As filed with the Securities and Exchange Commission on March 6, 2000.
Registration No. 333-xxxxx
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
--------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
GENERAL MOTORS CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 38-0572515
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
300 Renaissance Center, Detroit, Michigan 48265-3000
- -------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
GENERAL MOTORS
DEFERRED COMPENSATION PLAN
FOR EXECUTIVE EMPLOYEES
-------------------------------
(Full title of the plan)
PETER R. BIBLE, CHIEF ACCOUNTING OFFICER
General Motors Corporation
300 Renaissance Center, Detroit, Michigan 48265-3000
(313) 556-5000
--------------------------------------------------------
(Name, address and telephone number, including area code,
of agent for service)
GENERAL MOTORS
CALCULATION OF REGISTRATION FEE
========================================================================
Proposed Proposed
maximum maximum
Amount offering aggregate Amount of
Title of securities to be price per offering registration
to be registered(1) registered obligation price (2) fee
- -------------------- ------------ ---------- ------------ ------------
Deferred Compensation
Obligations $110,000,000 100% $110,000,000 $29,040.00
=============================================================================
(1) The Deferred Compensation Obligations are unsecured obligations of General
Motors Corporation to pay deferred compensation in the future in accordance
with the terms of the Deferred Compensation Plan for the Executive
Employees.
(2) Estimated solely for the purpose of determining the registration fee.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed below are incorporated by reference in this
registration statement:
(a)(1) The Current Reports on Form 8-K dated April 12, 1999, filed by
General Motors Corporation (hereinafter sometimes referred to as "General
Motors" or the "Corporation") with the Securities and Exchange Commission
(hereinafter referred to as the "Commission") pursuant to Section 13(a) of the
Securities Exchange Act of 1934, (hereinafter referred to as the "1934 Act");
and (2) The Annual Report on Form 10-K for the year ended December 31, 1998,
(hereinafter referred to as the "1998 Form 10-K") filed by the Corporation with
the Commission pursuant to Section 13(a) of the 1934 Act, except for Item 6,
Item 7, Item 8, Item 14(a)2, and Item 14 Exhibit 12; and
(b)(1) The Quarterly Reports on Form 10-Q for the quarters ended March
31, 1999, June 30, 1999, and September 30, 1999 filed by the Corporation
pursuant to Section 13 of the 1934 Act; and (2) The Current Reports on Form 8-K
dated January 14, 1999, January 20, 1999, January 22, 1999 (2), January 27,
1999, April 5, 1999, April 9, 1999, April 12, 1999 (3), April 14, 1999, April
28, 1999, May 12, 1999, May 25, 1999, May 28, 1999, June 21, 1999, June 24,
1999, July 9, 1999, July 19, 1999, August 2, 1999, October 4, 1999, October 13,
1999, December 10, 1999, January 13, 2000, January 20, 2000, February 1, 2000,
February 25, 2000, and March 1, 2000 were filed by the Corporation pursuant to
Section 13(a) of the 1934 Act.
All documents subsequently filed by the Corporation pursuant to
Sections 13(a), 13(c), 14, and 15(d) of the 1934 Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this registration statement and to be a part
thereof from the date of filing of such documents.
Item 5. Interests of Named Experts and Counsel.
The legality of the Deferred Compensation Obligations offered hereby
have been passed upon by Martin I. Darvick, Attorney, Legal Staff of the
Corporation. Mr. Darvick has no interest in the Deferred Compensation
Obligations for the General Motors Deferred Compensation Plan for Executive
Employees.
II-1
<PAGE>
PART II (continued)
Item 6. Indemnification of Directors and Officers.
Under Section 145 of the Delaware Corporation Law, the Corporation is
empowered to indemnify its directors and officers in the circumstances therein
provided.
The Corporation's Restated Certificate of Incorporation, as amended,
provides that no director shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174, or any successor provision thereto, of the Delaware Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit.
Under Article Fifth of its By-Laws, the Corporation shall indemnify and
advance expenses to every director and officer (and to such person's heirs,
executors, administrators, or other legal representatives) in the manner and to
the full extent permitted by applicable law as it presently exists, or may
hereafter be amended, against any and all amounts (including judgments, fines,
payments in settlement, attorneys' fees, and other expenses) reasonably incurred
by or on behalf of such person in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative ("a proceeding"), in which such director or officer was or is
made or is threatened to be made a party or is otherwise involved by reason of
the fact that such person is or was a director or officer of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee, fiduciary, or member of any other corporation, partnership, joint
venture, trust, organization, or other enterprise. The Corporation shall not be
required to indemnify a person in connection with a proceeding initiated by such
person if the proceeding was not authorized by the Board of Directors of the
Corporation. The Corporation shall pay the expenses of directors and officers
incurred in defending any proceeding in advance of its final disposition
("advancement of expenses"); provided, however, that the payment of expenses
incurred by a director or officer in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the director or
officer to repay all amounts advanced if it should be ultimately determined that
the director or officer is not entitled to be indemnified under Article Fifth of
the By-Laws or otherwise. If a claim for indemnification or advancement of
expenses by an officer or director under Article Fifth of the By-Laws is not
paid in full within ninety days after a written claim therefor has been received
by the Corporation, the claimant may file suit to recover the unpaid amount of
such claim and, if successful in whole or in part, shall be entitled to be paid
the expense of prosecuting such claim. In any such action the Corporation shall
have the burden of proving that the claimant was not entitled to the requested
indemnification or advancement of expenses under applicable law. The rights
conferred on any person by Article Fifth of the By-Laws shall not be exclusive
of any other rights which such person may have or hereafter acquire under any
statute, provision of the Corporation's Restated Certificate of Incorporation or
By-Laws, agreement, vote of stockholders or disinterested directors or
otherwise.
The Corporation is insured against liabilities which it may incur by
reason of Article Fifth of its By-Laws. In addition, directors and officers are
insured, at the Corporation's expense, against some liabilities which might
arise out of their employment and not be subject to indemnification under
Article Fifth of the By-Laws.
II-2
<PAGE>
PART II (continued)
Item 6. Indemnification of Directors and Officers (concluded).
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act"), is permitted to directors and officers of
the Corporation pursuant to the abovementioned provisions, or otherwise, the
Corporation has been informed that in the opinion of the Commission such
indemnification is against public policy, as expressed in said Act, and is
therefore unenforceable.
Pursuant to a resolution adopted by the Board of Directors on December
1, 1975, the Corporation to the fullest extent permissible under law will
indemnify, and has purchased insurance on behalf of, directors or officers of
the Corporation, or any of them, who incur or are threatened with personal
liability, including expenses, under the Employee Retirement Income Security Act
of 1974, as amended, or any amendatory or comparable legislation or regulation
thereunder.
Item 8. Exhibits.
Exhibit Number Page No.
- -------------- --------
(4)(a) General Motors Corporation Restated Certificate of
Incorporation, as amended, filed as Exhibit 3(i) to the
Current Report on Form 8-K of General Motors dated
June 24, 1999, and Amendment to Article Fourth of
the Certificate of Incorporation - Division III -
Preference Stock, by reason of the Certificates of
Designations filed with the Secretary of State of the
State of Delaware on September 14, 1987 and the
Certificate of Decrease filed with the Secretary of State
of the State of Delaware on September 29, 1987
(pertaining to the Six Series of Preference Stock
contributed to the General Motors pension trusts),
incorporated by reference to Exhibit 19 to the Quarterly
Report on Form 10-Q of General Motors for the quarter
ended June 30, 1990 in the Form SE of General Motors
dated August 6, 1990; as further amended by the
Certificate of Designations filed with the Secretary
of State of the State of Delaware on June 28, 1991
(pertaining to Series A Conversion Preference Stock),
incorporated by reference to Exhibit 4(a) to Form
S-8 Registration Statement No. 33-43744 in the Form SE
of General Motors dated November 1, 1991; as further amended
by the Certificate of Designations filed with the Secretary
of State of the State of Delaware on December 9, 1991
(pertaining to Series B 9-1/8% Preference Stock),
incorporated by reference to Exhibit 4(a) to Form S-3
Registration Statement No. 33-45216 in the Form SE of
General Motors dated January 27, 1992; as further amended
by the Certificate of Designations filed with the Secretary
of State of the State of Delaware on February 14, 1992
(pertaining to Series C Convertible Preference Stock),
incorporated by reference to Exhibit 3(a) to the Annual
Report on Form 10-K of General Motors for the year ended
December 31, 1991 in the Form SE of General Motors dated
March 20, 1992; as further amended by the Certificate
of Designations filed with the Secretary of State of the
State of Delaware on July 15, 1992 (pertaining to
Series D 7.92% Preference Stock), incorporated by reference
to Exhibit 3(a)(2) to the Quarterly Report on Form 10-Q of
General Motors for the quarter ended June 30, 1992 in the
Form SE of General Motors dated August 10, 1992; as
further amended by the Certificate of Designations filed
with the Secretary of State of the State of Delaware on
II-3
PART II (continued)
Exhibit Number Page No.
- -------------- --------
Item 8. Exhibits (concluded).
(4)(a) December 15, 1992 (pertaining to Series G 9.12%
Preference Stock), incorporated by reference to Exhibit 4(a)
to Form S-3 Registration Statement No. 33-49309 in the
Form SE of General Motors dated January 25, 1993; and as
further amended by the Certificate of Designations filed
with the Secretary of State of the State of Delaware on
June 24, 1999, filed as Exhibit 4(a) to this Registration
Statement on March 6, 2000. ................................ N/A
(b) By-Laws as amended, filed as Exhibit 3(ii) to the Current
Report on Form 8-K of General Motors dated August 2, 1999. . N/A
(5)(a) Opinion and consent of Martin I. Darvick, Attorney,
Legal Staff of General Motors, in respect of the legality of
the securities to be registered hereunder................... II-8
(23)(a) Consent of Independent Auditors - Deloitte & Touche LLP..... II-9
(b) Consent of Martin I. Darvick, Attorney, Legal Staff of
General Motors, included in Exhibit 5(a) above.............. N/A
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes: (1) to file, during any period
in which offers or sales are being made, a post-effective amendment to this
registration statement to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement; (2) that,
for the purpose of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) of the 1934 Act is incorporated by reference in
the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
PART II (concluded)
Item 9. Undertakings (concluded).
(h) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers, and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer,
or controlling person of the registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-5
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Detroit, State of Michigan, on March 6, 2000.
GENERAL MOTORS CORPORATION
--------------------------
(Registrant)
By
/s/JOHN F. SMITH, JR.
----------------------------
(John F. Smith, Jr., Chairman
of the Board of Directors, and
Chief Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on March 6, 2000 by the following persons
in the capacities indicated.
Signature Title
--------- -----
/S/JOHN F. SMITH, JR. Chairman of the Board of Directors,
- ------------------------------ Chief Executive Officer
(John F. Smith, Jr.)
/S/HARRY J. PEARCE Vice Chairman of the Board
- ------------------------------ of Directors
(Harry J. Pearce)
/s/G. RICHARD WAGONER, JR. Chief Operating Officer
- ------------------------------ and President
(G. Richard Wagoner, Jr.)
/s/J. MICHAEL LOSH Executive Vice President and)
- ------------------------------ Chief Financial Officer )
(J. Michael Losh) )
)Principal
)Financial
/s/ERIC A. FELDSTEIN Vice President and )Officers
- ------------------------------ Treasurer )
(Eric A. Feldstein) )
/s/WALLACE W. CREEK Comptroller )
- ------------------------------ )
(Wallace W. Creek) )Principal
)Accounting
)Officers
/s/PETER R. BIBLE Chief Accounting Officer )
- ------------------------------ )
(Peter R. Bible) )
II-6
<PAGE>
SIGNATURES (continued)
Signature Title
--------- -----
/s/PERCY BARNEVIK Director
- --------------------------------
(Percy Barnevik)
/s/JOHN H. BRYAN Director
- --------------------------------
(John H. Bryan)
/s/THOMAS E. EVERHART Director
- --------------------------------
(Thomas E. Everhart)
/s/CHARLES T. FISHER, III Director
- --------------------------------
(Charles T. Fisher, III)
/s/GEORGE M.C. FISHER Director
- --------------------------------
(George M.C. Fisher)
/s/NOBUYUKI IDEI Director
- --------------------------------
(Nobuyuki Idei
/s/ KAREN KATEN Director
- --------------------------------
(Karen Katen)
/s/J. WILLARD MARRIOTT, JR. Director
- --------------------------------
(J. Willard Marriott, Jr.)
/s/ANN D. MCLAUGHLIN Director
- --------------------------------
(Ann D. McLaughlin)
/S/ECKHARD PFEIFFER Director
- --------------------------------
(Eckhard Pfeiffer)
/s/JOHN G. SMALE Director
- --------------------------------
(John G. Smale)
/s/LOUIS W. SULLIVAN Director
- --------------------------------
(Louis W. Sullivan)
/s/DENNIS WEATHERSTONE Director
- --------------------------------
(Dennis Weatherstone)
II-7
EXHIBIT 5(a)
March 6, 2000
General Motors Corporation
767 Fifth Avenue
New York, New York 10153-0075
Gentlemen:
As Attorney, Legal Staff of General Motors Corporation (GM), I am
familiar with the Registration Statement, dated March 6, 2000, being filed by GM
with the Securities and Exchange Commission, relating to $110,000,000.00 of
Deferred Compensation Obligations, to be registered for the General Motors
Deferred Compensation Plan for Executive Employees (the "Plan").
It is my opinion that the Deferred Compensation Obligations to be
registered, when sold or issued hereafter in accordance with the provisions of
said Plan, in accordance with Delaware law and upon payment of the consideration
for such obligations as contemplated by said Plan, will be validly and legally
binding obligations of the Corporation in accordance with and subject to the
terms of the Plan.
I hereby consent to the use of this opinion as Exhibit 5(a) of the
abovementioned Registration Statement, the use of my name in such Registration
Statement, and the use of my name in the related prospectus under the heading
"Legal Opinions".
Very truly yours,
/s/MARTIN I. DARVICK
Martin I. Darvick
Attorney, Legal Staff
II-8
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
GENERAL MOTORS CORPORATION:
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of General Motors Corporation of:
- - our report dated April 12, 1999 appearing in the Current Report on Form
8-K of General Motors Corporation dated April 12, 1999;
- - our report dated January 20, 1999 (March 1, 1999 as to Note 19)
appearing on page IV-16 in the Annual Report on Form 10-K of General
Motors Corporation for the year ended December 31, 1998.
/s/DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Detroit, Michigan
March 6, 2000
II-9
EXHIBIT 4(a)
CERTIFICATE OF DESIGNATIONS
OF
SERIES H 6.25% AUTOMATICALLY CONVERTIBLE
PREFERENCE STOCK
OF
GENERAL MOTORS CORPORATION
PURSUANT TO SECTION 151
OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
General Motors Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY that, in accordance with the provisions of Section 151 of such
law and pursuant to Article Fourth of the Restated Certificate of Incorporation,
as amended, of the Corporation (the "Certificate of Incorporation"), the Board
of Directors (the "Board of Directors") of the Corporation is authorized to
issue Preference Stock, par value $0.10 per share, of the Corporation in one or
more series and has authorized the series of Preference Stock hereinafter
provided for and authorized a special committee of the Board of Directors to
adopt, and said committee has adopted, the following resolution creating a
series of 2,669,633 shares of Preference Stock, par value $0.10 per share,
stated value $561.875 per share, designated as Series H 6.25% Automatically
Convertible Preference Stock, as follows:
RESOLVED, that, pursuant to the authority vested in the Board of Directors
of the Corporation in accordance with the provisions of its Certificate of
Incorporation, a series of Preference Stock of the Corporation be, and hereby
is, created and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional or other special rights of the
shares of such series, and the qualifications, limitations or restrictions
thereon, are as follows:
Section 1. Designation. The series of Preference Stock established hereby
shall be designated as "Series H 6.25% Automatically Convertible Preference
Stock" (the shares of such series are hereinafter referred to as the "Series H
Preference Shares") and the authorized number of Series H Preference Shares
shall be 2,669,633.
Section 2. Ranking. In respect of the payment of dividends or the making
of other distributions in respect of the Series H Preference Shares, including,
without limitation, upon a Liquidation (as defined in Section 4 below), the
Series H Preference Shares shall rank junior to the Preferred Stock, on a parity
with the Series D 7.92% Preference Stock and the Series G 9.12% Preference Stock
of the Corporation, and junior to any other series of Preference Stock hereafter
issued unless and only to the extent that it shall be stated in the resolution
or resolutions providing for the issuance or amendment of such series of
Preference Stock that the Series H Preference Shares shall rank senior to or on
a parity with such series of Preference Stock.
Section 3. Dividends.
(i) Holders of outstanding Series H Preference Shares will be entitled to
receive, subject to the rights of holders of Preferred Stock of the Corporation
and of holders of any series of Preference Stock or other class of stock of the
Corporation or series thereof ranking senior to the Series H Preference Shares
in respect of dividends and distributions, when and as declared by the Board of
Directors out of funds legally available therefor, cumulative cash dividends at
the per share annual rate of 6.25% of the per share stated value (equivalent to
$35.1172 per annum per Series H Preference Share) ("Preferential Dividends"),
payable quarterly for each of the quarters ending March, June, September and
December of each year, payable in arrears on the first day that is not a legal
holiday of each succeeding May, August, November and February, respectively
(each such date being hereinafter referred to as a "Preferential Dividend
Payment Date"). The first dividend will be paid on August 2, 1999 with respect
to the period commencing on June 24, 1999 and ending on June 30, 1999. The full
amount of dividends payable on each Series H Preference Share for each full
quarterly period thereafter shall be computed by dividing the annual dividend
rate by four. Each such dividend will be payable to holders of record as they
appear on the stock books of the Corporation on such record dates, not less than
10 nor more than 50 days preceding the payment dates thereof, as shall be fixed
by the Board of Directors (each, a "Dividend Record Date"). Dividends on the
Series H Preference Shares shall accrue on a daily basis commencing on the date
of issuance of the Series H Preference Shares and accrued dividends for each
quarterly dividend period shall accumulate, to the extent not paid, on the
Preferential Dividend Payment Date first following the quarter for which they
accrue. Preferential Dividends shall accrue whether or not the Corporation shall
have earnings, whether or not there shall be funds legally available for the
payment of such dividends and whether or not such dividends are declared.
Accumulated dividends shall not bear interest. Dividends (or cash amounts equal
to accrued and unpaid dividends) payable on the Series H Preference Shares for
any period longer or shorter than a quarterly dividend period shall be computed
on the basis of a 360-day year of twelve 30-day months.
(ii) So long as any Series H Preference Shares shall remain outstanding, no
dividend (other than a dividend payable in shares of common stock of any class
of the Corporation) shall be declared, nor shall the Corporation make any other
distribution or payment or set aside anything of value for distribution or
payment on, or redeem, repurchase or otherwise acquire any shares of, the common
stock of any class of the Corporation or any other class of stock or series
thereof ranking junior to the Series H Preference Shares in the payment of
dividends (other than a redemption or purchase of shares of any class of common
stock of the Corporation made for purposes of an employee incentive or benefit
plan of the Corporation or any of its subsidiaries) unless the full Preferential
Dividends, if any, accumulated on all outstanding shares of the Series H
Preference Shares through all past Preferential Dividend Payment Dates shall
have been paid. No dividend shall be declared on any share or shares of any
class of stock of the Corporation or series thereof ranking on a parity with the
Series H Preference Shares in respect of payment of dividends for any prior
dividend payment period of said parity stock unless there shall have been
declared on all shares then outstanding of the Series H Preference Shares, for
all dividend payment periods of the Series H Preference Shares terminating with
or before such prior dividend payment period of said parity stock, like
proportionate dividends determined ratably in proportion to the respective
Preferential Dividends accumulated to date on all outstanding Series H
Preference Shares and the preferential dividends accumulated on all outstanding
shares of said parity stock.
Section 4. Liquidation Rights.
(i) In the event of any dissolution, liquidation or winding up of
the affairs of the Corporation, whether voluntary or involuntary (collectively,
a "Liquidation"), after payment or provision for payment has been made of the
debts and other liabilities of the Corporation and payment or provision for
payment has been made for all amounts required to be paid in respect of all
outstanding shares of Preferred Stock and any series of Preference Stock or
other class of stock of the Corporation or series thereof ranking senior to the
Series H Preference Shares, the holders of Series H Preference Shares shall be
entitled to receive, out of the net assets of the Corporation, for each share
$561.875 plus an amount equal to all Preferential Dividends (whether or not
declared) accrued and unpaid thereon (including dividends accumulated and
unpaid) prior to the date fixed for distribution, and no more. After such amount
is paid in full, no further distributions or payments shall be made in respect
of Series H Preference Shares, such Series H Preference Shares shall no longer
be deemed to be outstanding or be entitled to any other powers, preferences or
rights, including voting rights, and such Series H Preference Shares shall be
surrendered for cancellation to the Corporation.
(ii) The full amount payable to the holders of Series H Preference
Shares shall be paid before any distribution shall be made to the holders of any
class of common stock of the Corporation or any other class of stock or series
thereof ranking junior to the Series H Preference Shares with respect to the
distribution of assets upon a Liquidation. No payment on account of any
Liquidation shall be made to the holders of any class or series of stock ranking
on a parity with the Series H Preference Shares in respect of the distribution
of assets upon Liquidation unless there shall likewise be paid at the same time
to the holders of the Series H Preference Shares like proportionate amounts
determined ratably in proportion to the full amounts to which the holders of all
outstanding Series H Preference Shares and the holders of all outstanding shares
of such parity stock are respectively entitled with respect to such
distribution.
(iii) If the assets distributable to the holders of Series H Preference
Shares on any Liquidation shall be insufficient to permit the payment to such
holders of the full amounts to which they are entitled in such circumstances,
then such assets or the proceeds thereof shall be distributed among such holders
ratably in proportion to the sums which would be payable to such holders if all
such sums were paid in full.
(iv) Neither the merger nor consolidation of the Corporation into or with
any other corporation, nor the merger or consolidation of any other corporation
into or with the Corporation, nor a sale, transfer or lease of all or any part
of the assets of the Corporation, shall be deemed to be a Liquidation for
purposes of this Section 4.
(v) Written notice of any Liquidation, stating the payment date or dates
when and the place or places where the amounts distributable in such
circumstances shall be payable, shall be given by first class mail, postage
prepaid, not less than thirty (30) days prior to any payment date stated
therein, to the holders of record of the Series H Preference Shares at their
respective addresses as the same shall appear on the books of the Corporation or
any transfer agent for the Series H Preference Shares.
Section 5. Voting Rights.
(i) Except as otherwise provided by paragraphs (ii) and (iii) of
this Section 5 or as required by law, the holders of Series H Preference Shares
shall not be entitled to vote on any matter on which the holders of any voting
securities of the Corporation shall be entitled to vote.
(ii) So long as any Series H Preference Shares are outstanding, the
Corporation shall not amend, alter or repeal any of the provisions of its
Certificate of Incorporation or this Certificate so as to alter or change the
powers, preferences or special rights of the Series H Preference Shares so as to
affect them adversely without the consent of the holders of at least two-thirds
of the total number of outstanding Series H Preference Shares, given in person
or by proxy, by vote at a meeting called for that purpose or by written consent
as permitted by law and the Certificate of Incorporation and By-Laws of the
Corporation. For purposes of this paragraph, any such amendment or any
resolution or action of the Board of Directors which would create or issue any
series of Preference Stock out of the authorized shares of Preference Stock, or
which would authorize, create or issue any shares of stock (whether or not
already authorized) ranking junior to, on a parity with or senior to the Series
H Preference Shares with respect to payment of dividends and distributions and
distributions upon any Liquidation, shall not be considered to affect adversely
the rights of the outstanding Series H Preference Shares.
(iii) In the event that the Corporation shall have failed to declare
and pay or set apart for payment in full the Preferential Dividends accumulated
on the outstanding Series H Preference Shares for any six quarterly dividend
payment periods, whether or not consecutive, and all such accumulated
preferential dividends remain unpaid (a "Preferential Dividend Default"), the
number of directors of the Corporation shall be increased by two and the holders
of outstanding Series H Preference Shares, voting together as a class with all
other series of Preference Stock ranking junior to or on a parity with the
Series H Preference Shares with respect to dividends and then entitled to vote
on the election of such directors (including, without limitation, the Series D
7.92% Preference Stock of the Corporation and the Series G 9.12% Preference
Stock of the Corporation), shall be entitled to elect such two additional
directors until the full dividends accumulated on all outstanding Series H
Preference Shares have been declared and paid or set apart for payment. Upon the
occurrence of a Preferential Dividend Default, the Board of Directors of the
Corporation shall within a reasonable period call a special meeting of the
holders of Series H Preference Shares and all other holders of a series of
Preference Stock ranking junior to or on a parity with the Series H Preference
Shares with respect to dividends who are then entitled to participate in the
election of such directors for the purpose of electing the additional directors
provided by the foregoing provisions; provided that, in lieu of holding such
meeting, the holders of record of a majority of the outstanding Series H
Preference Shares and all other series of Preference Stock ranking junior to or
on a parity with the Series H Preference Shares with respect to the payment of
dividends who are then entitled to participate in the election of such directors
may, by action taken by written consent as permitted by law and the
Corporation's Certificate of Incorporation and By-laws, elect such additional
directors. If and when all accumulated dividends on the Series H Preference
Shares have been declared and paid or set aside for payment in full, the holders
of Series H Preference Shares shall be divested of the special voting rights
provided by this paragraph, subject to revesting in the event of each and every
subsequent Preferential Dividend Default. Upon termination of such special
voting rights attributable to all holders of Series H Preference Shares and all
other series of Preference Stock ranking junior to or on a parity with the
Series H Preference Shares with respect to the payment of dividends, the term of
office of each director elected by the holders of Series H Preference Shares and
such junior or parity stock (hereinafter referred to as a "Preference Stock
Director") pursuant to such special voting rights shall forthwith terminate and
the number of directors constituting the entire Board of Directors shall be
reduced by the number of Preference Stock Directors. Any Preference Stock
Director may be removed by, and shall not be removed otherwise than by, the vote
of the holders of record of a majority of the outstanding Series H Preference
Shares and all other series of Preference Stock ranking junior to or on a parity
with the Series H Preference Shares with respect to the payment of dividends who
were entitled to participate in such Preference Stock Director's election,
voting as a separate class, at a meeting called for such purpose or by written
consent as permitted by law and the Certificate of Incorporation and By-laws of
the Corporation. So long as a Preferential Dividend Default shall continue, any
vacancy in the office of a Preference Stock Director may be filled by written
consent of the Preference Stock Director remaining in office or, if none remains
in office, by vote of the holders of record of a majority of the outstanding
Series H Preference Shares and all other series of Preference Stock ranking
junior to or on a parity with the Series H Preference Shares with respect to the
payment of dividends who are then entitled to participate in the election of
such Preference Stock Directors as provided above. Holders of Series H
Preference Shares shall not, as such stockholders, be entitled to vote on the
election or removal of directors, other than Preference Stock Directors for so
long as a Preferential Dividend Default shall continue, but shall not be
divested of any other voting rights provided to such stockholders by law with
respect to any other matter to be acted upon by the stockholders of the
Corporation.
Section 6. Conversion.
(i) Mandatory Conversion. Subject to Sections 6(xii) and 7, unless
earlier converted or redeemed or otherwise cancelled pursuant to this
Certificate, on June 24, 2002 (the "Mandatory Conversion Date"), each
outstanding Series H Preference Share shall convert automatically (the
"Mandatory Conversion") into (a) shares of Class H Common Stock, par value $0.10
per share, of the Corporation ("Class H Common Stock") at the Exchange Rate (as
defined in Section 13) in effect on the Mandatory Conversion Date and (b) the
right to receive, out of funds legally available therefor, an amount in cash
equal to all accrued and unpaid dividends on such Series H Preference Share to
(but not including) the Mandatory Conversion Date, whether or not earned or
declared. As of the open of business on the Mandatory Conversion Date, dividends
on the Series H Preference Shares shall cease to accrue and the Series H
Preference Shares shall cease to be outstanding. The Corporation shall make such
arrangements as it deems appropriate for the issuance of certificates
representing, or other evidence of ownership of, shares of Class H Common Stock,
and for the payment of cash in respect of accrued and unpaid dividends on the
Series H Preference Shares, if any, and cash in lieu of fractional shares of
Class H Common Stock, if any, in exchange for and contingent upon surrender of
certificates representing the Series H Preference Shares, and the Corporation
may defer the payment of dividends on such shares of Class H Common Stock and
the voting thereof until, and make such payment and voting contingent upon, the
surrender of such certificates representing the Series H Preference Shares,
provided that the Corporation shall give the holders of the Series H Preference
Shares such notice of any such actions as the Corporation deems appropriate and
upon such surrender such holders shall be entitled to receive such dividends
declared and paid on such shares of Class H Common Stock subsequent to the
Mandatory Conversion Date. Amounts payable in cash in respect of the Series H
Preference Shares or in respect of such shares of Class H Common Stock shall not
bear interest.
(ii) Optional Conversion. Subject to Sections 6(xii) and 7, all or
any portion of the Series H Preference Shares are convertible, at the option of
the holder thereof (an "Optional Conversion"), at any time prior to the earlier
to occur of (A) the effective date of an amendment to or a change (including an
announced prospective change that remains legally viable) in a law or
interpretation thereof referred to in the definition of Tax Event or (B) the
Mandatory Conversion Date, into shares of Class H Common Stock at a rate of
8.0645 shares of Class H Common Stock for each Series H Preference Share (the
"Optional Conversion Rate"), subject to adjustment as set forth in Sections
6(iii) and (iv) below.
An Optional Conversion of Series H Preference Shares may be effected
by delivering certificates evidencing such shares, together with written notice
of conversion and a proper assignment of such certificates to the Corporation or
in blank to the office of the Secretary of the Corporation and otherwise in
accordance with any optional conversion procedures established by the
Corporation. Subject to Section 6(xii), each Optional Conversion shall be deemed
to have been effected immediately prior to the close of business on the date on
which the foregoing requirements shall have been satisfied; provided that an
Optional Conversion shall not be effective if the effective date or proposed
effective date of an amendment to or change (including an announced prospective
change) that remains legally viable in a law or the interpretation thereof
referred to in the definition of Tax Event shall have occurred on or prior to
the date of such Optional Conversion. The Optional Conversion shall be at the
Optional Conversion Rate in effect at such time and on such date. Upon the
effectiveness of an Optional Conversion, the Series H Preference Shares so
converted shall no longer be deemed to be outstanding.
Holders of Series H Preference Shares at the close of business on a
Dividend Record Date shall be entitled to receive the dividend payable on such
shares on the corresponding Dividend Payment Date notwithstanding the Optional
Conversion of such shares following such Dividend Record Rate and prior to such
Dividend Payment Date. Except as provided above, upon any Optional Conversion of
Series H Preference Shares, the Corporation shall make no payment or allowance
for accrued and unpaid Preferential Dividends, whether or not in arrears, on
such Series H Preference Shares as to which Optional Conversion has been
effected; provided, however, that in connection with an Optional Conversion
effected in accordance with Section 6(iv)(c), the holders of Series H Preference
Shares converted into Class H Common Stock pursuant to such Optional Conversion
shall be entitled to receive payment for accrued and unpaid Preferential
Dividends, whether or not in arrears, on such Series H Preference Shares as to
which such Optional Conversion has been effected to, but not including, the
effective date of such Optional Conversion.
(iii) Certain Adjustments. The terms of the Series H Preference
Shares, including without limitation the Exchange Rate and the Optional
Conversion Rate, shall be subject to adjustment from time to time as provided
below in this Section 6(iii).
(a) If the Corporation shall, after the date hereof, pay or make a
dividend or other distribution with respect to its Class H Common
Stock in shares of Class H Common Stock (including by way of
reclassification of any shares of its Class H Common Stock), the
Exchange Rate and the Optional Conversion Rate in effect as of
the open of business on the day following the date on which such
dividend is paid or other distribution is made, as applicable,
shall each be increased by multiplying such Exchange Rate and
Optional Conversion Rate by a fraction of which the numerator
shall be the sum of the number of shares of Class H Common Stock
outstanding at the time and date fixed for the determination of
stockholders entitled to receive such dividend or other
distribution, plus the total number of shares of Class H Common
Stock constituting such dividend or other distribution, and of
which the denominator shall be the number of shares of Class H
Common Stock outstanding at the time and date fixed for such
determination, such increase to become effective immediately
after the open of business on the day following the date on which
such dividend is paid or distribution is made, as applicable;
provided that, in the event that the Mandatory Conversion Date
occurs, any Optional Conversion is effected in accordance with
Section 6(ii) or any Tax Redemption is effected pursuant to
Section 7 after the record date for the determination of
stockholders entitled to receive such dividend or distribution
but before such dividend is paid or distribution is made, then as
soon as reasonably practicable following the making of such
dividend or distribution the Corporation shall deliver to the
holder of the Series H Preference Shares so converted or redeemed
such number of shares of Class H Common Stock, if any, so that
(giving effect to such delivery of shares of Class H Common
Stock) such Mandatory Conversion, Optional Conversion or Tax
Redemption was effected at an Exchange Rate or Optional
Conversion Rate, as applicable, which reflects the adjustments
provided for in this paragraph (iii)(a).
(b) In case outstanding shares of Class H Common Stock shall, after the
date hereof, be subdivided or split into a greater number of
shares of Class H Common Stock (other than as described in
paragraph (iii)(a) above), the Exchange Rate and the Optional
Conversion Rate in effect as of the open of business on the day
following the day upon which such subdivision or split becomes
effective shall each be proportionately increased, and,
conversely, in case outstanding shares of Class H Common Stock
shall be combined into a smaller number of shares of Class H
Common Stock, the Exchange Rate and the Optional Conversion Rate
in effect as of the open of business on the day following the day
upon which such combination becomes effective shall each be
proportionately reduced, such increases or reductions, as the
case may be, to become effective immediately after the open of
business on the day following the day upon which such
subdivision, split or combination becomes effective.
(c) If the Corporation shall, after the date hereof, issue rights or
warrants to all holders of its Class H Common Stock entitling
them (for a period not exceeding 180 days from the date of such
issuance) to subscribe for or purchase shares of Class H Common
Stock at a price per share less than the Fair Market Value of the
Class H Common Stock on the record date for the determination of
stockholders entitled to receive such rights or warrants, then in
each case the Exchange Rate and the Optional Conversion Rate
shall each be adjusted by multiplying the Exchange Rate and the
Optional Conversion Rate in effect on such record date by a
fraction of which the numerator shall be the Class H Dividend
Base on such record date plus the number of additional shares of
Class H Common Stock actually delivered in connection with the
exercise of such rights or warrants, and of which the denominator
shall be the Class H Dividend Base on such record date plus the
number of shares of Class H Common Stock which the aggregate
price received in payment for the total number of shares of Class
H Common Stock actually delivered in connection with the exercise
of such rights or warrants would purchase at such Fair Market
Value (determined by multiplying such total number of shares by
the exercise price of such rights or warrants and dividing the
product so obtained by such Fair Market Value). Such adjustment
shall become effective as of the open of business on the business
day next following the date on which such rights or warrants
expire; provided that, in the event that the Mandatory Conversion
Date occurs, any Optional Conversion is effected in accordance
with Section 6(ii) or any Tax Redemption is effected pursuant to
Section 7 after the record date for the determination of
stockholders entitled to receive such rights and warrants but
before such adjustment shall become effective, then as soon as
reasonably practicable following the effectiveness of such
adjustment either the Corporation shall deliver to the holder of
the Series H Preference Shares so converted or redeemed, or such
holder shall return to the Corporation, as applicable, such
number of shares of Class H Common Stock, if any, so that (giving
effect to such transfer of shares of Class H Common Stock) such
Mandatory Conversion, Optional Conversion or Tax Redemption was
effected at an Exchange Rate or Optional Conversion Rate, as
applicable, which reflects the adjustments provided for in this
paragraph (iii)(c).
(d)(I)Except as provided in paragraph (d)(II) below, if the Corporation
shall, after the date hereof, pay a dividend or make a
distribution to all holders of its Class H Common Stock
consisting of evidences of its indebtedness, securities, or other
assets (including shares of capital stock of the Corporation
other than Class H Common Stock but excluding (A) any cash
dividends or distributions, (B) any dividends or other
distributions referred to in paragraphs (a) or (b) above and (C)
any dividends or other distributions referred to in paragraph
(d)(II) below), or shall issue to all holders of its Class H
Common Stock rights or warrants to subscribe for or purchase any
of its securities (other than those referred to in paragraph (c)
above), then in each such case the Exchange Rate and the Optional
Conversion Rate shall each be adjusted by multiplying the
Exchange Rate and the Optional Conversion Rate in effect on the
payment or distribution date, as applicable, for such dividend or
distribution, or the issue date of such rights or warrants, as
the case may be, by a fraction of which the numerator shall be
the Fair Market Value per share of the Class H Common Stock on
such payment, distribution or issue date, and of which the
denominator shall be such Fair Market Value per share of Class H
Common Stock less the fair market value (as determined by the
Board of Directors of the Corporation, whose determination shall
be conclusive) as of such payment, distribution or issue date of
the portion of the evidences of indebtedness or assets so
distributed, or of such subscription rights or warrants,
applicable to one share of Class H Common Stock. Such adjustment
shall become effective as of the open of business on the business
day next following the payment, distribution or issue date for
such dividend, distribution or issuance, as the case may be;
provided that, in the event that the Mandatory Conversion Date
occurs, any Optional Conversion is effected in accordance with
Section 6(ii) or any Tax Redemption is effected pursuant to
Section 7 after the record date for the determination of the
stockholders entitled to participate in such dividend,
distribution or issuance but before such adjustment shall become
effective, then as soon as reasonably practicable following the
effectiveness of such adjustment either the Corporation shall
deliver to the holder of the Series H Preference Shares so
converted or redeemed, or such holder shall return to the
Corporation, as applicable, such number of shares of Class H
Common Stock, if any, so that (giving effect to such transfer of
shares of Class H Common Stock) such Mandatory Conversion,
Optional Conversion or Tax Redemption was effected at an Exchange
Rate or Optional Conversion Rate, as applicable, which reflects
the adjustments as provided in this paragraph (iii)(d)(I).
(II) Unless the Corporation shall elect to apply the
provisions of Section 6(iv)(a) to such transaction, then,
notwithstanding Section 6(iv)(a), if the Corporation shall, after
the date hereof, (A) pay a dividend or make a distribution to
holders of its Class H Common Stock consisting of shares of common
stock of or other equity interests (collectively, "Equity Units") in
a subsidiary or other Affiliate of the Corporation which holds,
directly or indirectly, any assets held, directly or indirectly, by
Hughes Electronics Corporation ("Hughes") or its subsidiaries
("Spinco"), or (B) exchange Equity Units in Spinco for outstanding
shares of Class H Common Stock on a pro rata basis (whether through
an exchange of Equity Units, by merger or otherwise), then the
Corporation shall make a distribution to all Persons who were
holders of Series H Preference Shares as of the record date for the
determination of stockholders entitled to participate in such
dividend, distribution or exchange consisting of automatically
convertible preference shares of Spinco (the "Spinco Preference
Shares") that satisfy the requirements set forth in the following
sentence. The Spinco Preference Shares received in such distribution
or exchange in respect of Series H Preference Shares (1) shall have
a liquidation preference and a stated value per share equal in
amount to the product of the liquidation preference or stated value,
as applicable, of a Series H Preference Share at such time and a
fraction (the "Adjustment Ratio"), the numerator of which shall be
equal to the aggregate fair market value of the Equity Units in
Spinco paid or distributed in respect of or exchanged for one share
of Class H Common Stock as of the date immediately prior to the
record date (the "Spinoff Record Date") for determining the holders
entitled to receive such shares in such distribution or exchange (as
determined by the Board of Directors of the Corporation, whose
determination shall be conclusive) and the denominator of which
shall be equal to the Fair Market Value of one share of Class H
Common Stock as of such date, (2) shall accrue a preferential
dividend at an annual rate equal to 6.25% of the stated value per
Spinco Preference Share, (3) shall be convertible at the option of
the holder at any time prior to the Mandatory Conversion Date into a
number of Equity Units in Spinco equal to the product obtained by
multiplying (x) the Optional Conversion Rate by (y) the number of
Equity Units in Spinco paid or distributed in respect of or
exchanged for one share of Class H Common Stock (the "Spinco
Equivalent Shares"), (4) for purposes of determining the exchange
rate applicable to a mandatory conversion of the Spinco Preference
Shares, (A) shall have a "threshold price" and an "initial price"
that are equal to the amount obtained by dividing (x) the product
obtained by multiplying the Threshold Price (as defined and used in
the definition of "Exchange Rate") and the Initial Price, as the
case may be, by the Adjustment Ratio by (y) the number of Spinco
Equivalent Shares and (B) shall convert on the Mandatory Conversion
Date into a number of Spinco Equity Units equal to the product of
the Exchange Rate and the number of Spinco Equivalent Shares and (5)
shall have such other terms and conditions (including, without
limitation, conditions relating to the conversion thereof) as are
comparable to the terms and conditions of the Series H Preference
Shares. Immediately after the distribution of such Spinco Preference
Shares shall have become effective, the liquidation preference,
Threshold Price (as defined and used in the definition of "Exchange
Rate"), Initial Price and stated value for each Series H Preference
Share shall be reduced so that such amount shall be equal to the
product obtained by multiplying such amount by the difference
obtained by subtracting the Adjustment Ratio from one (1).
Notwithstanding any provision in this Section 6(iii)(d)(II) to
the contrary, if the Corporation shall (A) pay a dividend or make a
distribution to holders of its Class H Common Stock consisting of
Equity Units in a subsidiary or other Affiliate of the Corporation
holding, directly or indirectly, assets of Hughes or its
subsidiaries, which subsidiary or other Affiliate (together with
such subsidiary's or other Affiliate's subsidiaries) has a fair
market value (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive) as of the date
of such dividend or distribution representing less than 25% of the
fair market value (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive) of Hughes and
its subsidiaries immediately prior to the date of such dividend or
distribution ("Lesser Spinco"), or (B) exchange Equity Units in
Lesser Spinco for outstanding shares of Class H Common Stock on a
pro rata basis (whether through an exchange of Equity Units, by
merger or otherwise), then, at the Corporation's option, either (1)
the Corporation shall make a distribution consisting of
automatically convertible preference shares of Lesser Spinco in
accordance with this paragraph (d)(II) to all Persons who were
holders of Series H Preference Shares as of the record date for the
determination of stockholders entitled to participate in such
dividend, distribution or exchange or (2) in lieu thereof, such
dividend, distribution or exchange shall be treated as a dividend or
distribution pursuant to paragraph (d)(I) above, and the Exchange
Rate and Optional Conversion Rate shall be adjusted in accordance
with such paragraph.
Notwithstanding any provision in this Section 6(iii)(d)(II) to
the contrary, if the Corporation shall (A) pay a dividend or make a
distribution to holders of its Class H Common Stock consisting of
Equity Units in a subsidiary or other Affiliate of the Corporation
holding, directly or indirectly, assets of Hughes or its
subsidiaries, which subsidiary or other Affiliate (together with
such subsidiary's or other Affiliate's subsidiaries) has a fair
market value (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive) as of the date
of such dividend or distribution representing 75% or more of the
fair market value (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive) of Hughes and
its subsidiaries immediately prior to the date of such dividend or
distribution ("Greater Spinco"), or (B) exchange Equity Units in
Greater Spinco for outstanding shares of Class H Common Stock on a
pro rata basis (whether through an exchange of Equity Units, by
merger or otherwise), then, in lieu of applying the other provisions
of this paragraph (d)(II), the Corporation may elect to make a
distribution consisting of automatically convertible preference
shares of Greater Spinco ("Greater Spinco Preference Shares") to all
Persons who were holders of Series H Preference Shares as of the
record date for the determination of stockholders entitled to
participate in such dividend, distribution or exchange, which shares
(1) shall have a liquidation preference, stated value and an annual
dividend rate equal to the liquidation preference, stated value and
the annual dividend rate of the Series H Preference Shares, (2)
shall have an optional conversion rate and exchange rate that shall
be equal to the product of (x) the Optional Conversion Rate or the
Exchange Rate, as the case may be, and (y) a fraction, the numerator
of which shall be equal to the Fair Market Value of one share of
Class H Common Stock as of the Spinoff Record Date and the
denominator of which shall be equal to the aggregate fair market
value of the Spinco Equivalent Shares (the "Greater Spinco
Adjustment Ratio"), (3) for purposes of determining the exchange
rate applicable to a mandatory conversion of the Greater Spinco
Preference Shares, the "threshold price" and the "initial price"
shall be equal to the quotient obtained by dividing the Threshold
Price or the Initial Price, as the case may be, by the Greater
Spinco Adjustment Ratio, and (4) shall have such other terms and
conditions (including, without limitation, conditions relating to
the conversion thereof) as are comparable to the terms and
conditions of the Series H Preference Shares. In the event that the
Corporation distributes the Greater Spinco Preference Shares to the
holders of the Series H Preference Shares, all Series H Preference
Shares shall cease to be outstanding and shall automatically be
canceled, and each holder of a certificate previously evidencing any
such Series H Preference Shares shall cease to have any rights with
respect thereto, except the right to receive the Greater Spinco
Preference Shares in accordance with this paragraph (d)(II).
(e) In case the Corporation shall, after the date hereof, by dividend or
otherwise, distribute to all holders of its Class H Common Stock
cash (excluding any cash that is distributed in a transaction to
which Section 6(iv) applies) in an aggregate amount that,
combined together with (1) the aggregate amount of any other such
distributions to all holders of its Class H Common Stock made
exclusively in cash within the 12 months preceding the date of
payment of such distribution and in respect of which no
adjustment pursuant to this Section 6(iii)(e) or
Section 6(iii)(f) has been made and (2) the excess of (i) the
aggregate amount of consideration (including any cash plus the
fair market value (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive and
described in a resolution of the Board of Directors) of any
non-cash consideration) payable in respect of any voluntary
tender or exchange offer by the Corporation or any of its
subsidiaries for all or any portion of the Class H Common Stock
concluded within the 12 months preceding the date of payment of
such distribution and in respect of which no adjustment pursuant
to this Section 6(iii)(e) or Section 6(iii)(f) has been made over
(ii) the Fair Market Value of the shares being so purchased at
the time of such purchase, exceeds 12.5% of the product of (A)
the Current Market Price per share of the Class H Common Stock on
the date for the determination of holders of shares of Class H
Common Stock entitled to receive such distribution and (B) the
number of shares of Class H Common Stock outstanding on such date
(such excess being referred to herein as the "Excess Amount"),
then, and in each such case, immediately after the close of
business on such date for determination, each of the Exchange
Rate and the Optional Conversion Rate shall be increased so that
the Exchange Rate and the Optional Conversion Rate shall equal
the rate determined by dividing the Exchange Rate and the
Optional Conversion Rate, respectively, in effect immediately
prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such
distribution by a fraction (1) the numerator of which shall be
equal to the Current Market Price per share of the Class H Common
Stock on the date fixed for such determination less an amount
equal to the quotient of (x) the Excess Amount and (y) the number
of shares of Class H Common Stock outstanding on such date for
determination and (2) the denominator of which shall be equal to
the Current Market Price per share of the Class H Common Stock on
such date for determination. Notwithstanding anything in this
paragraph to the contrary, no adjustment to the Exchange Rate or
Optional Conversion Rate shall be made pursuant to this paragraph
if such an adjustment is required by and made pursuant to the
terms of any other provision of this Certificate.
(f) In case a tender or exchange offer made by the Corporation or any
subsidiary of the Corporation after the date hereof for all or
any portion of the Class H Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof)
shall require the payment to stockholders of aggregate
consideration having a fair market value (as determined by the
Board of Directors of the Corporation, whose determination shall
be conclusive and described in a resolution of the Board of
Directors) in excess of the Fair Market Value of the shares being
so purchased at the time of such purchase, and such excess,
combined together with (1) the excess of (i) the aggregate amount
of consideration (including any cash plus the fair market value
(as determined by the Board of Directors of the Corporation,
whose determination shall be conclusive and described in a
resolution of the Board of Directors) of any non-cash
consideration) payable in respect of any tender or exchange offer
by the Corporation or any of its subsidiaries for all or any
portion of the Class H Common Stock concluded within the 12
months preceding the expiration of such tender or exchange offer
and in respect of which no adjustment pursuant to
Section 6(iii)(e) or this Section 6(iii)(f) has been made over
(ii) the Fair Market Value of the shares being so purchased at
the time of such purchase and (2) the aggregate amount of any
distributions to all holders of the Corporation's Class H Common
Stock made exclusively in cash (excluding cash distributions in
accordance with Section 6(iv) below) within the 12 months
preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to Section 6(iii)(e) or
this Section 6(iii)(f) has been made, exceeds 12.5% of the
product of (A) the Current Market Price per share of the Class H
Common Stock as of the last time (the "Expiration Time") tenders
could have been made pursuant to such tender or exchange offer
(as it may be amended) and (B) the number of shares of Class H
Common Stock outstanding (including any tendered shares) on the
Expiration Time (such excess being referred to herein as the
"Exchange Excess Amount") then, and in each such case,
immediately prior to the open of business on the day after the
date of the Expiration Time, the Exchange Rate and the Optional
Conversion Rate shall be adjusted so that the Exchange Rate and
the Optional Conversion Rate shall equal the rate determined by
dividing the Exchange Rate and the Optional Conversion Rate,
respectively, immediately prior to the close of business on the
date of the Expiration Time by a fraction (1) the numerator of
which shall be equal to the Current Market Price per share of the
Class H Common Stock on the date of the Expiration Time less an
amount equal to the quotient obtained by dividing (x) the
Exchange Excess Amount by (y) the number of shares of Class H
Common Stock outstanding on the date of the Expiration Time and
(2) the denominator of which shall be equal to the Current Market
Price per share of the Class H Common Stock on the date of the
Expiration Time. Notwithstanding anything in this paragraph to
the contrary, no adjustment to the Exchange Rate or Optional
Conversion Rate shall be made pursuant to this paragraph if such
an adjustment is required by and made pursuant to the terms of
any other provision of this Certificate.
(g) In any case in which Section 6(iii) shall require that an adjustment
as a result of any event becomes effective as of a time and date
later than the time and date of the event giving rise to the
adjustment and the date fixed for conversion pursuant to this
Section 6 occurs after such time and date, but before the time
and date at which such adjustment becomes effective, the
Corporation may in its sole discretion elect to defer the
following until after the effectiveness of such adjustment: (1)
issuing to the holder of any Series H Preference Shares
surrendered for conversion the additional shares of Class H
Common Stock issuable upon conversion by reason of such
adjustment; and (2) paying to such holder any amount in cash in
lieu of a fractional share of Class H Common Stock pursuant to
Section 6(vii).
(h) An adjustment in the Exchange Rate pursuant to this Section 6(iii)
shall be implemented by an adjustment of the nature and amount
specified, effected in the manner specified, in each of the Upper
Exchange Rate, the Middle Exchange Rate and the Lower Exchange
Rate. If an adjustment is made to the Exchange Rate pursuant to
this Section 6(iii), an adjustment shall also be made to the
Threshold Price and Initial Price as used in clauses (a), (b) and
(c) of the definition of Exchange Rate in Section 13. Except as
otherwise provided in this Section 6(iii), such adjustment shall
be made by multiplying the Threshold Price or the Initial Price,
as the case may be, as in effect at such time, by a fraction of
which the numerator shall be the Exchange Rate immediately before
giving effect to such adjustment and the denominator shall be the
Exchange Rate immediately after giving effect to such adjustment
pursuant to this Section 6(iii). All adjustments to the Exchange
Rate and the Optional Conversion Rate shall be calculated to the
nearest 1/10,000th, or if there shall not be a nearest 1/10,000,
to the next highest 1/10,000, of a share of Class H Common
Stock. No adjustment in the Exchange Rate or in the Optional
Conversion Rate shall be required unless such adjustment would
require an increase or decrease of at least one percent in the
Lower Exchange Rate; provided, however, that any adjustments
which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All adjustments to the Exchange Rate and the Optional
Conversion Rate shall be made successively.
(i) Before taking any action that would cause an adjustment increasing
the Exchange Rate or the Optional Conversion Rate such that the
conversion price (for purposes of this Section 6(iii)(i), an
amount equal to the liquidation preference per Series H
Preference Share divided by the Optional Conversion Rate,
respectively, as in effect from time to time) would be below the
then par value of the Class H Common Stock, the Corporation will
take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly
and legally issue fully paid and nonassessable shares of Class H
Common Stock at the Exchange Rate or the Optional Conversion Rate
as so adjusted.
(iv) Adjustment for Certain Consolidations, Mergers or Other
Transactions.
(a) Subject to Section 6(iii)(d)(II), in the case of any consolidation or
merger to which the Corporation is a party (other than a merger or
consolidation in which the Corporation is the continuing corporation
and in which the Class H Common Stock outstanding immediately prior to
the merger or consolidation remains unchanged), or in case of any
transaction as a result of which all outstanding shares of Class H
Common Stock are converted into or exchanged for any other securities,
cash or other property, proper provision shall be made by the
Corporation so that each Series H Preference Share shall, immediately
after consummation of such transaction, be subject to (i) conversion at
the option of the holder into the kind and amount of securities, cash
or other property receivable upon consummation of such transaction by a
holder of the number of shares of Class H Common Stock into which such
Series H Preference Share would have been optionally converted
immediately prior to consummation of such transaction, and (ii)
conversion on the Mandatory Conversion Date into the kind and amount of
securities, cash or other property receivable upon consummation of such
transaction by a holder of the number of shares of Class H Common Stock
into which such Series H Preference Share would have been converted if
the conversion on the Mandatory Conversion Date had occurred
immediately prior to the date of consummation of such transaction,
assuming in each case that such holder of Class H Common Stock failed
to exercise rights of election, if any, as to the kind or of amount of
securities, cash or other property receivable upon consummation of such
transaction (provided that if the kind or amount of securities, cash or
other property receivable upon consummation of such transaction is not
the same for each non-electing share, then the kind and amount of
securities, cash or other property receivable upon consummation of such
transaction for each non-electing share shall be deemed to be the kind
and amount so receivable per share by a plurality of the non-electing
shares).
(b) The kind and amount of securities into which the Series H Preference
Shares shall be convertible after consummation of a transaction described
in paragraph (a) above shall be subject to adjustment as described in
Section 6(iii) following the date of consummation of such transaction.
(c) Subject to the last sentence of this paragraph but notwithstanding
anything else in this Certificate to the contrary, if any holder of
Series H Preference Shares elects an Optional Conversion within ten
(10) days after the Corporation gives notice of either (i) a sale,
transfer or disposition of a majority of the voting stock of DIRECTV,
Inc. ("DTV") or of assets thereof representing at least fifty-one
percent (51%) of the total fair market value (as determined by the
Board of Directors of the Corporation, whose determination shall be
conclusive) of the U.S. direct broadcast satellite business of DTV and
its Affiliates engaged in such business to an entity not controlled
directly or indirectly by the Corporation or (ii) any other transaction
that has the result that the Corporation no longer controls directly or
indirectly the business of DTV(collectively, a "DTV Sale"), the
Optional Conversion Rate in connection with such Optional Conversion
shall be equal to the Exchange Rate that would be applicable if the
Mandatory Conversion Date were the date on which such Optional
Conversion occurred. Any such Optional Conversion shall be effectuated
in accordance with, and subject to, Section 6(ii), and shall not become
effective prior to the consummation of the DTV Sale. Notwithstanding
the foregoing, the term "DTV Sale" shall not include, and this
paragraph shall not apply to, (A) any dividend or distribution by the
Corporation to holders of its Class H Common Stock or other common
stock of the Corporation consisting of or including Equity Units in DTV
or any entity directly or indirectly owning a majority of the
outstanding Equity Unit in DTV, (B) any exchange of Equity Units in DTV
or any entity directly or indirectly owning a majority of the
outstanding Equity Units in DTV for outstanding shares of Class H
Common Stock (whether effected by an exchange of shares, merger or
otherwise), or (C) a sale-leaseback transaction entered into with a
commercial financing institution ordinarily engaged in transactions of
that type.
(v) Notice of Adjustments. Whenever the Exchange Rate and Optional
Conversion Rate are adjusted as provided in Sections 6(iii) or 6(iv), the
Corporation shall:
(a) Forthwith compute the adjusted Exchange Rate and Optional
Conversion Rate and prepare a certificate signed by any Vice
President and the Treasurer or the Controller of the Corporation
setting forth the adjusted Exchange Rate and Optional Conversion
Rate, the method of calculation thereof in reasonable detail and the
facts requiring such adjustment and upon which such adjustment is
based, which certificate shall be prima facie evidence of the
correctness of the adjustment; and
(b) Promptly mail such certificate to the holders of record of
the outstanding Series H Preference Shares at or prior to the time
the Corporation mails an interim statement to its stockholders
covering the financial performance of the Corporation for the fiscal
quarter period during which the facts requiring such adjustment
occurred but in any event within 45 days after the end of such
fiscal quarter period.
(vi) Notices of Proposed Actions. If, at any time while any of the
Series H Preference Shares are outstanding:
(a) the Corporation shall declare a dividend (or any other
distribution) on the Class H Common Stock (other than in cash out
of profits or surplus) or,
(b) the Corporation shall authorize the issuance to all
holders of the Class H Common Stock of rights or warrants to
subscribe for or purchase shares of the Class H Common Stock
or of any other subscription rights or warrants, or
(c) the Board of Directors of the Corporation shall authorize
any tender or exchange offer for or reclassification of the Class H
Common Stock (other than a subdivision or combination thereof) or
any consolidation or merger to which the Corporation is a party and
for which approval of any stockholders of the Corporation is
required (except for a merger of the Corporation into one of its
subsidiaries solely for the purpose of changing the corporate
domicile of the Corporation to another state of the United States
and in connection with which there is no substantive change in
the rights or privileges of any securities of the Corporation
other than changes resulting from differences in the corporate
statutes of the then existing and the new state of domicile), or
the sale or transfer of all or substantially all of the assets of
the Corporation or any dissolution, liquidation or winding up of
the Corporation, or
(d) the Corporation shall enter into a binding obligation to
consummate a DTV Sale,
then the Corporation shall cause to be mailed to the holders of Series H
Preference Shares at their last addresses as they shall appear on the stock
register, as promptly as possible, but at least five (5) days before the date
hereinafter specified (or the earlier of the dates hereinafter specified, in the
event that more than one date is specified), a notice stating (1) the date on
which a record is to be taken for the purpose of such dividend, distribution, or
issuance of rights or warrants, or, if a record is not to be taken, the date as
of which the holders of Class H Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined, or (2) the date
on which any such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Class H Common Stock of record
shall be entitled to exchange their Class H Common Stock for securities or other
property (including cash), if any, deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
The failure to give or receive the notice required by this Section 6(vi) or any
defect therein shall not affect the legality or validity of any such dividend,
distribution, right or warrant or other action.
(vii) No Fractional Shares. No fractional shares of Class H Common
Stock shall be issued upon the conversion of any Series H Preference Shares. In
lieu of any fraction of a share of Class H Common Stock which would otherwise be
issuable in respect of the aggregate number of Series H Preference Shares
surrendered by the same holder upon Mandatory Conversion or Optional Conversion,
such holder shall have the right to receive an amount in cash (computed to the
nearest cent) equal to the same fraction of (a) in the case of Mandatory
Conversion, the Current Market Price or (b) in the case of an Optional
Conversion by a holder, the Closing Price of the Class H Common Stock
determined as of the second Trading Day immediately preceding the effective
date of conversion. If more than one Series H Preference Share shall be
surrendered for conversion at one time by or for the same holder, the number of
full shares of Class H Common Stock issuable upon conversion thereof shall be
computed on the basis of the aggregate number of Series H Preference Shares so
surrendered.
(viii) Treasury Shares. For the purposes of this Section 6, the
number of shares of Class H Common Stock at any time outstanding shall not
include shares held in the treasury of the Corporation but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of
shares of Class H Common Stock.
(ix) Other Action. If the Corporation shall take any action
affecting the Class H Common Stock, other than action described in this
Section 6, that in the opinion of the Board of Directors of the Corporation
would materially affect, either positively or negatively, the conversion
rights of the holders of the Series H Preference Shares, the Exchange Rate
and/or the Optional Conversion Rate for the Series H Preference Shares may be
adjusted, to the extent permitted by law, in such manner, if any, and at such
time, as the Board of Directors of the Corporation may determine in its sole
discretion to be equitable in the circumstances.
(x) Conversion. The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate
of its authorized but unissued shares of Class H Common Stock, for the
purpose of effecting conversion of the Series H Preference Shares, the maximum
number of shares of Class H Common Stock deliverable upon the conversion
of all outstanding shares of Series H Preference Shares not theretofore
converted. For purposes of this Section 6(x), the maximum number of shares of
Class H Common Stock that shall be deliverable upon the conversion of all
outstanding shares of Series H Preference Shares shall be computed as if at
the time of computation all such outstanding shares were held by a single
holder.
The Corporation covenants that any shares of Class H Common Stock issued
upon conversion of the Series H Preference Shares shall be validly issued, fully
paid and non-assessable.
The Corporation shall endeavor to list (unless already listed) the shares
of Class H Common Stock required to be delivered upon conversion of the Series H
Preference Shares, prior to such delivery, upon each national securities
exchange, if any, upon which the outstanding Class H Common Stock is listed at
the time of such delivery.
(xi) Taxes. The Corporation will pay any and all documentary stamp
or similar issue or transfer taxes payable in respect of the issue or delivery
of shares of Class H Common Stock or other securities or property on conversion,
exchange or redemption of the Series H Preference Shares pursuant thereto;
provided, however, that the Corporation shall not be required to pay any tax
that may be payable in respect of any transfer involved in the issue or
delivery of shares of Class H Common Stock or other securities or property
in a name other than that of the holder of the Series H Preference Shares to be
converted and no such issue or delivery shall be made unless and until the
person requesting such issue or delivery has paid to the Corporation the
amount of any such tax or established, to the reasonable satisfaction of the
Corporation, that such tax has been paid.
(xii) HSR Act Filings. No shares of Class H Common Stock or any
other voting securities shall be issued to holders of Series H Preference
Shares upon a Mandatory Conversion, Optional Conversion, redemption or
otherwise unless and until any filings required by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), have been made,
and any applicable waiting periods under the HSR Act have expired. The
Corporation and holders of the Series H Preference Shares shall use their
commercially reasonable efforts and cooperate with one another to make any such
filings and provide any information needed in connection therewith so as to
promptly satisfy any requirements under the HSR Act.
Section 7. Tax Redemption. If a Tax Event has occurred, then the
Corporation or Hughes shall have the right, at any time up to and including the
Mandatory Redemption Date, upon not less than thirty (30) days nor more than
sixty (60) days written notice to the holders of Series H Preference Shares, to
redeem or acquire all (but not less than all) outstanding Series H Preference
Shares (the date of such acquisition or redemption being referred to herein as
the "Redemption Date") at the Tax Redemption Price, plus the amount referred to
in Section 8 to the extent provided therein (a "Tax Redemption"). The Tax
Redemption Price may be paid in cash, shares of Class H Common Stock, shares of
Hughes common stock, or by the exchange of each Series H Preference Share for a
share of automatically convertible preference stock of Hughes convertible into
common stock of Hughes ("Hughes Preference Shares"), in each case at the
election of the Corporation; provided, however, that in the event that the
applicable Tax Event is based on a change or proposed change in law or
interpretation that is not yet actually effective, the Tax Redemption Price
shall be payable only in shares of Class H Common Stock. Shares of common stock
of Hughes or Hughes Preference Shares shall not be delivered in satisfaction of
the Corporation's obligations pursuant to this Section 7 unless the shares of
common stock of Hughes will be publicly traded at or about (but in no event
beginning more than 20 business days after) the time of such delivery and, if
Hughes Preference Shares are to be delivered, either (x) such Hughes Preference
Shares are delivered as part of a plan involving the distribution of stock of
Hughes with respect to, or in exchange for, stock of the Corporation, and the
Corporation shall have obtained a ruling from the Internal Revenue Service or an
opinion of outside counsel to the effect that a stockholder of the Corporation
that receives such distribution shall not recognize any gain or loss on the
receipt thereof for federal income tax purposes, or (y) if not part of a
distribution described in (x), the Hughes Preference Shares shall be optionally
convertible, on comparable terms and conditions (including as to time of
conversion) to the Series H Preference Shares into Hughes common stock at the
exchange rate applicable to a mandatory conversion thereof (as if the mandatory
conversion date were the date of such optional conversion). In such case, the
number of shares of common stock of Hughes that would be issued in exchange for
each Series H Preference Share shall be equal to the product of (A) the number
of shares of Class H Common Stock into which a Series H Preference Share would
have been convertible had the Redemption Date been substituted for the Mandatory
Conversion Date and (B)(1) if such delivery of shares of common stock of Hughes
occurs in connection with an exchange (whether effected by an exchange of
shares, merger or otherwise) of the outstanding shares of Class H Common Stock
for some or all of the shares of common stock of Hughes, the ratio of the number
of shares of common stock of Hughes that are to be exchanged for each share of
Class H Common Stock and (2) in all other cases, the ratio of the Fair Market
Value of a share of Class H Common Stock to the fair market value of a share of
common stock of Hughes (as determined by the Board of Directors of the
Corporation, whose determination shall be conclusive). Notwithstanding the first
sentence of this paragraph, the Corporation may redeem Series H Preference
Shares in accordance with this paragraph using shares of Class H Common Stock on
less than thirty (30) days written notice if the Corporation deems such
redemption to be reasonably necessary so as to avoid incurrence by the
Corporation or its subsidiaries of any tax liability described in the definition
of Tax Event on its later redemption using shares of Class H Common Stock.
Except as otherwise provided in this Section 7, the Series H Preference
Shares are not redeemable.
Section 8. Yield Make-Up. If, at any time prior to the Mandatory
Conversion Date, the outstanding Series H Preference Shares cease to be
outstanding as a result of a Tax Redemption pursuant to Section 7 (unless such
Series H Preference Shares are redeemed using Hughes Preference Shares or cash
in accordance with Section 7), the Corporation shall pay or issue, as
appropriate, to such holder of Series H Preference Shares an amount of cash (or,
at the Corporation's option, the equivalent value in Class H Common Stock or
Hughes common stock) equal to the present value of the remaining Preferential
Dividends on the Series H Preference Shares calculated from the date of such
cancellation through the Mandatory Conversion Date discounted at an annual rate
equal to the interest rate on U.S. Treasury obligations having comparable
maturities plus 50 basis points.
Section 9. Outstanding Shares. Upon any Optional Conversion or Mandatory
Conversion, or on the Redemption Date, or upon the issuance of Greater Spinco
Preference Shares or upon the reacquisition by the Corporation of Series H
Preference Shares for any reason, the Series H Preference Shares subject thereto
shall cease to be outstanding and shall automatically be canceled effective as
of the time specified in this Certificate, and each holder of a certificate
previously evidencing any such Series H Preference Shares shall cease to have
any rights with respect thereto, except the right to receive the shares of Class
H Common Stock or other consideration issuable pursuant to this Certificate upon
the occurrence of such event. If any Series H Preference Shares shall cease to
be outstanding for any reason, such shares shall be retired and thereupon
restored to the status of authorized but unissued shares of Preference Stock,
par value $0.10 per share, of the Corporation undesignated as to series.
Section 10. Severability of Provisions. Whenever possible, each provision
hereof shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
Section 11. Fractional Shares. Series H Preference Shares may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series H Preference Shares, subject to Section 6(vii).
Section 12. Reversion to Corporation. Subject to applicable escheat laws,
any monies set aside by the Corporation in respect of any payment with respect
to shares of the Series H Preference Shares, or dividends thereon, and unclaimed
at the end of two years from the date upon which such payment is due and payable
shall revert to the general funds of the Corporation, after which reversion the
holders of such shares shall look only to the general funds of the Corporation
for the payment thereof. Any interest accrued on funds so deposited shall be
paid to the Corporation from time to time.
Section 13. Definitions. For purposes of this Certificate, the
following terms shall have the meanings indicated:
"Affiliate" means, with respect to any Person, any Person who
directly or indirectly is in control of, is controlled by or is under
common control with, such Person.
"business day" means any day other than a Saturday or Sunday or any
other day on which banks in the State of New York or the State of
California are authorized or required by law or executive order to close.
"Class H Dividend Base" means the denominator of the fraction, as
adjusted from time to time, used for purposes of computing the "Available
Separate Consolidated Net Income of Hughes" pursuant to the Certificate of
Incorporation, as of the date hereof.
"Closing Price" of a share of Class H Common Stock on any date of
determination means the closing sale price (or, if no closing sale price
is reported, the last reported sale price) of such share on the New York
Stock Exchange (the "NYSE") on such date or, if the Class H Common Stock
is not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange
on which the Class H Common Stock is so listed, or if it is not so listed
on a United States national or regional securities exchange, as reported
by the Nasdaq Stock Market, or, if it is not so reported, the last quoted
bid price for the Class H Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or, if
such bid price is not available, the market value of a share of Class H
Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Corporation.
"Current Market Price" per share of the Class H Common Stock means,
on any day, the average Closing Price per share of the Class H Common
Stock on the 20 Trading Days immediately prior to, but not including, such
day.
"Exchange Rate" means, as applicable, (a) if the Current Market
Price is greater than or equal to $69.6725 per share (the "Threshold
Price"), 8.0645 shares of Class H Common Stock (the "Upper Exchange
Rate"), (b) if the Current Market Price is less than the Threshold Price
but greater than the Initial Price, a number of shares of Class H Common
Stock equal to the product of ten (10) multiplied by a fraction, the
numerator of which is the Initial Price and the denominator of which is
the Current Market Price (the "Middle Exchange Rate"), and (c) if the
Current Market Price is less than or equal to the Initial Price, 10.00
shares of Class H Common Stock (the "Lower Exchange Rate"), in each case
per Series H Preference Share, subject to adjustment as set forth in
Sections 6(iii) and (iv).
"Fair Market Value" on any day means the average of the daily
Closing Prices of a share of Class H Common Stock of the Corporation on
the five (5) consecutive Trading Days ending on the earlier of the day in
question or the day before the "ex" date with respect to any issuance or
distribution in respect of which Fair Market Value is to be determined.
The term "ex date," when used with respect to any issuance or
distribution, means the first day on which the Class H Common Stock trades
regular way, without the right to receive such issuance or distribution,
on the exchange or in the market, as the case may be, used to determine
that day's Closing Price.
"Income Tax" means any federal or state tax, duty or other
governmental charge that is based on, measured by or calculated in whole
or in part with respect to income or profits, including, without
limitation, the Michigan Single Business Tax.
"Initial Price" means $56.1875 per share of Class H Common Stock.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit
corporation, entity or government (whether federal, state, county, city,
municipal, or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"Tax Event" means any amendment to, or change (including any
announcement of a prospective change, such as, but not limited to, the
reporting of legislation by the House Ways and Means Committee or the
Senate Finance Committee, or the proposal of a legislative change that has
an effective date that is proposed to precede the date of enactment) in,
the laws or regulations of the United States or any political subdivision
or taxing authority thereof or therein, or any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, as a result of the enactment, adoption or issuance of which
there is in the opinion of the Corporation's outside counsel more than an
insubstantial risk that the Corporation or any subsidiary thereof is or
will be subject to more than an insignificant amount of Income Taxes with
respect to the Series H Preference Shares, the shares of Class H Common
Stock issuable upon conversion, exchange or redemption thereof, or any
capital stock of the Corporation or any subsidiary issuable pursuant to
this Certificate (in each case including, without limitation, the
issuance, conversion, redemption or exchange thereof). A Tax Event shall
in no event be considered to have occurred more than 30 days prior to the
announced or expected effective date of any amendment or change that then
remains legally viable, as determined in the reasonable discretion of the
Corporation, taking into account the potential liability of the
Corporation. A Tax Event shall only include an amendment or change that
would have resulted in a tax liability that would not have been imposed
had the Corporation issued Class H Common Stock in lieu of the Series H
Preference Shares at the time of the initial issuance of the Series H
Preference Shares.
"Tax Redemption Price" means an amount determined by multiplying the
Exchange Rate then in effect by the Fair Market Value.
"Trading Day" means a day on which the Class H Common Stock (a) is
not suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and (b)
has traded at least once on the national or regional securities exchange
or association or over-the-counter market that is the primary market for
the trading of such security.
Section 14. Miscellaneous.
(i) All notices referred to herein shall be in writing, and all notices
hereunder shall be deemed to have been given upon the earlier of receipt thereof
or three (3) business days after the mailing thereof if sent by registered mail
(unless first-class mail shall be specifically permitted for such notice under
the terms of this Certificate) with postage prepaid, addressed: if to the
Corporation, to its offices at 100 Renaissance Center, Detroit, Michigan 48243
(Attention: Secretary), or to the transfer agent for the Series H Preference
Shares, as provided by Section 14(iv) below, or other agent of the Corporation
designated as permitted by this Certificate, or, if to any holder of the Series
H Preference Shares, to such holder at the address of such holder as listed in
the stock record books of the Corporation (which may include the records of any
transfer agent for the Series H Preference Shares, if appropriate), or to such
other address as the Corporation or holder, as the case may be, shall have
designated by notice similarly given.
(ii) In the event a holder of Series H Preference Shares shall not by
written notice designate the name to whom payment upon redemption, exchange or
conversion of Series H Preference Shares should be made or the address to which
the certificate or certificates representing, or other evidence of ownership of,
such shares, or such payment, should be sent, the Corporation shall be entitled
to register such shares, and make such payment, in the name of the holder of
such Series H Preference Shares as shown on the records of the Corporation and
to send the certificate or certificates representing such shares, or such
payment, to the address of such holder shown on the records of the Corporation.
(iii) All payments in the form of dividends and distributions and
distributions upon any Liquidation or otherwise made upon the Series H
Preference Shares and any other shares of stock ranking on a parity with the
Series H Preference Shares with respect to such dividend or distribution shall
be made pro rata, so that amounts paid per share on the Series H Preference
Shares and such other shares of stock shall in all cases bear to each other the
same ratio that the required dividends, distributions or payments, as the case
may be, payable per share on the Series H Preference Shares and such other
shares of stock bear to each other.
(iv) The Corporation may appoint, and from time to time discharge and
change, a transfer agent for the Series H Preference Shares. Initially, the
Secretary of the Corporation shall serve as the transfer agent, registrar and
dividend disbursing agent for the Series H Preference Shares.
(v) Other than to America Online, Inc. and its Permitted Transferees (as
defined in the Purchase Agreement, dated June 21, 1999, by and among the
Corporation, Hughes and America Online, Inc. (the "Purchase Agreement")), the
Corporation shall not issue any Series H Preference Shares to any Person so long
as America Online, Inc. owns at least 25% of the Series H Preference Shares that
it owned as of June 24, 1999 (as adjusted from time to time pursuant to this
Certificate).
[SIGNATURES BEGIN ON NEXT PAGE]
<PAGE>
This Certificate shall be effective as of June 24, 1999.
IN WITNESS WHEREOF, said Corporation has caused this Certificate to be
signed by Eric Feldstein, its Vice President and Treasurer, this 24th day of
June, 1999.
GENERAL MOTORS CORPORATION
--------------------------------------
Name:
Title:
