.S.C. Section 1369, against any person other than the
EDS RELEASEES in the event of a MATERIAL TRANSFER consisting of stock
of any single GM Subsidiary that has a fair value greater than $3
billion (other than a GM SUBSIDIARY that was transferred in a MATERIAL
TRANSFER described in section 9(e)(1)(D) of the AGREEMENT) and that is
not or will no longer be a member of GM's CONTROLLED GROUP on the
TRANSACTION DATE and is or will be a member of EDS's CONTROLLED GROUP
on the TRANSACTION DATE,] [or]
[(C) extend to, or restrict PBGC's rights under Title IV of ERISA, if
any, to the extent such rights are not released pursuant to paragraph
1 above with respect to a MATERIAL TRANSFER consisting of stock of any
single GM SUBSIDIARY that has a fair value greater than $3 billion
where such GM SUBSIDIARY is not or will no longer be a member of GM's
CONTROLLED GROUP immediately after the TRANSACTION DATE and
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<PAGE> 180
is not or will no longer be a member of EDS's CONTROLLED GROUP
immediately after the TRANSACTION DATE,] [or]
[(D) extend to, or restrict PBGC's exercise of its rights under Title
IV of ERISA, if any, including its rights, if any, under section
4069(a) of ERISA, 29 U.S.C. Section 1369(a), after the TRANSACTION
DATE, against the EDS RELEASEES for [insert amount, if any, determined
under section 9(f)(i)(D)(i) of the AGREEMENT] to the extent specified
in section 9(f)(i)(D) of the Agreement if GM elects Releases and
Covenants Not To Sue under section 9(f)(i)(D)(i) of the Agreement,]
[or]
[(E) extend to, or restrict PBGC's exercise of its rights under Title
IV of ERISA, if any, including its rights, if any, under section
4069(a) of ERISA, 29 U.S.C. Section 1369(a), after the TRANSACTION
DATE, to the extent specified in section 9(f)(i)(D) of the Agreement
as against [insert name(s) of corporation(s), if any, determined under
section 9(f)(i)(D)(ii) of the AGREEMENT].]
[Insert the following paragraph 2.5, if applicable under the Agreement]
[2.5. If, during the three-consecutive-year period ending on the
TRANSACTION DATE, there are MATERIAL TRANSFERS consisting of stock of NEWSUBS
that have an aggregate fair value
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<PAGE> 181
greater than $6 billion and that are no longer member(s) of GM's CONTROLLED
GROUP on the TRANSACTION DATE and are members of EDS's CONTROLLED GROUP
immediately after the TRANSACTION DATE, then all such MATERIAL TRANSFERS shall
be aggregated and treated the same as a MATERIAL TRANSFER consisting of stock
of a single GM SUBSIDIARY that has a fair value greater than $3 billion and
that is not or will no longer be a member of GM's CONTROLLED GROUP on the
TRANSACTION DATE and is or will be a member of EDS's CONTROLLED GROUP on the
TRANSACTION DATE for purposes of paragraph 2(B) above. Any MATERIAL TRANSFERS
consisting of stock of NEWSUBS that are not made during the
three-consecutive-year period noted above shall not be aggregated and treated
as provided for in the preceding sentence, nor shall such MATERIAL TRANSFERS be
taken into account in applying the $6 billion threshold set forth in the
preceding sentence, but such MATERIAL TRANSFERS shall be treated as MATERIAL
TRANSFERS to the extent otherwise provided under the AGREEMENT. If the period
beginning May 9, 1994, and ending on the TRANSACTION DATE is shorter than three
years, then such shorter period shall be substituted for the
three-consecutive-year period described above.]
3. CONTRIBUTED SHARES means those shares of GM Class E Stock
contributed pursuant to section 2 of the AGREEMENT. CONTRIBUTED SHARES do not
include EXCHANGED SHARES.
4. CONTRIBUTING SPONSOR has the meaning set forth in section
4001(a)(13) of ERISA.
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<PAGE> 182
5. CONTRIBUTION DATE with respect to a security or asset means
the date as of which that security or asset is deemed contributed to the HOURLY
PLAN pursuant to section 302 of ERISA and section 412 of the Internal Revenue
Code of 1986, as amended ("CODE").
6. CONTROLLED GROUP has the meaning set forth in section
4001(a)(14) of ERISA.
7. EDS means Electronic Data Systems Corporation, a Texas
corporation that currently is a wholly-owned subsidiary of RGR Holdings, Inc.
("RGR HOLDINGS, INC."), a Delaware corporation that in turn is a wholly-owned
subsidiary of GM.
8. EDS FUTURE AFFILIATES means any person that becomes a member
of a CONTROLLED GROUP with EDS after the TRANSACTION DATE, other than a person
that is or was at any time a member of GM's CONTROLLED GROUP.
9. EDS PLANS means the Electronic Data Systems Corporation
Retirement Plan, and every other defined benefit pension plan (if any) covered
by Title IV of ERISA for which EDS, an EDS SUBSIDIARY or an EDS RELEASEE is a
CONTRIBUTING SPONSOR.
10. EDS RELEASEES means EDS plus RGR HOLDINGS, INC., plus
the EDS SUBSIDIARIES plus the EDS FUTURE AFFILIATES, plus any person identified
in part (i) or (ii) of the definition of EDS SUBSIDIARIES that is not in EDS's
CONTROLLED GROUP as of the
- 7 -
<PAGE> 183
TRANSACTION DATE but is transferred in whole or in part to a third party in
conjunction with a QUALIFIED EDS TRANSACTION or in a transaction reasonably
related to or reasonably necessary to effect a QUALIFIED EDS TRANSACTION, plus
each and all of the agents, advisors, legal counsel, partners, joint venturers,
officers, directors and assigns of any of the foregoing persons or any of them.
Notwithstanding the foregoing, the term "EDS RELEASEES" shall not include
[insert name(s) of corporation(s), if any, determined under section
9(f)(i)(D)(ii) of the AGREEMENT,] GM or any other person that was a member of
GM's CONTROLLED GROUP before the TRANSACTION DATE and continues without
interruption to be a member of GM's CONTROLLED GROUP immediately following the
TRANSACTION DATE.
11. EDS SUBSIDIARIES means
(i) the persons listed on Appendix S to the AGREEMENT all of which
are owned, directly or indirectly, by EDS as of the EFFECTIVE
DATE plus
(ii) the additional persons, if any, in which EDS acquires a
"controlling interest" within the meaning of Treas. Reg.
Section 1.414(c)-(2)(b)(2) after the EFFECTIVE DATE and on or
before the TRANSACTION DATE
provided that those persons are members of EDS's CONTROLLED GROUP as of the
TRANSACTION DATE.
12. EDS TRANSFEREE means any purchaser or other direct or indirect
transferee of any or all of the stock or assets of any of the EDS RELEASEES, by
way of purchase, sale, assignment, pledge, exchange, conversion, merger,
consolidation, amalgamation
- 8 -
<PAGE> 184
or otherwise, and each of their parent organizations, subsidiary organizations,
successors and assigns (whether present or future), or any of them (whether or
not incorporated), and each and all of their agents, advisors, legal counsel,
fiduciaries, partners, joint venturers, officers, directors and assigns, or any
of them, but specifically excluding (i) any person who is, after the
TRANSACTION DATE, a member of GM's CONTROLLED GROUP, and (ii) any GM SUBSIDIARY
that is not a member of EDS's CONTROLLED GROUP immediately after the
TRANSACTION DATE and (iii) [insert name(s) of corporation(s), if any,
determined under section 9(f)(i)(D)(ii) of the AGREEMENT].
13. EMPLOYER SECURITY has the meaning set forth in section
407(d)(1) of ERISA.
14. ERISA LIMITS means, with respect to EMPLOYER SECURITIES held
by the HOURLY PLAN at the time application of the term "ERISA LIMITS" is at
issue, that: (i) the aggregate fair market value of all EMPLOYER SECURITIES
held by the HOURLY PLAN does not exceed 10 percent of the fair market value of
the assets of the HOURLY PLAN at such time; (ii) no more than 25 percent of the
aggregate amount of stock of the same class of EMPLOYER SECURITIES issued and
outstanding is held by the HOURLY PLAN at such time; and (iii) at least 50
percent of the aggregate amount of stock of the same class of EMPLOYER
SECURITIES issued and outstanding is held by persons independent of the issuer
at such time.
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<PAGE> 185
15. EXCHANGED SHARES means shares, if any, received by the HOURLY
PLAN in exchange for, or upon conversion or redemption of, the CONTRIBUTED
SHARES.
16. FUNDING STANDARD ACCOUNT means the funding standard account
maintained for the HOURLY PLAN pursuant to section 302 of ERISA and section 412
of the CODE.
17. GM PENSION LIABILITY means any and all liabilities or
obligations now existing, or hereafter arising, to PBGC (on its own behalf, as
trustee for any plan, or in any other capacity) or to the GM PENSION PLANS
under Title IV of ERISA with respect to the GM PENSION PLANS or the termination
of the GM PENSION PLANS, including without limitation any liability under
section 302 of Title I of ERISA or under Title IV of ERISA (including without
limitation, any lien, liability, or obligation under section 4042, 4062, 4068
or 4069 of ERISA, 29 U.S.C. Section 1342, 1362, 1368 or 1369).
18. GM PENSION PLANS means every defined benefit pension plan
covered by Title IV of ERISA for which GM or a GM SUBSIDIARY is a CONTRIBUTING
SPONSOR as of or at any time prior to or at any time after the TRANSACTION
DATE, provided, however, that GM PENSION PLANS shall not include any plans for
which EDS or an EDS SUBSIDIARY is a CONTRIBUTING SPONSOR.
19. GM SHARE means an equity security issued by GM, including
without limitation a share of GM Class E Stock.
- 10 -
<PAGE> 186
GM SHARES do not include shares or securities issued by persons other than GM
that are received in exchange for, or upon conversion or redemption of, GM
SHARES.
20. GM SUBSIDIARY means each and every person that is or was at
any time on or after May 9, 1994, a member of GM's CONTROLLED GROUP, except for
EDS, RGR HOLDINGS, INC., and the EDS SUBSIDIARIES listed on Appendix S to the
AGREEMENT.
21. HOURLY PLAN means the General Motors Hourly-Rate Employees
Pension Plan (Employer Identification number 38-0572515, plan number 003).
22. MATERIAL TRANSFER has the meaning set forth in the AGREEMENT.
[Insert the following paragraph 22.5 if paragraph 2.5 is included]
[22.5. NEWSUB has the meaning set forth in the AGREEMENT.]
23. QUALIFIED EDS TRANSACTION means any transaction or series of
transactions (including without limitation any transaction or series of
transactions by which GM Class E Stock is exchanged, converted or redeemed for
capital stock of EDS) by which EDS ceases to be a member of GM's CONTROLLED
GROUP, unless, immediately after the TRANSACTION DATE (i) more than 2.5% of the
Then-Current Fair Market Value of the HOURLY PLAN's assets consists of
CONTRIBUTED SHARES or EXCHANGED SHARES that are GM SHARES, and (ii) more than
5% of the Then-Current Fair Market
- 11 -
<PAGE> 187
Value of the HOURLY PLAN's assets consists of EMPLOYER SECURITIES.
Notwithstanding the foregoing, even if immediately after the TRANSACTION DATE,
more than 2.5% of the Then-Current Fair Market Value of the HOURLY PLAN's
assets consists of CONTRIBUTED SHARES or EXCHANGED SHARES that are GM Shares
and more than 5% of the Then-Current Fair Market Value of the Hourly Plan's
assets consists of EMPLOYER SECURITIES, such transaction nonetheless will
become a QUALIFIED EDS TRANSACTION if and upon any later date that falls not
more than 120 days after the TRANSACTION DATE either (i) no more than 2.5% of
the Then-Current Fair Market Value of the HOURLY PLAN's assets consists of
CONTRIBUTED SHARES or EXCHANGED SHARES that are GM SHARES, or (ii) no more than
5% of the Then-Current Fair Market Value of the HOURLY PLAN's assets consists
of EMPLOYER SECURITIES. For purposes of this definition of QUALIFIED EDS
TRANSACTION, in determining whether the 5% limit is exceeded, any security that
would otherwise constitute an EMPLOYER SECURITY and that is contributed to the
HOURLY PLAN after the last CONTRIBUTION DATE for the CONTRIBUTED SHARES shall
be deemed to be a Non-employer Security if (i) the contribution of such
security is within the ERISA LIMITS, and (ii) the credit balance in the FUNDING
STANDARD ACCOUNT resulting from the contribution of such security is still
unused on the TRANSACTION DATE.
24. TRANSACTION DATE with respect to the QUALIFIED EDS TRANSACTION
(including a transaction that becomes a QUALIFIED EDS
- 12 -
<PAGE> 188
TRANSACTION) means [insert the date on which EDS ceases to be a member of GM's
CONTROLLED GROUP, if known, or if not known, insert the following: "the date on
which EDS ceases to be a member of GM's CONTROLLED GROUP"].
25. This Release and Covenant Not to Sue shall not be affected by
(i) any amendment, modification, termination, or waiver of the AGREEMENT, (ii)
any determination with respect to the AGREEMENT, including without limitation
any determination that said AGREEMENT is not valid or enforceable in whole or
in part, or (iii) any breach by GM or PBGC of the AGREEMENT.
26. Except to the extent expressly provided in paragraphs 1 and 2
[and 2.5, if applicable,] above, this Release and Covenant Not to Sue shall not
affect the rights, if any, of any party with respect to, or under, or to
enforce the provisions of, the AGREEMENT.
27. This Release and Covenant Not to Sue shall be governed by the
laws of the District of Columbia and by ERISA, the CODE and other laws of the
United States to the extent they preempt District of Columbia law.
28. Nothing in this Release and Covenant Not to Sue shall be
construed as an admission by or on behalf of any person identified herein that
any liabilities or obligations are now owed to PBGC or a GM PENSION PLAN, or
may be owed to PBGC or a GM PENSION PLAN in the future, by that person.
Nothing in this
- 13 -
<PAGE> 189
Release and Covenant Not to Sue shall be construed as an admission by any
person that PBGC has, or will have, rights to legal or equitable relief in
connection with any transaction involving EDS, regardless of whether such
transaction is a QUALIFIED EDS TRANSACTION.
29. Notwithstanding anything in this Release and Covenant Not to
Sue, once released from the GM PENSION LIABILITY as a result of this Release
and Covenant Not to Sue, any EDS RELEASEE that reenters GM's CONTROLLED GROUP
and any EDS TRANSFEREE that enters or reenters GM's CONTROLLED GROUP may, by
reentering or entering the GM CONTROLLED GROUP, become subject to the GM
PENSION LIABILITY to the extent otherwise provided by law.
30. Nothing in this Release and Covenant Not to Sue shall be
construed to restrict, enlarge or otherwise affect PBGC's rights, if any,
against any person (including any EDS RELEASEE or any EDS TRANSFEREE) with
respect to transactions or events occurring after the TRANSACTION DATE and not
in connection with a QUALIFIED EDS TRANSACTION.
31. Nothing in this Release and Covenant Not to Sue shall be
construed to release any of the EDS RELEASEES, EDS SUBSIDIARIES or EDS
TRANSFEREES from their obligations and liabilities, if any, respecting the EDS
PLANS.
32. This Release and Covenant Not to Sue [if applicable, insert
the following: "together with the Release and Covenant Not
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<PAGE> 190
to Sue in the form of Appendix R5 to the AGREEMENT executed by the
undersigned,"] supersede[s] the Release and Covenant Not to Sue executed by the
undersigned on [insert date], a copy of which is attached hereto as Appendix
R1.
33. The undersigned represents and warrants that he has full power
and authority to execute this Release and Covenant Not to Sue on behalf of
PBGC, and to make the following representations on behalf of PBGC. PBGC is a
wholly-owned United States government corporation established under Title IV of
ERISA. PBGC has full power and authority to enter into and perform its
obligations under this Release and Covenant Not to Sue. PBGC's execution and
delivery of this Release and Covenant Not to Sue, and PBGC's performance of its
obligations under this Release and Covenant Not to Sue, have been duly
authorized by all necessary corporate action and are within PBGC's statutory
authorization and authority. PBGC's execution and delivery of this Release and
Covenant Not to Sue, and PBGC's performance of its obligations under this
Release and Covenant Not to Sue: (i) will not violate in any material respect
any law applicable to PBGC or any of its properties; and (ii) will not violate
any provision of Title IV of ERISA or PBGC's By-Laws, other applicable
statutes, regulations and rules governing PBGC, or any material contract or
agreement which is binding on PBGC or its properties.
- 15 -
<PAGE> 191
PENSION BENEFIT GUARANTY CORPORATION
By:
---------------------------------
MARTIN SLATE
Its Executive Director
SUBSCRIBED AND SWORN TO
BEFORE ME THIS ____ DAY OF
____________, 1995
- 16 -
<PAGE> 192
[APPENDIX R5]
RELEASE AND COVENANT NOT TO SUE
1. In consideration of the terms, conditions, mutual covenants
and agreements set forth in the Agreement made as of March 3, 1995 (the
"EFFECTIVE DATE"), by and between General Motors Corporation ("GM") and the
Pension Benefit Guaranty Corporation ("PBGC") (the "AGREEMENT"), the adequacy
and sufficiency of which are hereby acknowledged, the PBGC, a wholly-owned
United States government corporation created by section 4002(b) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. Section
1302(b), on its own behalf and in every other capacity in which it may now or
in the future act, releases and forever discharges each of the EDS TRANSFEREES,
including without limitation [INSERT NAMES OF SPECIFIC EDS TRANSFEREES, IF ANY,
IDENTIFIED BY GM AT THE TIME OF EXECUTION AND DELIVERY], from any claim
whatsoever with respect to any and all of the GM PENSION LIABILITY and from all
actions, causes of action, suits, debts, dues, sums of money, expenses,
accounts, reckonings, bonds, bills, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, costs, judgments,
executions, obligations, losses, liabilities, claims and demands whatsoever,
whether in law or equity, whether direct or indirect, whether for indemnity or
contribution, whether fixed or contingent, whether such be presently known or
unknown, suspected or unsuspected, whether or not hidden or concealed, which
PBGC and its successors and assigns ever had, now have, or
<PAGE> 193
may have in the future against any of the EDS TRANSFEREES with respect
to such GM PENSION LIABILITY.
2. PBGC covenants never to initiate or pursue against any person
(including without limitation, the EDS RELEASEES, EDS TRANSFEREES, GM, all
persons within GM's CONTROLLED GROUP, the GM PENSION PLANS, and the fiduciaries
and administrators of the GM PENSION PLANS) any administrative, judicial or
other proceeding, specifically including without limitation any proceeding
under section 4042 or 4069 of ERISA, 29 U.S.C. Section 1342 or 1369, or to
threaten or assert an intention to initiate any such proceeding, or to seek any
other equitable or legal relief, by reason of (i) any QUALIFIED EDS
TRANSACTION, (ii) any transaction in a series of transactions that constitutes,
is reasonably related to, or is reasonably necessary to effect, a QUALIFIED EDS
TRANSACTION, or (iii) any transfer from GM or a GM SUBSIDIARY of assets,
operations or securities (including stock of any type) to or into EDS or an EDS
SUBSIDIARY, that occurs prior to the TRANSACTION DATE or in conjunction with a
QUALIFIED EDS TRANSACTION; provided, however, that PBGC's Covenant Not To Sue
under this paragraph 2 shall not (A) extend to or restrict PBGC's exercise of
its rights, if any, against GM with respect to a material misrepresentation by
GM in a certification described in section 9(c)(2)(A), 9(c)(2)(E),
9(c)(3)(ii)(A), 9(c)(3)(ii)(B)(II) or 9(c)(3)(ii)(B)(III) of the Agreement
where such material misrepresentation was reasonably relied upon by
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<PAGE> 194
PBGC and resulted in material prejudice to PBGC, provided such claim is
asserted in a lawsuit filed against GM within the nine-month period beginning
on the later of the TRANSACTION DATE or the date on which a transaction becomes
a QUALIFIED EDS TRANSACTION, or [insert (B), (C), or (D) below, or a
combination thereof, as determined under the AGREEMENT, including in the case
of paragraph (B) below, section 9(f)(iii) of the Agreement]
[(B) extend to, or restrict PBGC's rights under Title IV of ERISA, if
any, to the extent such rights are not released pursuant to paragraph
1 above with respect to a MATERIAL TRANSFER consisting of stock of any
single GM SUBSIDIARY that has a fair value greater than $3 billion
where such GM SUBSIDIARY is not or will no longer be a member of GM's
CONTROLLED GROUP immediately after the TRANSACTION DATE and is not or
will no longer be a member of EDS's CONTROLLED GROUP immediately after
the TRANSACTION DATE,] [or]
[(C) extend to, or restrict PBGC's exercise of its rights under Title
IV of ERISA, if any, including its rights, if any, under section
4069(a) of ERISA, 29 U.S.C. Section 1369(a), after the TRANSACTION
DATE, against the EDS RELEASEES for [insert amount, if any, determined
under section 9(f)(i)(D)(i) of the AGREEMENT] to the extent specified
in section 9(f)(i)(D) of the Agreement if GM elects Releases
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<PAGE> 195
and Covenants Not To Sue under section 9(f)(i)(D)(i) of the
Agreement,] [or]
[(D) extend to, or restrict PBGC's exercise of its rights under Title
IV of ERISA, if any, including its rights, if any, under section
4069(a) of ERISA, 29 U.S.C. Section 1369(a), after the TRANSACTION
DATE, to the extent specified in section 9(f)(i)(D) of the Agreement
as against [insert name(s) of corporation(s), if any, determined under
section 9(f)(i)(D)(ii) of the AGREEMENT].]
3. CONTRIBUTED SHARES means those shares of GM Class E Stock
contributed pursuant to section 2 of the AGREEMENT. CONTRIBUTED SHARES do not
include EXCHANGED SHARES.
4. CONTRIBUTING SPONSOR has the meaning set forth in section
4001(a)(13) of ERISA.
5. CONTRIBUTION DATE with respect to a security or asset means
the date as of which that security or asset is deemed contributed to the HOURLY
PLAN pursuant to section 302 of ERISA and section 412 of the Internal Revenue
Code of 1986, as amended ("CODE").
6. CONTROLLED GROUP has the meaning set forth in section
4001(a)(14) of ERISA.
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<PAGE> 196
7. EDS means Electronic Data Systems Corporation, a Texas
corporation that currently is a wholly-owned subsidiary of RGR Holdings, Inc.
("RGR HOLDINGS, INC."), a Delaware corporation that in turn is a wholly-owned
subsidiary of GM.
8. EDS FUTURE AFFILIATES means any person that becomes a member
of a CONTROLLED GROUP with EDS after the TRANSACTION DATE, other than a person
that is or was at any time a member of GM's CONTROLLED GROUP.
9. EDS PLANS means the Electronic Data Systems Corporation
Retirement Plan, and every other defined benefit pension plan (if any) covered
by Title IV of ERISA for which EDS, an EDS SUBSIDIARY or an EDS RELEASEE is a
CONTRIBUTING SPONSOR.
10. EDS RELEASEES means EDS plus RGR HOLDINGS, INC., plus the EDS
SUBSIDIARIES plus the EDS FUTURE AFFILIATES, plus any person identified in part
(i) or (ii) of the definition of EDS SUBSIDIARIES that is not in EDS's
CONTROLLED GROUP as of the TRANSACTION DATE but is transferred in whole or in
part to a third party in conjunction with a QUALIFIED EDS TRANSACTION or in a
transaction reasonably related to or reasonably necessary to effect a QUALIFIED
EDS TRANSACTION, plus each and all of the agents, advisors, legal counsel,
partners, joint venturers, officers, directors and assigns of any of the
foregoing persons or any of them. Notwithstanding the foregoing, the term "EDS
RELEASEES" shall not include [insert name(s) of corporation(s),
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<PAGE> 197
if any, determined under section 9(f)(i)(D)(ii) of the AGREEMENT,] GM or any
other person that was a member of GM's CONTROLLED GROUP before the TRANSACTION
DATE and continues without interruption to be a member of GM's CONTROLLED GROUP
immediately following the TRANSACTION DATE.
11. EDS SUBSIDIARIES means
(i) the persons listed on Appendix S to the AGREEMENT, all of
which are owned, directly or indirectly, by EDS as of the
EFFECTIVE DATE plus
(ii) the additional persons, if any, in which EDS acquires a
"controlling interest" within the meaning of Treas. Reg.
Section 1.414(c)-(2)(b)(2) after the EFFECTIVE DATE and on or
before the TRANSACTION DATE
provided that those persons are members of EDS's CONTROLLED GROUP as of the
TRANSACTION DATE.
12. EDS TRANSFEREE means any purchaser or other direct or indirect
transferee of any or all of the stock or assets of any of the EDS RELEASEES, by
way of purchase, sale, assignment, pledge, exchange, conversion, merger,
consolidation, amalgamation or otherwise, and each of their parent
organizations, subsidiary organizations, successors and assigns (whether
present or future), or any of them (whether or not incorporated), and each and
all of their agents, advisors, legal counsel, fiduciaries, partners, joint
venturers, officers, directors and assigns, or any of them, but specifically
excluding (i) any person who is, after the TRANSACTION DATE, a member of GM's
CONTROLLED GROUP, and (ii) any GM SUBSIDIARY that is not a member of EDS's
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<PAGE> 198
CONTROLLED GROUP immediately after the TRANSACTION DATE and (iii) [insert
name(s) of corporation(s), if any, determined under section 9(f)(i)(D)(ii) of
the AGREEMENT].
13. EMPLOYER SECURITY has the meaning set forth in section
407(d)(1) of ERISA.
14. ERISA LIMITS means, with respect to EMPLOYER SECURITIES held
by the HOURLY PLAN at the time application of the term "ERISA LIMITS" is at
issue, that: (i) the aggregate fair market value of all EMPLOYER SECURITIES
held by the HOURLY PLAN does not exceed 10 percent of the fair market value of
the assets of the HOURLY PLAN at such time; (ii) no more than 25 percent of the
aggregate amount of stock of the same class of EMPLOYER SECURITIES issued and
outstanding is held by the HOURLY PLAN at such time; and (iii) at least 50
percent of the aggregate amount of stock of the same class of EMPLOYER
SECURITIES issued and outstanding is held by persons independent of the issuer
at such time.
15. EXCHANGED SHARES means shares, if any, received by the HOURLY
PLAN in exchange for, or upon conversion or redemption of, the CONTRIBUTED
SHARES.
16. FUNDING STANDARD ACCOUNT means the funding standard account
maintained for the HOURLY PLAN pursuant to section 302 of ERISA and section 412
of the CODE.
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<PAGE> 199
17. GM PENSION LIABILITY means any and all liabilities or
obligations now existing, or hereafter arising, to PBGC (on its own behalf, as
trustee for any plan, or in any other capacity) or to the GM PENSION PLANS
under Title IV of ERISA with respect to the GM PENSION PLANS or the termination
of the GM PENSION PLANS, including without limitation any liability under
section 302 of Title I of ERISA or under Title IV of ERISA (including without
limitation, any lien, liability, or obligation under section 4042, 4062, 4068
or 4069 of ERISA, 29 U.S.C. Section 1342, 1362, 1368 or 1369).
18. GM PENSION PLANS means every defined benefit pension plan
covered by Title IV of ERISA for which GM or a GM SUBSIDIARY is a CONTRIBUTING
SPONSOR as of or at any time prior to or at any time after the TRANSACTION
DATE, provided, however, that GM PENSION PLANS shall not include any plans for
which EDS or an EDS SUBSIDIARY is a CONTRIBUTING SPONSOR.
19. GM SHARE means an equity security issued by GM, including
without limitation a share of GM Class E Stock. GM SHARES do not include
shares or securities issued by persons other than GM that are received in
exchange for, or upon conversion or redemption of, GM SHARES.
20. GM SUBSIDIARY means each and every person that is or was at
any time on or after May 9, 1994, a member of GM's
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<PAGE> 200
CONTROLLED GROUP, except for EDS, RGR HOLDINGS, INC., and the EDS SUBSIDIARIES
listed on Appendix S to the AGREEMENT.
21. HOURLY PLAN means the General Motors Hourly-Rate Employees
Pension Plan (Employer Identification number 38-0572515, plan number 003).
22. MATERIAL TRANSFER has the meaning set forth in the AGREEMENT.
23. QUALIFIED EDS TRANSACTION means any transaction or series of
transactions (including without limitation any transaction or series of
transactions by which GM Class E Stock is exchanged, converted or redeemed for
capital stock of EDS) by which EDS ceases to be a member of GM's CONTROLLED
GROUP, unless, immediately after the TRANSACTION DATE (i) more than 2.5% of the
Then-Current Fair Market Value of the HOURLY PLAN's assets consists of
CONTRIBUTED SHARES or EXCHANGED SHARES that are GM SHARES, and (ii) more than
5% of the Then-Current Fair Market Value of the HOURLY PLAN's assets consists
of EMPLOYER SECURITIES. Notwithstanding the foregoing, even if immediately
after the TRANSACTION DATE, more than 2.5% of the Then-Current Fair Market
Value of the HOURLY PLAN's assets consists of CONTRIBUTED SHARES or EXCHANGED
SHARES that are GM Shares and more than 5% of the Then- Current Fair Market
Value of the Hourly Plan's assets consists of EMPLOYER SECURITIES, such
transaction nonetheless will become a QUALIFIED EDS TRANSACTION if and upon
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<PAGE> 201
any later date that falls not more than 120 days after the TRANSACTION DATE
either (i) no more than 2.5% of the Then-Current Fair Market Value of the
HOURLY PLAN's assets consists of CONTRIBUTED SHARES or EXCHANGED SHARES that
are GM SHARES, or (ii) no more than 5% of the Then-Current Fair Market Value of
the HOURLY PLAN's assets consists of EMPLOYER SECURITIES. For purposes of this
definition of QUALIFIED EDS TRANSACTION, in determining whether the 5% limit is
exceeded, any security that would otherwise constitute an EMPLOYER SECURITY and
that is contributed to the HOURLY PLAN after the last CONTRIBUTION DATE for the
CONTRIBUTED SHARES shall be deemed to be a Non-employer Security if (i) the
contribution of such security is within the ERISA LIMITS, and (ii) the credit
balance in the FUNDING STANDARD ACCOUNT resulting from the contribution of such
security is still unused on the TRANSACTION DATE.
24. TRANSACTION DATE with respect to the QUALIFIED EDS TRANSACTION
(including a transaction that becomes a QUALIFIED EDS TRANSACTION) means
[insert the date on which EDS ceases to be a member of GM's CONTROLLED GROUP,
if known, or if not known, insert the following: "the date on which EDS ceases
to be a member of GM's CONTROLLED GROUP"].
25. This Release and Covenant Not to Sue shall not be affected by
(i) any amendment, modification, termination, or waiver of the AGREEMENT, (ii)
any determination with respect to the AGREEMENT, including without limitation
any determination
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<PAGE> 202
that said AGREEMENT is not valid or enforceable in whole or in part, or (iii)
any breach by GM or PBGC of the AGREEMENT.
26. Except to the extent expressly provided in paragraphs 1 and 2
above, this Release and Covenant Not to Sue shall not affect the rights, if
any, of any party with respect to, or under, or to enforce the provisions of,
the AGREEMENT.
27. This Release and Covenant Not to Sue shall be governed by the
laws of the District of Columbia and by ERISA, the CODE and other laws of the
United States to the extent they preempt District of Columbia law.
28. Nothing in this Release and Covenant Not to Sue shall be
construed as an admission by or on behalf of any person identified herein that
any liabilities or obligations are now owed to PBGC or a GM PENSION PLAN, or
may be owed to PBGC or a GM PENSION PLAN in the future, by that person.
Nothing in this Release and Covenant Not to Sue shall be construed as an
admission by any person that PBGC has, or will have, rights to legal or
equitable relief in connection with any transaction involving EDS, regardless
of whether such transaction is a QUALIFIED EDS TRANSACTION.
29. Notwithstanding anything in this Release and Covenant Not to
Sue, once released from the GM PENSION LIABILITY as a result of this Release
and Covenant Not to Sue, any EDS RELEASEE that reenters GM's CONTROLLED GROUP
and any EDS TRANSFEREE that
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<PAGE> 203
enters or reenters GM's CONTROLLED GROUP may, by reentering or entering the GM
CONTROLLED GROUP, become subject to the GM PENSION LIABILITY to the extent
otherwise provided by law.
30. Nothing in this Release and Covenant Not to Sue shall be
construed to restrict, enlarge or otherwise affect PBGC's rights, if any,
against any person (including any EDS RELEASEE or any EDS TRANSFEREE) with
respect to transactions or events occurring after the TRANSACTION DATE and not
in connection with a QUALIFIED EDS TRANSACTION.
31. Nothing in this Release and Covenant Not to Sue shall be
construed to release any of the EDS RELEASEES, EDS SUBSIDIARIES or EDS
TRANSFEREES from their obligations and liabilities, if any, respecting the EDS
PLANS.
32. This Release and Covenant Not to Sue, together with the
Release and Covenant Not to Sue in the form of Appendix R4 to the AGREEMENT
executed by the undersigned, supersede the Release and Covenant Not to Sue
executed by the undersigned on [insert date], a copy of which is attached
hereto as Appendix R1.
33. The undersigned represents and warrants that he has full power
and authority to execute this Release and Covenant Not to Sue on behalf of
PBGC, and to make the following representations on behalf of PBGC. PBGC is a
wholly-owned United States government corporation established under Title IV of
ERISA. PBGC has full power and authority to enter into and
- 12 -
<PAGE> 204
perform its obligations under this Release and Covenant Not to Sue. PBGC's
execution and delivery of this Release and Covenant Not to Sue, and PBGC's
performance of its obligations under this Release and Covenant Not to Sue, have
been duly authorized by all necessary corporate action and are within PBGC's
statutory authorization and authority. PBGC's execution and delivery of this
Release and Covenant Not to Sue, and PBGC's performance of its obligations
under this Release and Covenant Not to Sue: (i) will not violate in any
material respect any law applicable to PBGC or any of its properties; and (ii)
will not violate any provision of Title IV of ERISA or PBGC's By-Laws, other
applicable statutes, regulations and rules governing PBGC, or any material
contract or agreement which is binding on PBGC or its properties.
PENSION BENEFIT GUARANTY CORPORATION
By:
---------------------------------
MARTIN SLATE
Its Executive Director
SUBSCRIBED AND SWORN TO
BEFORE ME THIS ____ DAY OF
____________, 1995
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<PAGE> 205
APPENDIX S
Agora s.r.1.
Alpha Joshua, Inc.
Alpha Mariah, Inc.
American Network Leasing Corporation
Appex, Inc.
Beijing International Information Processing Company Limited
Beta Mariah, Inc.
Beta Willow, Inc.
Bristol Center Owners Association
China Management Systems Corporation
Conseil et Realisation en Informatique S.A. (CORI S.A.)
Databank Systems Limited
Database Progetti S.p.A.
DATABASE S.p.A.
Database Software S.p.A.
Database Tecnologie S.p.A.
Deep Star, Inc.
Desarrollo y Servicios de Informatica y Communiciones, S.A. de C.V.
DVOIT Limited
E.D.S. (Electronic Data Systems) Limited
E.D.S. Canada Leasing Ltd.
E.D.S. de Mexico, Sociedad Anonima de Capital Variable
E.D.S. Finance Limited
E.D.S. International Corporation
E.D.S. International Limited
E.D.S. of Canada, Ltd.
E.D.S. Spectrum Corporation
E.D.S. World Corporation (Far East)
E.D.S. World Corporation (Netherlands)
Edley S.A.
EDS (Australia) Pty Limited
EDS (Australia) Superannuation Fund Pty Ltd
EDS (Europe) S.A.
EDS (New Zealand) Holdings Limited
EDS (New Zealand) Limited Staff Superannuation Fund
EDS (Schweiz) AG
EDS 1994 Trustee Limited
EDS Acquisition Corporation #4
EDS Alpha S.A.
EDS Antares, Inc.
EDS Automated Teller, Inc.
EDS Beta S.A.
EDS Beteiligungs GmbH
EDS Beteiligungsverwaltungsgesellschaft Duisburg mbH
EDS Consulting GmbH
EDS Crisis Response Foundation
EDS Defence Limited
EDS Electronic Data System Luxemburg S.A.
EDS Electronic Data Systems (City) Limited
<PAGE> 206
EDS Electronic Data Systems (Deutschland) GmbH
EDS Electronic Data Systems (Hong Kong) Limited
EDS Electronic Financial Services, Inc.
EDS Elektronikus Adatrendszer Kft
EDS Eurosept S.A.S.
EDS Export Corporation
EDS Fleet Services, Inc.
EDS Forsvars Services AB
EDS Gamma S.A.
EDS Global Services, Inc.
EDS Gulf States, WLL
EDS Hellas
EDS Holding GmbH
EDS Industrie S.A.
EDS Information Management AG
EDS Informatique (Suisse) S.A.
EDS International (France) S.A.
EDS International (Singapore) Pte. Limited
EDS Kaufma nnische Dienste und Informatik GmbH
EDS National Mid-Range Systems Pty Ltd
EDS New Zealand Limited
EDS Operations (M) Sdn. Bhd.
EDS Personal Communications Corporation
EDS Poland Sp. z.o.o.
EDS Praha spol.s.r.o.
EDS Technical Products Corporation
EDS Technical Services AB
EDS Trustee Limited
EDS Unigraphics Systems GmbH
EDS Vermo gensverwaltungs GmbH
EDS VLT Holdings, Inc.
EDS-Electronic Data Systems de Portugal
EDS-Electronic Data Systems do Brasil Ltda
EDS-Electronic Data Systems Italia S.p.A.
EDS-Padcom Clinical Research Beteiligungs GmbH
EDS-Scicon N.V.
EDS-Scicon, US Software Products Group Incorporated
EDSCICON (Malaysia) Sdn. Bhd.
Electronic Data Systems (EDS) A/S
Electronic Data Systems (EDS) de Argentina S.A.
Electronic Data Systems (EDS) Gesellschaft mbH
Electronic Data Systems (EDS) International B.V.
Electronic Data Systems (EDS) Nederland B.V.
Electronic Data Systems (EDS) Sweden AB
Electronic Data Systems (Ireland) Limited
Electronic Data Systems Belgium N.V.
Electronic Data Systems Chile, S.A.
Electronic Data Systems Colombia, S.A.
Electronic Data Systems Danmark A/S
Electronic Data Systems de Venezuela "EDS" C.A.
APPENDIX S -- Page 2
<PAGE> 207
Electronic Data Systems Espana S.A.
Electronic Data Systems IT Services (M) Sdn. Bhd.
Electronic Data Systems Limited
Electronic Data Systems, Ltd.
Electronic Data Systems Services, Ltd.
Eurexcel Associes S.A.
Europe Assurance Informatique S.A. (E.A.I. S.A.)
Eurosept Benelux S.A.
Eurosept Italy Associati S.r.l.
Eurostrategy Consultants Limited
Federal Computer Services Corporation
France Informatique Juridique S.A.
GCS Information Access Limited
GCS Limited
GFI Informatique Belgium S.A.
ICR Internationale Consulting und Rechenzentrum GmbH
Industrie Daten IDee GmbH
Informatica Centrum Infrastructuur en Milieu B.V.
Information Interchange Limited
Informatique Proget S.A.
J.C.I.S. Company, Limited
Japan Systems Company Limited
KIEL
Lakewood Corp.
Legacy Association
Lenguajes y Servicios Informaticos, S.A. (LEINSA)
M&DR Consultans Marketing and Data Research S.r.l.
M&SD Network Services, Inc.
Management Computer Equipment S.A.
mbp Industrie Software Gmbh
mbp Industrie Software Gmbh
mbp Informationstechnologie GmbH
mbp Software and Systems Technology Inc.
mbp Softwareentwicklungs Gmbh
National Heritage Insurance Company
Neodata Corporation
Nippon EDS Company, Ltd.
Nishinihon Attene Computer Company, Ltd.
Nova Domus S.r.l.
OAN Services of Florida, Inc.
OAN Services, Inc.
Oy EDS Electronic Data Systems Ab
Padcom Clinical Research Beteiligungs GmbH
Power Investment Corporation
Premida-Come rcio, Gestao e Servic os, LDA
PREMISYS CORPORATION
Progical S.A.
S.D. (UK) Limited
S.D. International Limited
SA MEGAPLUS
APPENDIX S -- Page 3
<PAGE> 208
SA Proget Noord
Sapporo Attene Computer Company, Ltd.
Scicon Arabia Limited
Scicon Energy, Inc.
Scicon International Consultancy Limited
Scicon International Systems Company Incorporated
Scicon Limited
Scicon Pension Trust Limited
SD Secure Office Systems Limited
SD-Scicon Europe Limited
SD-Scicon Ltd
SD-Scicon Pte Limited
SV-EDS Technology Services, Ltd.
Servicios Mexicanos E.D.S., S.A. de C.V.
Sigeba S.A.
Sipe Optimation S.p.A.
SOAGE Milano S.r.l.
Sociedad Anonima de Teleinforma tica para Cajas de Ahorros (SATEICA)
Societe Flerienne De Participations
Subarban Limited-Liability Company
Sysdes Limited
Systems & Management S.p.A.
Systems Designers Aviation Limited
Systems Designers Estates Limited
Systems Designers International Limited
Systems Designers Limited
Systems Programming (Scotland) Limited
Systems Programming Limited
Systems Programming Overseas Limited
Systems Technology Management Corporation
Technical Team S.A.
Telecommunications Data Services, Incorporated
Telecommunications International, Inc.
Tokai Attene Computer Company, Limited.
UMW-EDS Technologies Sdn. Bhd.
Uniti Pty Ltd
Varitel Select, Inc.
Varitel Video, Inc.
Ward FSC. Ltd
Worldmaster Marketing Pty Ltd
YLYS Informatique S.A.
American Network Leasing Partnership No. A5
American Network Leasing Partnership No. C4
American Network Leasing Partnership No. D2
EDS/Dockery & Walker JV Partnership
EDS Exploitation SNC
EDS, META, WAC JV Partnership
APPENDIX S -- Page 4
<PAGE> 209
Groupe Informatique de Developpement Pour L'Administration SNC
Interactive Transaction Partners
MLT Holding, L.P.
Potomac General Research Group
Pyns Ltd
SCI Sogelyon
Societe de Services Pour L'Informatisation de L'Administration SNC
Worldlink Technologies Pty Ltd
APPENDIX S -- Page 5
<PAGE> 210
APPENDIX T
INDEPENDENT ACCOUNTANTS' REPORT
We have performed the procedures enumerated below, which were agreed to by
General Motors Corporation ("General Motors") and Pension Benefit Guaranty
Corporation ("PBGC"), solely to assist the users in evaluating management's
assertion about General Motors' Material Transfers as determined under Section
9 of the Agreement between General Motors and the PBGC dated March 3, 1995
("Agreement"), during the period March 3, 1995 through {date of GM's Statement
under Section 9(c)(2)(D) or, if later, the date of GM's Statement under Section
9(c)(3)(ii)(B)(I) of the Agreement}, included in the accompanying List of
Material Transfers prepared by General Motors in accordance with Section
9(c)(2)(D) and (if applicable) Section 9(c)(3)(ii)(B)(I) of the Agreement. The
sufficiency of these procedures is solely the responsibility of the specified
users of the report. Consequently, we make no representation regarding the
sufficiency of the procedures described below either for the purpose for which
this report has been requested or for any other purpose.
The specific procedures to be performed would necessarily vary depending upon
the nature of each item included on the List(s) of Material Transfers referred
to above ("List"). However, they would be comprised of, at a minimum, the
following procedures, including the reporting of the findings as a result of
performing each procedure:
- - Planning the performance of the procedures set forth herein.
- - To obtain an understanding of the specified compliance requirements:
-- Obtaining a copy of and reading the Agreement, and the
amendments thereto, if any.
-- Obtaining a copy of and reading the letter of the Comptroller
of General Motors dated __________, 1995, and any successor
letters of the Comptroller or any Comptroller letters related
thereto, setting forth the procedures to be followed within
General Motors for identifying and recording Material
Transfers.
- - Comparing amounts on the List to entries in the underlying accounting
records.
- - Comparing the foregoing entries and related amounts in the underlying
accounting records to supporting documentation.
<PAGE> 211
- - Selecting sample transactions from general ledger accounts and
comparing them to supporting documentation and, for items
constituting Material Transfers, comparing them to the List.
- - Making inquiries of and/or obtaining representations from General
Motors and Electronic Data Systems Corporation officials.
- - Proving the arithmetic accuracy of the List and computations involved
in determining and recording Material Transfers.
These agreed-upon procedures are substantially less in scope than an
examination, the objective of which is the expression of an opinion on the
List. Accordingly, we do not express such an opinion. Had we performed
additional procedures, other matters might have come to our attention that
would have been reported to you.
This report is intended solely for the information of General Motors management
and the PBGC and should not be used by those who did not participate in
determining the procedures.
<PAGE> 1
EXHIBIT 10(h)
REGISTRATION RIGHTS AGREEMENT
By and Between
GENERAL MOTORS CORPORATION
and
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee of
THE GENERAL MOTORS
HOURLY-RATE
EMPLOYEES PENSION PLAN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
1. Contribution of Registrable Securities. . . . . . . . . . . . . . . 2
2. Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . 4
3. Demand Transfers . . . . . . . . . . . . . . . . . . . . . . . . . 12
4. Piggyback Registration . . . . . . . . . . . . . . . . . . . . . . 17
5. Holdback Period . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6. Other Registration Rights . . . . . . . . . . . . . . . . . . . . . 21
7. Demand, Piggyback and Shelf Registration Procedures . . . . . . . . 25
8. Participation in Underwritten Transfers . . . . . . . . . . . . . . 27
9. Registration Expenses and Legal Counsel . . . . . . . . . . . . . . 27
10. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
EXHIBITS
EXHIBIT A . . . . . . . . . . . . . Form of Transfer Agreement
EXHIBIT B . . . . . . . . . . . . . Interest Rate Schedule
EXHIBIT C . . . . . . . . . . . . . Form of Succession Agreement
- i -
<PAGE> 3
REGISTRATION RIGHTS AGREEMENT
This Agreement is entered into on March 12, 1995, by and between
General Motors Corporation, a Delaware corporation (sometimes referred to
herein as "Issuer"), and United States Trust Company of New York, as trustee
(the "Trustee") of a trust established under the General Motors Hourly-Rate
Employees Pension Plan (the "Pension Plan"), for the account and on behalf of
the Pension Plan (which shall thereby be deemed a party to this Agreement).
Capitalized terms used and not otherwise defined herein shall have the
respective meanings set forth in Section 11.
WHEREAS, Issuer intends, subject to the satisfaction of certain
regulatory and other conditions, to contribute approximately 177 million shares
of Class E Common Stock to the Pension Plan; and
WHEREAS, the Pension Plan is prepared to accept the Class E Common
Stock that may be contributed to it as described herein and to hold and dispose
of any such Class E Common Stock on the terms and conditions hereinafter
stated; and
WHEREAS, the Pension Plan is the owner of shares of Class E Common
Stock acquired by the Pension Plan pursuant to an Exchange and Registration
Agreement, dated as of November 4, 1992 (the "Exchange Agreement"), by and
among Issuer, the Pension Plan and the General Motors Retirement Program for
Salaried Employees (the "Salaried Plan"); and
WHEREAS, General Motors and the Pension Plan have entered into a
Transfer Agreement, dated as of the date hereof, substantially in the form of
Exhibit A attached hereto (as such agreement may be amended or modified from
time to time, the "Transfer Agreement"), pursuant to which the Pension Plan has
agreed to hold and dispose of the Class E Common Stock owned by the Pension
Plan on the terms and conditions stated therein; and
WHEREAS, the Trustee has been appointed by the named fiduciary of
the Pension Plan (the "Named Fiduciary") (as determined in accordance with
Section 402(a) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), to
<PAGE> 4
manage any shares of Class E Common Stock held by the Pension Plan as described
herein and to exercise all rights, powers and privileges appurtenant to such
shares (subject to the authority of the Named Fiduciary to terminate such
appointment and appoint one or more other investment managers for any such
shares); and
WHEREAS, the Trustee has full power and authority to execute and
deliver this Agreement for the account and on behalf of the Pension Plan and to
so bind the Pension Plan;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Issuer and the
Pension Plan agree as follows:
1. Contribution of Registrable Securities.
(a) Issuer agrees that any contribution of Registrable Securities
made by Issuer to the Pension Plan (each such contribution being hereinafter
referred to as a "Contribution") shall be made only on such days as the New
York Stock Exchange, Inc. ("NYSE") shall be open for trading (a "Business
Day").
(b) The Pension Plan represents that it beneficially owns
17,511,372 shares of Class E Common Stock as of the date hereof (as determined
pursuant to Section 16 of the Exchange Act (or any successor thereto)
("Section 16")) and agrees that, after the date hereof and until the final
Contribution is made hereunder, it shall not acquire beneficial ownership of
any additional shares of Class E Common Stock (as so determined), except
pursuant to a Contribution made hereunder. Issuer agrees that if it makes
multiple Contributions, either (i) no Contribution prior to the final
Contribution will cause the Pension Plan to become a ten percent beneficial
owner (as defined in Rule 16a-2 under the Exchange Act (or any successor
thereto)) or (ii) Issuer will not propose to its stockholders any transaction
that would result in a "sale" of shares of Class E Common Stock by the Pension
Plan for purposes of Section 16 being deemed to occur (unless such sale is
exempt under Section 16(b) of the Exchange Act (or any successor thereto)
("Section 16b")) prior to the date that is six months and one day after the
final Contribution (or, if Section 16 is amended to change the period within
which purchases and sales are matched
- 2 -
<PAGE> 5
for purposes of determining whether profits are recoverable by an issuer, the
date that is one day after the expiration of a period of such length commencing
on the date the final Contribution is made); provided, that is understood that
nothing herein shall prohibit Issuer from submitting any such transaction to
its stockholders prior to such date so long as any such sale is deemed to occur
on or after such date.
(c) Issuer agrees that it shall give the Trustee and its valuation
adviser on behalf of the Pension Plan notice by teleconference after the
close of normal trading on the NYSE but no later than 5:00 p.m., New York time,
on the Business Day prior to the Business Day on which Issuer contemplates
making such Contribution that it contemplates making a Contribution; provided,
however, that such notice shall be revocable by Issuer at any time in its sole
discretion prior to the conclusion of the teleconference referred to in Section
1(d). In such teleconference, Issuer shall state the date on which Issuer
contemplates making the proposed Contribution and a range for the number of
Registrable Securities which may be contributed, and the Trustee, together with
its valuation adviser, will estimate a value per share, based on the closing
price on the day of notice on the NYSE of Class E Common Stock, at various
points within such range.
(d) As soon as practicable, and in any event prior to 10:30 a.m.,
New York time, on the day of the proposed Contribution, Issuer will give the
Trustee and its valuation adviser on behalf of the Pension Plan notice by
teleconference of its continued interest, if any, in making a Contribution.
In such teleconference, Issuer will make one or more estimates of the specific
number of Registrable Securities which Issuer may contribute, and the Trustee,
together with its valuation adviser, will state the value per share it would
assign for the Contribution based on each such estimate. If Issuer so decides,
it shall irrevocably commit itself in such teleconference to contribute a
number of Registrable Securities equal to one of such estimates, and the
Trustee's valuation adviser shall be irrevocably committed to opine to the
applicable value per share previously stated by it in such teleconference.
The Contribution, if any, shall be effective at the end of such teleconference,
and the value per share for purposes of such Contribution shall be such stated
value. Immediately after the teleconference in which a Contribution is made,
Issuer shall deliver instructions to its transfer agent to issue the
Registrable
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<PAGE> 6
Securities so contributed (in the form described below) and to register such
Registrable Securities in the name of the Pension Plan or its nominee, and
Issuer shall confirm such Contribution by delivering copies of such transfer
instructions to the Trustee. As soon as practicable after the teleconference,
and in any case no later than 5:00 p.m., New York time, on the Business Day on
which such Contribution is made, the Trustee's valuation adviser will deliver
to the Trustee, with a copy to Issuer, its written valuation opinion,
confirming the valuation given in the teleconference.
(e) Delivery of certificates representing the duly authorized,
validly issued, fully paid and nonassessable shares of Class E Common Stock
contributed in a Contribution shall be made to the Pension Plan at the offices
of the Trustee for the Pension Plan (or such other place as may be mutually
agreed upon), in such form as shall permit, subject to the provisions of this
Agreement, the Transfer of the Registrable Securities through normal means of
settlement (subject to the proviso in the next following sentence), not later
than 5:00 p.m., New York time, on the fourth full Business Day after such
Contribution. Such certificates shall be in due and proper form for delivery
under applicable corporate law and shall be accompanied by such other documents
and certificates as may be reasonably requested by the Trustee to confirm that
the Pension Plan, upon receipt of such certificates, may, subject to the
provisions of this Agreement, Transfer record and beneficial ownership of the
shares of Class E Common Stock represented by such certificates; provided,
however, that, subject to Section 1(f) below, each such certificate
representing the Registrable Securities shall conspicuously bear legends in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAW AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
REGISTRATION RIGHTS AGREEMENT, DATED MARCH 12, 1995, BY AND BETWEEN THE
ISSUER OF SUCH SECURITIES (THE "COMPANY") AND UNITED STATES TRUST COMPANY
OF NEW YORK, AS TRUSTEE OF A TRUST
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<PAGE> 7
ESTABLISHED UNDER THE GENERAL MOTORS HOURLY RATE EMPLOYEES PENSION PLAN,
THAT CONTAINS, AMONG OTHER THINGS, CERTAIN RESTRICTIONS ON THE TRANSFER OF
SUCH SECURITIES. A COPY OF SUCH REGISTRATION RIGHTS AGREEMENT WILL BE
FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN
REQUEST."
The certificates representing shares of Class E Common Stock held by the
Pension Plan and acquired other than pursuant to a Contribution shall be
promptly surrendered to Issuer in order that Issuer's transfer agent may place
such legends upon them.
(f) Issuer will instruct its transfer agent that the legends set
forth in Section 1(e) shall be removed upon the Pension Plan's Transfer of
shares of Class E Common Stock if such Transfer is made in accordance with all
applicable provisions of this Agreement; provided, however, that if such
Transfer is a Negotiated Transfer (as defined below) that is not registered
under the Securities Act, the first legend shall remain on the certificates
representing such shares until such time as the restrictions set forth in such
legend cease to be applicable.
(g) The Pension Plan represents and warrants that the Pension
Plan, together with its investment managers, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Registrable Securities. The Pension Plan
understands and acknowledges that the Contributions have not been and will not
be registered under the Securities Act or any state securities law and that
the Registrable Securities may not be the subject of any Transfer except as
expressly permitted by this Agreement.
2. Restrictions on Transfer.
(a) The Pension Plan shall not make any Transfer of any
Registrable Securities other than, in each case, in accordance with the terms
and conditions of this Agreement, pursuant to (i) a Public Transfer (as defined
below), (ii) a Negotiated Transfer, (iii) as described in subsection (d), (e),
(f), (g) or (h) below, (iv) as described in Section 4 or 6 below, (v) from and
after such time as the Pension Plan reduces its ownership of the Registrable
Securities to less than 50 million shares of Class E Common Stock, pursuant to
Rule 144 under the Securities Act or any successor
- 5 -
<PAGE> 8
thereto ("Rule 144") (without giving effect to the provisions of paragraph (k)
(or any successor thereto) of Rule 144) and (vi) from and after such time as
the Pension Plan reduces its ownership of the Registrable Securities to less
than 25 million shares of Class E Common Stock, pursuant to Rule 144, (vii) a
Transfer to Issuer or a wholly-owned direct or indirect subsidiary of Issuer
pursuant to a self-tender offer or otherwise and (viii) a Transfer pursuant to
a merger or consolidation in which Issuer or a wholly-owned direct or indirect
subsidiary of Issuer is a constituent corporation. Except as provided in
Section 6(b), no Transfer described in clause (iii), (iv), (v), (vi), (vii) or
(viii) of the preceding sentence shall be considered a Demand Transfer (as
defined below).
(b) The Pension Plan shall not make any Transfer of Registrable
Securities pursuant to a Demand Registration Statement (as defined below), a
Shelf Registration Statement (as defined below) or a registration statement
pursuant to a Piggyback Registration (as defined below) or a Strategic Partner
Demand Registration (as defined below) other than in accordance with the plan
of distribution described therein.
(c) The Pension Plan shall not make any Transfer of securities
convertible into or exercisable or exchangeable for the Registrable Securities
or any other securities the value of which is derived from the Registrable
Securities without obtaining the prior written consent of Issuer to such
Transfer.
(d) Notwithstanding the provisions of this Agreement to the
contrary, the Pension Plan may at any time deliver to Issuer a written notice
that the Pension Plan proposes to make a Transfer of Registrable Securities to
or for the benefit of an employee benefit plan maintained or contributed to by
Issuer or any of its affiliates in connection with the satisfaction of ordinary
course funding obligations or investment objectives with respect to such
employee benefit plan. Each notice of a proposed Transfer pursuant to this
Section 2(d) shall be delivered a reasonable period of time before such
proposed Transfer and, in any event, not less than 30 days before such proposed
Transfer. The Pension Plan shall establish, to the reasonable satisfaction of
Issuer, that such proposed Transfer is in compliance with ERISA, federal and
state securities laws and regulations and other applicable laws and
regulations. Notwithstanding the foregoing, the Pension Plan shall not effect
any such Transfer if Issuer's legal counsel advises
- 6 -
<PAGE> 9
Issuer and the Pension Plan in writing that such Transfer would constitute a
"prohibited transaction" (as described in Section 4975 of the Internal Revenue
Code of 1986, as amended), unless the Pension Plan establishes to the
reasonable satisfaction of Issuer that an exemption from such Section is
available.
(e) Notwithstanding the provisions of this Agreement to the
contrary, the Pension Plan may at any time effect a Transfer by tendering any
or all of the Registrable Securities into an exchange offer, a tender offer or
a request or invitation for tenders (as such terms are used in Sections 14(d)
or 14(e) of the Exchange Act and the rules and regulations of the Commission
thereunder) (collectively, a "tender offer")) for Class E Common Stock if (X)
such Transfer is effected within the 24-hour period immediately prior to the
then scheduled expiration time for such tender offer, and (Y) at the time the
Pension Plan proposes to effect such Transfer:
(i) Issuer (A) does not have in effect a stockholders
rights plan or (B) has in effect a stockholders rights plan but there has
been a redemption, revocation or similar invalidation of the preferred
stock or other rights issued under such stockholders rights plan (the
"Rights"), in either case as a result of (X) action of the Board of
Directors of Issuer (or any committee thereof) in connection with such
tender offer (including as a result of a finding that such tender offer
was a "permitted offer" under the terms of such stockholders rights plan)
or (Y) a final and non-appealable order of a court of competent
jurisdiction issued in connection with such tender offer in response to a
challenge to the validity and/or effects of such stockholders rights plan
or Rights; or
(ii) Issuer (A) does not have in effect a stockholders rights plan
or (B) has in effect a stockholders rights plan but there has been a
redemption, revocation or similar invalidation of any Rights issued
thereunder, in either case other than as a result of the matters described
in clause (i) above and other than as a result of a court order of the
type described in clause (i) above that has not become final and
non-appealable, and (X) the Board of Directors of Issuer has not
recommended rejection of such tender offer pursuant to Rule 14e-2(a) under
the Exchange Act or any successor thereto
- 7 -
<PAGE> 10
("Rule 14e-2(a)"), or (Y) at least half of the members of the Board of
Directors of Issuer who are not officers or employees of Issuer and who
are not representatives, nominees or affiliates of the bidder (as defined
in Rule 14d-1(c) under the Exchange Act or any successor thereto) (the
"Bidder") making such tender offer (collectively, the "Independent
Directors") did not recommend rejection of such tender offer when the
Board of Directors of Issuer determined the position of Issuer with
respect to such tender offer as contemplated by Rule 14e-2(a) or (Z) there
are fewer than two members of the Board of Directors of Issuer that are
Independent Directors at the time the Board of Directors of Issuer
considers such tender offer; or
(iii) Issuer (A) does not have in effect a stockholders rights plan
or (B) has in effect a stockholders rights plan but there has been a
redemption, revocation or similar invalidation of any Rights issued
thereunder, in either case other than as a result of the matters described
in clause (i) above and other than as a result of a court order of the
type described in clause (i) above that has not become final and
non-appealable and other than as a result of a proposal initiated,
recommended, endorsed, supported or encouraged, directly or indirectly,
publicly or privately, by the Pension Plan (it being understood that, for
purposes of this subsection (iii), a vote by the Pension Plan in favor of
any such proposal shall constitute support for such proposal), and both
(X) the Pension Plan, after consultation with its legal counsel and
financial advisors, has concluded in good faith that the Minimum Tender
Condition with respect to such tender offer will likely be satisfied
without giving effect to any shares of Class E Common Stock tendered or to
be tendered into such tender offer by the Pension Plan and (Y) after the
date of the commencement of such tender offer and prior to the 24-hour
period immediately prior to the then scheduled expiration time of such
tender offer, Issuer has not given written notice to the Pension Plan that
such Transfer may not be made under this subsection (iii), which notice
included the good faith determination of the Board of Directors of Issuer
as to the Put Price as contemplated by Section 2(f)(iii) (or, if given,
such notice has been withdrawn in writing).
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<PAGE> 11
If, at any time after the Pension Plan has made a Transfer by tendering
Registrable Securities into a tender offer pursuant to this Section 2(e), the
Bidder making such tender offer decreases the percentage or number of shares of
Class E Common Stock being solicited for purchase, decreases the amount or
changes the form of consideration offered to tendering stockholders or
otherwise makes a material change or waives a material condition in the terms
of such tender offer such that the then scheduled expiration date of such
tender offer is extended, then the Pension Plan shall, upon the request of
Issuer, withdraw such Registrable Securities from such tender offer as promptly
as practicable, subject to the Pension Plan's right to tender Registrable
Securities again as contemplated by this Agreement.
If the Pension Plan is not permitted to make a Transfer of Registrable
Securities pursuant to Section 2(g), promptly (and in any event within one
Business Day after any public announcement with respect thereto) after the
Board of Directors of Issuer determines the position of Issuer with respect to
any tender offer as contemplated by Rule 14e-2(a), Issuer shall give the
Pension Plan written notice of such position by the Board of Directors of
Issuer and by the Independent Directors as described in subsection (ii) above.
If there are fewer than two members of the Board of Directors of Issuer that
are Independent Directors at the time the Board of Directors of Issuer
considers such tender offer, such notice shall so state. If, based on such
positions by the Board of Directors of Issuer and the Independent Directors, a
Transfer to be made by tendering into such tender offer would be permitted only
by subsection (iii) of this Section 2(e) (excluding for purposes of such
determination the conditions set forth in clauses (X) and (Y) of such
subsection (iii)), Issuer shall promptly commence arranging financing so that
it will be able to pay in full all amounts due in connection with any exercise
of the Put Right (as defined below) in connection with such tender offer and
shall use all commercially reasonable efforts to obtain such financing so as to
pay all such amounts as and when due (it being understood that the obligation
of Issuer to make payment at the Put Closing (as defined below) shall be
absolute and that compliance with this sentence shall not relieve Issuer of its
obligations under this Agreement or excuse performance hereunder).
(f) (i) If the Pension Plan in good faith desires to effect a
Transfer of Registrable Securities by tendering into
- 9 -
<PAGE> 12
a tender offer and such Transfer would be permitted only by subsection
(iii) of Section 2(e) (assuming that Issuer has not and will not give the
notice described in such subsection (iii) that such Transfer may not be
made thereunder) then the Pension Plan shall, no later than 96 hours prior
to the then scheduled expiration time for such tender offer, deliver to
Issuer a written notice (the "Tender Notice") of such proposed tender that
specifies the number of shares of Registrable Securities proposed to be so
tendered. If, after the delivery of such Tender Notice and prior to the
then scheduled expiration time for such tender offer, the Bidder making
such tender offer amends the terms thereof or another Bidder commences a
tender offer for shares of Class E Common Stock, then the Pension Plan may
revoke such Tender Notice by delivering written notice thereof to Issuer
at any time prior to the then scheduled expiration time for the tender
offer that was the subject of such Tender Notice. No such revocation
shall limit the Pension Plan's right to deliver a Tender Notice with
respect to any tender offer, including any such amended tender offer or
new tender offer.
(ii) If (A) the Pension Plan has delivered, and not
revoked, a Tender Notice with respect to a tender offer, each in
accordance with subsection (i), (B) Issuer has given (and not withdrawn)
the notice described in subsection (iii) of Section 2(e) that such
Transfer may not be made under such subsection (iii)), (C) the Minimum
Tender Condition with respect to such tender offer has been satisfied and
shares required to satisfy such Minimum Tender Condition have been
accepted for purchase and purchased pursuant to such tender offer and (D)
effecting a Transfer of Registrable Securities to Issuer pursuant to an
exercise of the Put Right would not violate the Transfer Agreement, then
the Pension Plan shall have the right (the "Put Right") to require Issuer
to purchase up to the number of shares of Registrable Securities specified
in the Tender Notice multiplied by, if applicable, the proration fraction
applied to determine the number of shares of Class E Common Stock
purchased from each tendering stockholder pursuant to such tender offer
(the "Maximum Share Number"). The purchase price per share at which
Issuer shall be required to purchase such Registrable Securities shall be
equal to the price per share of Class E Common Stock paid in such tender
offer (or, to the extent such tender offer price
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<PAGE> 13
was paid in consideration other than cash, the cash equivalent of the fair
market value thereof as of the expiration time of such tender offer
determined as described below) (the "Put Price"). The Pension Plan may
exercise the Put Right, in whole or in part, by delivering to Issuer a
written notice (the "Exercise Notice") of such exercise that specifies the
number of Registrable Securities to be purchased pursuant to such exercise
(which number shall not exceed the Maximum Share Number). The delivery of
the Exercise Notice shall constitute an agreement binding upon the Pension
Plan to sell, and upon Issuer to purchase, such Registrable Securities.
The term of the Put Right shall commence immediately after the Bidder
making such tender offer accepts for purchase and purchases shares of
Class E Common Stock tendered pursuant to such tender offer and shall
terminate ten days after Issuer gives the Pension Plan notice that such
purchase has occurred.
(iii) If any portion of the tender offer price for any tender
offer is payable in consideration other than cash: (A) any notice given
by Issuer to the Pension Plan under subsection (iii) of Section 2(e) that
a Transfer may not be made under such subsection (iii) shall include a
good faith determination by the Board of Directors of Issuer as to the Put
Price; (B) if the Put Right has become exercisable as described in
subsection (ii) above in connection with such tender offer, within 24
hours after the expiration time for such tender offer, Issuer shall
deliver to the Pension Plan a notice (the "Put Price Notice") confirming
the (or, if necessary, setting forth a revised) good faith determination
of Issuer's Board of Directors as to the Put Price; and (C) in the
Exercise Notice, if any, the Pension Plan shall either agree to the Put
Price as set forth in the Put Price Notice or set forth its own good faith
determination as to the Put Price. Each such determination shall
separately identify the value attributed to each component of the
consideration offered in such tender offer. If the Pension Plan does not
so agree to the Put Price as set forth in the Put Price Notice and Issuer
and the Pension Plan, negotiating in good faith, are unable to reach an
agreement on the Put Price within 15 days after delivery of an Exercise
Notice, an investment banking firm shall be selected and instructed to
determine the Put Price as contemplated herein and submit to Issuer and
the Pension Plan promptly (and in any event no later than 30 days
- 11 -
<PAGE> 14
after the delivery of the Exercise Notice) a written report setting forth
such determination. If Issuer and the Pension Plan are unable to agree on
an investment banking firm within 15 days after delivery of an Exercise
Notice, a firm shall be selected by lot (until a firm so selected has
agreed to accept the engagement to determine the Put Price as contemplated
herein) from the top eight New York-based investment banking firms, as
determined in each case by dollar volume of equity offerings in which such
firms acted as lead underwriters, on the basis of the most recently
available information, after Issuer and the Pension Plan have each
eliminated one such firm and after the elimination of each such firm that
represented the Bidder, Issuer or the Pension Plan in connection with such
tender offer or, within the 365-day period prior to the delivery of the
Put Notice, otherwise performed substantial services for the Bidder. If,
as a result of the selection process set forth in the preceding sentence,
no such firm is eligible to be so selected or no such firm accepts the
engagement, Issuer and the Pension Plan shall promptly agree on an
alternative process to promptly select an investment banking firm to
determine the Put Price as contemplated herein. In any case, the fees and
expenses of such firm shall be borne by Issuer, and the determination of
such firm shall be final and binding upon all parties; provided, that if
such determination results in a Put Price greater than the Put Price set
forth by the Pension Plan in the Exercise Notice, the Put Price determined
by such firm shall be deemed to equal the Put Price set forth in the
Exercise Notice for purposes hereof. Issuer and the Pension Plan shall
cooperate and provide each other (and any such firm) with the information
(in reasonable detail) used in making its determinations with respect to
the Put Price. Issuer shall cooperate with any investment banking firm
engaged to determine the Put Price hereunder, including providing
information as reasonably requested by such firm in connection with such
determination.
(iv) The closing (the "Put Closing") of the purchase and sale
of the Registrable Securities specified in the Exercise Notice shall occur
no later than 90 days after the delivery of the Exercise Notice (or, if
such day is not a Business Day, the immediately following Business Day)
(the "Final Date"), at a time and place mutually agreeable to Issuer and
the Pension Plan. If Issuer and the Pension Plan are unable to agree on
- 12 -
<PAGE> 15
a time and place for the Put Closing, the Put Closing shall be at 10:00
a.m. (local time) at the principal executive offices of Issuer on the
Final Date; provided, that the Issuer may specify that the Put Closing
occur on any Business Day prior to the Final Date by giving written notice
to the Pension Plan at least two Business Days prior to the date so
specified. At the Put Closing, Issuer shall pay to the Pension Plan, by
wire transfer of immediately available funds to the account designated in
writing by the Pension Plan, an amount (the "Base Purchase Price") equal
to (Y) the Put Price, multiplied by (Z) the number of shares of
Registrable Securities to be purchased, together with interest on the Base
Purchase Price at the interest rate determined as set forth in Exhibit B
attached hereto for the period from and including the fifth Business Day
after the delivery of the Exercise Notice through but excluding the day
the Base Purchase Price (and all accrued interest thereon) is paid in full
(calculated on the basis of actual days elapsed and a 365-day year). At
the Put Closing, the Pension Plan shall deliver to Issuer certificates
representing the Registrable Securities to be sold to Issuer, together
with duly executed stock powers endorsed in blank, and shall execute and
deliver such other certificates, agreements and instruments as Issuer may
reasonably request to effect such sale (which shall include a
representation and warranty of the Pension Plan that all Registrable
Securities sold to Issuer pursuant to the Put Right are owned of record by
the Pension Plan, free and clear of any liens, pledges, security
interests, encumbrances, equities, claims, options or limitations of
whatever nature (other than those contemplated by this Agreement) but
which shall not include any further representations and warranties from
the Pension Plan).
(g) Notwithstanding any provisions of this Agreement to the
contrary, at any time that the Pension Plan owns Registrable Securities that
constitute 7.5% or less of the Class E Common Stock on a fully-diluted basis
(calculated for such purpose without giving effect to options, warrants or
other rights exercisable for the Class E Common Stock issued or issuable
pursuant to any employee stock option or other benefit plan maintained by
Issuer), the Pension Plan may effect a Transfer by tendering any or all of the
Registrable Securities into a tender offer for Class E Common Stock.
- 13 -
<PAGE> 16
(h) Nothing in this Agreement shall prohibit Issuer and the
Pension Plan from at any time agreeing to effect or effecting a Transfer of
Registrable Securities from the Pension Plan to Issuer or any of its
consolidated subsidiaries. If Issuer or any of its consolidated subsidiaries
intends to purchase Class E Common Stock on the open market for or on behalf of
any employee benefit plan maintained or contributed to by Issuer, any of its
consolidated subsidiaries or any of their predecessors or successors, it
shall make reasonable efforts to consult in good faith with the Pension Plan
with respect to the possibility of purchasing such shares from the Pension
Plan.
(i) Prior to making any Transfer of Registrable Securities
pursuant to clause (v) or (vi) of the first sentence of Section 2(a), the
Pension Plan shall deliver to Issuer an opinion of counsel reasonably
satisfactory to Issuer to the effect that such Transfer may be made without
registration under the Securities Act in reliance upon Rule 144.
(j) No Transfer of Registrable Securities in violation of this
Agreement shall be made or recorded on the books of Issuer and any such
Transfer shall be void and of no effect.
3. Demand Transfers.
(a) The Pension Plan may from time to time deliver to Issuer a
written notice that the Pension Plan proposes to make a Transfer of Registrable
Securities either (i) pursuant to an underwritten public offering reasonably
designed to achieve a broad public distribution of the securities being offered
(a "Public Transfer") or (ii) subject to Section 3(h), pursuant to a negotiated
transaction or series of related transactions effected on the same date and at
the same price per share with one or more transferees (each such transaction or
series of related transactions described in this clause (ii), whether
registered or not, being referred to herein collectively as a "Negotiated
Transfer"). Public Transfers and Negotiated Transfers, whether made pursuant
to a Demand Registration Statement, a Shelf Registration Statement or without a
registration statement, are referred to herein collectively as "Demand
Transfers." The number of Public Transfers (including any Transfer considered
a Public Transfer under Section 6(b)) and Negotiated Transfers that are
registered under the Securities Act that may be effected by the Pension Plan in
any 12-
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<PAGE> 17
month period shall not exceed two in the aggregate; provided, that there shall
be no numerical limit hereunder on the number of Negotiated Transfers that may
be effected by the Pension Plan without registration under the Securities Act.
Notwithstanding anything to the contrary in the immediately preceding sentence,
from and after the first time at which an issuer other than General Motors
shall become the Issuer pursuant to the succession provisions of Section 12(a),
the Pension Plan shall not effect more than two Demand Transfers (including any
Transfer considered a Public Transfer under Section 6(b)) in any 12-month
period. For purposes of this Agreement, a Demand Transfer is deemed to be
effected (x) if the Demand Transfer is to be made pursuant to a Demand
Registration Statement, on the effective date of such Demand Registration
Statement and (y) if the Demand Transfer is to be made either pursuant to a
Shelf Registration Statement, or without a registration statement, on the date
of the consummation of such Demand Transfer. A registered transaction
pursuant to a Demand Registration Statement shall not be considered a Demand
Transfer unless and until the applicable registration statement has become
effective pursuant to the Securities Act (unless the failure to become
effective is due solely to a breach by the Pension Plan of its obligations
hereunder) and in the case of a Shelf Registration Statement, unless and until
Registrable Securities are actually Transferred pursuant to the Shelf
Registration Statement. The Pension Plan may withdraw any Demand Transfer
request prior to the effective date of a Demand Registration Statement, in the
case of a Demand Transfer to be made pursuant to a Demand Registration
Statement, prior to the commencement of an offering of Registrable
Securities, in the case of a Public Transfer to be made pursuant to a Shelf
Registration Statement, or prior to the consummation of a Transfer of
Registrable Securities, in the case of a Negotiated Transfer to be made
either pursuant to a Shelf Registration Statement or without a registration
statement, in each of which cases such request shall not be considered a Demand
Transfer.
(b) At any time after the fourth anniversary of the date of the
initial Contribution pursuant to Section 1, so long as the Pension Plan owns
not less than 50 million shares of Registrable Securities, the Pension Plan may
deliver to Issuer a written request that Issuer prepare and file with the
Commission a registration statement on the appropriate form under the
Securities Act (together with any amendments or supplements thereto, the "Shelf
Registration Statement"), registering under the Securities
- 15 -
<PAGE> 18
Act up to the lesser of (i) 40 million shares of Registrable Securities or
(ii) the amount of Registrable Securities that, if Transferred, would result in
the Pension Plan owning 50 million shares of Registrable Securities, in either
case for offering and sale by the Pension Plan in Public Transfers and
Negotiated Transfers from time to time pursuant to Rule 415 under the
Securities Act or any successor thereto ("Rule 415"). Subject to Sections 3(f)
and 12(a), as promptly as reasonably practicable after the receipt of the
Pension Plan's request for the filing of a Shelf Registration Statement,
Issuer shall file a Shelf Registration Statement registering the number of
shares of Registrable Securities so requested.
Subject to Sections 3(f) and 12(a), at any time after Issuer has
filed a Shelf Registration Statement and until such time as the Pension Plan
has reduced its ownership of Registrable Securities to less than 50 million
shares of Class E Common Stock, if fewer than 20 million shares of Registrable
Securities remain subject to the Shelf Registration Statement, Issuer shall,
if and to the extent requested by the Pension Plan, prepare and file with the
Commission an additional Shelf Registration Statement (utilizing a combined
prospectus as provided for by Rule 429 under the Securities Act or any
successor thereto ("Rule 429")) as promptly as reasonably practicable after
receipt of such request, registering under the Securities Act up to the number
of shares of Registrable Securities equal to the lesser of (i) the difference
between 40 million and the number of such shares remaining subject to the Shelf
Registration Statement then in effect and (ii) the amount of such Registrable
Securities that, if Transferred, would result in the Pension Plan owning 50
million shares of Registrable Securities.
(c) Notwithstanding any other provision of this Agreement, if
within 395 days following the delivery of a written request for a Demand
Transfer by the Pension Plan, such Demand Transfer has not been consummated,
such request has not been withdrawn or a Liquidity Event has not occurred and
(i) in the case of a Public Transfer, either Issuer has not filed the related
registration statement or there has not been a period of at least 45
consecutive days following the date on which the Commission has completed its
review, if any, of the related Demand Registration Statement (or, if a Shelf
Registration Statement is then effective, following the date of such request)
without the occurrence of a
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<PAGE> 19
Blackout Period, (ii) in the case of a Negotiated Transfer that is to be
registered under the Securities Act pursuant to this Agreement, either Issuer
has not filed the related registration statement or there has not been a period
of at least 20 consecutive days following the date on which the Commission has
completed its review, if any, of the related Demand Registration Statement (or,
if a Shelf Registration Statement is then effective, following the date of such
request) without the occurrence of a Blackout Period or (iii) in the case of a
Negotiated Transfer that is not to be registered under this Agreement, there
has not been a period of at least 20 consecutive days following the date of
such request without the occurrence of a Blackout Period, then the Pension Plan
may, at the end of such 395-day period, deliver to Issuer a written request for
a Demand Transfer, and Issuer shall take all reasonable actions that are
necessary to permit the Pension Plan to effect such Demand Transfer, including,
if such Demand Transfer is to be registered under the Securities Act pursuant
to this Agreement, and a Shelf Registration Statement is not then effective,
(i) preparing and filing a registration statement for the Transfer of the
Registrable Securities requested to be registered in connection with such
Demand Transfer within a period of 30 days following the delivery of such
request and (ii) providing the Pension Plan with a period of at least 45 days
following the date on which the Commission has completed its review, if any, of
such registration statement, or, if such Demand Transfer is not to be
registered under the Securities Act pursuant to this Agreement or a Shelf
Registration Statement is then effective, the date of the delivery of such
request, in either case, to allow for the marketing and Transfer of such
Registrable Securities. Without limiting the generality of the foregoing,
Issuer shall, within 60 days following the date of delivery of the Pension
Plan's request, terminate any proposal or plan or make any public disclosure,
that, in either case, would otherwise give rise to Issuer's right of
postponement pursuant to Section 3(f). All of the Pensions Plan's rights and
all of Issuer's obligations under this Section 3(c) shall terminate from and
after the time the Pension Plan has reduced its ownership of Registrable
Securities to less than 25 million shares of Class E Common Stock.
(d) Each notice of a proposed Demand Transfer shall be delivered a
reasonable period of time before the proposed Transfer and, in any event, (i)
in connection with a proposed Public Transfer pursuant to a Demand
Registration Statement, not less than 30
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<PAGE> 20
days before the anticipated filing date of such Demand Registration Statement
if Issuer is eligible to use Form S-3 or any successor form ("Form S-3") or 45
days before such date in the event Issuer is not eligible to use such form,
(ii) in connection with a proposed Negotiated Transfer pursuant to a Demand
Registration Statement, not less than 20 days before the anticipated filing
date of such Demand Registration Statement if Issuer is eligible to use Form
S-3 or 45 days before such date in the event Issuer is not eligible to use such
form, (iii) in connection with a proposed Transfer pursuant to a Shelf
Registration Statement, not less than 10 days before the proposed commencement
of such proposed Transfer and (iv) in connection with a proposed Negotiated
Transfer that is not to be registered under the Securities Act pursuant to
this Agreement, not less than five days before the proposed consummation of
such Negotiated Transfer. Each notice of a proposed Demand Transfer shall
specify whether such Transfer will be a Public Transfer or a Negotiated
Transfer, the approximate number of Registrable Securities proposed to be
Transferred, the proposed timetable for the transaction and the anticipated
per share price range for such Transfer.
(e) Unless a Shelf Registration Statement is effective with
respect to the full amount of shares proposed to be subject to a Demand
Transfer, (i) each notice of a proposed Public Transfer shall constitute a
request that Issuer register the proposed Transfer of the Registrable
Securities under the Securities Act on the appropriate form and (ii) in
connection with any notice of a proposed Negotiated Transfer, the Pension
Plan may request that Issuer register the proposed Transfer of the Registrable
Securities; provided, however, that if the Pension Plan does not request that
Issuer register such proposed Transfer of the Registrable Securities, the
Pension Plan shall establish, to the reasonable satisfaction of Issuer, that
such Negotiated Transfer may be made without registration under applicable
securities laws. In the case of each request for registration pursuant to the
foregoing sentence (a "Demand Registration"), Issuer shall file the requested
registration statement (together with any amendments or supplements thereto, a
"Demand Registration Statement") as promptly as reasonably practicable,
subject to postponement as provided in Section 3(f); provided, however, that
Issuer shall not be required to register a proposed Negotiated Transfer of the
Registrable Securities if Issuer's legal counsel advises in writing that (i)
such registration would not be permitted under applicable federal
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<PAGE> 21
and state securities laws and regulations, (ii) if such Transfer is not so
registered, the shares Transferred in such Transfer would not constitute
"restricted securities" (as defined in Rule 144) in the hands of the transferee
in such proposed Transfer or (iii) such registration is not required under
applicable federal securities laws and Issuer and the Pension Plan reasonably
agree that the shares Transferred in such Transfer would constitute "restricted
securities" in the hands of the transferee in such proposed transaction
regardless of registration.
(f) Subject to Section 3(c), Issuer may postpone the filing or
effectiveness of any Demand Registration Statement, the initial filing or
effectiveness of any Shelf Registration Statement or the making of any Demand
Transfer, whether registered or not, at any time if Issuer determines, in its
reasonable judgment, that (i) such action or proposed action would interfere
with any proposal or plan by Issuer or any of its affiliates to engage in any
material acquisition, merger, consolidation, tender offer, securities offering
(including any proposal or plan to register or offer Class E Common Stock
existing as of the time of the Pension Plan's notice to Issuer of a proposed
Demand Transfer) or other material transaction or (ii) would require Issuer to
make a public disclosure of previously non-public material information and
Issuer shall promptly notify the Pension Plan of any postponement pursuant to
this Section 3(f). Issuer agrees that it will terminate any such postponement
as promptly as reasonably practicable and will promptly notify the Pension Plan
of such termination. In making any such determination to initiate or terminate
a postponement, Issuer shall not be required to consult with or obtain the
consent of the Pension Plan or any investment manager therefor (including the
Trustee), and any such determination shall be Issuer's responsibility alone,
and neither the Pension Plan nor any investment manager for the Pension Plan
(including the Trustee) shall be responsible or have any liability therefor.
(g) The Pension Plan may select the lead underwriter and
co-manager or co-managers to administer any Public Transfer of Registrable
Securities from a list of eligible lead underwriters and of eligible
co-managers, respectively, prepared for each such purpose by Issuer and
delivered to the Pension Plan on the date hereof (as such list may be revised
by Issuer from time to time). The list of eligible lead underwriters shall
contain the names of no fewer than five Persons, each of which shall be among
the top
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<PAGE> 22
six underwriting firms, and the list of eligible co-managers shall contain the
names of no fewer than seven Persons, no fewer than six of which shall be among
the top ten underwriting firms, as determined in each case by dollar volume of
equity offerings in which such firms acted as lead underwriters, on the basis
of the most recently available information. The Pension Plan shall have the
right to request that Issuer add a Person to the list of eligible lead
underwriters and of eligible co-managers, provided that Issuer shall have no
obligation to consent to any such request. The Pension Plan may not select any
Person to be lead underwriter or co-manager unless such Person shall have
agreed to use its reasonable best efforts to effect a broad public
distribution of the Registrable Securities to be sold in the Public Transfer
and to use its reasonable best efforts not to sell to any one Person (or group
of related Persons) (whether such Person (or group of related persons) is buying
for its own account or as a fiduciary on behalf of one or more accounts)
Registrable Securities constituting more than 2% of the Class E Common Stock
then outstanding. The selection of counsel to such lead underwriter and
co-manager or co-managers shall be subject to the consent of Issuer, which
consent shall not be unreasonably withheld.
(h) The Pension Plan shall not make a Negotiated Transfer to (i)
any one Person (or group of related Persons) (whether such Person (or group of
related Persons) is buying for its own account or as a fiduciary on behalf of
one or more accounts) of more than 2% of the Class E Common Stock then
outstanding or (ii) any one Person (or group of related Persons) if such Person
(or group of related Persons) is then required to file, or has filed, or as a
result of such Negotiated Transfer will be required to file (to the knowledge
of the Pension Plan after reasonable inquiry) a Schedule 13D under the Exchange
Act (or any successor thereto) with respect to the Class E Common Stock. If
the Registrable Securities subject to any Negotiated Transfer are not to be
registered under the Securities Act, the Pension Plan shall, prior to effecting
such Negotiated Transfer, cause each transferee in such Negotiated Transfer to
represent and warrant to the Pension Plan and Issuer in writing that (i) such
transferee is acquiring such Registrable Securities for its own account, or for
one or more accounts, as to each of which such transferee exercises sole
investment discretion, for investment purposes only and not with a view to, or
for resale in connection with, any distribution (within the meaning of the
Securities Act) and (ii) such transferee does not constitute an
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<PAGE> 23
underwriter (within the meaning of the Securities Act) with respect to the
acquisition of such Registrable Securities from the Pension Plan.
(i) Issuer shall make available members of the management of
Issuer and its affiliates for reasonable assistance in the selling efforts
relating to any public offering of the Registrable Securities pursuant to a
Public Transfer, to the extent customary for public offerings (including,
without limitation, to the extent customary, senior management attendance at
due diligence meetings with underwriters and their counsel and road shows), and
for such assistance as is reasonably requested by the Pension Plan and its
counsel in the selling efforts relating to any Negotiated Transfer.
4. Piggyback Registration.
(a) In the event that Issuer proposes to register any shares of
Class E Common Stock for its own account or for the account of any holder or
holders of Class E Common Stock (other than the Strategic Partner) pursuant to
contractual rights of such holder or holders or otherwise, in either case under
the Securities Act in an underwritten public offering (other than on a
registration statement on Form S-4 or S-8 under the Securities Act or any
successors thereto, a registration statement for a delayed or continuous
offering pursuant to Rule 415, a registration statement covering securities
convertible into or exercisable or exchangeable for Class E Common Stock, an
offering of securities solely to Issuer's existing shareholders or otherwise in
connection with any offer to exchange securities) (together with any under-
written public offering of Class E Common Stock pursuant to Rule 415 as
described in Section 4(b) below, a "Piggyback Registration"), Issuer shall
give the Pension Plan written notice of such proposed registration no less than
30 days before the date of filing anticipated by Issuer in connection with such
registration. Subject to Sections 4(d), (e) and (f), Issuer shall include in
such registration all Registrable Securities held by the Pension Plan with
respect to which Issuer has received a written request for inclusion therein
within 15 days after Issuer's notice of such proposed registration.
(b) In the event that Issuer proposes to offer for its own account
or for the account of any holder or holders of Class E Common Stock (other than
the Strategic Partner) pursuant to
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<PAGE> 24
contractual rights of such holder or holders or otherwise, in either case any
shares of Class E Common Stock in any underwritten public offering pursuant to
Rule 415, Issuer shall give the Pension Plan written notice of such proposed
offering no less than 30 days before the date of commencement of distribution
anticipated by Issuer in connection with such offering. Subject to Sections
4(d), (e) and (f), Issuer shall include in such offering all such Registrable
Securities with respect to which Issuer has received a written request for
inclusion therein within 10 days after Issuer's notice of such proposed
offering. Without limiting the generality of the foregoing, in order to so
include such Registrable Securities, Issuer shall, to the extent necessary,
file an amendment to the registration statement then in effect for the Class E
Common Stock or an additional registration statement for the Class E Common
Stock that uses a combined prospectus pursuant to Rule 429.
(c) Issuer may select the lead underwriter and co-manager or
co-managers to administer any offering of Registrable Securities pursuant to a
Piggyback Registration; provided, however, that if Registrable Securities held
by the Pension Plan and expected to be included in any such offering
constitute, in Issuer's reasonable judgment, at least 25% of the shares of
Class E Common Stock expected to be Transferred in such offering, the Pension
Plan shall have the right to appoint one co-manager (reasonably acceptable to
Issuer) for such offering, who shall participate in such offering on the same
terms as the co-managers appointed by Issuer. In the event that Issuer gives
the Pension Plan notice of its intention to effect an offering pursuant to a
Piggyback Registration and subsequently declines to proceed with such
offering, the Pension Plan shall have no rights in connection with such
offering; provided, however, that, subject to Section 3(f), at the request of
the Pension Plan, Issuer shall proceed with such offering with respect to the
Registrable Securities, which offering shall be deemed to be a Demand Transfer
for all purposes hereunder. The Pension Plan shall participate in any
offering of Registrable Securities pursuant to a Piggyback Registration in
accordance with the same plan of distribution for such Piggyback Registration
as Issuer or the holder or holders of Class E Common Stock that proposed such
Piggyback Registration, as the case may be.
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<PAGE> 25
(d) Until the earlier of (i) the date on which the Pension Plan
reduces its ownership of Registrable Securities to less than 100 million shares
of Class E Common Stock and (ii) the seventh anniversary of the date of the
initial Contribution pursuant to Section 1 (the "Piggyback Priority Date"), if
there is a Share Limitation in connection with a Piggyback Registration, then
Issuer shall include in such offering (i) first, the Class E Common Stock that
Issuer proposes to Transfer, (ii) second, the Registrable Securities
requested to be included in the offering by the Pension Plan, (iii) third,
other shares of Class E Common Stock requested to be included therein pursuant
to contractual rights of the holder or holders thereof (including the Strategic
Partner, if any, and the holder or holders of Class E Common Stock that
proposed such Piggyback Registration, if any) and (iv) fourth, any other shares
of Class E Common Stock.
(e) From and after the Piggyback Priority Date and until such time
as the Pension Plan reduces its ownership of Registrable Securities to less
than 25 million shares of Class E Common Stock (the "Priority Termination
Date"), if there is a Share Limitation in connection with any Piggyback
Registration, then Issuer shall include in such offering (i) first, the Class E
Common Stock that Issuer proposes to Transfer, (ii) second, an equal number of
Registrable Securities and shares of Class E Common Stock from each of the
Pension Plan and the Strategic Partner, if any, respectively, until all of the
shares requested to be included therein by either the Pension Plan or the
Strategic Partner have been selected, (iii) third, any additional Registrable
Securities and shares of Class E Common Stock requested to be included therein
by the Pension Plan or the Strategic Partner, as the case may be, (iv) fourth,
other shares of Class E Common Stock requested to be included therein pursuant
to contractual rights of the holder or holders thereof (including the holder or
holders of Class E Common Stock that proposed such Piggyback Registration, if
any) and (v) fifth, any other shares of Class E Common Stock; provided,
however, that if the Strategic Partner, if any, does not beneficially own at
least 25 million shares of Class E Common Stock as of the time of such proposed
offering, all shares of Registrable Securities requested by the Pension Plan to
be included therein shall be so included before any shares of Class E Common
Stock requested by the Strategic Partner to be included therein are so
included.
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<PAGE> 26
(f) From and after the Priority Termination Date, if there is a
Share Limitation in connection with a Piggyback Registration, then Issuer shall
include in such offering (i) first, the Class E Common Stock Issuer proposes to
Transfer, (ii) second, the shares of Class E Common Stock requested by the
Strategic Partner, if any, and the holder or holders of Class E Common Stock
that proposed such Piggyback Registration, if any, to be included therein
pursuant to contractual rights of the Strategic Partner and such holder or
holders, as the case may be, (iii) third, the Registrable Securities requested
to be included therein by the Pension Plan, (iv) fourth, other shares of Class
E Common Stock requested to be included therein pursuant to contractual rights
of the holder or holders thereof and (v) fifth, any other shares of Class E
Common Stock.
5. Holdback Period.
(a) The Pension Plan agrees not to make any Transfer of
Registrable Securities during the period commencing with the effective date
of a registration statement for any underwritten public offering of the Class E
Common Stock (or any securities convertible into or exchangeable or exercisable
for the Class E Common Stock) or, in the case of a Rule 415 registration
statement, upon Issuer's notice of commencement of distribution in connection
with such offering, and terminating on the 90th day after the effectiveness of
the registration statement for such offering pursuant to the Securities Act or,
in the case of a Rule 415 registration statement, the commencement of such
offering, or, in either case, on such earlier date as Issuer gives notice to
the Pension Plan that Issuer declines to proceed with such offering, unless the
underwriter or underwriters administering such offering otherwise agree.
(b) Issuer agrees not to make any Transfer of any Class E Common
Stock (or any securities convertible into or exchangeable or exercisable for
the Class E Common Stock) during the period commencing with the date of any
notice of a proposed Public Transfer and terminating on the 90th day after
the effectiveness of the registration statement for such Public Transfer
pursuant to the Securities Act or, in the case of a Shelf Registration
Statement, the commencement of distribution in connection with such Public
Transfer, or, in either case, on such earlier date as the Pension Plan gives
notice to Issuer that the Pension Plan declines to
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<PAGE> 27
proceed with such Public Transfer, except (i) for the issuance of shares of
Class E Common Stock upon the conversion, exercise or exchange, by the holder
thereof, of options, warrants or other securities convertible into or
exercisable or exchangeable for the Class E Common Stock pursuant to the
terms of such options, warrants or other securities (which, in the case of any
conversion, exercise or exchange which is at Issuer's option, Issuer shall not
call for conversion, exercise or exchange during such period (it being
understood that nothing herein shall limit the right of Issuer to call for
redemption any security convertible, exercisable or exchangeable for Class E
Common Stock or to issue shares of Class E Common Stock to the extent a holder
of any such security elects to convert, exercise or exchange such security in
lieu of accepting any redemption payments)), (ii) pursuant to the terms of any
other agreement to issue shares of Class E Common Stock (or any securities
convertible into or exchangeable or exercisable for the Class E Common Stock)
in effect on the date of the notice of a proposed Transfer, including any such
agreement in connection with any previously disclosed acquisition, merger,
consolidation or other business combination, and (iii) in connection with
Transfers to dividend reinvestment plans or to employee benefit plans in order
to enable any such employee benefit plan to fulfill its funding obligations in
the ordinary course, unless the underwriter or underwriters administering the
offering in connection with such Public Transfer otherwise agree.
Notwithstanding the foregoing, the provisions of this Section 5(b) shall be
subject to the provisions of Section 3(f), and if Issuer exercises its rights
of postponement pursuant to Section 3(f) with respect to any proposed Public
Transfer, the provisions of this Section 5(b) shall not apply unless and until
such time as Issuer notifies the Pension Plan of the termination of such
postponement and the Pension Plan notifies Issuer of its intention to continue
with such proposed Public Transfer.
6. Other Registration Rights.
(a) Nothing herein shall restrict the authority of Issuer to grant
to any Person, including a Strategic Partner, if any, the right to obtain
registration under the Securities Act of any equity securities of Issuer, or
any securities convertible into or exchangeable or exercisable for such
securities; provided, however, that Issuer shall not grant any such right with
respect to the Class E Common Stock or securities convertible into or
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<PAGE> 28
exchangeable or exercisable for the Class E Common Stock that conflicts with
the rights of the Pension Plan under Section 3(c), 4 or 6 in a manner that
limits or reduces such rights. Without limiting the generality of the
foregoing, Issuer shall cause each such Person, including a Strategic Partner,
if any, and a holder or holders of Class E Common Stock with the right to
propose a registration giving rise to a Piggyback Registration, if any, to
agree to the provisions of Sections 3(c), 4 and 6(b) and to agree not to make
any Transfer of any such securities during the period referred to in Section
5(b) to the extent such Transfer would be prohibited if made by Issuer.
(b) If at any time a Strategic Partner has been designated by
Issuer, the relative rights of the Pension Plan and the Strategic Partner shall
be as follows:
(i) If at any time the Strategic Partner, if any, elects to
exercise any rights for a demand registration of shares of Class E Common
Stock pursuant to an underwritten public offering (a "Strategic Partner
Demand Registration"), Issuer shall give the Pension Plan written notice
of such proposed Strategic Partner Demand Registration within five days of
receipt of notice thereof from the Strategic Partner.
(ii) Until the earlier of (A) the date on which the
Pension Plan reduces its ownership of Registrable Securities to less than
100 million shares of Class E Common Stock and (B) the fifth anniversary
of the date of the initial Contribution under Section 1 (the "Demand
Priority Date"), if the Pension Plan requests (and does not withdraw its
request for) a Public Transfer within 10 days of Issuer's notice of a
proposed Strategic Partner Demand Registration, Issuer shall (subject to
Section 3(f)) effect such Public Transfer as contemplated herein, and the
proposed Strategic Partner Demand Registration shall not proceed. In such
case, the Pension Plan shall proceed with such Public Transfer in good
faith, taking into account market conditions, until such Public Transfer
is consummated or abandoned by the Pension Plan. The Pension Plan shall
give Issuer prompt written notice if it determines to abandon any such
proposed Public Transfer.
(iii) The Pension Plan may at any time elect to
participate in any Strategic Partner Demand Registration by
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<PAGE> 29
giving Issuer notice thereof within 10 days of Issuer's notice to the
Pension Plan of such Strategic Partner Demand Registration. In such case,
subject to Section 6(b)(iv), Issuer shall include in such registration the
number of Registrable Securities requested by the Pension Plan to be
included therein (which number shall be set forth in the Pension Plan's
notice to Issuer of its election to participate therein). Any such
registration shall be considered a Public Transfer and shall be deemed
made on such date as such Registrable Securities are Transferred pursuant
thereto. The Pension Plan shall participate in any offering of Class E
Common Stock in connection with such registration in accordance with the
same plan of distribution as the Strategic Partner.
(iv) Until the Priority Termination Date, if there is a
Share Limitation in connection with any Strategic Partner Demand
Registration in which the Pension Plan has elected to participate, Issuer
shall include in such registration (A) first, an equal number of
Registrable Securities and shares of Class E Common Stock from each of the
Pension Plan and the Strategic Partner, respectively, until all of the
shares requested to be included therein by either the Pension Plan or the
Strategic Partner have been selected, (B) second, any additional
Registrable Securities and shares of Class E Common Stock requested to be
included therein by the Pension Plan or the Strategic Partner, as the case
may be, (C) third, other shares of Class E Common Stock requested to be
included therein by the holder or holders thereof pursuant to contractual
rights of such holder or holders and (D) fourth, any other shares of Class
E Common Stock. From and after the Priority Termination Date, if there is
a Share Limitation in connection with a Strategic Partner Demand
Registration in which the Pension Plan has elected to participate, Issuer
shall include in such registration (W) first, the shares of Class E Common
Stock proposed to be registered by the Strategic Partner, (X) second, the
shares of Registrable Securities requested to be included therein by the
Pension Plan, (Y) third, other shares of Class E Common Stock requested to
be included therein by the holder or holders thereof pursuant to
contractual rights of such holder or holders and (Z) fourth, any other
shares of Class E Common Stock.
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<PAGE> 30
(v) The Strategic Partner, if any, may at any time elect to
participate in any Public Transfer requested by the Pension Plan by giving
Issuer notice thereof within 15 days of the Pension Plan's notice to
Issuer of such Public Transfer. In such case, subject to Section
6(b)(vi), Issuer may include in the registration in connection with such
Public Transfer the number of shares of Class E Common Stock requested by
the Strategic Partner to be included therein. The Strategic Partner shall
participate in any offering of Class E Common Stock in connection with
such Public Transfer in accordance with the same plan of distribution for
such Public Transfer as the Pension Plan.
(vi) Until the Demand Priority Date, if there is a Share
Limitation in connection with any Public Transfer requested by the Pension
Plan in which the Strategic Partner has elected to participate, Issuer
shall include in such registration (A) first, the Registrable Securities
requested to be included therein by the Pension Plan, (B) second, shares
of Class E Common Stock requested to be included therein by the Strategic
Partner, (C) third, other shares of Class E Common Stock requested to be
included therein pursuant to contractual rights of the holder or holders
thereof and (D) fourth, any other shares of Class E Common Stock. From
and after the Demand Priority Date and until the Priority Termination
Date, if there is a Share Limitation in connection with a Public Transfer
requested by the Pension Plan in which the Strategic Partner has elected
to participate, Issuer shall include in the registration in connection
with such Public Transfer (A) first, an equal number of Registrable
Securities and shares of Class E Common Stock from each of the Pension
Plan and the Strategic Partner, respectively, until all of the shares
requested to be included therein by either the Pension Plan or the
Strategic Partner have been selected, (B) second, any additional
Registrable Securities and shares of Class E Common Stock requested to be
included therein by the Pension Plan or the Strategic Partner, as the case
may be, (C) third, other shares of Class E Common Stock requested to be
included therein by the holder or holders thereof pursuant to contractual
rights of such holder or holders and (D) fourth, any other shares of Class
E Common Stock; provided, however, that if the Strategic Partner does not
beneficially own at least 25 million shares of Class E Common Stock as of
the time
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<PAGE> 31
of such registration, all shares of Registrable Securities requested by
the Pension Plan to be included therein shall be so included before any
shares of Class E Common Stock requested by the Strategic Partner to be
included therein are so included. From and after the Priority Termination
Date, if there is a Share Limitation in connection with a Public Transfer
requested by the Pension Plan in which the Strategic Partner has elected
to participate, Issuer shall include in the registration in connection
with such Public Transfer (X) first, the Registrable Securities proposed
to be registered by the Pension Plan, (Y) second, the shares of Class E
Common Stock requested to be included therein by the holder or holders
thereof (including the shares of Class E Common Stock requested to be
included therein by the Strategic Partner, if any), pursuant to
contractual rights of such holder or holders and (Z) third, any other
shares of Class E Common Stock.
(vii) Nothing herein shall obligate Issuer to grant to any
Person, including a Strategic Partner, if any, the right to obtain
registration under the Securities Act of any equity securities of Issuer,
or any securities convertible into or exercisable or exchangeable for such
securities. If and to the extent Issuer grants any such rights to any
Person, the terms thereof shall be as set forth in the related agreement
between such Person and Issuer and may include restrictions on and
obligations of such Person greater than or in addition to those
contemplated herein, subject to Section 6(a).
(c) The Pension Plan acknowledges and accepts the rights of the
Salaried Plan under the Exchange Agreement and that the Salaried Plan has not
agreed to the provisions of Sections 3(c), 4 or 6(b) hereof. The Pension Plan
and Issuer also acknowledge the arrangements set forth in the Agreement dated
as of the date hereof among Issuer, the Salaried Plan and the Hourly Plan with
respect to certain registration rights matters. Without limiting the
generality of the foregoing and notwithstanding anything to the contrary herein
(including Section 3(c)): (i) in the event of a Piggyback Registration
requested by the Salaried Plan pursuant to its rights under the Exchange
Agreement, if there is a Share Limitation, Issuer shall include in the related
offering all shares of Class E Common Stock requested to be included therein by
the Salaried Plan before including any shares of Registrable Securities
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<PAGE> 32
requested to be included therein by the Pension Plan, (ii) the events giving
rise to Issuer's right to postpone under Section 3(f) shall include performing
its obligations under the Exchange Agreement in connection with the offering
and sale of shares of Class E Common Stock by the Salaried Plan, regardless of
when the notice requesting the related registration is received by Issuer, and
(iii) in no event shall Issuer be deemed to be in breach of this Agreement
(including Section 3(c)) as a result of performing its obligations under the
Exchange Agreement.
7. Demand, Piggyback and Shelf Registration Procedures.
Whenever Registrable Securities are to be registered pursuant to this
Agreement, Issuer shall, to the extent applicable for each type of
registration statement:
(a) subject to Sections 3(f) and 12(a), prepare and file with the
Commission a registration statement with respect to such Registrable
Securities and use reasonable efforts to cause such registration statement to
be declared effective as promptly after the initial filing thereof as
reasonably practicable;
(b) furnish to any investment manager acting on behalf of the
Pension Plan with respect to the Registrable Securities and to one law firm
representing each such investment manager, copies of such registration
statement, the prospectus contained therein and any amendments or supplements
thereto prior to filing such documents with the Commission, but only to the
extent such documents contain information regarding such investment manager,
with such documentation, and any other documentation provided by this
Agreement to be delivered to the investment manager acting on behalf of the
Pension Plan and counsel to the Pension Plan, to be delivered as provided in
Section 12(d) unless otherwise directed by the Named Fiduciary or its delegate;
(c) subject to Sections 3(f) and 12(a), prepare and file with the
Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than nine months (or
such shorter period as may be necessary to effect the Transfer of all shares of
Registrable Securities covered by such registration statement as described
therein);
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<PAGE> 33
(d) furnish to the Pension Plan and the underwriters such number
of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as the Pension Plan and its
counsel may reasonably request in order to facilitate the disposition of the
Registrable Securities;
(e) so long as Class E Common Stock is listed on any United States
securities exchange or a quotation system, use its best efforts to cause all of
the Registrable Securities to be listed on such exchange or a quotation system;
(f) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions
as the Pension Plan reasonably requests and do any and all other acts and
things which may be reasonably necessary or advisable to enable the Pension
Plan to consummate the disposition in such jurisdictions of the Registrable
Securities (provided that Issuer will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subsection, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(g) notify the Pension Plan, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or omits
any material fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, and, at the request
of the Pension Plan, Issuer will prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the Pension
Plan or the underwriters, if any, reasonably
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<PAGE> 34
request in order to expedite or facilitate the disposition of the Registrable
Securities; and
(i) make available (and cause all the officers, directors,
employees and independent accountants of Issuer and its subsidiaries to make
available), to the extent reasonably requested by the Pension Plan or any
underwriter, attorney, accountant or agent retained by the Pension Plan in
connection with such registration statement, all financial and other records
and pertinent corporate documents and properties of Issuer and its subsidiaries
for inspection by the Pension Plan or any underwriter, attorney, accountant or
other agent retained by the Pension Plan in connection with such
registration.
Each of the parties will treat all notices of proposed Transfers and
registrations, all notices pursuant to Section 7(g) and all information
relating to any Blackout Periods under Section 3(f) received from the other
party with the strictest confidence and will not disseminate such information.
Subject to Section 3(c), nothing herein shall be construed to require Issuer or
any of its affiliates to make any public disclosure of information at any
time. In the event Issuer has notified the Pension Plan that (i) the
prospectus included in a registration statement contains an untrue statement of
a material fact or omits any fact necessary to make the statements therein not
misleading, (ii) the Commission has issued or threatened to issue any stop
order suspending the effectiveness of a registration statement or has
initiated proceedings for such purpose or (iii) Issuer has received any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, then the Pension Plan shall not
deliver such prospectus to any purchaser unless and until a supplement or
amendment to such prospectus has been prepared as set forth in Section 7(g) or
until Issuer advises the Pension Plan in writing that the use of such
prospectus may be resumed.
The Pension Plan shall cooperate with Issuer in the preparation and
filing of any registration statement under the Securities Act pursuant to this
Agreement and provide Issuer with all information necessary to complete such
preparation within a reasonable period of time prior to the proposed filing of
such registration statement, and in the case of any Demand Registration
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<PAGE> 35
Statement or Shelf Registration Statement to be filed pursuant to Section 3(c),
within such period as is necessary to enable Issuer to file such registration
statement within 30 days of the Pension Plan's request therefor.
From and after such time as the Pension Plan reduces its ownership
of the Registrable Securities to less than 50 million shares of Class E Common
Stock, Issuer shall file the reports required to be filed by it under Section
13 of the Exchange Act or any successor thereto (or, if Issuer is not required
to file such reports, make publicly available such information upon the request
of Pension Plan), and take such further action as the Pension Plan may
reasonably request, all to the extent required to enable the Pension Plan to
Transfer the Registrable Securities pursuant to Rule 144.
8. Participation in Underwritten Transfers. The Pension Plan
may not participate in any underwritten Transfers hereunder unless the
Pension Plan (a) agrees to sell the Pension Plan's securities on the basis
provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements,
custodian agreements and other documents required under the terms of such
underwriting arrangements.
9. Registration Expenses and Legal Counsel. Issuer shall be
responsible for all federal and state filing fees (including all blue sky
registration or qualification fees), all fees and expenses of its counsel and
all independent certified public accountants, underwriters (excluding
discounts and commissions and fees and expenses of counsel to the
underwriters) and other Persons retained by Issuer and all other costs or
expenses incurred by Issuer in the performance of its obligations hereunder
and the reasonable fees and expenses of one outside law firm representing the
Pension Plan and other out-of-pocket expenses of the Pension Plan in connection
with any registration statement under the Securities Act pursuant to this
Agreement or any amendment thereto; provided, however, that the selection of
the law firm representing the Pension Plan shall be subject to the consent of
Issuer, which consent shall not be unreasonably withheld. Issuer shall have
the right to select the financial printer to be used in connection with
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<PAGE> 36
any registration of Registrable Securities under the Securities Act pursuant to
this Agreement.
10. Indemnification.
(a) Issuer agrees to indemnify and hold harmless each of the
Pension Plan, the Trustee and any successor thereto, the investment manager or
managers acting on behalf of the Pension Plan with respect to the Registrable
Securities and Persons, if any, who control any of them within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act (each
an "Indemnitee"), from and against any and all costs and expenses reasonably
incurred and losses, damages and other liabilities sustained by such Indemnitee
and arising out of or caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration statement described
herein or any related prospectus relating to the Registrable Securities (as
amended or supplemented if Issuer shall have furnished any amendments or
supplements thereto), or arising out of or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, except insofar as such costs, expenses,
losses, damages or other liabilities arising out of or are caused by any such
untrue statement or omission included or omitted in conformity with
information furnished to Issuer in writing by such Indemnitee or any Person
acting on behalf of such Indemnitee expressly for use therein; provided,
however, the foregoing indemnity agreement with respect to any preliminary
prospectuses shall not inure to the benefit of such Indemnitee, if the Person
asserting any claims, losses, damages or other liabilities against such
Indemnitee purchased Registrable Securities and a copy of the prospectus (as
then amended or supplemented if Issuer shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Indemnitee
to such Person, if required by law so to have been delivered, at or prior to
the written confirmation of the sale of the Registrable Securities to such
Person, and if the prospectus (as so amended or supplemented) would have cured
the defect giving rise to such asserted claim, loss, damage or other
liability; provided, further, that the foregoing proviso shall not apply in
the case of a Piggy-back Registration if the Indemnitee is the Pension Plan or
Trustee.
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<PAGE> 37
(b) The Pension Plan agrees, to the extent permitted under
applicable law, and each underwriter selected shall agree, to indemnify and
hold harmless each of Issuer, its directors, officers, employees and agents,
and each person, if any, who controls Issuer within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from Issuer, but only with respect to costs,
expenses, losses, damages or other liabilities arising out of or caused by an
untrue statement or omission included or omitted in conformity with information
furnished in writing by or on behalf of the Pension Plan or such underwriter,
as the case may be, expressly for use in any registration statement described
herein or any related prospectus relating to the Registrable Securities (as
amended or supplemented if Issuer shall have furnished or any amendments or
supplements thereto). No claim against the assets of the Pension Plan shall be
created by this Section 10(b), except as and to the extent permitted by
applicable law.
(c) In case any claim is asserted or any proceeding (including any
governmental investigation) shall be instituted where indemnity may be sought
by an Indemnitee pursuant to any of the preceding paragraphs of this Section
10, such Indemnitee shall promptly notify in writing the Person against whom
such indemnity may be sought (the "Indemnitor"); provided, however, that the
omission so to notify the Indemnitor shall not relieve the Indemnitor of any
liability which it may have to such Indemnitee except to the extent that the
Indemnitor was prejudiced by such failure to notify. The Indemnitor, upon
request of the Indemnitee, shall retain counsel reasonably satisfactory to the
Indemnitee to represent (subject to the following sentences of this section)
the Indemnitee and any others the Indemnitor may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any Indemnitee shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnitee unless (i) the Indemnitor and the Indemnitee
shall have mutually agreed to the retention of such counsel, (ii) the
Indemnitor fails to take reasonable steps necessary to defend diligently any
claim within ten calendar days after receiving written notice from the
Indemnitee that the Indemnitee believes the Indemnitor has failed to take such
steps, or (iii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnitor and the Indemnitee and
representation of both parties by the
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<PAGE> 38
same counsel would be inappropriate due to actual or potential differing
interests or legal defenses between them and, in all such cases, the
Indemnitor shall only be responsible for the reasonable fees and expenses of
such counsel. It is understood that the Indemnitor shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees and expenses of more than one separate law firm (in
addition to any local counsel) for all such Indemnitees not having actual or
potential differing interests or legal defenses among them, and that all such
fees and expenses shall be reimbursed as they are incurred. In the case of any
such separate firm for the Pension Plan or any control Person of the Pension
Plan, such firm shall be designated in writing by the Named Fiduciary. The
Indemnitor shall not be liable for any settlement of any proceeding effected
without its written consent.
(d) If the indemnification provided for in this Section 10 is
unavailable to an Indemnitee in respect of any costs, expenses, losses, damages
or other liabilities referred to herein, then the Indemnitor, in lieu of
indemnifying such Indemnitee hereunder, shall contribute to the amount paid
or payable by such Indemnitee as a result of such costs, expenses, losses,
damages or other liabilities in such proportion as is appropriate to reflect
the relative fault of the Indemnitor and the Indemnitee and Persons acting on
behalf of or controlling the Indemnitee in connection with the statements or
omissions or violations which resulted in such costs, expenses, losses, damages
or other liabilities, as well as any other relevant equitable considerations.
If the indemnification described in Section 10(a) or 10(b) is unavailable to
an Indemnitee, the relative fault of Issuer, the Pension Plan and Persons
acting on behalf of or controlling the Pension Plan shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by Issuer or by Persons acting on
behalf of the Pension Plan and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Indemnitor shall not be required to contribute pursuant to this
Section 10(d) if there has been a settlement of any proceeding effected
without its written consent. No claim against the assets of the Pension Plan
shall be created by this Section 10(d), except as and to the extent permitted
by applicable law.
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<PAGE> 39
(e) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding section. Notwithstanding the provisions of this Section 10, the
aggregate contribution of the Pension Plan under this Section 10 will not
exceed the proceeds received by the Pension Plan from the Registrable
Securities sold by it and the Pension Plan shall not be required to contribute
under this Section 10 in respect of any costs, expenses, losses, damages or
other liabilities unless the same arise with reference to any information
furnished to Issuer in writing by Persons acting on behalf of the Pension Plan
expressly for use in any registration Statement pursuant to this Agreement or
the prospectus or any amendment or supplement thereto. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
(f) The indemnification and contribution agreements contained in
this Section 10 and the representations and warranties of Issuer contained in
this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement and (ii) acceptance of and the payment
by the buyer for any Registrable Securities.
11. Definitions.
"Blackout Period" means (i) any period of time during which a
requested Demand Transfer has been postponed pursuant to Section 3(f), which
period shall continue until notice of the termination of such postponement has
been delivered to the Pension Plan, and (ii) any holdback period during which
Transfers were not permitted by operation of Section 5(a), unless in any
offering referred to in Section 5(a), the Pension Plan Transferred or had the
opportunity to Transfer shares of Registrable Securities that constituted the
lesser of (a) the number of shares of Class E Common Stock that the Pension
Plan requested to be included in such offering or (b) 25 million shares.
"Class E Common Stock" means Class E Common Stock, par value $0.10
per share, of General Motors and any securities issued or issuable with
respect to the Class E Common Stock in connection
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<PAGE> 40
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 hereof.
In the event of any of the foregoing with respect to the Class E Common Stock
or similar transactions affecting the Class E Common Stock, all references
herein to the designation "Class E Common Stock" and to any specific number of
shares of Class E Common Stock shall be appropriately adjusted to give effect
thereto, and shall 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.
"Commission" means the United States Securities and Exchange
Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"General Motors" means General Motors Corporation, a Delaware
corporation.
"Issuer" means, initially, General Motors, and thereafter, each
successor issuer as described in Section 12(a).
"Liquidity Event" means that either (a) the Pension Plan has
Transferred an aggregate of at least 25 million shares of Registrable
Securities or (b) the Pension Plan has been given an opportunity to include at
least 25 million shares of Registrable Securities in a Piggyback Registration
or a Strategic Partner Demand Registration and has declined to do so.
"Minimum Tender Condition" means, with respect to any tender offer,
that there have been validly tendered and not withdrawn pursuant to such tender
offer a number of shares of Class E Common Stock which, when taken together
with the number of shares of Class E Common Stock that the Bidder making such
tender offer otherwise beneficially owns as of immediately after the acceptance
for purchase and purchase of such tendered shares, represent more than 50% of
the voting power of all securities of Issuer outstanding as of such expiration
date and generally entitled to vote in the election of directors.
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<PAGE> 41
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a governmental entity or any department, agency
or political subdivision thereof.
"Registrable Securities" means (i) the Class E Common Stock
contributed pursuant to this Agreement from time to time, (ii) the Class E
Common Stock held by the Pension Plan as of the date hereof which are subject
to the Exchange Agreement and (iii) the securities issued or issuable with
respect to the securities referred to in clauses (i) and (ii) 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 hereof.
In the event of any of the foregoing with respect to the Registrable
Securities or similar transactions affecting the Registrable Securities, all
references herein to any designation of securities and to any specific number
of shares or Registrable Securities shall be appropriately adjusted to give
effect thereto. As to any particular Registrable Securities, such securities
will cease to be Registrable Securities when they have been Transferred by the
Pension Plan in accordance with all applicable provisions of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations thereunder.
"Share Limitation" means that the lead underwriter or co-managers
of any offering in connection with a Piggyback Registration, a Demand
Registration or a Strategic Partner Demand Registration advise Issuer in
writing that in their opinion the number of Registrable Securities requested to
be included in such offering exceeds, together with other shares of Class E
Common Stock to be included therein, the number of shares of Class E Common
Stock which can be sold in such offering without adversely affecting the
marketability of the offering.
"Strategic Partner" means any Person (or group of Persons acting in
concert with respect to an investment in Issuer) who (i) in a single
transaction or series of related transactions entered into as part of a single
business venture (the "Strategic Partner Transactions") acquires or commits to
acquire shares of Class E Common Stock (or securities convertible into or
exchangeable or
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<PAGE> 42
exercisable for the Class E Common Stock) that constitute not less than 10% of
the Class E Common Stock then outstanding (determined after giving effect to
such commitment (and assuming that all such shares or securities subject to
such commitment are acquired) or acquisition and the conversion, exchange or
exercise of all such securities subject to such commitment or so acquired) and
(ii) is designated as such by the Board of Directors of Issuer. Issuer shall
give the Pension Plan prompt notice of any such acquisition, commitment and
designation, of the nature and proposed timetable for any acquisitions and of
the nature of any rights granted to the Person so designated to register under
the Securities Act shares of the Class E Common Stock. If more than one Person
is designated the Strategic Partner as described above, all rights of the
Strategic Partner herein shall be shared among such Persons as such Persons and
Issuer may agree. Issuer may designate only one Person (or group of Persons as
described above) as the Strategic Partner hereunder. All references herein to
the shares of Class E Common Stock beneficially owned by the Strategic Partner
shall include all shares of Class E Common Stock (or securities convertible
into or exchangeable or exercisable for the Class E Common Stock) acquired by
the Strategic Partner pursuant to the Strategic Partner Transactions and all
additional shares of Class E Common Stock (or securities convertible into or
exchangeable or exercisable for the Class E Common Stock) that the Strategic
Partner has a right, commitment or obligation to acquire pursuant to the
Strategic Partner Transactions.
"Transfer" means any sale, transfer or other disposition (including
any pledge and any disposition upon the foreclosure of any pledge or any
agreement to do any of the foregoing).
12. Miscellaneous.
(a) Succession. In the event that the Registrable Securities are
to be converted or exchanged into (or become the right to receive) securities
of any issuer other than the Person who is then Issuer hereunder in connection
with any transaction to which such Issuer is a party, such Issuer shall cause
the issuer of such securities to agree, effective as of such conversion or
exchange, that all rights, obligations and restrictions of Issuer set forth
in this Agreement, except for the rights, obligations and restrictions set
forth in subsections (a) through (e) of Section 1 (which shall only be
obligations of General Motors), shall continue
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<PAGE> 43
to apply to such securities. As of the time of such conversion or exchange,
subject to the exception set forth in the preceding sentence, such issuer shall
be bound by this Agreement and shall succeed to all rights, restrictions and
obligations of Issuer set forth in this Agreement, all references to Issuer
herein shall thereafter be deemed to be references to such issuer, and the
predecessor Issuer shall be released from all obligations under this Agree-ment
(except with respect to any obligations under Section 10 with respect to any
registration of securities issued by such Issuer). To evidence the foregoing,
prior to the time of such conversion or exchange, Issuer may execute, and cause
such issuer to execute, a Succession Agreement substantially in the form of
Exhibit C attached hereto. Upon request, the Pension Plan shall acknowledge
and agree to any such Succession Agreement as set forth therein. To the extent
required and permissible under applicable law, as soon as reasonably
practicable after such conversion or exchange, such issuer shall file with the
Commission an amendment to the Shelf Registration Statement, if any, then in
effect to ensure that such Shelf Registration shall continue to apply to such
securities. In the event such issuer is not eligible to register such
securities on Form S-3, all references to Form S-3 herein shall thereafter be
deemed to be references to Form S-1 or any other available form, except that
such issuer shall have no obligations hereunder to file a Shelf Registration
Statement (and shall have no obligation with respect to any Shelf Registration
Statement that is then in effect) unless and until such time as such issuer
becomes eligible to register such securities on Form S-3 or any successor short
form registration statement.
(b) Termination. All rights, restrictions and obligations of
Issuer and the Pension Plan, except with respect to any rights and obligations
under Section 10, shall terminate and this Agreement shall have no further
force and effect at such time as the Pension Plan reduces its ownership of the
Registrable Securities to less than 2% of the aggregate number of shares of
Class E Common Stock then outstanding.
(c) 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 Issuer and the Pension Plan.
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<PAGE> 44
(d) Notices. Except where notice by teleconference is
specifically called for in this Agreement, all notices and other communications
provided for or permitted hereunder shall be in writing and, except as
specified herein, shall be made by hand delivery, by registered or certified
first-class mail, return receipt requested, overnight courier or facsimile
transmission:
(i) If to the Pension Plan:
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:
General Motors Investment Management Corporation
767 Fifth Avenue
New York, New York 10153
Attention: Vice President, Portfolio Strategy
and Manager Relations
Telephone: (212) 418-3590
Facsimile: (212) 418-6339
(ii) If to Issuer:
General Motors Corporation
767 Fifth Avenue
New York, New York 10153
Attention: Treasurer
Telephone: (212) 418-3500
Facsimile: (212) 418-3695
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<PAGE> 45
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 and communications shall be deemed to have been duly
given and received: when received telephonically, if notice by teleconference
is specifically called for by this Agreement; 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 promptly to confirm receipt of all notices.
Whenever notices are required to be given by Issuer, such notices
may only be given by the Treasurer of Issuer or another officer or employee of
Issuer designated by the Treasurer in advance in writing to the recipient of
such notice. Whenever notices are required to be given by any investment
manager (including the Trustee) with respect to the Registrable Securities,
such notices may only be given by an officer or employee of such investment
manager designated in advance in writing to the recipient of such notice.
(e) No Third Party Beneficiaries. This Agreement shall be for the
sole and exclusive benefit of Issuer, the Pension Plan, the Trustee and any
other investment manager or managers acting on behalf of the Pension Plan with
respect to the Registrable Securities, and their respective successors, and
directors, trustees, officers, employees, agents and controlling Persons
indemnified hereunder. Nothing in this Agreement shall be construed to give
any other Person any legal or equitable right, remedy or claim under this
Agreement.
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<PAGE> 46
(f) Descriptive Headings. The headings of the sections of this
Agreement are inserted for convenience only and shall not constitute a part
hereof.
(g) 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 carry out the purposes of this Agreement.
(h) 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 and the directors, trustees (including, without
limitation, any successor trustee for the Pension Plan), officers, employees,
agents and controlling Persons of the parties. Except for an assignment to a
successor trustee or to an investment manager as stated herein, and except as
contemplated in Section 12(a), none of the rights or obligations under this
Agreement shall be assigned by the Pension Plan without the consent of Issuer
or by Issuer without the consent of the Pension Plan.
(i) Counterparts. This Agreement may be executed in 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 party. Each such counterpart hereof shall
be deemed to be an original, and all of such counterparts together shall
constitute one and the same instrument.
(j) Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement shall be governed by the internal
laws (and not the laws of conflict) of the State of Delaware, except to the
extent that the laws of the state or jurisdiction of incorporation or
organization of the issuer of the Registrable Securities from time to time
specifically apply to questions concerning the relative rights of the issuer of
the Registrable Securities and the stockholders of such issuer in their
capacities as such.
(k) Acknowledgments. The Pension Plan agrees that it will obtain
written acknowledgments, and provide a copy of such acknowledgments to Issuer,
from each of its investment managers with respect to the Registrable Securities
(other than the Trustee)
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<PAGE> 47
and from the Trustee's valuation adviser, confirming that such entity has
received and reviewed this Agreement and will comply with the terms of this
Agreement applicable to it. Issuer and the Pension Plan acknowledge and agree
that, as of the date hereof and pursuant to this Section 12(k), the Exchange
Agreement is terminated with respect to the Pension Plan and is of no further
force and effect with respect to the Class E Common Stock acquired by the
Pension Plan pursuant thereto, and the Pension Plan shall have no further
rights, and Issuer shall have no further obligations to the Pension Plan,
thereunder or with respect to the Class E Common Stock acquired by the Pension
Plan pursuant thereto, and the Pension Plan hereby waives any rights it may
have had thereunder.
* * * *
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<PAGE> 48
IN WITNESS WHEREOF, the parties hereto, being duly authorized, have
executed and delivered this Registration Agreement on the date first above
written.
GENERAL MOTORS CORPORATION
By: /s/ Heidi Kunz
Name: Heidi Kunz
Title: Vice President and
Treasurer
GENERAL MOTORS HOURLY-RATE
EMPLOYEES PENSION PLAN
By: UNITED STATES TRUST COMPANY OF
NEW YORK, As Trustee
By: /s/ Norman P. Goldberg
Name: Norman P. Goldberg
Title: Authorized Agent
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EXHIBIT A
TRANSFER AGREEMENT
This Agreement is entered into on March 12, 1995, by and
between General Motors Corporation, a Delaware corporation ("General Motors"),
and United States Trust Company of New York (the "Trustee") as trustee of a
trust established under the General Motors Hourly-Rate Employees Pension Plan
(the "Pension Plan"), for the account and on behalf of the Pension Plan (which
shall thereby be deemed a party to this Agreement). Capitalized terms used and
not otherwise defined herein shall have the respective meanings set forth in
Section 5.
WHEREAS, General Motors intends, subject to the satisfaction of
certain regulatory and other conditions, to contribute approximately
177,000,000 shares of Class E Common Stock to the Pension Plan, pursuant to the
terms of a Registration Rights Agreement, dated as of the date hereof (the
"Registration Rights Agreement"), by and between General Motors and the Pension
Plan; and
WHEREAS, the Pension Plan is the owner of other shares of Class E
Common Stock that are subject to the Registration Rights Agreement; and
WHEREAS, General Motors wishes to preserve its ability to
consummate at a later date a tax-free reorganization (or series of
reorganizations) under the Internal Revenue Code of 1986, as amended, and the
rules, regulations and rulings thereunder (the "Code"), including, without
limitation, a split-off pursuant to which the outstanding shares of Class E
Common Stock and, in the discretion of General Motors, Series C Preference
Stock will be converted into or exchanged for, among other things, shares of
capital stock of Electronic Data Systems Corporation, a Texas corporation
("Texas EDS") (or a subsidiary of Texas EDS or any other subsidiary of General
Motors owning an interest in Texas EDS) (Texas EDS and any such subsidiary
being collectively referred to
<PAGE> 50
herein as "EDS") such that EDS is no longer controlled by General Motors (any
such transaction or series of transactions being referred to herein as a
"Split-Off"), and to preserve the tax-free status of a Split-Off in the event
that EDS enters into a business combination with one or more other corporations
or other business entities (a "Merger") within two years of such time as a
Split-Off is effected, which objective makes it desirable that certain
restrictions be imposed on the Pension Plan's ability to Transfer the
Transferable Securities; and
WHEREAS, the Pension Plan is prepared to accept the shares of Class
E Common Stock that may be contributed to it as described in the Registration
Rights Agreement and to hold and Transfer any such shares and other shares of
Class E Common Stock owned by it on the terms and conditions stated herein; and
WHEREAS, the Trustee has been appointed by the named fiduciary of
the Pension Plan (the "Named Fiduciary") (as determined in accordance with
Section 402(a) of the Employee Retirement Income Security Act of 1974, as
amended), to manage any shares of Class E Common Stock held by the Pension Plan
as described in the Registration Rights Agreement and this Agreement and to
exercise all rights, powers and privileges appurtenant to such shares (subject
to the authority of the Named Fiduciary to terminate such appointment and
appoint one or more other investment managers for any such shares); and
WHEREAS, the Trustee has full power and authority to execute and
deliver this Agreement for the account and on behalf of the Pension Plan and to
so bind the Pension Plan;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, General Motors and the
Pension Plan hereby agree as follows:
1. Restrictions on Transfer.
(a) (i) From and after such date as the first shares of Class E
Common Stock are contributed to the Pension Plan
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pursuant to the Registration Rights Agreement (the "Initial Contribution
Date"), the Pension Plan shall not make any Transfer of the Transferable
Securities to any Person if, to the knowledge of the Pension Plan after
reasonable inquiry, such Person is a Foreign Person and, as a result of such
Transfer, such Person would own (directly or through the attribution rules
contained in the regulations under Section 367(e) of the Code) shares of Class
E Common Stock that would constitute more than 5% of the total value of the
Class E Common Stock then outstanding. The foregoing restriction shall
terminate at such time as a Split-Off is effected (the "Split-Off Date").
(ii) From and after the Initial Contribution Date, the Pension
Plan shall not make any Transfer of the Transferable Securities to (A) any
Person (or group of related Persons acting pursuant to a plan or arrangement)
(whether such Person (or group of related Persons acting pursuant to a plan or
arrangement) is buying for its own account or as a fiduciary on behalf of one
or more accounts), if such Transferable Securities constitute more than 2% of
the Class E Common Stock then outstanding or (B) any Person (or group of
related Persons acting pursuant to a plan or arrangement) if such Person (or
group of related Persons acting pursuant to a plan or arrangement) is then, or
as a result of such Transfer will become, to the knowledge of the Pension Plan
after reasonable inquiry, a 5% Person. The foregoing restrictions shall
terminate on the first anniversary of the Split-Off Date.
(b) From and after the Initial Contribution Date, the
Pension Plan shall not make any Transfer of the Transferable Securities to any
Person (or group of related Persons acting pursuant to a plan or arrangement)
if, as a result of such Transfer and related transactions, to the knowledge of
the Pension Plan after reasonable inquiry, such Person (or group of related
Persons acting pursuant to a plan or arrangement) would have acquired shares of
Class E Common Stock that (when aggregated with all other shares of Class E
Common Stock so acquired at any time by such Person (or group of related
Persons acting pursuant to a plan or arrangement)) would constitute 40% or more
of the total number of
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<PAGE> 52
shares of Class E Common Stock then outstanding (computed for this purpose as
if any option, warrant or other security that permits such Person (or group of
related Persons acting pursuant to a plan or arrangement) to acquire additional
shares of Class E Common Stock (or any securities convertible into or
exchangeable or exercisable for the Class E Common Stock) had been fully
exercised, converted or exchanged). The foregoing restriction shall terminate
185 days after the Split-Off Date.
(c) From and after any such time as the Pension Plan
receives notice from General Motors or otherwise becomes aware by public
announcement that General Motors intends to effect a Split-Off (the "Split-Off
Notice Date"), the Pension Plan shall not make any Transfer of the Transferable
Securities if, after giving effect to such Transfer, the number of shares of
Transferable Securities that would be owned directly by the Pension Plan (which
shall include all shares in which the Pension Plan has a beneficial interest
(whether or not registered in the name of the Pension Plan) and which shall not
include shares owned by any Affiliate of the Pension Plan) would constitute
less than 50% of the number of Transferable Securities owned directly by the
Pension Plan as of the Split-Off Notice Date; provided that if there has been
at any time from and after the Split-Off Notice Date, to the knowledge of the
Pension Plan after reasonable inquiry, any 5% Person, then the Pension Plan may
Transfer shares of Transferable Securities only if and to the extent that the
number of Transferable Securities that would be owned directly by the Pension
Plan immediately after such proposed Transfer would exceed 50% of the sum of
(i) the number of shares of Class E Common Stock owned directly by the Pension
Plan as of the Split-Off Notice Date and (ii) the maximum number of shares of
Class E Common Stock directly or indirectly beneficially owned (as defined in
Rule 13d-3 of the Exchange Act or any successor thereto ("Rule 13d-3")) at any
time since the Split-Off Notice Date, to the knowledge of the Pension Plan
after reasonable inquiry, by such 5% Person and by each other 5% Person
(reduced so as not to double count any shares Transferred by one 5% Person to
any other 5% Person). The restrictions set forth in this Section 1(c) shall
terminate (i) in the event any such Split-Off is abandoned, on such date as the
Pension Plan receives notice from General Motors or otherwise becomes aware of
such abandonment (subject to such restrictions again becoming applicable as
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<PAGE> 53
described in the first sentence of this Section 1(c)) or (ii) in the event any
such Split-Off is effected, on the second anniversary of the Split-Off Date,
provided that, if any agreement or letter of intent or other announcement of an
intention to effect a Merger is entered into or made prior to the second
anniversary of the Split-Off Date (a "Merger Event"), such restrictions shall
terminate (A) except as provided in clause (B) below, on the second anniversary
of such time as such Merger is consummated (such time being referred to as the
"Merger Date"), (B) in the event such Merger constitutes a fully taxable
exchange under Section 1001 of the Code, in which such Section applies to
consideration received pursuant to such Merger by all shareholders of the
Person who is then the issuer of the Transferable Securities and so long as the
Pension Plan (and the Trustee) complied fully with the provisions of Section
1(h) with respect to such Merger, on the Merger Date, or (C) in the event such
Merger is abandoned, on the later of (Y) the second anniversary of the
Split-Off Date (subject to the occurrence of another Merger Event after such
abandonment and prior to such second anniversary) and (Z) such date as the
Pension Plan receives notice from General Motors or otherwise becomes aware of
such abandonment.
(d) Sections 1(a), 1(b) and 1(f) shall not apply to any
Transfer of Transferable Securities by the Pension Plan if such Transfer is
pursuant to an underwritten public offering reasonably designed to achieve a
broad public distribution of the securities being offered; provided, that the
Pension Plan shall have caused the lead underwriter and any co-manager of such
offering to have agreed (and the Pension Plan shall have delivered evidence of
such agreement to General Motors prior to the proposed commencement of such
offering) to use its reasonable best efforts (i) to effect a broad public
distribution of such securities and (ii) not to make any Transfer to any one
Person (or group of related Persons acting pursuant to a plan or arrangement)
(whether such Person (or group of related Persons acting pursuant to a plan or
arrangement) is buying for its own account or as a fiduciary on behalf of one
or more accounts) if (A) such Transfer is of Transferable Securities
constituting more than 2% of the Class E Common Stock then outstanding or (B)
such Person (or group of related Persons acting pursuant to a plan or
arrangement) is a 5% Person, or, at any time prior to the time of such
Transfer, has been designated in a
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<PAGE> 54
written list provided by General Motors to the Pension Plan as, to the
reasonable belief of General Motors, beneficially owning (as defined in Rule
13d-3) 2% or more of the total voting power or total value of the Class E
Common Stock then outstanding.
(e) Nothing in this Agreement shall prohibit the Pension
Plan from making any Transfer of Transferable Securities if and to the extent
such Transfer is made pursuant to a Split-Off or a Merger; provided that this
Agreement shall continue to apply to any Transferable Securities received by
the Pension Plan pursuant to such Split-Off or Merger, as the case may be, as
provided in this Agreement.
(f) From and after the Initial Contribution Date, the
Pension Plan shall not make any Transfer of the Transferable Securities to any
Person (or group of related Persons acting pursuant to a plan or arrangement)
if, to the knowledge of the Pension Plan after reasonable inquiry, as a result
of such Transfer, such Person (or group of related Persons acting pursuant to a
plan or arrangement) would constitute a 5% Person, unless the Pension Plan
shall cause such Person (and all related Persons acting pursuant to a plan or
arrangement) to agree to be bound by the provisions of this Agreement and to
execute a transferee agreement reasonably satisfactory to General Motors and
the Pension Plan to effectuate the purposes hereof. An executed copy of such
agreement shall be delivered to General Motors prior to the consummation of any
such proposed Transfer of the Transferable Securities. The foregoing
restriction shall terminate on the second anniversary of the Split-Off Date;
provided that if a Merger Event occurs prior to the second anniversary of the
Split-Off Date, such restriction shall terminate on the second anniversary of
the Merger Date or, in the event such Merger is abandoned, on the later of (i)
the second anniversary of the Split-Off Date (subject to the occurrence of
another Merger Event after such abandonment and prior to such second
anniversary) and (ii) such date as the Pension Plan receives notice from
General Motors or otherwise becomes aware of such abandonment.
(g) Until all restrictions set forth in Sections 1(a)
through 1(f) have terminated pursuant to the terms set forth therein, the
Pension Plan shall not make any Transfer of securities
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<PAGE> 55
convertible into or exercisable or exchangeable for the Transferable Securities
or any other securities the value of which is derived from the Transferable
Securities unless prior to the consummation of such Transfer General Motors has
received a Modification Ruling (as defined below) confirming, in form and
substance reasonably satisfactory to General Motors, that no income, gain or
loss will be recognized by General Motors, EDS or General Motors's or EDS's
stockholders or Affiliates on account of such Transfer.
(h) The Trustee has determined that a Split-Off would
substantially increase the value of the Transferable Securities and is
therefore in the interests of the Pension Plan and the participants and
beneficiaries of the Pension Plan. General Motors has represented to the
Trustee that it will not consider a Split-Off unless it can be adequately
assured of the tax-free status of such Split-Off. The Trustee recognizes that
such tax-free status may be jeopardized by a taxable Merger that occurred
within two years of a Split-Off. Accordingly, until all restrictions set forth
in Sections 1(a) through 1(f) have terminated pursuant to the terms set forth
therein, the Pension Plan (or the Trustee on behalf of the Pension Plan) will
vote against any proposed Merger if (i) the Trustee determines, on the advice
of tax counsel, that such Merger would not constitute a tax-free reorganization
under Section 368 of the Code in which Section 354(a)(1) of the Code would
apply to consideration received pursuant to such Merger by all shareholders of
the Person who is then the issuer of the Transferable Securities or (ii)
General Motors delivers to the Trustee, no later than three Business Days prior
to the scheduled date for the stockholders meeting at which such Merger is to
be voted on or the expiration date for the consent solicitation with respect
thereto, as the case may be, an opinion of tax counsel reasonably satisfactory
to the Trustee (which tax counsel may have been and be retained, employed or
consulted from time to time by General Motors) that there is a material risk
that such Merger would not constitute a tax-free reorganization as described
above. The Trustee shall deliver written notice to General Motors of any
determination made pursuant to clause (i) of the preceding sentence (or of any
decision not to make any such determination) as promptly as practicable, and in
any event no later than ten Business Days prior to the scheduled date for the
stockholders meeting at which
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<PAGE> 56
such Merger is to be voted on or the expiration date for the consent
solicitation with respect thereto, as the case may be.
(i) No Transfer or attempted Transfer of Transferable
Securities in violation of this Agreement shall be made or recorded on the
books of General Motors (or any other issuer of the Transferable Securities)
and any such Transfer shall be void and of no effect.
(j) Each certificate representing the shares of Class E
Common Stock contributed to the Pension Plan pursuant to the Registration
Rights Agreement shall conspicuously bear a legend in substantially the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO A TRANSFER AGREEMENT, DATED AS OF MARCH 12,
1995, BY AND BETWEEN GENERAL MOTORS CORPORATION ("GENERAL
MOTORS") AND THE INITIAL HOLDER HEREOF THAT CONTAINS,
AMONG OTHER THINGS, CERTAIN RESTRICTIONS ON THE
TRANSFER OF SUCH SECURITIES. A COPY OF SUCH TRANSFER
AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY GENERAL
MOTORS TO THE HOLDER HEREOF UPON WRITTEN REQUEST."
The certificates representing shares of Class E Common Stock held by the
Pension Plan and acquired other than pursuant to the Registration Rights
Agreement shall be promptly surrendered to General Motors in order that General
Motors' transfer agent may place such legend upon them. General Motors (or any
other issuer of the Transferable Securities) shall instruct its transfer agent
that such legend shall be removed from the certificates representing any
Transferable Securities upon the earlier of (i) the Pension Plan's Transfer of
such shares of Transferable Securities if such Transfer is made in accordance
with all applicable provisions of this Agreement and to a Person (or group of
related Persons acting pursuant to a plan or arrangement) who is not required
to execute a transferee agreement under Section 1(f) and (ii) the termination
of all restrictions set forth in Sections 1(a) through 1(f) pursuant to the
terms set forth therein.
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<PAGE> 57
(k) Nothing herein shall be construed as a waiver or
modification of any of the restrictions on Transfer of the Registrable
Securities (as defined in the Registration Rights Agreement) set forth in the
Registration Rights Agreement, in no event shall any Transfer of the
Transferable Securities be deemed to be a permitted Transfer of the Registrable
Securities under the Registration Rights Agreement solely because such Transfer
is permitted under this Agreement and in no event shall any Transfer of the
Registrable Securities be deemed to be a permitted Transfer of the Transferable
Securities under this Agreement solely because such Transfer is permitted under
the Registration Rights Agreement.
2. Representations, Warranties and Covenants.
(a) The Pension Plan represents that it owns 17,233,484
shares of Class E Common Stock and 197,605* shares of Series C Preference
Stock, in each case as of the date hereof.
(b) The Pension Plan agrees that from and after the date
hereof it shall not purchase or acquire, in open market transactions or
otherwise, any additional shares of Class E Common Stock or any securities
convertible into or exercisable or exchangeable for the Class E Common Stock or
any other interest in the Class E Common Stock; provided, that (i) any
securities received by the Pension Plan as consideration for any exchange or
conversion of Class E Common Stock pursuant to the terms of a Split-Off or a
Merger, (ii) any securities acquired by the Pension Plan as a dividend or other
distribution on the Class E Common Stock and (iii) any shares of Class E Common
Stock contributed to the Pension Plan pursuant to the Registration Rights
Agreement, shall not violate this Section 2(b). The foregoing covenant shall
terminate following the consummation of a Split-Off at the time described in
clause (ii) of the last sentence of Section 1(c).
3. Cooperation and Other Covenants.
(a) The Pension Plan shall take (or refrain from taking)
all such actions as General Motors may reasonably request as necessary to
ensure that General Motors obtains and maintains (i) a private letter ruling
from the IRS (the "Split-Off Ruling") confirming, in form and substance
reasonably satisfactory to
- -----------------
* 197,605 Depositary Shares representing 19,760.5 shares of Series C Preference
Stock.
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<PAGE> 58
General Motors, that no income, gain or loss will be recognized by General
Motors, its stockholders or Affiliates on account of a Split-Off (except to the
extent of any additional consideration described in Section 356 of the Code)
and (ii) a private letter ruling from the IRS or an opinion of counsel, as
determined by General Motors in its sole discretion (the "Merger Ruling"),
confirming, in form and substance reasonably satisfactory to General Motors,
that no income, gain or loss will be recognized by General Motors, EDS or
General Motors's or EDS's stockholders or Affiliates on account of a Merger.
Without limiting the generality of the foregoing, the Pension Plan shall agree
to be bound by such further restrictions on its ability to Transfer the
Transferable Securities as may be reasonably necessary to satisfy the IRS that
the Split-Off is not a device for the distribution of profits and earnings of
General Motors to General Motors's stockholders and to make such further
representations and covenants and execute such additional documents, in each
case as General Motors may reasonably request as necessary in connection with
obtaining either the Split-Off Ruling or the Merger Ruling.
(b) If so requested by the Pension Plan, General Motors
shall waive or modify any restriction set forth in Section 1 if and to the
extent that General Motors obtains a private letter ruling from the IRS (the
"Modification Ruling") confirming, in form and substance reasonably
satisfactory to General Motors, that such proposed waiver or modification shall
not cause General Motors, EDS or General Motors's or EDS's stockholders or
Affiliates to recognize any income, gain or loss on account of either a
Split-Off (except to the extent of any additional consideration described in
Section 356 of the Code) or a Merger. Without limiting the generality of the
foregoing, General Motors shall promptly seek to obtain any such Modification
Ruling as the Pension Plan may reasonably request, including a Modification
Ruling hereby requested by the Pension Plan, confirming, in form and substance
reasonably satisfactory to General Motors, that the IRS will not consider all
or part of the number of shares of Class E Common Stock owned by 5% Persons
other than the Pension Plan for purposes of determining whether the continuity
of interest requirement has been satisfied with respect to a Split-Off or a
Merger. General Motors and the Pension Plan shall cooperate with each other
(and any such tax counsel) and shall take (or refrain from taking) such
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<PAGE> 59
actions as either party hereto may reasonably request as necessary to obtain
any requested Modification Ruling.
(c) General Motors shall promptly notify the Pension Plan
of any intention of General Motors to effect or abandon a Split-Off and any
intention of EDS of which EDS has notified General Motors with respect to a
Merger or the abandonment of a Merger, in all such cases at such time and to
the extent determined by General Motors, in its sole discretion, to be
reasonably consistent with the purposes of this Agreement.
(d) Until all restrictions set forth in Section 1 have
terminated, the Pension Plan shall give General Motors written notice of any
proposed Transfer of the Transferable Securities within a reasonable period of
time prior to such proposed Transfer, and in any event no later than such date
as any notice with respect to such proposed Transfer is required to be given by
the Pension Plan pursuant to the Registration Rights Agreement (including any
notice of election to participate in any Piggyback Registration) or, if no such
date is provided for in the Registration Rights Agreement, 10 days prior to the
proposed consummation of such Transfer. Each notice hereunder of a proposed
Transfer shall set forth the number of shares of Transferable Securities then
owned by the Pension Plan and the terms and conditions of such proposed
Transfer, including, without limitation, the approximate number of Transferable
Securities proposed to be Transferred, the proposed timetable for such
Transfer, whether such Transfer is to be made pursuant to an underwritten
public offering in accordance with Section 1(f) and, if such Transfer is to be
made otherwise, the identity of any proposed transferee and the number of
shares of Class E Common Stock otherwise then owned by such proposed
transferee, all with sufficient particularity to enable General Motors to
determine whether such proposed Transfer would comply with the provisions of
this Agreement. If, in connection with any such proposed Transfer, the Pension
Plan receives from any proposed underwriter, co-manager or transferee any
certificate, representation, undertaking or other documentation intended to
establish compliance with the provisions of this Agreement, then the Pension
Plan shall deliver to General Motors a copy thereof prior to the consummation
of such proposed Transfer. The Pension Plan shall give General Motors written
notice of any material
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change in the terms and conditions of a proposed Transfer from those described
in any previous notice thereof to General Motors from the Pension Plan as
promptly as practicable, and in no event later than two Business Days prior to
such time as such Transfer is then proposed to be consummated, and the Pension
Plan shall not make any proposed Transfer other than in accordance with such
terms and conditions as so described to General Motors. If at any time prior
to the consummation of any proposed Transfer, General Motors determines, based
on the advice of its legal counsel, that such proposed Transfer would violate
any of the restrictions or be inconsistent with any of the provisions of this
Agreement, then General Motors shall give notice to the Pension Plan of such
determination and, unless and until tax counsel (which shall not be tax counsel
regularly employed by General Motors or the Pension Plan unless otherwise
agreed) mutually agreeable to General Motors and the Pension Plan (the fees and
expenses of which shall be borne equally by General Motors and the Pension
Plan) delivers an opinion to General Motors and the Pension Plan that such
proposed Transfer would not so violate or be inconsistent with this Agreement,
the Pension Plan shall not make such proposed Transfer. General Motors and the
Pension Plan shall cooperate with each other (and any such tax counsel) and
shall provide each other with such information as may reasonably be requested
in order to enable any party (or such tax counsel) to make any determination
with respect to this Agreement.
(e) Each of the parties shall treat all notices of and
information relating to proposed Transfers, Split-Offs and Mergers, including,
without limitation, all notices pursuant to Sections 3(c) and 3(d), that are
received from the other party with the strictest confidence and shall not
disseminate such information; provided, that nothing herein shall prohibit
disclosure of any such notice or information to the then issuer of the
Transferable Securities. Nothing herein shall be construed to require General
Motors or any of its Affiliates to make any public disclosure of information at
any time.
4. Remedies. Each of the parties to this Agreement
shall be entitled to enforce its rights under this Agreement specifically, to
recover damages and costs (including reasonable attorneys fees) caused by any
breach of any provision of this
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Agreement and to exercise all other rights existing in its favor. The parties
hereto agree and acknowledge that the Pension Plan's breach of any term or
provision of this Agreement will materially and irreparably harm General
Motors, that money damages will accordingly not be an adequate remedy for any
breach of the provisions of this Agreement by the Pension Plan and that General
Motors, in its sole discretion and in addition to any other remedies it may
have at law or in equity, may apply to any court of law or equity of competent
jurisdiction (without posting any bond or deposit) for specific performance
and/or other injunctive relief in order to enforce or prevent any violations of
the provisions of this Agreement.
5. Definitions and Interpretations.
(a) Definitions.
"Affiliate" has the meaning set forth in Rule 12b-2 under the
Exchange Act (or any successor thereto).
"Business Day" means such days as the New York Stock
Exchange, Inc. shall be open for trading.
"Class E Common Stock" means Class E Common Stock, par value
$0.10 per share, of General Motors and 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 hereof, including, without
limitation, shares of capital stock of EDS issued or issuable with respect to
the Class E Common Stock in connection with a Split-Off and shares of capital
stock issued or issuable with respect to such shares of capital stock of EDS in
connection with a Merger. In the event of any of the foregoing with respect to
the Class E Common Stock or similar transactions affecting the Class E Common
Stock, all references herein to the designation "Class E Common Stock" and to
any specific number of shares of Class E Common Stock shall be appropriately
adjusted to give effect thereto, and shall include reference to all securities
of the same class regardless of whether
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<PAGE> 62
any such securities were issued or issuable with respect to the securities that
previously constituted the Class E Common Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"Exchange Agreement" means the Exchange and Registration
Agreement, dated as of November 4, 1992, by and among General Motors, the
Pension Plan and the General Motors Corporation Retirement Program for Salaried
Employees.
"5% Person" means any Person (or group of related Persons
acting pursuant to a plan or arrangement) that, directly or indirectly,
beneficially owns (as defined in Rule 13d-3) shares of Class E Common Stock
that constitute 5% or more of the total voting power or total value of the
Class E Common Stock then outstanding; provided that no Person (or group of
related Persons acting pursuant to a plan or arrangement) shall be deemed a 5%
Person for purposes of Section 1(c) if such Person (or group of related Persons
acting pursuant to a plan or arrangement) (i) acquired such shares directly
from General Motors or (ii) has executed and delivered to General Motors a
transferee agreement pursuant to Section 1(f).
"Foreign Person" means any person who is not either (i) a
citizen or resident of the United States, (ii) a domestic partnership, (iii) a
domestic corporation or (iv) an estate or trust treated as a U.S. person under
Section 7701(a)(30)(D) of the Code.
"IRS" means the Internal Revenue Service.
"Person" means an individual, a partnership, a corporation,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a governmental entity or any department, agency
or political subdivision thereof.
"Series C Preference Stock" means Series C Convertible
Preference Stock, par value $0.10 per share, of General Motors.
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<PAGE> 63
"Transfer" means any sale, transfer or other disposition
(including any pledge and any disposition upon the foreclosure of any pledge)
or any agreement to do any of the foregoing.
"Transferable Securities" means (i) the Class E Common Stock
contributed to the Pension Plan pursuant to the Registration Rights Agreement
from time to time, (ii) the Class E Common Stock held by the Pension Plan as of
the date hereof which are subject to the Exchange Agreement and (iii) the
securities issued or issuable with respect to the securities referred to in
clauses (i) and (ii) in connection with any stock dividend, stock split
(forward or reverse), combination of shares, recapitalization, merger, consol-
idation, redemption, exchange of securities or other reorganization or
reclassification after the date hereof, including, without limitation, shares
of capital stock of EDS issued or issuable with respect to the Class E Common
Stock in connection with a Split-Off and shares of capital stock issued or
issuable with respect to the Class E Common Stock in connection with a Merger.
In the event of any of the foregoing with respect to the Transferable
Securities or similar transactions affecting the Transferable Securities, all
references herein to the designation "Transferable Securities" and to any
specific number of shares of Transferable Securities shall be appropriately
adjusted to give effect thereto.
(b) Interpretations.
For purposes of this Agreement, "knowledge of the Pension Plan
after reasonable inquiry" shall mean actual knowledge of the Pension Plan after
such inquiry, provided that, for purposes of determining compliance of any
proposed Transfer of Transferable Securities with the provisions of this
Agreement, (i) the Pension Plan shall be deemed to have actual knowledge of the
information contained in any Schedule 13D or 13G (or any successor thereto)
filed under the Exchange Act or any amendment thereto with respect to the Class
E Common Stock more than two Business Days prior to such proposed Transfer and
(ii) if such Transfer is made pursuant to an underwritten public offering as
described in Section 1(d), the Pension Plan shall be deemed to have made a
reasonable inquiry if it shall have conducted a search of the filings of
Schedules 13D and 13G (and any successors thereto) under the Exchange Act and
any
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<PAGE> 64
amendments thereto within two Business Days of such proposed Transfer.
6. Miscellaneous.
(a) Successor Issuers. In the event that, at any time
after the time at which the Class E Common Stock is converted into, exchanged
for or otherwise becomes a security of EDS, EDS enters into any transaction
pursuant to which the capital stock of EDS is to be converted into, exchanged
for or otherwise become the right to receive securities of any issuer other
than EDS, then all references herein to EDS (including this Section 6(a)) shall
be deemed as of the time of consummation of such transaction to be references
to both EDS and such successor issuer.
(b) Amendments and Waivers. Except as otherwise pro-
vided herein, the provisions of this Agreement may not be amended, modified or
supplemented except by a writing signed by General Motors and the Pension Plan.
(c) 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, overnight courier or facsimile transmission:
(i) If to the Pension Plan:
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
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<PAGE> 65
with copies to:
General Motors Investment Management Corporation
767 Fifth Avenue
New York, New York 10153
Attention: Vice President, Portfolio Strategy
and Manager Relations
Telephone: (212) 418-3590
Facsimile: (212) 418-6339
(ii) If to General Motors:
General Motors Corporation
767 Fifth Avenue
New York, New York 10153
Attention: Treasurer
Telephone: (212) 418-3500
Facsimile: (212) 418-3695
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 and communications shall 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
promptly to confirm receipt of all notices.
Whenever notices are required to be given by General Motors,
such notices may only be given by the Treasurer of General
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<PAGE> 66
Motors or another officer or employee of General Motors designated by the
Treasurer in advance in writing to the recipient of such notice. Whenever
notices are required to be given by any investment manager (including the
Trustee) with respect to the Transferable Securities, such notices may only be
given by an officer or employee of such investment manager designated in
advance in writing to the recipient of such notice.
(d) No Third Party Beneficiaries. This Agreement shall
be for the sole and exclusive benefit of General Motors, the Pension Plan, the
Trustee and any other investment manager or managers acting on behalf of the
Pension Plan with respect to the Transferable Securities, and their respective
successors, and directors, trustees, officers, employees, agents and
controlling Persons indemnified hereunder. Nothing in this Agreement shall be
construed to give any other Person any legal or equitable right, remedy or
claim under this Agreement.
(e) Descriptive Headings. The headings of the sections
of this Agreement are inserted for convenience only and shall not constitute a
part hereof.
(f) 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 carry out the purposes of this
Agreement.
(g) 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. Except for an assignment to a successor
trustee or to an investment manager as stated herein and except as provided in
Section 1(f), none of the rights or obligations under this Agreement shall be
assigned by the Pension Plan without the consent of General Motors or by
General Motors without the consent of the Pension Plan.
(h) Counterparts. This Agreement may be executed in
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 party. Each such counterpart
hereof shall be deemed to be an
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<PAGE> 67
original, and all of such counterparts together shall constitute one and the
same instrument.
(i) Governing Law. All questions concerning the
construction, validity and interpretation of this Agreement shall be governed
by the internal laws (and not the laws of conflict) of the State of Delaware,
except to the extent that the laws of the state or jurisdiction of
incorporation or organization of the issuer of the Transferable Securities from
time to time specifically govern questions concerning the relative rights of
the issuer of the Transferable Securities and the stockholders of such issuer
in their capacities as such.
(j) Acknowledgements. The Pension Plan agrees that it
will (i) obtain written acknowledgements, and provide a copy of such
acknowledgments to General Motors from each of its investment managers with
respect to the Transferable Securities (other than the Trustee), confirming
that such entity has received and reviewed this Agreement and will comply with
the terms of this Agreement applicable to it and (ii) inform each of the
investment managers working with or for the Pension Plan in any capacity of the
existence and terms of the covenant made by the Pension Plan in Section 2(b)
and instruct each such investment manager to comply with such covenant at all
times until such covenant terminates as provided in Section 2(b).
* * * * *
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<PAGE> 68
IN WITNESS WHEREOF, the parties hereto, being duly
authorized, have executed and delivered this Transfer Agreement on the date
first above written.
GENERAL MOTORS CORPORATION
By: /s/ Heidi Kunz
Name: Heidi Kunz
Title: Vice President and Treasurer
GENERAL MOTORS HOURLY-RATE
EMPLOYEES PENSION PLAN
By: UNITED STATES TRUST COMPANY OF
NEW YORK, As Trustee
By: /s/ Norman P. Goldberg
Name: Norman P. Goldberg
Title: Authorized Agent
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<PAGE> 69
EXHIBIT B
INTEREST RATE SCHEDULE
The interest rate referred to in Section 2(f)(iv) shall be a
per annum rate equal to the sum of (i) the rate quoted on the date of delivery
of the Exercise Notice for United States Treasury bills with a maturity of 90
days and (ii) the amount set forth below under the column "Spread"
corresponding to the rating (the "Rating") assigned by Standard & Poor's
Ratings Group ("S&P") to the short term unsecured debt obligations of Issuer on
the date of delivery of the Exercise Notice (it being understood that, for
purposes of the foregoing, (i) the rating assigned to such debt obligations by
any other rating agency shall be disregarded, (ii) any plus attached to a
rating assigned by S&P shall be disregarded, (iii) any minus attached to a
rating assigned by S&P shall be considered a downgrade to the next lowest
rating and (iv) if S&P changes its rating system after the date hereof, the
Ratings as set forth below shall be adjusted to the comparable ratings under
such new rating system).
<TABLE>
<CAPTION>
Rating Spread (in basis points)
------ ------
<S> <C>
A or better 50
BBB 100
BB 250
B or below or No Rating 400
</TABLE>
<PAGE> 70
EXHIBIT C
SUCCESSION AGREEMENT
This Agreement is entered into as of ___________, ____, by and
between ________________________, a __________ corporation ("Predecessor"), and
___________________, a __________ corporation ("Successor"). Capitalized terms
used and not otherwise defined herein shall have the meanings set forth in the
Registration Rights Agreement, dated as of ___________, 1995 (the "Registration
Agreement") by and between General Motors Corporation, a Delaware corporation
("General Motors"), and United States Trust Company of New York, as trustee
(the "Trustee") of a trust established under the General Motors Hourly-Rate
Employees Pension Plan (the "Pension Plan"), for the account of and on behalf
of the Pension Plan.
WHEREAS, Predecessor is currently the issuer of the securities
referred to as the "Registrable Securities" and "Class E Common Stock" in the
Registration Agreement and generally has the rights and the obligations of
Issuer under the Registration Agreement; and
WHEREAS, pursuant to ________________ (the "Transaction"),
shares of Class E Common Stock shall be [converted into] [exchanged for]
securities of Successor (the "Successor Securities"), effective as of
____________ (the "[Conversion] [Exchange] Date"); and
WHEREAS, the Registration Agreement contemplates that in the
event of a transaction such as the Transaction, Successor shall generally
succeed to the rights and obligations of Issuer under the Registration
Agreement; and
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements set forth herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Predecessor and
Successor hereby agree as follows:
1. Succession.
(a) Effective as of the [Conversion] [Exchange] Date, all
rights, obligations and restrictions with respect to shares of Class E Common
Stock (including Registrable Securities) set forth in the Registration
Agreement shall apply to the Successor Securities.
(b) Effective as of the [Conversion] [Exchange] Date,
Successor shall be bound by the Registration Agreement and shall succeed to all
rights, restrictions and obligations of Issuer set
<PAGE> 71
forth in the Registration Agreement, all references to Issuer therein shall
thereafter be deemed to be references to Successor, and Predecessor shall be
released from all obligations under the Registration Agreement.
(c) Notwithstanding subsections (a) and (b) above, (i) all
rights and obligations in Sections 1(a) through 1(e) of the Registration
Agreement shall remain rights and obligations of General Motors and (ii)
Predecessor shall not be released from any obligations under Section 10 of the
Registration Agreement with respect to any registration of securities issued by
Predecessor.
1. Cooperation. Predecessor and Successor shall take
such further action, and execute such additional documents, as may be
reasonably requested by either party in order to carry out the purposes of this
Agreement.
2. Counterparts. This Agreement may be executed in
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 party. Each such counterpart
hereof shall be deemed to be an original, and all of such counterparts together
shall constitute one and the same instrument.
* * *
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<PAGE> 72
IN WITNESS WHEREOF, the parties hereto, being duly authorized,
have executed and delivered this Succession Agreement on the date first above
written.
PREDECESSOR:
_________________________________
By: _____________________________
Its: ____________________________
SUCCESSOR:
_________________________________
By: _____________________________
Its: ____________________________
This Succession Agreement (including, without limitation, the
release of the Predecessor from obligations under the Registration Agreement as
set forth herein (except as provided in Section 1(c) above)) is acknowledged
and agreed to as of this _____ day of _____________, ____.
GENERAL MOTORS HOURLY-RATE
EMPLOYEES PENSION PLAN
By: UNITED STATES TRUST COMPANY
OF NEW YORK, As Trustee
By: _____________________________
Its: ____________________________
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