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 Current Reports on Form
8-K dated April 12, 1999, and Filed on April 15, 1999, and April 21, 1999.
The following is the GM press release issued on March 6, 2000 to announce the
authorization by the GM Board of Directors for the Corporation to seek stock-
holder approval to increase the number of authorized shares of GM Class H common
stock. Following the press release are questions and answers relating to the
GM Class H common stock share authorization.
* * * * * * * * * *
GM WILL SEEK TO INCREASE AUTHORIZED SHARES OF CLASS H STOCK
-- Split of GM Class H Stock Foreseen --
DETROIT -- The General Motors Corp. (NYSE: GM, GMH) Board of Directors
today authorized the corporation to seek stockholder approval to increase the
number of authorized shares of GM Class H common stock from 600 million shares
to 3.6 billion shares.
GM's Class H stock is a tracking stock designed to provide holders with
financial returns based on the financial performance of GM's wholly-owned
subsidiary Hughes Electronics Corporation (Hughes).
The board of directors will recommend in General Motors' 2000 proxy
statement that stockholders approve a management proposal to make this increase
at the corporation's annual meeting of stockholders in June of this year. If
approved, the GM board currently expects that it will declare a split of the
Class H stock in the form of a stock dividend shortly after the annual meeting.
The ratio of such a stock split would be determined by the GM board at that
time.
"An increase in the GM Class H share authorization would provide GM and
Hughes increased flexibility to use the Class H stock in ways that would benefit
the business and stockholders, including future acquisitions, strategic
alliances and stock splits," said General Motors Chairman and CEO John F. Smith,
Jr. "In particular, a split of the GM Class H stock would make Class H stock
more accessible to a greater number of stockholders, which could broaden GM's
Class H stockholder base."
The increase in financial flexibility will enhance Hughes' ability to
pursue a new strategic direction. Earlier this year, Hughes announced a new
strategy designed to focus its resources on its high-growth services businesses.
In particular, Hughes is evolving as a premier provider of integrated digital
information and entertainment communications services by leveraging its
expertise in satellite and wireless communications systems. Hughes' objective is
to lead the multi-channel entertainment markets with DIRECTV, capitalize on
growth opportunities in the markets for internet services and digital data, and
achieve sustainable market leadership positions by participating in new markets
and developing new products and services to serve these markets.
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As previously announced, GM has filed a preliminary Form S-4 registration
statement with the Securities and Exchange Commission relating to GM's plan to
offer to repurchase GM $1-2/3 par value common stock in exchange for up to
approximately $8 billion of GM Class H common stock. Any Class H stock split
would be declared by the GM board after the completion of that exchange offer.
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.
# # #
Class H Share Authorization
Questions and Answers
Class H Authorization Increase
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Q. What did GM announce today?
A. The GM Board of Directors has authorized the corporation to seek
stockholder approval to increase the number of authorized shares of GM
Class H common stock from 600 million shares to 3.6 billion shares.
Q. What is Class H stock?
A. GM's Class H stock is a tracking stock designed to provide holders with
financial returns based on the financial performance of GM's wholly-owned
subsidiary Hughes Electronics Corporation (Hughes). A "tracking stock"
(also known as letter stock) is a separate class of a company's common
stock that is designed to provide holders with financial returns based on
the financial performance of a group of assets or a specific business
unit, division, or subsidiary. Holders of a tracking stock are
stockholders of the parent company and not of the underlying business or
subsidiary. The market value of the tracking stock generally reflects the
economic value of the tracked business rather than that of the parent
company as a whole. In the case of the GM Class H stock, the security
tracks the financial performance of Hughes Electronics Corporation.
Q. What is the purpose of this increase?
A. An increase in the GM Class H share authorization would provide GM and
Hughes increased flexibility to use the Class H stock in ways which make
sense for stockholders, such as stock splits, future acquisitions and
strategic alliances. If the increase is approved, the GM Board currently
expects that it will declare a split of Class H stock in the form of a
stock dividend shortly after the shareholders meeting. Such a split would
make the Class H stock more accessible to stockholders, which could
broaden GM's Class H stockholder base.
Q. Would this increase in authorized shares be dilutive to the Class H stock?
A. A stock split would be non-dilutive. Should the increased shares be used
for acquisitions or strategic alliances, such acquisitions or
strategic alliances could be either accretive, neutral or dilutive to
the Class H earnings per share.
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Q. How would the stock authorization process work?
A. The board of directors will recommend in GM's 2000 proxy statement that
stockholders approve a management proposal to approve this increase at the
corporation's annual meeting of stockholders in June of this year. If
approved, an amendment to GM's certificate of incorporation would be filed
with the Delaware Secretary of State to give effect to the increase.
Q. What happens if stockholders don't approve the management proposal?
A. If stockholders fail to approve the management proposal, the number of
authorized Class H shares will not increase and the GM board would not
declare a split of the Class H stock.
Q. What percentage of stockholders have to approve the management proposal?
A. It must be approved by a majority of GM's common stockholders voting
together, as well as the holders of the Class H stock voting separately.
Q. So are you definitely going to do a stock split?
A. If the management proposal to increase the number of shares is approved by
stockholders, the GM board currently expects that it will declare a split
of the Class H stock in the form of a stock dividend dependent upon the
share price and market conditions at that time.
Q. What would be the ratio of a stock split?
The ratio of such a stock split would be determined by the GM board
following the annual meeting and the completion of the exchange offer and
will depend on the then prevailing stock price and market conditions.
Q. What would be the timing of a stock split?
A. Any Class H stock split would be declared by the GM board after the annual
meeting in June and after the completion of the previously announced
exchange offer.
Exchange Offer
- - --------------
Q. Does this share authorization have something to do with the exchange offer
you already announced?
A. No, the exchange offer and the proposed increase in authorized Class H
shares are independent items.
Q. Doesn't your proposed exchange offer increase the number of Class H shares
outstanding?
A. Yes, the exchange offer would increase the number of shares of Class H
stock outstanding, while not being dilutive to the Class H stock.
An increase to the number of shares outstanding would decrease the number
of shares that remain to be issued within the total amount authorized.
Q. What is the status of that exchange offer?
A. On Feb. 22, 2000, GM filed a preliminary Form S-4 registration statement
with the Securities and Exchange Commission (SEC) relating to GM's plan to
offer to repurchase GM $1-2/3 par value common stock in exchange for
approximately $8 billion of GM Class H common stock. The S-4 has not yet
become effective, which means it is not yet final.
Q. When do you plan to execute the exchange offer?
A. GM has previously said that we currently expect the 20-business day
offering period to occur in the second quarter of 2000, following the
SEC's review of the Form S-4 registration statement.
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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.
# # #
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