GENERAL MOTORS CORP, 424B3, 1999-04-23

GENERAL MOTORS CORP
424B3, 1999-04-23
MOTOR VEHICLES & PASSENGER CAR BODIES

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<PAGE>
AS FILED PURSUANT TO RULE 424(b)(3)
REGISTRATION NO. 333-76503

UNITED STATES SATELLITE BROADCASTING COMPANY, INC.
PROXY STATEMENT
for a
Special Meeting of Shareholders
to be held on May 20, 1999

GENERAL MOTORS CORPORATION
PROSPECTUS

THIS PROXY STATEMENT/PROSPECTUS ALSO CONSTITUTES THE PROSPECTUS OF GM WITH
RESPECT TO UP TO 23,737,518 SHARES OF GM CLASS H STOCK TO BE DELIVERED TO
ELECTING U.S. SATELLITE BROADCASTING SHAREHOLDERS IN CONNECTION WITH THE
MERGER.
THE GM CLASS H STOCK IS TRADED ON THE NEW YORK STOCK EXCHANGE UNDER THE SYMBOL
"GMH."
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 18 IN THIS PROXY
STATEMENT/PROSPECTUS.
THIS PROXY STATEMENT/PROSPECTUS DOES NOT COVER, AND MAY NOT BE USED IN
CONNECTION WITH, ANY RESALES OF THE GM CLASS H STOCK RECEIVED IN THE MERGER.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THE SHARES OF
GM CLASS H STOCK ISSUABLE IN THE MERGER OR DETERMINED THAT THIS PROXY
STATEMENT/PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

THE MERGER--
This proxy statement/prospectus is being furnished to you in connection with
the solicitation of proxies by the board of directors of United States
Satellite Broadcasting Company, Inc. for use at a special meeting of
shareholders at which you will be asked to approve the proposed merger of
U.S. Satellite Broadcasting with and into Hughes Electronics Corporation, a
wholly owned subsidiary of General Motors Corporation.

THE MERGER CONSIDERATION--
If the merger is completed, you can elect to receive a fraction of a share
of GM class H stock or cash for each share of U.S. Satellite Broadcasting
stock you own. GM class H stock is a class of common stock issued by GM. The
financial performance of Hughes determines the earnings per share
attributable to GM class H stock.
Whether you elect to receive GM class H stock or cash, the value of what you
receive will vary depending on the volume-weighted average price of the GM
class H stock for the period of 20 trading days ending on the second trading
day prior to the merger, as follows--

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THEN THE VALUE PAID FOR EACH SHARE OF U.S.
IF THE 20-DAY AVERAGE PRICE SATELLITE BROADCASTING STOCK, BASED ON THE
OF GM CLASS H STOCK IS: 20-DAY AVERAGE PRICE, WILL BE:
- ---------------------------- ------------------------------------------
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More than $47.6821.......... $18.00 per share
Between $47.6821
and $27.8146.............. Between $18.00 and $10.50 per share--an
amount equal to .3775 times the 20-day
average price
Less than $27.8146
but not less than
$19.8675.................. $10.50 per share
Less than $19.8675.......... Less than $10.50 per share--an amount
equal to .5285 times the 20-day average
price
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On April 20, 1999, the closing sale price of the GM class H stock was $52.31
per share. If the merger had occurred on this date, the 20-day average price
would have been $53.05.
Your election may be subject to adjustment as described in this proxy
statement/prospectus.

The date of this proxy statement/prospectus is April 22, 1999.
This proxy statement/prospectus was first sent or given to security holders on
April 22, 1999.
<PAGE>
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND
FINANCIAL INFORMATION ABOUT U.S. SATELLITE BROADCASTING, GM AND HUGHES THAT IS
NOT INCLUDED OR DELIVERED WITH THIS DOCUMENT. YOU CAN REQUEST COPIES OF SUCH
INFORMATION. SEE "WHERE YOU CAN FIND MORE INFORMATION."

TABLE OF CONTENTS

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SUMMARY................................................................... 5
The Special Meeting..................................................... 5
The Merger.............................................................. 5
Summary Financial Information........................................... 11
Historical And Pro Forma Per Share Data................................. 12
Unaudited Comparative Per Common Share Data............................. 12
Summary Consolidated Financial Data..................................... 13
U.S. Satellite Broadcasting Summary Consolidated Financial Data......... 13
GM Summary Consolidated Financial Data.................................. 14
Hughes Summary Consolidated Financial Data.............................. 15
Selected Unaudited Pro Forma Financial Data............................. 16
Market Price Of U.S. Satellite Broadcasting Class A Stock............... 16

RISK FACTORS.............................................................. 18
Risk Factors Relating To The Business Of Hughes......................... 18
Risk Factors Relating To GM's Dual-Class Common Stock Capital
Structure............................................................. 20
Risk Factor Relating To Completion Of Merger............................ 22

THE SPECIAL MEETING....................................................... 22
Quorum; Required Vote................................................... 22
Voting Of Proxies....................................................... 22
Revocability Of Proxies................................................. 23
Solicitation Of Proxies................................................. 23

THE PARTIES TO THE MERGER................................................. 23
U.S. Satellite Broadcasting............................................. 23
General Motors.......................................................... 24
Hughes.................................................................. 25

THE MERGER................................................................ 35
Background Of The Merger................................................ 35
Recommendation Of The Committee Of Disinterested Directors And The U.S.
Satellite Broadcasting Board And Reasons For The Merger............... 38
Opinions Of The U.S. Satellite Broadcasting Financial Advisors.......... 41
Hughes' And GM's Reasons For The Merger................................. 48
Accounting Treatment.................................................... 48
Material Federal Income Tax Consequences................................ 48
Interests Of Directors, Officers And Affiliates Of U.S. Satellite
Broadcasting In The Merger............................................ 51
Regulatory Filings And Approvals........................................ 56
Rights Of Shareholders Who Object To The Merger......................... 56

THE MERGER AGREEMENT...................................................... 59
General................................................................. 59
Conversion Of Securities................................................ 59
Merger Consideration.................................................... 59
Limitations On Stock Elections And Cash Elections....................... 60
Exchange Of Certificates; Procedures For Exchange....................... 60
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Representations And Warranties.......................................... 62
Conduct Of Business Pending The Merger.................................. 63
No Solicitation......................................................... 65
Access To Information................................................... 65
Reasonable Best Efforts................................................. 66
Billing And Customer Management Systems................................. 66
110 DEG. Construction Permit............................................ 66
Accounting Adjustments.................................................. 66
Employee Matters........................................................ 66
Replacement Payload Option Agreement And Channel Services Provision
Agreement............................................................. 67
Conditions To The Merger................................................ 67
Termination Of The Merger Agreement..................................... 69
Fees And Expenses....................................................... 69
Amendment And Waiver.................................................... 69

OWNERSHIP OF VOTING SECURITIES OF U.S. SATELLITE BROADCASTING............. 70

DESCRIPTION OF GM CLASS H STOCK........................................... 73
General................................................................. 73
GM's Dual-Class Common Stock Capital Structure.......................... 73
Introduction To The GM Class H Stock.................................... 74
GM Restated Certificate Of Incorporation Provisions Regarding
Dividends............................................................. 74
Dividend Policy......................................................... 77
Voting Rights........................................................... 78
Liquidation Rights...................................................... 78
Subdivision Or Combination.............................................. 78
Recapitalization And Certain Other Transactions......................... 78
Stock Exchange Listing.................................................. 79
Transfer Agent And Registrar; Direct Registration System................ 79

COMPARISON OF RIGHTS OF HOLDERS OF GM CLASS H STOCK AND U.S. SATELLITE
BROADCASTING STOCK...................................................... 80
Comparison Of Terms Of GM Class H Stock And U.S. Satellite Broadcasting
Stock................................................................. 80
Other Stockholder Rights................................................ 81

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS........................... 84

LEGAL MATTERS............................................................. 85

EXPERTS................................................................... 85

SHAREHOLDER PROPOSALS..................................................... 85

WHERE YOU CAN FIND MORE INFORMATION....................................... 86

U.S. SATELLITE BROADCASTING SELECTED HISTORICAL FINANCIAL DATA............ 89

HUGHES SELECTED HISTORICAL FINANCIAL DATA................................. 90

UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION.............. 91

NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS...... 94
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ANNEXES

Annex A Agreement and Plan of Merger, dated December 11, 1998, among U.S.
Satellite Broadcasting, GM and Hughes................................. A-1

Annex B-1 Opinion of Credit Suisse First Boston Corporation, dated December 11,
1998.................................................................. B-1-1

Annex B-2 Opinion of Goldman, Sachs & Co., dated December 10, 1998................ B-2-1

Annex C Sections 302A.471 and 302A.473 of the Minnesota Business Corporation
Act................................................................... C-1

Annex D GM Board Policy Statement Regarding Certain Capital Stock Matters....... D-1
</TABLE>

DIRECTV-Registered Trademark-, Galaxy-TM-, Spaceway-TM- and DirectPC-TM- are
trademarks of Hughes Electronics Corporation or its subsidiaries.
USSB-Registered Trademark- and U.S. Satellite Broadcasting-Registered Trademark-
are trademarks of United States Satellite Broadcasting Company, Inc.
PRIMESTAR-Registered Trademark- is a trademark of PRIMESTAR, Inc.

4
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SUMMARY

This summary highlights selected information from this document and may not
contain all of the information that is important to you. For more detailed
information about the proposed merger, we encourage you to read this entire
document, the merger agreement attached hereto as Annex A, and the documents to
which we have referred you. See "Where You Can Find More Information" on page
86. We have parenthetically included page references to indicate where you may
find more complete descriptions of the topics presented in this Summary.

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THE SPECIAL MEETING

DATE, TIME AND PLACE ............. The special meeting of U.S. Satellite Broadcasting
shareholders will be held at the Marriott City Center
Hotel, 30 South 7th Street, Minneapolis, Minnesota
55402, on May 20, 1999, at 9:00 a.m., local time. At the
meeting, you will be asked to approve the merger
agreement, which provides for the merger of U.S.
Satellite Broadcasting with Hughes.
THE RECORD DATE FOR VOTING ....... The close of business on March 25, 1999 was the record
date for determining which shareholders are entitled to
vote at the special meeting.
VOTING ........................... You will have ten votes for each share of common stock
that you owned on the record date and one vote for each
share of class A stock that you owned on the record
date. The affirmative vote of a majority of the voting
power of the common stock and class A stock, voting as a
single class, is required to approve the merger. Hubbard
Broadcasting, Inc., the majority shareholder of U.S.
Satellite Broadcasting, has agreed to vote some of the
shares owned by it, constituting 19.9% of the voting
power of the U.S. Satellite Broadcasting stock, in favor
of the merger agreement. Hubbard Broadcasting has also
stated its intention to vote all shares owned by it,
constituting 74.5% of the voting power of the U.S.
Satellite Broadcasting stock, in favor of the merger.
SECURITY OWNERSHIP OF DIRECTORS
AND EXECUTIVE OFFICERS ......... On the record date, directors and executive officers of
(PAGE 70) U.S. Satellite Broadcasting and their affiliates
(including Hubbard Broadcasting) beneficially owned
56,370,900 shares of common stock and 9,208,615 shares
of class A stock, representing 91.8% of the voting power
of U.S. Satellite Broadcasting stock. Each director and
executive officer has indicated his or her intention to
vote all shares of U.S. Satellite Broadcasting stock
owned by him or her and their affiliates in favor of the
merger agreement.
U.S. SATELLITE BROADCASTING BOARD
RECOMMENDATION ................. The U.S. Satellite Broadcasting board has adopted the
(PAGE 41) merger agreement and recommends that you vote FOR
approval of the merger agreement.

THE MERGER

THE PARTIES ...................... UNITED STATES SATELLITE BROADCASTING COMPANY, INC. (PAGE
23)
3415 University Avenue
St. Paul, Minnesota 55114
(651) 645-4500
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U.S. Satellite Broadcasting provides satellite-delivered
subscription-television programming with a focus on the
best-known premium movie network brands.
U.S. Satellite Broadcasting launched its service in June
1994 and, as of December 31, 1998, had more than two
million subscribers nationwide. Consumers receive
programming through a digital satellite system, which
includes an 18" "mini-dish," digital home receiver and
remote control and is exclusive to U.S. Satellite
Broadcasting and DIRECTV Enterprises, Inc., a subsidiary
of Hughes. The DIRECTV/USSB system was the first
high-power mini-dish system and is marketed under major
consumer electronics brands, such as RCA, Sony and
ProScan, and sold at more than 26,000 retail locations.
Programming is broadcast from DBS-1, a satellite owned
by U.S. Satellite Broadcasting and DIRECTV and operated
by DIRECTV.

GENERAL MOTORS CORPORATION (PAGE 24)
100 Renaissance Center
Detroit, Michigan 48243-7301
(313) 556-5000
GM is primarily engaged in the automotive and
electronics industries. As the world's largest
manufacturer of automotive vehicles, GM designs,
manufactures and markets automotive vehicles globally
under many well-known nameplates. Hughes, a wholly owned
subsidiary of GM, designs, manufactures and markets
advanced technology electronic systems, products and
services for the telecommunications and space
industries. GM also has financing and insurance
operations and engages to a lesser extent in other
industries.

HUGHES ELECTRONICS CORPORATION (PAGE 25)
200 North Sepulveda Boulevard
El Segundo, California 90245
(310) 647-1000
Hughes is a space and telecommunications company. The
operations of Hughes are divided into four segments:

- Hughes Space & Communications manufactures
satellites, including its new spacecraft, the HS
702, and two of the industry's most popular
spacecraft, the HS 601 and HS 376. Hughes Space
also manufactures key components of satellites.

- Hughes Network Systems builds and services
satellite-based private business networks and
terrestrial wireless telephone systems around the
world. Hughes Network Systems also manufactures
equipment for DIRECTV, Hughes' digital
direct-to-home television service, and DirectPC,
Hughes' high-speed Internet access service.

- PanAmSat serves U.S. and international customers
with a global fleet of spacecraft. Owned 81% by
Hughes, PanAmSat provides satellite distribution
services to meet
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the growing demand of television networks, cable
TV providers, direct-to-home TV broadcasters,
telephone carriers and Internet service providers.

- DIRECTV uses satellites, mini-dishes and digital
receivers to provide 185 video channels via direct
broadcast satellite to more than 4.7 million
subscribers in the United States. On January 22,
1999, Hughes agreed to acquire the direct
broadcast satellite medium-power business of
PRIMESTAR, Inc., with an additional 2.3 million
subscribers, and related Tempo high-power
satellite assets. Working with local partners,
Hughes also has introduced DIRECTV throughout
Latin America and the Caribbean, and into Japan.
WHAT YOU WILL RECEIVE
IN THE MERGER .................. Each share of U.S. Satellite Broadcasting stock will be
(PAGE 59) canceled and converted into the right to receive, at
your election, a fraction of a share of GM class H stock
or cash.

The value of the GM class H stock or cash you will
receive will depend on the volume-weighted average
trading price of the GM class H stock for the 20 trading
days ending on the second trading day prior to the
merger, as follows--
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<CAPTION>
THEN THE VALUE PAID FOR EACH SHARE OF
U.S. SATELLITE BROADCASTING STOCK,
IF THE 20-DAY AVERAGE PRICE BASED ON THE 20-DAY AVERAGE PRICE,
OF GM CLASS H STOCK IS: WILL BE:
- ----------------------------- --------------------------------------
<S> <C>
More than $47.6821........... $18.00 per share
Between $47.6821
and $27.8146............... Between $18.00 and $10.50 per
share--an amount equal to .3775 times
the 20-day average price
$10.50 per share
Less than $27.8146
but not less than
$19.8675...................
Less than $10.50 per share--an amount
equal to .5285 times the 20-day
average price
Less than $19.8675...........
</TABLE>

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Your election may be subject to adjustment so that--

- not more than 50% of the total merger
consideration will be paid in cash;

- not more than 70% of the total merger
consideration will be paid in GM class H stock; and

- not more than 23,737,518 shares of GM class H stock
will be issued in the merger, subject to adjustment
based on the number of outstanding shares of U.S.
Satellite Broadcasting stock.
For example:

- if you elect to receive cash, and the total amount
of cash elected by U.S. Satellite Broadcasting
shareholders exceeds the 50% limit on cash to be
issued in the merger,
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you will receive some GM class H stock on a pro
rata basis; and

- if you elect to receive GM class H stock, and the
total amount of GM class H stock elected by U.S.
Satellite Broadcasting shareholders exceeds the
70% limit on stock to be issued in the merger, or
exceeds the 23,737,518 share limit as adjusted,
you will receive some cash on a pro rata basis.
WHAT IS GM CLASS H STOCK? .............. GM class H stock is one of two classes of GM common
(PAGE 73) stock. GM owns 100% of the stock of Hughes. The
financial performance of Hughes determines the earnings
per share of GM class H stock and the amounts available
for the payment of dividends on the GM class H stock.
However, holders of GM class H stock would have no
direct claim against the assets of Hughes in the event
of a GM liquidation, insolvency or similar event. Such
holders only have rights in the assets of GM as common
stockholders of GM.
Currently, approximately 26.5% of Hughes' earnings is
allocated to the GM class H stock for purposes of
determining earnings per share and amounts available for
the payment of dividends. The balance is allocated to
GM's other class of common stock. If 60% of the total
merger consideration is paid in GM class H stock, the
20-day average price of GM class H stock is $53.05, and
the value paid for each share of U.S. Satellite
Broadcasting stock is $18.00, the number of shares of GM
class H stock outstanding will increase by approximately
18.3 million shares, and the portion of Hughes' earnings
allocated to the GM class H stock will increase to
approximately 30%. The payment of dividends is
determined by the GM board of directors. Since the
completion in 1997 of a series of transactions which
effected the restructuring of the predecessor of Hughes,
no dividends have been paid on the GM class H stock, nor
are dividends currently expected to be paid in the
foreseeable future on the GM class H stock.
If, based on the assumptions described above,
approximately 18.3 million shares are issued in the
merger, U.S. Satellite Broadcasting shareholders would
hold approximately 15% of the shares of GM class H stock
outstanding after the merger.
OPINIONS OF THE U.S. SATELLITE BROAD-
CASTING FINANCIAL ADVISORS ........... Credit Suisse First Boston Corporation has delivered a
(PAGE 41) written opinion to the U.S. Satellite Broadcasting board
that, as of the date of its opinion, the consideration
to be received in the merger by holders of U.S.
Satellite Broadcasting stock was fair from a financial
point of view.
Goldman, Sachs & Co. has delivered its written opinion
to the U.S. Satellite Broadcasting board that, as of the
date of its opinion, the stock consideration and the
cash consideration to be received by the holders of U.S.
Satellite Broadcasting stock, taken as a unitary
transaction, are fair from a financial point of view to
the holders of U.S. Satellite Broadcasting stock
receiving such consideration.
The opinions of Credit Suisse First Boston and Goldman
Sachs are directed to the U.S. Satellite Broadcasting
board and do not
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constitute recommendations as to how you should vote on
the merger or whether you should elect to receive GM
class H stock or cash.
The written opinions of Credit Suisse First Boston and
Goldman Sachs are attached to this proxy
statement/prospectus as Annex B-1 and Annex B-2 and are
based upon and subject to various qualifications and
assumptions. You should carefully read each opinion in
its entirety.
MATERIAL FEDERAL INCOME TAX
CONSEQUENCES ......................... You should not recognize gain or loss for federal income
(PAGE 48) tax purposes with respect to shares of U.S. Satellite
Broadcasting stock converted only into GM class H stock
in the merger. If you only receive cash, you will
recognize gain or loss in an amount equal to the
difference between the amount of cash you receive and
your adjusted tax basis in your shares of U.S. Satellite
Broadcasting stock. If you receive a combination of GM
class H stock and cash, you should recognize gain in an
amount equal to the lesser of the gain that you realize
in the merger and the amount of cash you receive. For
this purpose, your realized gain is equal to the amount
by which the sum of cash and the fair market value of
the GM class H stock you receive, including fractional
shares, exceeds your aggregate tax basis in your U.S.
Satellite Broadcasting stock. If you receive a
combination of GM class H stock and cash, you should not
be allowed to recognize any loss as a result of the
merger.
RIGHTS OF SHAREHOLDERS WHO OBJECT TO THE
MERGER ............................... Under Minnesota law, you may dissent from the merger and
(PAGE 56) obtain payment for the fair value of your shares. If you
wish to exercise dissenters' rights you must follow the
procedures contained in Section 302A.473 of Minnesota
Business Corporation Act, including providing U.S.
Satellite Broadcasting with a written notice of intent
to demand the fair value of your shares prior to the
special meeting, and you must not vote your shares in
favor of the merger. A copy of the Minnesota law
provisions describing these dissenters' rights is
attached hereto as Annex C.
INTERESTS OF DIRECTORS, OFFICERS AND
AFFILIATES OF U.S. SATELLITE BROAD-
CASTING IN THE MERGER ................ You should be aware that a number of directors, officers
(PAGE 51) and affiliates of U.S. Satellite Broadcasting have
interests in the merger that may be different from yours
and that other transactions will occur that are related
to the merger. As required by the merger agreement.
Hubbard Broadcasting will be given the option to
purchase some of the assets now owned by U.S. Satellite
Broadcasting from Hughes for fair market value,
including assets related to the U.S. Satellite
Broadcasting national broadcast center and the
trademarks and logos of U.S. Satellite Broadcasting. In
addition, U.S. Satellite Broadcasting has sold to
Hubbard Broadcasting its interest in Spring Programming
Partners, LLC, a Delaware limited liability company that
develops and supplies programming, for $100,000. Hubbard
Broadcasting has also agreed to assume U.S. Satellite
Broadcasting's obligations to Spring. Hubbard
Broadcasting also has the
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right to provide programming to DIRECTV. In addition,
Stanley S. Hubbard, Chairman of the U.S. Satellite
Broadcasting board, Stanley E. Hubbard, Chief Executive
Officer, and Robert W. Hubbard, Executive Vice
President, will enter into consulting agreements with
DIRECTV. Hubbard Broadcasting and the Hubbards will be
subject to a non-competition agreement with GM and
Hughes for a period of four years and have agreed to
some restrictions on their rights to sell shares of GM
class H stock which they may receive in the merger. The
aggregate cash consideration to be received by all
executive officers and directors of U.S. Satellite
Broadcasting as a result of the consulting, programming
and other agreements relating to the merger, not
including cash received as merger consideration, will be
approximately $4,238,000.
The U.S. Satellite Broadcasting board recognized these
interests and determined that they did not detract from
the fairness of the merger to the shareholders of U.S.
Satellite Broadcasting.
FEES AND EXPENSES ...................... If the merger agreement is terminated, each party is
(PAGE 69) responsible for its own fees and expenses. Hubbard
Broadcasting has agreed to pay a fee of $50 million to
Hughes if the merger agreement is terminated because
U.S. Satellite Broadcasting shareholders do not approve
the merger agreement.
REGULATORY FILINGS AND APPROVALS ....... The control of some of U.S. Satellite Broadcasting's
(PAGE 56) communications licenses cannot be transferred unless the
FCC has consented to the transfer. FCC consent is a
condition to completion of the merger. The FCC's
International Bureau has issued an order approving the
transfer of control of U.S. Satellite Broadcasting's FCC
licenses to DIRECTV. This order will become final May
11, 1999, unless the Bureau or the full FCC acts to set
it aside before that date.
U.S. SATELLITE BROADCASTING'S PLANS IF
THE MERGER IS NOT COMPLETED .......... If the merger is not completed, U.S. Satellite
Broadcasting intends to remain independent and pursue
its existing strategy to develop its business by
increasing the number of subscribers and developing and
offering new programming.
FORWARD-LOOKING STATEMENTS MAY PROVE
INACCURATE ........................... U.S. Satellite Broadcasting and GM have made
(PAGE 84) forward-looking statements in this document that are
subject to risks and uncertainties. Forward-looking
statements include information concerning possible or
assumed future results of operations of U.S. Satellite
Broadcasting or DIRECTV and Hughes, as well as
statements preceded by, followed by or that include the
words "believes", "expects", "anticipates", "intends",
or similar expressions. You should understand that a
variety of factors, including those discussed in the
Risk Factors section and elsewhere in this document and
in the documents which we incorporate by reference in
this proxy statement/prospectus, could cause the actual
future results of U.S. Satellite Broadcasting or DIRECTV
and Hughes to differ materially from those expressed in
our forward-looking statements. You should not place
undue reliance on these statements.
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SUMMARY FINANCIAL INFORMATION

You should read this summary financial information in conjunction with the
following documents which are incorporated by reference into this proxy
statement/prospectus.

- U.S. Satellite Broadcasting's 1998 Annual Report on Form 10-K;

- GM's 1998 Annual Report on Form 10-K, including information related to
Hughes in Exhibit 99 to that document except for Item 6, Item 7, Item 8,
Item 14(a)(2), and Item 14 Exhibit 12;

- GM's Current Reports on Form 8-K dated April 12, 1999 and filed on April
15, 1999 and April 21, 1999, which restate GM's consolidated financial
statements and Management's Discussion and Analysis of Financial Condition
and Results of Operations to reflect Delphi Automotive Systems Corporation
as discontinued operations;

- PRIMESTAR's consolidated financial statements (including the notes
thereto), included in PRIMESTAR's 1998 Annual Report on Form 10-K; and

- TCI Satellite Entertainment's consolidated financial statements (including
the notes thereto), included in TCI Satellite Entertainment's 1998 Annual
Report on Form 10-K.

The statement of operations data for U.S. Satellite Broadcasting for the
years ended December 31, 1998, 1997, 1996 and 1995 and balance sheet data as of
December 31, 1998, 1997 and 1996 have been derived from U.S. Satellite
Broadcasting's consolidated financial statements audited by Arthur Andersen LLP,
independent public accountants. The U.S. Satellite Broadcasting statement of
operations data for the year ended December 31, 1994 and the balance sheet data
as of December 31, 1995 and 1994 have been derived from the unaudited
consolidated financial statements of U.S. Satellite Broadcasting.

The statement of operations and balance sheet data for GM for all periods
presented have been derived from GM's consolidated financial statements
reflecting Delphi Automotive Systems Corporation as discontinued operations,
audited by Deloitte & Touche LLP, independent public accountants. The statement
of operations data for Hughes for all periods presented and balance sheet data
as of December 31, 1998, 1997, 1996 and 1995 have been derived from Hughes'
consolidated financial statements audited by Deloitte & Touche LLP, independent
public accountants. The balance sheet data for Hughes as of December 31, 1994
has been derived from Hughes' unaudited consolidated financial statements.

Some of the summary financial information is presented on a pro forma basis
to give effect to the merger and to other specified transactions. Pro forma
information is not necessarily indicative of future financial position or
operating results.

On December 17, 1997, Hughes' predecessor, which was also known as Hughes
Electronics Corporation, and GM completed a series of transactions which
restructured Hughes Electronics and which were designed to address strategic
challenges facing the three principal businesses of Hughes Electronics. These
transactions included the tax-free spin-off of the Hughes Electronics defense
electronics business to holders of GM $1 2/3 stock and old class H stock, the
transfer of Delco Electronics Corporation to GM's Delphi Automotive Systems
Corporation business sector, and the recapitalization of the old GM class H
stock into the GM class H stock that is currently outstanding. These
transactions were followed immediately by the merger of the Hughes Electronics
defense electronics business with Raytheon Company.

In connection with these transactions, the telecommunications and space
businesses of Hughes Electronics, consisting principally of its direct-to-home
broadcast, satellite services, satellite systems and network systems businesses,
were contributed to the recapitalized Hughes. These telecommunications and space
businesses, both before and after the recapitalization, are referred to as
Hughes. The financial information presented for Hughes, unless otherwise noted,
represents the financial information of the recapitalized Hughes.

Earnings per share attributable to the GM class H stock is determined based
on the relative amounts of Hughes net income available for the payment of
dividends to holders of GM class H stock and to

11
<PAGE>
holders of GM's other class of common stock. The manner in which this allocation
is made is described in this proxy statement/prospectus under the heading
"Description Of GM Class H Stock--GM Restated Certificate Of Incorporation
Provisions Regarding Dividends."

HISTORICAL AND PRO FORMA PER SHARE DATA

The following tables present historical and pro forma per common share data
for U.S. Satellite Broadcasting and Hughes. Book value per share of GM class H
stock is calculated based on the liquidation rights of GM class H stock, which
are described under "Description Of GM Class H Stock."

The pro forma per common share data as of or for the year ended December 31,
1998 take into account the merger and the PRIMESTAR/Tempo acquisition. The pro
forma earnings per share data has been derived from, and should be read in
conjunction with, the financial data set forth under "Unaudited Pro Forma
Combined Condensed Financial Statements."

UNAUDITED COMPARATIVE PER COMMON SHARE DATA

<TABLE>
<CAPTION>
AS OF OR FOR THE
YEAR ENDED
DECEMBER 31, 1998
-----------------
<S> <C>
U.S. SATELLITE BROADCASTING
Net loss per common share:
Historical................................................................................... $ (.63)
Pro forma equivalent per share(1)............................................................ (.07)
Cash dividends declared per common share:
Historical................................................................................... --
Pro forma equivalent per share(1)............................................................ --
Book value per common share:
Historical................................................................................... $ (.61)
Pro forma equivalent per share(1)............................................................ 4.33

HUGHES
Income from continuing operations before cumulative effect of accounting change per GM class H
share:
Historical................................................................................... $ .70
Pro forma.................................................................................... (.20)
Cash dividends declared per GM class H share:
Historical................................................................................... --
Pro forma.................................................................................... --
Book value per GM class H share:
Historical................................................................................... $ 12.00
Pro forma.................................................................................... 12.76
</TABLE>

- ------------------------

(1) The pro forma equivalent per share amounts have been calculated assuming
each outstanding share of U.S. Satellite Broadcasting stock is converted
into .3393 shares of GM class H stock upon completion of the merger.

12
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA

The summary consolidated financial data set forth below represent the
historical financial information for U.S. Satellite Broadcasting, GM and Hughes.

U.S. SATELLITE BROADCASTING SUMMARY CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- -----------
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.................................................... $ 550,801 $ 456,619 $ 292,624 $ 107,926 $ 5,132
Net operating loss.......................................... (60,719) (92,122) (99,066) (82,364) (49,471)
Net loss.................................................... (56,603) (87,306) (104,959) (91,378) (56,864)
Net loss per share.......................................... (0.63) (0.97) (1.17) (1.02) (0.63)
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- ---------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>

BALANCE SHEET DATA
Total assets........................................................ $ 190,111 $ 206,310 $ 217,354 $ 149,571 $ 130,472
Long-term debt...................................................... -- -- -- 128,456 68,775
Shareholders' equity (deficit)...................................... (54,470) 2,099 89,477 (48,972) 41,728
</TABLE>

13
<PAGE>
GM SUMMARY CONSOLIDATED FINANCIAL DATA

$1-2/3 par value common stock
Basic earnings per share (EPS) from continuing operations... $ 4.40 $ 8.52 $ 5.08 $ 5.57 $ 3.59
Basic (loss) earnings per share from discontinued
operations................................................ (0.14) 0.18 0.98 1.71 1.63
Diluted EPS from continuing operations...................... 4.32 8.45 5.04 5.52 3.54
Diluted (loss) earnings per share from discontinued
operations................................................ (0.14) 0.17 0.98 1.69 1.61
Cash dividends declared per share........................... 2.00 2.00 1.60 1.10 0.80

GM class H stock subsequent to the Hughes transactions(1)
Basic EPS from continuing operations........................ 0.68 0.02 -- -- --
Diluted EPS from continuing operations...................... 0.68 0.02 -- -- --

GM class H stock prior to the Hughes transactions(2)
Basic EPS from continuing operations........................ -- 2.30 1.83 1.39 1.46
Basic EPS from discontinued operations...................... -- 0.87 1.05 1.38 1.16
Diluted EPS from continuing operations...................... -- 2.30 1.83 1.39 1.46
Diluted EPS from discontinued operations.................... -- 0.87 1.05 1.38 1.16
Cash dividends declared per share........................... -- 1.00 0.96 0.92 0.80

Class E common stock
Basic EPS from discontinued operations...................... -- -- 0.04 1.96 1.71
Diluted EPS from discontinued operations.................... -- -- 0.04 1.96 1.71
Cash dividends declared per share........................... -- -- 0.30 0.52 0.48

BALANCE SHEET DATA:
Total assets.................................................. $ 246,345 $ 221,400 $ 215,690 $ 208,898 $ 186,141
Long-term debt(3)............................................. 7,118 5,669 5,352 4,100 5,047
GM-obligated mandatorily redeemable preferred securities of
subsidiary trusts........................................... 220 222 -- -- --
Stockholders' equity.......................................... 15,052 17,584 23,413 23,310 12,814
</TABLE>

- ------------------------------

(1) Amounts present the earnings attributable to GM class H stock subsequent to
its recapitalization on December 17, 1997, related to Hughes, consisting
principally of its direct-to-home broadcast, satellite services, satellite
systems and network systems businesses.

(2) Amounts present the earnings attributable to GM class H stock prior to its
recapitalization on December 17, 1997, related to Hughes Electronics,
consisting principally of its defense electronics, automotive electronics
and telecommunications and space businesses.

(3) Calculated from Automotive, Electronics and Other Operations only.

14
<PAGE>
HUGHES SUMMARY CONSOLIDATED FINANCIAL DATA

Earnings per share attributable to class H stock(1):
Basic and diluted earnings per share from continuing operations
before extraordinary item and cumulative effect of accounting
change............................................................ $ 0.70 $ 1.07 $ 0.48 $ 0.23 $ 0.30
Discontinued operations........................................... -- 0.16 (0.02) (0.16) (0.14)
Extraordinary item................................................ -- (0.05) -- -- --
Cumulative effect of accounting change............................ (0.02) -- -- -- --
--------- --------- --------- --------- ---------
Basic and diluted earnings per share................................ $ 0.68 $ 1.18 $ 0.46 $ 0.07 $ 0.16
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Cash dividends declared per share..................................... -- -- -- -- --

OTHER DATA:
Depreciation and amortization......................................... 455 317 216 201 161
Capital expenditures.................................................. 1,429 827 449 442 399
</TABLE>

- ------------------------------

(1) Earnings per share for the years prior to 1998 do not reflect the earnings
attributable to GM class H stock on a historical basis. Earnings per share
for the years prior to 1998 present the financial results that would have
been achieved relative to the GM class H stock had they been calculated on
the performance of the telecommunications and space businesses of Hughes
Electronics.

15
<PAGE>
SELECTED UNAUDITED PRO FORMA FINANCIAL DATA

The following unaudited selected pro forma financial data combines the
historical results of Hughes, U.S. Satellite Broadcasting, Primestar and TCI
Satellite Entertainment, for the year ended December 31, 1998, giving effect to
the merger and the PRIMESTAR/Tempo acquisition as if each had occurred on
January 1, 1998 for income statement data and December 31, 1998 for balance
sheet data. See "Where You Can Find More Information" and "Unaudited Pro Forma
Combined Condensed Financial Information."

<TABLE>
<CAPTION>
AS OF OR FOR THE
YEAR ENDED
DECEMBER 31, 1998
-----------------
(DOLLARS IN
MILLIONS, EXCEPT
PER SHARE
AMOUNTS)
<S> <C>
INCOME STATEMENT DATA
Revenues..................................................................................... $ 7,802
Operating loss............................................................................... (252)
Loss from continuing operations before cumulative effect of accounting change................ (107)
Loss per share from continuing operations before cumulative effect of accounting change...... (0.20)

BALANCE SHEET DATA
Total assets................................................................................. 16,181
Long-term debt............................................................................... 779
Total owner's equity......................................................................... 9,585
</TABLE>

MARKET PRICE OF U.S. SATELLITE BROADCASTING CLASS A STOCK

The class A stock of U.S. Satellite Broadcasting is listed on the Nasdaq
National Market under the symbol "USSB". The following table sets forth, for the
calendar quarters indicated, the high and low closing sales prices for the class
A stock as reported on Nasdaq, based on published financial sources, for the
periods indicated. The common stock of U.S. Satellite Broadcasting is not listed
on Nasdaq and is

16
<PAGE>
automatically convertible into class A stock if transferred to a holder that is
not an affiliate of a current holder of common stock.

<TABLE>
<CAPTION>
CALENDAR YEAR HIGH LOW
- ------------------------------------------------------------------------ --------- ---------
<S> <C> <C>
1996
First Quarter (commencing February 1, 1996)........................... $ 34.750 $ 27.750
Second Quarter........................................................ 37.750 31.313
Third Quarter......................................................... 38.000 22.000
Fourth Quarter........................................................ 23.000 9.750

1997
First Quarter......................................................... $ 14.250 $ 9.375
Second Quarter........................................................ 11.750 8.250
Third Quarter......................................................... 9.250 8.250
Fourth Quarter........................................................ 10.750 7.625

1998
First Quarter......................................................... $ 10.250 $ 7.563
Second Quarter........................................................ 11.688 8.938
Third Quarter......................................................... 11.688 5.625
Fourth Quarter........................................................ 13.750 5.000

1999 (through April 13)................................................. $ 17.688 $ 13.313
</TABLE>

U.S. Satellite Broadcasting has not paid any cash dividends on its class A
stock and does not intend to pay cash dividends for the foreseeable future.

The following table compares the high and low sales prices of the class A
stock on an historical and equivalent per share basis and the high and low sales
prices of the GM class H stock, as of December 11, 1998, the date preceding
public announcement of the proposed merger.

<TABLE>
<CAPTION>
HIGH SALES PRICE LOW SALES PRICE
PER SHARE ON PER SHARE ON
CLASS OF STOCK 12/11/98 12/11/98
- -------------------------------------------------- -------------------- --------------------
<S> <C> <C>
Class A stock of U.S. Satellite Broadcasting
Historical...................................... $ 9.625 $ 8.750
Equivalent(1)................................... 13.063 12.766
GM class H stock
Historical...................................... $ 38.500 $ 37.625
</TABLE>

- ------------------------

(1) The equivalent share price of class A stock has been calculated assuming
each outstanding share of class A stock is converted into .3393 shares of GM
class H stock upon completion of the merger.

17
<PAGE>
RISK FACTORS

RISK FACTORS RELATING TO THE BUSINESS OF HUGHES

HUGHES COULD FAIL TO MAINTAIN LEADING TECHNOLOGICAL CAPABILITIES

The rapid technological changes and innovation inherent in the
telecommunications and space industry could cause the products and services
offered by Hughes to become obsolete. If the new technologies on which Hughes is
currently focusing its research and development investments fail to achieve
acceptance in the marketplace, Hughes would suffer a material adverse effect on
its future competitive position and results of operations. For example,
competitors of Hughes could be the first to obtain proprietary technologies that
are perceived by the market as being superior. In addition, after substantial
research and development expenditures, one or more of the technologies under
development by Hughes could become obsolete even prior to its introduction.

Hughes' operating results will depend to a significant extent on its ability
to continue to introduce new products and services on a timely basis and to
reduce costs of existing products and services. We cannot assure you that Hughes
will successfully identify new product or service opportunities and develop and
market these opportunities in a timely manner. The success of new product
development depends on many factors, including proper identification of customer
needs, cost, timely completion and introduction, differentiation from offerings
of competitors and market acceptance.

HUGHES COULD HAVE INADEQUATE ACCESS TO CAPITAL FOR GROWTH

Hughes may not be able to raise adequate capital to complete some or all of
its business strategies or to react rapidly to changes in technology, products
and services. Hughes believes that key success factors in the telecommunications
and space industry include superior access to capital and financial flexibility.
Industry participants often face high capital requirements in order to take
advantage of new market opportunities, respond to rigorous competitive pressures
and react quickly to changes in technology.

Hughes expects the global telecommunications services market to continue to
grow due to the high demand for communications infrastructure and the
opportunities created by industry deregulation. Many of Hughes' competitors are
committing substantial capital and, in many instances, are forming alliances to
acquire or maintain market leadership. Hughes' strategy is to build on its
experience in satellite technology to be a leader in providing emerging
telecommunications products and services. This strategy will require substantial
investments of capital over the next several years. Hughes could fail to satisfy
its capital requirements in the future, whether through lack of competitive
access to capital markets, GM's overall financial condition and credit rating
objectives or otherwise. GM's ability to issue class H stock as a means of
funding Hughes' capital requirements may be limited in the event of the
enactment of a proposal to amend the Internal Revenue Code that is included in
the Clinton administration's budget proposal for the fiscal year 2000. This
amendment, which is proposed to apply to tracking stock issued on or after the
date of enactment, would require GM to recognize gain attributable to Hughes for
federal income tax purposes when it issues class H stock.

HUGHES IS VULNERABLE TO SATELLITE FAILURE

DIRECTV and PanAmSat both own and utilize satellites in their businesses.
The complete or partial loss of a satellite, in-orbit or during launch, could
have a material adverse impact on the business of PanAmSat and/or DIRECTV.
Orbiting satellites are subject to the risk of failing prematurely due to, among
other things, mechanical failure, a collision with objects in space or an
inability to maintain proper orbit. Satellites not yet launched are subject to
the risk of launch failure, destruction and damage. With respect to both
in-orbit failures and launch failures, insurance carried by PanAmSat and Hughes
does not compensate for business interruption or loss of future revenues or
customers. In addition, any future in-

18
<PAGE>
orbit failures involving satellites built by Hughes could adversely impact
satellite sales by Hughes Space and Communications.

These risks were highlighted during 1998, when four Hughes-built satellites,
three owned and operated by PanAmSat and the fourth owned by DIRECTV,
experienced the failure of a primary spacecraft control processor. With the
exception of the Galaxy IV satellite, owned and operated by PanAmSat, control of
the satellites was automatically switched to a backup processor and the
spacecraft are operating normally. The backup processor on the Galaxy IV
satellite had also failed, however, resulting in the loss of the satellite. An
extensive investigation by Hughes revealed that electrical shorts involving
tin-plated relay switches were the most likely cause of the primary spacecraft
control processor failure. Hughes believes the probability of a primary and a
backup processor failing in one satellite is low.

Battery anomalies have occurred in two other Hughes-built PanAmSat
satellites. In both cases, battery cells have failed, resulting in the need to
briefly shut off a number of transponders during twice-yearly eclipse periods.
It is possible that service to full-time customers could be interrupted for
brief periods during future eclipse periods, or that additional battery cell
failures will occur in the future. Such future service interruptions, depending
on their extent, could result in claims by affected customers for termination of
their transponder agreements.

In addition, following the launch of a non-Hughes built PanAmSat satellite,
an error by the satellite's manufacturer was discovered that affected the
geographical coverage or flexibility of a number of the transponders on the
satellite. PanAmSat is evaluating the impact of the error and currently believes
that a portion of those transponders will not be marketable for their intended
purpose, although the affected transponders may be capable of generating revenue
at a reduced rate.

GRAND JURY INVESTIGATION/STATE DEPARTMENT REVIEW COULD RESULT IN SANCTIONS

There is a pending grand jury investigation into whether Hughes should be
accused of criminal violations of the export control laws arising out of the
participation of two of its employees on a committee formed to review the
findings of Chinese engineers regarding the crash of a Long March rocket in
China in 1996. Hughes is also subject to the authority of the State Department
to impose sanctions for non-criminal violations of the Arms Export Control Act.
The possible criminal and/or civil sanctions could include fines as well as
debarment from various export privileges and participation in government
contracts. Hughes does not expect the grand jury investigation or State
Department review to result in a material adverse effect upon its business.
However, there can be no assurance as to those conclusions. In addition, a
congressional committee chaired by Representative Cox has prepared a report that
is expected to be publicly released within the month of April. This report may
contain negative commentary about the compliance of U.S. satellite
manufacturers, including Hughes, with the export control laws.

THE FEDERAL GOVERNMENT COULD ADVERSELY IMPACT THE ABILITY OF THE U.S.
SATELLITE INDUSTRY TO COMPETE FOR FOREIGN SATELLITE COMMERCE

The Federal Government has broad discretion over the issuance of export
licenses for the sale to foreign customers and/or overseas launches of
commercial communication satellites. Hughes sells a substantial number of
satellites to foreign customers and launches a substantial number of satellites
overseas. Effective March 1999, Congress directed that satellites and their
components be placed on the munitions list and made subject to the export
licensing jurisdiction of the State Department. Prior to March 1999, satellites
were classified as dual use exports under the jurisdiction of the Department of
Commerce. It is anticipated that future licenses for satellite exports will not
be granted in the same manner and time frame as was previously the case, which
could adversely impact the ability of not only Hughes, but all other domestic
satellite manufacturers, to compete on equal footing with international
satellite manufacturers for foreign satellite sales.

19
<PAGE>
In February 1999, the Department of Commerce notified Hughes that it
intended to deny the export licenses required by Hughes to fulfill its
contractual obligations to Asia-Pacific Mobile Telecommunications Satellite Pte.
Ltd., a Singapore-based company with a majority interest held by Chinese
entities. As a result, Asia-Pacific Mobile Telecommunications and Hughes
terminated the contract, resulting in a pre-tax charge to earnings of $92
million in the first quarter of 1999.

DISPUTES WITH RAYTHEON REGARDING FORMER DEFENSE OPERATIONS COULD RESULT IN A
MATERIAL PAYMENT FROM HUGHES TO RAYTHEON

As part of the 1997 spin-off of Hughes' defense business and the subsequent
merger of that business with Raytheon, agreements entered into by Hughes and
Raytheon provide processes for resolving disputes that might arise in connection
with, among other things, post-closing financial adjustments. Such adjustments
might call for a cash payment between Hughes and Raytheon. Various disputes
currently exist regarding the post-closing adjustments that Hughes and Raytheon
have proposed to one another and related issues regarding the completeness and
accuracy of disclosures made to Raytheon in the period prior to consummation of
the merger. In an attempt to resolve the post-closing adjustment dispute, Hughes
gave notice to Raytheon to commence the arbitration process specified in the
merger agreements. It is possible that the ultimate resolution of the
post-closing financial adjustment and of related disclosure issues may result in
Hughes making a payment to Raytheon that would be material to Hughes. However,
the amount of any payment that either party might be required to make to the
other cannot be determined at this time. Hughes intends to vigorously pursue
resolution of the disputes through the arbitration process, opposing the
adjustments proposed by Raytheon, and seeking the payment from Raytheon that
Hughes has proposed.

RISK FACTORS RELATING TO GM'S DUAL-CLASS COMMON STOCK CAPITAL STRUCTURE

GM CLASS H STOCKHOLDERS HAVE NO DIRECT INTEREST IN HUGHES

GM class H stockholders are stockholders of GM and, as a result, have rights
in the equity and assets of GM rather than Hughes. Although the net income of
Hughes is allocated for accounting purposes to calculate the amounts which may
be used to pay dividends on each class of GM common stock, such allocation does
not result in a physical segregation of the assets of GM or Hughes, or the
establishment of separate accounts or dividend or liquidation preferences. If a
liquidation, insolvency or similar event occurred with respect to Hughes,
creditors of Hughes, as well as GM as the sole stockholder of Hughes, would
receive payment from the assets of Hughes. The holders of GM class H stock would
not be entitled to any payment from the assets of Hughes. See "Description Of GM
Class H Stock."

THERE IS NO ASSURANCE THAT CASH DIVIDENDS WILL EVER BE PAID ON GM CLASS H
STOCK

Please note that there is no assurance that cash dividends will ever be paid
on GM class H stock and such stock may not be an appropriate investment for a
holder that wishes to receive a dividend. Since the completion of the
restructuring of Hughes Electronics in late 1997, the GM board has not paid, and
does not currently intend to pay, cash dividends on GM class H stock. Future
earnings of Hughes are expected to be retained for the development of the
businesses of Hughes. The GM board reserves the right to reconsider from time to
time its policies and practices regarding dividends on GM class H stock and to
pay or not pay, or increase or decrease the dividends paid on GM class H stock
on the basis of GM's consolidated financial position, including liquidity and
other factors, such as the earnings and consolidated results of operations and
financial condition of Hughes. See "Description Of GM Class H Stock--GM Restated
Certificate Of Incorporation Provisions Regarding Dividends" and "--Dividend
Policy."

20
<PAGE>
THE INTERESTS OF GM'S OTHER COMMON STOCKHOLDERS MAY CONFLICT WITH THE
INTERESTS OF GM CLASS H STOCKHOLDERS

The holders of GM class H stock may have different interests than the
holders of GM's other class of common stock, GM $1 2/3 stock, with respect to
various intercompany transactions and other matters. Although these two classes
of common stock are both stocks of GM, they have separate earnings pools and
dividend rights. Under Delaware law, the GM board owes an equal fiduciary duty
to all holders of GM common stock and must act with due care and on an informed
basis in the best interests of GM and all of its stockholders. It is not clear
how these fiduciary duties would be applied in the context of a capital
structure involving multiple classes or series of tracking stock. The officers
and directors of GM may pursue policies and practices and/or transactions that
are different from those that they would pursue if the GM class H stock was the
only class of common stock of GM. The GM board, in the discharge of its
fiduciary duties, oversees, principally through its capital stock committee, the
policies, programs and practices of GM which may give rise to conflicts of
interest between GM's two classes of common stock. However, we cannot assure you
as to the resolution of any such conflicts. See "Description Of GM Class H
Stock" and Annex D, which contains the policy statement of the GM board with
respect to capital stock matters.

TRADING PRICE OF GM CLASS H STOCK COULD BE AFFECTED BY GM RESULTS

The trading prices of the GM class H stock and the GM $1 2/3 stock are
generally affected by different events. A transaction which is beneficial to the
holders of GM $1 2/3 stock may not positively affect the trading price of the GM
class H stock, which generally will be affected by the results of Hughes rather
than GM. However, if GM were to suffer a material adverse event, this could have
an adverse effect on the trading price of the GM class H stock as well as the GM
$1 2/3 stock.

GM BOARD POLICIES AND PRACTICES RELATING TO GM CLASS H STOCK CAN BE CHANGED
WITHOUT STOCKHOLDER APPROVAL

The GM board has adopted a policy statement governing matters relating to
the GM class H stock, which is subject to change at any time without stockholder
approval. The policy statement sets principles for, among other things,
transactions between GM and Hughes and the relationship between dividends, if
any, to be paid by Hughes to GM and by GM to the GM class H stockholders. The GM
board may adopt additional policies, practices or policy statements which could
have a significant impact on the GM class H stock, in each case without the
approval of GM's common stockholders.

YOUR INVESTMENT IN GM CLASS H STOCK MAY BE CHANGED WITHOUT YOUR CONSENT

All outstanding shares of GM class H stock are subject to potential
mandatory recapitalization into shares of GM $1 2/3 stock. Any recapitalization
would significantly change both the form and nature of the investment of holders
of GM class H stock, without the consent of such holders. Any recapitalization
can be effected at a 120% exchange ratio at any time after December 31, 2002 in
the sole discretion of the GM board, or automatically, if GM disposes of 80% or
more of the business of Hughes to a person, entity or group of which GM is not
the majority owner. See "GM Class H Stock--Recapitalization And Certain Other
Transactions." GM cannot predict the impact on the market prices of the GM
$1 2/3 stock or the effect that the exercise by GM of its recapitalization right
would have. Consistent with the GM restated certificate of incorporation,
applicable corporate law and the GM board policy statement referred to above,
the GM board may submit from time to time to the GM common stockholders for
their consideration and approval one or more alternative transactions on terms
different from those provided for by these provisions concerning
recapitalization of GM class H stock at a 120% exchange ratio. See "Description
Of GM Class H Stock."

21
<PAGE>
RISK FACTOR RELATING TO COMPLETION OF MERGER

PROPOSED TAX CHANGES COULD PREVENT COMPLETION OF MERGER

If the proposed amendment to the Internal Revenue Code discussed in the risk
factor entitled "Hughes Could Have Inadequate Access To Capital For Growth" were
to be enacted so as to apply to the issuance of GM class H stock in the merger,
the merger could not occur as presently structured, because one of the
conditions to the consummation of the merger, i.e., the delivery of the required
tax opinions, could not be met. There can be no assurance that this proposal
will be enacted as currently formulated, if at all, or that if enacted, it will
be enacted prior to the completion of the merger.

THE SPECIAL MEETING

QUORUM; REQUIRED VOTE

Under Minnesota law, the approval of the merger agreement will require the
affirmative vote of a majority of the voting power of the U.S. Satellite
Broadcasting stock. As of the record date, there were 30,446,950 shares of class
A stock issued and outstanding held by approximately 669 holders of record and
59,382,825 shares of common stock held by approximately 16 holders of record.
The class A stock and common stock will vote together, as a single class, on the
approval of the merger agreement. The total voting power of the U.S. Satellite
Broadcasting stock is 624,275,200 votes, and 312,137,601 votes are necessary for
a quorum and to approve the merger agreement.

In a shareholders agreement with Hughes, Hubbard Broadcasting agreed to vote
shares of U.S. Satellite Broadcasting constituting 19.9% of the outstanding
voting power of the U.S. Satellite Broadcasting stock in favor of the merger
agreement. In addition, Hubbard Broadcasting indicated its intention to vote the
rest of the shares of U.S. Satellite Broadcasting owned by it, even though not
subject to the shareholders agreement, in favor of the merger agreement. As of
the record date, Hubbard Broadcasting owned 74.5% of the total voting power in
U.S. Satellite Broadcasting stock.

VOTING OF PROXIES

Although you may not be able to attend the special meeting in person, you
have the opportunity to vote by using the proxy solicited by the U.S. Satellite
Broadcasting board which is enclosed with this proxy statement/prospectus. Your
vote is important. Please complete, sign and return your proxy form. The
individuals designated as proxies will vote your shares according to your
instructions. If you sign and return your proxy and do not specify your choice,
your shares will be voted for the merger, as the U.S. Satellite Broadcasting
board has recommended. If you prefer, you may also vote by ballot at the special
meeting, which will cancel any proxy you previously gave.

Shareholders of U.S. Satellite Broadcasting will not be entitled to present
any matter for consideration at the special meeting, and no business is to be
acted upon at the special meeting other than the merger agreement.

Shares of U.S. Satellite Broadcasting stock represented at the special
meeting by a properly executed, dated and returned proxy will be treated as
present at the special meeting for purposes of determining a quorum, without
regard to whether the proxy is marked as casting a vote or abstaining.

If you return a signed proxy form indicating that you abstain from voting or
if you attend the special meeting but choose to abstain from voting on the
proposal, you will be considered present at the meeting for purposes of
determining if a quorum is present and not voting in favor of the proposal.
Because the merger agreement passes only if a majority of the outstanding voting
power of U.S. Satellite Broadcasting stock votes in favor, your abstention will
have the same effect as if you had voted against the proposal. In addition, if a
broker or other nominee holds your shares, but is not empowered to vote your
shares in favor of or against the merger, it will be as if you voted against
approval of the merger agreement.

22
<PAGE>
You are also asked to provide the individuals set forth in the enclosed
proxy card with the power to vote for one or more adjournments of the special
meeting to permit further solicitations of proxies in favor of approval of the
merger agreement. No proxy that is voted against the approval of the merger
agreement will be voted in favor of any such adjournment.

REVOCABILITY OF PROXIES

After you have signed and returned the enclosed proxy card, you may revoke
it at any time until it is voted at the special meeting. You can revoke your
proxy either by submitting a signed written revocation to the Secretary of U.S.
Satellite Broadcasting, by submitting a signed proxy bearing a later date, or by
voting by ballot at the special meeting. Attendance at the special meeting will
not, in and of itself, constitute revocation of a proxy.

SOLICITATION OF PROXIES

U.S. Satellite Broadcasting will bear the cost of the solicitation of
proxies from its shareholders, including the costs of preparing, filing,
printing and distributing this proxy statement/prospectus and any other
solicitation materials that are used. In addition to solicitation by mail, the
directors, officers and employees of U.S. Satellite Broadcasting may solicit
proxies from shareholders of U.S. Satellite Broadcasting by telephone or
telegram or by other means of communication. U.S. Satellite Broadcasting's
directors, officers and employees will not be compensated but may be reimbursed
for reasonable out-of-pocket expenses in connection with such solicitation.
Arrangements will also be made with brokerage houses and other custodians,
nominees and fiduciaries for the forwarding of solicitation material to the
beneficial owners of stock, and U.S. Satellite Broadcasting will reimburse such
custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses.

YOU SHOULD NOT SEND U.S. SATELLITE BROADCASTING STOCK CERTIFICATES WITH YOUR
PROXY CARDS. IF THE MERGER IS COMPLETED, HUGHES WILL SEND YOU TRANSMITTAL FORMS
AND INSTRUCTIONS FOR EXCHANGING YOUR STOCK CERTIFICATES AND FOR ELECTING CASH OR
STOCK AS THE FORM OF THE MERGER CONSIDERATION.

THE PARTIES TO THE MERGER

U.S. SATELLITE BROADCASTING

U.S. Satellite Broadcasting is a provider of subscription television
programming to households throughout the continental United States via
high-power direct broadcast satellite. U.S. Satellite Broadcasting broadcasts a
high quality digital television signal using a digital satellite broadcasting
system that it shares with DIRECTV. Programming is available to virtually all of
the approximately 98 million U.S. television households upon the purchase of a
DIRECTV/USSB unit, which features an 18" mini-dish. U.S. Satellite Broadcasting
currently delivers 25 channels of video programming, including premium networks
such as:

- Multichannel HBO-Registered Trademark---7 channels;

- Multichannel SHOWTIME-Registered Trademark---5 channels;

- Multichannel CINEMAX-Registered Trademark---3 channels;

- Multichannel THE MOVIE CHANNEL-Registered Trademark---2 channels;

- FLIX-Registered Trademark-;

- the SUNDANCE CHANNEL-Registered Trademark-; and

- fXM: Movies from FOX.

The programming delivered by U.S. Satellite Broadcasting includes over 800
movies per month. U.S. Satellite Broadcasting also broadcasts original news
programming on the All News Channel-TM- and events and specials on a
pay-per-view basis. As of December 31, 1998, U.S. Satellite Broadcasting had
over 2 million subscribers.

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U.S. Satellite Broadcasting broadcasts from a single satellite, DBS-1, which
is able to reach the entire continental United States. DBS-1 was manufactured by
Hughes and is owned jointly by U.S. Satellite Broadcasting and DIRECTV. U.S.
Satellite Broadcasting and DIRECTV were the first domestic providers of
high-power direct broadcast satellite programming. U.S. Satellite Broadcasting
and DIRECTV share the use of the technology underlying the DIRECTV/USSB system,
cooperate to promote and build awareness of the DIRECTV/USSB system and
currently offer complementary programming packages. U.S. Satellite Broadcasting
estimates that the majority of households which receive DIRECTV also receive
USSB-Registered Trademark- programming. In addition to its FCC license to
broadcast from 101 DEG. west longitude, U.S. Satellite Broadcasting also holds
an FCC authorization to construct and launch a high-power direct broadcast
satellite system consisting of three transponders at the 110 DEG. west longitude
orbital location. On April 1, 1999, the FCC staff issued an order approving the
transfer of control of U.S. Satellite Broadcasting's license at 101 DEG. west
longitude and its authorization to construct and launch at 110 DEG. west
longitude to DIRECTV. See "Regulatory Filings And Approvals".

U.S. Satellite Broadcasting was incorporated in Minnesota in 1981. For more
information on U.S. Satellite Broadcasting, see U.S. Satellite Broadcasting's
1998 Annual Report on Form 10-K filed on April 6, 1999, which is incorporated
into this document by reference, as well as the other documents incorporated
into this document by reference. See "Where You Can Find More Information."

GENERAL MOTORS

GM is primarily engaged in the automotive and electronics industries. GM is
the world's largest manufacturer of automotive vehicles. GM also has financing
and insurance operations and, to a lesser extent, engages in other industries.
GM participates in the automotive industry through its General Motors Automotive
operating segment, and its majority-owned subsidiary, Delphi Automotive Systems
Corporation. General Motors Automotive is composed of four regional operations:
GM North America, GM Europe, GM Asia/Pacific and GM Latin
America/Africa/Mid-East. GM North America designs, manufactures and markets
Chevrolet, Pontiac, GMC, Oldsmobile, Buick, Cadillac and Saturn vehicles
primarily in North America. GM's international operations design, manufacture
and market Opel, Vauxhall, Holden, Isuzu, Saab, Chevrolet, GMC and Cadillac
vehicles. Delphi is a diversified supplier of components, systems and modules to
the automotive industry.

In February 1999, Delphi completed an initial public offering of
approximately 17.7% of its common stock. As a result, GM now owns approximately
82.3% of Delphi. On April 12, 1999, the GM board of directors approved the
complete separation of Delphi from GM principally by means of a tax-free
spin-off to holders of GM $1 2/3 stock. To effect the Delphi spin-off, the GM
board declared a dividend on GM $1 2/3 stock consisting of approximately 80.1%
of the outstanding Delphi common stock, payable on May 28, 1999 to holders of
record of GM $1 2/3 stock as of May 25, 1999. GM intends to contribute the
remaining approximately 2.2% of outstanding Delphi common stock owned by it to a
voluntary employees' beneficiary association (VEBA) trust for GM hourly retirees
if GM receives confirmation from the IRS that the VEBA contribution will not
affect the tax-free status of the Delphi spin-off. If GM does not receive such a
confirmation from the IRS on a timely basis, the remaining Delphi common stock
owned by GM will be distributed to holders of GM $1 2/3 stock as part of the
Delphi spin-off.

GM's electronics operations are conducted by Hughes. Hughes designs,
manufactures and markets advanced technology electronic systems, products and
services for the telecommunications and space industries. GM's other industrial
operations include the design, manufacture and marketing of locomotives and
heavy-duty transmissions. GM's financing and insurance operations primarily
relate to General Motors Acceptance Corporation. GMAC provides a broad range of
financial services, including consumer vehicle financing, full-service leasing
and mortgage services and vehicle and homeowner's insurance.

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GM'S FINANCIAL RESULTS FOR THE FIRST QUARTER OF 1999

On April 15, 1999, GM reported an all-time quarterly record of $3.10 basic
earnings per share of GM $1 2/3 stock in the first quarter of 1999 on
consolidated net income of $2.1 billion. That compares with net income of $1.6
billion, or $2.31 per share, in the first quarter of 1998. The results include
Delphi Automotive Systems, which as announced on April 12, 1999 is being spun
off as an independent company and is now classified by GM as a discontinued
operation.

Excluding Delphi, net income and earnings per share from continuing
operations were an all-time quarterly record of $1.8 billion, or $2.73 basic
earnings per share. That compares with $1.4 billion, or $1.96 per share, for
continuing operations in the first quarter of 1998.

Consolidated net sales and revenues in the first quarter of 1999 totaled
$42.4 billion, compared with $40.0 billion for the first quarter of 1998.

Cash, marketable securities and assets of the voluntary employees'
beneficiary association trust invested in fixed-income securities ($3.0 billion)
totaled $16.2 billion at March 31, 1999, compared with $15.4 billion at March
31, 1998, and $13.1 billion at December 31, 1998. These cash amounts exclude
GM's financing and insurance operations.

For more information on GM, see GM's 1998 Annual Report on Form 10-K except
for Item 6, Item 7, Item 8, Item 14(a)(2), and Item 14 Exhibit 12, filed on
March 10, 1999, the Current Reports on Form 8-K dated April 12, 1999 and filed
April 15, 1999 and April 21, 1999, and the Current Report on Form 8-K dated
April 14, 1999 and filed April 15, 1999, which are incorporated into this
document by reference, as well as the other documents incorporated into this
document by reference. See "Where You Can Find More Information."

HUGHES

Hughes is a leading worldwide provider of satellite-based video, data and
telephony services and manufacturer of communications satellites and wireless
and other telecommunications equipment. Hughes conducts its operations in four
principal segments: satellite systems, network systems, direct-to-home broadcast
and satellite services.

SATELLITE SYSTEMS

The satellite systems segment of Hughes consists of the operations of Hughes
Space and Communications Company, which:

- is a leading provider of communications satellites based on the number of
satellites in service and recently awarded contracts.

- in 1963, was the manufacturer of the world's first communications
satellite capable of remaining directly above a fixed location on the
earth, known as a geostationary satellite;

- is the manufacturer of approximately 40% of the geostationary commercial
communications satellites now in service worldwide; and

- is a manufacturer of spacecraft and spacecraft-based electronic equipment
for a variety of defense, NASA and other government space missions.

As of December 31, 1998, Hughes Space had outstanding orders to construct 38
communications satellites for companies and government agencies in several
countries, representing over $4.3 billion in backlog. In 1999, 19 satellites
built by Hughes Space are scheduled for launch. Launch schedules are subject to
a number of factors, some of which are beyond the control of Hughes Space,
including construction delays, weather, availability of launch vehicles, launch
vehicle problems and governmental and political pressures. Launch difficulties
and delays can result in increased costs to Hughes Space.

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Hughes believes that Hughes Space's leadership position in the competitive
satellite manufacturing industry results from Hughes Space's technological
superiority in satellite design, production and operation. Since the launch of
Hughes Space's first satellite in 1963, its satellites have accumulated over
1,000 years of in-orbit experience, with channel availability of 99.1% on HS
376, HS 601 and other current generation commercial satellites. Approximately
95% of Hughes Space's satellites have remained in service past their originally
scheduled retirement dates.

Hughes Space's technological capabilities have enhanced its satellites and
improved cost effectiveness through the use of higher power and the expansion of
its satellite product line. Each of these strengthens its leadership position
and expands the market for satellites as a whole. For example, Hughes Space has
developed a family of satellite structures, electronics, propulsion and power
systems, which can be replicated at relatively low cost in a variety of
commercial and defense configurations. In addition, Hughes Space has applied
signal compression and other methods to enhance the efficiency of transponders.
The newest product in this family is the HS 702 satellite, which offers
substantially higher power levels than those previously achieved. Advancements
in digital electronics, high power amplifiers, antenna implementations and
propulsion systems offer improved performance capabilities of satellites built
by Hughes Space, which Hughes Space expects will provide it with a competitive
advantage.

In order to enhance its competitive position in both the government and
commercial satellite manufacturing markets, Hughes Space continues to work to
lower its costs and improve productivity and quality. Since 1992, Hughes Space
has improved its satellite manufacturing productivity by approximately 64%,
measured by satellite sales dollars per employee. In addition, Hughes Space has
secured commitments for 45 launch vehicles over the next several years, which
will facilitate its access to space at competitive costs.

NETWORK SYSTEMS

Hughes' network systems segment consists of the operations of Hughes Network
Systems, which is:

- a provider of a broad range of satellite and ground-based
telecommunications products and services;

- the world's leading supplier of satellite-based private business networks,
based on an estimated worldwide market share of 55-60%, utilizing highly
flexible communications systems with the capacity to link thousands of
locations for data exchange, voice communications and video conferencing;

- a provider of shared-hub systems that allow users with more modest
communications needs to share usage of Hughes Network's satellite ground
stations and networks;

- a provider of wireless access networks and digital cellular mobile
systems; and

- a provider of satellite-based access to the Internet through its
DirectPC-TM- service.

Hughes Network is the leading supplier, based on market share, of very small
aperture terminals utilized in satellite-based private business networks, Hughes
Network has delivered or received orders for more than 300,000 of these
terminals for use in the private networks of companies, government agencies,
universities and research institutions. These include more than 9,000 terminals
installed in the GM Pulsar network, the world's largest private business
network. Since 1987, Hughes Network has sold private business networks to a
variety of customers worldwide, including DaimlerChrysler, Ford, Toyota,
Chevron, Texaco, Mobil, Amoco, Wal-Mart, Toys "R" Us, Jusco (Japan), the China
Ministry of Posts and Telecommunications and France Telecom. Hughes believes
that sales to international customers will increase, particularly as government
regulation of private ownership of such networks decreases. As of December 31,
1998, Hughes Network had sold private networks for use in over 85 countries in
North America, Europe, Asia, Latin America and Africa.

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Hughes Network believes that it has developed a unique and flexible system
that uses common hardware and software modules for multiple wireless
telecommunications applications, including analog and digital mobile cellular,
mobile data and fixed wireless telephony.

Hughes believes that significant opportunities exist in utilizing digital
access technologies to provide broadband fiber quality wireless access to
businesses worldwide, for fixed wireless telecommunications networks and mobile
communications systems in areas with deficient communications infrastructures.
For example, on September 30, 1997, the government of India issued to Hughes
Ispat Limited, a limited liability company organized under the laws of India in
which Hughes has an ownership interest, a license to provide basic
telecommunications services within the Indian state of Maharashtra. Service
commenced in October 1998. A letter of intent has also been signed for Hughes
Ispat Limited to provide similar services to the Indian state of Karnataka. In
addition, Hughes Network will be the primary wireless equipment provider in
connection with both of these services.

Hughes Network believes that its technologies and other capabilities
position it to become a leading provider of satellite-based mobile
communications equipment and services. Several programs that have been awarded
in recent years to provide satellite ground telecommunications networking
equipment have established Hughes Network's credentials in this sector.

In 1996, Hughes Network began manufacturing subscriber equipment for
DIRECTV-Registered Trademark- and is now the second leading supplier of this
equipment in terms of volume. In addition, Hughes Network developed DirecPC-TM-,
a satellite-based information delivery service that uses a small antenna and
high-speed digital transmission to make software, documents, desk-top video,
games, news and other information accessible through personal computers. For
example, through DirecPC's Turbo Internet-TM- service, a personal computer user
can download data and video at speeds up to 400 kilobits per second.

DIRECT-TO-HOME BROADCAST

The direct-to-home broadcast segment of Hughes consists of the operations of
DIRECTV Enterprises, Inc., Galaxy Latin America and DIRECTV Japan. In addition,
on January 22, 1999, Hughes entered into agreements with PRIMESTAR, Inc., a
direct-to-home broadcast company operating in the United States, and Tempo
Satellite, Inc., to acquire PRIMESTAR's 2.3 million subscriber direct broadcast
satellite business and the related satellite assets of Tempo Satellite, a wholly
owned subsidiary of TCI Satellite Entertainment, Inc. See "--Recent
Developments--PRIMESTAR And Tempo Acquisitions."

UNITED STATES. The direct-to-home broadcast business in the United States
is conducted by DIRECTV Enterprises, Inc., which is:

- the distributor of DIRECTV-Registered Trademark- programming service to
households in the 48 contiguous states in the United States;

- the first high-powered, all digital direct-to-home television distribution
service in North America;

- the leader in the direct broadcast satellite market in the United States,
based on number of subscribers; and

- a competitor of cable television, broadcast television and other
entertainment services, including video rentals.

Introduced in June 1994, DIRECTV-Registered Trademark- is broadcast from
three Hughes Space HS 601 satellites directly to 18-inch receiving antennae and
decoding boxes located in households and businesses. DIRECTV Enterprises uses 11
of the 16 transponders on the first satellite and all transponders on the second
and third satellites for DIRECTV-Registered Trademark- services. A fourth
satellite currently being built that will be launched in the third quarter of
1999, will provide additional channels and allow for back-up capability to the
satellite fleet. Hughes sold the remaining five transponders on the first
satellite to U.S. Satellite Broadcasting for use in its own programming service.
Programming is received and broadcast from DIRECTV Enterprise's 55,000 square
foot broadcast facility in Castle Rock, Colorado. In mid-1999, DIRECTV
Enterprises will complete

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a second broadcast center in Los Angeles which will provide expanded capacity
for additional channels, as well as back-up in case of a failure at Castle Rock.
The receiving equipment for direct-to-home television services is manufactured
by a number of name brand consumer electronics companies. Equipment prices have
fallen steadily from the initial $699-$899 range in June 1994 to approximately
$99-$149 today. The technology for the DIRECTV-Registered Trademark- service is
based, in part, on Hughes' satellite and satellite-based services experience and
in part, on the expertise of the consumer electronics manufacturers which
produce equipment. DIRECTV Enterprises has outsourced many of the significant
facets of consumer marketing, the operation of the related infrastructure and
support services to vendors experienced in the respective fields.

Hughes believes that DIRECTV Enterprises can compete effectively through a
combination of its high quality video, audio and customer service, broad range
of programming and extensive distribution. Both the
DIRECTV-Registered Trademark- programming service and equipment are currently
distributed through consumer electronics stores such as Circuit City, Radio
Shack and Best Buy, and satellite television dealers. In addition, under an
arrangement with the National Rural Telecommunications Cooperative,
DIRECTV-Registered Trademark- services are offered to member cooperatives
located primarily in rural areas of the continental United States.

PRIMESTAR, U.S. Satellite Broadcasting and Echostar Communications
Corporation are the only other direct broadcast service companies currently in
operation in the United States. Echostar has recently announced its aquisition
of the satellites and orbital slots owned by The News Corporation Limited and
MCI Worldcom, Inc. As described above, Hughes recently agreed to acquire the
PRIMESTAR-Registered Trademark- direct broadcast satellite medium-power business
and related high power satellite assets of Tempo Satellite.
DIRECTV-Registered Trademark- service also competes with cable television,
broadcast television and other entertainment services, including video rentals.

As of December 31, 1998, there were approximately 4.5 million
DIRECTV-Registered Trademark- subscribers in the United States, including
approximately one million National Rural Telecommunications Cooperative
subscribers. Excluding National Rural Telecommunications Cooperative subscribers
and related revenues, currently average revenue per U.S. subscriber is
approximately $46 per month, and net subscriber churn is approximately 1% per
month. In the past few years the demographics of the
DIRECTV-Registered Trademark- subscriber base has changed. Increasingly, more
subscribers come from urban and suburban homes served by cable.

LATIN AMERICA. The direct-to-home broadcast business of Hughes in Latin
America is conducted by Galaxy Latin America, a partnership in which Hughes is
the majority owner. Galaxy Latin America is:

- a direct-to-home television distribution service using the
DIRECTV-Registered Trademark- brand name; and

- the first direct-to-home satellite television service available in Latin
America.

Hughes estimates that the Latin American market represents over 110 million
television households. However, it estimates that the number of households which
are potential customers for DIRECTV-Registered Trademark- service is
substantially less. Galaxy Latin America believes that approximately one-half of
television households in Latin America earn an income sufficient to afford pay
TV services, but only a small fraction currently subscribe to such services.
Hughes holds a 70% ownership share in Galaxy Latin America. Cisneros Group of
Venezuela holds 20% and TV Abril of Brazil holds 10%.

Galaxy Latin America commenced operations in July 1996 using a Hughes Space
HS 601 satellite. Galaxy Latin America currently utilizes five broadcast centers
in Long Beach, California, Mexico City, Sao Paulo, Caracas and Buenos Aires to
uplink diverse programming throughout Latin America. Local operating companies
in each country provide marketing, sales, distribution, customer service and
other infrastructure services. Hughes either has purchased or plans to purchase
an interest in each of the local operating companies operating in the larger
Latin American markets, such as Brazil, Mexico, Venezuela, Colombia and
Argentina. Hughes believes that an equity stake in these local operating
companies will help ensure a coordinated strategy throughout Latin America.
DIRECTV-Registered Trademark- service in Latin America currently includes
approximately 197 video and 35 audio channels of entertainment for customers in
25 countries

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including, Mexico, Brazil, Venezuela, Ecuador, Panama, Costa Rica, Barbados, El
Salvador, Guadalupe, Guyana, Honduras, Martinique, Trinidad/Tobago, Guatemala,
Chile, Colombia, Argentina and throughout the Caribbean. As of December 31,
1998, there were approximately 480,000 subscribers in Latin America. Galaxy
Latin America's average revenue per subscriber is currently over $41 per month.

Galaxy Latin America has announced several agreements designed to allow for
the expansion and growth of DIRECTV-Registered Trademark- in Mexico, along with
accelerating the execution of Hughes' strategies in that country. As a result of
these recent agreements, Hughes has acquired a 10% stake in Galaxy Latin America
from the previous Mexican partner, thus raising its ownership interest from 60%
to 70%. The agreements also provide for an increase in Galaxy Latin America's
ownership level in the Mexican local operating company as well as greater
involvement in its management.

Galaxy Latin America's business strategy includes maintaining its market
leadership through program differentiation, high quality video, audio and
customer service, advanced technological capabilities and increased channel
capacity. Galaxy Latin America believes that its early entry into the Latin
American direct broadcast market coupled with its existing
DIRECTV-Registered Trademark- technology, provides it with a competitive
advantage in this market.

DIRECTV JAPAN. The direct-to-home broadcast business in Japan is conducted
by DIRECTV Japan Management, Inc., a joint venture in which Hughes will hold a
42.2% ownership interest. Hughes estimates that there are more than 40 million
television households in Japan, with very low cable penetration. Hughes believes
that DIRECTV Japan's strong in-country partners, its higher-quality video,
audio, data and interactive services, its programming line-up containing a
number of unique local Japanese programs and major U.S. programming channels,
and Hughes' experience in the United States and Latin American markets, provide
DIRECTV Japan with a strong competitive position in this market. DIRECTV Japan
service commenced commercial operations in December 1997 with a partial offering
of channels. Full service began in April 1998 with 88 channels and was expanded
to 190 channel capacity in December 1998. DIRECTV Japan ended 1998 with
approximately 231,000 subscribers.

SATELLITE SERVICES

Hughes' satellite services segment consists of Hughes' 81% interest in
PanAmSat Corporation, which is:

- a leading provider of commercial satellite services in the domestic market
and the international market, based on sales volume;

- the operator of a global network of 19 satellites supported by seven
teleport and operations facilities in the United States and more than 500
sales, marketing and engineering employees on five continents; and

- a unique, one-stop provider of global satellite services.

On May 16, 1997, Hughes and PanAmSat merged their respective satellite
services operations into a new publicly held company named PanAmSat Corporation.
As part of the merger, Hughes contributed its Galaxy-Registered Trademark-
satellite services business in exchange for a 71.5% interest in PanAmSat. In the
merger, existing PanAmSat stockholders received $1.5 billion in cash and a 28.5%
interest in PanAmSat in exchange for their existing holdings. PanAmSat borrowed
approximately $1.725 billion from Hughes to finance the stock purchase and to
facilitate the sale of a portion of the direct-to-home television rights to a
stockholder of PanAmSat. In 1998, Hughes acquired an additional 9.5%, increasing
its total interest in PanAmSat to 81%.

PanAmSat's global satellite network is used to provide video distribution
and telecommunications services. PanAmSat operates satellites for cable and
broadcast television distribution in the United States, Latin America, the
Indian subcontinent and the Asia-Pacific region, and satellite platforms for
direct-to-home television services in the United States, Latin America, South
Africa and India. In addition, PanAmSat offers live transmission services for
news, sports and special events coverage worldwide and satellite transmissions
capacity and related services for private business networks and international

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Internet access. PanAmSat also provides satellite tracking, telemetry and
control services for its own satellite fleet as well as for satellites owned by
others, including other Hughes companies.

PanAmSat provides satellite services to its customers primarily through
long-term operating lease contracts for the use of full or partial transponder
capacity. PanAmSat also offers services to its customers through sales and
sales-type lease contracts. PanAmSat currently provides service to hundreds of
video distribution and telecommunications customers worldwide. As of December
31, 1998, PanAmSat had long-term contracts for satellite services representing
future payments of approximately $6.3 billion, including amounts due from
affiliated companies as well as approximately $400 million relating to
agreements for satellites that are under construction and are expected to be
launched within 12 months.

PanAmSat's business strategy is to capture more of the value-added benefits
of the satellite-based services market. PanAmSat accomplishes this by offering
one-stop satellite shopping through its global reach and by capitalizing on its
technological capabilities, its early market entry, the desirable orbital
locations of its satellite fleet and its management expertise in satellite
operations. For example, PanAmSat developed and markets the concept of cable and
broadcast neighborhoods. These innovations, which concentrate a broad range of
quality cable programming or broadcast programming on specific satellites, have
made those satellites particularly attractive to cable programmers and broadcast
programmers desiring to distribute widely their programming to cable system
operators or television stations.

PanAmSat has six additional satellites under construction to meet the
expected demand for additional satellite capacity, replace capacity affected by
satellite anomalies, including those noted in "Risk Factors-- Hughes is
Vulnerable to Satellite Failure", and provide adequate back-up to existing
capacity. There can be no assurance that the schedule for PanAmSat's future
satellite launches will be met. Delays in the production or successful launch of
these satellites could materially affect the ability of PanAmSat to deliver
services and benefit from the opportunities it is currently pursuing. In
addition, revenues attributable to satellites affected by anomalies could be at
reduced levels.

CORPORATE AND OTHER

Hughes operates and owns equity interests in other businesses in addition to
those described above. These businesses are reported as part of "other" in
Hughes' consolidated financial statements and the revenues of these businesses
are not, in the aggregate, material to Hughes. For example, Hughes is the
largest stockholder of American Mobile Satellite Corporation, with a current
equity interest of approximately 21%. American Mobile's common stock is publicly
traded and other stockholders include Singapore Telecommunications, Ltd. and
AT&T Wireless Services. American Mobile provides a full range of satellite-based
mobile telephone, facsimile and data services in the United States, including
Alaska, Hawaii, Puerto Rico, the Virgin Islands and hundreds of miles of U.S.
coastal waters.

STRATEGY

Hughes' mission is to leverage its satellite and wireless capabilities to
become a premier communications company. Hughes' strategy includes strengthening
its leadership position in each of its primary businesses, with a particular
focus on the rapidly expanding telecommunications service markets. Hughes' roots
lie in its satellite design and manufacturing expertise and it is this
technological know how which has given Hughes its early competitive advantage.
Hughes intends to capture more of the value-added benefits of the
satellite-based services market by capitalizing on its technological
capabilities, the size and desirable orbital locations of its satellite fleet
and its management expertise in satellite, communications and telecommunications
operations. Hughes' strategy also includes building on its technology and
experience to develop new applications for its products and services for
governments, businesses and consumers and expanding international sales for all
its businesses. Hughes believes significant opportunities exist in:

- satellite-based high speed broadband services. Beginning in 2002, Hughes
expects its Spaceway-TM- system to offer customers ultra-fast two-way
communications of video, voice and data in North America. Most of the
space-based hardware including the satellites, the transponders and other

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electronic components comprising the satellite payloads, and most of the
ground-based control equipment will be designed or manufactured by Hughes.
See "--Recent Developments-- Spaceway-TM- Satellite System";

- expanded direct-to-home satellite-based programming as well as other new
services, including interactive programming and the integration of
web-based technologies into programming, which, among other things, gives
viewers the ability to order merchandise or access information on-screen
on a "real-time" basis and permits access to the worldwide web through the
television set;

- direct-to-home satellite-based television programming distribution outside
North America based on Hughes' experience with
DIRECTV-Registered Trademark-, especially in areas lacking established
alternative distribution infrastructures;

- owning and operating an expanding satellite fleet to provide global
communications services;

- fixed wireless telecommunications networks for local and international
telecommunications in areas with deficient communications infrastructures;

- mobile wireless communications systems and services based on Hughes'
digital satellite and cellular communications technologies; and

- satellite-based communications directly to personal computers.

In addition, Hughes seeks to maintain its strong position in satellite
manufacturing and telecommunications equipment through more efficient production
processes.

ACQUISITIONS, STRATEGIC ALLIANCES AND DIVESTITURES

Due to the rapid growth in the telecommunications and space industry,
particularly internationally, and increasing competitive pressures, Hughes
reviews its competitive position on an ongoing basis and from time to time
considers various acquisitions, strategic alliances and divestitures in order to
continue to compete effectively, grow its business and allocate its resources
efficiently. It is becoming increasingly important for Hughes to form strategic
partnerships with other firms. These alliances bring together the necessary
expertise, such as distribution, market knowledge and technology, to address
competitive pressures and meet new market demands. Hughes has done this in its
international DIRECTV-Registered Trademark- businesses as well as its network
systems businesses. Hughes also seeks acquisitions which will improve its
position in these high growth and increasingly competitive markets. The
PRIMESTAR and Tempo transactions and the PanAmSat merger are significant recent
examples of this. Hughes continues to evaluate acquisitions, alliances and
divestitures, and from time to time engages in discussions regarding possible
transactions, which it believes will improve its competitive position and
financial results.

REGULATION

Various aspects of Hughes' businesses are subject to federal and state
regulation. Noncompliance by Hughes with such regulation may result in the
suspension or revocation of licenses or registrations, the termination or loss
of contracts or the imposition of contractual damages, civil fines or criminal
penalties. In particular, the ability of Hughes to sell satellites and other
technologies to businesses outside the United States is dependent on Hughes
obtaining export licenses from the Unted States government. See "Risk
Factors--The Federal Government Could Adversely Impact The Ability Of The U.S.
Satellite Industry To Compete For Foreign Satellite Commerce" and "Grand Jury
Investigation/State Department Review Could Result In Sanctions."

U.S. GOVERNMENT CONTRACTS

Hughes acts as a prime contractor or major subcontractor with respect to
U.S. government programs. Principally, this business is performed in the
satellite manufacturing segment of Hughes. Sales to the U.S. government may be
affected by changes in acquisition policies, budget considerations, changing

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concepts of national defense, civilian space needs, spending priorities and
other factors that are outside Hughes' control.

Government spacecraft acquisition programs generally follow a life cycle of
three phases. The first is the research and development phase, followed by an
engineering development phase which includes the first spacecraft, and finally
progressing into a production phase for the remaining spacecraft. The production
phase may continue with refinements and improvements for several years. Large
programs with significant start-up costs, which are usually incurred in the
research and development phase, do not become profitable until the engineering
development phase. The U.S. government typically uses multiple sources during
the research and development phase to intensify competition and selects one
source to perform the later phases of the program. Therefore, Hughes may not be
selected for engineering development and production phases even when
considerable resources have been expended in the research and development phase
of a program.

Hughes performs its U.S. government business under two general types of
contracts: fixed-price and cost reimbursement. Under fixed-price contracts,
Hughes realizes all the benefit or detriment caused by decreased or increased
costs of performing the contract. Under cost reimbursement contracts, Hughes
receives reimbursement of its reasonable costs that are allocable to the
particular contract and allowable under applicable regulations, plus a fee.
Approximately 37% of Hughes' total sales to the U.S. government in 1998 were
under fixed-price contracts, and approximately 63% were under cost reimbursement
contracts. Total Hughes net sales to the U.S. government in 1998 were
approximately $.7 billion.

Most of Hughes' contracts with the U.S. government which are the basis of
Hughes' backlog are incrementally funded and therefore are subject to
appropriations decisions subsequent to award. Once awarded, contracts may be
contested by other bidders. In addition, Hughes' contracts with the U.S.
government are subject to termination by the U.S. government either for its own
convenience or because of Hughes' default. In the event of a termination for
convenience, Hughes may not receive full reimbursement for its costs, and the
profit or fee Hughes receives may be lower than that which it had expected for
the portion of the contract performed. In the event of a termination for
default, normal contract remedies generally apply. In addition, the U.S.
government has broad discretion to suspend or prohibit contractors from engaging
in new government business. A contractor may be prohibited based on a conviction
or civil judgment involving various offenses, including fraud in connection with
obtaining or performing a public contract or subcontract, and may be suspended,
if indicted for such an offense or if there is other adequate evidence that such
an offense has been committed. Like other government contractors, Hughes is
subject to civil and criminal audits and investigations of its contracting
activity. This liability includes potential contract cost reductions due to the
defective pricing claims.

COMPETITION

Hughes has various competitive advantages in its telecommunications and
space business. In the construction of satellites, Hughes' family of satellite
structures, electronics, propulsion and power systems gives it the flexibility
to respond to varying customer requirements. Hughes faces competition from
companies such as TRW Inc., Loral Space & Communications Ltd. and Lockheed
Martin in the satellite manufacturing segment. In the sale and leasing of
satellite transponders, Hughes enjoys advantages from its economies of scale and
the location of its orbital positions, many of which are the most desirable in
North America. Loral Space & Communications' purchase of AT&T Skynet, as well as
Intelsat's and Inmarsat's current spacecraft fleets, keep this an exceptionally
competitive market. Hughes also believes that its experience acquired through
the development and operation in North America of the
DIRECTV-Registered Trademark- service and its strong market position, will
provide it with competitive advantages in the international markets in which it
participates. The various DIRECTV-Registered Trademark- services face stiff
competition from local cable operations as well as other direct-to-home
satellite systems. As a result of this competitive environment, DIRECTV
Enterprises may have to incur increased subscriber acquisition costs through
competitive offers in the future to maintain its market leadership. The network
systems business of Hughes faces global competition from firms such as Lucent
Technologies Inc., Telefonaktiebolaget LM Ericsson, AT&T

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Corporation, as well as other large telecommunications companies and the various
regional Bell operating companies.

Notwithstanding the competitive advantages described above, Hughes
participates in markets that involve a high level of competition by other
companies that have similar or better financial, technological and personnel
resources than Hughes. Hughes' telecommunications businesses compete with other
communications technologies and systems, such as, telecommunications systems for
fixed and mobile applications, fiber optics networks, cable systems, wire
telephony and radio-based systems and other satellite-based systems. In addition
to existing and other planned operations of direct-to-home broadcasting
services, Hughes' direct broadcasting service competes in telecommunications
markets with telephone companies, cable television and other broadcast
television and other entertainment services, including video rentals. No
assurance can be given as to the effect that competition may have on the
financial condition or results of operations of Hughes.

RESEARCH AND INTELLECTUAL PROPERTY

The ability to continue to generate technological innovations is critical to
ensure Hughes' long-term success and the competitiveness of its business. See
"Risk Factors Relating To The Business Of Hughes." The continued development of
new technologies may provide new and improved products which will continue to
fuel business opportunities and product improvements which, among other things,
will enable the extension of profitable production programs. Research and
development is carried on in each of Hughes' business units in connection with
ongoing product improvement efforts. HRL Laboratories LLC, a company of which
Hughes owns 50%, conducts long-range applied research in the specialized fields
of physics, chemistry, electronics and information sciences.

Hughes utilizes a large number of patents and trademarks which are held by
Hughes or its affiliates. Hughes believes that, in the aggregate, the rights
existing under such patents, trademarks and licenses are important. Hughes
believes that its competitive position is dependent on research, engineering and
production capabilities. Hughes actively pursues patent and trademark
protections of its technological and engineering innovations, and actively
pursues enforcement of its intellectual property rights.

RECENT DEVELOPMENTS

HUGHES FINANCIAL RESULTS FOR THE FIRST QUARTER OF 1999. On April 14, 1999,
Hughes reported that its financial results for the first quarter of 1999
reflected continued record subscriber growth in its
DIRECTV-Registered Trademark- businesses. Revenues for the quarter were $1,451.8
million, compared with $1,291.0 million in the first quarter of 1998, a 12.5%
increase. The revenue increase was due primarily to the direct-to-home broadcast
segment, where revenues increased 43.5% to $556.6 million from $387.9 million in
the first quarter of 1998. The increase resulted from continued strong
subscriber growth, as well as strong average monthly revenue per subscriber in
the United States.

Earnings were $78.3 million ($0.20 earnings per share, or EPS) in the first
quarter of 1999 versus $44.5 million ($0.11 EPS) in the same period last year.
First quarter earnings, excluding one-time items, were $40.1 million in 1999
compared to $53.7 million in the same period for 1998, resulting in EPS of $0.10
and $0.13 for first quarter 1999 and 1998, respectively. The declines in
earnings and EPS (excluding one-time items) were primarily due to lower interest
income and higher depreciation and amortization expenses.

One-time items in the first quarter of 1999 were a $94.3 million after-tax
($154.6 million pre-tax) gain related to the settlement of a patent infringement
case, see "--Patent Case Award" below, and a $56.1 million after-tax ($92.0
million pre-tax) charge related to the Asia Pacific Mobile Telecommunications
contract termination, see "--Failure To Obtain Export Licenses" below. The
one-time item in the first quarter of 1998 was a $9.2 million after-tax charge
for the cumulative effect of an accounting change mandated by the American
Institute of Certified Public Accountants for the write-off of previously
capitalized start-up costs.

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With respect to the balance sheet, the cash balance declined $562.1 million
in the quarter to $780.0 million as of March 31, 1999, primarily due to working
capital requirements, purchase of the Tempo ground satellite, and early buy-out
of PanAmSat's sale-leaseback agreements, which were partially offset by proceeds
from the settlement of the patent infringement case described above. Long-term
debt increased $77.9 million to $856.6 million principally from an increase in
PanAmSat's commercial paper program to fund its satellite fleet expansion and
early buy-out of PanAmSat's sale-leaseback agreements.

FAILURE TO OBTAIN EXPORT LICENSES. Hughes entered into a contract with
Asia-Pacific Mobile Telecommunications Satellite Pte. Ltd. effective May 15,
1998. Under the contract, Hughes was to provide to Asia-Pacific Mobile
Telecommunications a satellite-based mobile telecommunications system consisting
of two satellites, a ground segment, user terminals and associated equipment and
software. In addition, Hughes was required to obtain all necessary U.S.
Government export licenses for the Asia-Pacific Mobile Telecommunications system
by February 15, 1999. On February 24, 1999, the Department of Commerce notified
Hughes that it intended to deny the export licenses required by Hughes to
fulfill its contractual obligation to Asia-Pacific Mobile Telecommunications. As
a result, Asia-Pacific Mobile Telecommunications and Hughes terminated the
contract on April 9, 1999, which led to Hughes recording a pre-tax charge to
earnings of $92 million in the first quarter of 1999.

PRIMESTAR AND TEMPO ACQUISITIONS. On January 22, 1999, Hughes entered into
agreements to acquire the 2.3 million-subscriber PRIMESTAR-Registered Trademark-
direct broadcast satellite medium-power business and related high-power
satellite assets of Tempo Satellite, a wholly owned subsidiary of TCI Satellite
Entertainment, Inc., in two transactions valued at approximately $1.82 billion.

PRIMESTAR operates a 160-channel medium-power service using leased satellite
capacity at 85 DEG. west longitude. DIRECTV intends to operate the medium-power
PRIMESTAR-Registered Trademark- business for a period of approximately two
years, during which time PRIMESTAR-Registered Trademark- subscribers will be
offered the opportunity to transition to the high-power
DIRECTV-Registered Trademark- service. During this period, PRIMESTAR's
distribution network will continue servicing PRIMESTAR-Registered Trademark-
subscribers and begin to offer the DIRECTV-Registered Trademark- service to new
subscribers.

The purchase price for the medium-power business will be $1.1 billion in
cash and 4,871,000 shares of GM class H stock for a total consideration, based
upon the market price of the GM class H stock at the time the agreement was
signed, of $1.32 billion. Hughes also agreed to acquire the high-power Tempo
assets for $500 million in cash. If fully completed, the PRIMESTAR and Tempo
acquisitions will also provide DIRECTV with:

- 11 high-power DBS frequencies at 119 DEG. west longitude, from which the
in-orbit Tempo satellite can begin delivering programming on a national
basis at any time;

- an immediate increase in revenues from more than 2.3 million existing
PRIMESTAR-Registered Trademark- subscribers, and ongoing revenues from
those subscribers that transition to the DIRECTV-Registered Trademark-
service.

The acquisition of the PRIMESTAR-Registered Trademark- medium-power business
is subject to the consent of various lenders of PRIMESTAR. The acquisition of
the Tempo in-orbit satellite is subject to receipt of appropriate regulatory
approvals. We cannot assure you that such consents and approvals will be
obtained or that the PRIMESTAR and Tempo acquisitions will be consummated. On
March 10, 1999, Hughes completed the first half of the high-power satellite
acquisition by purchasing a Tempo ground satellite and related assets for $150
million in cash. Hughes intends to launch this satellite as a back-up to some of
its existing satellites.

SPACEWAY-TM- SATELLITE SYSTEM. GM has recently approved an initial
investment by Hughes of $1.4 billion in its proposed Spaceway-TM- satellite
system. The Spaceway-TM- system, when completed, will provide for high speed,
two-way communications of video, voice and data direct to companies and
individual consumers. Hughes expects that the initial investment will allow it
to start building three high-powered satellites to provide these broadband
network services "on demand" for video-conferencing, data transfer and other
purposes in North America in 2002. Hughes is currently investigating a
subsequent phase which

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would lead to Hughes serving most of the world with Spaceway-TM- services using
a total of eight high-orbit satellites. The subsequent phase would require
significant additional investment. Hughes expects to face competition from
companies such as Lockheed Martin Corp., Teledesic LLC, Skybridge LP, Loral
Space & Communications' Cyberstar and others, which propose systems or have
competing technology with similar services.

PATENT CASE AWARD. Hughes has maintained a suit against the U.S. Government
since September 1973 regarding the Government's infringement and use of a Hughes
patent covering "Velocity Control and Orientation of a Spin Stabilized Body,"
principally satellites. On April 7, 1998, the U.S. Court of Appeals for the
Federal Circuit reaffirmed earlier decisions in the Hughes patent case including
the award of $114.0 million in damages, plus interest. In March 1999, Hughes
received a $154.6 million payment from the U.S. Government as final settlement
of the suit.

ISSUANCE OF DEBT AND EQUITY. In anticipation of the successful completion
of the merger and the PRIMESTAR and Tempo acquisitions, Hughes expects to file a
registration statement with the SEC with respect to an issuance of notes and GM
expects to file a registration statement with the SEC with respect to an
issuance of shares of GM class H stock. The registered offerings will be made
only by means of a prospectus and are expected to be completed during the second
and third quarters of 1999. The offerings are expected to result in aggregate
proceeds of approximately $1.5 billion to $2.0 billion. A significant portion of
the proceeds will be used to repay any bridge financing incurred in connection
with the merger and the acquisitions. GM may elect to provide a portion of the
equity funding that Hughes will require for these matters, in which event the
size of the registered offerings would be reduced.

THE MERGER

BACKGROUND OF THE MERGER

The relationship between U.S. Satellite Broadcasting and Hughes dates back
to 1990. Since that time, under various agreements, the two companies have
cooperated to create and share the DIRECTV/USSB broadcasting system, including
joint ownership of the DBS-1 satellite and sharing the same satellite
broadcasting technology for transmission and signal encryption. Periodically
throughout the relationship, the companies have explored other ways to
coordinate their efforts. U.S. Satellite Broadcasting and DIRECTV have regularly
engaged in joint marketing efforts to promote the DIRECTV/USSB system. For
example, since September 1996, the companies have cooperated in a program to
increase manufacturer loyalty and reduce retail prices of the DIRECTV/USSB
system.

As a part of the companies' ongoing cooperative efforts to maximize the
effectiveness and efficiencies of their operations, in late 1997 U.S. Satellite
Broadcasting and DIRECTV began an in-depth exploration of the potential benefits
which might be obtained from combining various customer services. As an
outgrowth of this exploration, on May 11, 1998, senior Hughes executives
presented to U.S. Satellite Broadcasting executives their view of the merits of
combining the companies. Following this discussion, on May 26, 1998, U.S.
Satellite Broadcasting received a letter from Michael T. Smith, Chairman of the
Board and Chief Executive Officer of Hughes, proposing to commence negotiations
to purchase U.S. Satellite Broadcasting for approximately $12.50 per share,
subject to a number of conditions.

At its meeting on May 28, 1998, the U.S. Satellite Broadcasting board
discussed the Hughes letter. The board determined that the proposed purchase
price in the letter did not reflect an appropriate valuation of the benefits
that U.S. Satellite Broadcasting could bring to a combination or of management's
plans at that time to maximize long-term shareholder value. The board then
approved the retention of Goldman, Sachs & Co. and Credit Suisse First Boston
Corporation to assist U.S. Satellite Broadcasting in evaluating and preparing a
response to Hughes' proposal and in examining a closer strategic relationship
with DIRECTV.

On June 1, 1998, the GM board authorized the capital stock committee to
approve a transaction on behalf of the GM board, as contemplated by the May 26,
1998 letter, subject to Hughes board approval.

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On July 4, 1998, Hughes disclosed to U.S. Satellite Broadcasting that a
spacecraft control processor aboard the DBS-1 satellite had failed. The failure
was confirmed on July 8, 1998. As designed, control of the DBS-1 satellite was
automatically switched to the spare spacecraft control processor and the
spacecraft continued to operate normally. DIRECTV and U.S. Satellite
Broadcasting subsequently engaged in discussions regarding how U.S. Satellite
Broadcasting's services should be integrated into a reduced offering of channels
in the event that DBS-1 failed, but no agreement was reached.

On July 6, 1998, representatives of U.S. Satellite Broadcasting, Goldman
Sachs and Credit Suisse First Boston met with representatives of Hughes and
Salomon Brothers Inc/Smith Barney Inc., financial advisor to Hughes, in Los
Angeles to present U.S. Satellite Broadcasting's initial views as to Hughes' May
proposal.

On July 9, 1998, U.S. Satellite Broadcasting and its representatives and
Hughes and its representatives met again in Chicago to continue discussions and,
on July 13, 1998, representatives of U.S. Satellite Broadcasting and Hughes set
guidelines and objectives for follow-up meetings between the companies and their
respective representatives and advisors.

In July and August, the companies' financial advisors continued discussions
to clarify the parties' respective positions.

At a September 10, 1998 U.S. Satellite Broadcasting board meeting,
management, Credit Suisse First Boston and Goldman Sachs briefed the board on
the discussions to date and concluded that key differences existed between the
parties' positions.

On September 17, 1998, U.S. Satellite Broadcasting's representatives met
with Hughes' executives and representatives to summarize the key differences
between the parties, including valuation, employee, governance and management
issues. Discussions continued intermittently during September and October
without significant progress.

On October 4, 1998, the Hughes board authorized Hughes management to extend
a non-binding offer to acquire U.S. Satellite Broadcasting.

On November 5, 1998, U.S. Satellite Broadcasting received a revised proposal
from Hughes. The November revision proposed a transaction merging U.S. Satellite
Broadcasting into Hughes, with U.S. Satellite Broadcasting shareholders to
receive a value per share based on an exchange ratio of .3587 with a per share
value cap of $18.00. This proposal represented a premium to the market price of
the class A stock and offered U.S. Satellite Broadcasting shareholders the
opportunity to receive up to $5.50 of increased consideration per share over
Hughes' May proposal. In addition, the proposal addressed employee-related
issues and other business issues which had been discussed by the parties over
the summer.

On November 19 and 20, 1998, U.S. Satellite Broadcasting, Credit Suisse
First Boston, Goldman Sachs and Leonard, Street and Deinard Professional
Association, counsel to U.S. Satellite Broadcasting, met in Chicago with Hughes,
Salomon Smith Barney and Weil, Gotshal & Manges LLP, counsel to Hughes, to
negotiate the terms of a potential transaction.

On November 23, 1998, the U.S. Satellite Broadcasting board approved an
outline of proposed terms for a potential transaction and authorized Stanley E.
Hubbard and Robert W. Hubbard to commence negotiation of definitive agreements
based on the proposed terms, but at an increased exchange ratio.

From November 30, 1998 to December 4, 1998, Hughes and U.S. Satellite
Broadcasting and their representatives met in Minneapolis to perform due
diligence on U.S. Satellite Broadcasting. During that same week, U.S. Satellite
Broadcasting and Hughes and their representatives met in Los Angeles to perform
due diligence on Hughes, and Weil Gotshal distributed a first draft of the
merger agreement.

On December 3 and 4, 1998, the parties and their representatives held
preliminary discussions at the offices of Leonard Street in Minneapolis to
negotiate the definitive agreements.

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The Hughes board approved the transaction on December 6, 1998 and the
capital stock committee of the GM board approved the transaction on December 7,
1998.

The parties and their representatives reconvened at the offices of Weil
Gotshal in New York from December 7 through December 11, 1998 to conclude the
negotiation and drafting of the definitive agreements. During this week, several
issues important to the parties remained unresolved. Among these were the issues
of a cap and a floor on the merger consideration, limits on the total amount of
GM class H stock to be issued, limits on the amount of cash to be paid, the
interpretation of termination rights in various U.S. Satellite Broadcasting
contracts, a termination fee payable by U.S. Satellite Broadcasting in the event
the transaction did not close, and the disposition of U.S. Satellite
Broadcasting's interest in Spring Programming Partners, LLC. The final exchange
ratio of .3775 was agreed to on December 9, 1998, as part of a negotiated
resolution of the remaining issues between the parties.

By December 9, 1998, the final terms had been agreed to and, on December 10,
1998, the U.S. Satellite Broadcasting board met to consider the final terms of
the proposed transaction.

In the negotiations, Hughes had required, as a condition to agreeing to the
merger, that Hubbard Broadcasting and the Hubbards enter into the shareholders
agreement. In the shareholders agreement, Hubbard Broadcasting and the Hubbards
agreed to vote shares of U.S. Satellite Broadcasting stock constituting 19.9% of
the voting power of the outstanding U.S. Satellite Broadcasting stock in favor
of the merger. In addition, they granted to Hughes an option to purchase such
shares in the event the shareholder agreement is breached, the merger agreement
is terminated by Hughes because the merger is not approved by U.S. Satellite
Broadcasting shareholders, or U.S. Satellite Broadcasting breaches its covenant
to use its reasonable best efforts to cause the merger to be completed. Under
Minnesota law, the entry into the shareholders agreement, including the grant of
the option, would prohibit Hughes from entering into any business combination
with U.S. Satellite Broadcasting, such as the merger, unless a committee of
disinterested directors of U.S. Satellite Broadcasting approved the shareholders
agreement, including the option, before the parties signed the shareholders
agreement.

Consequently, at its December 10, 1998 meeting, the U.S. Satellite
Broadcasting board appointed a committee of disinterested directors to consider
the terms of the shareholders agreement, including the option, and to approve
the terms of the merger, particularly with respect to the agreements to be
entered into between Hughes and Hubbard Broadcasting and between Hughes and the
Hubbards. The committee consisted of Herbert S. Schlosser, David S. Allen, Frank
N. Magid, Peter G. Skinner, William D. Savoy, John W. Marvin, Ward L. Quaal,
Louis G. Zachary, Peter F. Frenzer and Robert E. Torray. The directors on the
committee had participated in the May, September and November board meetings,
had received information and updates from U.S. Satellite Broadcasting's Chief
Executive Officer and legal and financial advisors and were familiar with the
course of the merger negotiations. At the December 10, 1998 board meeting, the
directors again reviewed with U.S. Satellite Broadcasting's management and legal
and financial advisors various aspects of the merger, including the material
terms of the merger agreement, the shareholders agreement and other ancillary
agreements; the due diligence that had been conducted on Hughes; the history of
the stock performance of U.S. Satellite Broadcasting and the GM class H stock;
other transactions in the broadcasting industry; the synergies, based on
management's estimates, which might be achievable through a merger; and an
overview of the competitive conditions in the satellite broadcasting industry.

After a thorough discussion, and an opportunity to ask questions of U.S.
Satellite Broadcasting's management and legal and financial advisors, the
committee of disinterested directors, with Mr. Zachary abstaining due to his
position as a managing director of Credit Suisse First Boston, approved the
shareholders agreement, including the option to Hughes, determined that the
merger, upon the terms and conditions set forth in the merger agreement, was
fair to, and in the best interests of, the shareholders of U.S. Satellite
Broadcasting and unanimously approved and adopted the merger agreement, the
merger, and a number of ancillary agreements, including the shareholders
agreement. The various ancillary agreements are described in "The
Merger--Interests Of Certain Persons In The Merger."

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The full U.S. Satellite Broadcasting board then reconvened. After a
discussion of the material terms of the merger agreement and the ancillary
agreements, including the consideration to be received in the merger by holders
of U.S. Satellite Broadcasting Stock and legal, accounting and financial issues,
the U.S. Satellite Broadcasting board received the opinion of Credit Suisse
First Boston to the effect that, as of the date of its opinion and based upon
and subject to the matters stated in the opinion, the merger consideration to be
received by holders of U.S. Satellite Broadcasting stock was fair from a
financial point of view to such holders, and the opinion of Goldman Sachs that,
as of the date of its opinion, the stock consideration and the cash
consideration to be received by the holders of U.S. Satellite Broadcasting
stock, taken as a unitary transaction, were fair from a financial point of view
to the holders of U.S. Satellite Broadcasting stock receiving such
consideration. See "The Merger--Opinions Of The U.S. Satellite Broadcasting
Financial Advisors" for a description of the opinions of Credit Suisse First
Boston and Goldman Sachs. The board then determined that the merger, upon the
terms and conditions set forth in the merger agreement and the ancillary
agreements, was fair to, and in the best interests of, the shareholders of U.S.
Satellite Broadcasting and, with Mr. Zachary abstaining, unanimously approved
and adopted the merger agreement, the ancillary agreements and the merger and
resolved to recommend to the shareholders of U.S. Satellite Broadcasting that
they vote to approve the merger agreement.

The final language of the merger agreement was agreed to and the the parties
signed the definitive merger agreement late on Friday, December 11, 1998 and
Hughes and DIRECTV issued a press release announcing the merger and related
transactions on Monday, December 14, 1998.

RECOMMENDATION OF THE COMMITTEE OF DISINTERESTED DIRECTORS AND THE U.S.
SATELLITE BROADCASTING BOARD AND REASONS FOR THE MERGER

In approving the merger agreement, the committee of disinterested directors
and the U.S. Satellite Broadcasting board each considered a number of factors
including, without limitation, the following:

1. The merger agreement offers shareholders a per share election of stock or
cash, and so provides maximum flexibility to shareholders. Those U.S.
Satellite Broadcasting shareholders who elect to take GM class H stock will
be able to participate in the growth of a larger, more diversified company
with interests in satellite manufacturing, network systems and satellite
services in addition to direct-to-home broadcasting, and to the extent that
U.S. Satellite Broadcasting stock is converted solely into GM class H
stock, should be able to do so on a tax-free basis.

2. For those shareholders who do not elect stock, receipt of cash will allow
shareholders to receive consideration that was more than double the
prevailing market prices of the class A stock at the time the merger was
negotiated. The per share value of the merger consideration was $15.03 on
December 8, 1998 and the closing price of the class A stock on December 8,
1998 was $7.00. This substantial premium supported the determination that
the merger was fair to the shareholders. See "Summary--Market Prices Of
Class A Stock Of U.S. Satellite Broadcasting."

3. There are competitive advantages which can be obtained from combining U.S.
Satellite Broadcasting's premium channels with DIRECTV's basic and sports
channels so that these combined offerings can be more easily compared to
those of cable operators and other satellite broadcasters. The board and
the committee believed that this combination would better position the
merged company to attract new subscribers. Consequently, this factor
contributed to the determination that the merger was fair to shareholders.

4. The merger is expected to provide cost savings and efficiencies, commonly
known as synergies.

- In reviewing potential synergies, the board and the committee considered
cost savings which could be obtained in the areas of customer acquisition,
billing and remittance, customer service, commissions, improved collection
of receivables, reduction in programming costs and other miscellaneous
areas. These savings were estimated to range from approximately $49
million to $61 million in the first year after the merger, increasing to
an estimated $112 million to $150 million in the second year.

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- The board and the committee also considered the merged company's potential
for additional subscriber revenues by attracting new subscribers at a
higher rate than either U.S. Satellite Broadcasting or DIRECTV could
attain on its own. The board and the committee recognized that the costs
involved in attracting and servicing new subscribers would likely outweigh
new revenues by $126 million to $135 million in the first year after the
merger and by $40 million to $50 million in the second year. However,
additional new revenues in excess of related customer acquisition and
servicing costs were estimated to turn positive in the third year.

- Total synergy estimates considered by the board and the committee ranged
from a net cost of $85 million in year one to benefits of up to $220
million in year three. The board and the committee recognized that actual
results could be significantly different from the synergy estimates.
Nevertheless, the expectation of significant synergies contributed to the
determination of the board and the committee that the merger was fair to
shareholders.

5. The rapidly changing competitive environment in which U.S. Satellite
Broadcasting operates and, in particular, two recent consolidations in the
satellite broadcasting and subscriber television industry. First, on
November 30, 1998, EchoStar Communications Corporation announced its
pending acquisition of the direct broadcast satellite assets of News
Corporation Limited, which will give EchoStar the ability to broadcast from
both 110 DEG. west longitude and 119 DEG. west longitude, significantly
increasing EchoStar's broadcasting capacity. Second, AT&T Corp. announced a
merger with Tele-Communications, Inc. This merger will allow AT&T to
upgrade TCI's existing cable systems, thereby providing increased capacity
for digital video services. This will change the nature of TCI as a
competitor because of the additional services, such as local telephone,
available through AT&T. The members of the committee and the board
concluded that, given the expected increase in competition, a combined
company would be better positioned to successfully compete and, therefore,
this factor supported the determination that the merger was fair to the
shareholders.

6. The fact that growth in the satellite broadcasting industry is constrained
by licenses and capacity and the concern that as Hughes grew its operations
over time, U.S. Satellite Broadcasting could become a smaller percentage of
the DIRECTV/USSB system, even if U.S. Satellite Broadcasting's business
continued to grow. If U.S. Satellite Broadcasting remained independent, its
desire to maintain its percentage share of DIRECTV/USSB system revenues at
current levels would require the expenditure of greater amounts for
marketing directed toward positioning U.S. Satellite Broadcasting and its
programming services. By merging into Hughes, U.S. Satellite Broadcasting
shareholders would be able to participate in the anticipated growth of
Hughes and would not have to run the risk that the increasing levels of
expenditures that would be required if U.S. Satellite Broadcasting remained
independent would prevent it from achieving profitable operations.
Consequently, these factors contributed to the determination that the
merger was fair to the shareholders.

7. The July 1998 failure of the spacecraft control processor aboard the DBS-1
satellite and the fact that:

- the satellite is currently operating with no back-up spacecraft control
processor; and

- no agreement had been reached with DIRECTV as to how U.S. Satellite
Broadcasting's services should be integrated into a reduced offering of
the DIRECTV/USSB system signals if the DBS-1 satellite were to fail.

8. The merger agreement resolved issues concerning the carriage of U.S.
Satellite Broadcasting's services on DIRECTV's other satellites at 101 DEG.
west longitude--DBS-2 and DBS-3--and clarified U.S. Satellite
Broadcasting's right to transponder capacity on a replacement satellite if
the merger is not completed due to a failure of DBS-1. Given the risk that
U.S. Satellite Broadcasting's business could be adversely affected by a
more serious satellite failure, the resolution of this risk by the merger
and the merger agreement contributed to the conclusion by the committee and
the board that the merger was fair to the shareholders. See "The Merger
Agreement--Replacement Payload Option Agreement And Channel Services
Provision Agreement."

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9. The strong financial condition and business reputation of GM and Hughes;
the diversity of businesses which GM and Hughes own and operate; the
experience and high rate of success of GM and Hughes in structuring and
completing transactions similar to the merger; and the ability of GM and
Hughes to complete the merger in a timely fashion. These factors
contributed to the determination that the merger was fair to the
shareholders.

10. The opinion of Credit Suisse First Boston to the U.S. Satellite
Broadcasting board to the effect that, as of the date of its opinion and
based upon and subject to the matters stated in the opinion, the merger
consideration to be received by holders of U.S. Satellite Broadcasting
stock was fair from a financial point of view to such holders, and the
opinion of Goldman Sachs that, as of the date of its opinion, the stock
consideration and the cash consideration to be received by the holders of
U.S. Satellite Broadcasting Stock, taken as a unitary transaction, were
fair from a financial point of view to the holders of U.S. Satellite
Broadcasting Stock receiving such consideration. Neither the board nor the
committee evaluated any of the financial advisors' analyses in isolation
and did not reach conclusions regarding any of the individual analyses. The
U.S. Satellite Broadcasting board believed that the totality of the
analyses performed by Credit Suisse First Boston and Goldman Sachs in
connection with their opinions collectively supported their opinions. See
"The Merger--Opinions Of The U.S. Satellite Broadcasting Financial
Advisors" for a description of the opinions of Credit Suisse First Boston
and Goldman Sachs.

11. The terms and conditions of the merger agreement and related documents,
including the absence of any term or condition that the U.S. Satellite
Broadcasting board considered unduly onerous or likely to prevent
completion of the merger. These factors contributed to the determination
that the merger was fair to the shareholders.

12. The board and the committee gave particular attention to the shareholders
agreement, and to the related agreements with Hubbard Broadcasting to be
signed in connection with the merger, because the shareholder agreement
satisfied two of Hughes' conditions for agreeing to the merger. Hughes
required that, if the merger did not receive shareholder approval, a
substantial termination fee would be paid to Hughes and Hughes would be
able to acquire a significant ownership position in U.S. Satellite
Broadcasting. Since "bust-up fees," as these types of termination fees are
known, are generally an obligation of the company being acquired, the board
and the committee believed that U.S. Satellite Broadcasting was advantaged
by having this fee paid by Hubbard Broadcasting and that the option granted
to Hughes by Hubbard Broadcasting did not disadvantage U.S. Satellite
Broadcasting. In addition, the commitment of Hubbard Broadcasting, as
majority shareholder, to vote for the merger meant that a shareholder vote
in favor of the merger agreement was more likely. The board and the
committee concluded that, since the merger was in the best interests of the
shareholders, this commitment did not adversely affect the other
shareholders. The board and the committee also reviewed the other
provisions of the shareholders agreement which provided benefits to Hubbard
Broadcasting, such as the options to purchase various assets of U.S.
Satellite Broadcasting, after the closing, if Hughes did not need those
assets, and the opportunity to provide programming to DIRECTV. Since the
pricing for these transactions is to be set at market rates, the board and
the committee concluded that these provisions did not adversely impact the
fairness of the merger, and were justified in light of the burdens imposed
on Hubbard Broadcasting, burdens which were not being imposed on other
shareholders.

13. In making its fairness determination, the committee and the board
considered the possible reduction in the exchange ratio if U.S. Satellite
Broadcasting had to pay "excess termination amounts" to terminate two
contracts. The committee and the board concluded that any termination
payment was unlikely to be required and, that if any amounts were paid, the
amounts would be immaterial to its fairness determination.

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The board did not solicit additional third party bids because it believed
that the shared ownership of the DBS-1 satellite and shared use of the same
transmit and receive technology gave Hughes greater incentive and capability
than other parties to offer the highest value for U.S. Satellite Broadcasting.
Hughes is the only party whose purchase of U.S. Satellite Broadcasting could
achieve operating synergies and cost savings from combining the two companies'
marketing, billing and customer service functions. Any other third party
purchaser would obtain only a minority interest in the DBS-1 satellite, and
would not be able to use the existing transmit and receive technology or achieve
operating synergies or cost savings without negotiating separate agreements with
Hughes. In addition, there are only a very limited number of potential
purchasers of the business. At present, only one other provider of high-power
direct-to-home services, Echostar Communications Corporation, is operational and
Echostar owns and operates satellites at other orbital locations and uses a
different transmit and receive technology.

The foregoing discussion of factors considered by the committee and the U.S.
Satellite Broadcasting board is not intended to be exhaustive but is believed to
include the material factors considered. Neither the committee nor the U.S.
Satellite Broadcasting board viewed any single factor as determinative, nor did
they quantify or assign relative weights to the above factors. Rather, the
committee and the board based their positions and recommendation on all of the
information presented to and considered by them. In addition, individual members
of the committee and the U.S. Satellite Broadcasting board may have given
different weight to different factors.

THE U.S. SATELLITE BROADCASTING BOARD HAS APPROVED AND ADOPTED THE MERGER
AGREEMENT AND DETERMINED THAT THE MERGER IS ADVISABLE AND IN THE BEST INTERESTS
OF U.S. SATELLITE BROADCASTING AND ITS SHAREHOLDERS, AND RECOMMENDS THAT
SHAREHOLDERS OF U.S. SATELLITE BROADCASTING VOTE FOR THE APPROVAL OF THE MERGER
AGREEMENT.

In considering the recommendation of the U.S. Satellite Broadcasting board
with respect to the merger agreement and the transactions contemplated thereby,
U.S. Satellite Broadcasting shareholders should be aware that some members of
U.S. Satellite Broadcasting's management and its principal shareholder have
various interests in the merger that are different from, and in addition to,
their duties as directors and officers of U.S. Satellite Broadcasting. See "The
Merger--Interests Of Directors, Officers And Affiliates Of U.S. Satellite
Broadcasting In The Merger."

OPINIONS OF THE U.S. SATELLITE BROADCASTING FINANCIAL ADVISORS

OPINION OF CREDIT SUISSE FIRST BOSTON CORPORATION. Credit Suisse First
Boston has acted as financial advisor to U.S. Satellite Broadcasting in
connection with the merger. Credit Suisse First Boston was selected by U.S.
Satellite Broadcasting based on Credit Suisse First Boston's experience,
expertise and familiarity with U.S. Satellite Broadcasting and its business.
Credit Suisse First Boston is an internationally recognized investment banking
firm and is regularly engaged in the valuation of businesses and securities in
connection with mergers and acquisitions, leveraged buyouts, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for corporate and other
purposes.

In connection with Credit Suisse First Boston's engagement, U.S. Satellite
Broadcasting requested that Credit Suisse First Boston evaluate the fairness of
the consideration to be received in the merger by holders of U.S. Satellite
Broadcasting stock from a financial point of view. On December 10, 1998, at a
meeting of the U.S. Satellite Broadcasting board, Credit Suisse First Boston
delivered its oral opinion to the U.S. Satellite Broadcasting board to the
effect that, as of the date of its opinion and based upon and subject to the
matters stated in the opinion, the merger consideration was fair, from a
financial point of view, to the holders of U.S. Satellite Broadcasting stock.
Credit Suisse First Boston confirmed its oral opinion by delivery of a written
opinion dated December 11, 1998, the date of the execution of the merger
agreement.

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THE FULL TEXT OF CREDIT SUISSE FIRST BOSTON'S WRITTEN OPINION DATED DECEMBER
11, 1998 TO THE U.S. SATELLITE BROADCASTING BOARD, WHICH SETS FORTH THE
PROCEDURES FOLLOWED, ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON THE
REVIEW UNDERTAKEN, IS ATTACHED AS ANNEX B-1 TO THIS PROXY STATEMENT/PROSPECTUS
AND IS INCORPORATED HEREIN BY REFERENCE. WE ENCOURAGE YOU TO READ THE ENTIRE
OPINION CAREFULLY. CREDIT SUISSE FIRST BOSTON HAS CONSENTED TO THE INCLUSION OF
ITS OPINION LETTER AS ANNEX B-1 TO THIS PROXY STATEMENT/ PROSPECTUS. IN GIVING
ITS CONSENT, CREDIT SUISSE FIRST BOSTON DOES NOT ADMIT THAT IT COMES WITHIN THE
CATEGORY OF PERSONS WHOSE CONSENT IS REQUIRED UNDER, AND DOES NOT ADMIT THAT IT
IS AN "EXPERT" FOR PURPOSES OF, THE SECURITIES ACT AND THE RELATED RULES AND
REGULATIONS. CREDIT SUISSE FIRST BOSTON'S OPINION IS ADDRESSED TO THE U.S.
SATELLITE BROADCASTING BOARD AND RELATES ONLY TO THE FAIRNESS OF THE MERGER
CONSIDERATION FROM A FINANCIAL POINT OF VIEW AND DOES NOT ADDRESS ANY OTHER
ASPECT OF THE PROPOSED MERGER OR ANY RELATED TRANSACTION AND DOES NOT CONSTITUTE
A RECOMMENDATION TO ANY SHAREHOLDER AS TO HOW SUCH SHAREHOLDER SHOULD VOTE AT
THE SPECIAL MEETING OR THE FORM OF MERGER CONSIDERATION TO BE ELECTED BY SUCH
SHAREHOLDER IN THE MERGER. THE SUMMARY OF THE OPINION OF CREDIT SUISSE FIRST
BOSTON SET FORTH IN THIS PROXY STATEMENT/PROSPECTUS IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO THE FULL TEXT OF SUCH OPINION.

In arriving at its opinion, Credit Suisse First Boston reviewed the merger
agreement and other publicly available business and financial information
relating to U.S. Satellite Broadcasting and Hughes. Credit Suisse First Boston
also reviewed other information relating to U.S. Satellite Broadcasting and
Hughes, including financial forecasts provided to or discussed with Credit
Suisse First Boston by U.S. Satellite Broadcasting and Hughes, and Credit Suisse
First Boston discussed with the management of U.S. Satellite Broadcasting and
Hughes the businesses and prospects of U.S. Satellite Broadcasting and Hughes.
Credit Suisse First Boston also considered financial and stock market data of
U.S. Satellite Broadcasting and Hughes and compared this data with similar data
for other publicly held companies in businesses similar to U.S. Satellite
Broadcasting and Hughes and considered, to the extent publicly available, the
financial terms of other business combinations and other transactions recently
effected. Credit Suisse First Boston also considered such other information,
financial studies, analyses and investigations and financial, economic and
market criteria which Credit Suisse First Boston deemed relevant.

In connection with its review, Credit Suisse First Boston did not assume any
responsibility for independent verification of any of the information provided
to or otherwise reviewed by Credit Suisse First Boston and relied on such
information being complete and accurate in all material respects. With respect
to financial forecasts, Credit Suisse First Boston was advised, and assumed,
that such forecasts were reasonably prepared on bases reflecting the best
currently available estimates and judgments of the management of U.S. Satellite
Broadcasting and Hughes as to the future financial performance of U.S. Satellite
Broadcasting and Hughes and the cost savings and other potential synergies
anticipated to result from the merger, including the amount, timing and
achievability of the cost savings and other potential synergies.

Credit Suisse First Boston was not requested to, and did not, make an
independent evaluation or appraisal of the assets or liabilities, contingent or
otherwise, of U.S. Satellite Broadcasting or Hughes, nor was Credit Suisse First
Boston furnished with any evaluations or appraisals. Credit Suisse First
Boston's opinion was necessarily based upon information available to Credit
Suisse First Boston, and financial, economic, market and other conditions as
they existed, and could be evaluated by Credit Suisse First Boston, on the date
of its opinion. Credit Suisse First Boston did not express any opinion as to the
actual value of the GM class H stock when issued pursuant to the merger or the
prices at which the GM class H stock will trade subsequent to the merger.
Although Credit Suisse First Boston evaluated the merger consideration from a
financial point of view, Credit Suisse First Boston was not requested to, and
did not, solicit third party indications of interest in acquiring all or any
part of U.S. Satellite Broadcasting. No other limitations were imposed on Credit
Suisse First Boston with respect to the investigations made or procedures
followed by Credit Suisse First Boston in rendering its opinion.

In preparing its opinion to the U.S. Satellite Broadcasting board, Credit
Suisse First Boston performed a variety of financial and comparative analyses,
including those described below. The summary of

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Credit Suisse First Boston's analyses set forth below describes the material
analyses performed by Credit Suisse First Boston and does not purport to be a
complete description of the analyses underlying Credit Suisse First Boston's
opinion. The preparation of a fairness opinion is a complex analytic process
involving various determinations as to the most appropriate and relevant methods
of financial analyses and the application of those methods to the particular
circumstances and, therefore, such an opinion is not readily susceptible to
summary description. In arriving at its opinion, Credit Suisse First Boston made
qualitative judgments as to the significance and relevance of each analysis and
factor considered by it. Accordingly, Credit Suisse First Boston believes that
its analyses must be considered as a whole and that selecting portions of its
analyses and factors, without considering all analyses and factors, could create
a misleading or incomplete view of the processes underlying such analyses and
its opinion.

In its analyses, Credit Suisse First Boston made numerous assumptions with
respect to U.S. Satellite Broadcasting, Hughes, industry performance,
regulatory, general business, economic, market and financial conditions and
other matters, many of which are beyond the control of U.S. Satellite
Broadcasting and Hughes. No company, transaction or business used in the
analyses as a comparison is identical to U.S. Satellite Broadcasting or Hughes
or the proposed merger, nor is an evaluation of the results of such analyses
entirely mathematical. Rather, the analyses involve complex considerations and
judgments concerning financial and operating characteristics and other factors
that could affect the acquisition, public trading or other values of the
companies, business segments or transactions being analyzed. The estimates
contained in such analyses and the ranges of valuations resulting from any
particular analysis are not necessarily indicative of actual values or
predictive of future results or values, which may be significantly more or less
favorable than those suggested by such analyses. In addition, analyses relating
to the value of businesses or securities do not purport to be appraisals or to
reflect the prices at which businesses or securities actually may be sold.
Accordingly, such analyses and estimates are inherently subject to substantial
uncertainty.

Credit Suisse First Boston's opinion and financial analyses were only one of
many factors considered by the U.S. Satellite Broadcasting board in its
evaluation of the proposed merger and should not be viewed as determinative of
the views of the U.S. Satellite Broadcasting board or management with respect to
the merger or the merger consideration.

OPINION OF GOLDMAN, SACHS & CO. On December 10, 1998, Goldman Sachs
delivered its oral opinion to the U.S. Satellite Broadcasting board that as of
the date of such opinion, the stock consideration and the cash consideration to
be received by the holders of U.S. Satellite Broadcasting stock, taken as a
unitary transaction, are fair from a financial point of view to the holders of
the U.S. Satellite Broadcasting stock receiving such consideration. Goldman
Sachs subsequently confirmed its oral opinion by delivery of its written opinion
dated as of December 10, 1998.

THE FULL TEXT OF THE WRITTEN OPINION OF GOLDMAN SACHS, DATED AS OF DECEMBER
10, 1998, WHICH SETS FORTH THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND
LIMITATIONS ON THE REVIEW UNDERTAKEN IN CONNECTION WITH SUCH OPINION, IS
ATTACHED AS ANNEX B-2 TO THIS PROXY STATEMENT/PROSPECTUS AND IS INCORPORATED
HEREIN BY REFERENCE. HOLDERS OF U.S. SATELLITE BROADCASTING STOCK SHOULD READ
THE ENTIRE OPINION. THE OPINION OF GOLDMAN SACHS WAS PROVIDED FOR THE
INFORMATION AND ASSISTANCE OF THE U.S. SATELLITE BROADCASTING BOARD IN
CONNECTION WITH ITS CONSIDERATION OF THE TRANSACTION CONTEMPLATED BY THE MERGER
AGREEMENT AND SUCH OPINION DOES NOT CONSTITUTE A RECOMMENDATION AS TO HOW ANY
HOLDER OF THE U.S. SATELLITE BROADCASTING STOCK SHOULD VOTE ON SUCH TRANSACTION
OR AS TO WHETHER ANY SHAREHOLDER SHOULD ELECT TO RECEIVE GM CLASS H STOCK, CASH
OR ANY COMBINATION THEREOF.

In connection with its opinion, Goldman Sachs reviewed, among other things:

- the merger agreement;

- the annual reports to shareholders and annual reports on Form 10-K of U.S.
Satellite Broadcasting for the two years ended December 31, 1997;

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- the annual reports to holders of GM class H stock for the five years ended
December 31, 1997;

- the annual reports on Form 10-K of GM for the five fiscal years ended
December 31, 1997;

- various interim reports to shareholders and quarterly reports on Form 10-Q
of U.S. Satellite Broadcasting and GM;

- various other communications from U.S. Satellite Broadcasting and Hughes
to their respective shareholders, and

- various internal financial analyses and forecasts of U.S. Satellite
Broadcasting prepared by its management, including costs savings and
operating synergies forecasted by the management of U.S. Satellite
Broadcasting and discussed with Salomon Smith Barney, financial advisor to
Hughes, to result from the transaction contemplated by the merger
agreement.

Goldman Sachs also held discussions with members of the senior management of
U.S. Satellite Broadcasting and Hughes regarding the strategic rationale for,
and the potential benefits of, the transaction contemplated by the merger
agreement and the past and current business operations, financial condition, and
future prospects of their respective companies. In addition, Goldman Sachs
reviewed the reported price and trading activity for the U.S. Satellite
Broadcasting stock and the GM class H stock, compared financial and stock market
information for U.S. Satellite Broadcasting and Hughes, and the U.S. Satellite
Broadcasting stock and the GM class H stock, with similar information for other
companies the securities of which are publicly traded, reviewed the financial
terms of recent business combinations in the direct to home satellite television
industry specifically and in other industries generally and performed other
studies and analyses as it considered appropriate.

Goldman Sachs relied upon the accuracy and completeness of all of the
financial and other information reviewed by it and assumed such accuracy and
completeness for purposes of rendering its opinion. In addition, Goldman Sachs
did not make an independent evaluation or appraisal of the assets and
liabilities of U.S. Satellite Broadcasting, Hughes, GM or any of their
subsidiaries and was not furnished with any such evaluation or appraisal.
Goldman Sachs was not requested to solicit, and did not solicit, interest from
other parties in an acquisition of or other business combination with U.S.
Satellite Broadcasting.

The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary set forth below, without considering
the analyses as a whole, could create an incomplete view of the processes
underlying Goldman Sachs' opinion. In arriving at its fairness determination,
Goldman Sachs considered the results of all these analyses. No company or
transaction used in the analyses below as a comparison is directly comparable to
U.S. Satellite Broadcasting, Hughes or GM or the contemplated transaction. The
analyses were prepared solely for purposes of Goldman Sachs' providing its
opinion to the U.S. Satellite Broadcasting board as to the fairness to the
holders of the U.S. Satellite Broadcasting stock from a financial point of view
of the stock consideration and the cash consideration to be received by the
holders of U.S. Satellite Broadcasting stock, taken as a unitary transaction,
and do not purport to be appraisals or necessarily reflect the prices at which
businesses or securities actually may be sold. Analyses based on forecasts of
future results are inherently subject to uncertainty, being based on numerous
factors or events beyond the control of the parties or their respective
advisors, and are not necessarily indicative of actual future results, which may
be significantly more or less favorable than suggested by these analyses; as a
result, future results may be materially different from those forecast. Goldman
Sachs' opinion to the U.S. Satellite Broadcasting board was only one of many
factors taken into consideration by the U.S. Satellite Broadcasting board in
making its determination to approve the merger agreement. The following summary
is not a complete description of the analysis performed by Goldman Sachs and is
qualified by reference to the written opinion of Goldman Sachs set forth in
Annex B-2.

Goldman Sachs, as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings,

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competitive biddings, secondary distributions of listed and unlisted securities,
private placements, and valuations for estate, corporate and other purposes.
U.S. Satellite Broadcasting selected Goldman Sachs as its financial advisor
because it is a nationally recognized investment banking firm that has
substantial experience in transactions similar to the merger. Goldman Sachs has
provided investment banking services to U.S. Satellite Broadcasting, including
acting as a co-manager of the initial public offering of its class A stock.
Goldman Sachs has also provided investment banking services to Hughes from time
to time including serving as an advisor to Hughes on the spin-off of its defense
electronics business and subsequent merger with Raytheon Company and its
investment in Thomson Multimedia SA and may provide investment banking services
to Hughes in the future.

THE U.S. SATELLITE BROADCASTING FINANCIAL ADVISORS' FINANCIAL ANALYSES. The
following is a summary of the material analyses performed by Credit Suisse First
Boston and Goldman Sachs in connection with their respective opinions:

IMPLIED PREMIUM ANALYSIS. The U.S. Satellite Broadcasting financial
advisors analyzed the consideration to be received in the merger by holders of
U.S. Satellite Broadcasting stock in relation to the market price of the GM
class H stock. Such analysis indicated that the exchange ratio represented a
premium of 114.7% based on the market price of the GM class H stock at the close
of business on the New York Stock Exchange on December 8, 1998 of $39.81 per
share and the market price of the class A stock at the close of business on
Nasdaq on December 8, 1998 of $7.00 per share, and 51.5% based on the market
price of the GM class H stock at the close of business on the New York Stock
Exchange on December 9, 1998 of $38.88 per share and the market price of the
class A stock at the close of business on Nasdaq on December 9, 1998 of $9.69
per share.

HISTORICAL DAILY EXCHANGE RATIO ANALYSIS. The U.S. Satellite
Broadcasting financial advisors compared the exchange ratio, computed as if the
merger closed on December 8, 1998, to the ratio implied by dividing the daily
closing price for the class A stock on Nasdaq for each trading day during the
twelve-month period ended December 8, 1998 by the daily closing price for the GM
class H stock on the New York Stock Exchange for each trading day during the
twelve-month period ended December 8, 1998. No daily exchange ratio during this
last twelve-month period exceeded .2600, as compared to the exchange ratio of
.3775.

HISTORICAL STOCK TRADING ANALYSIS. The U.S. Satellite Broadcasting
financial advisors reviewed the historical trading prices and volumes for the
class A stock. This analysis indicated that:

- the weighted average price of the class A stock for the period from
February 1, 1996 through December 8, 1998 was $16.36 per share; and

- the weighted average price of the class A stock for the twelve months
ending on December 8, 1998 was $8.69 per share

as compared to the implied consideration to be received in the merger by holders
of U.S. Satellite Broadcasting stock of $15.03 per share, based on the market
price of the GM class H stock at the close of business on the New York Stock
Exchange on December 8, 1998 of $39.81 per share.

SELECTED COMPANIES ANALYSIS. The U.S. Satellite Broadcasting financial
advisors reviewed and compared financial information relating to U.S. Satellite
Broadcasting to corresponding financial information for sixteen satellite
companies, the last three listed of which are direct-to-home satellite
television companies:

- Asia Satellite Telecommunications Holdings Limited;

- COMSAT Corporation;

- PanAmSat Corporation;

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- Societe Europeenne des Satellites;

- Shinawatra Satellite Public Company Limited;

- American Mobile Satellite Corporation;

- APT Satellite Holdings Limited;

- Globalstar Telecommunications Limited;

- ICO Global Communications Holdings Limited;

- Iridium World Communications Ltd.;

- Hughes Electronics Corporation;

- Loral Space & Communications Ltd;

- Orbital Sciences Corporation;

- British Sky Broadcasting Limited;

- Echostar Communications Corporation and

- TCI Satellite Entertainment, Inc.

The U.S. Satellite Broadcasting financial advisors calculated and compared
various financial multiples and ratios for U.S. Satellite Broadcasting and the
companies listed above. The financial multiples of U.S. Satellite Broadcasting
were calculated using the market price of the class A stock at the close of
business on Nasdaq on December 8, 1998 of $7.00 per share. The multiples and
ratios for each of the companies listed above were based on the most recent
publicly available information. The U.S. Satellite Broadcasting financial
advisors' analysis of the companies listed above compared the five-year
estimated annual fully diluted earnings per share ("EPS") growth rates, compiled
by Institutional Broker Estimate System, for the companies listed above, which
ranged from 4.0% to 67.5% with a median of 30.0%, as compared to 25.0% for U.S.
Satellite Broadcasting. The U.S. Satellite Broadcasting financial advisors also
compared the closing share prices of each of the companies listed above on
December 8, 1998 as a percentage of its 52 week high share price, which ranged
from 10.8% to 97.9% with a median of 65.05%, as compared to 58.0% for U.S.
Satellite Broadcasting.

DISCOUNTED CASH FLOW ANALYSIS. The U.S. Satellite Broadcasting
financial advisors performed a discounted cash flow analysis of U.S. Satellite
Broadcasting using forecasts prepared by U.S. Satellite Broadcasting's
management, excluding potential synergies that U.S. Satellite Broadcasting's
management expects to result from the merger. The U.S. Satellite Broadcasting
financial advisors aggregated the present value of free cash flows for the years
1999 through 2001 with the present value of a range of terminal values. The
range of terminal values represented the value of U.S. Satellite Broadcasting's
free cash flows beyond 2002. The U.S. Satellite Broadcasting financial advisors
calculated a range of terminal values by applying a range of selected earnings
before interest, taxes, depreciation and amortization multiples between 11.0x
and 15.0x based, in part, on published research analysts' reports. In connection
with this analysis, the U.S. Satellite Broadcasting financial advisors used
discount rates between 11.0% and 17.0%. This range of discount rates represented
U.S. Satellite Broadcasting's estimated weighted average cost of capital as
derived from published research analysts' reports. This analysis indicated an
implied equity reference range for U.S. Satellite Broadcasting of approximately
$7.53 to $12.40 per share.

SELECTED TRANSACTIONS ANALYSIS. The U.S. Satellite Broadcasting
financial advisors analyzed information relating to selected transactions in the
satellite industry since 1993. These selected transactions included the sale of:

- various assets of The News Corporation Limited/MCI Worldcom, Inc. to
Echostar Communications Corporation;

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- 2.5% of DIRECTV, Inc. from AT&T Corporation to DIRECTV, Inc.;

- Orion Network Systems to Loral Space & Communications Ltd.;

- CTA Inc.-Satellite to Orbital Sciences Corporation;

- American Sky Broadcasting to Primestar, Inc.;

- 50% of EchoStar Communications Corporation to The News Corporation
Limited;

- 19.8% of Asia Satellite Telecommunications Holdings Limited to CITIC;

- Skynet Holdings, Inc. to Loral Space & Communications Ltd.;

- PanAmSat Corporation to Hughes;

- 7.2% of Comsat Corporation to Joseph Harrosh;

- 2.5% of DIRECTV, Inc. to AT&T Corporation;

- a minority interest in Iridium World Communications Ltd. to Veba Urbana;

- Multitone Electronics to Kantone Holdings Limited; and

- Sundstrand Corporation to Allied Signal Inc.

This analysis indicated that for the selected transactions levered aggregate
consideration as a multiple of latest twelve-month revenues ranged from 0.9x to
22.7x, with a median of 9.4x, as compared to 2.5x for the levered aggregate
consideration to be received in the merger by holders of U.S. Satellite
Broadcasting stock.

PRO FORMA MERGER ANALYSIS. The U.S. Satellite Broadcasting financial
advisors prepared pro forma analyses of the financial impact of the merger.
Using earnings and expected synergy forecasts for U.S. Satellite Broadcasting
and Hughes prepared by their respective managements for the years 1999 and 2000,
the U.S. Satellite Broadcasting financial advisors compared the estimated EPS of
the GM class H stock on a stand-alone basis to the estimated EPS of the GM class
H stock on a pro forma basis, based on discussions with Hughes' financial
advisor and after giving effect to U.S. Satellite Broadcasting management's
estimate of post-merger cost, but not revenue, expected synergies to result from
the merger of approximately $49.4 to $61.0 million in 1999 and approximately
$112.0 to $150.1 million in 2000. The U.S. Satellite Broadcasting financial
advisors performed this analysis based on a price of $14.68 per share of U.S.
Satellite Broadcasting stock, which is the implied consideration to be received
per share by holders of the U.S. Satellite Broadcasting stock pursuant to the
merger based upon the market price of the GM class H stock at the close of
business on the New York Stock Exchange on December 9, 1998 of $38.88 per share,
under three scenarios; namely, that the GM class H stock would equal 50%, 60%
and 70%, of the total value of the consideration to be received in the merger by
the holders of U.S. Satellite Broadcasting stock. Based on this analysis, the
proposed merger would be dilutive by approximately 32%, 31% and 30% in the above
scenarios to the holders of GM class H stock on an EPS basis in 1999 and
accretive to the holders of GM class H stock on an EPS basis by approximately 1%
in each scenario in 2000.

FEE ARRANGEMENTS. Under the terms of its engagement, U.S. Satellite has
agreed to pay Credit Suisse First Boston for its financial advisory services in
connection with the merger an aggregate financial advisory fee upon completion
of the merger equal to 0.50% of the aggregate consideration payable in the
merger. U.S. Satellite Broadcasting also has agreed to reimburse Credit Suisse
First Boston for all out-of-pocket expenses incurred by Credit Suisse First
Boston in performing its services, including the fees and expenses of legal
counsel and any other advisor retained by Credit Suisse First Boston, and to
indemnify Credit Suisse First Boston and related persons and entities against
liabilities, including liabilities under the federal securities laws.

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By an engagement letter dated May 28, 1998, U.S. Satellite Broadcasting
engaged Goldman Sachs to act as its financial advisor in connection with the
sale of U.S. Satellite Broadcasting. Under the terms of the Goldman Sachs
engagement letter, U.S. Satellite Broadcasting has agreed to pay Goldman Sachs
upon completion of the merger a transaction fee of 0.50% of the aggregate
consideration received by holders of U.S. Satellite Broadcasting's equity
securities, including amounts paid to holders of options, warrants and
convertible securities, in the merger. U.S. Satellite Broadcasting has agreed to
reimburse Goldman Sachs for its reasonable out-of-pocket expenses, including
attorney's fees, and to indemnify Goldman Sachs against liabilities, including
liabilities under the federal securities laws.

MISCELLANEOUS. Each of Credit Suisse First Boston and, as noted above,
Goldman Sachs and their respective affiliates have in the past provided
financial services to U.S. Satellite Broadcasting, Hughes and their respective
affiliates unrelated to the proposed merger, and Goldman Sachs currently is
providing financial advisory services to Hughes unrelated to the merger, for
which services each of Credit Suisse First Boston and Goldman Sachs and their
respective affiliates have received, and in the case of Goldman Sachs will
receive, compensation. Louis G. Zachary, a managing director of Credit Suisse
First Boston, is a member of the U.S. Satellite Broadcasting board. Each U.S.
Satellite Broadcasting financial advisor and its respective affiliates provide a
full range of financial, advisory and brokerage services and in the ordinary
course of business may from time to time effect transactions and hold positions
in the securities or options on securities of U.S. Satellite Broadcasting or GM,
including GM class H stock, for its own account and for the accounts of
customers. Credit Suisse First Boston and Goldman Sachs may at any time hold
long or short positions in such securities.

HUGHES' AND GM'S REASONS FOR THE MERGER

Hughes and GM believe that the consummation of the merger will constitute a
further step in the implementation of Hughes' strategy of maintaining its
position, through DIRECTV, as a leading provider of high-powered digital
direct-to-home satellite services to subscribers in national and international
markets. As part of that strategy, Hughes is actively exploring strategic
opportunities worldwide that can enhance its leadership position in
entertainment and communications services. The merger will allow Hughes to
combine premium movie channels, currently offered by U.S. Satellite
Broadcasting, with DIRECTV's current channel offerings. Expected benefits from
the merger include simplification of the consumer purchase decision process,
enhanced program packaging flexibility, improved platform cost effectiveness and
increased customer satisfaction. In addition, upon completion of the merger,
DIRECTV will obtain the rights to various FCC rights and licenses currently
controlled by a U.S. Satellite Broadcasting subsidiary.

ACCOUNTING TREATMENT

The merger will be accounted for as a "purchase" for financial accounting
purposes in accordance with generally accepted accounting principles, whereby
the purchase price will be allocated based on fair values of assets acquired and
liabilities assumed. Such allocations will be made based upon valuations and
other studies that have not been finalized. The excess of such purchase price
over the amounts so allocated, if any, will be allocated to goodwill.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

The following is a general summary of the material anticipated United States
federal income tax consequences of the merger. The summary is based on the
Internal Revenue Code of 1986, as amended, Treasury regulations promulgated or
proposed thereunder and administrative rulings and court decisions, in each case
as in effect as of the date hereof and all of which are subject to change at any
time, possibly with retroactive effect. Any such change could alter the tax
consequences to GM, Hughes or a U.S. Satellite Broadcasting shareholder
described below. This summary is based on the assumption that shares of U.S.
Satellite Broadcasting stock are held as capital assets, as defined in Section
1221 of the Internal

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Revenue Code, on the date of the merger. This summary is not a complete
description of all of the tax consequences of the merger and does not address
all aspects of United States federal income taxation that might be relevant to a
holder in light of his, her or its status or personal investment circumstances.
This summary also does not address the United States federal income tax
consequences of the merger to shareholders subject to special tax rules, such as
foreign persons, financial institutions, dealers in securities, insurance
companies, tax-exempt entities, regulated investment companies, pass-through
entities, holders who acquired their shares of U.S. Satellite Broadcasting stock
pursuant to the exercise of an employee stock option or right or otherwise as
compensation, and holders who hold U.S. Satellite Broadcasting stock as part of
a "hedge", "straddle" or "conversion transaction" or who have a "functional
currency" other than the U.S. dollar. In addition, no information is provided in
this summary for the tax consequences of the merger under foreign, state or
local laws, or the impact of the federal alternative minimum tax provisions.

HOLDERS OF U.S. SATELLITE BROADCASTING STOCK ARE URGED TO CONSULT WITH THEIR
TAX ADVISORS REGARDING THE PARTICULAR TAX CONSEQUENCES OF THE MERGER TO THEM,
INCLUDING THE EFFECTS OF UNITED STATES FEDERAL, STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS.

GENERAL. Weil Gotshal, counsel to Hughes and special tax counsel to GM, has
provided an opinion to the effect that

- the merger should be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Internal
Revenue Code;

- each of GM, Hughes and U.S. Satellite Broadcasting should be a party to
the reorganization within the meaning of Section 368(b) of the Internal
Revenue Code; and

- no gain or loss should be recognized by GM, Hughes or U.S. Satellite
Broadcasting as a result of the merger.

Leonard Street, counsel to U.S. Satellite Broadcasting, has provided an opinion
to the effect of the first two bullet points of the preceding sentence and that
no gain or loss should be recognized by a shareholder of U.S. Satellite
Broadcasting as a result of the merger with respect to shares of U.S. Satellite
Broadcasting stock converted into shares of GM class H stock, other than with
respect to cash received in lieu of fractional shares of GM class H stock. The
merger will not be completed unless counsel confirm their opinions at the
effective time. See "The Merger Agreement--Conditions To The Merger." The tax
opinions have been and will be based on the basis of facts, representations and
assumptions set forth or referred to in such opinions, and the opinions are
subject to limitations and qualifications set forth in the opinions. In
providing these opinions, Weil Gotshal and Leonard Street have required and
relied, and will require and rely, on factual representations contained in
certificates of officers of GM, Hughes, U.S. Satellite Broadcasting and Hubbard
Broadcasting. None of the tax opinions to be delivered to the parties in
connection with the merger is binding on the Internal Revenue Service or the
courts, and the parties do not intend to request a ruling from the IRS on the
tax consequences of the merger.

U.S. SATELLITE BROADCASTING SHAREHOLDERS WHO RECEIVE ONLY GM CLASS H STOCK
IN THE MERGER. No gain or loss should be recognized by a shareholder of U.S.
Satellite Broadcasting as a result of the merger with respect to U.S. Satellite
Broadcasting stock converted only into shares of GM class H stock. The aggregate
tax basis of the shares of GM class H stock received in the merger by such a
U.S. Satellite Broadcasting shareholder should be equal to the aggregate tax
basis of the shares of U.S. Satellite Broadcasting stock surrendered for the GM
class H stock, and the holding period of these shares of GM class H stock should
include the period during which the shares of U.S. Satellite Broadcasting stock
surrendered in exchange for the GM class H stock were held.

U.S. SATELLITE BROADCASTING SHAREHOLDERS WHO RECEIVE ONLY CASH IN THE
MERGER. A U.S. Satellite Broadcasting shareholder that receives only cash
consideration as a result of the merger or pursuant to the

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exercise of dissenters' rights will recognize gain or loss equal to the
difference between the amount of cash consideration received by such holder and
the tax basis of the holder's U.S. Satellite Broadcasting stock. Gain or loss
recognized by a holder of U.S. Satellite Broadcasting stock as a result of the
merger will be capital gain or loss, and will be long-term capital gain or loss
if the holding period for such holder's shares of U.S. Satellite Broadcasting
stock is greater than one year at the time of the consummation of the merger.

U.S. SATELLITE BROADCASTING SHAREHOLDERS WHO RECEIVE BOTH CASH AND GM CLASS
H STOCK IN THE MERGER. A U.S. Satellite Broadcasting shareholder that receives
both cash consideration and GM class H stock as a result of the merger should
recognize gain equal to the lesser of the gain that the holder realizes in the
merger and the amount of cash the holder receives. For this purpose, a holder's
realized gain is equal to the amount by which the sum of the cash and the fair
market value of the GM class H stock received exceeds the holder's aggregate tax
basis in the surrendered U.S. Satellite Broadcasting stock. No holder who
receives a combination of GM class H stock and cash should be allowed to
recognize any loss as a result of the merger.

Any gain recognized by a U.S. Satellite Broadcasting shareholder who
receives a combination of GM class H stock and cash pursuant to the merger
should be treated as capital gain unless the receipt of the cash has the effect
of the distribution of a dividend for federal income tax purposes, in which case
the recognized gain will be treated as ordinary dividend income to the extent of
the shareholder's ratable share of U.S. Satellite Broadcasting's accumulated
earnings and profits. Any gain that is treated as capital gain should be
long-term capital gain if the holding period for these shares was greater than
one year at the time of the consummation of the merger.

For purposes of determining whether the cash received has the effect of a
distribution of a dividend for federal income tax purposes, a U.S. Satellite
Broadcasting shareholder is treated as if the shareholder first exchanged all of
his, her or its shares of U.S. Satellite Broadcasting stock solely for GM class
H stock and then GM immediately redeemed a portion of such GM class H stock in
exchange for the cash the shareholder actually received. Under this analysis, in
general, if the receipt of cash in the deemed redemption by the holder results
in a substantially disproportionate reduction in the holder's voting stock
interest in GM or is not essentially equivalent to a dividend, the receipt of
the cash will not have the effect of the distribution of a dividend. For
purposes of this determination, the holder's voting stock interest in GM before
the deemed redemption is compared to the holder's interest in GM after the
deemed redemption, taking into account in each case any GM stock constructively
owned by the holder as a result of the application of the attribution rules of
the Internal Revenue Code. Generally, taking into account actual ownership and
ownership by attribution, if the holder's interest in the voting stock of GM has
declined, as a result of the deemed redemption, by more than 20%, then the
receipt of cash should not be taxed as a dividend. However, even if the holder's
interest in the voting stock of GM has declined, as a result of the deemed
redemption, by 20% or less, then generally, in the case of a minority
stockholder who is neither an officer nor director of GM or who exercises no
control over GM corporate affairs, the receipt of cash should not be taxed as a
dividend. Each shareholder should consult with his or her own tax advisor as to
whether the receipt of the cash has the effect of a distribution of a dividend,
and, if so, the consequences thereof.

The holding period of a share of GM class H stock received in the merger,
including a fractional share interest deemed received and redeemed as described
below, by such a U.S. Satellite Broadcasting shareholder should include the
holder's holding period in the U.S. Satellite Broadcasting stock surrendered in
exchange therefor. The aggregate tax basis of the GM class H stock received by a
U.S. Satellite Broadcasting shareholder, including fractional shares deemed
received, should be the same as the aggregate tax basis of the U.S. Satellite
Broadcasting stock exchanged increased by the gain recognized, if any, including
any portion of such gain that is treated as a dividend, and decreased by the
amount of cash consideration received, other than cash received in lieu of
fractional shares.

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CASH IN LIEU OF FRACTIONAL SHARES. Cash received by a U.S. Satellite
Broadcasting shareholder in lieu of a fractional share interest in GM class H
stock will be treated as received in redemption of the fractional share
interest, and a U.S. Satellite Broadcasting shareholder should generally
recognize gain or loss for United States federal income tax purposes equal to
the difference between the amount of cash received and the portion of the tax
basis of the share of U.S. Satellite Broadcasting stock allocable to the
fractional share interest. The gain or loss should be treated as a capital gain
or loss and, generally, should be long-term capital gain or loss if the holding
period for the shares is greater than one year as of the date of the merger.

HOLDERS OF SEPARATE BLOCKS OF U.S. SATELLITE BROADCASTING STOCK. Special
rules apply if the U.S. Satellite Broadcasting shareholder owns U.S. Satellite
Broadcasting stock that was acquired on different dates or is otherwise regarded
as separate blocks for federal income tax purposes.

INFORMATION REPORTING AND BACKUP WITHHOLDING. Payments in respect of U.S.
Satellite Broadcasting stock may be subject to information reporting to the IRS
and to a 31% backup withholding tax. Backup withholding will not apply, however,
to a payment to a holder of U.S. Satellite Broadcasting stock or other payee if
the stockholder or payee completes and signs the substitute Form W-9, or
otherwise proves to Hughes and the exchange agent that it is exempt from backup
withholding. Any amounts withheld under the backup withholding rules are not an
additional tax and may be refunded or credited against a holder's United States
federal income tax liability, provided that the holder furnishes the required
information to the IRS.

INTERESTS OF DIRECTORS, OFFICERS AND AFFILIATES OF U.S. SATELLITE BROADCASTING
IN THE MERGER

In considering the recommendations of the U.S. Satellite Broadcasting board,
shareholders should be aware that some members of the U.S. Satellite
Broadcasting board, some executive officers of U.S. Satellite Broadcasting, and
some shareholders of U.S. Satellite Broadcasting have interests in the merger
that are in addition to the interests of U.S. Satellite Broadcasting's
shareholders generally.

SHAREHOLDERS AGREEMENT. In connection with the negotiation of the merger
agreement, Hughes required that Hubbard Broadcasting, Inc. and Stanley S.
Hubbard, Stanley E. Hubbard and Robert W. Hubbard, the Chairman of the Board,
Chief Executive Officer and Executive Vice President, respectively, of U.S.
Satellite Broadcasting, enter into a shareholders agreement, dated December 11,
1998, with Hughes. The Hubbards are also executive officers, directors and
shareholders of Hubbard Broadcasting. In this agreement, Hubbard Broadcasting
agreed to vote some of the shares owned by it, constituting 19.9% of the voting
power of the U.S. Satellite Broadcasting stock, in favor of the merger
agreement. In addition, Hubbard Broadcasting and the Hubbards have indicated
their intention to vote the rest of the shares of U.S. Satellite Broadcasting
owned by them, even though not subject to the shareholders agreement, in favor
of the merger agreement. As of the record date, Hubbard Broadcasting owned 73.4%
of the total voting power of the U.S. Satellite Broadcasting stock.

In addition, Hubbard Broadcasting and the Hubbards agreed to vote:

- against any action or agreement that would result in the breach of any
covenant, representation or warranty or other obligation of U.S. Satellite
Broadcasting under the merger agreement; and

- against any extraordinary corporate action or change in U.S. Satellite
Broadcasting's corporate structure or any other action which could be
expected to delay or materially adversely affect the merger.

Hubbard Broadcasting and the Hubbards also granted to Hughes an option to
purchase shares of U.S. Satellite Broadcasting stock owned by them which in the
aggregate constitute 19.9% of the voting power of

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the U.S. Satellite Broadcasting stock. The option exercise price is equal to the
per share merger consideration, determined as of the date of exercise. The
option becomes exercisable if:

- the merger agreement is terminated by Hughes because U.S. Satellite
Broadcasting shareholders fail to approve the merger agreement and the
merger;

- U.S. Satellite Broadcasting fails to use its reasonable best efforts to
take all action reasonably necessary, proper or advisable to consummate
the merger; or

- Hubbard Broadcasting or any Hubbard materially breaches the shareholders
agreement.

The option is exercisable for the 120-day period beginning on the date of the
termination of the merger agreement or the date on which GM or Hughes is
informed of a material breach. Further, Hubbard Broadcasting and the Hubbards
agreed to waive any rights to dissent from the merger under Minnesota law. If
the merger agreement is terminated by Hughes because U.S. Satellite
Broadcasting's shareholders fail to approve the merger agreement, Hubbard
Broadcasting has agreed to pay to Hughes a termination fee of $50 million.
Finally, Hubbard Broadcasting and the Hubbards acknowledged that the transfer of
any shares of GM class H stock acquired in the merger may only be made in
accordance with Rule 145 under the Securities Act and agreed to sign a "lock-up"
agreement restricting the transfer of shares of GM class H stock during any
underwritten offering of GM class H stock occurring within two years of the
effective time.

The option and the termination fee payable by Hubbard Broadcasting were
requirements of Hughes. Hughes had indicated that it would not be willing to
enter into a merger agreement without these provisions being included in the
shareholders agreement. Hughes had originally desired an option on all of the
shares owned by Hubbard Broadcasting, but was prevented from taking an option by
the provisions of Section 302A.671 of Minnesota law. This section provides that
if a person or entity acquires 20% or more of the voting power of a Minnesota
public company's shares, the acquiror loses voting rights on the shares in
excess of 19.9% of the voting power unless the other shareholders of the
company, at a special meeting, vote to restore voting rights. Nevertheless, by
taking an option on shares with 19.9% of the voting power and negotiating a $50
million termination fee, Hughes gained significant protection in the event the
Hubbards vote against the merger agreement. Were that to happen, Hughes could
become a major shareholder of U.S. Satellite Broadcasting and could collect a
substantial fee from Hubbard Broadcasting.

CONSULTING AGREEMENTS. Each of the Hubbards will enter into a consulting
agreement with DIRECTV. The consulting agreements will be effective on or prior
to the effective time and will have a four-year term. Under the consulting
agreements, the Hubbards will become members of a to-be-created advisory board
of DIRECTV and will perform reasonable consulting services as may be requested
by a member of the board or by senior management of DIRECTV. Each consultant
will receive an annual fee of $100,000. The consulting agreements contain
provisions which prohibit the Hubbards from engaging in specified business
activities if these activities create a conflict of interest with their advisory
board duties.

NON-COMPETITION AGREEMENTS. Hubbard Broadcasting and the Hubbards will
enter into a non-competition agreement with GM and Hughes. The non-competition
agreement will have a term of four years commencing on the effective time. The
non-competition agreement will prohibit Hubbard Broadcasting and the Hubbards
from competing with GM and Hughes in the entertainment distribution business in
the United States and Canada, except to the extent that they are already engaged
in the entertainment distribution business other than through U.S. Satellite
Broadcasting. The entertainment distribution business is defined as any business
or operation involving the delivery of multichannel video, audio and/or data
services to consumers, but specifically excludes:

- video, audio and/or data services delivered terrestrially utilizing the
facilities of a broadcast television or radio station;

- the development or ownership of programming content;

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- data services delivered on a stand-alone basis to personal computers; or

- other services as Hubbard Broadcasting or the Hubbards may submit from
time to time for Hughes' good faith consideration and approval.

Neither Hubbard Broadcasting nor the Hubbards will receive any fees or
payments pursuant to the non-competition agreement.

TRADEMARK/TRADE NAME OPTION AGREEMENT. Hughes will grant to Hubbard
Broadcasting an option to purchase all the right, title and interest to the
names "United States Satellite Broadcasting Company," "United States Satellite
Broadcasting Company, Inc.," "USSB," "U.S. Satellite Broadcasting," and the USSB
logo. The option may be exercised by Hubbard Broadcasting during a six-month
period beginning three years following the effective time of the merger or
earlier at the sole discretion of Hughes. The purchase price for the option is
$50,000.

ASSET OPTION AGREEMENT. Hughes will grant to Hubbard Broadcasting an option
to purchase all of Hughes' right, title and interest to the national broadcast
center facility in Oakdale, Minnesota, currently owned by U.S. Satellite
Broadcasting, and all antennas and all other fixed assets related to the
broadcast center facility. Hubbard Broadcasting may exercise the option at any
time after the effective time and prior to the fifteenth month following the
effective time, but cannot actually purchase the assets until the eighteenth
month following the effective time. The purchase price for the option will be
the fair market value of the assets being acquired.

AFFILIATION AGREEMENT. Hubbard Broadcasting and DIRECTV will enter into an
affiliation agreement whereby DIRECTV will continue U.S. Satellite
Broadcasting's distribution of the All News Channel-TM- via the direct broadcast
satellite distribution system in the United States, its territories and
possessions. The term of the license for All News Channel-TM- is seven years.
During the first five years of the license, DIRECTV will pay a bulk licensing
fee equal to $2 million in year one and increasing by $1 million each year
through year five, so that the license fee in year five will be $6 million.
Thereafter, DIRECTV will pay a per subscriber rate.

PROGRAMMING AGREEMENT. DIRECTV and Hubbard Broadcasting will enter into a
programming letter agreement governing the terms and conditions for carriage by
DIRECTV of two channels of direct broadcast satellite programming to be
developed by Hubbard Broadcasting. Hubbard Broadcasting will have a period of
seven years from the effective time of the merger to make programming available
and to enter into affiliation agreements with respect to these channels with
DIRECTV. The programming must be compatible with other DIRECTV programming, must
be of acceptable quality and will be carried at market rates.

PURCHASE OF SPRING PROGRAMMING PARTNERS, LLC. Pursuant to the merger
agreement, U.S. Satellite Broadcasting has sold to Hubbard Broadcasting all of
U.S. Satellite Broadcasting's interest in Spring Programming Partners, LLC, a
company that develops and supplies programming, for a purchase price of
$100,000. Hubbard Broadcasting assumed all liabilities and obligations relating
to Spring, including U.S. Satellite Broadcasting's obligation to make an
additional capital contribution to Spring of $500,000, and indemnified U.S.
Satellite Broadcasting with respect to these liabilities and obligations.

TRANSITION SERVICES AND INDEMNITY AGREEMENT. U.S. Satellite Broadcasting
currently leases facilities and obtains management services from Hubbard
Broadcasting and Conus Communications Company Limited Partnership, an affiliate
of Hubbard Broadcasting. Under the terms of the merger agreement, U.S. Satellite
Broadcasting, Hubbard Broadcasting, Conus and Hughes will enter into a
transition services and indemnity agreement. Under this agreement, the service
agreements and leases between U.S. Satellite Broadcasting and Hubbard
Broadcasting and/or Conus will be continued for the benefit of Hughes but will
be amended to provide, among other things, that the terms of these agreements
shall terminate without notice one year after the effective time or upon 60 days
written notice by Hughes. The tax sharing

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<PAGE>
agreement currently in effect between Hubbard Broadcasting and U.S. Satellite
Broadcasting will terminate upon completion of the merger. Payment of $2.3
million due to U.S. Satellite Broadcasting by Hubbard Broadcasting under this
agreement will be made by Hubbard Broadcasting on the earlier of the first
anniversary of the closing date of the merger or April 1, 2000. In addition, a
$10 million administrative services fee currently due to Hubbard Broadcasting
from U.S. Satellite Broadcasting will be paid by Hughes to Hubbard Broadcasting
on the earlier of the first anniversary of the closing date of the merger or
April 1, 2000. This $10 million administrative services fee is an existing
obligation of U.S. Satellite Broadcasting payable at the time the board
determines U.S. Satellite Broadcasting has sufficient cash to fund its operating
needs. The board determined that U.S. Satellite Broadcasting had sufficient cash
to fund its operating needs in March 1999.

The shareholder agreement, the consulting agreements, the non-competition
agreements, the trademark/trade name option agreement, the asset option
agreement, the affiliation agreement, the programming agreement and the
transition services and indemnity agreement are referred to collectively as the
ancillary agreements.

WARRANTS AND STOCK OPTIONS. As of the record date, some of the directors
and executive officers of U.S. Satellite Broadcasting had options granted under
the U.S. Satellite Broadcasting 1995 stock option plan or the 1996 non-employee
director stock option plan to acquire an aggregate of 73,500 shares of class A
stock. The plans provide that the compensation committee of the U.S. Satellite
Broadcasting board may accelerate the vesting of outstanding options on a change
of control. The merger agreement permits U.S. Satellite Broadcasting to
accelerate the vesting of options, and the U.S. Satellite Broadcasting board has
determined that all outstanding options shall become immediately exercisable in
full at the effective time. In the merger, each optionholder will receive an
amount in cash equal to the difference between the merger consideration per
share and the per share exercise price of his or her option, multiplied by the
number of shares of U.S. Satellite Broadcasting stock which may be purchased
pursuant to the option, subject to applicable withholding taxes.

The table below identifies the number of options held by each director and
executive officer of U.S. Satellite Broadcasting as of the record date and the
cash payment to be received by the person, subject to tax withholdings, for the
options, assuming a cash price in the merger of $18.00 per share of U.S.
Satellite Broadcasting stock.

<TABLE>
<CAPTION>
NUMBER OF
U.S. SATELLITE BROADCASTING CASH PAYMENT PER
NAME STOCK OPTIONS OPTION GRANT TOTAL CASH PAYMENT
- ------------------------------------------- ------------------------------- ---------------- ------------------
<S> <C> <C> <C>
Stanley S. Hubbard......................... 0 $ 0 $ 0
Stanley E. Hubbard......................... 0 0 0
Robert W. Hubbard.......................... 0 0 0
Gerald D. Deeney........................... 0 0 0
Bernard J. Weiss........................... 20,000 0
15,000 153,750 153,750
Jan G. Schuth.............................. 10,000 92,500
10,000 118,120
2,500 25,625 236,245
David S. Allen............................. 1,000 6,500
1,000 10,250 16,750
Peter F. Frenzer........................... 1,000 6,500
1,000 10,250 16,750
Frank N. Magid............................. 1,000 6,500
1,000 10,250 16,750
</TABLE>

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<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
U.S. SATELLITE BROADCASTING CASH PAYMENT PER
NAME STOCK OPTIONS OPTION GRANT TOTAL CASH PAYMENT
- ------------------------------------------- ------------------------------- ---------------- ------------------
<S> <C> <C> <C>
John W. Marvin............................. 1,000 6,500
1,000 10,250 16,750
Ward L. Quaal.............................. 1,000 6,500
1,000 10,250 16,750
William D. Savoy........................... 1,000 6,500
1,000 10,250 16,750
Herbert S. Schlosser....................... 1,000 6,500
1,000 10,250 16,750
Peter G. Skinner(1)........................ -- -- --
Robert E. Torray........................... 0 0 0
Louis G. Zachary........................... 1,000 6,500
1,000 10,250 16,750
</TABLE>

- ------------------------

(1) All options granted to Mr. Skinner have been assigned by Mr. Skinner to Dow
Jones & Company, his employer.

EMPLOYEE TRANSITION PROGRAM; SEVERANCE. The merger agreement provides that
$15 million will be made available to be awarded to current and some former
employees of U.S. Satellite Broadcasting and some current employees of Hubbard
Broadcasting who provide services to U.S. Satellite Broadcasting. The amount of
individual awards was established by the executive management of U.S. Satellite
Broadcasting and was approved by DIRECTV. Final awards may be reduced if
necessary to avoid excise taxes resulting from the application of Internal
Revenue Code Section 280G. Prior to the effective time, the Chief Executive
Officers of U.S. Satellite Broadcasting and DIRECTV can award any unallocated
amounts. Awards are payable on:

- the first anniversary of the closing date of the merger;

- if earlier, on an employee's termination of employment at the end of the
transition period;

- as otherwise provided for in the merger agreement; or

- by reason of death or disability.

Awards to current employees of Hubbard Broadcasting are payable upon
termination of the transition services agreement, if earlier than the first
anniversary. In addition, employees of U.S. Satellite Broadcasting will be
eligible for a six-month severance payment from DIRECTV in some circumstances.
See "The Merger Agreement--Employee Matters."

The table below identifies the cash award under the employee transition
program and the potential severance amounts established for each executive
officer of U.S. Satellite Broadcasting. Employee transition program awards and
severance amounts were based upon a set of factors which was applied to all U.S.
Satellite Broadcasting employees:

<TABLE>
<CAPTION>
NAME AMOUNT OF AWARD
- ---------------------------------------------------------------------------- ----------------
<S> <C>
Stanley S. Hubbard.......................................................... $ 202,867
Stanley E. Hubbard.......................................................... $ 710,033
Robert W. Hubbard........................................................... $ 507,167
Gerald D. Deeney............................................................ $ 100,000
Bernard J. Weiss............................................................ $ 600,896
Jan G. Schuth............................................................... $ 392,836
</TABLE>

Outside directors do not receive awards under either program.

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OFFICERS AND DIRECTORS INDEMNIFICATION; INSURANCE. Hughes has agreed to
provide the directors and officers of U.S. Satellite Broadcasting an insurance
and indemnification policy for a period of not less than six years from the
effective time. In addition, Hughes will, to the fullest extent permitted by
applicable law, and consistent with the bylaws of Hughes, indemnify, defend and
hold harmless each director or officer of U.S. Satellite Broadcasting against
all liabilities arising out of actions or omissions occurring at or prior to the
effective time that are based on the merger or the fact that the person is or
was a director or officer of U.S. Satellite Broadcasting.

REGULATORY FILINGS AND APPROVALS

HSR AND ANTITRUST. Under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules promulgated by the Federal Trade Commission,
the merger may not be completed until required notifications and information
have been given to the Antitrust Division of the U.S. Department of Justice and
the FTC and waiting period requirements have been satisfied. GM and U.S.
Satellite Broadcasting made Hart-Scott-Rodino Act filings in December 1998 and
the waiting period expired on January 20, 1999.

State antitrust authorities may bring legal action under state antitrust
laws seeking to enjoin the completion of the merger or seeking divestiture of
various assets of U.S. Satellite Broadcasting. Private parties may also seek to
take legal action under the antitrust laws under limited circumstances.

FCC APPROVAL PROCESS. The Federal Communications Commission must approve
the transfer of control to Hughes of various licenses and other rights held by a
U.S. Satellite Broadcasting subsidiary. On December 17, 1998, the parties filed
applications with the FCC requesting consent to the transfer of control of the
FCC licenses, permits and authorizations held by a U.S. Satellite Broadcasting
subsidiary to Hughes. The applications were placed on public notice on December
23, 1998. On April 1, 1999, the FCC's International Bureau issued an order
approving the transfer of control of the FCC license for five frequencies at the
101 DEG. orbital location and related earth station licenses, as well as the
transfer of control of the FCC authorization to construct, launch and operate
three frequencies at the 110 DEG. orbital location. The latter transfer is
subject to the condition that DIRECTV initiate service using the three
frequencies at the 110 DEG. orbital location by December 31, 1999. Any request
for reconsideration of the International Bureau's order or application for
review by the full FCC must be filed by May 3, 1999. In addition, the FCC may
determine to review the Bureau's order on its own motion until May 11, 1999.
Absent any of the foregoing, the April 1, 1999 order will become final on May
11, 1999.

RIGHTS OF SHAREHOLDERS WHO OBJECT TO THE MERGER

Shareholders of U.S. Satellite Broadcasting are entitled to dissenters'
rights under Sections 302A.471 and 302A.473 of Minnesota law. Sections 302A.471
and 302A.473 are reprinted in their entirety as Annex C to this proxy statement.
The following discussion is not a complete statement of the law relating to
dissenters' rights. ANY HOLDER OF U.S. SATELLITE BROADCASTING STOCK WHO WISHES
TO EXERCISE STATUTORY DISSENTERS' RIGHTS OR WHO WISHES TO RESERVE THE RIGHT TO
DO SO SHOULD REVIEW THIS DISCUSSION AND ANNEX C CAREFULLY, BECAUSE FAILURE TO
STRICTLY COMPLY WITH THE PROCEDURES WILL RESULT IN THE LOSS OF DISSENTERS'
RIGHTS.

A record holder of shares of U.S. Satellite Broadcasting stock as of the
record date who follows the steps described in this section, who continues to be
the record holder of the shares through the effective time, and who does not
vote in favor of the merger, will be entitled to the fair value of his or her
shares. A person having a beneficial interest in shares of U.S. Satellite
Broadcasting Stock that are held of record in the name of another person, such
as a broker or nominee, must cause the record holder to properly follow the
steps summarized below in a timely manner to perfect dissenters' rights.

PROCEDURES BEFORE THE MERGER. Under Section 302A.473, where a merger
agreement is to be submitted for approval at a meeting of shareholders, a
corporation that is a party to the merger must notify each of the record holders
of its stock as of the record date of the availability of such dissenters'
rights and

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include in the notice a copy of Sections 302A.471 and 302A.473. This proxy
statement/prospectus provides this notice.

HOLDERS OF U.S. SATELLITE BROADCASTING STOCK WHO DESIRE TO EXERCISE THEIR
DISSENTERS' RIGHTS MUST NOT VOTE IN FAVOR OF THE MERGER. If you elect to demand
the fair value of your shares of U.S. Satellite Broadcasting stock, you must
mail or deliver a notice to United States Satellite Broadcasting Company, Inc.
at 3415 University Avenue, St. Paul, Minnesota 55114, Attention: David A. Jones,
before the vote on the merger at the special meeting. This notice will be
sufficient if you give your name and state that you intend to demand the fair
value of your shares.

PROCEDURES AFTER THE MERGER. After the merger agreement has been approved
by the shareholders, Hughes must send to all shareholders who have properly
given notice of their intent to demand the fair value of their shares, a notice
that contains:

- the address to which a demand for payment and certificates representing
the U.S. Satellite Broadcasting stock must be sent in order to obtain
payment and the date by which they must be received;

- any restrictions on transfer of uncertificated shares that will apply
after the demand for payment is received;

- a form used to certify the date on which the shareholder, or the
beneficial owner on whose behalf the shareholder dissents, acquired the
shares or an interest in them and to demand payment; and

- a copy of Section 302A.471 and 302A.473 and a brief description of the
procedures to be followed under these sections.

IN ORDER TO RECEIVE THE FAIR VALUE OF THE DISSENTING SHARES, YOU MUST DEMAND
PAYMENT AND DEPOSIT YOUR SHARE CERTIFICATES WITHIN 30 DAYS AFTER THE NOTICE
ABOVE IS GIVEN BY HUGHES; HOWEVER, YOU RETAIN ALL OTHER RIGHTS AS A SHAREHOLDER
UNTIL THE MERGER TAKES EFFECT.

After the effective time of the merger or after Hughes receives a valid
demand for payment, whichever is later, Hughes must deliver to each dissenting
shareholder who has complied with the notice and delivery requirements above,
the amount that Hughes estimates to be the fair value of the dissenting shares,
plus interest from a date commencing five days after the effective time until
the date of payment calculated at the rate provided under Minnesota law,
presently 4%. The payment must be accompanied by a balance sheet and statement
of income for the fiscal year ending not more than 16 months before the
effective time and the latest available interim financial statements, an
estimate of the fair value of the shares, a brief description of the method used
to reach the estimate, a copy of Sections 302A.471 and 302A.473 and a brief
description of the procedure to be followed in demanding supplemental payment.

If you believe that the amount delivered is less than the fair value of the
dissenting shares plus interest, you may give written notice to Hughes of your
own estimate of the fair value of the dissenting shares, plus interest, within
30 days after Hughes mails the payment, and you may demand payment of the
difference. Otherwise, you are entitled only to the amount paid by Hughes.

If Hughes receives such a demand it must, within 60 days after receiving the
demand, either pay to the dissenting shareholder the amount demanded or an
amount agreed to by the dissenting shareholder after a discussion with Hughes or
file in court a petition requesting the court to determine the fair value of the
dissenting shares of all the demanding dissenting shareholders. The action must
be filed in Ramsey County, Minnesota, where the last registered office of U.S.
Satellite Broadcasting was located. The court may appoint appraisers, with
powers and authorities the court deems proper, to receive evidence on and to
recommend the amount of the fair value of the dissenting shares. The court must
determine whether the dissenting shareholders have fully complied with the
requirements of Section 302A.473. The court must also determine the fair value
of the dissenting shares, taking into account any and all factors the court
finds relevant, computed by any method or combination of methods that the court,
in its discretion, sees fit to

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use, whether or not used by Hughes or by the dissenting shareholders. The fair
value of the dissenting shares as determined by the court could be more than or
less than the value being offered in the merger. The fair value of the
dissenting shares as determined by the court is binding on all shareholders,
wherever located. The dissenting shareholders are entitled to judgment in cash
for the amount by which the fair value of the dissenting shares as determined by
the court, plus interest, exceeds the amount, if any, paid by Hughes to the
dissenting shareholders. The dissenting shareholders are not liable to Hughes
for the amount, if any, by which the amount paid to them exceeds the fair value
of the dissenting shares as determined by the court, plus interest.

The court will determine the cost and expenses of the proceeding, including
the reasonable expenses and compensation of any appraisers and will assess those
costs and expenses against Hughes, except that a court may assess part or all of
those costs and expenses against a dissenting shareholder whose action is found
to be arbitrary, vexatious, or not in good faith. If the court finds that Hughes
has failed to comply substantially with Section 302A.473, the court also may
assess fees and expenses against Hughes, including the fees of attorneys and
experts, as the court deems equitable. These fees and expenses may also be
assessed against any person who has acted arbitrarily, vexatiously or not in
good faith in bringing the proceeding, and may be awarded to a party injured by
those actions.

As provided in Section 302A.471, subdivision 4, a shareholder of U.S.
Satellite Broadcasting has no right at law or equity to set aside the approval
of the merger agreement or the completion of the merger, except if such approval
or completion is fraudulent with respect to such shareholder or U.S. Satellite
Broadcasting.

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THE MERGER AGREEMENT

The following describes the material terms of the merger agreement. A copy
of the merger agreement is attached to this proxy statement as Annex A and is
incorporated herein by reference. Since a summary cannot provide you with every
detail, you are strongly urged to read the entire merger agreement, so that you
will have a complete understanding of its terms.

GENERAL

At the effective time, U.S. Satellite Broadcasting will be merged with and
into Hughes, the separate corporate existence of U.S. Satellite Broadcasting
will cease and Hughes will continue as the surviving corporation. As a result of
the merger, Hughes will succeed to and assume all the rights and obligations of
U.S. Satellite Broadcasting in accordance with Minnesota and Delaware law. The
directors and officers of Hughes will be the directors and officers of the
surviving corporation and the certificate of incorporation and bylaws of Hughes
will be the certificate of incorporation and bylaws of the surviving
corporation.

As soon as practicable on or after the "closing date," which will be no
later than the second business day following the satisfaction or waiver of the
conditions set forth in the merger agreement, merger documents will be filed by
the parties with the Secretary of State of the State of Minnesota and the
Secretary of State of the State of Delaware. The merger will be effective upon
the filing of those documents.

CONVERSION OF SECURITIES

At the effective time of the merger, each issued and outstanding share of
U.S. Satellite Broadcasting stock, other than shares beneficially owned by GM,
Hughes or U.S. Satellite Broadcasting or any of their subsidiaries, will be
canceled without payment. Dissenting shares will have the right to receive the
merger consideration. The outstanding capital stock of Hughes and GM will remain
outstanding and will be unchanged as a result of the merger.

MERGER CONSIDERATION

The merger consideration will consist of a combination of GM class H stock
and cash. Subject to possible adjustment as described below, each U.S. Satellite
Broadcasting shareholder can elect to receive for each share of U.S. Satellite
Broadcasting stock held by such shareholder either:

- a fractional share of GM class H stock equal to the exchange ratio
described below; or

- cash equal to the exchange ratio multiplied by the volume-weighted average
closing price of the GM class H stock on the New York Stock Exchange for
the 20 consecutive trading days ending the second trading day prior to the
closing date of the merger.

The exchange ratio is fixed at .3775 as long as the 20-day average price of
the GM class H stock, computed as described immediately above, is between
$27.8146 and $47.6821. If the 20-day average price is greater than $47.6821, the
exchange ratio will be adjusted so as to limit the value, based on the 20-day
average price, of the consideration to be received by U.S. Satellite
Broadcasting shareholders to $18 per share of U.S. Satellite Broadcasting stock.
If the 20-day average price is less than $27.8146, but not less than $19.8675,
the exchange ratio will be equal to the quotient obtained by dividing $10.50 by
such 20-day average price, such that the value to be received by U.S. Satellite
Broadcasting shareholders, based on the 20-day average price, will be $10.50 per
share of U.S. Satellite Broadcasting stock. If the 20-day average price is less
than $19.8675, the exchange ratio will be .5285 and the value of the
consideration to be received by U.S. Satellite Broadcasting shareholders, based
on the 20-day average price, will be less than $10.50 per share.

If the merger were completed on the date of this proxy statement/prospectus,
the 20-day average price would have been $53.05, the exchange ratio would have
been .3393 and the value per share to be received by U.S. Satellite Broadcasting
shareholders, based on the 20-day average price, would have been $18.00.

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The merger agreement obligates U.S. Satellite Broadcasting to terminate its
contracts with Convergys Information Management Group Inc. and with Lockheed
Martin Corporation. The exchange ratio would be reduced if termination payments
made by U.S. Satellite Broadcasting to either Convergys Information Management
Group Inc. or to Lockheed Martin Corporation exceeded amounts agreed to by U.S.
Satellite Broadcasting and Hughes. U.S. Satellite Broadcasting has terminated
both contracts and made termination payments within the agreed upon amounts;
therefore no reduction in the exchange ratio will be made.

LIMITATIONS ON STOCK ELECTIONS AND CASH ELECTIONS

The merger agreement:

- limits the number of shares of GM class H stock to be issued in the merger
to 70% of the product of the number of shares of U.S. Satellite
Broadcasting stock and .3775; if the merger were completed on the date of
this proxy statement/prospectus, this maximum share number would be
23,737,518;

- limits the amount of GM class H stock to be issued in the merger to not
more than 70% of the aggregate merger consideration; and

- provides that the amount of cash to be paid in the merger cannot be less
than a minimum of 30% of the aggregate merger consideration or exceed a
maximum of 50% of the aggregate merger consideration.

The total amount of cash to be paid in the merger will also be adjusted as
necessary to enable Weil Gotshal and Leonard Street to provide written opinions
relating to the federal income tax consequences of the merger, and to prevent
the number of shares of GM class H stock issued in the merger from exceeding the
maximum share limitation. These factors, along with fluctuations of the average
price of the GM class H stock, will affect the amount and make-up of the merger
consideration, as well as the determination whether distributions of the merger
consideration will be made strictly in accordance with the cash elections and
stock elections as made by shareholders.

If U.S. Satellite Broadcasting shareholders elect to receive, in the
aggregate, more cash than is permitted to be paid under the foregoing
limitations, each U.S. Satellite Broadcasting shareholder who made a cash
election will receive GM class H stock, on a pro rata basis, to the extent
necessary for the aggregate merger consideration to comply with the cash
limitations.

If U.S. Satellite Broadcasting shareholders elect to receive, in the
aggregate, more GM class H stock than is permitted to be issued under the
foregoing limitations, then the number of shares to be received by each
shareholder making a stock election would be reduced pro rata and the amount of
cash to be paid to the shareholder would be increased. Furthermore, if the
20-day average price of the GM class H stock is less than $27.8146, such that
the number of shares of the GM class H stock to be issued in the merger would
exceed the stock limitations described above, then the number of shares to be
received by each shareholder making a stock election would also be reduced pro
rata and the amount of cash to be paid to the shareholder would be increased.

EXCHANGE OF CERTIFICATES; PROCEDURES FOR EXCHANGE

GM will appoint a bank or trust company to act as exchange agent for the
payment of the merger consideration. As soon as reasonable after the effective
time, the exchange agent will mail to each record holder of U.S. Satellite
Broadcasting stock immediately prior to the effective time:

- instructions for delivery and surrender of stock certificates;

- an election form providing for stockholders to make the cash election
and/or the stock election. The election form will include information as
to the average price, the exchange ratio and the value per share to be
received in the merger; and

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- a letter of transmittal specifying that delivery of stock certificates, or
other evidence of stock ownership, will be made, and the risk of loss of
the certificates will pass, only on delivery of certificates to the
exchange agent.

The deadline for shareholders to make an election will be no later than 5:00
p.m. New York, New York time on the date which is twenty business days after the
effective time of the merger. If a holder of U.S. Satellite Broadcasting stock
has not submitted to the exchange agent an effective, properly completed
election form prior to the election deadline, he or she will be deemed to have
made a cash election. A stock election will be validly made only if the exchange
agent has received a properly completed and signed election form, accompanied by
either the corresponding certificates or an appropriate guarantee of delivery of
the certificates from a member of a registered national securities exchange or
the National Association of Securities Dealers, Inc. or a commercial bank. Any
shareholder who has made an election may change it at any time by submitting a
revised election form prior to the election deadline.

As soon as reasonable following the election deadline, the exchange agent
shall determine the allocation of the cash portion of the merger consideration
and the stock portion of the merger consideration.

Promptly after the allocation determination, Hughes will deposit with the
exchange agent an exchange fund consisting of:

- cash in an amount sufficient to pay the aggregate amount of cash
consideration to be paid in the merger; and

- stock certificates, or other evidence of stock ownership, representing the
aggregate number of shares of GM class H stock to be issued in the merger.

Upon surrender of a certificate to the exchange agent, together with the
letter of transmittal, duly executed, and any other documents as Hughes or the
exchange agent reasonably requests, a shareholder will be entitled to receive:

- a certified or bank cashiers check for the cash consideration which the
shareholder has either elected to receive or has been allocated; and

- GM class H stock certificates, or other evidence of stock ownership, for
the shares of GM class H stock which the shareholder has either elected to
receive or has been allocated.

No dividends or other distributions with respect to shares of GM class H
stock, with a record date after the effective time, will be paid to the holder
of any unsurrendered certificate until the certificate is surrendered. No
fractional shares of GM class H stock will be issued in the merger and any
holder entitled to receive a fraction of a share will instead receive an amount
in cash equal to the value of the fractional share, based on the value per share
to be received in the merger. GM, Hughes and the exchange agent will be entitled
to deduct and withhold from the consideration otherwise payable to any
shareholder, the amount any of them is required to deduct and withhold under the
Internal Revenue Code or any provision of state, local or foreign tax law.
However, it is anticipated that no withholding will be required for U.S.
citizens.

Any portion of the exchange fund which remains undistributed to U.S.
Satellite Broadcasting shareholders for twelve months after the effective time
will be delivered to Hughes, upon demand. After that time, any former U.S.
Satellite Broadcasting shareholders who have not complied with the exchange
provisions of the merger agreement may look only to Hughes for payment of their
merger consideration and will be treated as a general creditors of Hughes.

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REPRESENTATIONS AND WARRANTIES

The merger agreement contains various representations and warranties with
respect to U.S. Satellite Broadcasting and its subsidiaries relating to, among
other things:

- their corporate organization, existence, good standing and similar
corporate matters;

- their capitalization;

- the authorization, execution, delivery and enforceability of the merger
agreement;

- the absence of conflicts, violations and defaults under their charters or
bylaws and under other agreements and documents;

- the absence of required consents, approvals, orders, or authorizations of,
or registrations, declarations or filings with, governmental entities
relating to the merger;

- the accuracy and completeness of the documents and reports filed with the
Securities and Exchange Commission;

- the accuracy and completeness of the information in this proxy statement
and the Form S-4;

- the absence of a material adverse effect or other material changes or
events since January 1, 1998;

- the existence of necessary permits or approvals from governmental
entities, the absence of material pending or threatened litigation and
compliance with applicable laws;

- the filing of tax returns and payment of taxes;

- the absence of defaults under material contracts;

- owned and leased real property matters;

- environmental matters;

- labor matters;

- benefit plans and other matters relating to the Employee Retirement Income
Security Act of 1974;

- information relating to subsidiaries;

- FCC matters;

- intellectual property matters;

- material contracts and programming agreements;

- the recommendation of the U.S. Satellite Broadcasting board with respect
to the merger agreement;

- brokers' fees and expenses; and

- the receipt of opinions from Goldman Sachs and Credit Suisse First Boston.

The merger agreement also contains various representations and warranties of
GM and Hughes relating to, among other things:

- their corporate organization, existence, good standing and similar
corporate matters;

- their capitalization;

- the authorization, execution, delivery and enforceability of the merger
agreement;

- the absence of conflicts, violations and defaults under their certificates
of incorporation or by-laws and under other agreements and documents;

- the absence of required consents, approvals, orders or authorizations of,
or registrations, declarations or filings with, governmental entities
relating to the merger;

- the accuracy and completeness of the documents and reports filed with the
Securities and Exchange Commission;

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- the accuracy and completeness of the information contained in this proxy
statement and the Form S-4;

- the absence of a material adverse effect since January 1, 1998;

- the existence of necessary permits or approvals from governmental
entities, the absence of material pending or threatened litigation and
compliance with applicable laws;

- the absence of defaults under material contracts;

- environmental matters;

- benefit plans and other matters relating to the Employee Retirement Income
Security Act of 1974;

- information relating to subsidiaries;

- FCC matters; and

- brokers' fees and expenses.

As used in the merger agreement and this proxy statement/prospectus, the
term material adverse effect means:

- any development that results in a material adverse effect on the business,
operations, financial performance or prospects of a party and its
subsidiaries, taken as whole; or

- an event, change, effect or development that may materially impair or
delay the ability of a party to complete the merger.

A material adverse effect does not include effects or developments arising from
general economic conditions affecting participants in the multichannel
entertainment distribution industry, inactions of U.S. Satellite Broadcasting if
Hughes refuses to provide its consent to actions required under the merger
agreement, or actions which U.S. Satellite Broadcasting is required to take
pursuant to the merger agreement.

CONDUCT OF BUSINESS PENDING THE MERGER

CONDUCT OF U.S. SATELLITE BROADCASTING AND SUBSIDIARIES. Until the
effective time, U.S. Satellite Broadcasting will conduct its operations in the
ordinary course consistent with past practice and will:

- seek to preserve intact its business organization;

- take all actions necessary to maintain and preserve its FCC licenses;

- seek to keep available the service of its current officers and employees;
and

- seek to preserve its relationships with customers, suppliers and others
having business dealings with it to the end that good will and ongoing
businesses shall be unimpaired at the effective time.

Except as permitted or required under the merger agreement, U.S. Satellite
Broadcasting has further agreed that until the effective time it will not, nor
will it permit any of its subsidiaries to:

- amend its articles of incorporation or bylaws;

- issue any stock, any stock options or any stock appreciation rights,
except for the issuance of shares pursuant to outstanding options granted
prior to the date of the merger agreement;

- split, combine or reclassify any shares of its capital stock, declare, set
aside or pay any dividend or other distribution, or redeem or otherwise
acquire any of its securities or any securities of any of its
subsidiaries;

- adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization;

- alter the corporate structure or ownership of any subsidiary;

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- except as may be required by law or permitted by the merger agreement,
adopt, amend or terminate any employee benefit agreement, or other
arrangement for the benefit or welfare of any director, officer or
employee; increase the compensation or fringe benefits of any director,
officer or employee, except for normal increases in the ordinary course;
or pay any bonuses or annual incentive awards with respect to 1998 or 1999
in excess of $1,375,000 in the aggregate;

- hire or retain any individual as an employee or consultant;

- enter into, renew or modify any material contract;

- except as may be required as a result of a change in law or generally
accepted accounting principles, change any of its accounting principles or
practices;

- revalue any of its assets, including writing up or down the value of
inventory or writing-off notes or accounts receivable, other than in the
ordinary course of business consistent with past practice;

- make or revoke any tax election, settle or compromise any material tax
liability or change or make a request to any taxing authority to change
any material aspect of its method of accounting for tax purposes;

- pay, discharge or satisfy any material claims, liabilities or obligations,
other than in the ordinary course of business consistent with past
practice;

- settle or compromise any pending or threatened material suit, action or
claim or initiate or join any material suit, action or claim;

- incur, assume or guarantee any debt except in the ordinary course of
business and in immaterial amounts;

- make any loans, advances or capital contributions to, or investments in,
any other person, other than customary and immaterial loans or advances to
employees in the ordinary course of business consistent with past
practice;

- pledge or otherwise encumber shares of capital stock of U.S. Satellite
Broadcasting or its subsidiaries or mortgage or pledge any of its assets;

- acquire or sell any assets outside the ordinary course of business or any
assets which in the aggregate are material;

- acquire any corporation, partnership or other business organization or
division thereof or any equity interest therein;

- authorize any new capital expenditure or expenditures in excess of
$250,000 or, in the aggregate, in excess of $3 million; or

- enter into or amend any contract, agreement, commitment or arrangement
providing for the taking of any action that would be prohibited by the
merger agreement.

CONDUCT OF GM AND HUGHES. Hughes and its subsidiaries will conduct their
respective operations in the ordinary course of business consistent with past
practice. GM and Hughes further agreed that GM will not, and will not permit
Hughes and its subsidiaries to:

- amend its certificate of incorporation or by-laws in a manner which
adversely affects the rights, powers and preferences of the GM class H
stock;

- adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of
Hughes or any of its subsidiaries, except that Hughes and/or any
subsidiary of Hughes may adopt a plan of merger in connection with a
merger of any subsidiary of Hughes into Hughes or another subsidiary of
Hughes, or an acquisition or disposition of a business or assets, except
for any such acquisition or disposition which would have a material
adverse effect on Hughes;

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- alter through merger, liquidation, reorganization, restructuring or in any
other fashion the corporate structure or ownership of Hughes or any of its
subsidiaries, except for any alteration which would not have a material
adverse effect on Hughes; or

- take any action, or agree to take any action, which would have the effect
of terminating Hughes' engaging in the multichannel entertainment
distribution industry.

NO SOLICITATION

U.S. Satellite Broadcasting has agreed that it will not, nor will it permit
any of its subsidiaries nor any of its or its subsidiaries' officers, directors,
employees, representatives, agents or affiliates to initiate, solicit or
encourage any inquiries or the making of any proposal that constitutes, or may
be reasonably expected to lead to, a proposal to acquire U.S. Satellite
Broadcasting or enter into or continue discussions or negotiations in
furtherance of any inquiries or to obtain an acquisition proposal. However, U.S.
Satellite Broadcasting may engage in discussions with any person or entity for
the sole purpose of clarifying the terms of any unsolicited proposal if the
discussions are, in the judgment of independent counsel to the independent
directors of U.S. Satellite Broadcasting, required by the fiduciary duties of
the U.S. Satellite Broadcasting board.

The U.S. Satellite Broadcasting board may not:

- subject to its fiduciary duties, withdraw or modify the approval or
recommendation by the U.S. Satellite Broadcasting board of the merger
agreement and the shareholders agreement;

- approve or recommend any other acquisition proposal; or

- cause U.S. Satellite Broadcasting or any of its subsidiaries to enter into
any agreement, including a letter of intent, with respect to any other
acquisition proposal.

U.S. Satellite Broadcasting will promptly advise Hughes of receipt of any
acquisition proposal, the identity of the person making the acquisition proposal
and the material terms.

ACCESS TO INFORMATION

U.S. Satellite Broadcasting will, until the effective time:

- give GM and Hughes and their authorized representatives reasonable access
to all employees, plants, offices, warehouses and other facilities and to
all books and records of U.S. Satellite Broadcasting and its subsidiaries;

- permit GM and Hughes to make inspections as they reasonably require; and

- cause U.S. Satellite Broadcasting's officers and those of its subsidiaries
to furnish GM with the financial and operating data and other information
with respect to the business, properties and personnel of U.S. Satellite
Broadcasting and its subsidiaries as they may from time to time reasonably
request.

U.S. Satellite Broadcasting also granted Hughes the right to retain one or
more environmental professionals to conduct an environmental assessment and
investigation of any land, facility or operations currently or previously owned
by U.S. Satellite Broadcasting or any of its subsidiaries, including the right
to conduct tests of soil, ground water, surface water or air. In addition, U.S.
Satellite Broadcasting agreed to furnish to Hughes monthly financial statements
and data as are regularly prepared for distribution to U.S. Satellite
Broadcasting's Chief Executive Officer and, prior to filing with the SEC, all
quarterly and annual financial statements.

GM and Hughes will hold, and will cause their consultants and advisors to
hold, in confidence all documents and information furnished to them concerning
U.S. Satellite Broadcasting and its subsidiaries in accordance with the terms of
a confidentiality agreement between U.S. Satellite Broadcasting, DIRECTV and
Hughes dated December 1, 1998.

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REASONABLE BEST EFFORTS

U.S. Satellite Broadcasting, GM and Hughes will use their reasonable best
efforts to take all actions and to do all things necessary, proper or advisable
to complete the merger, including:

- cooperating in the preparation and filing of this proxy
statement/prospectus, the registration statement on Form S-4, and any
filings under the Hart-Scott-Rodino Act and the Communications Act of
1934;

- cooperating in obtaining approval for listing on the New York Stock
Exchange of the GM class H stock to be issued in the merger;

- taking all action reasonably necessary to secure any necessary consents of
all third parties and governmental entities;

- transferring existing environmental permits to Hughes;

- contesting any legal proceeding relating to the merger; and

- executing any additional instruments necessary to complete the merger.

BILLING AND CUSTOMER MANAGEMENT SYSTEMS

U.S. Satellite Broadcasting and DIRECTV will cooperate to consolidate their
respective billing and customer management systems. As required by the merger
agreement, U.S. Satellite Broadcasting has terminated its contract with
Convergys Information Management Group Inc. In the event the merger is not
completed, DIRECTV will provide to U.S. Satellite Broadcasting, on reasonably
satisfactory terms, billing and customer management systems for up to 18 months
commencing on the later of July 1, 1999 or the date on which the merger
agreement is terminated, at the contract rates set in the Convergys contract.

10 DEG. CONSTRUCTION PERMIT

U.S. Satellite Broadcasting and Hughes will cooperate and use their
reasonable best efforts to maintain the construction permit and launch authority
to use digital broadcast satellite frequencies at 110 DEG. west longitude
currently held by U.S. Satellite Broadcasting, including jointly developing a
plan for this construction permit which might include the use of a satellite
constructed by Hughes. Consequently, U.S. Satellite Broadcasting terminated its
satellite construction contract with Lockheed Martin. On April 1, 1999 the FCC's
International Bureau issued an order approving the transfer of control of the
FCC authorization to construct, launch and operate three frequencies at the
110 DEG. west longitude location to DIRECTV. This transfer is subject to the
condition that DIRECTV initiate service using the three frequencies at the
110 DEG. location by December 31, 1999. See "Regulatory Filings And Approvals".

ACCOUNTING ADJUSTMENTS

In connection with the termination of the contracts with Convergys and
Lockheed Martin, the payment of the contractual termination fees and the
write-off of progress payments previously made under the Lockheed Martin
contract, U.S. Satellite Broadcasting took a charge to operations in the fourth
quarter of 1998 of approximately $21 million.

EMPLOYEE MATTERS

EMPLOYMENT; RELOCATION AND SEVERANCE. All employees of U.S. Satellite
Broadcasting will be employed by DIRECTV immediately after the closing date at a
comparable salary rate for a period of time necessary to effect the transition
of U.S. Satellite Broadcasting's business to DIRECTV. This period is not
expected to exceed one year and, in some cases, will be shorter than one year.
Hughes has agreed to consider every U.S. Satellite Broadcasting employee
individually for permanent employment with

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DIRECTV. Any employee who is offered permanent employment with DIRECTV and is
required to relocate within the first 12 months after the closing will be
provided with the standard relocation package of DIRECTV and an adjusted salary
rate for a comparable position at DIRECTV in such location. Any employee who is
not offered permanent employment with DIRECTV or who accepts a relocation
package and is terminated without cause by DIRECTV within 12 months of the
closing will receive severance pay of six month's salary and bonus and career
counseling and out-placement services in exchange for a full release of DIRECTV,
U.S. Satellite Broadcasting and their affiliates.

STOCK OPTIONS. The U.S. Satellite Broadcasting board has adopted
resolutions to fully vest and effect the cancellation of all outstanding options
in exchange for a cash payment equal to the aggregate excess of the merger
consideration per share over the aggregate exercise price of the option, less
any applicable withholding taxes.

EMPLOYEE TRANSITION PROGRAM. Fifteen million dollars will be made available
to all current and some former employees of U.S. Satellite Broadcasting and some
current employees of Hubbard Broadcasting who provided services to U.S.
Satellite Broadcasting. The amount of individual awards was established by the
executive management of U.S. Satellite Broadcasting with the approval of
DIRECTV. Awards are payable on the first anniversary of the closing, the end of
an employee's transition period or an employee's death or disability, whichever
is earlier. An employee is not entitled to payment if the employee is
terminated, or could have been terminated, for cause or resigns from employment
with U.S. Satellite Broadcasting, Hughes, DIRECTV or their affiliates prior to
the one-year anniversary of the closing.

REPLACEMENT PAYLOAD OPTION AGREEMENT AND CHANNEL SERVICES PROVISION AGREEMENT

On December 11, 1998, U.S. Satellite Broadcasting and Hughes entered into a
replacement payload option agreement which provides that, if the merger
agreement is terminated by GM or Hughes because all transponders on DBS-1, and
not solely those transponders utilized by U.S. Satellite Broadcasting, have
suffered a confirmed failure then U.S. Satellite Broadcasting may elect, within
30 days of such termination, to purchase for $90 million five transponders on
DIRECTV 1-R, a satellite under construction by Hughes and planned for launch as
a direct broadcast satellite at 101 DEG. west longitude. In addition, on
December 11, 1998, DIRECTV and U.S. Satellite Broadcasting entered into a
channel services provision agreement which provides that if all transponders on
DBS-1, and not solely those transponders utilized by U.S. Satellite
Broadcasting, have suffered a confirmed failure, DIRECTV will provide to U.S.
Satellite Broadcasting channel capacity and related services on either or both
of DBS-2 and DBS-3 for four premium movie services. DIRECTV will continue to
provide this channel capacity and services unless U.S. Satellite Broadcasting
fails to exercise its option to purchase the five transponders under the
replacement payload option agreement within 30 days of notice of termination of
the merger agreement by GM or Hughes.

CONDITIONS TO THE MERGER

The obligations of each of GM, Hughes and U.S. Satellite Broadcasting to
effect the merger are subject to the satisfaction or waiver at or prior to the
effective time of the following conditions:

- the approval of the merger agreement by the majority of the voting power
of the outstanding shares of U.S. Satellite Broadcasting;

- no statute, rule, regulation, executive order, ruling or injunction
prohibiting or restricting the completion of the merger;

- the expiration of the Hart-Scott-Rodino Act waiting period;

- the receipt of FCC consent to the transfer of control of the FCC licenses
by means of a final and nonappealable FCC action;

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- the effectiveness of the registration statement on Form S-4 registering
the GM class H stock under the Securities Act and the receipt all
applicable state securities permits and authorizations; and

- the authorization by New York Stock Exchange of the listing of the GM
class H stock issuable in the merger.

The obligation of U.S. Satellite Broadcasting to effect the merger is also
subject to the satisfaction of the following conditions at or prior to the
effective time:

- the representations and warranties of GM and Hughes contained in the
merger agreement or in any other document delivered pursuant to the merger
agreement shall be true and correct in all respects as of the effective
time and GM and Hughes shall have delivered to U.S. Satellite Broadcasting
a certificate to that effect;

- the obligations of GM and Hughes to be performed at or before the
effective time pursuant to the terms of the merger agreement shall have
been duly performed in all material respects at or before the effective
time and GM and Hughes shall have delivered to U.S. Satellite Broadcasting
a certificate to that effect;

- the ancillary agreements shall have been duly executed and delivered by
Hughes or DIRECTV;

- there shall have been no events, changes or effects with respect to Hughes
or its subsidiaries that would have a material adverse effect on Hughes;
and

- Leonard Street shall have delivered its opinion relating to some of the
federal income tax consequences of the merger. See "The Merger--Material
Federal Income Tax Consequences."

The respective obligations of GM and Hughes to effect the merger are also
subject to the satisfaction of the following conditions at or prior to the
effective time:

- the representations and warranties of U.S. Satellite Broadcasting
contained in the merger agreement or in any document delivered pursuant to
the merger agreement shall be true and correct in all respects as of the
effective time and U.S. Satellite Broadcasting shall have delivered to GM
and Hughes a certificate to that effect;

- each of the obligations of U.S. Satellite Broadcasting to be performed at
or before the effective time shall have been duly performed in all
material respects at or before the effective time and U.S. Satellite
Broadcasting shall have delivered to GM and Hughes a certificate to that
effect;

- the dissenting shares shall constitute not more than 5% of the outstanding
U.S. Satellite Broadcasting stock;

- U.S. Satellite Broadcasting shall have delivered to Hughes all consents,
modifications or notices necessary to effect the assignment of various
material contracts of U.S. Satellite Broadcasting;

- Hubbard Broadcasting and U.S. Satellite Broadcasting, as applicable, shall
have executed and delivered the ancillary agreements;

- the shareholders agreement shall be in full force and effect;

- there shall have been no events, changes or effects with respect to U.S.
Satellite Broadcasting or its subsidiaries, other than events, changes or
effects primarily resulting from the actions of DIRECTV, which would have
a material adverse effect on U.S. Satellite Broadcasting;

- U.S. Satellite Broadcasting shall have delivered to Hughes not later than
two business days prior to the effective time true, correct, complete and
unredacted copies of U.S. Satellite Broadcasting's programming agreements;
and

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- Hughes shall have received the opinion of Weil Gotshal relating to some of
the federal income tax consequences of the merger. See "The
Merger--Material Federal Income Tax Consequences."

TERMINATION OF THE MERGER AGREEMENT

U.S. Satellite Broadcasting and GM and Hughes can mutually agree to
terminate the merger agreement at any time. U.S. Satellite Broadcasting or
Hughes can terminate the merger agreement if:

- the merger is not completed by September 30, 1999; or

- the U.S. Department of Justice or the FTC has issued, or has stated an
intention to seek, an order or injunction or other restraint preventing
consummation of the merger or related transactions.

Hughes can terminate the merger agreement if:

- U.S. Satellite Broadcasting shareholders fail to approve the merger
agreement;

- U.S. Satellite Broadcasting has breached any of its representations or
warranties in the merger agreement or materially breached its covenants or
agreements under the merger agreement; or

- there has been a failure of the DBS-1 satellite.

U.S. Satellite Broadcasting can terminate the merger agreement if GM or Hughes
has breached any of its representations and warranties in the merger agreement
or materially breached its covenants or agreements under the merger agreement.

FEES AND EXPENSES

Whether or not the merger is completed, all costs and expenses incurred in
connection with the merger agreement and the related transactions will be paid
by the party incurring the costs or expenses. The costs of filing and printing
the Form S-4 and the proxy statement/prospectus will be borne by U.S. Satellite
Broadcasting.

AMENDMENT AND WAIVER

The merger agreement may be amended by the parties at any time before
shareholder approval. After approval, no amendment may be made that requires
further approval by the shareholders unless another shareholder vote is taken.
The merger agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties.

U.S. Satellite Broadcasting or GM or Hughes may, to the extent legally
allowed, extend the time for the performance, waive any inaccuracies in the
representations and warranties, or waive compliance with any of the agreements
or conditions contained in the merger agreement. Any extension or waiver will be
valid only if in writing. The failure of any party to the merger agreement to
assert any of its rights under the merger agreement or otherwise will not
constitute a waiver of those rights.

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OWNERSHIP OF VOTING SECURITIES OF U.S. SATELLITE BROADCASTING

The following table sets forth information with respect to beneficial
ownership of class A stock and common stock by each shareholder known by U.S.
Satellite Broadcasting to the beneficial owner of more than 5% of either class,
each director, each executive officer, and all executive officers and directors
of U.S. Satellite Broadcasting as a group. Such information is presented as of
March 23, 1999.

SHARES OF CLASS A STOCK AND COMMON STOCK
BENEFICIALLY OWNED(1)

<TABLE>
<CAPTION>
PERCENT
PERCENT OF PERCENT OF
NAME AND ADDRESS OF COMMON TOTAL
OF BENEFICIAL OWNER(2) NUMBER CLASS A STOCK STOCK VOTING POWER
- -------------------------------------- --------------------------------- ------------- --------- ------------

<S> <C> <C> <C> <C>
Hubbard Broadcasting, Inc............. 11,790 (Class A) * 78.3 74.5
46,522,825 (Common stock)(3)

Stanley S. Hubbard.................... 7,740 (Class A) * 78.3 74.5
46,522,825 (Common stock)(4)

Stanley E. Hubbard.................... 7,740 (Class A) * 77.6 73.8
46,051,225 (Common stock)(5)

Robert W. Hubbard..................... 7,740 (Class A) * 77.6 73.8
46,051,225 (Common stock)(5)

Nationwide Mutual Insurance Company... 2,565,500 (Class A) 8.4 -- *
One Nationwide Plaza
Columbus, Ohio 43216

Robert E. Torray...................... 8,510,000 (Class A)(6) 28.0 -- 1.4
6610 Rockledge Drive, #450
Bethesda, Maryland 20817
</TABLE>

- ------------------------

* Indicates an amount which is less than one percent.

(1) Each share of common stock is convertible into one share of class A stock at
the option of the holder.

(2) Unless otherwise noted, the address is 3415 University Avenue, St. Paul,
Minnesota 55114.

(3) Includes 2,025 shares of class A stock held by each of Stanley S. Hubbard,
Stanley E. Hubbard and Robert W. Hubbard and 471,600 shares of common stock
held in trust for employees of Hubbard Broadcasting who were instrumental in
the development of U.S. Satellite Broadcasting, for which Stanley S. Hubbard
acts as trustee.

(4) Includes 46,051,225 shares of common stock held by Hubbard Broadcasting,
471,600 shares of common stock held in trust for employees of Hubbard
Broadcasting who were instrumental in the development of U.S. Satellite
Broadcasting, for which Stanley S. Hubbard acts as trustee, and 5,715 shares
of class A stock held by Hubbard Broadcasting.

(5) Includes 46,051,225 shares of common stock and 5,715 shares of class A stock
held by Hubbard Broadcasting.

(6) Includes of 3,000,000 shares of class A stock owned by Robert Torray & Co.,
Inc. and 3,370,000 shares of class A stock owned by Robert Torray Corp.

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<PAGE>

<TABLE>
<CAPTION>
PERCENT
PERCENT OF PERCENT OF
NAME AND ADDRESS OF COMMON TOTAL
OF BENEFICIAL OWNER(2) NUMBER CLASS A STOCK STOCK VOTING POWER
- ------------------------------------- ---------------------------------- ------------- --------- ------------

<S> <C> <C> <C> <C>
Peter G. Skinner..................... 3,000 (Class A) * 7.4 7.1
Dow Jones & Company 4,411,800 (Common stock)(7)
200 Liberty Street
New York, New York 10281

Dow Jones & Company.................. 2,000 (Class A) * 7.4 7.1
200 Liberty Street 4,411,800 (Common stock)
New York, New York 10281

Pittway Corporation.................. 143,000 (Class A) * 4.7 4.5
200 South Wacker Drive 2,781,375 (Common stock)
Chicago, Illinois 60606

Vulcan Ventures, Inc................. 3,529,425 (Common stock) -- 5.9 5.7
110 110th Avenue Northeast
Bellevue, Washington 98004

William D. Savoy..................... 2,000 (Class A)(8) * 5.9 5.7
Vulcan Ventures, Inc. 3,529,425 (Common stock)(9)
110 110th Avenue Northwest
Bellevue, Washington 98004

Par Capital.......................... 2,485,000 (Class A) 8.2 -- *
One Financial Center
Suite 1600
Boston, MA 02111

John W. Marvin....................... 20,100 (Class A)(10) * 2.2 2.1
Marvin Lumber and Cedar Company 1,323,525 (Common stock)(11)
Highway 11
Warroad, Minnesota 56763

Frank N. Magid....................... 662,225 (Class A)(10) 2.2 -- *

David S. Allen....................... 2,000 (Class A)(8) * * *
286,650 (Common stock)

Gerald D. Deeney..................... 3,000 (Class A) * * *
118,550 (Common stock)

Ward L. Quaal........................ 2,000 (Class A)(8) * * *
94,350 (Common stock)
</TABLE>

- ------------------------

(7) Includes 2,000 shares of class A stock and 4,411,800 of shares of common
stock held by Dow Jones & Company, of which Mr. Skinner is General Counsel,
Secretary and Senior Vice President.

(8) Consists of options to purchase shares of class A stock, all of which are
currently exercisable.

(9) Consists of shares held by Vulcan Ventures, Inc., of which Mr. Savoy is Vice
President.

(10) Includes options to purchase 2,000 shares of class A stock, all of which
are currently exercisable.

(11) Consists of shares of common stock held by Marvin Lumber and Cedar Company,
of which Mr. Marvin is Chief Operating Officer.

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<PAGE>

<S> <C> <C> <C> <C>
Herbert S. Schlosser.................. 2,000 (Class A)(8) * * *
83,775 (Common stock)

Bernard J. Weiss...................... 35,500 (Class A)(12) * -- *

Jan G. Schuth......................... 22,500 (Class A)(13) * -- *

Peter F. Frenzer...................... 4,000 (Class A)(10) * -- *

Louis G. Zachary, Jr.................. 2,000 (Class A)(8) * -- *

All directors and executive officers
as a group (16 persons)(14).......... 9,282,115 (Class A) 30.4 94.9 91.8
56,370,900 (Common stock)
</TABLE>

- ------------------------

(12) Includes options to purchase 35,000 shares of class A stock, 15,750 of
which are currently exercisable.

(13) Consists of options to purchase 22,500 shares of class A stock, 2,625 of
which are currently exercisable.

(14) Footnotes (3) and (6)-(14) are incorporated herein by reference.

The U.S. Satellite Broadcasting board has determined that, at the closing of
the merger, the vesting of all outstanding options shall be accelerated so that
such options will be fully exercisable.

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DESCRIPTION OF GM CLASS H STOCK

GENERAL

GM is authorized to issue 2,706,000,000 shares of capital stock, consisting
of:

- 6,000,000 shares of preferred stock, without par value;

- 100,000,000 shares of preference stock, $0.10 par value, of which
11,500,000 shares are designated as series B 9 1/8% preference stock,
3,925,000 shares are designated as series D 7.92% preference stock, and
5,750,000 shares are designated as series G 9.12% preference stock; and

- 2,600,000,000 shares of GM common stock comprised of two classes, which
currently include 2,000,000,000 shares of common stock, $1 2/3 par value,
and 600,000,000 shares of GM class H stock.

On March 31, 1999, the following shares of capital stock of GM were
outstanding:

- approximately 5,005,146 shares of series B 9 1/8% preference stock,
represented by approximately 20,020,586 depositary shares;

- approximately 753,663 shares of series D 7.92% preference stock,
represented by approximately 3,014,654 depositary shares;

- approximately 1,253,852 shares of series G 9 1/2% preference stock,
represented by approximately 5,015,410 depositary shares;

- approximately 648,407,231 shares of GM $1 2/3 stock; and

- approximately 106,521,749 shares of GM class H stock.

There are currently no outstanding shares of preferred stock.

On April 5, 1999, GM redeemed all of the outstanding shares of series B 9 1/8%
preference stock, and the depositary redeemed all of the outstanding Series B
depositary shares.

GM'S DUAL-CLASS COMMON STOCK CAPITAL STRUCTURE

The GM certificate of incorporation restricts the power of the GM board to
declare and pay dividends on either class of common stock. The amounts of
dividends which may be declared and paid by the GM board are allocated to each
separate class of common stock and are subject to the amount legally available
for the payment of dividends by GM. For dividend purposes, this allocation
serves to preserve for each class of GM common stockholders an interest in
retained earnings that is not shared by the other class. This restriction does
not require a physical segregation of the assets of GM on the one hand and
Hughes on the other. It also does not require separate accounts or separate
dividend or liquidation preferences of GM and Hughes assets for the benefit of
the holders of either of the separate classes of GM common stock. The holders of
GM class H stock have liquidation rights in the equity and assets of GM.

The existence of two classes of common stock with separate dividend rights
can give rise to potential divergences among the interests of the holders of the
two classes of GM common stock concerning various intercompany transactions and
other matters. The laws of Delaware govern the duties of the GM board with
respect to these divergences. Under Delaware law, the GM board owes an equal
fiduciary duty to all holders of GM common stock and must act with due care and
on an informed basis in the best interests of GM and all common stockholders,
regardless of class. In this regard, the GM board, in the discharge of its
fiduciary duties, principally through its capital stock committee, oversees the
policies, programs and practices of GM which may impact the potentially
divergent interests of the two classes of GM common stock. The capital stock
committee is comprised entirely of independent directors of GM.

The GM by-laws currently provide that the capital stock committee will
oversee those matters in which the two classes of stockholders may have
divergent interests, particularly as they relate to:

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<PAGE>
- the business and financial relationships between GM or any of its units
and Hughes;

- dividends in respect of, disclosures to stockholders and the public
concerning, and transactions by GM or any of its subsidiaries in, shares
of GM class H stock; and

- any matters arising concerning these items, all to the extent the capital
stock committee may deem appropriate, and recommend changes in policies,
programs and practices as the capital stock committee may deem
appropriate.

The capital stock committee's role is not to make decisions concerning
matters referred to its attention, but rather to oversee the process by which
decisions concerning these matters are made. The capital stock committee
conducts its oversight with a view toward, among other things, assuring a
process of fair dealing between GM and Hughes as well as fair consideration of
the interests of all of GM's common stockholders in the resolution of these
matters.

INTRODUCTION TO THE GM CLASS H STOCK

The following is a general description of the GM class H stock. In addition
to this description, we urge you to refer to Article Fourth of the GM
certificate of incorporation, which sets forth in full the terms of the GM class
H stock.

GM class H stock is designed to provide holders with financial returns based
on the financial performance of Hughes. To further this objective:

- the GM certificate of incorporation allocates earnings of GM attributable
to Hughes between amounts available for the payment of dividends on GM
class H stock and amounts available for the payment of dividends on the GM
$1 2/3 stock, which also permits a corresponding calculation of the
earnings per share of GM attributable to GM class H stock and GM $1 2/3
stock; and

- the GM board adopts dividend policies and practices concerning the GM
class H stock consistent with this design objective as more fully
described below.

GM is the issuer of GM class H stock. The GM board is free at any time to change
its dividend policies and practices concerning the GM class H stock or the GM
$1 2/3 stock. See "Risk Factors Relating To GM's Dual-Class Common Stock Capital
Structure--GM Board Policies And Practices Are Subject To Change."

GM RESTATED CERTIFICATE OF INCORPORATION PROVISIONS REGARDING DIVIDENDS

The financial performance of Hughes determines the earnings per share of GM
class H stock and the portion of GM earnings out of which dividends on the GM
class H stock may be paid. In order to determine what amount is available to pay
dividends on the GM class H stock, the following steps are taken:

- the net income of Hughes is determined for each quarterly accounting
period;

- the net income of Hughes determined for each quarter is divided into
amounts allocated to the GM class H stock and the GM $1 2/3
stock--currently, the GM class H stock is allocated approximately 26.5% of
the net income; and

- the amount allocated to the GM class H stock, referred to as the available
separate consolidated net income of Hughes, is accumulated from quarter to
quarter, together with any surplus attributable to shares of GM class H
stock issued from time to time, and is reduced by the amount of any
dividends actually paid on the GM class H stock.

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<PAGE>
After the amount available to pay dividends on the GM class H stock is
determined as provided above, the GM board may decide to pay or not pay
dividends on the GM class H stock in its discretion. This discretion is subject
to the following restrictions:

- the holders of GM preferred stock, if any, and GM preference stock may
have a higher priority claim on amounts that would otherwise be available
to pay dividends on the GM class H stock, to the extent that dividends
have been declared but not paid on GM's preferred or preference stock; and

- GM can only pay dividends to the extent that it has surplus--the extent to
which the fair market value of GM's net assets exceeds the amount of GM's
capital--or to the extent of GM's net profits for the then current and/or
the preceding fiscal year.

Due to the foregoing restrictions, it is possible that, even though the net
income of Hughes is sufficient to permit the payment of a dividend on the GM
class H stock, payment of a dividend on the GM class H stock would not be
permitted because of the requirements for the payment of dividends on GM
preferred or preference stock, or the Delaware law surplus restriction described
above.

You should note that, since the completion of the restructuring of Hughes
Electronics in late 1997, although payment of dividends on the GM class H stock
has been permitted, the GM board has decided not to pay, and does not intend to
pay in the foreseeable future, cash dividends on GM class H stock.

The following is a more detailed description of the method used to determine
the amount of Hughes earnings available for the payment of dividends on the GM
class H stock, i.e., the available separate consolidated net income of Hughes.
The available separate consolidated net income of Hughes is the net income of
Hughes, its subsidiaries and successors after December 17, 1997 on a
consolidated basis, determined in accordance with generally accepted accounting
principles, without giving effect to any adjustment which would result from
accounting for the 1985 acquisition of Hughes Aircraft Company by GM using the
purchase method of accounting, calculated for each quarterly accounting period
and multiplied by a fraction. The fraction reflects the derivative or "tracking
stock" interests of each of GM's classes of common stock in the earnings of
Hughes for dividend purposes.

- The numerator of the fraction is the weighted average number of shares of
GM class H stock outstanding during any applicable accounting period.

- The denominator of the fraction is the notional number of shares of GM
class H stock which, if issued and outstanding, would represent 100% of
the tracking stock interest in the earnings of Hughes. This denominator is
also referred to in the GM certificate of incorporation as the "class H
dividend base."

- The class H dividend base was initially established by the GM board in
connection with the 1985 acquisition of Hughes Aircraft Company and the
issuance of the original GM class H stock. The class H dividend base was
determined by negotiation between GM and the seller of Hughes Aircraft
Company based on the value of Hughes Electronics immediately after the
acquisition and the amount of GM class H stock the seller was to receive
in the transaction. It has since been adjusted by the GM board in
accordance with the GM certificate of incorporation to reflect various
events, including a stock split in 1988 and contributions by GM of GM
class H stock to Hughes Electronics from time to time for use in
connection with employee benefit plans. The amount of the class H dividend
base was continued when the GM class H stock was recapitalized as part of
the 1997 restructuring of Hughes Electronics. The class H dividend base
will be adjusted in connection with U.S. Satellite Broadcasting's merger
with Hughes and is subject to future adjustment, as described below.

- For the quarter ended December 31, 1998, the numerator of the fraction was
approximately 105.9 million and the denominator was approximately 399.9
million. The resulting fraction, approximately

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26.5%, represents the current tracking stock interest in the earnings of
Hughes allocated to the holders of the GM class H stock. The remaining
73.5% of the tracking stock interest is currently allocated to the holders
of GM $1 2/3 stock.

- The currently outstanding shares of GM class H stock do not represent a
100% tracking stock interest in the earnings of Hughes because GM has not
yet issued the full number of shares of GM class H stock which can be
issued under the GM certificate of incorporation, as determined by the
class H dividend base. To the extent GM issues more shares of GM class H
stock, the percentage of the earnings of Hughes allocated to GM class H
stockholders would increase and the remaining tracking stock interest in
the earnings of Hughes that would be allocated to the holders of GM $1 2/3
stock would proportionately decrease. At such time, if any, as GM has
issued a number of shares of GM class H stock which causes the fraction to
be equal to one, the holders of GM class H stock would have a 100%
tracking stock interest in the earnings of Hughes and the holders of GM
$1 2/3 stock would have no tracking stock interest in Hughes' earnings.

- All determinations of the available separate consolidated net income of
Hughes are in the discretion of the GM board and are final and binding on
all GM stockholders.

In connection with the merger, GM will contribute to the capital of Hughes
an amount of cash at least sufficient to enable Hughes to purchase from GM, for
fair value as determined by the GM board, the number of shares of GM class H
stock to be delivered by Hughes to U.S. Satellite Broadcasting shareholders in
the merger. In accordance with the GM certificate of incorporation, the GM board
will increase the class H dividend base to reflect that number of shares. This
will result in the fraction described above being increased to approximately
30%, assuming that 60% of the total merger consideration is paid in GM class H
stock, the value paid for each share of U.S. Satellite Broadcasting stock is
$18.00, and the 20-day average price of GM class H stock is $53.05, in which
case approximately 18.3 million shares would be purchased from GM. It is
expected that a similar adjustment to the class H dividend base will be made in
connection with the PRIMESTAR transactions.

Any dividends declared or paid on each class of GM common stock from time to
time will reduce the amount available for future payments of dividends on that
class. The amount available for dividends on each class will also depend on any
adjustments to GM's capital or surplus due to repurchases or issuances of shares
of that class. In addition, as provided by Delaware law, the GM board may adjust
for any reason it deems appropriate the amount of surplus, and therefore the
amount available for dividends on each class. Delaware law also permits the
board of directors to adjust in the exercise of its business judgment the total
amount legally available for the payment of dividends to reflect a re-valuation
of the corporation's assets and liabilities.

Within the constraints mentioned above, the GM board can determine, in its
sole discretion, the timing of declarations and payments, and the amounts, of
dividends on each class of GM common stock. The GM board may, in its sole
discretion, declare dividends payable exclusively to the holders of GM $1 2/3
stock, exclusively to the holders of GM class H stock, or to the holders of both
classes in equal or unequal amounts. The GM board may make its decision
notwithstanding the respective amounts of surplus available for dividends to
each class, the voting and liquidation rights of each class, the amount of prior
dividends declared on each class or any other factor. However, the maximum
amount declared as dividends on either class of GM common stock cannot exceed
the amount available for dividends on each class of common stock under the GM
certificate of incorporation.

As of September 30, 1998, based on the stockholders' equity of GM reflected
in its consolidated balance sheet and subject to the GM board's authority to
make adjustments, the cumulative amount available for payment of dividends on GM
common stock was approximately $17.7 billion. Of this total, approximately $13.9
billion was available for dividends on the GM $1 2/3 stock and approximately
$3.8 billion was available for dividends on the GM class H stock.

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Under the GM certificate of incorporation, the GM board may adjust the
denominator of the fraction that determines the net income of Hughes
attributable to the GM class H stock, i.e., the class H dividend base, from time
to time as the GM board deems appropriate to reflect the following:

- subdivisions and combinations of the GM class H stock and stock dividends
payable in shares of GM class H stock to holders of GM class H stock;

- the fair market value of contributions of cash or property by GM to
Hughes, or of cash or property of GM to or for the benefit of employees of
Hughes for employee benefit plans or arrangements of GM, Hughes or other
GM subsidiaries;

- the contribution of shares of capital stock of GM to or for the benefit of
employees of Hughes or its subsidiaries for benefit plans or arrangements
of GM, Hughes or other GM subsidiaries;

- payments made by Hughes to GM of amounts applied to the repurchase by GM
of shares of GM class H stock, so long as the GM board has approved the
repurchase and applied the payment to each repurchase; and

- the repurchase by Hughes of shares of GM class H stock that are no longer
outstanding, so long as the GM board approved the repurchase.

You may calculate the approximate earnings per share attributable to GM
class H stock by dividing the quarterly earnings allocated to GM class H stock,
i.e., the available separate consolidated net income of Hughes, by the weighted
average number of these shares outstanding during the quarter. The weighted
average number of shares of GM class H stock is also the numerator of the
fraction used to determine the available separate consolidated net income of
Hughes. You may also calculate approximately the same amount by dividing the
quarterly earnings, i.e., net income, of Hughes used in computing the available
separate consolidated net income of Hughes by the class H dividend base.

DIVIDEND POLICY

Delaware law and the GM certificate of incorporation do not require the GM
board to declare dividends on any class of GM common stock. The declaration of
any dividend on either class is a matter to be acted upon by the GM board upon
the recommendation of GM management. If and to the extent the GM board chooses
to declare dividends on either or both of the classes of GM common stock,
neither Delaware law nor the GM certificate of incorporation requires any
proportionate or other fixed relationship between the amount of the dividends
declared on the different classes of common stock. The GM board reserves the
right to reconsider from time to time its policies and practices regarding
dividends on GM common stock and to increase or decrease the dividends paid on
GM common stock. The GM board may reconsider such matters on the basis of GM's
consolidated financial position, which includes liquidity and other factors,
and, with regard to GM class H stock, the earnings and consolidated financial
position of Hughes. You many find information regarding GM and its consolidated
financial performance, including management's discussion and analysis and the GM
1998 Form 10-K, in the documents incorporated into this proxy
statement/prospectus by reference.

In connection with its determination of the terms of the GM class H stock at
the time of the Hughes reorganization transactions, the GM board adopted a
policy statement concerning GM's dual-class common stock structure. The policy
statement is attached to this proxy statement/prospectus as Annex D. Among other
matters, the policy statement provides that the GM board's quarterly dividend
policy regarding the GM class H stock is to declare and pay quarterly dividends
on the GM class H stock in an amount that will equal the product of the
aggregate amount of each quarterly dividend GM receives as a stockholder of
Hughes, if any, multiplied by the fraction used to determine the available
separate consolidated net income of Hughes at the time the dividend is declared
by Hughes. The policy statement expressly provides that GM will pay the
quarterly dividend on the GM class H stock as soon as practicable after receipt
of the corresponding dividend payment from Hughes. The policy statement states
that the

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GM board may modify it from time to time or rescind it at any time. The GM board
has no present intention to modify or rescind the policy statement. Hughes
expects to retain any future earnings from its businesses for the development of
those businesses. As a result, Hughes does not currently expect that it will pay
dividends to GM in the foreseeable future.

VOTING RIGHTS

The GM certificate of incorporation entitles holders of GM class H stock to
a fixed number of votes per share on all matters submitted to GM's common
stockholders for a vote. Except as described below, holders of GM class H stock
vote together as a single class with the holders of GM $1 2/3 stock based on
their respective voting rights described in the GM certificate. The GM
certificate of incorporation entitles each share of GM class H stock to 0.60
vote per share and each share of GM $1 2/3 stock to one vote per share. The
number of votes for each share of GM class H stock and GM $1 2/3 stock is
subject to adjustment as described below under "--Subdivision Or Combination."
GM class H stock votes separately as a class only on any amendment to the GM
certificate which adversely affects the rights, powers or privileges of the GM
class H stock and any increase in the number of authorized shares of GM class H
stock. Neither holders of GM class H stock nor holders of GM $1 2/3 stock vote,
either as a separate class or together, on any adjustment of the class H
dividend base or any other determination made in the calculation of the
available separate consolidated net income of Hughes.

LIQUIDATION RIGHTS

In the event of the liquidation, dissolution or winding up of the business
of GM, whether voluntary or involuntary, the GM certificate of incorporation
provides that, after the holders of GM preferred stock and GM preference stock
receive their full preferential amounts, holders of GM class H stock and holders
of GM $1 2/3 stock will receive the assets remaining for distribution to GM's
stockholders on a per share basis in proportion to their respective per share
liquidation units. Subject to adjustment as described below under "--Subdivision
Or Combination," each share of GM class H stock has liquidation units equal to
its number of votes, i.e., 0.60 liquidation unit, as described above under
"--Voting Rights." Similarly, each share of GM $1 2/3 stock has one liquidation
unit. Holders of the GM class H stock have no direct rights in the equity or
assets of Hughes, but rather have rights in the equity and assets of GM, which
include 100% of the stock of Hughes.

SUBDIVISION OR COMBINATION

If GM subdivides or combines the outstanding shares of the GM $1 2/3 stock
or the GM class H stock, GM will appropriately adjust the voting and liquidation
rights of shares of GM class H stock relative to GM $1 2/3 stock. In the event
that GM issues shares of GM class H stock as a dividend on shares of GM $1 2/3
stock, GM will adjust the liquidation rights of the applicable class of common
stock so that the relative aggregate liquidation rights of each stockholder
would not change as a result of the dividend.

RECAPITALIZATION AND CERTAIN OTHER TRANSACTIONS

Under the GM certificate of incorporation, the GM board may recapitalize all
outstanding shares of GM class H stock as shares of GM $1 2/3 stock at any time
after December 31, 2002 in the sole discretion of the GM board or automatically,
if at any time GM, in one transaction or a series of related transactions,
disposes of substantially all of the business of Hughes to a person, entity or
group of which GM is not a majority owner. For purposes of the recapitalization
provisions of the GM certificate of incorporation, substantially all of the
business of Hughes means at least 80% of the business of Hughes, based on the
fair market value of the assets, both tangible and intangible, of Hughes as of
the time of the proposed transaction. No automatic recapitalization will occur
on a disposition in connection with the dissolution, liquidation and winding up
of GM and the distribution of the net assets of GM to GM's common stockholders.
In the event of any recapitalization, each holder of GM class H stock would
receive shares of

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GM $1 2/3 stock having a market value as of the date provided in the GM
certificate of incorporation equal to 120% of the market value of the holder's
GM class H stock.

GM would not issue any fractional shares of GM's $1 2/3 stock in an
exchange. In lieu of fractional shares, a holder of GM class H stock would
receive cash equal to the product of the fraction of a share of GM $1 2/3 stock
which the holder would otherwise receive multiplied by the average market price
per share of GM $1 2/3 stock on the valuation date, determined as provided in
the GM certificate of incorporation.

The GM board has adopted a policy statement which provides, among other
things, that, subject to various exceptions, in the event that Hughes transfers
any material assets to GM, the GM board shall declare and pay a dividend or make
a distribution to holders of class H stock. In this event, these holders would
receive a portion of the assets or cash or other assets having an equivalent
fair value that is not less at the time of the transfer than the fraction used
to determine the available separate consolidated net income of Hughes. The
policy statement also provides that, subject to various exceptions, in the event
that Hughes transfers any material assets to GM's stockholders, the portion of
the assets transferred to the holders of GM class H stock will not be less at
the time of the transfer than the fraction used to determine the available
separate consolidated net income of Hughes. The exceptions to the provisions
above include an exception for any transfer for which Hughes receives fair
compensation. However, the policy statement provides that GM will not acquire in
one transaction or a series of transactions a significant portion, i.e., more
than 33%, of the business of Hughes for compensation without receiving the
consent of the holders of a majority of the outstanding shares of GM class H
stock, voting as a separate class, and GM $1 2/3 stock, voting as a separate
class.

STOCK EXCHANGE LISTING

The GM class H stock is listed on the New York Stock Exchange under the
symbol "GMH." Application has been made to list on the New York Stock Exchange
the shares of GM class H stock to be delivered to U.S. Satellite Broadcasting
shareholders in the merger.

TRANSFER AGENT AND REGISTRAR; DIRECT REGISTRATION SYSTEM

BankBoston, N.A. serves as the transfer agent and registrar for the GM class
H stock. GM class H stock is registered in book-entry form through the direct
registration system. Under this system, unless a GM class H stockholder requests
a stock certificate, ownership of GM class H stock is reflected in account
statements periodically distributed to GM class H stockholders by BankBoston,
who holds the book-entry shares on behalf of GM class H stockholders.

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COMPARISON OF RIGHTS OF HOLDERS
OF GM CLASS H STOCK
AND U.S. SATELLITE BROADCASTING STOCK

If you elect to receive shares of GM class H stock upon completion of the
merger, your rights as a GM stockholder will be governed by Delaware law and
GM's charter documents. You should be aware that your rights as a GM stockholder
will be different than the rights you had as a U.S. Satellite Broadcasting
shareholder, which is governed by Minnesota law and U.S. Satellite
Broadcasting's charter documents.

The following summary is a discussion of the principal differences between
the rights of U.S. Satellite Broadcasting shareholders and of GM stockholders.
The following summary does not reflect any rules of the New York Stock Exchange
or the National Association of Securities Dealers, Inc. that may apply to GM or
U.S. Satellite Broadcasting in connection with the matters discussed. For more
detailed information, you are encouraged to refer to the full texts of the
governing corporate instruments of each corporation. Copies of the GM
certificate of incorporation and the GM by-laws are available for inspection at
the offices of GM and copies will be sent to you upon request. Copies of the
U.S. Satellite Broadcasting articles and the U.S. Satellite Broadcasting bylaws
are available for inspection at the principal executive office of U.S. Satellite
Broadcasting.

COMPARISON OF TERMS OF GM CLASS H STOCK AND U.S. SATELLITE BROADCASTING STOCK

DIVIDENDS AND DISTRIBUTIONS

Payments of dividends on either GM class H stock or U.S. Satellite
Broadcasting Stock is at the discretion of each company's board. Dividends on
shares of GM class H stock are payable by GM based on an allocable portion of
Hughes' net income; currently approximately 26.5% of the amount is allocable to
GM class H stock. If dividends have been declared but not paid on shares of GM
preferred stock or GM preference stock, dividends may not be paid on the GM
class H stock until all declared but unpaid dividends on the preferred and
preference stock have been paid. Neither GM nor U.S. Satellite Broadcasting has
any current intention to pay dividends on the GM class H stock or the U.S.
Satellite Broadcasting Stock, as applicable. U.S. Satellite Broadcasting has
never paid dividends on its outstanding shares of stock.

VOTING RIGHTS

GM. Each holder of GM class H stock is entitled to 0.60 vote per share. The
holders of GM class H stock vote together with the holders of the GM $1 2/3
stock based on their respective voting powers on all matters, except that:

- holders of GM $1 2/3 stock voting separately as a class are entitled to
approve by a majority vote of the shares outstanding any amendment to the
GM certificate of incorporation which adversely affects the rights, powers
or privileges of the GM $1 2/3 stock;

- holders of GM class H stock voting separately as a class are entitled to
approve by a majority vote of the shares outstanding any amendment to the
GM certificate of incorporation which adversely affects the rights, powers
or privileges of the GM class H stock; and

- any increase in the number of authorized shares of GM class H stock must
be approved by a majority vote of the holders of both classes of GM's
common stock outstanding voting together based on their respective voting
powers, and by a majority vote of the holders of GM class H stock
outstanding voting separately as a class.

U.S. SATELLITE BROADCASTING. Holders of shares of U.S. Satellite
Broadcasting common stock are entitled to ten votes per share. Holders of shares
of U.S. Satellite Broadcasting class A stock are entitled to one vote per share.
The holders of the shares of class A stock and common stock generally vote
together as a class.

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LIQUIDATION RIGHTS

GM. Holders of GM class H stock only have rights in the assets and equity
of GM. On GM's dissolution, holders of GM preferred stock and GM preference
stock have the right to receive all amounts paid by them before holders of GM
class H stock or GM $1 2/3 stock are entitled to receive anything. Thereafter,
holders of GM class H stock have a 0.60 interest per share in any remaining
assets of GM, while holders of GM $1 2/3 stock have one interest per share in
such assets.

U.S. SATELLITE BROADCASTING. Holders of class A stock and common stock are
entitled to share equally, on a per share basis, in any remaining assets after
payment of all claims and obligations.

RECAPITALIZATION, REPURCHASE RIGHTS, DISPOSITIONS AND OTHER TRANSACTIONS

GM. Your shares of GM class H stock may be exchanged for shares of GM
$1 2/3 stock:

- at any time after December 31, 2002, at the discretion of the GM board; or

- automatically, if GM sells at least 80% of the business of Hughes to an
unrelated party.

On any exchange, you will receive shares of GM $1 2/3 stock which are equal to
120% of the shares of GM class H stock you own.

U.S. SATELLITE BROADCASTING. Each share of common stock is convertible into
a share of class A stock:

- automatically, if you transfer or try to transfer it to someone other than
your affiliate;

- automatically, if the holders of a majority of the common stock so vote;
or

- at any time, at your discretion.

OTHER STOCKHOLDER RIGHTS

STATUTORY PROVISIONS RELATING TO BUSINESS COMBINATIONS

Both Delaware and Minnesota have statutes which make hostile acquisitions
more difficult. Both states have a business combination act, which prohibits an
interested stockholder from engaging in types of business combinations,
including a merger, sale of substantial assets, loan or substantial issuance of
stock, with the target company. The prohibition lasts for three years in
Delaware and four years in Minnesota. In Delaware, an interested stockholder is
one who acquires at least 15% of a company's outstanding voting stock. In
Minnesota, the trigger is at least 10%. These statutes do not apply if, in
Delaware, the board of directors gives prior approval to the business
combination or the transaction in which the person becomes an interested
stockholder; in Minnesota, the transaction must be approved by a committee of
disinterested directors. Delaware also provides an exemption if, on a
post-transaction basis, the board of directors approves the business combination
and holders of at least 66 2/3% of the outstanding voting stock, excluding
shares owned by the interested stockholder, authorize the business combination.

Minnesota law also includes a provision restricting acquisitions of stock of
an issuing public corporation in excess of specified levels, i.e., 20%, 33 1/3%
and 50% of the voting power of the stock of the target company. Voting rights
are lost on stock in excess of these levels unless disinterested shareholders,
at a special meeting, vote to restore voting rights.

NUMBER OF DIRECTORS, TERM AND VACANCIES

GM. The GM certificate of incorporation provides that the number of
directors of GM will not be less than three, but the GM by-laws provide that the
total number of directors will not be less than 12 or more than 20.

U.S. SATELLITE BROADCASTING. U.S. Satellite Broadcasting's bylaws fix the
number of directors at 14.

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REMOVAL OF DIRECTORS

GM. Delaware law provides that a majority of the shares having a right to
vote at an election of directors may remove, with or without cause, a director
or the entire board.

U.S. SATELLITE BROADCASTING. U.S. Satellite Broadcasting's bylaws provide
that any directors elected by the holders of the class A stock may be removed
only by a majority vote of the holders of the class A stock. Other directors may
be removed by a majority of the outstanding voting power of the U.S. Satellite
Broadcasting stock.

AMENDMENTS TO CHARTER AND ARTICLES

GM. Under Delaware law, an amendment to a corporation's certificate of
incorporation requires a resolution of the board, the affirmative vote of the
holders of a majority, or greater proportion if the certificate requires, of the
outstanding shares having a right to vote, and a majority, or greater proportion
if the certificate requires, of the outstanding stock of each class having a
right to vote as a class. The holders of the outstanding shares of a class have
a right to vote as a class on a proposed amendment, whether or not the
certificate of incorporation so provides, if the amendment would increase or
decrease the aggregate number of authorized shares of the class, increase or
decrease the par value of the shares of the class, or alter or change the
powers, preferences, or special rights of the shares of the class so as to
affect them adversely.

The holders of GM $1 2/3 stock and GM class H stock vote together as a
single class on all amendments to the GM certificate of incorporation, except
that:

- the holders of GM $1 2/3 stock voting separately as a class have the right
to approve by a majority vote of the shares of GM $1 2/3 stock outstanding
any amendment, alteration or repeal of any of the provisions of the GM
certificate of incorporation which adversely affects their rights, powers
or privileges;

- the holders of GM class H stock voting separately as a class have the
right to approve by majority vote of the shares of GM class H stock
outstanding any amendment, alteration or repeal of any of the provisions
of the GM certificate of incorporation which adversely affects their
rights, powers or privileges; and

- any increase in the number of authorized shares of GM class H stock will
require approval by the holders of a majority of the shares of GM $1 2/3
stock and GM class H stock outstanding, voting together as a single class
based on their respective voting power, and the holders of a majority of
the shares of GM class H stock outstanding, voting separately as a class.

U.S. SATELLITE BROADCASTING. Under Minnesota law, after approval by the
board, a corporation's articles of incorporation may be amended by its
shareholders by vote of the greater of:

- at least a majority of the voting power of the shares present at a meeting
of the shareholders and entitled to vote on an item; or

- at least a majority of the minimum number of shares entitled to vote that
would constitute a quorum for the transaction of business at the meeting.

Minnesota law further entitles holders of shares of a class or series to vote as
a separate class or series on various amendments to a corporation's articles of
incorporation that would affect the class or series.

SHAREHOLDER MEETINGS

Delaware law requires that corporations hold a stockholder meeting to elect
directors on an annual basis, unless directors are elected by written consent in
lieu of an annual meeting. The GM by-laws provide that the annual meeting of
stockholders for the election of directors, ratification or rejection of the

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selection of auditors and the transaction of other business convene on the first
Monday in June of each year. Alternatively the chairman of the board or the GM
board can designate a date, place and time.

Minnesota law does not require corporations to hold annual shareholder
meetings. However, if a regular meeting of shareholders has not been held during
the immediately preceding 15 months, shareholders holding 3% or more of the
voting power of all shares entitled to vote at a shareholders meeting may
require that a regular meeting of shareholders be held. The U.S. Satellite
Broadcasting bylaws provide that annual meetings of U.S. Satellite
Broadcasting's shareholders shall be held at such time as may be specified by
the U.S. Satellite Broadcasting board.

QUORUM AT STOCKHOLDER MEETINGS

The GM by-laws provide, unless Delaware law, the GM certificate of
incorporation or the GM by-laws state otherwise, that holders of one-third of
the voting power of the outstanding shares of stock entitled to vote at a
stockholder's meeting constitute a quorum. U.S. Satellite Broadcasting's bylaws
provide that a majority of the voting power of the outstanding shares of U.S.
Satellite Broadcasting entitled to vote constitutes a quorum.

SHAREHOLDER ACTION BY WRITTEN CONSENT

GM stockholders may take action by written consent. The written consent must
be signed by holders having that number of votes that would be required to take
the action at a meeting at which all shares having the right to vote were
present and voted. Under Minnesota law, shareholders may only take action by
written consent signed by all of the shareholders entitled to vote on the
action.

INDEMNIFICATION

GM. Under Delaware law, a corporation may indemnify any person involved in
a third-party action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of being a director or officer of the
corporation. The indemnification can cover expenses, judgments, fines and
settlement amounts actually and reasonably incurred in connection with the
action, suit or proceeding or incurred by reason of the person being or having
been a representative of such corporation, if the person acted in good faith and
reasonably believed that his or her actions were in or not opposed to the best
interests of the corporation. In any criminal proceeding, the person must not
have had reasonable cause to believe that his or her conduct was unlawful.

Delaware law also provides that a corporation may advance to directors or
officers expenses they incurred in defending any action, on receipt of an
undertaking by the person to repay the amount advanced if it is ultimately
determined that he or she is not entitled to indemnification. A majority vote of
the directors who are not parties to the action, even though less than a quorum,
may determine the amount of the indemnification. If there are no nonparty
directors or if these directors so direct, independent legal counsel may
determine the amount. Delaware law does not permit indemnification for expenses
in derivative actions where the person is adjudged liable to the corporation,
unless a court finds him or her entitled to indemnification. If, however, the
person is successful in defending a third-party or derivative action,
indemnification for expenses incurred is mandatory. Delaware law also provides
that these provisions for indemnification are nonexclusive of any other rights
to which the party may have under any by-law, agreement or vote of stockholders
or disinterested directors.

The GM by-laws generally provide for indemnification of directors and
officers to the fullest extent permitted by law. In addition, directors and
officers are insured, at GM's expense, against some liabilities which might
arise out of their employment and not be subject to indemnification under the GM
by-laws.

Based on a resolution adopted by the GM board on December 1, 1975, GM will
indemnify to the fullest extent permissible under law, and has purchased
insurance on behalf of, directors or officers who

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incur or are threatened with personal liability, including expense, under the
Employee Retirement Income Security Act of 1974 or any comparable legislation.

U.S. SATELLITE BROADCASTING. Under Minnesota law, a corporation must
indemnify a person involved in a third-party action by reason of the former or
present official capacity of the person with respect to the corporation, against
judgments, penalties, fines, settlements, and reasonable expenses, if the
person:

- has not been indemnified by another organization or employee benefit plan
for the same judgments, penalties, or fines;

- acted in good faith;

- received no improper personal benefit, and statutory procedure has been
followed in the case of any conflict of interest by a director;

- in the case of a criminal proceeding, had no reasonable cause to believe
the conduct was unlawful; and

- in the case of directors, officers, board committee members or employees,
reasonably believed that the conduct was in the best interests of the
corporation; or,

- in the case of performance by a director, officer or employee of the
corporation involving service as a director, officer, partner, trustee,
employee or agent of another organization or employee benefit plan,
reasonably believed that the conduct was not opposed to the best interests
of the corporation.

In addition, Minnesota law generally requires payment by a corporation, upon
written request, of reasonable expenses in advance of final disposition of the
proceeding. A decision as to whether acts or omissions require indemnification
is made by a disinterested majority of the corporation's board present at a
meeting at which a disinterested quorum is present. Alternatively, the decision
may be made by a designated committee of the corporation's board, by special
legal counsel, by the corporation's shareholders, or by a court.

Neither U.S. Satellite Broadcasting's articles or bylaws alter the
provisions set forth above.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus includes forward-looking statements which
may constitute "forward-looking statements" within the meaning of various
provisions of the Securities Act and the Exchange Act. All statements, other
than statements of historical facts, included in this proxy statement/prospectus
that address activities, events or developments that we expect or anticipate
will or may occur in the future, references to future success and other matters
are forward-looking statements including statements preceded by, followed by or
that include the words "believes", "expects" or "anticipates", or similar
expressions. These statements are based on various assumptions and analyses made
in light of our experience and perception of historical trends, current
conditions and expected future developments as well as other factors we believe
are appropriate in the circumstances. However, whether actual future results and
developments will conform with our expectations and predictions is subject to a
number of risks and uncertainties, including the significant considerations
discussed in this proxy statement/prospectus; general economic, market or
business conditions; the opportunities that may be presented to and pursued by
us and our respective subsidiaries; competitive actions in the industry; changes
in laws or regulations; and other factors, many of which are beyond our and our
subsidiaries' control. Consequently, all of the forward-looking statements made
in this proxy statement/prospectus are qualified by these cautionary statements
and there can be no assurance that the actual results or developments we
anticipate will be realized or, even if realized, that they will have the
expected consequences to or effects on us and our respective subsidiaries or
their business or operations. The cautionary statements contained or referred to
in this section should be considered in connection with any subsequent written
or oral forward-looking statements that we or persons acting on our behalf may
issue.

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LEGAL MATTERS

The legality of the shares of GM class H stock to be issued in the merger is
being passed upon for GM by Anne T. Larin, Esq., legal staff of GM. Certain tax
consequences of the merger will be passed upon for GM and Hughes by Weil,
Gotshal & Manges LLP and for U.S. Satellite Broadcasting by Leonard, Street and
Deinard Professional Association.

EXPERTS

The consolidated financial statements and financial statement schedule of GM
as of December 31, 1998 and 1997 and for each of the three years in the period
ended December 31, 1998, included in the Current Report on Form 8-K dated April
12, 1999 and filed April 15, 1999 incorporated by reference in this document,
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report which is incorporated herein by reference in reliance on such
report given upon the authority of said firm as experts in accounting and
auditing.

The consolidated financial statements of Hughes as of December 31, 1998 and
1997 and for each of the three years in the period ended December 31, 1998,
included in Exhibit 99 to GM's 1998 Annual Report on Form 10-K for the year
ended December 31, 1998, incorporated by reference in this document, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference in reliance on such report
given upon the authority of said firm as experts in accounting and auditing.

The financial statements and schedule of PRIMESTAR, Inc. and subsidiaries as
of December 31, 1998 and 1997, and for each of the years in the three-year
period ended December 31, 1998, have been incorporated by reference herein and
in the registration statement in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.

The financial statements and schedule of TCI Satellite Entertainment, Inc.
and subsidiaries as of December 31, 1998 and 1997, and for each of the years in
the three-period ended December 31, 1998, have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
LLP, independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.

The consolidated financial statements of U.S. Satellite Broadcasting as of
December 31, 1998 and 1997, and for each of the three years in the period ended
December 31, 1998, incorporated by reference herein have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are incorporated by reference herein in reliance on the
authority of Arthur Andersen as experts in giving their report.

Representatives of Arthur Andersen LLP will be present at the special
meeting and will have the opportunity to make a statement if they desire to do
so and are expected to be available to respond to appropriate questions.

SHAREHOLDER PROPOSALS

Proposals submitted by shareholders of U.S. Satellite Broadcasting for
presentation at the 1999 annual meeting of shareholders, to be held if the
merger has not been consummated prior thereto, must have been received by the
Secretary of U.S. Satellite Broadcasting not later than May 3, 1999, for
inclusion in the proxy statement and form of proxy relating to the 1999 Annual
Meeting of Shareholders.

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WHERE YOU CAN FIND MORE INFORMATION

Each of U.S. Satellite Broadcasting and GM files annual, quarterly and
current reports, proxy statements and other information with the SEC. GM's
filings include information relating to Hughes. You may read and copy any
reports, statements or other information that the companies file at the SEC's
public reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the SEC at (800) SEC-0330 for further information on the
public reference rooms. U.S. Satellite Broadcasting and GM public filings are
also available to the public from commercial document retrieval services and at
the Internet World Wide Web site maintained by the SEC at "http://www.sec.gov."
Reports, proxy statements and other information filed by GM should also be
available for inspection at the offices of the New York Stock Exchange, Inc.,
120 Broad Street, New York, New York 10005. Reports, proxy statements and other
information concerning U.S. Satellite Broadcasting also may be inspected at the
offices of the National Association of Securities Dealers, Inc., NASDAQ Reports
Section, 1735 K Street, Washington, D.C., 20006.

GM has filed a registration statement on Form S-4 to register with the SEC
its GM class H stock to be issued to you in the merger. This proxy
statement/prospectus is part of this registration statement and constitutes a
prospectus of GM. As allowed by the SEC rules, however, this proxy
statement/prospectus does not contain all of the information you can find in the
registration statement or the exhibits to the registration statement.

The SEC allows U.S. Satellite Broadcasting and GM to incorporate by
reference information into this proxy statement/prospectus, which means that
U.S. Satellite Broadcasting and GM can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this proxy
statement/prospectus, except for any information superseded by information
contained directly in the proxy statement/prospectus or in later filed documents
incorporated by reference in the proxy statement/prospectus. This proxy
statement/ prospectus incorporates by reference the documents set forth below
that each of U.S. Satellite Broadcasting, GM, PRIMESTAR and TCI Satellite
Entertainment, Inc. have previously filed with the SEC. These

86
<PAGE>
documents contain important information about U.S. Satellite Broadcasting, GM,
PRIMESTAR and TCI Satellite Entertainment, Inc. and their respective financial
condition.

<TABLE>
<CAPTION>
U.S. SATELLITE BROADCASTING FILINGS (FILE NO. 0-27492) PERIOD
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Report on Form 10-K Fiscal Year ended December 31, 1998
Current Reports on Form 8-K Date filed: July 13, 1998
Date filed: December 18, 1998
Date filed: February 18, 1999
Quarterly Report on Form 10-Q Quarters ended: March 31, 1998;
June 30, 1998; September 30, 1998
</TABLE>

<TABLE>
<CAPTION>
GM FILINGS (FILE NO. 1-143) PERIOD
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Annual Report on Form 10-K except for Item 6, Item 7, Fiscal Year ended December 31, 1998
Item 8, Item 14(a)(2), and Item 14 Exhibit 12
Current Reports on Form 8-K Date filed: January 15, 1999; January 20, 1999; January
22, 1999; January 27, 1999; February 5, 1999; April 9,
1999(two filings); April 15, 1999(two filings); and
April 21, 1999
Quarterly Report on Form 10-Q Quarters ended: March 31, 1998;
June 30, 1998; September 30, 1998
</TABLE>

<TABLE>
<CAPTION>
PRIMESTAR FILINGS (FILE NO. 0-23883) PERIOD
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Consolidated financial statements (including the notes Fiscal Year ended December 31, 1998
thereto), included in the Annual Report on Form 10-K
</TABLE>

<TABLE>
<CAPTION>
TCI SATELLITE ENTERTAINMENT, INC. (FILE NO. 0-21317) PERIOD
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Consolidated financial statements (including the notes Fiscal Year ended December 31, 1998
thereto), included in the Annual Report on Form 10-K
</TABLE>

U.S. Satellite Broadcasting and GM each incorporates by reference additional
documents that it may file with the SEC between the date of this proxy
statement/prospectus and the date of the special meeting. These include periodic
reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, as well as proxy statements.

You may have received some of the documents incorporated by reference, but
you can obtain any of them through U.S. Satellite Broadcasting, GM, or the SEC
or the SEC's Internet site described above. Documents incorporated by reference
are available from U.S. Satellite Broadcasting or GM without charge, excluding
all exhibits unless specifically incorporated by reference as exhibits in this
proxy statement/prospectus. You may obtain documents incorporated by reference
in this proxy statement/

87
<PAGE>
prospectus by requesting them in writing or by telephone from the appropriate
party at the following address:

United States Satellite Broadcasting Company, Inc.
3415 University Avenue
St. Paul, Minnesota 55114
Attention: Kristine Sundberg
(651) 645-4500

General Motors Corporation
100 Renaissance Center
Detroit, Michigan 48243-7301
Attention: Hughes Electronics Investor Relations
(310) 662-9688

If you would like to request documents from U.S. Satellite Broadcasting or
GM, please do so by May 5, 1999 to receive them before the special meeting. If
you request any incorporated documents from us we will mail them to you by first
class mail, or other equally prompt means, within one business day of receipt of
your request.

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS TO VOTE YOUR SHARES AT THE SPECIAL
MEETING. NEITHER U.S. SATELLITE BROADCASTING NOR GM HAS AUTHORIZED ANYONE TO
PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS
PROXY STATEMENT/PROSPECTUS. THIS PROXY STATEMENT/PROSPECTUS IS DATED APRIL 22,
1999. YOU SHOULD NOT ASSUME THE INFORMATION CONTAINED IN THIS PROXY
STATEMENT/PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, OR ANY
OTHER DATE AS THIS PROXY STATEMENT/PROSPECTUS INDICATES. NEITHER THE MAILING OF
THIS PROXY STATEMENT/ PROSPECTUS TO YOU NOR THE ISSUANCE OF GM CLASS H STOCK IN
THE MERGER CREATES ANY IMPLICATION TO THE CONTRARY.

88
<PAGE>
U.S. SATELLITE BROADCASTING SELECTED HISTORICAL FINANCIAL DATA

The following selected historical financial data have been derived from the
financial statements of U.S. Satellite Broadcasting. The data should be read in
conjunction with U.S. Satellite Broadcasting's financial statements and notes
thereto filed as part of U.S. Satellite Broadcasting's 1998 Form 10-K, and
incorporated by reference herein. The statement of operations data for the years
ended December 31, 1998, 1997, 1996 and 1995 and balance sheet data as of
December 31, 1998, 1997 and 1996 have been derived from the financial statements
of U.S. Satellite Broadcasting audited by Arthur Andersen LLP, independent
public accountants. The statement of operations data for the year ended December
31, 1994 and balance sheet data as of December 31, 1995 and 1994 have been
derived from the unaudited financial statements of U.S. Satellite Broadcasting.
In the opinion of management, the unaudited financial statements reflect all
adjustments consisting only of normal recurring items, that are necessary for
the fair presentation of the financial position and results of operations for
such periods.
<TABLE>
<CAPTION>
For the Years Ended December 31,
-----------------------------------------------------------------
(IN THOUSANDS EXCEPT PER SHARE DATA) 1998 1997 1996 1995 1994
----------------- --------- --------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.......................................... $ 550,801 $ 456,619 $ 292,624 $ 107,926 $ 5,132
Cost of sales..................................... 327,676 292,917 193,356 70,961 3,362
-------- --------- --------- ----------- -----------
Gross margin...................................... 223,125 163,702 99,268 36,965 1,770
Operating expenses:
Selling and marketing........................... 114,983 99,399 102,715 62,922 17,598
Manufacturer incentive.......................... 44,778 66,726 18,387 -- --
General and administrative...................... 57,571 46,935 31,992 17,040 10,539
Commissions to retailers........................ 13,232 14,537 13,909 6,813 307
Engineering and operations...................... 13,834 9,801 11,644 4,564 3,022
Depreciation and amortization................... 17,316 18,426 19,687 21,323 19,775
Early cancellation of contracts due to merger... 22,130 -- -- -- --
Management fees(a).............................. -- -- -- 6,667 --
-------- --------- --------- ----------- -----------
Net operating loss............................ (60,719) (92,122) (99,066) (82,364) (49,471)

OTHER (INCOME) EXPENSE:
Interest expense................................ -- -- 2,326 9,081 8,218
Interest (income)............................... (4,067) (4,919) (6,244) (1,556) (1,352)
Cost to terminate credit agreement.............. -- -- 9,504 -- --
Other........................................... (49) 103 307 1,489 526
-------- --------- --------- ----------- -----------
Loss before income taxes...................... (56,603) (87,306) (104,959) (91,378) (56,863)
Income tax provision.............................. -- -- -- -- 1
-------- --------- --------- ----------- -----------
Net loss...................................... $ (56,603) $ (87,306) $(104,959) $ (91,378) $ (56,864)
-------- --------- --------- ----------- -----------
Net loss per share--basic and diluted............. $ (0.63) $ (0.97) $ (1.17) $ (1.02) $ (0.63)
-------- --------- --------- ----------- -----------
-------- --------- --------- ----------- -----------

<CAPTION>
As of December 31,
-----------------------------------------------------------------

1998 1997 1996 1995 1994
----------------- --------- --------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>

BALANCE SHEET DATA
Cash and cash equivalents......................... $ 66,297 $ 68,646 $ 86,518 $ 19,683 $ 1,817
Working capital (deficit)......................... (34,482) (8,308) 31,065 (17,786) (27,353)
Long-term investments............................. 4,501 3,970 6,941 13,001 15,298
Total assets...................................... 190,111 206,310 217,354 149,571 130,472
Long-term debt.................................... -- -- -- 128,456 68,775
Shareholders' equity (deficit).................... (54,470) 2,099 89,477 (48,972) 41,728
</TABLE>

- ------------------------------

(a) In connection with management services performed by Hubbard Broadcasting for
U.S. Satellite Broadcasting during 1992 through 1994, U.S. Satellite
Broadcasting agreed to pay Hubbard Broadcasting an aggregate of $10.0
million, of which $3.3 million was accrued in 1992 and the remainder accrued
in the quarter ended September 30, 1995, when it became likely the
preconditions to payment would be satisfied. In connection with the merger
agreement, Hughes has agreed to pay the accrued management fee of $10.0
million to Hubbard Broadcasting no later than April 1, 2000.

89
<PAGE>
HUGHES SELECTED HISTORICAL FINANCIAL DATA

The following selected historical financial data have been derived from the
financial statements of Hughes. The data should be read in conjunction with
Hughes' financial statements and notes thereto incorporated by reference herein.
The statement of operations data for the periods ended December 31, 1998, 1997,
1996, 1995 and 1994 and balance sheet data as of December 31, 1998, 1997, 1996,
and 1995 have been derived from the financial statements of Hughes audited by
Deloitte & Touche LLP, independent auditors. The balance sheet data as of
December 31, 1994 has been derived from the unaudited financial statements of
Hughes. In the opinion of management, the unaudited financial statements reflect
all adjustments, consisting only of normal recurring items, that are necessary
for the fair presentation of the financial position and results of operations
for such periods.

<TABLE>
<CAPTION>
AS OF OR FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenues........................................................ $ 5,964 $ 5,128 $ 4,009 $ 3,153 $ 2,697
Costs and expenses.................................................... 5,694 4,822 3,799 2,981 2,462
Amortization of GM purchase accounting
Adjustments......................................................... 21 21 21 21 21
--------- --------- --------- --------- ---------
Total operating costs and expenses.................................. 5,715 4,843 3,820 3,002 2,483
--------- --------- --------- --------- ---------
Operating profit...................................................... 249 285 189 151 214
Interest expense...................................................... 17 91 43 61 52
Other (expense) income, net........................................... (41) 424 76 8 (9)
--------- --------- --------- --------- ---------
Income from continuing operations before income taxes and minority
interests........................................................... 191 618 222 98 153
Income tax (benefit) expense.......................................... (45) 237 105 31 56
Minority interests in net losses of subsidiaries...................... 24 25 53 4 --
--------- --------- --------- --------- ---------
Income from continuing operations before extraordinary item and
cumulative effect of accounting changes............................. 260 406 170 71 97
Income (loss) from discontinued operations, net of taxes.............. -- 1 (7) (65) (54)
Gain on sale of discontinued operations, net of taxes................. -- 63 -- -- --
Extraordinary item, net of taxes...................................... -- (20) -- -- --
Cumulative effect of accounting change................................ (9) -- -- -- (2)
--------- --------- --------- --------- ---------
Net income.......................................................... 251 450 163 6 41
Adjustments to exclude the effect of GM purchase accounting
adjustments....................................................... 21 21 21 21 21
--------- --------- --------- --------- ---------
Earnings used for computation of available separate consolidated net
income.............................................................. $ 272 $ 471 $ 184 $ 27 $ 62
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------

Earnings per share attributable to GM class H stock(1):
Basic and diluted earnings per share from continuing operations
before extraordinary item and cumulative effect of accounting
change............................................................ $ 0.70 $ 1.07 $ 0.48 $ 0.23 $ 0.30
Discontinued operations............................................. -- 0.16 (0.02) (0.16) (0.14)
Extraordinary item.................................................. -- (0.05) -- -- --
Cumulative effect of accounting change.............................. (0.02) -- -- -- --
--------- --------- --------- --------- ---------
Basic and diluted earnings per share................................ $ 0.68 $ 1.18 $ 0.46 $ 0.07 $ 0.16
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Cash dividends declared per share..................................... -- -- -- -- --

BALANCE SHEET DATA:
Total assets.......................................................... $ 13,435 $ 12,731 $ 4,373 $ 3,942 $ 3,609
Long-term debt........................................................ 779 638 -- -- --
Owner's equity:....................................................... 8,382 8,312 2,492 2,609 2,301
OTHER DATA:
Depreciation and amortization......................................... 455 317 216 201 161
Capital expenditures.................................................. 1,429 827 449 442 399
</TABLE>

- ------------------------------

90
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION

The following unaudited pro forma combined condensed financial statements have
been prepared from the historical consolidated financial statements of Hughes,
U.S. Satellite Broadcasting, PRIMESTAR and TCI Satellite Entertainment. The
unaudited pro forma combined condensed financial statements give effect to the
merger of Hughes and U.S. Satellite Broadcasting and Hughes' acquisition of
PRIMESTAR's direct broadcast satellite medium-power business and related
high-power satellite assets of Tempo Satellite, Inc., a wholly owned subsidiary
of TCI Satellite Entertainment.

The unaudited pro forma combined condensed statement of income (loss) from
continuing operations reflects adjustments as if the merger and the
PRIMESTAR/Tempo acquisition had each taken place on January 1, 1998. The
unaudited pro forma combined condensed balance sheet reflects adjustments as if
the merger and the PRIMESTAR/Tempo acquisition had each occurred on December 31,
1998. The pro forma adjustments described in the accompanying notes are based on
preliminary estimates and various assumptions that Hughes management believes
are reasonable in these circumstances. Pro forma information of GM reflecting
the merger and the PRIMESTAR/Tempo acquisition is not provided as GM management
has determined that the effects are not significant.

The unaudited pro forma combined condensed statement of income (loss) from
continuing operations does not give effect to any cost savings that may be
realized after the consummation of the merger and the PRIMESTAR/Tempo
acquisition, which savings relate primarily to the reduction of duplicative
operating, general and administrative expenses.

The unaudited pro forma combined condensed financial statements should be read
in conjunction with the Hughes, U.S. Satellite Broadcasting, PRIMESTAR and TCI
Satellite Entertainment financial statements, including the notes thereto, which
are incorporated by reference into this document each as of and for the period
ended December 31, 1998.

91
<PAGE>
HUGHES

UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET

AS OF DECEMBER 31, 1998

(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
HISTORICAL MERGER PRIMESTAR/TEMPO
HISTORICAL U.S. SATELLITE PRO FORMA PRO FORMA HISTORICAL ACQUISITION PRO
HUGHES BROADCASTING ADJUSTMENTS COMBINED PRIMESTAR/TEMPO FORMA ADJUSTMENTS
----------- --------------- ------------- ----------- ----------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash
equivalents............. $ 1,342 $ 66 $ (646)a $ 762 $ 887i
(1,479)j
Accounts and notes
receivable, net......... 922 48 (19)b 951 $ 140
Contracts in process, less
advances and progress
payments................ 784 784
Other current assets...... 798 9 807 4
----------- ----- ------ ----------- ------ -------
TOTAL CURRENT ASSETS........ 3,846 123 (665) 3,304 144 (592)

Satellites, net............. 3,198 37c 3,235 463
Property, net............... 1,059 59 (37)c 1,081 1,148 (15)j
Intangible assets, net...... 3,552 3,552 317
Investments and other
assets.................... 1,780 8 (42)b 1,746 34 (28)j
Excess of purchase price
over book value of net
liabilities acquired...... 1,670a 1,670 122j
----------- ----- ------ ----------- ------ -------
TOTAL ASSETS................ $ 13,435 $ 190 $ 963 $ 14,588 $ 2,106 $ (513)
----------- ----- ------ ----------- ------ -------
----------- ----- ------ ----------- ------ -------

LIABILITIES AND OWNER'S EQUITY
CURRENT LIABILITIES
Accounts payable.......... $ 764 $ 66 $ 830 $ 196
Current portion of
long-term debt.......... 156 156 575 $ (575)j
887i
Other current
liabilities............. 1,089 91 $ (19)b 1,161 252 (50)j
----------- ----- ------ ----------- ------ -------
TOTAL CURRENT LIABILITIES... 2,009 157 (19) 2,147 1,023 262

Long-term debt.............. 779 779 1,258 (1,258)j
Other liabilities and
deferred credits.......... 1,139 87 (42)b 1,184 41 (41)j
Deferred income taxes....... 644 644 75
Minority interests.......... 482 482
Owner's Equity.............. 8,382 (54) 1,024a 9,352 (291) 524j
----------- ----- ------ ----------- ------ -------
TOTAL LIABILITIES AND
OWNER'S EQUITY............ $ 13,435 $ 190 $ 963 $ 14,588 $ 2,106 $ (513)
----------- ----- ------ ----------- ------ -------
----------- ----- ------ ----------- ------ -------

PRO FORMA
COMBINED
-----------
<S> <C>

CURRENT ASSETS
Cash and cash
equivalents............. $ 170

Accounts and notes
receivable, net......... 1,091
Contracts in process, less
advances and progress
payments................ 784
Other current assets...... 811
-----------
TOTAL CURRENT ASSETS........ 2,856
Satellites, net............. 3,698
Property, net............... 2,214
Intangible assets, net...... 3,869
Investments and other
assets.................... 1,752
Excess of purchase price
over book value of net
liabilities acquired...... 1,792
-----------
TOTAL ASSETS................ $ 16,181
-----------
-----------

CURRENT LIABILITIES
Accounts payable.......... $ 1,026
Current portion of
long-term debt.......... 1,043

Other current
liabilities............. 1,363
-----------
TOTAL CURRENT LIABILITIES... 3,432
Long-term debt.............. 779
Other liabilities and
deferred credits.......... 1,184
Deferred income taxes....... 719
Minority interests.......... 482
Owner's Equity.............. 9,585
-----------
TOTAL LIABILITIES AND
OWNER'S EQUITY............ $ 16,181
-----------
-----------
</TABLE>

The accompanying notes are an integral part of the unaudited
pro forma combined condensed financial statements.

92
<PAGE>
HUGHES

UNAUDITED PRO FORMA COMBINED CONDENSED

STATEMENT OF INCOME (LOSS) FROM CONTINUING OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1998

(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL MERGER
HISTORICAL U.S. SATELLITE PRO FORMA PRO FORMA HISTORICAL
HUGHES BROADCASTING ADJUSTMENTS COMBINED PRIMESTAR/TEMPO
----------- --------------- --------------- ------------- ---------------------
<S> <C> <C> <C> <C> <C>
REVENUES
Product sales.................... $ 3,360 $ 3,360
Direct broadcast, leasing and
other services................. 2,604 $ 551 $ (3)(b) 3,152 $ 1,290
----------- ----- ----- ------ -------
TOTAL REVENUES................... 5,964 551 (3) 6,512 1,290
----------- ----- ----- ------ -------
OPERATING COSTS AND EXPENSES
Cost of products sold............ 2,627 2,627
Broadcast programming and other
costs.......................... 1,176 328 75(c) 1,579 655
Selling, general, and
administrative expenses........ 1,457 267 (75)(c) 1,624 486
(3)(b)
(22)(d)
Impairment of long-lived
assets......................... 950
Depreciation and amortization.... 455 17 42(e) 514 543
----------- ----- ----- ------ -------
TOTAL OPERATING COSTS AND
EXPENSES....................... 5,715 612 17 6,344 2,634
----------- ----- ----- ------ -------
OPERATING PROFIT (LOSS).......... 249 (61) (20) 168 (1,344)
Interest income (expense), net... 95 4 (32)(f) 67 (146)
Other, net....................... (153) (153) (8)
----------- ----- ----- ------ -------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES AND MINORITY
INTERESTS...................... 191 (57) (52) 82 (1,498)
----------- ----- ----- ------ -------
Income tax benefit............... 45 27(g) 72 148
Minority interests in net losses
of subsidiaries................ 24 24
----------- ----- ----- ------ -------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE.... 260 (57) (25) 178 (1,350)
----------- ----- ----- ------ -------
Adjustments to exclude the effect
of GM purchase accounting
related to Hughes Aircraft
Company........................ 21 21
----------- ------
Earnings (Loss) Used for
Computation of Available
Separate Consolidated Income
from Continuing Operations
Before Cumulative Effect of
Accounting Change.............. $ 281 $ 199
----------- ------
----------- ------
Available Separate Consolidated
Income (Loss) from Continuing
Operations Before Cumulative
Effect of Accounting Change:
Average number of shares of
GM Class H Stock
outstanding (in millions)
(numerator)................ 105.3 18.3(h) 123.6
Class H dividend base (in
millions) (denominator)
(1)........................ 399.9 18.3(h) 418.2
Available Separate
Consolidated Income (Loss)
from Continuing Operations
Before Cumulative Effect of
Accounting Change.......... 74 59
----------- ------
Earnings (Loss) Per Share from
Continuing Operations Before
Cumulative Effect of Accounting
Change......................... $ 0.70 $ 0.48
----------- ------
----------- ------

<CAPTION>
PRIMESTAR/TEMPO
ACQUISITION PRO FORMA
PRO FORMA ADJUSTMENTS COMBINED
--------------------- -------------
<S> <C> <C>
REVENUES
Product sales.................... $ 3,360
Direct broadcast, leasing and
other services................. 4,442
------
TOTAL REVENUES................... 7,802
------
OPERATING COSTS AND EXPENSES
Cost of products sold............ 2,627
Broadcast programming and other
costs.......................... $ 85k 2,319
Selling, general, and
administrative expenses........ (85)k 2,025

Impairment of long-lived
assets......................... (950)l
Depreciation and amortization.... 6m 1,083
20n
------ ------
TOTAL OPERATING COSTS AND
EXPENSES....................... (924) 8,054
------ ------
OPERATING PROFIT (LOSS).......... 924 (252)
Interest income (expense), net... (47) o 20
146p
Other, net....................... (161)
------ ------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE
INCOME TAXES AND MINORITY
INTERESTS...................... 1,023 (393)
------ ------
Income tax benefit............... (148)q 262
190r
Minority interests in net losses
of subsidiaries................ 24
------ ------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE.... 1,065 (107)
------ ------
Adjustments to exclude the effect
of GM purchase accounting
related to Hughes Aircraft
Company........................ 21
------
Earnings (Loss) Used for
Computation of Available
Separate Consolidated Income
from Continuing Operations
Before Cumulative Effect of
Accounting Change.............. $ (86)
------
------
Available Separate Consolidated
Income (Loss) from Continuing
Operations Before Cumulative
Effect of Accounting Change:
Average number of shares of
GM Class H Stock
outstanding (in millions)
(numerator)................ 4.9s 128.5
Class H dividend base (in
millions) (denominator)
(1)........................ 4.9s 423.1
Available Separate
Consolidated Income (Loss)
from Continuing Operations
Before Cumulative Effect of
Accounting Change.......... (26)
------
Earnings (Loss) Per Share from
Continuing Operations Before
Cumulative Effect of Accounting
Change......................... $ (0.20)
------
------
</TABLE>

- ----------------------------------
(1) See discussion of GM class H dividend base in "Introduction To The GM Class
H Stock."

The accompanying notes are an integral part of the unaudited
pro forma combined condensed financial statements.

93
<PAGE>
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL STATEMENTS

BASIS OF PRESENTATION

The accompanying unaudited pro forma combined condensed financial statements
have been derived from the historical consolidated financial statements of
Hughes, U.S. Satellite Broadcasting, PRIMESTAR and TCI Satellite Entertainment.
The unaudited pro forma combined condensed financial statements give effect to
the merger of Hughes and U.S. Satellite Broadcasting and Hughes' acquisition of
PRIMESTAR's direct broadcast satellite medium-power business and related
high-power satellite assets of Tempo Satellite, Inc., a wholly owned subsidiary
of TCI Satellite Entertainment.

The unaudited pro forma combined condensed statement of income (loss) from
continuing operations presents the historical results of operations of Hughes,
U.S. Satellite Broadcasting, PRIMESTAR and TCI Satellite Entertainment for the
year ended December 31, 1998, as if the merger and the Primestar/Tempo
acquisition had each occurred on January 1, 1998. The unaudited pro forma
combined condensed balance sheet presents the historical balance sheets of
Hughes, U.S. Satellite Broadcasting, PRIMESTAR and TCI Satellite Entertainment
as of December 31, 1998, as if the merger and the Primestar/Tempo acquisition
had each been consummated as of December 31, 1998. The pro forma adjustments
reflected in the accompanying unaudited pro forma combined condensed financial
statements were prepared using the purchase method of accounting.

The unaudited pro forma combined condensed financial statements do not
purport to present the financial position or results of operations of Hughes had
the transactions and events assumed therein occurred on the dates specified, nor
are they necessarily indicative of the results of operations that may be
achieved in the future. The unaudited pro forma combined condensed statement of
income (loss) from continuing operations does not give effect to any cost
savings that may be realized after the consummation of the merger and the
Primestar/Tempo acquisition, which savings relate primarily to the reduction of
duplicative operating general and administrative expenses.

The unaudited pro forma combined condensed financial statements should be
read in conjunction with the Hughes, U.S. Satellite Broadcasting, PRIMESTAR and
TCI Satellite Entertainment audited financial statements, including the notes
thereto, which are incorporated by reference into this document, each as of and
for the period ended December 31, 1998.

Various reclassifications have been made to the historical financial
statements of U.S. Satellite Broadcasting, PRIMESTAR and TCI Satellite
Entertainment to conform to the unaudited pro forma combined condensed financial
statement presentation. As more fully described in Note 3 to PRIMESTAR's 1998
consolidated financial statements, the historical operating results of PRIMESTAR
reflect the operations of its predecessor, TCI Satellite Entertainment, prior to
the restructuring transaction on April 5, 1998.

U.S. SATELLITE BROADCASTING PRO FORMA ADJUSTMENTS

The following adjustments, which are set forth in millions, except per share
amounts, give pro forma effect to the merger:

a. To record the exchange consideration at closing. The total purchase
price will be based on the average price of GM class H stock for the 20
consecutive trading days ending on and including the second trading day
before the merger. For purposes of pro forma calculation, the share
price is assumed to be $53.05. Accordingly, U.S. Satellite Broadcasting
shareholders would receive $18.00 for each share of U.S. Satellite
Broadcasting stock owned.

94
<PAGE>
For purposes of the accompanying pro forma combined condensed financial
statements, the excess of purchase price over book value of net
liabilities acquired has been estimated as follows:

<TABLE>
<S> <C>
Outstanding shares of U.S. Satellite Broadcasting stock........ 89.8
Consideration per share........................................ $ 18.00
------
Subtotal--purchase price..................................... 1,616
U.S. Satellite Broadcasting net liabilities.................... 54
------
Excess of purchase price over book value of net liabilities
acquired..................................................... $ 1,670
------
------
</TABLE>

Holders of U.S. Satellite Broadcasting stock may elect to receive
consideration in the form of GM class H stock or the cash equivalent.
However, not more than 50% of the total consideration will be payable in
cash, and not more than 70% of the total consideration will be in the
form of GM class H stock. For purposes of the accompanying pro forma
combined condensed financial statements, it is assumed that 60% of the
total consideration will be paid in GM class H stock ($970) and 40% in
cash ($646).

b. To eliminate intercompany transactions between Hughes and U.S. Satellite
Broadcasting.

c. To reclassify various amounts in the historical financial statements of
U.S. Satellite Broadcasting to conform to the Hughes presentation.

d. To eliminate a non-recurring loss recorded by U.S. Satellite
Broadcasting during 1998, to provide for the termination of various
contracts as specified in the merger agreement.

e. Hughes has not as yet completed an analysis of the relative fair market
value of U.S. Satellite Broadcasting's net liabilities in order to
determine a preliminary allocation of the purchase price to the net
liabilities acquired. Accordingly, the excess of the purchase price over
the carrying value of U.S. Satellite Broadcasting's net liabilities has
been presented as a single caption in the accompanying pro forma
combined condensed balance sheet. Hughes believes the vast majority of
the excess will be allocated to U.S. Satellite Broadcasting's FCC
licenses and enterprise value goodwill. Both of these intangible assets
are considered to have indefinite lives and will be amortized over 40
years.

f. To reduce interest income on cash required for the merger assuming
Hughes' historical interest rate of 5.0% on pro forma adjustment (a)
above.

g. Income taxes associated with the pro forma adjustments discussed above
have been calculated at an assumed combined federal and state rate of
40%, excluding amortization associated with the excess purchase price
over book value of net liabilities acquired, which is not deductible for
tax purposes.

The unaudited pro forma combined condensed statement of income (loss)
from continuing operations has also been adjusted to recognize a tax
benefit, at an assumed combined federal and state rate of 40%, for U.S.
Satellite Broadcasting's historical losses from continuing operations
for the year ended December 31, 1998. This adjustment recognizes that,
if the merger had taken place on January 1, 1998, the tax benefit of
U.S. Satellite Broadcasting's losses would have been realized in the
consolidated federal tax return of GM.

h. In connection with the merger, GM will contribute to the capital of
Hughes an amount of cash at least sufficient to enable Hughes to
purchase from GM, for fair value as determined by the GM board, the
number of shares of GM class H stock to be delivered to U.S. Satellite
Broadcasting shareholders in the merger. In accordance with GM's
certificate of incorporation, the GM board will increase the class H
dividend base to reflect that number of shares, which for purposes of
this

95
<PAGE>
pro forma presentation is 18.3 million based on the factors discussed in
note (a) above and assuming that the 20-day average trading price of GM
class H stock is $53.05.

PRIMESTAR/TEMPO ACQUISITION PRO FORMA ADJUSTMENTS

The following adjustments give pro forma effect to the PRIMESTAR/Tempo
acquisition (in millions, except per share amounts):

i. To record incremental debt incurred by Hughes to finance the
PRIMESTAR/Tempo acquisition. For purposes of the accompanying pro forma
combined condensed financial statements, it is assumed that $592 of the
cash consideration will be funded through available Hughes cash and $887
will be financed. The remaining consideration, $233, will be settled
through the issuance of 4.9 million shares of GM class H stock. As
Hughes management expects to utilize its 364-day credit facility (and
new borrowings as necessary) to provide the initial financing, debt has
been classified as short-term in the combined condensed balance sheet.

j. To record the exchange consideration at closing. The total purchase
price of $1,833 will be adjusted upon consummation of the
PRIMESTAR/Tempo acquisition based upon the net working capital of
PRIMESTAR (as defined in the PRIMESTAR asset purchase agreement) at
closing. For purposes of pro forma calculation, the December 31, 1998
net working capital of PRIMESTAR (a liability of $121) was used to
calculate the exchange consideration of the PRIMESTAR/Tempo acquisition
($1,712).

For purposes of the accompanying pro forma combined condensed financial
statements, the excess purchase price over book value of net assets
acquired has been estimated as follows:

<TABLE>
<S> <C> <C>
Exchange consideration of PRIMESTAR/Tempo acquisition.................. $ 1,712
Less book value of PRIMESTAR
Historical book value of PRIMESTAR........................ $ (291)
Less: excluded assets..................................... (43)
Plus: excluded liabilities................................ 1,924
---------
1,590
---------
Preliminary excess purchase cost over net book value of
assets acquired (see note m, below)....................... $ 122
---------
---------
</TABLE>

As defined in the PRIMESTAR asset purchase agreement, excluded assets
include high-power direct broadcast satellite inventory and deferred
loan costs. Excluded liabilities include debt and related interest
payable, restructuring accruals and employee-related liabilities.

k. To reclassify certain amounts in the historical financial statements of
PRIMESTAR to conform to the Hughes presentation.

l. To eliminate a non-recurring impairment loss and related income tax
benefit recorded by PRIMESTAR during 1998 to reduce the carrying amount
of certain assets to their net realizable values based upon the assumed
purchase price of the PRIMESTAR/Tempo acquisition.

m. Hughes has not as yet completed an analysis of the relative fair market
value of the net assets acquired from PRIMESTAR and Tempo in order to
determine a preliminary allocation of the purchase price. Accordingly,
the excess of the purchase price over the carrying value of PRIMESTAR and
Tempo net assets has been presented as a single caption in the
accompanying pro forma combined condensed balance sheet. For purposes of
the accompanying combined condensed statement of income (loss) from
continuing operations, such excess is being amortized using an estimated
weighted-average composite life of 20 years.

96
<PAGE>
n. To record depreciation on the in-orbit satellite acquired by Hughes in
connection with the
PRIMESTAR/Tempo acquisition over the estimated remaining useful life of
12 years.

o. To reflect interest expense associated with the incremental debt
incurred by Hughes to finance the PRIMESTAR/Tempo acquisition. For
purposes of pro forma calculation, Hughes' current interest rate of
LIBOR + 0.25% (5.3% in total) was used to compute interest on the
incremental debt discussed in pro forma adjustment (i) above.

p. To reduce interest expense associated with PRIMESTAR debt not assumed by
Hughes.

q. To eliminate PRIMESTAR's historical income tax benefit recorded in
connection with the PRIMESTAR restructuring consummated during 1998.

r. Income taxes associated with the pro forma adjustments discussed above
have been calculated at an assumed combined federal and state rate of
40%. Since the PRIMESTAR/Tempo acquisition is a taxable transaction,
amortization of any goodwill generated is expected to be deductible over
15 years for income tax purposes.

The unaudited pro forma combined condensed statement of income (loss)
from continuing operations has also been adjusted to recognize a tax
benefit, at an assumed combined federal and state rate of 40%, for
PRIMESTAR's historical losses from continuing operations for the year
ended December 31, 1998. This adjustment recognizes that, if the
PRIMESTAR/Tempo acquisition had taken place on January 1, 1998, the tax
benefit of PRIMESTAR and Tempo losses would have been realized in the
consolidated federal tax return of GM.

s. Based on the PRIMESTAR asset purchase agreement, 4.9 million shares of
GM class H stock will be issued to effect the PRIMESTAR/Tempo
acquisition. Hughes will acquire these shares from GM for a cash
payment, in exchange for which GM will make a capital contribution to
Hughes adequate to fund the acquisition of these shares. The GM board
will increase the class H dividend base by the number of shares issued.

97
<PAGE>
ANNEX A

AGREEMENT AND PLAN OF MERGER
AMONG
GENERAL MOTORS CORPORATION,
HUGHES ELECTRONICS CORPORATION
AND
UNITED STATES SATELLITE BROADCASTING COMPANY, INC.

A-1
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
---------
<C> <S> <C>
ARTICLE 1 THE MERGER..................................................................................... A-9
1.1. The Merger................................................................................... A-9
1.2. Effective Time............................................................................... A-9
1.3. Closing of the Merger........................................................................ A-9
1.4. Effects of the Merger........................................................................ A-10
1.5. Certificate of Incorporation and Bylaws...................................................... A-10
1.6. Directors.................................................................................... A-10
1.7. Officers..................................................................................... A-10

ARTICLE 2 CONVERSION OF SHARES; MERGER CONSIDERATION.................................................. A-10
2.1. Conversion of Shares......................................................................... A-10
2.2. Merger Consideration......................................................................... A-11
2.3. Stock and Cash Elections; Exchange Fund...................................................... A-12
2.4. Prorations................................................................................... A-14
2.5. Dissenting Shares............................................................................ A-16
2.6. Stock Options................................................................................ A-16

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................................. A-16
3.1. Organization and Qualification............................................................... A-16
3.2. Capitalization of the Company and Its Subsidiaries........................................... A-17
3.3. Authority Relative to This Agreement......................................................... A-18
3.4. SEC Reports; Financial Statements............................................................ A-18
3.5. Information Supplied......................................................................... A-19
3.6. Consents and Approvals; No Violations........................................................ A-19
3.7. No Default................................................................................... A-20
3.8. No Undisclosed Liabilities; Absence of Changes............................................... A-20
3.9. Litigation................................................................................... A-20
3.10. Compliance with Applicable Law............................................................... A-20
3.11. Employee Plans............................................................................... A-21
3.12. Environmental Matters........................................................................ A-21
3.13. Tax Matters.................................................................................. A-24
3.14. Opinion of Financial Advisors................................................................ A-26
3.15. Brokers...................................................................................... A-26
3.16. Material Contracts........................................................................... A-26
3.17. Labor and Employment Matters................................................................. A-27
3.18. FCC Matters.................................................................................. A-27
3.19. Intellectual Property........................................................................ A-28
3.20. Insurance.................................................................................... A-28
3.21. Indebtedness................................................................................. A-28
3.22. Liens........................................................................................ A-28
3.23. Real Property................................................................................ A-28
3.24. Tangible Property............................................................................ A-28
3.25. Programming Arrangements..................................................................... A-29
3.26. Consolidation Matters........................................................................ A-29
3.27. No Other Representations or Warranties....................................................... A-29

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF GM AND HUGHES................................................ A-29
4.1. Organization and Qualification............................................................... A-29
</TABLE>

A-2
<PAGE>
<TABLE>
<CAPTION>
PAGE
---------
4.2. Capitalization of GM and Its Subsidiaries.................................................... A-30
<C> <S> <C>
4.3. Authority Relative to This Agreement......................................................... A-30
4.4. SEC Reports; Financial Statements............................................................ A-30
4.5. Information Supplied......................................................................... A-31
4.6. Consents and Approvals; No Violations........................................................ A-31
4.7. No Default................................................................................... A-31
4.8. No Undisclosed Liabilities; Absence of Changes............................................... A-32
4.9. Litigation................................................................................... A-32
4.10. Compliance with Applicable Law............................................................... A-32
4.11. Brokers...................................................................................... A-32
4.12. Employee Plans............................................................................... A-32
4.13. Environmental Matters........................................................................ A-33
4.14. FCC Matters.................................................................................. A-33
4.15. No Other Representations or Warranties....................................................... A-33

ARTICLE 5 COVENANTS...................................................................................... A-33
5.1. Conduct of Business of the Company........................................................... A-33
5.2. Conduct of Business of GM and Hughes......................................................... A-35
5.3. Preparation of S-4 and the Proxy Statement................................................... A-36
5.4. Company Meeting.............................................................................. A-36
5.5. No Solicitation.............................................................................. A-36
5.6. Letter of the Company's Accountants.......................................................... A-37
5.7. Access to Information........................................................................ A-37
5.8. Additional Agreements; Reasonable Best Efforts............................................... A-38
5.9. Regulatory Reviews........................................................................... A-38
5.10. Public Announcements......................................................................... A-39
5.11. Directors' and Officers' Insurance; Indemnification.......................................... A-39
5.12. Notification of Certain Matters.............................................................. A-40
5.13. Tax-Free Reorganization Treatment............................................................ A-40
5.14. Company Affiliates........................................................................... A-40
5.15. SEC Filings.................................................................................. A-40
5.16. Employee Matters............................................................................. A-41
5.17. Ancillary Agreements......................................................................... A-42
5.18. Billing and Customer Management Systems...................................................... A-43
5.19. 110 DEG. Construction Permit................................................................. A-43
5.20. Spring Communications........................................................................ A-43
5.21. Confirmatory Certificates; Communications.................................................... A-43
5.22. Affiliate Agreements......................................................................... A-44

ARTICLE 6 CONDITIONS TO CONSUMMATION OF THE MERGER.................................................... A-44
6.1. Conditions to Each Party's Obligations to Effect the Merger.................................. A-44
6.2. Conditions to the Obligations of the Company................................................. A-44
6.3. Conditions to the Obligations of GM and Hughes............................................... A-45

ARTICLE 7 TERMINATION; AMENDMENT; WAIVER................................................................. A-46
7.1. Termination.................................................................................. A-46
7.2. Effect of Termination........................................................................ A-46
7.3. Expenses..................................................................................... A-46
7.4. Amendment.................................................................................... A-46
7.5. Extension; Waiver............................................................................ A-47
</TABLE>

A-3
<PAGE>
<TABLE>
<CAPTION>
PAGE
---------
ARTICLE 8 MISCELLANEOUS.................................................................................. A-47
<C> <S> <C>
8.1. Nonsurvival of Representations and Warranties................................................ A-47
8.2. Entire Agreement; Assignment................................................................. A-47
8.3. Notices...................................................................................... A-47
8.4. Governing Law................................................................................ A-48
8.5. Descriptive Headings......................................................................... A-48
8.6. Parties in Interest.......................................................................... A-48
8.7. Severability................................................................................. A-48
8.8. Specific Performance......................................................................... A-48
8.9. Brokers...................................................................................... A-48
8.10. Counterparts................................................................................. A-48
</TABLE>

A-4
<PAGE>

<TABLE>
<S> <C> <C>
EXHIBITS

Exhibit A -- Shareholders Agreement
Exhibit B-1 -- Company Tax Certificate
Exhibit B-2 -- Shareholder Tax Certificate
Exhibit B-3 -- Hughes Tax Certificate
Exhibit C -- Form of Consulting Agreement
Exhibit D -- Non-Competition Agreement
Exhibit E -- Transition Services Agreement
Exhibit F -- Replacement Payload Option Agreement
Exhibit G -- Channel Capacity Provision Agreement
Exhibit H -- United States Satellite Broadcasting Company, Inc. Closing Certificate
</TABLE>

A-5
<PAGE>
GLOSSARY OF DEFINED TERMS

<TABLE>
<CAPTION>
DEFINED IN
DEFINED TERMS SECTION
- ----------------------------------------------------------------------------------------------- -----------------
<S> <C>
110 DEG. Construction Permit................................................................... 3.18
20-Day Average Price........................................................................... 2.2(a)(ii)(3)
Acquiror Certificates.......................................................................... 2.3(d)
Acquiror Share Cap............................................................................. 2.4(e)(i)
Acquiror Stock................................................................................. 2.2(a)(ii)(1)
Acquisition Proposal........................................................................... 5.5(a)
Adjusted Price................................................................................. 2.4(e)(ii)
ADS............................................................................................ 3.26
Adverse Environmental Condition................................................................ 5.7(b)
Agreement...................................................................................... Preamble
Allocation Determination....................................................................... 2.3(c)
Ancillary Agreements........................................................................... 5.17
Cap Price...................................................................................... 2.2(b)(i)(A)
Cash Cap....................................................................................... 2.4(e)(iii)
Cash Consideration Per Share................................................................... 2.2(a)(i)
Cash Election.................................................................................. 2.2(a)(i)
Class A Common Stock........................................................................... 3.2(a)
Closing........................................................................................ 1.3
Closing Date................................................................................... 1.3
Closing Date Price............................................................................. 2.4(e)(iv)
Code........................................................................................... Recitals
Common Stock................................................................................... 3.2(a)
Communications Act............................................................................. 3.6
Company........................................................................................ Preamble
Company Affiliate.............................................................................. 5.14
Company Board.................................................................................. 3.3(a)
Company Certificate............................................................................ 2.1(c)
Company Common Stock........................................................................... 3.2(a)
Company Disclosure Schedule.................................................................... 3.1(b)
Company Employee Benefit Plan.................................................................. 3.11(a)
Company Financial Advisors..................................................................... 3.14
Company Permits................................................................................ 3.10
Company SEC Reports............................................................................ 3.4(a)
Company Securities............................................................................. 3.2(a)
Company Stock Options.......................................................................... 3.2(a)
Confidentiality Agreement...................................................................... 5.7(d)
D&O Insurance.................................................................................. 5.11(a)
DGCL........................................................................................... 1.1
DIRECTV Benefit Plan........................................................................... 4.12(a)
DIRECTV FCC Licenses........................................................................... 4.14
Dissenters' Rights Statute..................................................................... 2.5
Dissenting Shares.............................................................................. 2.5
Effective Time................................................................................. 1.2
Election Deadline.............................................................................. 2.3(c)
Election Form.................................................................................. 2.3(b)
Environmental Claim............................................................................ 3.12(a)(2)
Environmental Investigation.................................................................... 5.7(b)
</TABLE>

A-6
<PAGE>
<TABLE>
<CAPTION>
DEFINED IN
DEFINED TERMS SECTION
- ----------------------------------------------------------------------------------------------- -----------------
<S> <C>
Environmental Law.............................................................................. 3.12(a)(1)
Environmental Permit........................................................................... 3.12(a)(3)
ERISA.......................................................................................... 3.11(a)
Excess Termination Amount...................................................................... 2.2(b)(ii)
Excess Termination Amount Per Share............................................................ 2.2(b)(ii)(A)
Exchange Act................................................................................... 3.4(a)
Exchange Agent................................................................................. 2.3(b)
Exchange Fund.................................................................................. 2.3(d)
Excise Tax..................................................................................... 5.16(j)
FCC............................................................................................ 3.18
FCC Application................................................................................ 3.18
FCC Licenses................................................................................... 3.18
Filed Company SEC Reports...................................................................... 3.4(a)
Filed GM SEC Reports........................................................................... 4.8
Floor Price.................................................................................... 2.2(b)(1)(A)
GAAP........................................................................................... 3.4(a)
GM............................................................................................. Preamble
GM Permits..................................................................................... 4.10
GM SEC Reports................................................................................. 4.4
Governmental Entity............................................................................ 3.6
Hazardous Substance............................................................................ 3.12(a)(4)
HSR Act........................................................................................ 3.6
Hughes......................................................................................... Preamble
Hughes Securities.............................................................................. 4.2
Indemnified Party.............................................................................. 5.11(b)
Intellectual Property.......................................................................... 3.19(b)
Latest Date.................................................................................... 7.1(b)
Letter of Transmittal.......................................................................... 2.3(b)
Lien........................................................................................... 3.2(b)
Lien........................................................................................... 3.22
Material Adverse Effect........................................................................ 3.1(a)
Material Contracts............................................................................. 3.16(a)
MBCA........................................................................................... 1.1
Merger......................................................................................... 1.1
Merger Consideration........................................................................... 2.2(a)
Minimum Cash Amount............................................................................ 2.4(e)(v)
NPL............................................................................................ 3.12(m)
NYSE........................................................................................... 2.2(a)(ii)(3)
Payment........................................................................................ 5.16(j)
Program........................................................................................ 5.16(e)
Property....................................................................................... 3.12(a)(5)
Proxy Statement................................................................................ 3.5(b)
Redacted Contracts............................................................................. 5.7(a)
Release........................................................................................ 3.12(a)(6)
Relocation Package............................................................................. 5.16(b)
Remedial Action................................................................................ 3.12(a)(7)
Requested Cash Amount.......................................................................... 2.4(e)(vi)
S-4............................................................................................ 3.5(a)
SEC............................................................................................ 3.4(a)
Share.......................................................................................... 2.1(b)
</TABLE>

A-7
<PAGE>
<TABLE>
<CAPTION>
DEFINED IN
DEFINED TERMS SECTION
- ----------------------------------------------------------------------------------------------- -----------------
<S> <C>
Share Value.................................................................................... 2.2(a)(ii)(2)
Shareholders Agreement......................................................................... Recitals
Spring......................................................................................... 5.20
Statutory Committee............................................................................ Recitals
Stock Consideration Per Share.................................................................. 2.2(a)(ii)
Stock Election................................................................................. 2.2(a)(ii)
subsidiary..................................................................................... 3.1(b)
Surviving Corporation.......................................................................... 1.1
tax............................................................................................ 3.13(a)
tax returns.................................................................................... 3.13(a)
</TABLE>

A-8
<PAGE>
AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER, dated as of December 11, 1998 (the
"AGREEMENT"), is among GENERAL MOTORS CORPORATION, a Delaware corporation
("GM"), HUGHES ELECTRONICS CORPORATION, a Delaware corporation and a direct
wholly owned subsidiary of GM ("HUGHES"), and UNITED STATES SATELLITE
BROADCASTING COMPANY, INC., a Minnesota corporation (the "COMPANY").

WHEREAS, the Board of Directors of the Company and the committee of
disinterested directors of the Company formed pursuant to Section 302A.673,
subd. 1(d) of the MBCA (as defined in Section 1.1) (the "STATUTORY COMMITTEE")
have determined that the Merger (as defined in Section 1.1) is fair to and in
the best interests of the Company's shareholders and have approved the Merger in
accordance with this Agreement;

WHEREAS, the respective Boards of Directors of GM and Hughes have determined
that the Merger is advisable and in the best interests of Hughes, GM and GM's
common stockholders;

WHEREAS, for federal income tax purposes, it is intended that the Merger
shall qualify as a tax-free reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "CODE");

WHEREAS, concurrently with the execution hereof, certain holders of shares
of Company Common Stock (as defined in Section 3.2) are entering into an
agreement providing for certain matters with respect to their shares of Company
Common Stock (the "SHAREHOLDERS AGREEMENT"), a copy of which is attached hereto
as EXHIBIT A; and

WHEREAS, GM, Hughes and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger.

NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein contained, GM,
Hughes and the Company hereby agree as follows:

ARTICLE 1
THE MERGER

1.1. THE MERGER. At the Effective Time, upon the terms and subject to the
conditions of this Agreement and in accordance with the Delaware General
Corporation Law (the "DGCL") and the Minnesota Business Corporations Act (the
"MBCA"), the Company shall be merged with and into Hughes (the "MERGER").
Following the Merger, Hughes shall continue as the surviving corporation (the
"SURVIVING CORPORATION") and shall continue its corporate existence under the
DGCL, and the separate corporate existence of the Company shall cease.

1.2. EFFECTIVE TIME. Subject to the provisions of this Agreement, GM,
Hughes and the Company shall cause the Merger to be consummated by (i) filing a
certificate of merger complying with the DGCL with the Secretary of State of the
State of Delaware and (ii) filing articles of merger complying with the MBCA
with the Secretary of State of the State of Minnesota, in each case as soon as
practicable on or after the Closing Date (as defined in Section 1.3). The Merger
shall become effective upon the later of such filings or at such time thereafter
as is provided in such certificate of merger and such articles of merger (the
"EFFECTIVE TIME").

1.3. CLOSING OF THE MERGER. The closing of the Merger (the "CLOSING") will
take place at a time and on a date (the "CLOSING DATE") to be specified by the
parties, which shall be no later than the second business day after satisfaction
or waiver of the conditions set forth in Article 6, at the offices of Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, unless another
time, date or place is agreed to in writing by the parties hereto.

A-9
<PAGE>
1.4. EFFECTS OF THE MERGER. The Merger shall have the effects set forth in
the DGCL and the MBCA. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the properties, rights, privileges,
immunities, powers and franchises of the Company and Hughes shall vest in the
Surviving Corporation, and all debts, liabilities, obligations and duties of the
Company and Hughes shall become the debts, liabilities, obligations and duties
of the Surviving Corporation.

1.5. CERTIFICATE OF INCORPORATION AND BYLAWS. The Certificate of
Incorporation of Hughes in effect immediately prior to the Effective Time shall
be the Certificate of Incorporation of the Surviving Corporation, until amended
in accordance with such Certificate of Incorporation and the DGCL. The Bylaws of
Hughes in effect immediately prior to the Effective Time shall be the Bylaws of
the Surviving Corporation, until amended in accordance with such Bylaws and the
DGCL.

1.6. DIRECTORS. The directors of Hughes immediately prior to the Effective
Time shall be the initial directors of the Surviving Corporation, each to hold
office in accordance with the Certificate of Incorporation and Bylaws of the
Surviving Corporation until such director's successor is duly elected or
appointed and qualified.

1.7. OFFICERS. The officers of Hughes at the Effective Time shall be the
initial officers of the Surviving Corporation, each to hold office in accordance
with the Certificate of Incorporation and Bylaws of the Surviving Corporation
until such officer's successor is duly elected or appointed and qualified.

ARTICLE 2
CONVERSION OF SHARES; MERGER CONSIDERATION

2.1. CONVERSION OF SHARES. At the Effective Time, by virtue of the Merger
and without any action on the part of any of the parties hereto or any holder of
shares of Company Common Stock:

(a) COMMON STOCK OF HUGHES AND GM. Each issued and outstanding share of
common stock, par value $1.00 per share, of Hughes shall remain outstanding and
shall be unchanged as a result of the Merger. The issued and outstanding
securities of GM shall remain outstanding and shall be unchanged as a result of
the Merger.

(b) CANCELLATION OF TREASURY SHARES AND GM-OWNED SHARES. Each share of
Company Common Stock issued and outstanding immediately prior to the Effective
Time (each, a "SHARE") that is owned by the Company or any subsidiary of the
Company, or by GM or Hughes (other than Shares in trust accounts, managed
accounts, custodial accounts and the like that are beneficially owned by third
parties) shall automatically be cancelled and shall cease to exist, and no
consideration shall be delivered or deliverable in exchange therefor.

(c) COMMON STOCK OF THE COMPANY. Each Share, other than Shares to be
cancelled in accordance with Section 2.1(b) and any Dissenting Shares (as
defined in Section 2.5), shall be converted, in accordance with Section 2.2(a),
into the right to receive the Merger Consideration (as defined in Section
2.2(a)) and shall cease to be outstanding and shall automatically be canceled
and shall cease to exist, and each holder of a certificate previously evidencing
any such Shares (each, a "COMPANY CERTIFICATE") shall cease to have any rights
with respect thereto, except the right to receive, upon the surrender of such
Company Certificate in accordance with the provisions of Section 2.3, the Merger
Consideration multiplied by the number of Shares previously evidenced by such
Company Certificate.

A-10
<PAGE>
2.2. MERGER CONSIDERATION.

(a) MERGER CONSIDERATION. Except as otherwise provided in Section 2.4 and
subject to Section 2.5, the term "MERGER CONSIDERATION" shall mean, at the
election of each holder of Shares, which election shall be available on a
share-by-share basis, one of the following:

(i) for each Share with respect to which an election to receive cash has
been effectively made or deemed made pursuant to Section 2.3 and not revoked
(a "CASH ELECTION"), the right to receive an amount in cash, without
interest, equal to the Share Value (the "CASH CONSIDERATION PER SHARE"); or

(ii) for each Share with respect to which an election to receive shares
of Acquiror Stock has been effectively made pursuant to Section 2.3 and not
revoked (a "STOCK ELECTION"), the right to receive a fractional interest in
a share of Acquiror Stock equal to the Exchange Ratio (as defined in Section
2.2(b)) (the "STOCK CONSIDERATION PER SHARE"), subject to Section 2.3(h).

For purposes of this Agreement:

(1) "ACQUIROR STOCK" shall mean the Class H Stock of GM, par value $0.10
per share;

(2) "SHARE VALUE" shall mean the product of (x) the Exchange Ratio and
(y) the 20-Day Average Price; and

(3) "20-DAY AVERAGE PRICE" shall mean the average (rounded to nearest
1/10,000, or if there shall not be a nearest 1/10,000, to the next highest
1/10,000) of the volume weighted averages (rounded to the nearest 1/10,000,
or if there shall not be a nearest 1/10,000, to the next highest 1/10,000)
of the trading prices of the Acquiror Stock on the New York Stock Exchange,
Inc. (the "NYSE") as reported by Bloomberg Financial Markets (or such other
source as the parties shall agree in writing) for each of the 20 consecutive
trading days ending on and including the second trading day prior to the
Closing Date;

(b) EXCHANGE RATIO.

(i) The Exchange Ratio shall be determined in the following manner,
subject to reduction pursuant to Section 2(b)(ii):

(A) If the 20-Day Average Price is less than or equal to $47.6821 (the
"CAP PRICE"), and greater than or equal to $27.8146 (the "FLOOR PRICE"), the
Exchange Ratio shall be equal to 0.3775.

(B) If the 20-Day Average Price is greater than the Cap Price, the
Exchange Ratio shall be equal to the quotient obtained by dividing $18.00 by
the 20-Day Average Price (such quotient shall be rounded to the nearest
1/10,000, or if there shall not be a nearest 1/10,000 to the next lowest
1/10,000).

(C) If the 20-Day Average Price is less than the Floor Price, the
Exchange Ratio shall be equal to the quotient obtained by dividing (x) the
lower of (1) $10.50 and (2) the Adjusted Price (as defined in Section
2.4(e)) by (y) the 20-Day Average Price (such quotient shall be rounded to
the nearest 1/10,000, or if there shall not be a nearest 1/10,000, to the
next highest 1/10,000).

(ii) The Exchange Ratio shall be reduced by the amount determined by:

(A) first, dividing the Excess Termination Amount by the number of
Shares (such quotient, the "EXCESS TERMINATION AMOUNT PER SHARE"), and

(B) then, dividing the Excess Termination Amount Per Share by the 20-Day
Average Price (the resulting quotient shall be rounded to the nearest
1/10,000 or, if there shall not be a nearest 1/10,000, to the next highest
1/10,000).

The "EXCESS TERMINATION AMOUNT" shall be the sum of (x) the amount, if any,
by which the payments made or required to be made by the Company or any of
its subsidiaries after the date hereof arising out of or relating to the
termination of the contract identified on Section 2.2(b)(ii)(x) of the
Acquiror

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Disclosure Schedule exceed the Termination Amount in respect thereof set
forth therein, and (y) the amount, if any, by which the payments made or
required to be made by the Company or any of its subsidiaries after the date
hereof arising out of or relating to the termination of the contract
identified in Section 2.2(b)(ii)(y) of the Acquiror Disclosure Schedule
exceed the Termination Amount in respect thereof set forth in therein.

(iii) If between the date of this Agreement and the Effective Time, the
outstanding shares of Acquiror Stock or Company Common Stock shall have been
changed into a different number of shares or a different class, by reason of
any stock dividend, subdivision, reclassification, recapitalization, rights
offering, split, combination or exchange of shares, the Exchange Ratio
correspondingly shall be adjusted to the extent warranted to reflect such
stock dividend, subdivision, reclassification, recapitalization, rights
offering, split, combination or exchange of shares.

2.3. STOCK AND CASH ELECTIONS; EXCHANGE FUND.

(a) RIGHT TO ELECT. Each Person who, at the Effective Time, is a record
holder of Shares (other than holders of Shares to be cancelled as set forth in
Section 2.1(b) or Shares subject to Section 2.5) shall have the right to submit
an Election Form (as defined in Section 2.3(b)) specifying the number of Shares
that such Person desires to have converted into the right to receive, subject to
Section 2.4, (i) the Stock Consideration Per Share pursuant to the Stock
Election and (ii) the Cash Consideration Per Share pursuant to the Cash
Election.

(b) LETTER OF TRANSMITTAL AND ELECTION FORM. As soon as reasonably
practicable after the Effective Time, a bank or trust company to be designated
by GM (the "EXCHANGE AGENT") shall mail to each holder of record of Shares
immediately prior to the Effective Time (excluding any Shares to be cancelled
pursuant to Section 2.1(b) or subject to Section 2.5) (i) a letter of
transmittal (the "LETTER OF TRANSMITTAL") which shall specify that delivery
shall be effected, and risk of loss and title to the Company Certificates shall
pass, only upon delivery of such Company Certificates to the Exchange Agent and
shall be in such form and have such other provisions as GM shall reasonably
specify, (ii) an election form (the "ELECTION FORM") providing for such holders
to make the Cash Election or the Stock Election and (iii) instructions for use
in effecting the surrender of the Company Certificates in exchange for the
Merger Consideration with respect to the Shares formerly represented thereby.
The Election Form shall include information as to the Share Value and the
Exchange Ratio. As of the Election Deadline (as hereinafter defined), to the
extent that a holder of Shares shall not have submitted to the Exchange Agent an
effective, properly completed Election Form with respect to all or certain of
the Shares held by such holder or shall have properly revoked and not properly
submitted to the Exchange Agent a subsequent Election Form with respect to all
or certain of the Shares, such holder shall be deemed to have made the Cash
Election with respect to such Shares.

(c) ELECTION DEADLINE AND ALLOCATION DETERMINATION. Any Stock Election
shall have been validly made only if the Exchange Agent shall have received by
5:00 p.m. New York, New York time on a date (the "ELECTION DEADLINE") to be
mutually agreed upon by Hughes and the Company (which date shall not be later
than the twentieth (20th) business day after the Effective Time), an Election
Form properly completed and executed (with the signature or signatures thereof
guaranteed to the extent required by the Election Form) by such holder
accompanied by such holder's Company Certificates, or by an appropriate
guarantee of delivery of such Company Certificates from a member of any
registered national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States as set forth in such Election Form. Any holder of Shares (other than a
holder who has submitted an irrevocable election) who has made an election by
submitting an Election Form to the Exchange Agent may at any time prior to the
Election Deadline change such holder's election by submitting a revised Election
Form, properly completed and signed that is received by the Exchange Agent prior
to the Election Deadline. Any holder of Shares may at any time prior to the
Election Deadline revoke such holder's election by written notice to the
Exchange Agent received by the close of business on the day prior to the
Election Deadline. As soon as practicable after the Election Deadline, the
Exchange

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Agent shall, subject to Section 2.4, determine the allocation of the cash
portion of the Merger Consideration and the stock portion of the Merger
Consideration and shall notify GM, Hughes and Hubbard Broadcasting (as a
representative of the shareholders of the Company) of its determination (the
"ALLOCATION DETERMINATION").

(d) DEPOSIT OF MERGER CONSIDERATION. Promptly after the Allocation
Determination, Hughes shall deposit with the Exchange Agent, for the benefit of
the holders of Shares for exchange in accordance with this Article 2, (i) cash
in an amount sufficient to pay the aggregate Merger Consideration that shall
take the form of cash and (ii) certificates or other evidence representing the
aggregate Merger Consideration that shall take the form of shares of Acquiror
Stock ("ACQUIROR CERTIFICATES"; the cash and certificates or other evidence
deposited pursuant to clauses (i) and (ii) being hereinafter referred to as the
"EXCHANGE FUND"). The Acquiror Stock into which Company Common Stock shall be
converted pursuant to the Merger shall be deemed to have been issued at the
Effective Time for purposes of entitlement to dividends declared, if any, after
the Effective Time. In connection with the issuance of shares of Acquiror Stock
pursuant to this Agreement and the contribution by GM to the capital of Hughes
of cash in an amount no less than the fair market value of such shares, GM's
Board of Directors shall, in accordance with paragraph (a)(4) of Division I of
Article Fourth of GM's Amended and Restated Certificate of Incorporation, as
amended, make an appropriate adjustment to the denominator of the fraction used
to determine the "Available Separate Consolidated Net Income of Hughes," as
defined therein.

(e) SURRENDER OF COMPANY CERTIFICATES. Upon surrender of a Company
Certificate to the Exchange Agent, together with the Letter of Transmittal, duly
executed, and such other documents as Hughes or the Exchange Agent shall
reasonably request, the holder of such Company Certificate shall be entitled to
receive, promptly after the Election Deadline in exchange therefor, (i) a
certified or bank cashier's check in the amount equal to the aggregate amount of
the Merger Consideration consisting of cash which such holder has the right to
receive pursuant to the provisions of this Article 2 (including any cash in lieu
of fractional shares of Acquiror Stock pursuant to Section 2.3(h)) and (ii)
Acquiror Certificates representing the Acquiror Stock, if any, which such holder
has the right to receive (in each case without interest and less the amount of
any required withholding taxes, if any, in accordance with Section 2.3(k)).

(f) RULES GOVERNING EXCHANGE. Hughes, in consultation with the Company
prior to the Effective Time, shall have the right to make reasonable rules, not
inconsistent with the terms of this Agreement, governing the validity of the
Election Forms, the manner and extent to which Cash Elections or Stock Elections
are to be taken into account in making the determinations prescribed by Section
2.4, the issuance and delivery of certificates for, or other evidence of,
Acquiror Stock, and the payment of the Cash Consideration Per Share.

(g) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES OF ACQUIROR STOCK. No
dividends or other distributions with respect to shares of Acquiror Stock, with
a record date after the Effective Time, shall be paid to the holder of any
unsurrendered Company Certificate with respect to the shares of Acquiror Stock
they are entitled to receive until such Company Certificate is surrendered by
such holder.

(h) FRACTIONAL SHARES. No fraction of a share of Acquiror Stock shall be
issued in the Merger. In lieu of any such fractional shares, each holder of
Shares entitled to receive a fraction of a share of Acquiror Stock in the
Merger, upon surrender of a Company Certificate for exchange pursuant to this
Section 2.3, shall be paid in lieu thereof an amount in cash (without interest),
rounded to the nearest cent, determined by multiplying (x) the Share Value by
(y) the fractional interest in Acquiror Stock to which such holder would
otherwise be entitled (after aggregating all shares of Acquiror Stock which such
holder is entitled to receive pursuant to this Article 2).

(i) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund which
remains undistributed to the former holders of Shares for twelve (12) months
after the Effective Time shall be delivered to Hughes, upon demand, and any
former holders of Shares who have not theretofore complied with this Article 2
shall thereafter look only to Hughes for the Merger Consideration to which they
are entitled pursuant to this Article 2.

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(j) NO LIABILITY. None of GM, Hughes or the Company shall be liable to any
former holder of Shares for any Merger Consideration from the Exchange Fund
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.

(k) WITHHOLDING RIGHTS. GM, Hughes and the Exchange Agent shall be
entitled to deduct and withhold, from the consideration otherwise payable
pursuant to this Agreement to any former holder of Shares, such amounts as GM,
Hughes, the Company (or any subsidiary thereof) or the Exchange Agent is
required to deduct and withhold with respect to the making of such payment under
the Code or any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by GM, Hughes or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the former holder of the Shares in respect of which such deduction and
withholding was made by GM, Hughes or the Exchange Agent.

2.4. PRORATIONS.

(a) REQUESTED CASH AMOUNT NOT IN EXCESS OF CASH CAP AND NOT BELOW MINIMUM
CASH AMOUNT. If the Requested Cash Amount equals or exceeds the Minimum Cash
Amount and does not exceed the Cash Cap, the Merger Consideration shall be
issued and paid in the manner set forth in Section 2.2, unless the 20-Day
Average Price is less than the Floor Price and the Acquiror Stock to be issued
pursuant to this Agreement would exceed the Acquiror Share Cap, in which case
the adjustments set forth in Section 2.4(d) shall be made.

(b) REQUESTED CASH AMOUNT IN EXCESS OF CASH CAP. If the Requested Cash
Amount exceeds the Cash Cap, each holder who makes or is deemed to have made a
Cash Election pursuant to Section 2.3 shall receive, for each Share for which a
Cash Election has been made or deemed made, Merger Consideration consisting of:

(i) cash in an amount equal to the product of the Share Value and a
fraction, (A) the numerator of which is the Cash Cap and (B) the denominator
of which is the Requested Cash Amount; and

(ii) a fractional interest in a share of Acquiror Stock equal to a
fraction, (A) the numerator of which is equal to the Share Value minus the
amount of cash payable pursuant to clause (i) of this Section 2.4(b) and (B)
the denominator of which is the 20-Day Average Price.

(c) REQUESTED CASH AMOUNT BELOW MINIMUM CASH AMOUNT. If the Requested Cash
Amount is less than the Minimum Cash Amount and the 20-Day Average Price equals
or exceeds the Floor Price, each holder making a Stock Election shall receive,
for each Share for which a Stock Election has been made, Merger Consideration
consisting of:

(i) cash in an amount equal to the quotient obtained by dividing (A) the
excess of the Minimum Cash Amount over the Requested Cash Amount by (B) the
number of Shares for which such Stock Elections have been made; and

(ii) a fractional interest in a share of Acquiror Stock equal to a
fraction, (A) the numerator of which is equal to the excess of the Share
Value over the amount of cash payable pursuant to clause (i) of this Section
2.4(c) and (B) the denominator of which is the 20-Day Average Price.

(d) ADJUSTMENTS REQUIRED IF 20-DAY AVERAGE PRICE IS LESS THAN FLOOR
PRICE. If (A) the 20-Day Average Price is less than the Floor Price, (B) the
Requested Cash Amount does not exceed the Cash Cap, and (C) the number of shares
of Acquiror Stock that would be issuable pursuant to this Agreement would, but
for this Section 2.4(d), exceed the Acquiror Share Cap, then each holder making
a Stock Election shall receive, for each Share for which a Stock Election has
been made, Merger Consideration consisting of:

(x) a fractional interest in a share of Acquiror Stock equal to the
product of the Stock Consideration Per Share and a fraction, (I) the
numerator of which is the Acquiror Share Cap and

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(II) the denominator of which is the total number of shares of Acquiror
Stock that, but for Section 2.4, would have been issuable to all holders of
Shares pursuant to this Agreement, and

(y) an amount of cash equal to the excess of (I) the Share Value over
(II) the product of (a) the fractional interest in a share of Acquiror Stock
to which such holder shall be entitled pursuant to clause (x) of this
Section 2.4(d) and (b) the 20-Day Average Price.

(e) CERTAIN DEFINITIONS. For purposes of this Agreement:

(i) "ACQUIROR SHARE CAP" shall mean a number equal to seventy percent
(70%) of the product of the number of Shares and 0.3775.

(ii) "ADJUSTED PRICE" shall mean an amount equal to the quotient
obtained by dividing (1) an amount equal to two hundred percent (200%) of
the product of the Acquiror Share Cap and the 20-Day Average Price by (2)
the number of Shares.

(iii) "CASH CAP" shall mean an amount of cash determined as follows:

(A) If the 20-Day Average Price equals or exceeds the Floor Price, the
Cash Cap shall be equal to fifty percent (50%) of the product of (1) the
Exchange Ratio, and (2) the Closing Date Price, and (3) the number of
Shares.

(B) If the 20-Day Average Price is less than the Floor Price, the Cash
Cap shall be equal to the lesser of (1) the amount described in clause (A)
of this Section 2.4(e)(iii) and (2) the product of (X) the Acquiror Share
Cap and (Y) the Closing Date Price.

(C) Notwithstanding anything to the contrary contained in this
Agreement, if, based on the Merger Consideration payable pursuant to this
Agreement, the tax opinions referred to in Sections 6.2(e) and 6.3(h) hereof
cannot be delivered as a result of the Merger potentially failing to satisfy
continuity of interest requirements under applicable federal income tax
principles relating to reorganizations under 368(a) of the Code (as
reasonably determined by Weil, Gotshal & Manges LLP, in consultation with
Leonard, Street and Deinard Professional Association, such determination to
be made (x) taking into account Dissenting Shares and cash issued in lieu of
fractional shares, if any, (y) using the Closing Date Price as the measure
of value of the shares of Acquiror Stock issued as Merger Consideration and
(z) on the basis that the total value of such Acquiror Stock issued as
Merger Consideration must represent no less than forty-five percent (45%) of
the total consideration issued and to be issued in the Merger to all holders
of Shares), then the Cash Cap shall be reduced to the extent necessary to
enable the tax opinions to be rendered.

(iv) "CLOSING DATE PRICE" shall mean the per share closing price of the
Acquiror Stock on the NYSE as of the Closing Date.

(v) "MINIMUM CASH AMOUNT" shall mean an amount equal to the lesser of
(A) 30% of the product of the Share Value and the number of Shares and (B)
the Cash Cap.

(vi) "REQUESTED CASH AMOUNT" shall mean the aggregate amount of cash
that would be payable with respect to all Shares for which Cash Elections
have been made or deemed made pursuant to Section 2.3 or 2.5, before giving
effect to Section 2.4.

(f) APPLICATION OF CASH AND SHARE LIMITATIONS. The foregoing provisions of
this Article 2 are not intended to, and shall not be applied so as to, result
in:

(i) the issuance of an aggregate number of shares of Acquiror Stock in
excess of the Acquiror Share Cap;

(ii) the payment of an aggregate amount of cash in excess of the Cash
Cap;

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(iii) the receipt by a holder of Merger Consideration per Share having an
aggregate value (with Merger Consideration in the form of Acquiror Stock
valued for this purpose at the 20-Day Average Price) less than the Share
Value unless both (x) the aggregate number of shares of Acquiror Stock to be
issued is equal to the Acquiror Share Cap, and (y) the aggregate amount of
cash to be paid is equal to the product of (1) the Acquiror Share Cap and
(2) the Closing Date Price; or

(iv) the receipt by a holder making a Cash Election of a value per Share
which is different from the value per Share received by a holder making a
Stock Election (with Acquiror Stock valued for this purpose at the 20-Day
Average Price).

2.5. DISSENTING SHARES. Notwithstanding anything in this Agreement to the
contrary, Shares held by a holder (if any) who has the right to exercise
dissenters' rights under Section 302A.471 and Section 302A.473 of the MBCA, or
any successor provisions (the "DISSENTERS' RIGHTS STATUTE") and who shall have
filed with the Company, prior to the vote by the shareholders of the Company on
this Agreement and the Merger, a notice of intent to demand payment of the fair
value of such Shares in accordance with the Dissenters' Rights Statute and shall
not have voted to approve this Agreement and the Merger ("DISSENTING SHARES")
shall not be converted into a right to receive the Merger Consideration, unless
such holder fails to perfect or otherwise loses such holder's right to exercise
such holder's dissenters' rights with respect to such Shares, if any. If, before
or after the Effective Time, such holder fails to perfect or loses any such
right to exercise such holder's dissenters' rights with respect to such Shares,
each such Share of such holder shall be treated as a Share that had been
converted as of the Effective Time into the right to receive the Merger
Consideration and such holder shall be deemed to have made the Cash Election. At
the Effective Time, any holder of Dissenting Shares shall cease to have any
rights with respect thereto, except the rights provided in the Dissenters'
Rights Statute and as provided in the immediately preceding sentence. The
Company shall give prompt notice to Hughes of any notices of intent to demand
fair value of Shares in accordance with the Dissenters' Rights Statute received
by the Company, and Hughes shall have the right to participate in and direct all
negotiations and proceedings with respect to such demands. The Company shall
not, except with the prior written consent of Hughes, make any payment with
respect to, or settle or offer to settle, any such demands.

2.6. STOCK OPTIONS. The Company may elect to take all such action
necessary to cause each Company Stock Option (as defined in Section 3.2(a)),
which is outstanding and unexercised immediately prior to the Effective Time, to
become vested as of the Effective Time. Hughes shall pay each holder of any
Company Stock Option, with respect to each Share subject to such Company Stock
Option, an amount in cash equal to the excess of the Share Value over the
exercise price per Share of such Company Stock Option, less all applicable
withholding taxes. All Company Stock Options and all Company stock option plans,
arrangements or agreements shall be terminated thereafter as of the Effective
Time.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to each of GM and Hughes as
follows:

3.1. ORGANIZATION AND QUALIFICATION.

(a) The Company and each of its subsidiaries (as defined in Section 3.1(b))
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its businesses as now being conducted, except where the failure
to be so organized, existing and in good standing or to have such power and
authority would not have or constitute a Material Adverse Effect (as defined
below) on the Company. When used in connection with any party to this Agreement,
the term "MATERIAL ADVERSE EFFECT" means (i) a material adverse effect, or any
development that results in a

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material adverse effect, on the business, operations, financial performance or
prospects of such party and its subsidiaries, taken as whole, or (ii) an event,
change, effect or development that may materially impair or delay the ability of
such party to consummate the transactions contemplated hereby; PROVIDED,
HOWEVER, that effects or developments arising from (A) general economic
conditions affecting participants in the multichannel entertainment distribution
industry, (B) inactions of the Company resulting from Hughes' refusal to provide
its consent pursuant to Section 5.1 of this Agreement or (C) actions which the
Company is required to take pursuant to this Agreement, shall not constitute a
Material Adverse Effect.

(b) Except as set forth in Section 3.1(b) of the Disclosure Schedule
previously delivered by the Company to GM (the "COMPANY DISCLOSURE SCHEDULE"),
the Company has no subsidiaries and does not own, directly or indirectly,
beneficially or of record, any shares of capital stock or other security of any
other entity or any other investment in any other entity. The term "SUBSIDIARY"
shall mean, when used with reference to any party to this Agreement, any entity
more than fifty percent (50%) of either the outstanding voting securities or the
value of the outstanding equity securities or interests (including membership
interests) of which are owned directly or indirectly by such party.

(c) The Company and each of its subsidiaries is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except in such jurisdictions
where the failure to be so duly qualified or licensed and in good standing would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company.

(d) The Company has heretofore delivered to Hughes accurate and complete
copies of the articles of incorporation and by-laws, as currently in effect, of
the Company and each of its subsidiaries.

3.2. CAPITALIZATION OF THE COMPANY AND ITS SUBSIDIARIES.

(a) The authorized capital stock of the Company consists of: (i) 100,000,000
shares of Common Stock, par value $.0001 per share (the "COMMON STOCK"), of
which, as of December 1, 1998, 60,868,825 shares were issued and outstanding and
no shares were held in treasury, (ii) 500,000,000 shares of Class A Common
Stock, par value $.0001 per Share (the "CLASS A COMMON STOCK"; and collectively
with the Common Stock, the "COMPANY COMMON STOCK"), of which, as of December 1,
1998, 28,941,950 shares were issued and outstanding and no shares were held in
treasury and (iii) 50,000,000 shares of Preferred Stock, par value $.01 per
share, no shares of which are issued and outstanding. All of the issued and
outstanding shares of Company Common Stock have been validly issued, and are
fully paid, nonassessable and free of preemptive rights. As of December 1, 1998,
713,400 shares of Class A Common Stock were reserved for issuance and issuable
upon or otherwise deliverable in connection with the exercise of outstanding
options granted by the Company to purchase shares of Class A Common Stock (the
"COMPANY STOCK OPTIONS") issued pursuant to the Company stock option plans
listed in Section 3.2(a) of the Company Disclosure Schedule. Since December 1,
1998, no shares of the Company's capital stock have been issued other than
pursuant to the exercise of Company Stock Options already in existence on such
date and, since December 1, 1998, no Company Stock Options have been granted.
Except as set forth above in this Section 3.2(a), as of the date hereof, there
are outstanding (i) no shares of capital stock or other voting securities of the
Company, (ii) no securities of the Company or its subsidiaries convertible into
or exchangeable for shares of capital stock or voting securities of the Company,
(iii) no options or other rights to acquire from the Company or its
subsidiaries, and no obligations of the Company or its subsidiaries to issue,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company, and (iv) no
equity equivalents, or interests in the ownership or earnings, of the Company or
its subsidiaries or other similar rights (including stock appreciation rights)
(collectively, "COMPANY SECURITIES"). There are no outstanding obligations of
the Company or its subsidiaries to repurchase, redeem or otherwise acquire any
Company Securities. Except as set forth in Section 3.2(a) of the Company
Disclosure Schedule, there are no shareholder agreements, voting trusts or other
agreements

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or understandings to which the Company is a party or to which it is bound
relating to the voting of any shares of capital stock of the Company.

(b) Except as set forth in Section 3.2(b) of the Company Disclosure
Schedule, all of the outstanding capital stock of the Company's subsidiaries is
owned by the Company, directly or indirectly, free and clear of any Lien (as
defined below) or any other limitation or restriction (including any restriction
on the right to vote or sell the same, except as may be provided as a matter of
law). There are no securities of the Company or its subsidiaries convertible
into or exchangeable for, no options or other rights to acquire from the Company
or its subsidiaries, and no other contract, understanding, arrangement or
obligation (whether or not contingent) providing for the issuance or sale,
directly or indirectly of, any capital stock or other ownership interests in, or
any other securities of, any subsidiary of the Company. There are no outstanding
contractual obligations of the Company or its subsidiaries to repurchase, redeem
or otherwise acquire any outstanding shares of capital stock or other ownership
interests in any subsidiary of the Company. For purposes of this Agreement,
"LIEN" means, with respect to any asset (including, without limitation, any
security) any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset.

3.3. AUTHORITY RELATIVE TO THIS AGREEMENT.

(a) The Company has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized and
approved by the board of Directors of the Company (the "COMPANY BOARD") and the
Statutory Committee and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval and adoption of this Agreement by the holders of a majority of the
voting power of the then outstanding shares of Company Common Stock). This
Agreement has been duly and validly executed and delivered by the Company and
constitutes a valid, legal and binding agreement of the Company, enforceable
against the Company in accordance with its terms.

(b) The Company board has, by unanimous vote of those present, duly and
validly approved, and taken all corporate actions required to be taken by the
Company board for the consummation of the transactions, including the Merger,
contemplated hereby and by the Shareholders Agreement and resolved to recommend
that the shareholders of the Company approve and adopt this Agreement. The
Statutory Committee has been duly formed pursuant to Section 302A.673, subd.1,
and has duly and validly authorized and approved this Agreement, the Merger and
the Shareholders Agreement and the consummation of the transactions contemplated
by this Agreement and the Shareholders Agreement. The action of the Statutory
Committee in approving this Agreement and the transactions contemplated hereby,
including the Merger, and in approving the Shareholders Agreement and the
transactions contemplated thereby, is sufficient to render inapplicable to the
Merger, this Agreement, and the transactions contemplated by the Shareholders
Agreement, the provisions of Sections 302A.673 and 302A.675 of the MBCA and no
Minnesota or other State takeover statute or similar statute or regulation
applies to the Merger, this Agreement, the Shareholders Agreement, or any of the
transactions contemplated hereby or thereby.

3.4. SEC REPORTS; FINANCIAL STATEMENTS.

(a) The Company has filed all required forms, reports and documents with the
Securities and Exchange Commission (the "SEC") since February 6, 1996 (the
"COMPANY SEC REPORTS"), each of which has complied in all material respects with
all applicable requirements of the Securities Act and the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), each as in effect on the dates
such forms, reports and documents were filed. None of the Company SEC Reports,
including, without limitation, any financial statements or schedules included or
incorporated by reference therein, contained, when filed, any untrue statement
of a material fact or omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the statements
therein, in light of the

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<PAGE>
circumstances under which they were made, not misleading. The consolidated
financial statements of the Company included in the Company SEC Reports complied
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto and fairly
present, in conformity with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis (except as may be indicated in
the notes thereto), the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and their consolidated results
of operations and changes in financial position for the periods then ended
(subject, in the case of the unaudited interim financial statements, to (A)
normal year-end adjustments and (B) any other adjustments described in the
Company SEC Reports filed prior to the date of this Agreement (the "FILED
COMPANY SEC REPORTS")).

(b) The Company has heretofore made available to GM a complete and correct
copy of any material amendments or modifications, which have not yet been filed
with the SEC, to agreements, documents or other instruments which previously had
been filed by the Company with the SEC pursuant to the Exchange Act.

3.5. INFORMATION SUPPLIED.

(a) None of the information supplied or to be supplied by the Company for
inclusion or incorporation by reference in the registration statement on Form
S-4 to be filed with the SEC by GM in connection with the issuance of shares of
Acquiror Stock in the Merger, including the prospectus contained therein and any
amendment thereof or supplement thereto (the "S-4") will, at the time the S-4 is
filed with the SEC and at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading. If at any time prior to the Effective Time, any event
with respect to the Company, its officers and directors or any of its
subsidiaries should occur which is required to be described in the S-4, the
Company shall promptly so advise Hughes.

(b) The proxy statement relating to the meeting of the Company's
shareholders to be held in connection with the Merger, including any amendment
thereof or supplement thereto (the "PROXY STATEMENT") will not, at the date
mailed to shareholders of the Company and at the times of the meeting of
shareholders of the Company to be held in connection with the Merger, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
thereunder.

3.6. CONSENTS AND APPROVALS; NO VIOLATIONS. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR ACT"), the Communications Act of 1934, as amended,
and the rules and regulations promulgated thereunder (the "COMMUNICATIONS ACT"),
the filing and recordation of a certificate of merger as required by the DGCL,
the filing of articles of merger as required by the MBCA, and as otherwise set
forth in Section 3.6 of the Company Disclosure Schedule, no filing with or
notice to, and no permit, authorization, consent or approval of, any court or
tribunal or administrative, governmental or regulatory body, agency or authority
(a "GOVERNMENTAL ENTITY") is necessary for the execution and delivery by the
Company of this Agreement or the consummation by the Company of the transactions
contemplated hereby, except where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings or give such
notice would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. Except as set forth in Section 3.6 to the Company
Disclosure Schedule, neither the execution, delivery and performance of this
Agreement by the Company nor the consummation by the Company of the transactions
contemplated hereby will (i) conflict with or result in any breach of any

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provision of the respective certificate or articles of incorporation or bylaws
(or similar governing documents) of the Company or any of its subsidiaries, (ii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration or Lien) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which the Company or
any of its subsidiaries is a party or by which any of them or any of their
respective properties or assets may be bound, or (iii) violate any order, writ,
injunction, decree, law, statute, rule or regulation applicable to the Company
or any of its subsidiaries or any of their respective properties or assets,
except in the case of (ii) or (iii) for violations, breaches or defaults which
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company. Except as set forth in Section 3.6 of the Company Disclosure
Schedule, neither the execution, delivery and performance of this Agreement by
the Company, nor the consummation by the Company of the transactions
contemplated hereby, will require any consent or approval pursuant to any
material programming agreement, software license or billing/ customer service
agreement binding on the Company. No rights of first refusal or first offer,
preemptive rights or similar rights of participation are applicable to the
transactions contemplated by this Agreement or the Shareholders Agreement.

3.7. NO DEFAULT. None of the Company or its subsidiaries is in default or
violation (and no event has occurred which with or without due notice or the
lapse of time or both would constitute a default or violation) of any term,
condition or provision of (i) its certificate or articles of incorporation or
bylaws (or similar governing documents), (ii) any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which the Company or any of its subsidiaries is now a party or by which any
of them or any of their respective properties or assets may be bound or (iii)
any order, writ, injunction, decree, law, statute, rule or regulation applicable
to the Company, its subsidiaries or any of their respective properties or
assets, except in the case of (ii) or (iii) for violations, breaches or defaults
which would not, individually or in the aggregate, have a Material Adverse
Effect on the Company.

3.8. NO UNDISCLOSED LIABILITIES; ABSENCE OF CHANGES. Except as and to the
extent disclosed by the Company in the Filed Company SEC Reports or as disclosed
in Section 3.8 of the Company Disclosure Schedule, since January 1, 1998, (a)
neither the Company nor its subsidiaries has incurred any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, and
whether due or to become due or asserted or unasserted, which would,
individually or in the aggregate, have a Material Adverse Effect on the Company,
(b) except as contemplated by this Agreement, the business of the Company and
its subsidiaries has been carried on in all material respects in the ordinary
course consistent with past practices, (c) the Company has not paid any dividend
or distribution in respect of, or redeemed or repurchased any of, its capital
stock or other equity securities, including securities directly or indirectly
convertible into or exercisable or exchangeable for any of its capital stock or
other equity securities, (d) the Company has not entered into or consummated any
transaction with any officer, director or affiliate of the Company or any person
known by the Company to be an affiliate of any of them and (e) except as
required by GAAP, the Company has not changed its methods of accounting (either
for financial accounting or tax purposes).

3.9. LITIGATION. Except as disclosed by the Company in the Filed Company
SEC Reports, as disclosed in Section 3.9 of the Company Disclosure Schedule, or
as would not, individually or in the aggregate, have a Material Adverse Effect
on the Company, (i) there is no suit, claim, action, proceeding or investigation
pending or, to the knowledge of the Company, threatened against the Company or
any of its subsidiaries or any of their respective properties or assets and (ii)
none of the Company or its subsidiaries is subject to any outstanding order,
writ, injunction or decree.

3.10. COMPLIANCE WITH APPLICABLE LAW. Except as disclosed by the Company
in the Filed Company SEC Reports and for failures which would not, individually
or in the aggregate, have a Material Adverse Effect on the Company, (i) the
Company and its subsidiaries hold all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities necessary for the lawful
conduct of their

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<PAGE>
respective businesses (the "COMPANY PERMITS"), (ii) the Company and its
subsidiaries are in compliance with the terms of the Company Permits, (iii) the
businesses of the Company and its subsidiaries are not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity and
(iv) no investigation or review by any Governmental Entity with respect to the
Company or its subsidiaries is pending or, to the knowledge of the Company,
threatened, nor, to the knowledge of the Company, has any Governmental Entity
indicated an intention to conduct the same. No representation or warranty is
made in this Section 3.10 with respect to Environmental Laws (as defined in
Section 3.12(a)) and the FCC Licenses (as defined in Section 3.18).

3.11. EMPLOYEE PLANS.

(a) Section 3.11(a) of the Company Disclosure Schedule lists all "employee
benefit plans," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and all other employee benefit plans
or other benefit arrangements, including but not limited to all employment and
consulting agreements and all bonus and other incentive compensation, deferred
compensation, disability, severance, retention, salary continuation, stock and
stock-related award, stock option, stock purchase, collective bargaining or
workers' compensation agreements, plans, policies and arrangements which the
Company or any of its subsidiaries maintains, is a party to, contributed to or
has any obligation to or liability for in respect of current or former employees
and directors (each, a "COMPANY EMPLOYEE BENEFIT PLAN" and collectively, the
"COMPANY EMPLOYEE BENEFIT PLANS"). None of the Company Employee Benefit Plans is
subject to Title IV of ERISA.

(b) True, correct and complete copies of the most recent summary plan
description for each Company Employee Benefit Plan have been delivered to Hughes
for review prior to the date hereof.

(c) Except as would not, individually or in the aggregate, have a Material
Adverse Effect on the Company, (i) all payments required to be made by or under
any Company Employee Benefit Plan, any related trusts, insurance policies or
ancillary agreements, or any collective bargaining agreement have been timely
made, (ii) the Company and its subsidiaries have performed all obligations
required to be performed by them under any Company Employee Benefit Plan, (iii)
the Company Employee Benefit Plans comply in all respects and have been
maintained in compliance with their terms and the requirements of ERISA, the
Code and other applicable laws, and (iv) there are no actions, suits,
arbitrations or claims (other than routine claims for benefits) pending or, to
the knowledge of the Company, threatened with respect to any Company Employee
Benefit Plan.

(d) Each Company Employee Benefit Plan and its related trust which are
intended to be "qualified" within the meaning of Sections 401(a) and 501(a) of
the Code, respectively, have been determined by the Internal Revenue Service to
be so "qualified" under such Sections, as amended by the Tax Reform Act of 1986,
and the Company knows of no fact which would adversely affect the qualified
status of any such Company Employee Benefit Plan and its related trust.

(e) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) increase any
benefits otherwise payable under any Company Employee Benefit Plan, or (ii)
result in the acceleration of the time of payment or vesting of any such
benefits. Except as contemplated by Section 5.1(f) or 5.16 of this Agreement,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will result in any payment becoming due, or
increase the compensation due, to any current or former employee or director of
the Company or any of its subsidiaries.

3.12. ENVIRONMENTAL MATTERS. (a) As used in this Agreement:

(i) "ENVIRONMENTAL LAW" means any applicable federal, state or local law,
statute, code, ordinance, policy, rule, regulation, order, settlement agreement,
or other governmental requirement from any U.S. or foreign jurisdiction
concerning the Release (as defined herein), handling, storage, management,
processing, transportation or other use, or disposal or arrangement for
disposal, of any solid waste, industrial

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<PAGE>
waste or Hazardous Substance (as defined herein) including, by way of example
but not limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (43 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.), the Clean Water Act (33
U.S.C. Section 1251 et seq.), the Clean Air Act (33 U.S.C. Section 2601 et
seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et
seq.) and the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.)
as such laws have been amended and the regulations promulgated pursuant thereto,
and any applicable and analogous state or local statutes, codes, policies,
rules, regulations or related requirements of governmental entities of foreign
jurisdictions.

(ii) "ENVIRONMENTAL CLAIM" means any allegation, notice of violation,
action, claim, lien, demand, order, injunction, judgment, decree, ruling,
assessment or arbitration award or directive (conditional or
otherwise) by any court, arbitrator or governmental entity or any person for
personal injury (including sickness, disease or death), tangible or intangible
property damage, diminution in value, damage to the environment or natural
resources, nuisance, pollution, contamination or other adverse effects on the
environment, or for fines, penalties or restrictions resulting from or based
upon (A) the existence, or the continuation of the existence, of a Release
(including, without limitation, sudden or non-sudden accidental or
non-accidental Release) of, or exposure to, any Hazardous Substance, odor,
audible noise, or any solid or industrial waste, (B) the transportation,
storage, treatment or disposal of solid waste, industrial waste or Hazardous
Substances, in connection with the past or present operations of the Company,
any of its subsidiaries or any of their respective predecessors or assigns, or
(C) the violation, or alleged violation, of any Environmental Laws, orders,
injunctions, judgments, decrees, rulings, assessments, arbitration awards,
Environmental Permits or ruling, order or decision of any court arbitrator or
Government Entity relating to environmental matters.

(iii) "ENVIRONMENTAL PERMIT" means any permit, approval, authorization,
license, variance, registration, permit application, notification, program
development and implementation, or permission required under any applicable
Environmental Law.

(iv) "HAZARDOUS SUBSTANCE" means any substance, material or waste which is
regulated under any Environmental Law or by any applicable governmental entity,
governmental entity in the jurisdictions in which the Company or any subsidiary
or any of their respective predecessors or assigns conducts or has conducted
business, or the United States, including, without limitation, any material or
substance which is defined as a "hazardous waste," "hazardous material,"
"hazardous substance," "extremely hazardous waste" or "restricted hazardous
waste," "subject waste," "contaminant," "toxic waste," "toxic substance" or
"residual waste" "under any Environmental Law, including, but not limited to,
radioactive materials, petroleum products (including fractions thereof),
asbestos and polychlorinated biphenyls.

(v) "PROPERTY" means any land, facility or operations currently or
previously owned by the Company, any of its subsidiaries or any of their
respective predecessors or assigns.

(vi) "RELEASE" means any intentional or unintentional, continuous or
intermittent release, spill, emission, seepage, leaking, pumping, uncontrolled
loss, injection, deposit, disposal, discharge, dispersal, leaching or migration
into the environment, or any building surface, or onto or from any Property of
any Hazardous Substance, including the movement of any Hazardous Substance
through or in the air, soil, surface water, ground water or otherwise.

(vii) "REMEDIAL ACTION" means all actions, including, without limitation, any
capital expenditures, required or voluntarily undertaken to (A) clean up,
remove, treat, or in any other way address any Hazardous Substance or any other
material required pursuant to applicable Environmental Law, (B) prevent the
Release or threat of Release, or minimize the further Release of any Hazardous
Substance or any other material required pursuant to applicable Environmental
Law, (C) perform pre-remedial

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<PAGE>
studies and investigations or post-remedial monitoring and care including the
conduct of risk assessments and negotiation with applicable governmental
entities regarding Hazardous Substance or any other material required pursuant
to applicable Environmental Law, or (D) bring the Properties into compliance
with all applicable Environmental Laws and Environmental Permits.

(b) The Company and each of its subsidiaries, with respect to its use of and
operations at each Property, has been and is in compliance in all material
respects with all Environmental Laws, except where the failure so to be in
compliance would not, individually or in the aggregate, have a Material Adverse
Effect on the Company.

(c) Neither the Company nor any of its subsidiaries or any of their
respective predecessors (to the Company's knowledge, with respect to
non-affiliated predecessors) has received any written communication from a
court, arbitrator or governmental entity or any other person that alleges that
the Company or any such subsidiary or predecessor is not in compliance, in any
respect, with any Environmental Law or has liability thereunder, except for
written communications which make allegations which, if true, are not reasonably
likely, individually or in the aggregate, to result in a Material Adverse Effect
on the Company.

(d) Except as disclosed in Section 3.12 of the Company Disclosure Schedule,
none of the operations or Properties of the Company or any of its subsidiaries
or any of their respective predecessors or assigns (to the Company's knowledge,
with respect to unaffiliated predecessors and assigns) is the subject of
investigation by any governmental entity, whether U.S., State, local or foreign,
respecting (i) Environmental Laws, (ii) any Remedial Action or (iii) any
Environmental Claim arising from a Release or otherwise of any Hazardous
Substance or any other substance regulated under any Environmental Law, which in
each case would, individually or in the aggregate, have a Material Adverse
Effect on the Company. The Company and each of its subsidiaries have filed all
notices, obtained all Environmental Permits and conducted all actions required
under all Environmental Laws, except where the failure to file such notices,
obtain such Environmental Permits or take such actions would not, individually
or in the aggregate, have a Material Adverse Effect on the Company.

(e) The Company, each of its subsidiaries and any of their respective
predecessors (to the Company's knowledge, with respect to unaffiliated
predecessors) have filed all notices required to be filed under all
Environmental Laws reporting any Release, obtained all Environmental Permits and
taken all Remedial Actions required under all Environmental Laws, except where
failure to file such notices, obtain such Environmental Permits or take such
Remedial Actions would not, individually or in the aggregate, have a Material
Adverse Effect on the Company.

(f) Neither the Company nor any of its subsidiaries has any contingent
liabilities (as defined in GAAP) with respect to its business or that of its
predecessors in connection with any Hazardous Substance or Environmental Law
that would, individually or in the aggregate, have a Material Adverse Effect on
the Company.

(g) Underground storage tanks are not and have not been located on or under
any Property and there have been no Releases of Hazardous Substances on, in or
under any Property or other real property for which the Company or any of its
subsidiaries would be responsible or potentially responsible and that would,
individually or in the aggregate, have a Material Adverse Effect on the Company.

(h) Neither the Company nor any of its subsidiaries or any of their
respective predecessors (to the Company's knowledge, with respect to
unaffiliated predecessors) is subject to any judicial, administrative or
arbitral actions, suits, proceedings (public or private), written claims or
governmental proceedings alleging the violation of any Environmental Law or
Environmental Permit that would, individually or in the aggregate, have a
Material Adverse Effect on the Company.

(i) Neither the Company nor any of its subsidiaries or any of their
respective predecessors or assigns (to the Company's knowledge, with respect to
unaffiliated predecessors and assigns) as a result of their respective past and
current operations, has caused or permitted any Hazardous Substances to remain
or be

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<PAGE>
disposed of, either on or under any Property or on any real property not
permitted to accept, store or dispose of such Hazardous Substances, that would,
individually or in the aggregate, have a Material Adverse Effect on the Company.

(j) The transactions contemplated under this Agreement do not trigger any
obligation or duty on the part of the Company or the subsidiaries to file any
notice with or obtain approval from any Governmental Entity having jurisdiction
over environmental or health and safety matters.

(k) None of the Properties owned by the Company or any of its subsidiaries
contain or are constructed with any asbestos or asbestos-containing building
materials, the presence of which in its current condition requires abatement or
encapsulation.

(l) The Company and all its subsidiaries have obtained, currently maintain,
and are in material compliance with all Environmental Permits required for their
operations, such Environmental Permits are readily transferable to the Buyer,
and there is no pending or threatened action or proceeding to revoke or
materially modify or alter the terms and condition of such Environmental
Permits.

(m) None of the Properties of the Company or any subsidiaries is listed or
proposed for listing on the National Priorities List ("NPL"), the CERCLIS, or
any analogous state list of sites to be investigated or remediated as a result
of the possible presence of Hazardous Substances and neither the Company nor the
subsidiaries has received any notice from any Governmental Entity or Person that
it is or could potentially be liable for the cost to investigate or remediate
contamination under Environmental Law or any request for information under
section 104 of CERCLA or any analogous state law.

3.13. TAX MATTERS. Except as disclosed on Section 3.13 of the Company
Disclosure Schedule:

(a) The Company and each of its subsidiaries, and each affiliated group
(within the meaning of Section 1504 of the Code), unitary group or combined
group of which the Company or any of its subsidiaries is or has ever been a
member, has (or, by the Closing Date, will have) timely filed with the
appropriate taxing authorities all Federal income tax returns and all other
material tax returns and reports required to be filed by it through the Closing
Date. All such tax returns are (or will be) complete and correct in all material
respects. Except to the extent adequately reserved for in accordance with GAAP,
the Company and each of its subsidiaries has (or, by the Closing Date, will
have) paid (or the Company has paid on its subsidiaries' behalf) all taxes due
in respect of the taxable periods covered by such tax returns. The most recent
consolidated financial statements contained in the Company SEC Reports reflect
an adequate reserve in accordance with GAAP for all taxes payable by the Company
and its subsidiaries for all taxable periods and portions thereof through the
date of such financial statements. Since December 31, 1997, neither the Company
nor any of its subsidiaries has incurred any liability for taxes other than in
the ordinary course of its businesses for which adequate reserves have been
established on subsequent unaudited financial statements. The Company has
previously delivered to Hughes copies of all income and franchise tax returns
filed by the Company and each of its subsidiaries for their taxable years ended
in 1995, 1996 and 1997 and all audit or examination reports relating to income
or franchise taxes in respect of the Company or any of its subsidiaries within
the preceding ten (10) years. For purposes of this Agreement, "TAX" or "TAXES"
shall mean all taxes, charges, fees, imposts, levies, gaming or other
assessments, including, without limitation, all net income, gross receipts,
capital, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation, property and
estimated taxes, customs duties, fees, assessments and charges of any kind
whatsoever, together with any interest and any penalties, fines, additions to
tax or additional amounts imposed by any taxing authority (domestic or foreign)
and shall include any joint and/or transferee liability (including any liability
under Treasury Regulation Section 1.1502-6 or any comparable provision of state,
local or foreign tax law) in respect of taxes or any liability in respect of
taxes imposed by contract, tax sharing agreement, tax indemnity agreement or any
similar agreement; and "TAX RETURNS" shall mean any report, return, document,
declaration or any other information or filing required to be supplied to any
taxing authority or jurisdiction (foreign or domestic)

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<PAGE>
with respect to taxes, including, without limitation, information returns, any
document with respect to or accompanying payments or estimated taxes, or with
respect to or accompanying requests for the extension of time in which to file
any such report, return document, declaration or other information.

(b) No material deficiencies for any taxes have been proposed, asserted or
assessed against the Company or any of its subsidiaries that have not been fully
paid or adequately provided for in the appropriate financial statements of the
Company and its subsidiaries. No state where the Company or one of its
subsidiaries does not file an income or franchise tax return has asserted in
writing during the preceding five (5) years that such corporation should be so
filing, no outstanding waivers or comparable consents regarding the application
of the statute of limitations with respect to taxes or tax returns have been
given by or on behalf of the Company or any of its subsidiaries (and no request
for any such waiver or consent is pending) and no power of attorney with respect
to any taxes has been executed or filed with any taxing authority. No material
issues relating to taxes have been raised in writing by the relevant taxing
authority during any presently pending audit or examination. None of the federal
income tax returns of the Company and each of its subsidiaries consolidated in
such tax returns have been reviewed by the Internal Revenue Service and the
Company has not been contacted regarding any such review, and the state and
local tax returns of the Company and its subsidiaries have been examined for the
taxable periods set forth in Section 3.13(b) of the Company Disclosure Schedule.

(c) No material Liens for taxes exist with respect to any assets or
properties of the Company or any of its subsidiaries, except for statutory liens
for taxes not yet due.

(d) None of the Company or any of its subsidiaries is a party to or is bound
by any tax sharing agreement, tax indemnity obligation or similar agreement,
arrangement or practice with respect to taxes (including any advance pricing
agreement, closing agreement or other agreement relating to taxes with any
taxing authority).

(e) None of the Company or any of its subsidiaries has taken, agreed to take
or will take any action that would prevent the Merger from constituting a
reorganization qualifying under the provisions of Section 368(a) of the Code.

(f) Neither the Company nor any of its subsidiaries has made, will make, or
is obligated to make any payment (whether in cash or property or the vesting of
property) that, either individually or in the aggregate, would not be deductible
by reason of Section 280G or 162(m) of the Code, or is party to any employment,
severance or termination agreement, other compensation arrangement or Company
Employee Benefit Plan currently in effect, or the Program (as defined in Section
5.16(e)) or any other program established pursuant to Section 5.16, which
provides for the making of any such payment.

(g) The Company and its subsidiaries have complied in all material respects
with all applicable laws, rules and regulations relating to the payment and
withholding of taxes.

(h) No federal, state, local or foreign audits or other administrative
proceedings or court proceedings are presently pending or threatened in writing
with regard to any federal income or material state, local or foreign taxes or
tax returns of the Company or its subsidiaries and neither the Company nor any
of its subsidiaries has received a written notice of any pending audit or
proceeding.

(i) Neither the Company nor any of its subsidiaries has agreed to or is
required to make any adjustment under Section 481(a) of the Code.

(j) Neither the Company nor any of its subsidiaries has (i) with regard to
any assets or property held or acquired by any of them, filed a consent to the
application of Section 341(f) of the Code or agreed to have Section 341(f)(2) of
the Code apply to any disposition of a subsection (f) asset (as such term is
defined in Section 341(f)(4) of the Code) owned by the Company or any of its
subsidiaries, (ii) executed or entered into a closing agreement pursuant to
Section 7121 of the Code or any similar provision of state,

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<PAGE>
local or foreign law, or (iii) received or filed any requests for rulings or
determinations in respect of any taxes within the last five (5) years.

(k) No property owned by the Company or any of its subsidiaries (i) is
property required to be treated as being owned by another person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended
and in effect immediately prior to the enactment of the Tax Reform Act of 1986,
(ii) constitutes "tax exempt use property" within the meaning of Section
168(h)(1) of the Code, or (iii) is "tax exempt bond financed property" within
the meaning of Section 168(g) of the Code.

(l) The Company and each of its subsidiaries are not currently, have not
been within the last five years, and do not anticipate becoming, a "United
States real property holding company" within the meaning of Section 897(c) of
the Code.

(m) No subsidiary of the Company owns any Shares.

3.14. OPINION OF FINANCIAL ADVISORS. Each of Credit Suisse First Boston
Corporation and Goldman, Sachs & Co. (the "COMPANY FINANCIAL ADVISORS") has
delivered to the Company board its opinion, dated the date of this Agreement, to
the effect that, as of such date, and based upon and subject to certain matters
stated in such opinions, the Merger Consideration is fair to the holders of
Shares from a financial point of view, and such opinion has not been withdrawn
or adversely modified.

3.15. BROKERS. No broker, finder or investment banker (other than the
Company Financial Advisors, a true and correct copy of whose engagement
agreements have been provided to GM) is entitled to any brokerage, finder's or
other fee or commission or expense reimbursement in connection with the
transactions contemplated by this Agreement based upon arrangements made by and
on behalf of the Company or any of its affiliates.

3.16. MATERIAL CONTRACTS.

(a) Section 3.16 of the Company Disclosure Schedule lists all contracts and
agreements (and all amendments, modifications and supplements thereto and all
side letters to which the Company is a party affecting the obligations of any
party thereunder) to which the Company or any of its subsidiaries is a party or
by which any of its properties or assets are bound that relate to: (i) material
employment, product design or development, personal services, consulting,
non-competition, severance or indemnification; (ii) material licensing,
merchandising, production, manufacturing, retailing, sales (including sales
agency) or programming, production or distribution (including any programming
"puts"), including without limitation, all such contracts and agreements
containing exclusivity or "most favored nation" provisions; (iii) a right of
first refusal, first negotiation, "tag along" or "drag along" rights applicable
to any capital stock or material assets of the Company; (iv) a partnership or
joint venture, or cooperative development efforts; (v) the acquisition, sale,
lease or other disposition of material properties or assets of the Company or
its subsidiaries or predecessors (by merger, purchase or sale of assets or stock
or otherwise) entered into since February 6, 1996; (vi) agreements with any
Governmental Entity; (vii) contracts for the construction of satellites; (viii)
financial incentive arrangements for equipment manufacturers; (ix) signal
security and testing or signal theft; (x) material promotion, marketing,
sponsorship or similar arrangements; (xi) indebtedness for borrowed money,
letters of credit, security agreements, lockbox arrangements or guaranties of
the foregoing; (xii) real property deeds or leases and material equipment leases
including, without limitation, all satellite transponder leases; (xiii) material
software or Intellectual Property (as defined in Section 3.19(b)) license or
maintenance agreements; (xiv) customer services (including, without limitation,
telemarketing and billing); (xv) the provision of any services, products or
payments to or from any officer, director, employee or other affiliate of the
Company or such officer, director or employee; (xvi) all agreements relating to
the retransmission of the Company's signal by cable systems or any other
multichannel programming distributor; and (xvii) all commitments and agreements
to enter into any contracts or agreements relating to any of the foregoing
(collectively, together with any such contracts entered into in accordance with
Section 5.1 hereof, the "MATERIAL CONTRACTS").

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(b) Each of the Material Contracts is valid and enforceable in accordance
with its terms, and there is no default under any Material Contract so listed
either by the Company (including the consummation of the Merger) or, to the
knowledge of the Company, by any other party thereto, and no event has occurred
that with the lapse of time or the giving of notice or both would constitute a
default thereunder by the Company (including the consummation of the Merger) or,
to the knowledge of the Company, any other party, in any such case in which such
default or event would, individually or in the aggregate, have a Material
Adverse Effect on the Company. Except as set forth in Section 3.16 of the
Company Disclosure Schedule, all material agreements or other arrangements
between the Company and its sales agents, dealers and retailers are terminable
by the Company on not greater than 30 days' notice, with no material termination
fee or, except for commissions or fees earned, continuing payment obligations
thereunder.

(c) No party to any Material Contract has given notice to the Company of, or
made a claim against the Company with respect to, any breach or default
thereunder, in any such case in which such breach or default would, individually
or in the aggregate, have a Material Adverse Effect on the Company. The Company
is not currently being audited, and has not received notice of an intent to
conduct any audit, under any material programming agreement.

3.17. LABOR AND EMPLOYMENT MATTERS.

(a) Except as set forth in Section 3.17(a) of the Company Disclosure
Schedule or as contemplated by Section 5.16 of this Agreement, neither the
Company nor any of its subsidiaries is a party to any employment, severance
compensation, labor or collective bargaining agreement and there are no
employment, severance compensation, labor or collective bargaining agreements
which pertain to employees of the Company or any of its subsidiaries. No labor
organization or group of employees of the Company or any of its subsidiaries has
made a pending written demand for recognition or certification.

(b) Except as contemplated by Section 5.16 of this Agreement, the only
employment agreements and severance compensation agreements with officers of the
Company or any of its subsidiaries are set forth in Section 3.17(b) of the
Company Disclosure Schedule. Except as set forth in Section 3.17(b) of the
Company Disclosure Schedule, neither the Company nor any of its subsidiaries is
a party to or bound by any severance or other agreement with any employee or
consultant pursuant to which such person would be entitled to receive any
additional compensation or an accelerated payment of compensation as a result of
the consummation of the transactions contemplated hereby.

3.18. FCC MATTERS. Section 3.18 of the Company Disclosure Schedule sets
forth all permits, licenses, waivers or authorizations issued by the Federal
Communications Commission (the "FCC") held by the Company and its subsidiaries
(the "FCC LICENSES"). For the purposes of this Agreement, the term "FCC
Licenses" shall not include the FCC construction permit and launch authority to
use DBS frequencies at 110 DEG. west longitude (the "110 DEG. CONSTRUCTION
PERMIT"). Except as is not material to the conduct of the business of the
Company and its subsidiaries: (i) the Company and its subsidiaries are
financially qualified and, to the knowledge of the Company, are otherwise
qualified to hold the FCC Licenses or to control the FCC Licenses, as the case
may be; (ii) the FCC Licenses constitute all permits, licenses, waivers or
authorizations that the Company and its subsidiaries are required by the FCC to
hold in connection with the operation of its business as currently conducted,
the Company and such subsidiaries that are required to hold FCC Licenses to
operate the Company's business as currently conducted validly hold such FCC
Licenses, and the FCC Licenses are in full force and effect; (iii) the Company
is not aware of any facts or circumstances relating to the FCC qualifications of
the Company or any of its subsidiaries that would prevent the FCC's granting the
Transfer of Control Application to be filed with respect to the Merger (the "FCC
APPLICATION"); (iv) the Company and its subsidiaries are in compliance with all
FCC Licenses and with the Communications Act; and (v) there is not pending or,
to the knowledge of the Company threatened, any application, petition, objection
or other pleading with the FCC or other governmental authority which challenges
the validity of, or any rights of the holder under, any FCC License.

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3.19. INTELLECTUAL PROPERTY.

(a) The Company or one of its subsidiaries owns or possesses (and will own
or possess as of the Effective Time) all right, title and interest in and to, or
a valid and enforceable license or other right to use all of the Intellectual
Property (as defined below), and all of the right, benefits, and privileges
associated therewith, that is material to the conduct of the business of the
Company and its subsidiaries as currently conducted (and as conducted as of the
Effective Time). To the knowledge of the Company, neither the Company nor any of
its subsidiaries has infringed, misappropriated or otherwise violated any
Intellectual Property of any other person, and neither the Company nor any of
its subsidiaries is aware of any such infringement, misappropriation or
violation which would reasonably be expected to occur prior to the Effective
Time. To the knowledge of the Company, no person is materially infringing upon
any Intellectual Property right of the Company or any of its subsidiaries.
Notwithstanding the foregoing, no representation or warranty is made with
respect to any Intellectual Property licensed from Hughes or DIRECTV
Enterprises, Inc. ("DIRECTV"), or developed or used by Hughes or DIRECTV in
connection with the multichannel entertainment distribution business.

(b) The term "INTELLECTUAL PROPERTY" means all patents, patent applications
and patent disclosures; all inventions (whether or not patentable and whether or
not reduced to practice); all trademarks, service marks, trade dress, trade
names and corporate names and all the goodwill associated therewith; all mask
works; all registered and unregistered statutory and common law copyrights; all
registrations, applications and renewals for any of the compositions, know-how,
manufacturing and production processes and techniques, research information,
drawings, specifications, design plans, improvements, proposals, technical and
computer data, documentation and software, financial proposals, technical and
computer data, documentation and software, financial business and marketing
plans, customer and supplier lists and related proprietary information,
marketing materials and all other proprietary rights.

3.20. INSURANCE. The Company and its subsidiaries maintain adequate
insurance with respect to its properties and business against loss or damage of
the kinds customarily insured against by corporations of established reputations
engaged in the same or similar business and similarly situated, of such types
and in such amounts as are customarily carried under similar circumstances by
such other corporations. For all such insurance policies, as described in
Section 3.20 of the Company Disclosure Schedule, all premiums shall be paid to
ensure that they are in effect and will remain in force until or after the
Effective Time.

3.21. INDEBTEDNESS. Except as set forth in the Filed Company SEC Reports,
neither the Company nor any of its subsidiaries has any outstanding indebtedness
for borrowed money or representing the deferred purchase price of property or
services or similar liabilities or obligations, including any guarantee in
respect thereof, or is a party to any agreement, arrangement or understanding
providing for the creation, incurrence or assumption thereof.

3.22. LIENS. Neither the Company nor any of its subsidiaries has granted,
created or suffered to exist with respect to any of its assets, any security
interest, mortgage, deed of trust, pledge or encumbrance (a "LIEN") of any kind
or nature whatsoever.

3.23. REAL PROPERTY. Section 3.23 of the Company Disclosure Schedule sets
forth all of the real property owned in fee by the Company and its subsidiaries
that is material to the conduct of the business of the Company and its
subsidiaries, taken as a whole. Each of the Company and its subsidiaries has
good and marketable title to each parcel of real property owned by it free and
clear of all Liens, except those listed in Section 3.22 of the Company
Disclosure Schedule.

3.24. TANGIBLE PROPERTY. With respect to the tangible properties and
assets of the Company and its subsidiaries (excluding real property) that are
material to the conduct of the businesses of the Company and its subsidiaries,
the Company and its subsidiaries have good title to, or hold pursuant to valid
and enforceable leases, all such properties and assets. All of the assets of the
Company and its subsidiaries have been maintained and repaired for their
continued operation and are in good operating condition,

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reasonable wear and tear excepted, and usable in the ordinary course of
business, except where the failure to be in such repair or condition or so
usable would not individually or in the aggregate, have a Material Adverse
Effect on the Company.

3.25. PROGRAMMING ARRANGEMENTS. The amount of license fees currently paid
by the Company pursuant to any material programming agreement has not been and
shall not be increased due to the Company's failure to meet any subscriber
penetration requirements or other similar benchmarks. Except as set forth in
Section 3.25 of the Company Disclosure Schedule, none of the Company's material
programming agreements are subject to renewal prior to December 31, 2000, nor
will any negotiation period relating to the renewal or extension of any material
programming agreement commence prior to December 31, 2000. Except as set forth
on Section 3.25 to the Company Disclosure Schedule, there are no affirmative
obligations under any programming (or similar) agreement to carry any additional
programming channels (or feeds thereof) above and beyond what the Company
currently carries.

3.26. CONSOLIDATION MATTERS. The Agreement, dated March 5, 1993, as
amended, between ADS Alliance Data Systems, Inc. ("ADS") and the Company is
terminable effective as of June 17, 1999, without the payment of any termination
fee and without the obligation to continue to use or pay for ADS services
following such date. The Company has the contractual right to terminate (i)
Direct Broadcast Satellite Contract No. 104274-B, effective December 31, 1996,
between Lockheed Martin Corporation and the Company, as amended and (ii) the
Billing and Customer Service Agreement between the Company and Convergys
Information Management Group Inc., effective October 16, 1998 and the letter
agreement dated October 16, 1998. The rights of Vulcan Ventures, Inc. and Dow
Jones & Company under their respective programming agreements with the Company
have been suspended effective on the date hereof. Such agreements automatically
terminate upon the Closing of the Merger, and there will be no continuing
payment or performance obligation of the Company under such agreements
thereafter. The Agreement, dated March 21, 1997 between the Company and ADS for
remittance processing service (the "ADS REMITTANCE AGREEMENT") is terminable
effective March 20, 2000 upon prior notice as required by such agreement. The
fees due under the ADS Remittance Agreement are subject to adjustment in March
1999 as provided in Section 4.2 of such Agreement. The ADS Remittance Agreement
contains minimum fee obligations as provided in Appendix A thereto.

3.27. NO OTHER REPRESENTATIONS OR WARRANTIES. Notwithstanding anything
contained in this Article 3 or any other provision of this Agreement, it is the
explicit intent of each party hereto that the Company is making no
representation or warranty whatsoever, express or implied, except those
representations and warranties of the Company set forth in this Article 3.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF GM AND HUGHES

GM and Hughes hereby jointly and severally represent and warrant to the
Company as follows:

4.1. ORGANIZATION AND QUALIFICATION. GM is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
businesses as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power and authority would neither
have a Material Adverse Effect on Hughes nor materially impair or delay the
ability of GM to consummate the transactions contemplated hereby. GM is duly
qualified or licensed and in good standing to do business in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing necessary, except
in such jurisdictions where the failure to be so duly qualified or licensed and
in good standing would neither have a Material Adverse Effect on Hughes nor may
materially impair or delay the ability of GM to consummate the transactions
contemplated hereby.

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4.2. CAPITALIZATION OF GM AND ITS SUBSIDIARIES. The Acquiror Stock is the
only class of authorized capital stock of GM as to which GM reports earnings per
share based upon the Available Separate Consolidated Net Income of Hughes
attributable to holders of Acquiror Stock, as provided for under GM's Amended
and Restated Certificate of Incorporation and as set forth in GM's Annual Report
on Form 10-K for the fiscal year ended December 31, 1997. As of November 30,
1998, 600,000,000 shares of Acquiror Stock were authorized and 105,993,793
shares of Acquiror Stock were issued and outstanding. All of the issued and
outstanding shares of Acquiror Stock have been validly issued, and are fully
paid, nonassessable and free of preemptive rights. As of November 30, 1998,
16,396,454 shares of Acquiror Stock were reserved for issuance and issuable upon
or otherwise deliverable in connection with the exercise of outstanding options
to purchase Acquiror Stock granted by GM or Hughes pursuant to the GM Amended
Stock Incentive Plan and the Hughes Incentive Plan. Except (i) as described in
the GM SEC Reports, and (ii) as set forth above, as of the date hereof, there
are outstanding (A) no securities of GM or its subsidiaries convertible into or
exchangeable for shares of Acquiror Stock, (B) no options or other rights to
acquire from GM or its subsidiaries, and no obligations of GM or its
subsidiaries to issue, any Acquiror Stock, or securities convertible into or
exchangeable for Acquiror Stock, and (C) no equity equivalents, interests in the
ownership or earnings of Hughes or its subsidiaries or other similar rights
(including stock appreciation rights) (collectively, "HUGHES SECURITIES"). There
are no outstanding obligations of GM or any of its subsidiaries to repurchase,
redeem or otherwise acquire any Acquiror Stock.

4.3. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of GM and Hughes has all
necessary corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the Boards of Directors of GM
and Hughes and by GM as the sole shareholder of Hughes, and no other corporate
proceedings on the part of GM or Hughes are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by each of GM and Hughes and
constitutes a valid, legal and binding agreement of each of GM and Hughes,
enforceable against each of GM and Hughes in accordance with its terms.

4.4. SEC REPORTS; FINANCIAL STATEMENTS. (a) GM has filed all required
forms, reports and documents with the SEC since January 1, 1996 (the "GM SEC
REPORTS"), each of which has complied in all material respects with all
applicable requirements of the Securities Act and the Exchange Act, each as in
effect on the dates such forms, reports and documents were filed. None of the GM
SEC Reports, including, without limitation, any financial statements or
schedules included or incorporated by reference therein, contained, when filed,
any untrue statement of a material fact or omitted to state a material fact
required to be stated or incorporated by reference therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The consolidated financial statements of GM included
in the GM SEC Reports complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto and fairly present, in conformity with GAAP applied
on a consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of GM and its consolidated subsidiaries as of
the dates thereof and their consolidated results of operations and changes in
financial position for the periods then ended (subject, in the case of the
unaudited interim financial statements, to (A) normal year-end adjustments and
(B) any other adjustments described in the GM SEC Reports filed prior to the
date of this Agreement (the "FILED GM SEC REPORTS")).

(b) Hughes has heretofore made available to the Company a complete and
correct copy of any material amendments or modifications, which have not yet
been filed with the SEC, to agreements, documents or other instruments which
previously had been filed by GM with the SEC pursuant to the Exchange Act, to
the extent that Hughes or DIRECTV is a party to such agreements or such
agreements relate to the business of Hughes or DIRECTV.

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4.5. INFORMATION SUPPLIED.

(a) None of the information supplied or to be supplied by GM or Hughes for
inclusion in the Proxy Statement will, at the date mailed to shareholders of the
Company and at the time of the meeting of shareholders of the Company to be held
in connection with the Merger, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. If at any time prior to the Effective Time, any
event with respect to GM, its officers and directors or any of its subsidiaries
should occur which is required to be described in the Proxy Statement, GM shall
promptly so advise the Company.

(b) Neither the S-4 nor any amendment thereto will at the time it becomes
effective under the Securities Act or at the Effective Time contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. No representation
or warranty is made by GM or Hughes in this Section 4.5 with respect to
statements made or incorporated by reference therein based on information
supplied by the Company or any of its subsidiaries for inclusion or
incorporation by reference in the S-4. The S-4 will comply as to form in all
material respects with the provisions of the Securities Act and the rules and
regulations thereunder.

4.6. CONSENTS AND APPROVALS; NO VIOLATIONS. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the HSR Act, the Communications Act, the filing and
recordation of a certificate of merger as required by the DGCL, and the filing
of articles of merger as required by the MBCA, no filing with or notice to, and
no permit, authorization, consent or approval of, any Governmental Entity is
necessary for the execution and delivery by GM or Hughes of this Agreement or
the consummation by GM or Hughes of the transactions contemplated hereby, except
where the failure to obtain such permits, authorizations, consents or approvals
or to make such filings or give such notice would neither have a Material
Adverse Effect on Hughes nor materially impair or delay the ability of GM to
consummate the transactions contemplated hereby. Except as set forth in Section
4.6 of the GM Disclosure Schedule, neither the execution, delivery and
performance of this Agreement by GM or Hughes nor the consummation by GM or
Hughes of the transactions contemplated hereby will (i) conflict with or result
in any breach of any provision of the respective certificate or articles of
incorporation or bylaws (or similar governing documents) of GM or Hughes or any
of GM's subsidiaries, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration or Lien)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which GM or Hughes or any of GM's subsidiaries is a party or by which any of
them or any of their respective properties or assets may be bound or (iii)
violate any order, writ, injunction, decree, law, statute, rule or regulation
applicable to GM or Hughes or any of GM's subsidiaries or any of their
respective properties or assets, except in the case of (ii) or (iii) for
violations, breaches or defaults which would neither have a Material Adverse
Effect on Hughes nor materially impair or delay the ability of GM to consummate
the transactions contemplated hereby.

4.7. NO DEFAULT. None of GM or its subsidiaries is in default or violation
(and no event has occurred which with or without due notice or the lapse of time
or both would constitute a default or violation) of any term, condition or
provision of (i) its certificate or articles of incorporation or bylaws (or
similar governing documents), (ii) any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which GM or
any of its subsidiaries is now a party or by which any of them or any of their
respective properties or assets may be bound or (iii) any order, writ,
injunction, decree, law, statute, rule or regulation applicable to GM, its
subsidiaries or any of their respective properties or assets, except in the case
of (ii) or (iii) for violations, breaches or defaults which would

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neither have a Material Adverse Effect on Hughes nor materially impair or delay
the ability of GM to consummate the transactions contemplated hereby.

4.8. NO UNDISCLOSED LIABILITIES; ABSENCE OF CHANGES. Except as and to the
extent disclosed by GM in the GM SEC Reports filed prior to the date of this
Agreement (the "FILED GM SEC REPORTS"), since January 1, 1998, (a) neither GM
nor its subsidiaries has incurred any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, and whether due or to become
due or asserted or unasserted, which would either have a Material Adverse Effect
on Hughes or materially impair or delay the ability of GM to consummate the
transactions contemplated hereby, (b) except as contemplated by this Agreement,
Hughes and its subsidiaries have conducted their respective businesses in all
material respects in the ordinary course consistent with past practices, (c) GM
has not paid any dividend or distribution in respect of, or redeemed or
repurchased any of, the Acquiror Stock or other securities directly or
indirectly convertible into or exercisable or exchangeable for any Acquiror
Stock, and (d) except as required by GAAP, neither GM nor Hughes has changed its
method of accounting (either for financial accounting or tax purposes) in any
manner which would reasonably be expected to materially adversely affect the
valuation of the Acquiror Stock.

4.9. LITIGATION. Except as disclosed by GM in the Filed GM SEC Reports,
there is no suit, claim, action, proceeding or investigation pending or, to the
knowledge of GM, threatened against GM or any of its subsidiaries or any of
their respective properties or assets which, individually or in the aggregate,
would either have a Material Adverse Effect on Hughes or materially impair or
delay the ability of GM to consummate the transactions contemplated hereby.
Except as disclosed by GM in the Filed GM SEC Reports, none of GM or its
subsidiaries is subject to any outstanding order, writ, injunction or decree
which would either have a Material Adverse Effect on Hughes or materially impair
or delay the ability of GM to consummate the transactions contemplated hereby.

4.10. COMPLIANCE WITH APPLICABLE LAW. Except as disclosed by GM in the
Filed GM SEC Reports, GM and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities
necessary for the lawful conduct of their respective businesses (the "GM
PERMITS"), except for failures to hold such permits, licenses, variances,
exemptions, orders and approvals which would neither have a Material Adverse
Effect on Hughes nor materially impair or delay the ability of GM to consummate
the transactions contemplated hereby. Except as disclosed by GM in the Filed GM
SEC Reports, the businesses of GM and its subsidiaries are not being conducted
in violation of any law, ordinance or regulation of any Governmental Entity
except for violations or possible violations which would neither have a Material
Adverse Effect on Hughes nor impair or materially delay the ability of GM to
consummate the transactions contemplated hereby. Except as publicly disclosed by
GM in the Filed GM SEC Reports, no investigation or review by any Governmental
Entity with respect to GM or its subsidiaries is pending or, to the knowledge of
GM, threatened, nor, to the knowledge of GM, has any Governmental Entity
indicated an intention to conduct the same, other than, in each case, those the
outcome of which would neither have a Material Adverse Effect on Hughes nor
materially impair or delay the ability of GM to consummate the transactions
contemplated hereby. No representation or warranty is made in this Section 4.10
with respect to Environmental Laws and the FCC Licenses.

4.11. BROKERS. No broker, finder or investment banker (other than Salomon
Smith Barney) is entitled to any brokerage, finder's or other fee or commission
in connection with the transactions contemplated by this Agreement based upon
arrangements made by and on behalf of GM or Hughes or any of their affiliates.

4.12. EMPLOYEE PLANS.

(a) Section 4.12(a) of the Disclosure Schedule previously delivered by GM
and Hughes to the Company (the "ACQUIROR DISCLOSURE SCHEDULE") lists all
"employee benefit plans," as defined in Section 3(3) of ERISA and all bonus and
other incentive compensation, disability, severance, retention, salary
continuation, stock and other stock-related award, stock option, stock purchase,
collective bargaining or

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workers' compensation agreements, plans, policies and arrangements generally
made available to the employees of DIRECTV and which will be made available to
the employees of the Company (each, a "DIRECTV BENEFIT PLAN" and collectively,
the "DIRECTV BENEFIT PLANS").

(b) Except as set forth in the Filed GM SEC Reports or would not,
individually or in the aggregate, have a Material Adverse Effect on Hughes, (i)
all payments required to be made by or under any DIRECTV Employee Benefit Plan,
any related trusts, insurance policies or ancillary agreements, or any
collective bargaining agreement have been timely made; (ii) Hughes has performed
all obligations required to be performed by it under any DIRECTV Employee
Benefit Plan; (iii) the DIRECTV Employee Benefit Plans comply in all respects
and have been maintained in compliance with their terms and the requirements of
ERISA, the Code and other applicable laws; and (iv) there are no actions, suits,
arbitrations or claims (other than routine claims for benefits) pending or, to
the knowledge of Hughes, threatened with respect to any DIRECTV Employee Benefit
Plan.

(c) Each DIRECTV Employee Benefit Plan and its related trust which are
intended to be "qualified" within the meaning of Sections 401(a) and 501(a) of
the Code, respectively, have been determined by the Internal Revenue Service to
be so "qualified" under such Sections, as amended by the Tax Reform Act of 1986,
and Hughes knows of no fact which would adversely affect the qualified status of
any such DIRECTV Employee Benefit Plan and its related trust.

4.13. ENVIRONMENTAL MATTERS. Except as would not reasonably be expected to
have a Material Adverse Effect on Hughes, (1) Hughes is in compliance with
Environmental Laws; (2) no judicial or administrative proceedings are pending
or, to the knowledge of Hughes, threatened against Hughes or any real property
owned or operated by Hughes alleging the violation of or seeking to impose
liability under any Environmental Law, and there are no investigations of an
environmental nature pending or, to the knowledge of Hughes, threatened against
Hughes or any real property owned or operated by Hughes; and (3) there are no
facts, circumstances or conditions relating to, arising from or attributable to
Hughes or any real property currently or, to the knowledge of Hughes, formerly
owned, operated or leased by Hughes that are reasonably likely to result in
Hughes incurring liabilities under Environmental Laws.

4.14. FCC MATTERS. Section 4.14 of the Acquiror Disclosure Schedule sets
forth all material permits, licenses, waivers or authorizations issued by the
FCC held by DIRECTV (the "DIRECTV FCC LICENSES"). Except as is not material to
the conduct of the business of DIRECTV: (i) DIRECTV is financially qualified
and, to the knowledge of Hughes, is otherwise qualified to hold the DIRECTV FCC
Licenses or to control the DIRECTV FCC Licenses, as the case may be; (ii) the
DIRECTV FCC Licenses constitute all permits, licenses, waivers or authorizations
that DIRECTV is required by the FCC to hold in connection with the operation of
its business as currently conducted; (iii) DIRECTV is not aware of any facts or
circumstances relating to the FCC qualifications of Hughes that would prevent
the FCC's granting the FCC Application; (iv) DIRECTV is in compliance with all
DIRECTV FCC Licenses and with the Communications Act; and (v) there is not
pending or, to the knowledge of Hughes threatened, any application, petition,
objection or other pleading with the FCC or other governmental authority which
challenges the validity of, or any rights of the holder under, any DIRECTV FCC
License.

4.15. NO OTHER REPRESENTATIONS OR WARRANTIES. Notwithstanding anything
contained in this Article 4 or any other provision of this Agreement, it is the
explicit intent of each party hereto that neither GM nor Hughes is making any
representation or warranty whatsoever, express or implied, except those
representations and warranties of GM and Hughes set forth in this Article 4.

ARTICLE 5
COVENANTS

5.1. CONDUCT OF BUSINESS OF THE COMPANY. Except as contemplated by this
Agreement, during the period from the date hereof to the Effective Time, the
Company will, and will cause each of its subsidiaries to, conduct its operations
in the ordinary course of business consistent with past practice and, to the
extent

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consistent therewith, with no less diligence and effort than would be applied in
the absence of this Agreement, seek to preserve intact its current business
organizations, take all actions necessary to maintain and preserve the FCC
Licenses, seek to keep available the service of its current officers and
employees and seek to preserve its relationships with customers, suppliers and
others having business dealings with it to the end that goodwill and ongoing
businesses shall be unimpaired at the Effective Time. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in this
Agreement, prior to the Effective Time, the Company shall not, and shall not
permit any of its subsidiaries to, without the prior written consent of Hughes
(which consent shall not be unreasonably withheld):

(a) amend its certificate or articles of incorporation or bylaws (or other
similar governing instrument);

(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities or equity equivalents (including, without
limitation, any stock options or stock appreciation rights), except for the
issuance or sale of shares of Company Common Stock pursuant to outstanding
options granted prior to the date hereof under existing stock incentive plans;

(c) split, combine or reclassify any shares of its capital stock, declare,
set aside or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock, make any
other actual, constructive or deemed distribution in respect of any shares of
its capital stock or otherwise make any payments to shareholders in their
capacity as such, or redeem or otherwise acquire any of its securities or any
securities of any of its subsidiaries;

(d) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the
Company or any of its subsidiaries (other than the Merger);

(e) alter through merger, liquidation, reorganization, restructuring or in
any other fashion the corporate structure or ownership of any subsidiary;

(f) except as may be required by law or as contemplated by this Agreement,
(i) enter into, adopt or amend or terminate any bonus, profit sharing,
compensation, severance, termination, stock option, stock appreciation right,
restricted stock, performance unit, stock equivalent, stock purchase, pension,
retirement, deferred compensation, employment, severance or other employee
benefit agreement, trust, plan, fund, award or other arrangement for the benefit
or welfare of any director, officer or employee in any manner; (ii) except for
normal increases in the ordinary course of business consistent with past
practice that, in the aggregate, do not result in a material increase in
benefits or compensation expense to the Company, increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay any
benefit not required by any plan and arrangement as in effect as of the date
hereof (including, without limitation, the granting of stock appreciation rights
or performance units); or (iii) pay any bonuses or annual incentive awards with
respect to fiscal 1998 or the interim period of fiscal 1999 ending on the
Closing Date in excess of $1,375,000 in the aggregate;

(g) except as set forth on Section 5.1(g) of the Company Disclosure
Schedule, hire or retain any individual as an employee of or consultant to the
Company or any subsidiary of the Company;

(h) except as set forth on Section 5.1(h) of the Company Disclosure
Schedule, enter into, renew or modify any agreement which, if in effect on the
date hereof, would have been required to be disclosed in Section 3.16 of the
Company Disclosure Schedule;

(i) except as may be required as a result of a change in law or in generally
accepted accounting principles, change any of the accounting principles or
practices used by it;

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(j) revalue any of its assets, including, without limitation, writing up or
down the value of inventory or writing-off notes or accounts receivable other
than in the ordinary course of business consistent with past practice;

(k) make or revoke any tax election or settle or compromise any tax
liability material to the Company and its subsidiaries taken as a whole, or
change (or make a request to any taxing authority to change) any material aspect
of its method of accounting for tax purposes;

(l) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business of liabilities reflected or reserved against in, or
contemplated by, the consolidated financial statements (or the notes thereto) of
the Company and its subsidiaries or incurred in the ordinary course of business
consistent with past practice;

(m) settle or compromise any pending or threatened material suit, action or
claim or initiate or join any material suit, action or claim;

(n) (i) incur or assume any long-term or short-term debt or issue any debt
securities except for borrowings under existing lines of credit in the ordinary
course of business and in amounts not material to the Company and its
subsidiaries, taken as a whole; (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other person except in the ordinary course of business
consistent with past practice and in amounts not material to the Company and its
subsidiaries, taken as a whole, and except for obligations of wholly owned
subsidiaries of the Company; (iii) make any loans, advances or capital
contributions to, or investments in, any other person (other than to wholly
owned subsidiaries of the Company or customary loans or advances to employees in
the ordinary course of business consistent with past practice and in amounts not
material to the maker of such loan or advance); (iv) pledge or otherwise
encumber shares of capital stock of the Company or its subsidiaries; or (v)
mortgage or pledge any of its assets, tangible or intangible, or create or
suffer to exist any Lien thereupon;

(o) (i) acquire, sell, lease or dispose of any assets outside the ordinary
course of business or any assets which in the aggregate are material to the
Company and its subsidiaries, taken as a whole; (ii) enter into any commitment
or transaction outside the ordinary course of business; or (iii) grant any
exclusive distribution rights;

(p) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof or any equity interest therein; (ii) authorize any new capital
expenditure or expenditures which, individually, is in excess of $250,000 or, in
the aggregate, are in excess of $3 million; or (iii) enter into or amend any
contract, agreement, commitment or arrangement providing for the taking of any
action that would be prohibited hereunder; or

(q) take, propose to take, or agree in writing or otherwise to take, any of
the actions described in Sections 5.1(a) through 5.1(p) or any action which
would make any of the representations or warranties of the Company contained in
this Agreement untrue or incorrect.

5.2. CONDUCT OF BUSINESS OF GM AND HUGHES. Except as contemplated by this
Agreement, during the period from the date hereof to the Effective Time, Hughes
and its subsidiaries shall conduct their respective operations in the ordinary
course of business consistent with past practice and, to the extent consistent
therewith, with no less diligence and effort than would be applied in the
absence of this Agreement. Without limiting the generality of the foregoing, and
except as otherwise expressly provided in this Agreement, prior to the Effective
Time, GM shall not, and shall not permit Hughes and its subsidiaries to, without
the prior written consent of the Company, which consent shall not be
unreasonably withheld:

(a) amend its certificate or articles of incorporation or bylaws (or other
similar governing instrument) in a manner which adversely affects the rights,
powers and preferences of the Acquiror Stock;

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(b) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of Hughes
or any of its subsidiaries (except that Hughes and/or any subsidiary of Hughes
may adopt a plan of merger in connection with (i) a merger of any subsidiary of
Hughes into Hughes or another subsidiary of Hughes or (ii) an acquisition or
disposition of a business or assets, except for any such acquisition or
disposition which would have a Material Adverse Effect on Hughes);

(c) alter through merger, liquidation, reorganization, restructuring or in
any other fashion the corporate structure or ownership of Hughes or any of its
subsidiaries, except for any such alteration which would not have a Material
Adverse Effect on Hughes; or

(d) take any action, or agree to take any action, which would have the
effect of terminating Hughes's engaging in the multichannel entertainment
distribution industry.

5.3. PREPARATION OF S-4 AND THE PROXY STATEMENT.

(a) The Company will, as promptly as practicable, prepare and file with the
SEC the Proxy Statement in connection with the vote of the shareholders of the
Company with respect to the Merger. GM and Hughes shall have a reasonable
opportunity to review the Proxy Statement and any supplement thereto prior to
the filing or submission thereof to the SEC.

(b) GM will, as promptly as practicable, prepare, following receipt of
notification from the SEC that it has no further comments on the Proxy
Statement, and file with the SEC the S-4 in connection with the registration
under the Securities Act of the shares of Acquiror Stock issuable upon
conversion of the Shares and the other transactions contemplated hereby. The
Company will have a reasonable opportunity to review the S-4 and any amendments
thereto prior to the filing thereof with the SEC.

(c) GM and the Company will, and will cause their accountants and lawyers
to, use all reasonable best efforts to have or cause the S-4 declared effective
as promptly as practicable after it is filed, and will take any other action
required or necessary to be taken under federal or state securities laws or
otherwise in connection with the registration process. The Company will use its
reasonable best efforts to cause the Proxy Statement to be mailed to its
shareholders at the earliest practicable date after the S-4 shall become
effective.

5.4. COMPANY MEETING. The Company shall call a meeting of its shareholders
to be held as promptly as practicable for the purpose of voting upon this
Agreement and the Merger. The Company agrees that its obligations pursuant to
the first sentence of this Section 5.4 shall not be affected by the
commencement, public proposal, public disclosure or communication to the Company
of any Acquisition Proposal (as defined in Section 5.5). The Company shall use
its reasonable best efforts to hold such meeting as soon as practicable after
the date hereof and will, through the Company board, subject to the fiduciary
duties of the Company board, recommend to its shareholders approval of this
Agreement and the Merger.

5.5. NO SOLICITATION.

(a) Until the termination of this Agreement, the Company shall not, and
shall not permit any of its subsidiaries, or any of its or its subsidiaries'
officers, directors, employees, representatives, agents or affiliates
(including, without limitation, any investment banker, financial advisor,
attorney, accountant or other representative of the Company or any of its
subsidiaries), to, directly or indirectly, initiate, solicit or knowingly
encourage (including by way of furnishing non-public information or assistance),
or take any other action to facilitate, any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, an
Acquisition Proposal (as defined below), or enter into or maintain or continue
discussions or negotiate with any person or entity in furtherance of such
inquiries or to obtain an Acquisition Proposal or agree to or endorse any
Acquisition Proposal, or authorize or permit any of its officers, directors or
employees or any of its subsidiaries or any investment banker, financial
advisor, attorney, accountant or other representative of it or any of its
subsidiaries to take any such action; PROVIDED,

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HOWEVER, that the Company may engage in discussions with any person or entity
for the sole purpose of clarifying the terms of any unsolicited Acquisition
Proposal if such discussions are in the judgment of independent counsel to the
independent directors of the Company (as set forth in a reasoned legal opinion
delivered to Hughes prior to any such discussions), required by the fiduciary
duties of the Company board. The Company will promptly (and in no event later
than twenty-four (24) hours after receipt of any Acquisition Proposal) notify
(which notice shall be provided orally and in writing and shall identify the
person making such Acquisition Proposal and set forth the material terms
thereof) Hughes after any receipt of any Acquisition Proposal. For purposes of
this Agreement, "ACQUISITION PROPOSAL" means any proposal regarding any of the
following (other than the transactions contemplated by this Agreement) involving
the Company or any of its subsidiaries: (w) any merger, consolidation, share
exchange, recapitalization, business combination or other similar transaction;
(x) any sale, lease, exchange, mortgage, pledge, transfer or other disposition
of fifteen percent (15%) or more of the assets of the Company and its
subsidiaries, taken as a whole, in a single transaction or series of related
transactions; (y) any tender offer or exchange offer that if consummated would
result in any person (other than Hubbard Broadcasting) beneficially owning more
than fifteen percent (15%) of the outstanding shares of Company Common Stock or
the filing of a registration statement under the Securities Act in connection
therewith; or (z) any public announcement of a proposal, plan or intention to do
any of the foregoing or any agreement to engage in any of the foregoing.

(b) Until the termination of this Agreement, the Company board shall not (i)
subject to the fiduciary duties of the Company board, withdraw or modify, or
propose to withdraw or modify, in a manner adverse to GM or Hughes, the approval
or recommendation of the Merger, this Agreement and the Shareholders Agreement
by the Company board, (ii) approve or recommend, or propose to approve or
recommend, any Acquisition Proposal or (iii) cause the Company or any of its
subsidiaries to enter into any agreement (including, without limitation, any
letter of intent) with respect to any Acquisition Proposal.

5.6. LETTER OF THE COMPANY'S ACCOUNTANTS. The Company shall use all
reasonable best efforts to cause to be delivered to GM a letter of Arthur
Andersen LLP (or its successor firm), the Company's independent auditors, dated
a date within two (2) business days before the date on which the S-4 shall
become effective and addressed to GM, in form and substance reasonably
satisfactory to GM and customary in scope and substance for letters delivered by
independent public accountants in connection with registration statements
similar to the S-4.

5.7. ACCESS TO INFORMATION.

(a) Between the date hereof and the Effective Time, the Company will give GM
and Hughes and their authorized representatives reasonable access to all
employees (which access shall be coordinated with the Company's executive
management), plants, offices, warehouses and other facilities and to all books
and records of the Company and its subsidiaries, will permit GM and Hughes to
make such inspections as GM and Hughes may reasonably require and will cause the
Company's officers and those of its subsidiaries to furnish GM and Hughes with
such financial and operating data and other information with respect to the
business, properties and personnel of the Company and its subsidiaries as GM or
Hughes may from time to time reasonably request; PROVIDED, that no investigation
pursuant to this Section 5.7(a) shall affect or be deemed to modify any of the
representations or warranties made by the Company and PROVIDED, FURTHER, except
as provided in Section 6.3(i), that information heretofore redacted by the
Company and relating to exclusivity and renegotiation provisions of programming
agreements may, at the Company's discretion, be provided only in redacted form
(contracts containing such redaction being referred to herein as the "REDACTED
CONTRACTS").

(b) From and after the date of this Agreement, Hughes shall have the right,
but not the obligation, to retain one or more environmental professionals to
conduct an environmental assessment and investigation ("ENVIRONMENTAL
INVESTIGATION") of the Properties, which Environmental Investigation shall be
conducted as

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promptly as reasonably practicable in consultation with the Company and shall
include the right to conduct such tests of soil, groundwater, surface water or
air that Hughes reasonably requires, in its sole discretion, to determine
whether there exists an Adverse Environmental Condition at any of the
Properties. For purposes of this Agreement, "ADVERSE ENVIRONMENTAL CONDITION"
shall mean any of the following: (i) the existence, or the continuation of the
existence, of a Release (including, without limitation, sudden or non-sudden,
accidental or non-accidental Releases), of, or exposure to, any Hazardous
Substance at, in, by, from or related to the Properties, (ii) damage or injury
to the environment in connection with the transportation, storage, treatment or
disposal (or the arrangement thereof) of Hazardous Substances in connection with
the operation of the Company or its subsidiaries or (iii) the violation, or
alleged violation, of Environmental Law by the Company or any of its
subsidiaries.

(c) Between the date hereof and the Effective Time, the Company shall
furnish to Hughes (i) within two business days after the delivery thereof to
management, such monthly financial statements and data as are regularly prepared
for distribution to the Company's Chief Executive Officer and (ii) at the
earliest time at which they are available and prior to filing thereof with the
SEC, such quarterly and annual financial statements as are prepared for the
Company's SEC filings, which shall be in accordance with the books and records
of the Company, and drafts of all such Company SEC filings.

(d) Each of GM and Hughes will hold and will cause its consultants and
advisors to hold in confidence all documents and information concerning the
Company and its subsidiaries furnished to GM or Hughes in connection with the
transactions contemplated by this Agreement to the extent required by that
certain confidentiality agreement entered into between the Company, DIRECTV and
Hughes dated December 1, 1998 (the "CONFIDENTIALITY AGREEMENT").

5.8. ADDITIONAL AGREEMENTS; REASONABLE BEST EFFORTS. Subject to the terms
and conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things reasonably necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation, (i)
cooperation in the preparation and filing of the Proxy Statement and the S-4,
any filings that may be required under the HSR Act and the Communications Act,
and any amendments to any thereof, (ii) cooperation in obtaining, prior to the
Effective Time, the approval for listing on the NYSE, effective upon the
official notice of issuance, of the shares of Acquiror Stock into which the
Shares will be converted pursuant to Article 2 hereof, (iii) the taking of all
action reasonably necessary, proper or advisable to secure any necessary
consents of all third parties and Governmental Entities, including those
relating to existing debt obligations of the Company and its subsidiaries, (iv)
the transfer of existing Environmental Permits to Hughes (or, if such transfer
is not permissible, the Company shall assist Hughes in obtaining new
Environmental Permits as necessary), (v) contesting any legal proceeding
relating to the Merger and (vi) the execution of any additional instruments
necessary to consummate the transactions contemplated hereby. Subject to the
terms and conditions of this Agreement, GM, Hughes and the Company agree to use
all reasonable efforts to cause the Effective Time to occur as soon as
practicable after the shareholder vote with respect to the Merger. In case at
any time after the Effective Time any further action is necessary to carry out
the purposes of this Agreement, the proper officers and directors of each party
hereto shall take all such necessary action.

5.9. REGULATORY REVIEWS. Each party hereto will use its reasonable best
efforts (a) to file with the U.S. Department of Justice and U.S. Federal Trade
Commission, as soon as practicable after the date hereof, the Notification and
Report Form under the HSR Act and any supplemental information or material
requested pursuant to the HSR Act, and (b) to comply as soon as practicable
after the date hereof with any other laws of any country and the European Union
under which any consent, authorization, registration, declaration or other
action with respect to the transactions contemplated herein may be required.
Each party hereto shall furnish to the other such information and assistance as
the other may reasonably request in connection with any filing or other act
undertaken in compliance with the HSR Act or other such laws, and shall keep
each other timely apprised of the status of any communications with,

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and any inquiries or requests for additional information from, any Governmental
Entity under the HSR Act or other such laws. Hughes and the Company will each
use its reasonable best efforts to cause termination of the HSR waiting
period(s) in connection with any review of the transactions contemplated by this
Agreement under the HSR Act. In connection with any litigation or administrative
proceeding instituted to prevent the consummation of the Merger, Hughes and the
Company shall take any and all action reasonably necessary in connection with
such litigation or administrative proceeding (i) to prevent the entry of any
order, preliminary or permanent injunction, or other legal restraint or
prohibition preventing consummation of the Merger or any related transactions
contemplated by this Agreement and (ii) to vacate any order, injunction of legal
restraint or prohibition which would prevent the consummation of the
transactions contemplated by this Agreement; PROVIDED, however, that nothing
contained herein shall require Hughes to divest any portion of Hughes or the
Company or to accept any restrictions or the operation of Hughes or the Company
in order to consummate the transactions contemplated this Agreement.

5.10. PUBLIC ANNOUNCEMENTS. Each of GM, Hughes and the Company will agree
on the text of any press release before issuing any press release or otherwise
making any public statements with respect to the transactions contemplated by
this Agreement, including, without limitation, the Merger. The press release or
public statement shall make appropriate reference to the role of the Company and
the Hubbard Broadcasting family in the development of the direct-to-home
satellite broadcasting business. None of GM, Hughes or the Company shall issue
any such press release or make any such public statement prior to such
agreement, except as may be required by applicable law or by obligations
pursuant to any agreement with the NYSE or NASDAQ, as determined by GM, Hughes
or the Company, as the case may be, in which case such release or statement
shall be limited to a factual summary of the material provisions of this
Agreement and the transactions contemplated hereby.

5.11. DIRECTORS' AND OFFICERS' INSURANCE; INDEMNIFICATION.

(a) DIRECTORS' AND OFFICERS' INSURANCE. Hughes will provide, for an
aggregate period of not less than six (6) years from the Effective Time, the
directors and officers of the Company who are currently covered by the Company's
existing insurance and indemnification policy an insurance and indemnification
policy that provides coverage for events occurring prior to the Effective Time
(the "D&O INSURANCE") that is no less favorable than the Company's existing
policy or, if substantially equivalent insurance coverage is unavailable, the
best available coverage; PROVIDED that Hughes shall not be required to pay an
annual premium for the D&O Insurance in excess of 150% of the last annual
premium paid prior to the date hereof, but in such case shall purchase as much
coverage as possible for such amount.

(b) INDEMNIFICATION. To the extent, if any, not provided by a right under
one of the parties' directors and officers liability insurance policies, from
and after the Effective Time, Hughes shall, to the fullest extent permitted by
applicable law and consistent with the by-laws of Hughes, indemnify, defend and
hold harmless each person who is now, or has been at any time prior to the date
hereof, or who becomes prior to the Effective Time, a director or officer of the
Company (each an "INDEMNIFIED PARTY" and, collectively, the "INDEMNIFIED
PARTIES") against all losses, expenses (including reasonable attorneys' fees and
expenses), claims, damages or liabilities or, subject to the proviso of the next
succeeding sentence, amounts paid in settlement, arising out of actions or
omissions occurring at or prior to the Effective Time and whether asserted or
claimed prior to, at or after the Effective Time that are in whole or in part
(i) based on, or arising out of the fact that such person is or was a director
or officer of the Company or (ii) based on, arising out of or pertaining to the
transactions contemplated by this Agreement. In the event of any such loss,
expense, claim, damage or liability (whether or not arising before the Effective
Time), in addition to any indemnification and hold harmless hereunder (i) Hughes
shall pay the reasonable fees and expenses of counsel selected by the
Indemnified Parties, which counsel shall be reasonably satisfactory to Hughes,
promptly after statements therefor are received and otherwise advance to such
Indemnified Party upon request reimbursement of documented expenses reasonably
incurred, in either case to the extent not prohibited by the DGCL and upon
receipt of any affirmation and undertaking required by the DGCL and

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(ii) Hughes will cooperate in the defense of any such matter; PROVIDED, HOWEVER,
that Hughes shall not be liable for any settlement effected without its written
consent. The Indemnified Parties as a group may retain only one law firm with
respect to each related matter.

(c) SUCCESSORS. In the event Hughes or any of its successors or assigns
(i) consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity or such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
person, then and in either such case, proper provision shall be made so that the
successors and assigns of Hughes shall assume the obligations set forth in this
Section 5.11.

(d) BENEFIT. The provisions of this Section 5.11 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and his or her representatives.

5.12. NOTIFICATION OF CERTAIN MATTERS. The Company, on the one hand, and
GM and Hughes, on the other, shall give prompt notice to each other of (i) the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be likely to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect at or prior to the
Effective Time, (ii) any material failure of a party to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder, (iii) any notice of, or other communication relating to, a default or
event which, with notice or lapse of time or both, would become a default,
received by a party or any of its subsidiaries subsequent to the date of this
Agreement and prior to the Effective Time, under any contract or agreement
material to the financial condition, properties, businesses or results of
operations of a party and its subsidiaries taken as a whole to which it or any
of its subsidiaries is a party or is subject, (iv) any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement, or (v) any Material Adverse Effect on a party; PROVIDED, that the
delivery of any notice pursuant to this Section 5.12 shall not cure such breach
or non-compliance or limit or otherwise affect the remedies available hereunder
to GM and Hughes.

5.13. TAX-FREE REORGANIZATION TREATMENT. The Company, the significant
shareholders of the Company, and Hughes (on behalf of GM and Hughes) shall
execute and deliver to Leonard, Street and Deinard Professional Association,
counsel to the Company, and Weil, Gotshal & Manges LLP, counsel to Hughes and
GM, certificates containing customary representations relating to their business
operations and substantially in the forms attached hereto as Exhibits B-1, B-2
and B-3 (with such changes as may be reasonably requested by such law firms) at
such time or times as may be reasonably requested by such law firms in
connection with their respective deliveries of opinions, pursuant to Sections
6.2(e) and 6.3(h) hereof, with respect to the tax-free reorganization treatment
of the Merger. Prior to the Effective Time, none of the Company, GM or Hughes
shall take or cause to be taken any action which would cause to be untrue (or
fail to take or cause not to be taken any action which would cause to be untrue)
any of the representations in such certificates.

5.14. COMPANY AFFILIATES. Prior to the Closing Date, the Company shall
deliver to GM a letter identifying each affiliate (as such term is defined in
Rule 12b-2 under the Exchange Act) of the Company at the time the Merger is
submitted for approval to the shareholders of the Company (each a "COMPANY
AFFILIATE") and the Company shall use its reasonable best efforts to cause each
Company Affiliate to deliver to GM on or prior to the Closing Date, a written
agreement that such Company Affiliate will not sell, pledge, transfer or
otherwise dispose of any shares of Acquiror Stock issued to such Company
Affiliate pursuant to the Merger, except in compliance with Rule 145 promulgated
under the Securities Act or an exemption from the registration requirements of
the Securities Act.

5.15. SEC FILINGS. Each of GM and the Company shall promptly provide the
other party (or its counsel) with copies of all filings made by the other party
or any of its subsidiaries with the SEC or any other state or federal
Governmental Entity in connection with this Agreement and the transactions
contemplated hereby.

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5.16. EMPLOYEE MATTERS.

(a) All employees of the Company who are actively at work as of the Closing
Date shall be employed immediately after the Closing Date at a rate of salary
comparable to the salary rate in effect for such employee as of the date
immediately preceding the Closing Date. All employees of the Company who are on
unpaid leave as of the Closing Date and who have rights of re-employment upon
termination of such individual's leave shall be employed by DIRECTV upon such
termination and shall not receive any salary until the return of such employees
to active work with DIRECTV. Section 5.16(a) of the Company Disclosure Schedule
sets forth a list of all employees of the Company, their positions, status and
rates of salary as of November 24, 1998.

(b) If any employee of the Company is required within the first twelve (12)
months after the Closing Date by DIRECTV to relocate to a facility that was
owned by DIRECTV immediately prior to the Closing Date and such employee accepts
such relocation, such employee shall be provided with (i) the standard
relocation benefits under the DIRECTV Relocation Allowances Policy (the
"RELOCATION PACKAGE") and (ii) an adjusted salary rate for comparable positions
at DIRECTV at such DIRECTV facility; PROVIDED, that any such employee who is
required to relocate pursuant to this paragraph shall be provided with up to two
(2) weeks to consider such relocation.

(c) Any employee of the Company who (i) (x) is actively at work as of the
Closing Date or (y) is on an authorized leave of absence as of the Closing Date,
has rights of re-employment upon termination of such individual's leave, and is
able to return to work, and (ii) (x) has not accepted a Relocation Package and
within twelve (12) months after the Closing terminates employment with DIRECTV
(other than any employee whose employment was terminated or could have been
terminated for cause, death or disability) or (y) has accepted a Relocation
Package and within twelve (12) months after the Closing is terminated by DIRECTV
without cause, shall be entitled to receive severance pay of six (6) months'
salary (in lump sum), career counseling and outplacement services (consistent
with the counseling and outplacement services previously provided to similarly
situated employees of DIRECTV); PROVIDED, HOWEVER, that no such severance shall
be paid under this Section 5.16(c) unless (i) such employee has signed a full
release of any claims against DIRECTV, the Company and any of their affiliates
and (ii) such employee, if voluntarily terminating his or her employment with
DIRECTV, has provided at least two (2) weeks' notice to DIRECTV; and PROVIDED,
FURTHER, that any severance paid under this Section 5.16(c) shall be reduced by
the amount of any payment under the Worker Adjustment and Retraining
Notification Act and by the amount of severance paid or payable under any other
plan or arrangement, but not any severance paid pursuant to Section 5.16(e)
hereof. Any person receiving a severance payment under this Section 5.16(c)
shall not be entitled to any payment or benefit under the Hughes Employment
Transition Assistance Plan.

(d) Subject to applicable laws and Sections 5.16(a), (b), (c) and (e)
hereof, DIRECTV shall have the right to terminate the employment of any employee
of the Company who becomes an employee of DIRECTV, with or without cause, change
the terms and conditions of employment of any such employee, and amend or
terminate any employee benefit plans or employee arrangements applicable to such
employees.

(e) The Company and DIRECTV shall establish a program ("PROGRAM") pursuant
to which $15 million shall be made available to be awarded to current employees
and certain former employees of the Company and certain current employees of
Hubbard Broadcasting. The amount of individual awards shall be as heretofore
established by the executive management of the Company with the approval of
DIRECTV. Awards under the Program to any participating employee shall be payable
on (i) the first anniversary of the Closing Date, (ii) with respect to current
employees of the Company, such participating employee's termination of
employment by reason of death or disability or by DIRECTV without cause, if
earlier, or (iii) with respect to current employees of Hubbard Broadcasting, the
termination of the Transition Services Agreement by DIRECTV, if earlier. No
person shall be entitled to payment of an award if such person is terminated or
could have been terminated for cause or resigns from employment

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with the Company, DIRECTV and their affiliates, and awards with respect to such
persons shall be forfeited. The amount payable with respect to any award under
the Program shall be reduced by the amount paid or payable under any
change-in-control, retention or similar arrangements, but not any severance paid
pursuant to Section 5.16(c) hereof. For purposes of this Section 5.16(e), a
termination of employment by DIRECTV "without cause" shall include a termination
of employment by a participating employee resulting from a material reduction in
his or her job duties or salary, which reduction shall have continued for a
period of ten (10) days after written notice to DIRECTV.

(f) For purposes of this Section 5.16, "cause" shall mean: (A) fraud,
embezzlement, theft or material dishonesty against the Company or the Surviving
Corporation, any of their subsidiaries or the Board of Directors; (B) conviction
of or plea of NOLO CONTENDERE to any crime (whether or not involving the Company
or the Surviving Corporation) constituting a felony in the jurisdiction
involved; PROVIDED, that such felony is related to such employee's job
responsibility or the safety of co-workers; (C) a willful failure by the
employee to follow reasonable directions or instructions of his or her
supervisor and, in the case of senior officers, the Board of Directors, in each
case consistent with his or her position, which failure shall have continued for
a period of time that allows the progressive discipline policy to be followed
and shall not be the result of the employee's physical or mental incapacity or
disability, PROVIDED that the employee's resignation during such time shall not
be effective without the written consent of the Company; or (D) willful
misconduct in the performance of the employee's duties which results in material
damage to or material liability of the Company, the Surviving Corporation or any
of their subsidiaries.

(g) Service by the employees of the Company who are actively at work as of
the Closing Date or who are on authorized leave of absence as of the Closing
Date with rights of re-employment upon termination of such leave and return to
active work shall be recognized under any benefit plan or arrangement
established, maintained or contributed to by DIRECTV or its affiliates after the
Closing Date for the benefit of any such employee solely for purposes of
eligibility and vesting, except that, with respect to DIRECTV's Non-Bargaining
Retirement Plan, such service shall be recognized solely for purposes of
vesting; PROVIDED, that such recognition does not result in any duplication of
benefits. Individuals who have terminated employment with the Company prior to
the Closing Date and are subsequently hired by DIRECTV or its affiliates will
not be entitled to any service recognition under this paragraph.

(h) Hughes shall cause DIRECTV to perform all of the obligations under this
Section 5.16, and all rights hereunder are intended to accrue to the benefit of
DIRECTV.

(i) Notwithstanding anything to the contrary herein, in the event that any
payment pursuant to this Section 5.16, together with any payment or benefit
received or to be received by any person pursuant to the terms of this Agreement
or of any other plan, arrangement or agreement of the Company or its affiliates
(each a "PAYMENT" and collectively, the "PAYMENTS"), would be subject to the
excise tax imposed by Section 4999 of the Code (the "EXCISE TAX") either in
whole or in part, the Payments shall be reduced (but not below zero) until no
portion of the Payments would be subject to the Excise Tax. The Company and
Hubbard Broadcasting agree to provide all such information DIRECTV may request
to determine whether and to what extent the Excise Tax applies to any Payment.
Each recipient of a Payment pursuant to this Section 5.16 shall be required to
agree, as a condition to receiving such Payment, to indemnify and hold GM,
Hughes and their respective affiliates harmless with respect to any liability
for the Excise Tax arising from or relating to the Payments if it is established
that such Payments resulted in the imposition of the Excise Tax.

5.17. ANCILLARY AGREEMENTS. On or prior to the Closing Date, Hughes shall,
or shall cause DIRECTV to, and the Company shall, or shall use its reasonable
best efforts to cause its relevant affiliates to, enter into the following
agreements (the "ANCILLARY AGREEMENTS"): (i) Consulting Agreements,
substantially in the form of EXHIBIT C hereto, with the Chairman, the President
and the Executive Vice President of the Company, (ii) a Non-Competition
Agreement, substantially in the form of EXHIBIT D hereto, binding Hubbard
Broadcasting and the foregoing officers, and (iii) a Transition Services
Agreement, substantially

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in the form of EXHIBIT E hereto, providing for certain transition services to be
provided by Hubbard Broadcasting to the Company. Concurrently with the execution
of this Agreement, Hughes and the Company have entered into (i) a Replacement
Payload Option Agreement, substantially in the form of EXHIBIT F hereto,
providing for certain arrangements for the benefit of the Company in the event
that this Agreement is terminated pursuant to Section 7.1(g) and (ii) a Channel
Capacity Provision Agreement, substantially in the form of EXHIBIT G hereto,
providing for channel capacity and related services to be provided to the
Company in the event of a "Total Failure" (as defined therein) of DBS-1.

5.18. BILLING AND CUSTOMER MANAGEMENT SYSTEMS. Prior to the Closing Date,
the Company and DIRECTV will cooperate with each other to facilitate the
consolidation of their respective billing and customer management systems and
other support systems, and DIRECTV shall provide the Company, upon terms
reasonably satisfactory to the Company, in the event the transactions
contemplated by this Agreement are not consummated, with billing and customer
management systems (including CUI) for a period of up to eighteen (18) months
(the length of such period to be determined by the Company in its sole
discretion) commencing on the later of July 1, 1999 or the date on which this
Agreement is terminated pursuant to Section 7.1 at the rates specified in the
contract for such services between the Company and Convergys, a true, correct
and complete copy of which has been provided to Hughes. The Company has advised
Hughes that it has elected to, and covenants and agrees to, exercise its
existing contractual right to terminate its contract with Convergys within two
(2) weeks of the date hereof. The parties hereto agree that the payment by the
Company of any fee or penalty pursuant to such contract on account of such
termination shall not be a violation of Section 5.1 hereof and shall not
constitute a Material Adverse Effect. Each of the Company and Hughes covenants
and agrees to use its reasonable best efforts to reduce the amount of such
termination fee or penalty. In the event the Company utilizes the billing and
customer management systems of DIRECTV, DIRECTV shall use its reasonable best
efforts to assist the Company in transitioning such services to DIRECTV and,
subsequently, transitioning such services to a third party service provider.

5.19. 110 DEG. CONSTRUCTION PERMIT. The Company and Hughes will cooperate
and use their reasonable best efforts to maintain (including, without
limitation, by obtaining extensions of) the 110 DEG. Construction Permit
including, without limitation, jointly developing a plan for the 110 DEG..
Construction Permit which may include, without limitation, the use of a
satellite produced by Hughes. The Company, with prior notice to Hughes, shall
exercise its existing contractual right to terminate the Lockheed Martin
Contract on or prior to December 31, 1998, unless instructed to the contrary by
Hughes.

5.20. SPRING COMMUNICATIONS. Promptly following the date hereof, Hubbard
Broadcasting shall purchase from the Company, and the Company shall sell to
Hubbard Broadcasting, all of the Company's interest in Spring U.S. Satellite
Broadcasting Communications LLC ("SPRING") for a purchase price of One Hundred
Thousand Dollars ($100,000), plus an amount equal to all capital contributions
paid by the Company to Spring following the date hereof and prior to such
purchase. As part of such purchase and sale, Hubbard Broadcasting shall assume
all liabilities and obligations relating to Spring and shall indemnify and hold
the Company harmless with respect thereto. All documents relating to the
purchase of Spring and such indemnification shall be reasonably satisfactory to
Hughes and the Company.

5.21. CONFIRMATORY CERTIFICATES; COMMUNICATIONS. In order to verify the
truth of the representations and warranties contained in (i) Section 3.16(b),
(ii) the penultimate sentence of Section 3.6 and (iii) the first sentence of
Section 3.25, Hughes may elect to provide the Company with a list of Material
Contracts as to which it desires written confirmation to such effect from the
parties to such Contracts. Hughes shall consult with the Company regarding the
content of such list and conduct such confirmation in a reasonable manner to
limit disruption to the business. The Company shall use its reasonable best
efforts to obtain such requested written confirmations prior to the Closing
Date. The Company and Hughes will coordinate their communications to, and each
participate in all meetings and discussions with, material providers of
programming and other suppliers to the Company; PROVIDED, that the Company may
continue its day-to-day operational activities with such parties in the ordinary
course of business. Without limiting the foregoing,

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Hughes shall direct, and the Company shall assist and cooperate with respect to,
the development of any new programming arrangements to be effective from and
after the Closing Date, to the extent deemed necessary or advisable by Hughes to
fulfill the conditions to closing pursuant to this Agreement, with providers of
programming to the Company.

5.22. AFFILIATE AGREEMENTS. On or prior to the Closing Date, the Company
shall (i) assume the Company's liability insurance and indemnification policy
currently held by Hubbard Broadcasting and (ii) terminate and cancel all
agreements with Hubbard Broadcasting and its affiliates, except as set forth in
the Transition Services Agreement.

ARTICLE 6
CONDITIONS TO CONSUMMATION OF THE MERGER

6.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE MERGER. The
respective obligations of each party hereto to effect the Merger are subject to
the satisfaction at or prior to the Effective Time of the following conditions:

(a) this Agreement shall have been approved and adopted by the requisite
vote of the shareholders of the Company;

(b) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
United States court or United States governmental authority and continued in
effect which prohibits, restrains, enjoins or restricts the consummation of the
Merger;

(c) any waiting period applicable to the Merger under the HSR Act shall have
terminated or expired, and any other governmental or regulatory notices or
approvals required with respect to the transactions contemplated hereby shall
have been either filed or received;

(d) the FCC shall have consented to the transfer of control of the FCC
Licenses, by means of action by the FCC (including action duly taken by the
FCC's staff, pursuant to delegated authority), which shall not have been
reversed, stayed, enjoined, set aside, annulled or suspended, with respect to
which no timely request for stay, petition for rehearing, appeal or certiorari
or SUA SPONTE action of the FCC with comparable effect shall be pending and as
to which the time for filing any such request, petition, appeal, certiorari or
for the taking of any such SUA SPONTE action by the FCC shall have expired;

(e) the S-4 shall have become effective under the Securities Act and shall
not be the subject of any stop order or proceedings seeking a stop order and GM
shall have received all state securities laws or "blue sky" permits and
authorizations necessary to issue shares of Acquiror Stock in exchange for the
Shares in the Merger; and

(f) the Acquiror Stock issuable in the Merger shall have been authorized for
listing on the NYSE, subject to official notice of issuance.

6.2. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligation of the
Company to effect the Merger is subject to the satisfaction at or prior to the
Effective Time of the following conditions:

(a) the representations and warranties of GM and Hughes contained in this
Agreement or in any other document delivered pursuant hereto shall be true and
correct in all respects at and as of the Effective Time with the same effect as
if made at and as of the Effective Time, and at the Closing GM and Hughes shall
have delivered to the Company a certificate to that effect;

(b) each of the obligations of GM and Hughes to be performed at or before
the Effective Time pursuant to the terms of this Agreement shall have been duly
performed in all material respects at or before the Effective Time and at the
Closing GM and Hughes shall have delivered to the Company a certificate to that
effect;

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(d) there shall have been no events, changes or effects with respect to
Hughes or its subsidiaries which would have a Material Adverse Effect on Hughes;
and

(e) the opinion of Leonard, Street and Deinard Professional Association,
dated the Closing Date and addressed to the Company substantially to the effect
that (i) the Merger should be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code; (ii) each of
GM, Hughes and the Company should be a party to the reorganization within the
meaning of Section 368(b) of the Code; and (iii) no gain or loss should be
recognized by a shareholder of the Company as a result of the Merger with
respect to Shares converted into shares of Acquiror Stock (other than with
respect to cash received in lieu of fractional shares of Acquiror Stock), shall
have been delivered and such opinion shall not have been withdrawn or modified
in any material respect. In rendering such opinion, Leonard, Street and Deinard
Professional Association shall have received and may rely upon the
representations contained in the certificates referred to in Section 5.13.

6.3. CONDITIONS TO THE OBLIGATIONS OF GM AND HUGHES. The respective
obligations of GM and Hughes to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of the following conditions:

(a) the representations and warranties of the Company contained in this
Agreement or in any other document delivered pursuant hereto shall be true and
correct in all respects at and as of the Effective Time with the same effect as
if made at and as of the Effective Time, and at the Closing the Company shall
have delivered to GM and Hughes a certificate to that effect in the form of
EXHIBIT H hereto, duly executed by each of the Chairman, President, Executive
Vice President and Chief Financial Officer of the Company in their respective
capacities as such;

(b) each of the obligations of the Company to be performed at or before the
Effective Time pursuant to the terms of this Agreement shall have been duly
performed in all material respects at or before the Effective Time and at the
Closing the Company shall have delivered to GM and Hughes a certificate to that
effect;

(d) the Company shall have delivered to Hughes all consents or notices
necessary to effect valid assignments of the contracts listed on Section 6.3(d)
of the Acquiror Disclosure Schedule, all in form and substance reasonably
acceptable to Hughes;

(e) Hubbard Broadcasting and the Company, as applicable, shall have duly
executed and delivered the Ancillary Agreements;

(f) the Shareholders Agreement shall be in full force and effect;

(g) there shall have been no events, changes or effects with respect to the
Company or its subsidiaries (except for events, changes or effects primarily
resulting from the actions of DIRECTV) which would have a Material Adverse
Effect on the Company;

(h) the opinion of Weil, Gotshal & Manges LLP, dated the Closing Date and
addressed to Hughes and GM, substantially to the effect that (i) the Merger
should be treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code; (ii) each of GM, Hughes and the Company
should be a party to the reorganization within the meaning of Section 368(b) of
the Code; and (iii) no gain or loss should be recognized by GM, Hughes or the
Company as a result of the Merger, shall have been delivered and such opinion
shall not have been withdrawn or modified in any material respect. In rendering
such opinion, Weil, Gotshal & Manges LLP shall have received and may rely upon
the representations contained in the certificates referred to in Section 5.13;

A-45
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(i) the Company shall have delivered to Hughes no later than two (2)
business days prior to the Effective Time true, correct and complete copies of
the Redacted Contracts, without any redaction of the information contained
therein; and

(j) the modifications to certain Material Contracts described in Section
6.3(j) of the Acquiror Disclosure Schedule shall have been adopted by each party
thereto and shall be in full force and effect.

ARTICLE 7
TERMINATION; AMENDMENT; WAIVER

7.1. TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time:

(a) by mutual written consent of GM, Hughes and the Company;

(b) by Hughes or the Company if the Merger has not been consummated by
September 30, 1999 (the "LATEST DATE"); PROVIDED, that no party may terminate
this Agreement pursuant to this Section 7.1(b) if such party's failure to
fulfill any of its obligations under this Agreement shall have been the reason
that the Effective Time shall not have occurred on or before said date;

(c) by Hughes or the Company if the U.S. Department of Justice or U.S.
Federal Trade Commission has issued or stated its intention to seek an order,
preliminary or permanent injunction, or other legal restraint or prohibition
preventing consummation of the Merger or any related transactions contemplated
by this Agreement;

(d) by the Company, so long as the Company is not then in material breach of
its obligations hereunder, if (i) there shall have been a breach of any
representation or warranty on the part of GM or Hughes set forth in this
Agreement, or (ii) there shall have been a material breach by GM or Hughes of
any of their respective covenants or agreements hereunder, in either case such
that the conditions set forth in Section 6.2(a) would be incapable of being
satisfied by the Latest Date;

(e) by Hughes, so long as GM and Hughes are not then in material breach of
any of their obligations hereunder, if (i) there shall have been a breach of any
representation or warranty on the part of the Company set forth in this
Agreement or (ii) there shall have been a material breach by the Company of its
covenants or agreements hereunder in either case such that the conditions set
forth in Section 6.3(a) would be incapable of being satisfied by the Latest
Date;

(f) by Hughes if the Company shall have convened a meeting of its
shareholders and failed to obtain the requisite vote to approve this agreement
and the Merger; or

(g) by Hughes by written notice to the Company following the date on which
all transponders on DBS-1 (and not solely those transponders utilized by the
Company) have suffered a "Confirmed Failure" as defined in the Satellite Payload
Purchase Agreement dated as of May 31, 1991.

7.2. EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 7.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party hereto or its affiliates, directors, officers or shareholders, other
than the provisions of this Section 7.2 and Sections 5.7(d), 5.10, 5.18 and 7.3,
which shall survive any termination. Nothing contained in this Section 7.2 shall
relieve any party from liability for any breach of this Agreement.

7.3. EXPENSES. Each party shall bear its own expenses in connection with
this Agreement and the transactions contemplated hereby. The cost of filing and
printing the S-4 and the Proxy Statement shall be borne by the Company.

7.4. AMENDMENT. This Agreement may be amended by action taken by the
Company, GM and Hughes at any time before or after approval of the Merger by the
shareholders of the Company but, after any such approval, no amendment shall be
made which requires the approval of such shareholders under

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applicable law without such approval. This Agreement may not be amended except
by an instrument in writing signed on behalf of the parties hereto.

7.5. EXTENSION; WAIVER. At any time prior to the Effective Time, each
party hereto (for these purposes, GM and Hughes shall together be deemed one
party and the Company shall be deemed the other party) may (i) extend the time
for the performance of any of the obligations or other acts of the other party,
(ii) waive any inaccuracies in the representations and warranties of the other
party contained herein or in any document, certificate or writing delivered
pursuant hereto or (iii) waive compliance by the other party with any of the
agreements or conditions contained herein. Any agreement on the part of either
party hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. The failure of either
party hereto to assert any of its rights hereunder shall not constitute a waiver
of such rights.

ARTICLE 8
MISCELLANEOUS

8.1. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties made herein shall not survive beyond the Effective Time or a
termination of this Agreement.

8.2. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement:

(a) constitutes the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof; and

(b) shall not be assigned by operation of law or otherwise; PROVIDED,
HOWEVER, that Hughes may assign any or all of its rights and obligations under
this Agreement to any direct or indirect wholly owned subsidiary of GM, but any
representation, warranty or covenant of Hughes contained in this Agreement shall
remain a representation, warranty or covenant of Hughes and no such assignment
shall relieve Hughes of its obligations hereunder if such assignee does not
perform such obligations.

8.3. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telegram, confirmed facsimile or telex, or by first class mail (postage prepaid,
return receipt requested), to the other party as follows:

<TABLE>
<S> <C>
if to GM or
to Hughes to: General Motors Corporation
767 Fifth Avenue
New York, New York 10153
Attention: Treasurer
Facsimile:

and Hughes Electronics Corporation
200 North Sepulveda Boulevard
El Segundo, California 90245
Attention: Roxanne S. Austin
Facsimile: (310) 322-1841

with a copy to: Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Frederick S. Green, Esq.
Facsimile: (212) 310-8007
</TABLE>

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<PAGE>
<TABLE>
<S> <C>
if to the Company to: United States Satellite Broadcasting Company,
Inc.
3415 University Avenue
St. Paul, Minnesota 55114
Attention: Stanley E. Hubbard
Facsimile: (651) 642-4365

with a copy to: Leonard, Street and Deinard Professional
Association
150 South Fifth Street, Suite 2300
Minneapolis, Minnesota 55402
Attention: Mark S. Weitz, Esq.
Facsimile: (612) 335-1657
</TABLE>

or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.

8.4. GOVERNING LAW. Except to the extent that Minnesota law is mandatorily
applicable to the Merger and the rights of the shareholders of the Company, this
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the principles of conflicts of law thereof.

8.5. DESCRIPTIVE HEADINGS. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.

8.6. PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and its successors and permitted
assigns, and except as provided in Section 5.11, nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.

8.7. SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or unenforceable, all other provisions of this Agreement shall
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party.

8.8. SPECIFIC PERFORMANCE. The parties hereto acknowledge that irreparable
damage would result if this Agreement were not specifically enforced, and they
therefore consent that the rights and obligations of the parties under this
Agreement may be enforced by a decree of specific performance issued by a court
of competent jurisdiction. Such remedy shall, however, not be exclusive and,
shall be in addition to any other remedies which any party may have under this
Agreement or otherwise.

8.9. BROKERS. Except as otherwise provided in Section 7.3, the Company
agrees to indemnify and hold harmless GM and Hughes, and Hughes agrees to
indemnify and hold harmless the Company, from and against any and all liability
to which GM and Hughes, on the one hand, or the Company, on the other hand, may
be subjected by reason of any broker's, finder's or similar fees or expenses
with respect to the transactions contemplated by this Agreement to the extent
such similar fees and expenses are attributable to any action undertaken by or
on behalf of the Company, or GM or Hughes, as the case may be.

8.10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.

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<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly
executed on its behalf as of the day and year first above written.

<TABLE>
<S> <C> <C>
GENERAL MOTORS CORPORATION

By: /s/ ERIC FELDSTEIN
-----------------------------------------
Name: Eric Feldstein
Title: Treasurer

HUGHES ELECTRONICS CORPORATION

By: /s/ CHARLES H. NOSKI
-----------------------------------------
Name: Charles H. Noski
Title: President

UNITED STATES SATELLITE BROADCASTING COMPANY,
INC.

By: /s/ STANLEY S. HUBBARD
-----------------------------------------
Name: Stanley S. Hubbard
Title: Chairman of the Board

By: /s/ STANLEY E. HUBBARD
-----------------------------------------
Name: Stanley E. Hubbard
Title: President and CEO

By: /s/ ROBERT W. HUBBARD
-----------------------------------------
Name: Robert W. Hubbard
Title: Executive Vice President
</TABLE>

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<PAGE>

Annex B-1

[LETTERHEAD OF CREDIT SUISSE FIRST BOSTON CORPORATION]

December 11, 1998

Board of Directors
United States Satellite Broadcasting Company, Inc.
3415 University Avenue
St. Paul, Minnesota 55114

Members of the Board:

You have asked us to advise you with respect to the fairness to the holders
of the common stock of United States Satellite Broadcasting Company, Inc.
("USSB") from a financial point of view of the consideration to be received
by such holders pursuant to the terms of the Agreement and Plan of Merger,
dated as of December 11, 1998 (the "Merger Agreement"), by and among General
Motors Corporation ("GM"), Hughes Electronics Corporation ("Hughes") and
USSB. The Merger Agreement provides for, among other things, the merger of
USSB with and into Hughes pursuant to which, subject to certain allocation
and proration procedures set forth in the Merger Agreement (as to which we
express no opinion), each outstanding share of the Common Stock, par value
$0.01 per share, of USSB and Class A Common Stock, par value $0.0001 per
share, of USSB (collectively, the "USSB Common Stock") will be converted into
the right to receive, at the election of the holder thereof, either (i) an
amount in cash (the "Cash Consideration") equal to the product of (x) the
Exchange Ratio (as defined below) and (y) the volume weighted average of the
per share closing price of the Class H Common Stock, par value $0.01 per
share, of GM (the "Class H Common Stock") on the New York Stock Exchange,
Inc. for the 20 trading days ending on and including the second trading day
prior to the closing of the Merger (the "20-Day Average Price") or (ii) that
fraction of a share of Class H Common Stock equal to the Exchange Ratio (the
"Stock Consideration" and, together with the Cash Consideration, the "Merger
Consideration"). Pursuant to the Merger Agreement, (i) if the 20-Day Average
Price is less than or equal to $47.6821 and greater than or equal to
$27.8146, the Exchange Ratio will equal 0.3775, (ii) if the 20-Day Average
Price is greater than $47.6821, the Exchange Ratio will equal the quotient
obtained by dividing $18.00 by the 20-Day Average Price and (iii) if the
20-Day Average Price is less than $27.8146, the Exchange Ratio will equal the
quotient obtained by dividing (x) the lesser of (A) $10.50 and (B) an amount
equal to the quotient obtained by dividing (1) an amount equal to 200% of the
product of the "Acquiror Share Cap" (defined in the Merger Agreement as a
number equal to 70% of the product of the number of shares of USSB Common
Stock and 0.3775) and the 20-Day Average Price by (2) the number of shares of
USSB Common Stock by (y) the 20-Day Average Price. The Exchange Ratio is
subject to adjustment under certain circumstances more fully described in the
Merger Agreement.

In arriving at our opinion, we have reviewed the Merger Agreement and certain
publicly available business and financial information relating to USSB and
Hughes. We have also reviewed certain other information relating to USSB and
Hughes, including financial forecasts, provided to or discussed with us by
USSB and Hughes, and have met with the managements of USSB and Hughes to
discuss the businesses and prospects of USSB and Hughes. We have also
considered certain financial and stock market data of USSB and Hughes, and we
have compared those data with similar data for other publicly held companies
in businesses similar to USSB and Hughes, and we have considered, to the
extent publicly available, the financial terms of certain other business
combinations and other transactions which have recently been effected. We
also considered such other information, financial studies, analyses and
investigations and financial, economic and market criteria which we deemed
relevant.

In connection with our review, we have not assumed any responsibility for
independent verification of any of the foregoing information and have relied
on its being complete and accurate in all

B-1-1

<PAGE>

Board of Directors
United States Satellite Broadcasting Company, Inc.
December 11, 1998
Page 2

material respects. With respect to the financial forecasts, we have been
advised, and have assumed, that such forecasts have been reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
managements of USSB and Hughes as to the future financial performance of USSB
and Hughes and the cost savings and potential synergies (including the amount,
timing and achievability thereof) anticipated to result from the Merger. We have
not been requested to make, and have not made, an independent evaluation or
appraisal of the assets or liabilities (contingent or otherwise) of USSB or
Hughes, nor have we been furnished with any such evaluations or appraisals. Our
opinion is necessarily based upon information available to us, and financial,
economic, market and other conditions as they exist and can be evaluated, on the
date hereof. We are not expressing any opinion as to what the value of the Class
H Common Stock actually will be when issued pursuant to the Merger or the prices
at which such Class H Common Stock will trade subsequent to the Merger. In
connection with our engagement, we were not requested to, and we did not,
solicit third party indications of interest in acquiring all or any part of
USSB.

We have acted as financial advisor to USSB in connection with the Merger and
will receive a fee for such services contingent upon the consummation of the
Merger. We have in the past provided financial services to USSB, GM and Hughes,
and currently are providing financial services to Hughes, unrelated to the
proposed Merger, for which services we have received and will receive
compensation. In the ordinary course of business, Credit Suisse First Boston and
its affiliates may actively trade the debt and equity securities of USSB and GM
for their own accounts and for the accounts of customers and, accordingly, may
at any time hold long or short positions in such securities.

It is understood that this letter is for the information of the Board of
Directors of USSB in connection with its evaluation of the Merger, does not
constitute a recommendation to any shareholder as to how such shareholder should
vote with respect to any matter relating to the Merger or the form of
consideration to be elected by such shareholder in the Merger, and is not to be
quoted or referred to, in whole or in part, in any registration statement,
prospectus or proxy statement, or in any other document used in connection with
the offering or sale of securities, nor shall this letter be used for any other
purposes, without our prior written consent.

Based upon and subject to the foregoing, it is our opinion that, as of the date
hereof, the Merger Consideration is fair to the holders of USSB Common Stock,
from a financial point of view.

Very truly yours,

CREDIT SUISSE FIRST BOSTON CORPORATION

B-1-2

<PAGE>

Annex B-2

[LETTERHEAD]

PERSONAL AND CONFIDENTIAL

December 10, 1998

United States Satellite Broadcasting Company, Inc.
3415 University Avenue
St. Paul, Minnesota 55114

Gentlemen:

Attached is our opinion letter dated December 10, 1998 with respect to the
fairness from a financial point of view to the holders of the outstanding shares
of Class A Common Stock, par value $.0001 per share (the "Class A Shares"), and
holders of the outstanding shares of Common Stock, par value $.0001 per share,
(such shares, collectively with the Class A Shares, the "Shares"), of United
States Satellite Broadcasting Company, Inc. (the "Company") of the Stock
Consideration and the Cash Consideration (as defined below) to be received for
Shares pursuant to the Agreement and Plan of Merger, dated as of December 11,
1998, among General Motors Corporation ("General Motors"), its subsidiary Hughes
Electronics Corporation ("Hughes") and the Company (the "Agreement"). Pursuant
to the Agreement, the Company will be merged with Hughes and each outstanding
Share will be converted into (a) the right to receive a fraction of a share of
Class H Common Stock, par value $.10 per share, of General Motors (the "GMH
Shares") equal to the Exchange Ratio (as defined in the Merger Agreement) (the
"Stock Consideration"), or (b) the right to receive an amount of cash (the "Cash
Consideration") equal to the product of (x) the Exchange Ratio multiplied by (y)
the average of the volume weighted averages of the trading prices of the GMH
Shares on the New York Stock Exchange, Inc. for each of the 20 consecutive
trading days ending on and including the second trading day prior to the Closing
Date (as defined in the Merger Agreement). We are expressing no opinion
concerning such limitations and procedures.

The foregoing opinion letter is provided for the information and assistance of
the Board of Directors United States Satellite Broadcasting Company, Inc. in
connection with its consideration of the transaction contemplated therein and is
not to be used, circulated, quoted or otherwise referred to for any other
purpose, nor is it to be filed with, included in or referred to in whole or in
part in any registration statement, proxy statement or any other document,
except in accordance with our prior written consent.

Very truly yours,

(GOLDMAN, SACHS & CO.)

B-2-1

<PAGE>

[LETTERHEAD]

PERSONAL AND CONFIDENTIAL

December 10, 1998

Board of Directors
United States Satellite Broadcasting Company, Inc.
3415 University Avenue
St. Paul, Minnesota 55114

Gentlemen:

You have requested our opinion as to the fairness from a financial point of
view to the holders of the outstanding shares of Class A Common Stock, par
value $.0001 per share (the "Class A Shares"), and holders of the outstanding
shares of Common Stock, par value $.0001 per share, (such shares,
collectively with the Class A Shares, the "Shares"), of United States
Satellite Broadcasting Company, Inc. (the "Company") of the Stock
Consideration and the Cash Consideration (as defined below), taken as a
unitary transaction, to be received for Shares pursuant to the Agreement and
Plan of Merger, dated as of December 11, 1998, among General Motors
Corporation ("General Motors"), its subsidiary Hughes Electronics Corporation
("Hughes") and the Company (the "Agreement"). Pursuant to the Agreement, the
Company will be merged with Hughes and each outstanding Share will be
converted, at the election of the holder thereof, but subject to certain
procedures and limitations contained in the Agreement, into (a) the right to
receive a fraction of a share of Class H Common Stock, par value $.10 per
share, of General Motors (the "GMH Shares") equal to the Exchange Ratio (as
defined below) (the "Stock Consideration"), or (b) the right to receive an
amount of cash (the "Cash Consideration") equal to the product of (x) the
Exchange Ratio multiplied by (y) the average of the volume weighted averages
of the trading prices of the GMH Shares on the New York Stock Exchange, Inc.
for each of the 20 consecutive trading days ending on and including the
second trading day prior to the Closing Date (as defined in the Merger
Agreement) (the "20-Day Average Price"). We are expressing no opinion
concerning such limitations and procedures. Pursuant to the Agreement, if the
20-Day Average Price is (a) less than or equal to $47.6821 (the "Cap Price"),
and greater than or equal to $27.8146 (the "Floor Price"), the Exchange Ratio
shall be equal to 0.3775, (b) greater than the Cap Price, the Exchange Ratio
shall be equal to the quotient obtained by dividing $18.00 by the 20-Day
Average Price, or (c) less than the Floor Price, the Exchange Ratio shall be
equal to the quotient obtained by dividing $10.50 (or, if lower, the Adjusted
Price, as defined in the Agreement) by the 20-Day Average Price.

Goldman, Sachs & Co., as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes. We are familiar with
the

B-2-2

<PAGE>

United States Satellite Broadcasting Company, Inc.
December 10, 1998
Page Two

Company having acted as a co-manager on the initial public offering of Class A
shares in January 1996 and having acted as its financial advisor in connection
with, and having participated in certain of the negotiations leading to, the
Agreement. We have also provided certain investment banking services to Hughes
from time to time including serving as an advisor to Hughes on the spin-off of
its defense electronics business and subsequent merger with Raytheon Company and
its investment in Thomson Multimedia SA and may provide investment banking
services to Hughes in the future. Goldman, Sachs & Co. provides a full range of
financial advisory and securities services and, in the course of its normal
trading activities, may from time to time effect transactions and hold
securities, including derivative securities, of the Company, Hughes or General
Motors for its own account and for the accounts of customers.

In connection with this opinion, we have reviewed, among other things, the
Agreement; Annual Reports to Shareholders and Annual Reports on Form 1O-K of the
Company for the two years ended December 31, 1997, Annual Reports to holders of
GMH Shares for the five years ended December 31, 1997; Annual Reports on Form
10-K of General Motors for the five years ended December 31, 1997; certain
interim reports to shareholders and Quarterly Reports on Form 10-Q of the
Company and General Motors; certain other communications from the Company and
Hughes to their respective shareholders; and certain internal financial analyses
and forecasts for the Company prepared by its management, including certain cost
savings and operating synergies projected by the management of the Company to
result from the transaction contemplated by the Agreement. We also have held
discussions with members of the senior management of the Company and Hughes
regarding the strategic rationale for, and the potential benefits of, the
transaction contemplated by the Agreement and the past and current business
operations, financial condition and future prospects of their respective
companies. In addition, we have reviewed the reported price and trading activity
for the Shares and the GMH Shares, compared certain financial and stock market
information for the Company and Hughes, and the Shares and the GMH Shares, with
similar information for certain other companies the securities of which are
publicly traded, reviewed the financial terms of certain recent business
combinations in the direct to home satellite television industry specifically
and in other industries generally and performed such other studies and analyses
as we considered appropriate.

We have relied upon the accuracy and completeness of all of the financial and
other information reviewed by us and have assumed such accuracy and completeness
for purposes of rendering this opinion. In addition, we have not made an
independent evaluation or appraisal of the assets and liabilities of the
Company, Hughes, General Motors or any of their subsidiaries and we have not
been furnished with any such evaluation or appraisal. We were not requested to
solicit, and did not solicit, interest from other parties with respect to an
acquisition of or other business combination with the Company. Our advisory
services and the opinion expressed herein are provided for the information and
assistance of the Board of Directors of the Company in connection with its
consideration of the transaction contemplated by the Agreement and such opinion
does not constitute a recommendation as to how any holder of Shares should vote
with respect to such transaction or as to whether any

B-2-3

<PAGE>

United States Satellite Broadcasting Company, Inc.
December 10, 1998
Page Three

such holder should elect to receive the Stock Consideration, the Cash
Consideration, or any combination thereof.

Based upon and subject to the foregoing and based upon such other matters as we
consider relevant, it is our opinion that as of the date hereof the Stock
Consideration and the Cash Consideration to be received by the holders of
Shares, taken as a unitary transaction, are fair from a financial point of view
to such holders.

Very truly yours,

(GOLDMAN, SACHS & CO.)

B-2-4

<PAGE>
ANNEX C

302A.471. RIGHTS OF DISSENTING SHAREHOLDERS

Subdivision 1. ACTIONS CREATING RIGHTS. A shareholder of a corporation may
dissent from, and obtain payment for the fair value of the shareholder's shares
in the event of, any of the following corporate actions:

(a) An amendment of the articles that materially and adversely affects the
rights or preferences of the shares of the dissenting shareholder in that it:

(1) alters or abolishes a preferential right of the shares;

(2) creates, alters, or abolishes a right in respect of the redemption of
the shares, including a provision respecting a sinking fund for the redemption
or repurchase of the shares;

(3) alters or abolishes a preemptive right of the holder of the shares to
acquire shares, securities other than shares, or rights to purchase shares or
securities other than shares;

(4) excludes or limits the right of a shareholder to vote on a matter, or to
cumulate votes, except as the right may be excluded or limited through the
authorization or issuance of securities of an existing or new class or series
with similar or different voting rights; except that an amendment to the
articles of an issuing public corporation that provides that section 302A.671
does not apply to a control share acquisition does not give rise to the right to
obtain payment under this section;

(b) A sale, lease, transfer, or other disposition of all or substantially
all of the property and assets of the corporation, but not including a
transaction permitted without shareholder approval in section 302A.661,
subdivision 1, or a disposition in dissolution described in section 302A.725,
subdivision 2, or a disposition pursuant to an order of a court, or a
disposition for cash on terms requiring that all or substantially all of the net
proceeds of disposition be distributed to the shareholders in accordance with
their respective interests within one year after the date of disposition;

(c) A plan of merger, whether under this chapter or under chapter 322B, to
which the corporation is a party, except as provided in subdivision 3;

(d) A plan of exchange, whether under this chapter or under chapter 322B, to
which the corporation is a party as the corporation whose shares will be
acquired by the acquiring corporation, if the shares of the shareholder are
entitled to be voted on the plan; or

(e) Any other corporate action taken pursuant to a shareholder vote with
respect to which the articles, the bylaws, or a resolution approved by the board
directs that dissenting shareholders may obtain payment for their shares.

Subd. 2. BENEFICIAL OWNERS. (a) A shareholder shall not assert dissenters'
rights as to less than all of the shares registered in the name of the
shareholder, unless the shareholder dissents with respect to all the shares that
are beneficially owned by another person but registered in the name of the
shareholder and discloses the name and address of each beneficial owner on whose
behalf the shareholder dissents. In that event, the rights of the dissenter
shall be determined as if the shares as to which the shareholder has dissented
and the other shares were registered in the names of different shareholders.

(b) The beneficial owner of shares who is not the shareholder may assert
dissenters' rights with respect to shares held on behalf of the beneficial
owner, and shall be treated as a dissenting shareholder under the terms of this
section and section 302A.473, if the beneficial owner submits to the corporation
at the time of or before the assertion of the rights a written consent of the
shareholder.

Subd. 3. RIGHTS NOT TO APPLY. (a) Unless the articles, the bylaws, or a
resolution approved by the board otherwise provide, the right to obtain payment
under this section does not apply to a shareholder of the

C-1
<PAGE>
surviving corporation in a merger, if the shares of the shareholder are not
entitled to be voted on the merger.

(b) If a date is fixed according to section 302A.445, subdivision 1, for the
determination of shareholders entitled to receive notice of and to vote on an
action described in subdivision 1, only shareholders as of the date fixed, and
beneficial owners as of the date fixed who hold through shareholders, as
provided in subdivision 2, may exercise dissenters' rights.

Subd. 4. OTHER RIGHTS. The shareholders of a corporation who have a right
under this section to obtain payment for their shares do not have a right at law
or in equity to have a corporate action described in subdivision 1 set aside or
rescinded, except when the corporate action is fraudulent with regard to the
complaining shareholder or the corporation

302A.473. PROCEDURES FOR ASSERTING DISSENTERS' RIGHTS

Subdivision 1. DEFINITIONS. (a) For purposes of this section, the terms
defined in this subdivision have the meanings given them.

(b) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action referred to in section 302A.471, subdivision 1 or the
successor by merger of that issuer.

(c) "Fair value of the shares" means the value of the shares of a
corporation immediately before the effective date of the corporate action
referred to in section 302A.471, subdivision 1.

(d) "Interest" means interest commencing five days after the effective date
of the corporate action referred to in section 302A.471, subdivision 1, up to
and including the date of payment, calculated at the rate provided in section
549.09 for interest on verdicts and judgments.

Subd. 2. NOTICE OF ACTION. If a corporation calls a shareholder meeting at
which any action described in section 302A.471, subdivision 1 is to be voted
upon, the notice of the meeting shall inform each shareholder of the right to
dissent and shall include a copy of section 302A.471 and this section and a
brief description of the procedure to be followed under these sections.

Subd. 3. NOTICE OF DISSENT. If the proposed action must be approved by the
shareholders, a shareholder who is entitled to dissent under section 302A.471
and who wishes to exercise dissenters' rights must file with the corporation
before the vote on the proposed action a written notice of intent to demand the
fair value of the shares owned by the shareholder and must not vote the shares
in favor of the proposed action.

Subd. 4. NOTICE OF PROCEDURE; DEPOSIT OF SHARES. (a) After the proposed
action has been approved by the board and, if necessary, the shareholders, the
corporation shall send to all shareholders who have complied with subdivision 3
and to all shareholders entitled to dissent if no shareholder vote was required,
a notice that contains:

(1) The address to which a demand for payment and certificates of
certificated shares must be sent in order to obtain payment and the date by
which they must be received;

(2) Any restrictions on transfer of uncertificated shares that will apply
after the demand for payment is received;

(3) A form to be used to certify the date on which the shareholder, or the
beneficial owner on whose behalf the shareholder dissents, acquired the shares
or an interest in them and to demand payment; and

(4) A copy of section 302A.471 and this section and a brief description of
the procedures to be followed under these sections.

(b) In order to receive the fair value of the shares, a dissenting
shareholder must demand payment and deposit certificated shares or comply with
any restrictions on transfer of uncertificated shares within 30

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<PAGE>
days after the notice required by paragraph (a) was given, but the dissenter
retains all other rights of a shareholder until the proposed action takes
effect.

Subd. 5. PAYMENT; RETURN OF SHARES. (a) After the corporate action takes
effect, or after the corporation receives a valid demand for payment, whichever
is later, the corporation shall remit to each dissenting shareholder who has
complied with subdivisions 3 and 4 the amount the corporation estimates to be
the fair value of the shares, plus interest, accompanied by:

(1) The corporation's closing balance sheet and statement of income for a
fiscal year ending not more than 16 months before the effective date of the
corporate action, together with the latest available interim financial
statements;

(2) An estimate by the corporation of the fair value of the shares and a
brief description of the method used to reach the estimate; and

(3) A copy of section 302A.471 and this section, and a brief description of
the procedure to be followed in demanding supplemental payment.

(b) The corporation may withhold the remittance described in paragraph (a)
from a person who was not a shareholder on the date the action dissented from
was first announced to the public or who is dissenting on behalf of a person who
was not a beneficial owner on that date. If the dissenter has complied with
subdivisions 3 and 4, the corporation shall forward to the dissenter the
materials described in paragraph (a), a statement of the reason for withholding
the remittance, and an offer to pay to the dissenter the amount listed in the
materials if the dissenter agrees to accept that amount in full satisfaction.
The dissenter may decline the offer and demand payment under subdivision 6.
Failure to do so entitles the dissenter only to the amount offered. If the
dissenter makes demand, subdivisions 7 and 8 apply.

(c) If the corporation fails to remit payment within 60 days of the deposit
of certificates or the imposition of transfer restrictions on uncertificated
shares, it shall return all deposited certificates and cancel all transfer
restrictions. However, the corporation may again give notice under subdivision 4
and require deposit or restrict transfer at a later time.

Subd. 6. SUPPLEMENTAL PAYMENT; DEMAND. If a dissenter believes that the
amount remitted under subdivision 5 is less than the fair value of the shares
plus interest, the dissenter may give written notice to the corporation of the
dissenter's own estimate of the fair value of the shares, plus interest, within
30 days after the corporation mails the remittance under subdivision 5, and
demand payment of the difference. Otherwise, a dissenter is entitled only to the
amount remitted by the corporation.

Subd. 7. PETITION; DETERMINATION. If the corporation receives a demand under
subdivision 6, it shall, within 60 days after receiving the demand, either pay
to the dissenter the amount demanded or agreed to by the dissenter after
discussion with the corporation or file in court a petition requesting that the
court determine the fair value of the shares, plus interest. The petition shall
be filed in the county in which the registered office of the corporation is
located, except that a surviving foreign corporation that receives a demand
relating to the shares of a constituent domestic corporation shall file the
petition in the county in this state in which the last registered office of the
constituent corporation was located. The petition shall name as parties all
dissenters who have demanded payment under subdivision 6 and who have not
reached agreement with the corporation. The corporation shall, after filing the
petition, serve all parties with a summons and copy of the petition under the
rules of civil procedure. Nonresidents of this state may be served by registered
or certified mail or by publication as provided by law. Except as otherwise
provided, the rules of civil procedure apply to this proceeding. The
jurisdiction of the court is plenary and exclusive. The court may appoint
appraisers, with powers and authorities the court deems proper, to receive
evidence on and recommend the amount of the fair value of the shares. The court
shall determine whether the shareholder or shareholders in question have fully
complied with the requirements of this section, and shall determine the fair
value of the shares, taking into account any and all factors the court finds
relevant, computed by any method or combination of methods that the court, in
its discretion, sees fit to use,

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<PAGE>
whether or not used by the corporation or by a dissenter. The fair value of the
shares as determined by the court is binding on all shareholders, wherever
located. A dissenter is entitled to judgment in cash for the amount by which the
fair value of the shares as determined by the court, plus interest, exceeds the
amount, if any, remitted under subdivision 5, but shall not be liable to the
corporation for the amount, if any, by which the amount, if any, remitted to the
dissenter under subdivision 5 exceeds the fair value of the shares as determined
by the court, plus interest.

Subd. 8. COSTS; FEES; EXPENSES. (a) The court shall determine the costs and
expenses of a proceeding under subdivision 7, including the reasonable expenses
and compensation of any appraisers appointed by the court, and shall assess
those costs and expenses against the corporation, except that the court may
assess part or all of those costs and expenses against a dissenter whose action
in demanding payment under subdivision 6 is found to be arbitrary, vexatious, or
not in good faith.

(b) If the court finds that the corporation has failed to comply
substantially with this section, the court may assess all fees and expenses of
any experts or attorneys as the court deems equitable. These fees and expenses
may also be assessed against a person who has acted arbitrarily, vexatiously, or
not in good faith in bringing the proceeding, and may be awarded to a party
injured by those actions.

(c) The court may award, in its discretion, fees and expenses to an attorney
for the dissenters out of the amount awarded to the dissenters, if any.

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<PAGE>
ANNEX D

GM BOARD POLICY STATEMENT REGARDING
CERTAIN CAPITAL STOCK MATTERS

(A) GENERAL POLICY. It is the policy of the Board of Directors of General
Motors Corporation (the "GM Board"):

(1) that all material matters as to which the holders of the two classes
of GM common stock may have potentially divergent interests shall be
resolved in a manner which the GM Board determines to be in the best
interests of General Motors Corporation and all of its common stockholders
after giving fair consideration to the potentially divergent interests and
all other relevant interests of the holders of the separate classes of GM
common stock; and

(2) that a process of fair dealing shall govern the relationship between
GM and Hughes and the means by which the terms of any material transaction
between them shall be determined.

(B) ADDITIONAL MATTERS. In relation to the foregoing policy, it is the
further policy of the GM Board that:

(1) QUARTERLY DIVIDENDS.

(a) In contemplation of the GM Board's duty periodically to consider
an appropriate dividend policy and practice in relation to Class H Stock
and its expectation that the Board of Directors of Hughes (the "Hughes
Board") shall, at least annually, consider and determine a quarterly
dividend policy with respect to the common stock of Hughes (100% of which
is held by GM), the GM Board shall, at least annually, determine a
quarterly dividend policy with respect to the Class H Stock.

(b) The quarterly dividend policy of the GM Board with respect to the
Class H Stock shall be to declare and pay quarterly dividends on the
Class H Stock in an amount equal to the product of (i) the aggregate
amount of each quarterly dividend received by GM as a stockholder of
Hughes, if any, multiplied by (ii) the fraction used to determine the
Available Separate Consolidated Net Income of Hughes (as such term is
used in GM's Restated Certificate of Incorporation, as amended) at the
time such dividend was declared by Hughes.

(c) GM's payment of a quarterly dividend on the Class H Stock shall
be made as soon as practicable after receipt of the corresponding
dividend payment from Hughes.

(2)PRINCIPLES GOVERNING DIVIDENDS AND DISTRIBUTIONS OTHER THAN QUARTERLY
DIVIDENDS.

(a) Except as provided in paragraph (B)(2)(b) below, in the event
that Hughes directly or indirectly makes any transfer of material assets
to GM or to GM's stockholders:

(i) TRANSFERS OF HUGHES ASSETS TO GM. If such transfer of assets
by Hughes is to GM, the GM Board shall as soon thereafter as
practicable declare and pay a dividend or make other provision with
respect to a distribution on the Class H Stock so that there shall be
distributed to the holders of Class H Stock a portion of such assets
transferred to GM that is not less than the fraction used to
determine the Available Separate Consolidated Net Income of Hughes at
the time of such transfer to GM; provided that, if the GM Board
determines that it is not reasonably practicable or not in the best
interests of the holders of Class H Stock for GM to distribute any
such assets to the holders of Class H Stock, GM shall distribute to
such holders cash or other noncash assets having an equivalent fair
value; and

(ii) TRANSFERS OF HUGHES ASSETS TO GM'S STOCKHOLDERS. If such
transfer of assets by Hughes is to GM's stockholders, the portion of
such assets transferred to the holders of

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<PAGE>
Class H Stock shall be not less than the fraction used to determine
the Available Separate Consolidated Net Income of Hughes at the time
of such transfer.

(b) EXCEPTIONS TO FOREGOING PRINCIPLES. The Provisions of paragraph
(B)(2)(a) above shall not apply to any of the following asset transfers:

(i) any transfer that results in the recapitalization of Class H
Stock into $1 2/3 Par Value Common Stock pursuant to the provisions
of paragraph (c) of Division I of Article Fourth of GM's Restated
Certificate of Incorporation, as amended;

(ii) any transfer that is made pursuant to the quarterly dividend
policy described in paragraph (B)(1) above;

(iii) any transfer that is made in the ordinary course of Hughes'
business;

(iv) any transfer for which Hughes shall have received fair
compensation as determined pursuant to this policy as described in
paragraph (A) above, provided that, where required by paragraph
(B)(3) below, stockholder consent to such transfer shall have been
received; and

(v) any transfer which shall have received the consent of the
holders of a majority of the outstanding shares of Class H Stock,
voting as a separate class, and $1 2/3 Par Value Common Stock, voting
as a separate class.

(3) SEPARATE CLASS VOTES OF GM'S STOCKHOLDERS AS A CONDITION TO GM'S
ACQUISITION OF A SIGNIFICANT PORTION OF HUGHES ASSETS. GM shall not acquire
in one transaction or a series of related transactions a significant portion
of the business of Hughes for compensation without receiving the consent of
the holder of a majority of the outstanding shares of Class H Stock, voting
as a separate class, and $1 2/3 Par Value Common Stock, voting as a separate
class. For purposes of this paragraph, "significant portion of the business
of Hughes" shall mean more than 33% of the business of Hughes, based on the
fair market value of the assets, both tangible and intangible, of Hughes as
of the time that the proposed transaction is approved by the GM Board.

(4) BASIS FOR COMMERCIAL TRANSACTIONS BETWEEN GM AND HUGHES. GM and
Hughes shall operate on the principle that all material commercial
transactions between them shall be based on commercially reasonable terms.

(C) MEANING OF "GM" AND "HUGHES" WITHIN THIS POLICY. For purposes of this
policy, "GM" shall mean General Motors Corporation and its affiliates (other
than Hughes), and "Hughes" shall mean Hughes Electronics Corporation, including
any person controlled by Hughes Electronics Corporation.

(D) ROLE OF CAPITAL STOCK COMMITTEE RELATING TO THIS POLICY. The Capital
Stock Committee of the GM Board shall oversee the implementation of, and shall
have authority to interpret, this policy.

(E) DELEGATION. In administering this policy, the GM Board may, at its
option, delegate its authority, including to the Capital Stock Committee, and
may delegate to members of management the authority to implement any matter
pursuant to this policy.

(F) FIDUCIARY OBLIGATIONS. In making any and all determinations in
connection with this policy, either directly or by appropriate delegation of
authority, the GM Board shall act in its fiduciary capacity and pursuant to
legal guidance concerning its obligations under applicable law.

(G) GM BOARD MAY MAKE FUTURE PROPOSALS TO STOCKHOLDERS FOR RECAPITALIZATION
TRANSACTIONS WHICH WOULD BE ON TERMS DIFFERENT FROM THOSE IN GM'S CURRENT
RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED. Consistent with the terms of
both GM's Restated Certificate of Incorporation, as amended, and Delaware
General Corporation Law, the GM Board may, in the future, propose
recapitalization transactions to GM stockholders on terms different from those
provided for under GM's Restated

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Certificate of Incorporation, as amended. (Such alternative proposals were
utilized by GM's Board of Directors in connection with the split-off of
Electronic Data Systems Corporation in 1996 and the spin-off of the defense
electronics business of Hughes in 1997.)

(H) INTERPRETATION, AMENDMENTS AND MODIFICATIONS OF THIS POLICY. This
policy may at any time and from time to time be modified, rescinded and
interpreted by the GM board, and the GM board may adopt additional or other
policies or make exceptions with respect to the application of this policy in
connection with particular facts and circumstances, all as the GM board may
determine, consistent with its fiduciary duties to General Motors Corporation
and all of its common stockholders, to be in the best interests of General
Motors Corporation and all of its common stockholders, and any such action may
be taken with or without the approval of the stockholders of General Motors
Corporation.

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