|
FOR RELEASE: June 13, 2000 CONTACT(S): Mark A. Tanner GM ANNOUNCES $5.6 BILLION CONTRIBUTION TO EMPLOYEE-BENEFIT PLANS DETROIT - General Motors (NYSE: GM, GMH) today announced that on June 12, 2000, it contributed to certain of its employee-benefit plans a total of 60.5 million shares of GM Class H common stock, valued by the independent trustee for the employee-benefit plans at approximately $5.6 billion. GM contributed 53.6 million shares of Class H stock to its U.S. Hourly-Rate Employees Pension Plan (Hourly Pension Plan) and 6.9 million shares to its Welfare Benefit Trust, a voluntary employees' beneficiary association trust established principally to fund health-care and life-insurance benefits for GM's hourly retirees. The employee-benefit-plan contributions are part of GM's previously announced plan to restructure its economic interest in Hughes. These contributions will reduce GM's annual pension expense and other post-retirement employee-benefit expense, improve GM's operating earnings, and will strengthen GM's overall financial position. The newly contributed shares of Class H stock will be managed by U.S. Trust Company of New York (U.S. Trust), an independent trustee for each of the employee-benefit plans. U.S. Trust has acted as trustee of the Hourly Pension Plan with respect to its holdings of Electronic Data Systems Corporation stock, formerly GM's Class E common stock, since 1995. U.S. Trust has indicated that it intends to manage the Class H common stock in substantially the same manner as it has managed the EDS stock held by the Hourly Pension Plan. A registration-rights agreement with GM will enable U.S. Trust to sell the Class H stock in a manner consistent with maintaining an orderly market for the stock and maximizing the value of the plans' investment in the stock. Recent History of GM Class H Stock As part of GM's restructuring of its economic interest in Hughes, which was announced in February 2000, General Motors also recently completed a successful exchange offer. Through the exchange offer, GM effectively repurchased about 14 percent of its outstanding GM $1-2/3 par value common stock in exchange for the issuance of approximately $9 billion of Class H common stock. This reduction in the number of GM $1-2/3 shares outstanding is expected to have a significant favorable impact on GM $1-2/3 earnings per share going forward. As a result of the exchange offer and employee-benefit-plan contributions, the economic interest in Hughes attributable to GM $1-2/3 par value common stock will decline from about 62 percent to approximately 30 percent, and the economic interest in Hughes represented by outstanding Class H stock will correspondingly increase from about 38 percent to approximately 70 percent, in each case on a fully diluted basis. Hughes continues to be a wholly owned subsidiary of General Motors. Separately, as announced June 6, 2000, the GM Board of Directors declared a three-for-one split of the GM Class H stock in the form of a 200-percent stock dividend. The dividend is payable on June 30, 2000, to GM Class H stockholders of record on June 13, 2000, and will make the Class H stock substantially more liquid and accessible to a broader range of investors. Class H stock is a tracking stock of GM designed to provide holders with financial returns based on the financial performance of GM's wholly owned Hughes Electronics subsidiary. |
