SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT
(Date of earliest event reported): June 21, 1999
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GENERAL MOTORS CORPORATION
(Exact Name of Registrant)
Delaware 1-143 38-0572515
(State of Incorporation) (Commission File No.) (IRS Employer
Identification Number)
100 Renaissance Center, Detroit, Michigan 48265-1000
3044 West Grand Boulevard, Detroit, Michigan 48202-3091
(Address of Principal Executive Offices)
(313) 556-5000
(Registrant's telephone number)
#600294 v6.
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Item 5. Other Events
Hughes Electronics Corporation ("Hughes") issued a press
release on June 21, 1999, announcing, among other things, the
formation of a strategic alliance with America Online, Inc. to
market digital entertainment and internet services. A copy of
the press release is attached hereto as Exhibit 99.1.
Hughes also issued a press release on June 21, 1999,
announcing, among other things, the extension of the election
deadline for former holders of United Satellite Broadcasting
Company, Inc. ("USSB") shares to elect cash or shares of GM
Class H common stock in connection with the consummated merger
of USSB into Hughes and a second quarter 1999 charge related
to Hughes' satellite manufacturing operations. A copy of the
press release is attached hereto as Exhibit 99.2.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits
Exhibit No. Exhibit
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99.1 Press Release dated June 21, 1999.
99.2 Press Release dated June 21, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
(Registrant)
By: /s/ Peter R. Bible
-------------------------------
Date: June 21, 1999 Name: Peter R. Bible
Title: Chief Accounting Officer
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EXHIBIT INDEX
Exhibit No. Exhibit
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99.1 Press Release dated June 21, 1999.
99.2 Press Release dated June 21, 1999
EXHIBIT 99.1
AMERICA ONLINE/HUGHES ELECTRONICS CORPORATION
AMERICA ONLINE AND HUGHES ELECTRONICS FORM STRATEGIC ALLIANCE TO MARKET
UNPARALLELED DIGITAL ENTERTAINMENT AND INTERNET SERVICES
Will Accelerate Growth of DIRECTV, AOL TV and Launch
AOL-Plus High-Speed Internet Service via DirecPC Nationwide Satellite System
AOL to Make $1.5 Billion Strategic Investment in Hughes
DULLES, Virg., and EL SEGUNDO, Calif., June 21, 1999 -- America Online,
Inc. (NYSE:AOL), the world's leading interactive services company, and Hughes
Electronics Corporation (NYSE:GMH), the world's leading provider of digital
television entertainment and satellite-based data services, today announced a
strategic alliance to develop and market uniquely integrated digital
entertainment and Internet services nationwide.
The Companies said that this alliance will accelerate subscriber growth
and revenue-per-subscriber for Hughes' DIRECTV(R) television entertainment
service and DirecPC(R) satellite-based broadband Internet delivery system, as
well as extend the reach of America Online's developing AOL TV interactive
television and high-speed AOL-Plus services. America Online and Hughes also plan
to jointly develop new content and interactive services for the U.S. market and
elsewhere in the world.
This new alliance builds on the Companies' earlier agreement to develop
a "combination" set-top receiver to make DIRECTV/AOL TV available to consumers
next year. The Companies will launch an extensive cross-marketing initiative to
package and extend the reach of both AOL TV and DIRECTV.
Hughes and America Online will market the DIRECTV/AOL TV package to
America Online's more than 16 million AOL and CompuServe members in the United
States, as well as to millions more consumers of its Internet brands. Hughes
also will market AOL TV to its more than 7 million current DIRECTV subscribers,
and to millions of potential new subscribers through its extensive network of
retail outlets.
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The Companies will also make the AOL-Plus broadband service available
nationwide via the DirecPC satellite Internet network by early 2000. This
initiative builds on America Online's recently announced partnerships with Bell
Atlantic and SBC Communications to deliver DSL broadband connectivity to AOL
members. The DirecPC network provides broadband download speeds up to 14 times
faster than the standard 28.8 kilobits-per-second analog modem. AOL-Plus members
will be able to transmit information back over standard telephone lines at
speeds as fast as 56.6 kbps.
Hughes Network Systems, a unit of Hughes, provides the DirecPC system
and service, and will design and initially manufacture the combination
DIRECTV/AOL TV set-top receiver.
The alliance will also enhance the development of Hughes'
next-generation satellite system for two-way, broadband connectivity, known as
Spaceway(TM), scheduled to launch in 2002. Hughes previously announced a $1.4
billion investment to design, manufacture and launch the North American system
and accompanying ground infrastructure.
Under the agreement, America Online will make a $1.5 billion strategic
investment in a General Motors equity security, which carries a 6-1/4% coupon
rate, that is automatically convertible into GM Class H common stock (GMH) at a
24 percent premium in three years. GM will immediately invest the $1.5 billion
in a security of Hughes under similar terms where it will be employed to
implement the strategic alliance between AOL and Hughes.
AOL said the investment would be non-dilutive to its earnings.
Over the next three years, Hughes is making a major commitment to
market AOL TV and AOL-Plus, as well as accelerate the growth of DIRECTV and
DirecPC. Among its planned expenditures are:
** More than $500 million for AOL-Plus via DirecPC through both America Online
brands and Hughes retail channels;
** Up to $500 million for DIRECTV, including more than $150 million in marketing
to AOL members;
** Approximately $400 million for the combined DIRECTV/AOL TV service; and
** Approximately $100 million for DirecDuo, which enables subscribers to access
the DIRECTV and DirecPC networks with a single satellite dish.
America Online and Hughes have agreed to explore making broadband
satellite offerings available in Latin America as that market evolves.
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Alliance Advances "AOL Anywhere" and Hughes Internet and Interactive Strategies
Steve Case, Chairman and Chief Executive Officer of America Online,
Inc., said: "Our strategic alliance with Hughes is a major step forward in our
"AOL Anywhere" strategy, as well as a valuable e-commerce opportunity and yet
another addition to our broadband capabilities. It benefits America Online
across all fronts and puts more pieces in place for the next wave of interactive
services. AOL TV and DIRECTV are a winning combination, and we believe that AOL
members and DIRECTV subscribers, as well as other television viewers, will see
it the same way."
Mr. Case added: "We are committed to providing our AOL-Plus high-speed
service over all broadband technologies as they emerge for the mass market
audience -- DSL, cable, DirecPC, and wireless. With this alliance, we are
providing our members with the only broadband connectivity network with a
national footprint. Together with our DSL partnerships, this new Hughes alliance
will help ensure that millions of AOL members across the United States will be
among the first to benefit from convenient and easy-to-use broadband Internet
access."
Mike Smith, Chairman and Chief Executive Officer of Hughes Electronics,
said: "This is an alliance of the #1 brand in interactive services and the #1
brand in digital television entertainment. As a result, Hughes will not only
accelerate its already record-setting DIRECTV subscriber growth, but we will
also attain entirely new revenues from Internet-based service opportunities.
It's another demonstration of Hughes' leadership in digital communications, and
our vision of being the premier global provider of integrated entertainment and
information products and services. We created the high-power digital satellite
television industry five years ago and set a new standard for multi-channel
television entertainment. By joining with America Online in this strategic
relationship, we're making it clear that DIRECTV will remain the market leader."
Mr. Smith added: "Offering AOL-Plus via DirecPC clearly marks Hughes'
commitment to being a leader in the Internet economy. Our technological
leadership allowed us to launch DirecPC to the consumer market in 1997, well
before any of our competitors. As we offer the power of high-speed,
satellite-delivered data services to AOL members, we'll just be scratching the
surface of the major role that satellites can and will play in the broadband
Internet market."
Bob Pittman, President and Chief Operating Officer of America Online,
Inc., said: "This alliance with Hughes demonstrates America Online's continuing
commitment to embracing all mass market technologies that enrich our members'
interactive experiences. AOL TV is a natural enhancement for DIRECTV's
successful service. And the key to our broadband strategy is to offer our
members all the services unique to these higher speeds, in addition to all the
narrowband features, services, and content they now receive. Through this
alliance, along with the partnerships we've forged with telecommunications
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companies, we will now have the ability to offer best-of-breed services ranging
from long distance telephone and broadband access to interactive TV and dial-up
connectivity at attractive package prices to our members -- making AOL even more
central to their daily lives."
About America Online
Founded in 1985, America Online, Inc., based in Dulles, Virginia, is
the world's leader in interactive services, Web brands, Internet technologies,
and e-commerce services. America Online, Inc. operates: two worldwide Internet
services, America Online, with more than 17 million members, and CompuServe,
with approximately 2 million members; several leading Internet brands including
ICQ, AOL Instant Messenger and Digital City, Inc.; the Netscape Netcenter and
AOL.COM portals; the Netscape Navigator and Communicator browsers; and AOL
MovieFone, the nation's # 1 movie listing guide and ticketing service. Through
its strategic alliance with Sun Microsystems, the Company develops and offers
easy-to-deploy, end-to-end e-commerce and enterprise solutions for companies
operating in the Net Economy.
About Hughes Electronics Corporation
Hughes Electronics Corporation is the world's leading provider of
digital television entertainment, and satellite and wireless systems and
services. The Company's DIRECTV, Inc. unit is the United States' leading digital
television entertainment service, with more than 7.3 million subscribers.
DIRECTV provides more than 210 channels of sports, entertainment, news, music
and family programming, including exclusive and original programming. Hughes
also holds major interests in DIRECTV businesses in Latin America and Japan.
Hughes owns 81 percent of PanAmSat Corporation (NASDAQ:SPOT), the world's
leading commercial provider of global satellite-based communications services.
Two other units, Hughes Space and Communications Company and Hughes Network
Systems (HNS), are leading providers of satellite systems, and ground systems
and services, respectively. HNS is the world leader in satellite-based data
communications, and provides the DirecPC system and service. DIRECTV is a
trademark of DIRECTV, Inc. DirecPC is a trademark of Hughes Network Systems. The
earnings of Hughes Electronics are used to calculate the earnings per share
attributable to GMH (NYSE symbol) common stock. Visit Hughes on the World Wide
Web at www.hughes.com.
# # #
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AOL Media Contact: Jim Whitney (703) 265-2896
AOL INVESTOR RELATIONS: MICHAEL GROSS (703) 265-1271
HUGHES MEDIA CONTACT: RICHARD DORE (310) 662-9670
HUGHES INVESTOR RELATIONS: (310) 662-9688
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EXHIBIT 99.2
FOR IMMEDIATE RELEASE
MEDIA CONTACT: RICHARD DORE, 310-662-9670
INVESTOR RELATIONS: 310-662-9688
HUGHES EXTENDS ELECTION PERIOD
FOR FORMER USSB SHAREHOLDERS
EL SEGUNDO, Calif., June 21, 1999 - Hughes Electronics Corporation
announced today that, in connection with the recently completed merger of United
States Satellite Broadcasting Company, Inc. (USSB) into Hughes, it is extending
until 9 a.m. EDT, on Monday, June 28, 1999 the time during which former holders
of USSB shares may elect to receive cash or shares of General Motors Class H
common stock as payment for their USSB shares.
The extension provides USSB shareholders with the opportunity to
consider the potential impact of today's separately announced $1.5 billion
investment by America Online, Inc. (AOL) to form a strategic alliance with
Hughes. In addition, Hughes announced a second quarter 1999 charge related to
Hughes' satellite manufacturing operations.
The extension of the election period will enable former USSB
shareholders to factor this information into their decision as to whether to
elect to receive .3199 of a share of GM Class H common stock in lieu of $18.00
of cash as the consideration for each share of USSB that they formerly owned.
Hughes does not anticipate that this extension of the election deadline
will materially delay the actual distribution of cash or certificates beyond the
previously announced distribution date of July 6. Except for the extension of
the election deadline, none of the terms of the election which former USSB
shareholders may make have been changed and no change has been made in the
consideration to be paid to former shareholders of USSB.
<PAGE>
The strategic alliance with AOL will accelerate subscriber growth and
revenue-per-subscriber for Hughes' DIRECTV(R) television entertainment service
and DirecPC(R) satellite-based broadband Internet delivery system, as well as
help develop and extend the reach of America Online's AOL TV interactive
television and AOL-Plus high-speed services. Hughes and AOL also plan to jointly
develop new content and interactive services for the U.S. market and elsewhere
in the world.
The charge at Hughes Space and Communications Company, the satellite
manufacturing unit of Hughes, is primarily due to increased development costs
and schedule delays related to several new product lines. After required
intercompany eliminations, Hughes expects to report a second quarter pre-tax
charge to earnings of between $100 million and $130 million ($65 million to $85
million after tax). This is the principal contributor to Hughes' anticipated
loss for the quarter of 20 to 25 cents per share, excluding GM purchase
accounting adjustments.
During the extension period for exercise of the USSB election process,
former USSB shareholders may revoke an election previously made and make a new
one, or make an initial election if they have not already done so in the manner
provided in the letter of transmittal previously sent to them. A revocation of
an earlier election must be made in writing and received by Boston Equiserve by
5:00 p.m. EDT, on June 27, 1999, the close of business on the day prior to the
extended deadline of June 28, 1999. No further notice is required from former
USSB shareholders that have already made an election and do not wish to change
that election.
A letter containing additional details regarding the extension and the
election will also be mailed as soon as practicable to former USSB shareholders
who are entitled to make the election. Questions concerning the extension or
exercise of the election can be addressed to Hughes' transfer agent, Boston
Equiserve at 1-800-331-9922.
Separately, due to AOL's $1.5 billion strategic investment, General
Motors Corporation (GM) and Hughes have decided not to proceed with the
previously planned public offering of $500 million of Class H common stock nor
GM's $500 million equity investment in Hughes.
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