TYPE: 425
SEQUENCE: 1
DESCRIPTION: FILING OF COMMUNICATION
Filed by General Motors Corporation (GM)
Subject Company - General Motors Corporation
Pursuant to Rule 425 under the Securities Act of 1933
File No. 333-30826
The following communication contains forward-looking statements within the
meaning of the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995. Reference made in the following are based on management's
current expectations or beliefs and are subject to a number of factors and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements.
The principal risk factors that may cause actual results to differ materially
from those expressed in forward-looking statements contained in this
communication are described in various documents filed by GM with the U.S.
Securities and Exchange Commission (SEC), including GM's Annual Report on Form
10-K for the year ended December 31, 1999.
On March 31, 2000, the following charts and accompanying scripts were
distributed to employee's of GM's Communications department in relation to the
previously announced plan of the corporation to offer up to $9 billion of the
Corporation's GM Class H stock in exchange for outstanding shares of the
Corporation's $1-2/3 par value common stock. The exchange is part of an overall
plan to restructure GM's economic interest in its wholly-owned subsidiary,
Hughes Electronics Corporation. As previously indicated, it is anticipated that
the plan will be executed in the first half of calendar year 2000. The filing is
being made in compliance with U.S. SEC Rules, which among other things, require
the filing of certain communications used by the Corporation to describe the
exchange offer to external groups or the public.
* * * * * * * * *
<PAGE>
CHART 1
General Motors Corporation Offer to Exchange
Shares of Class H Common Stock for shares of $1-2/3 Par Value Common Stock
STOCKHOLDERS ARE URGED TO READ THE IMPORTANT INFORMATION IN GM'S PROSPECTUS
RELATING TO THE EXCHANGE OFFER THAT WILL BE MAILED TO THEIR ADDRESS OF RECORD
AND WILL ALSO BE ON FILE AT THE SEC AND BE AVAILABLE FREE OF CHARGE AT ITS
WEBSITE, www.sec.gov, AT GM'S WEBSITE, www.gm.com, AND FROM GM STOCKHOLDER
SERVICES. THIS COMMUNICATION DOES NOT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION TO BUY IN CONNECTION WITH THE PLANNED EXCHANGE OFFER, WHICH WILL
ONLY BE MADE BY MEANS OF AN APPROPRIATE PROSPECTUS.
SPEAKER NOTES:
- - -------------
GM announced February 1, 2000 plans for a broad restructuring of its economic
interest in Hughes which included:
1)Exchange Offer to current stockholders to repurchase shares of GM $1-2/3
par value common stock in exchange for approximately $9 billion* of GM
Class H common stock
2)Contributions of approximately $7 billion of Class H stock to certain GM
benefit plans (independent from exchange offer, but part of restructuring)
Both events are expected to take place in the second quarter of 2000. The
specific dates for the exchange offer and the exchange ratio have not yet been
announced.
*Original announcement was for $8 billion, but has since been increased to $9
billion in order to help offset in part new issuances of $1-2/3 stock being used
to finance the acquisition of a 20% stake in Fiat Auto.
CHART 2
General Motors Corporation Exchange Offer
o What is it?
- An opportunity for GM stockholders who hold GM $1-2/3 par value common
stock to voluntarily exchange some or all of his or her shares for GM
Class H common stock
o Exchange will be based on an "exchange ratio" which will be set by GM
at the commencement of the exchange offer
- Available to all holders of GM $1-2/3 stock, including employees who hold
GM $1-2/3 stock directly, through brokerage accounts or through GM stock
savings plans
SPEAKER NOTES: Background on Class H Stock
- - -------------
GM Class H stock is a letter stock (or tracking stock) of General Motors related
to GM's Hughes Electronics subsidiary. It is designed to provide holders with
financial returns based on the financial performance of Hughes. Holders of a
Class H are stockholders of GM and not of Hughes.
<PAGE>
CHART 3
General Motors Corporation Exchange Offer
o Why is GM doing this?
- This restructuring of GM's economic interest in Hughes
o Enables GM to realize some of the economic value arising from its
ownership of Hughes
o Generates increase in GM $1-2/3 earnings per share (EPS) by reducing
total number of shares outstanding
o Allows $1-2/3 shareholders to participate in any further improvements
in the Class H stock price through GM's retained interest in Hughes
o Increases the liquidity of the Class H stock (due to greater number of
shares outstanding) which should benefit trading of Class H over time
SPEAKER NOTES:
- - --------------
The exchange offer of up to about $9 billion on Class H common stock is an
important element of GM's overall plan to restructure GM's economic interest
in our Hughes subsidiary in order to realize some of the economic value arising
from GM's ownership of Hughes. The other element consists of the
anticipated contributions of about $7 billion of Class H common stock to certain
of our employee benefit plans.
It is expected that this restructuring will result in the following benefits to
GM and its stockholders:
- - - Realize some of the economic value arising from GM's ownership of Hughes.
Given the substantial increase in the Class H stock price over the past year,
it is a good time for GM to unlock shareholder value arising from its
investment in Hughes.
- - - Reduction in the number of shares of GM $1-2/3 stock outstanding (as GM will
retire shares which are repurchased) would increase the earnings per share
for GM $1-2/3 in the future (same earnings and lower denominator results in
higher earnings per share).
- - - Participation in potential future upside of Class H share price as GM will
still retain a significant economic interest in Hughes (over $20 billion
based on recent stock prices).
- - - The issuance of additional shares of Class H common stock in connection with
these transactions should substantially increase the liquidity of Class H
stock in the market (more shares available to trade), which should benefit
Class H stockholders over time.
<PAGE>
CHART 4
General Motors Corporation Exchange Offer
o As a participant in one of GM's Savings Plans, what can I expect?
- An information package will be sent to address of record including:
o Offering Circular-Prospectus and related materials containing
information that will help you understand the business of Hughes and
the benefits and risks associated with the exchange offer
o Instruction Letter to Plan Participants outlining:
- Process for participating in the transaction, if you choose to do so
- Effective dates of the exchange period (there is a time limit on the
exchange offer)
o Questions and Answers
- If you own shares of GM $1-2/3 in more than one plan or if you hold
shares directly or through a broker you will receive separate
information packages relating to those shares
o You must tender such shares separately
SPEAKER NOTES:
- - -------------
Important to let employees know that they may receive multiple packages if they
hold GM $1-2/3 shares in multiple employee plans, directly and/or through
a broker. In all cases, they need to tender these shares independently
if they wish to tender such shares in the exchange offer.
<PAGE>
CHART 5
General Motors Corporation Exchange Offer
o What are the benefits to participating in the exchange offer?
- Transaction is generally tax-free for U.S. income tax purposes, except for
cash received for fractional shares
o Tax-free for participants in Savings Plans
- Potential financial incentive in the form of a premium on GM $1-2/3 stock
exchanged for Class H stock
- To understand the benefits and risk associated with participating in the
exchange offer, carefully review the exchange offer materials that you
will receive in the mail
o Please note that neither GM or its Board is making a recommendation as
to whether you should participate in the exchange offer
SPEAKER NOTES:
- - -------------
Neither GM nor GM's Board of Directors is making a recommendation in connection
with the exchange offer.
The exchange is generally tax free to employee benefit plan participants and GM
would expect to provide stockholders a financial incentive to participate in the
exchange offer, which will be reflected in the exchange ratio at the time it is
set (based on the relative trading prices of $1-2/3 and H at such time).
However, because the trading prices of $1-2/3 and H will fluctuate over time,
there can be no assurance as to whether there will be a premium at the time of
the closing of the exchange offer.
Thus, it is very important to let employees know that they must read the
Offering Circular-Prospectus to understand how this financial incentive works.
Each individual stockholder must make their own decision regarding participation
in the exchange offer.
<PAGE>
CHART 6
General Motors Corporation Exchange Offer
o What are my choices?
- Read carefully the information that is delivered to your home (or address
of record)
- You can choose to tender some, all or none of your shares of $1-2/3
stock in the exchange offer
- If you choose to tender, follow transfer procedures as indicated in the
exchange package
o If you have any questions on the information in the Offering
Circular-Prospectus or the terms and conditions of the exchange offer,
contact Morrow & Co.
o If you have any questions on how to participate through your GM Savings
Plan, contact your plan administrator
o These contacts will not be able to provide investment advice - you must
make your own investment decision
- If you choose not to accept this offer, NO FURTHER ACTION IS REQUIRED
SPEAKER NOTES:
- - -------------
- - - Carefully read the material that is delivered to your home (or address
of record).
- - - Make your own investment decision based on a careful review of the prospectus
and the other exchange offer materials that you will receive at your home (or
address of record).
- - - If you choose to participate, follow the procedures outlined in the package
that is delivered to your home (or address of record).
- - - Once you receive the materials, if you have any questions relating to the
terms of the exchange offer, contact GM's information agent, Morrow & Co. at
the number provided in the prospectus.
- - - If you have any questions on how to participate, contact your Plan
Administrator at the numbers provided in the instruction letter attached to
the prospectus.
- - - None of GM, Hughes, the Exchange Agent, the Dealer Manager, the Marketing
Manager, Morrow & Co. or your Plan Administrator will provide investment
advice. Your must contact your own personal investment advisor if you want
advice on whether to participate.
- - - If you choose not to accept this offer, NO FURTHER ACTION IS REQUIRED!
<PAGE>
While General Motors has filed a Registration Statement on Form S-4,
including a preliminary prospectus, regarding the exchange offer with the SEC,
it has not yet become effective, which means it is not yet final. GM urges
holders of GM $1-2/3 common stock to read the final Registration Statement on
Form S-4, including the final prospectus, regarding the exchange offer referred
to above, when it is finalized and distributed to GM $1-2/3 common stockholders,
as well as the other documents which General Motors has filed or will file with
the SEC, because they contain or will contain important information for making
an informed investment decision. Holders of GM $1-2/3 common stock may obtain a
free copy of the final prospectus, when it becomes available, and other
documents filed by General Motors at the SEC's web site at www.sec.gov, at
General Motors' web site at www.gm.com, or from General Motors by directing such
request in writing or by telephone to: GM Fulfillment Center, 30200 Stephenson
Hwy. (MC 480-000-FC1), Madison Heights, Mich. 48071. Telephone: (313) 667-1500,
menu option #2. This communication shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of securities in
any state in which offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state. No
offering of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended. Inquiries
from the news media should be directed to GM Corporate Communications at
212-418-6380.
