PROSPECTUS SUPPLEMENT
(To Prospectus dated March 25, 2004)
$650,000,000
General Motors Corporation
7.50% Senior Notes Due July 1, 2044
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Interest payable on January 1, April 1, July 1 and October 1
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This is an offering of 7.50% Senior Notes due July 1, 2044 (the "Bonds") to
be issued by General Motors Corporation ("GM"). The Bonds will be general
unsecured, unsubordinated obligations of GM. The Bonds will mature on July 1,
2044. The Bonds will bear interest from June 30, 2004, at the rate of 7.50% per
annum, payable quarterly on January 1, April 1, July 1 and October 1 of each
year, commencing on October 1, 2004. We will have the right to redeem the Bonds
in whole but not in part in certain circumstances if we are unable to deduct
interest paid on the Bonds for U.S. federal income tax purposes. The Bonds also
will be redeemable at our option, in whole or in part, at any time on or after
June 30, 2009, upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to 100% of the principal amount to be redeemed plus
accrued and unpaid interest to the redemption date. The Bonds will be issued in
minimum denominations of $25 and integral multiples of $25.
We will apply to list the Bonds on the New York Stock Exchange and expect
trading in the Bonds on the New York Stock Exchange to begin within 30 days
after the original issue date.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the related prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
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Per Bond Total
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Public offering price................................ 100.0% $650,000,000
Underwriting Discounts............................... 3.15% $ 20,475,000
Proceeds to GM (before expenses)..................... 96.85% $629,525,000
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The public offering price set forth above does not include accrued
interest, if any. Interest on the Bonds will accrue from June 30, 2004, and must
be paid by the purchaser if the Bonds are delivered after June 30, 2004.
The underwriters expect to deliver the Bonds in book-entry form only
through the facilities of The Depository Trust Company, including for the
accounts of Euroclear Bank S.A./N.V. and Clearstream Banking S.A. to purchasers
on June 30, 2004.
We have granted the underwriters a right to request from us the opportunity
to purchase up to an additional $97,500,000 aggregate principal amount of Bonds
to cover overallotments, if any. Whether or not to approve the request is
totally at our discretion.
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Joint Book-Running Managers
Citigroup Merrill Lynch & Co. Morgan Stanley UBS Investment Bank
A.G. Edwards Wachovia Securities
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Banc One Capital Markets, Inc.
Bear, Stearns & Co. Inc.
Deutsche Bank Securities
HSBC
RBC Capital Markets
TD Securities
June 23, 2004
TABLE OF CONTENTS
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Page
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PROSPECTUS SUPPLEMENT
Incorporation of Certain Documents By Reference.................... S-1
Ratio of Earnings to Fixed Charges................................. S-2
Use of Proceeds.................................................... S-2
Description of the Bonds........................................... S-2
U.S. Tax Considerations............................................ S-8
Underwriting....................................................... S-11
Legal Opinions..................................................... S-13
PROSPECTUS
About this Prospectus.............................................. 1
Principal Executive Offices........................................ 2
Where You Can Find More Information................................ 2
Incorporation of Certain Documents by Reference.................... 3
Description of General Motors Corporation.......................... 4
Ratio of Earnings to Fixed Charges and Ratio of Earnings
to Fixed Charges and Preference Stock Dividends.................. 5
Use of Proceeds.................................................... 5
Overview of Our Capital Stock...................................... 6
Description of $1 2/3 Par Value Common Stock....................... 8
Description of Preferred Stock..................................... 10
Description of Preference Stock.................................... 11
Description of Debt Securities..................................... 13
Description of Purchase Contracts.................................. 21
Description of Depositary Shares................................... 22
Description of Warrants............................................ 25
Description of Units............................................... 28
Forms of Securities................................................ 31
Plan of Distribution............................................... 33
Legal Matters...................................................... 36
Experts............................................................ 36
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Unless the context indicates otherwise, the words "GM" "we", "our", "ours",
and "us" refer to General Motors Corporation.
You should rely only on the information contained in or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not, and the underwriters have not, authorized any other person to provide you
different information or to make any additional representations. We are not, and
the underwriters are not, making an offer of any securities other than the
Bonds. This prospectus supplement is part of and must be read in conjunction
with the accompanying prospectus dated March 25, 2004. You should not assume
that the information appearing in this prospectus supplement and the
accompanying prospectus, as well as the information incorporated by reference,
is accurate as of any date other than the date on the front cover of this
prospectus supplement.
We will deliver the Bonds to the underwriters at the closing of this
offering when the underwriters pay us the purchase price of the Bonds. The
underwriting agreement provides that the closing will occur on June 30, 2004,
which is five business days after the date of the prospectus supplement. Rule
15c6-1 under the Securities Exchange Act of 1934 generally requires that
securities trades in the secondary market settle in three business days, unless
the parties to a trade expressly agree otherwise.
i
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information we file with
them, which means that we can disclose important information to you by referring
you to those documents, including our annual, quarterly and current reports,
that are considered part of this prospectus supplement and accompanying
prospectus. Information that we file later with the SEC will automatically
update and supersede this information.
We incorporate by reference the documents set forth below that we
previously filed with the SEC. These documents contain important information
about General Motors Corporation and its finances.
SEC Filings (File No. 1-143) Period
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Annual Report on Form 10-K Year ended December 31, 2003
Quarterly Report on Form 10-Q Quarter ended March 31, 2004
Current Reports on Form 8-K Dates filed: April 1, 2004, April 20,
2004(2)*, April 29, 2004, May 4,
2004, May 20, 2004, June 2, 2004,
June 15, 2004* and June 16, 2004*.
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* Reports submitted to the SEC under Item 9, Regulation FD Disclosure and Item
12, Results of Operations and Financial Condition. Pursuant to General
Instructions B(2) and B(6) of Form 8-K the reports submitted under Items 9 and
12 are not deemed to be "filed"` for the purpose of Section 18 of the
Securities Exchange Act of 1934 and we are not subject to the liabilities of
that section. We are not incorporating and will not incorporate by reference
these reports into a filing under the Securities Act of 1933, the Securities
Exchange Act of 1934 or into this prospectus supplement or the accompanying
prospectus.
You may, at no cost, request a copy of the documents incorporated by
reference in this prospectus supplement and accompanying prospectus, except
exhibits to such documents, by writing or telephoning the office of Paul W.
Schmidt, Controller, at the following address and telephone number:
General Motors Corporation
300 Renaissance Center
Detroit, Michigan 48265-3000
Tel: (313) 556-5000
S-1
RATIO OF EARNINGS TO FIXED CHARGES
The following table presents the ratio of our earnings to fixed charges for
the periods indicated:
Three Months
Ended March 31, Years Ended December 31,
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2004 2003 2003 2002 2001 2000 1999
---- ---- ---- ---- ---- ---- ----
1.51 2.06 1.33 1.29 1.28 1.59 2.21
We compute the ratio of earnings to fixed charges by dividing earnings
before income taxes and fixed charges by the fixed charges. This ratio includes
the earnings and fixed charges of us and our consolidated subsidiaries. Fixed
charges consist of interest and discount and the portion of rentals for real and
personal properties in an amount deemed to be representative of the interest
factor.
USE OF PROCEEDS
We will use the net proceeds (approximately $629,525,000 after deducting
underwriting discounts and commissions or approximately $723,953,750 if the
underwriters exercise their over-allotment option in full) for general corporate
purposes, including the repayment of existing indebtedness.
DESCRIPTION OF THE BONDS
General
The following description of the particular terms of the Bonds offered
hereby supplements and, to the extent that the terms are inconsistent, replaces
the description of the general terms and provisions of the Debt Securities set
forth in the accompanying prospectus. The Bonds are part of the Debt Securities
registered by GM in September 2003 to be issued on terms to be determined at the
time of sale.
The Bonds offered hereby will be issued in an initial aggregate principal
amount of $650,000,000 pursuant to an Indenture dated as of December 7, 1995,
between us and Citibank, N.A. (the "Trustee"), which is more fully described in
the accompanying prospectus and the Bonds have been authorized and approved by
resolution of our Board of Directors.
The Indenture and the Bonds are governed by, and construed in accordance
with, the laws of the State of New York, United States.
The Bonds will be unsecured obligations of GM and will rank equally with
all other unsecured and unsubordinated indebtedness of GM. The Bonds will mature
on July 1, 2044. The Bonds are expected to be listed on the New York Stock
Exchange. The Bonds will bear interest, calculated on the basis of a 360-day
year consisting of twelve 30 day months, from June 30, 2004 at a rate of 7.50%
per annum, payable on January 1, April 1, July 1 and October 1 of each year, the
first payment to be made on October 1, 2004, to the person in whose name the
Bonds are registered at the close of business on the fifteenth day of the month
preceding such January 1, April 1, July 1 and October 1.
If any January 1, April 1, July 1 and October 1 falls on a day that is not
a Business Day, then payment of interest will be made on the next succeeding
Business Day with the same force and effect as if made on such date.
The Bonds will be issued in book-entry form only through the facilities of
The Depository Trust Company, including for the accounts of Euroclear Bank
S.A./N.V. and Clearstream Banking S.A. See "Forms of Securities" below.
We may from time to time, without notice to or the consent of the
registered holders of the Bonds, create and issue further Bonds ranking pari
passu with the Bonds in all respects, or in all respects except for the payment
of interest accruing prior to the issue date of such further Bonds or except for
the first payment of interest following the issue date of such further Bonds.
Such further Bonds may be consolidated and form a single series with the Bonds
and have the same terms as to status, redemption or otherwise as the Bonds.
Optional Redemption
We may not redeem the Bonds before June 30, 2009, except for tax reasons as
described below under "Redemption for Tax Reasons." On and after June 30, 2009,
we may redeem the Bonds, at our option and at any time, in whole or in part at a
redemption price equal to 100% of their principal amount plus accrued and unpaid
interest up to but not including the date of redemption.
S-2
Redemption for Tax Reasons
We may elect to redeem the Bonds, in whole but not in part, at any time at
a redemption price of 100% of their principal amount, plus accrued and unpaid
interest up to but not including the redemption date, if on or after June 30,
2004, a change in the U.S. tax laws results in a substantial likelihood that we
will not be able to deduct the full amount of interest accrued on the Bonds for
U.S. federal income tax purposes.
The Bonds describe such a change in tax laws broadly and permit us to
redeem because of:
o any actual or proposed change in or amendment to the laws of
the U.S. or regulations or rulings promulgated under those laws;
o any change in the way those laws, rulings or regulations are
interpreted, applied or enforced;
o any action taken by a taxing authority that applies to us;
o any court decision, whether or not in a proceeding involving us; or
o any technical advice memorandum, letter ruling or administrative
pronouncement issued by the U.S. Internal Revenue Service, based on a
fact pattern substantially similar to ours.
Selection and Notice
We will mail notices of redemption by first-class mail at least 30 and not
more than 60 days prior to the date fixed for redemption to each registered
holder of the Bonds to be redeemed at its registered address. If we redeem less
than all of the Bonds at any time, the trustee will select the Bonds to be
redeemed on a pro rata basis, by lot or by such other method directed by us. The
trustee will make that selection not more than 45 days before the redemption
date.
Trading Characteristics
We expect the Bonds to trade at a price that takes into account the value,
if any, of accrued but unpaid interest. This means that purchasers will not pay,
and sellers will not receive, accrued and unpaid interest on the Bonds that is
not included in their trading price. Any portion of the trading price of a Bond
that is attributable to accrued interest will be treated as ordinary interest
income for federal income tax purposes and will not be treated as part of the
amount realized for purposes of determining gain or loss on the disposition of
the Bonds. See "U.S. Tax Considerations" below.
Forms of Securities
The Bonds will be issued in the form of one or more fully registered global
securities (a "Global Security") which will be deposited with, or on behalf of,
The Depository Trust Company, New York, New York ("DTC") and registered in the
name of DTC's nominee. Beneficial interests in a Global Security will be
represented through book-entry accounts of financial institutions acting on
behalf of beneficial owners as direct and indirect participants of DTC.
Investors may elect to hold interests in the Global Securities through either
DTC (in the United States) or (in Europe) through Clearstream Banking S.A.,
formerly Cedelbank ("Clearstream"), or through Euroclear Bank S.A./N.V., as
operator of the Euroclear System ("Euroclear"). Investors may hold their
interests in the Global Securities directly if they are participants of such
systems, or indirectly through organizations that are participants in these
systems. Clearstream and Euroclear will hold interests on behalf of their
participants through customers' securities accounts in Clearstream's and
Euroclear's names on the books of their respective depositaries, which in turn
will hold these interests in customers' securities accounts in the depositaries'
names on the books of DTC. Citibank, N.A. will act as depositary for Clearstream
and JPMorgan Chase Bank will act as depositary for Euroclear. Citibank and
JPMorgan Chase Bank are referred to in these capacities as the "U.S.
Depositaries." Beneficial interests in the Global Securities will be held in
denominations of $25 and integral multiples of $25. Except as set forth below,
the Global Securities may be transferred, in whole and not in part, only to
another nominee of DTC or to a successor of DTC or its nominee. GM will not
issue certificates to you for the Bonds that you purchase, unless DTC's services
are discontinued as described below. Accordingly, you must rely on the
procedures of DTC and its participants to exercise any rights under the Bonds.
S-3
DTC
DTC has advised us that it is a limited-purpose trust company which was
created to hold securities for its participating organizations and to facilitate
the clearance and settlement of securities transactions between participants in
such securities through electronic book-entry changes in accounts of its
participants. Participants include:
o securities brokers and dealers, including the underwriters named in the
accompanying prospectus supplement;
o banks and trust companies;
o clearing corporations; and
o certain other organizations.
Access to DTC's system is also available to others such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. Persons who are
not participants may beneficially own securities held by DTC only through
participants or indirect participants.
DTC advises that pursuant to procedures established by it:
o upon issuance of a Global Security, DTC will credit the account of
participants designated by any dealers, underwriters or agents
participating in the distribution of the securities with the
respective principal or face amounts of securities beneficially owned
by such participants; and
o ownership of beneficial interests in a Global Security will be shown on,
and the transfer of that ownership will be effected only through, records
maintained by DTC (with respect to participants' interests), the
participants and the indirect participants (with respect to the owners
of beneficial interests in the Global Security).
The laws of some states require that certain persons take physical delivery
in definitive form of securities which they own. Consequently, the ability to
own, transfer or pledge beneficial interests in a Global Security is limited to
such extent.
As long as DTC's nominee is the registered owner of a Global Security, such
nominee for all purposes will be considered the sole owner or holder of the
securities represented by the Global Security. Except as provided below, you
will not:
o be entitled to have any of the securities registered in your name;
o receive or be entitled to receive physical delivery of the securities
in definitive form; or
o be considered the owners or holders of the securities under the
applicable indenture, purchase contract agreement, warrant agreement or
unit agreement.
Principal, premium, if any, and interest payments on debt securities, and
any payments to holders with respect to purchase contracts, warrants or units,
represented by a Global Security registered in the name of a Depository or its
nominee will be made to DTC or its nominee, as the case may be, as the
registered owner of the Global Security. Neither we, the trustees, any unit
agent, purchase contract agent, warrant agent, paying agent or any other agent
for payment on or registration of transfer or exchange of any Global Security
nor DTC will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in
Global Securities or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
If DTC is at any time unwilling or unable to continue as depositary and we
have not appointed a successor depositary within 90 days, we will issue
securities in definitive form in exchange for the Global Securities. In
addition, we may at any time determine not to have the securities represented by
Global Securities and, in such event, will issue securities in definitive form
in exchange for the Global Securities. In either instance, an owner of a
beneficial interest in a Global Security will be entitled to have securities
equal in principal amount to the beneficial interest registered in its name and
will be entitled to physical delivery of the securities in definitive form. No
service charge will be made for any transfer or exchange of the securities, but
we may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Clearstream
Clearstream is incorporated under the laws of Luxembourg as a professional
depositary. Clearstream holds securities for its participating organizations
("Clearstream Participants") and facilitates the clearance and settlement of
securities transactions between Clearstream Participants through electronic
book-entry changes in accounts of Clearstream Participants, thereby eliminating
the need for physical movement of certificates. Clearstream provides to
Clearstream Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
S-4
and securities lending and borrowing. Clearstream interfaces with domestic
securities markets in several countries. As a professional depositary,
Clearstream is subject to regulation by the Luxembourg Commission for the
Supervision of the Financial Sector (Commission de Surveillance du Secteur
Financier). Clearstream Participants are recognized financial institutions
around the world, including underwriters, securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations and may
include the underwriters. Clearstream's U.S. Participants are limited to
securities brokers and dealers and banks. Indirect access to Clearstream is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Clearstream
Participant either directly or indirectly.
Distributions with respect to Bonds held beneficially through Clearstream
will be credited to cash accounts of Clearstream Participants in accordance with
its rules and procedures, to the extent received by the U.S. Depositary for
Clearstream.
Euroclear
Euroclear was created in 1968 to hold securities for participants of
Euroclear ("Euroclear Participants") and to clear and settle transactions
between Euroclear Participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Euroclear performs various other services, including securities lending
and borrowing and interacts with domestic markets in several countries.
Euroclear is operated by Euroclear Bank S.A./N.V. (the "Euroclear Operator")
under contract with Euroclear plc, a U.K. corporation. All operations are
conducted by the Euroclear Operator, and all Euroclear securities clearance
accounts and Euroclear cash accounts are accounts with the Euroclear Operator,
not Euroclear plc. Euroclear plc establishes policy for Euroclear on behalf of
Euroclear Participants. Euroclear Participants include banks, including central
banks, securities brokers and dealers and other professional financial
intermediaries and may include the underwriters. Indirect access to Euroclear is
also available to other firms that clear through or maintain a custodial
relationship with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator is a Belgian bank. As such it is regulated by the
Belgian Banking and Finance Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific clearance accounts. The
Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
Distributions with respect to Bonds held beneficially through Euroclear
will be credited to the cash accounts of Euroclear Participants in accordance
with the Terms and Conditions, to the extent received by the U.S. Depositary for
Euroclear.
Euroclear has further advised GM that investors that acquire, hold and
transfer interests in the Bonds by book-entry through accounts with the
Euroclear Operator or any other securities intermediary are subject to the laws
and contractual provisions governing their relationship with their intermediary,
as well as the laws and contractual provisions governing the relationship
between such an intermediary and each other intermediary, if any, standing
between themselves and the global securities certificates.
Global Clearance and Settlement Procedures
Initial settlement for the Bonds will be made in immediately available
funds. Secondary market trading between DTC participants will occur in the
ordinary way in accordance with DTC rules and will be settled in immediately
available funds using DTC's Same Day Funds Settlement System. Secondary market
trading between Clearstream Participants and/or Euroclear Participants will
occur in the ordinary way in accordance with the applicable rules and operating
procedures of Clearstream and Euroclear and will be settled using the procedures
applicable to conventional eurobonds in immediately available funds.
Cross market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Clearstream
Participants or Euroclear Participants, on the other, will be effected through
DTC in accordance with DTC rules on behalf of the relevant European
international clearing system by its U.S. Depositary; however, such cross market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its U.S.
Depositary to take action to effect final settlement on its behalf by delivering
or receiving Bonds through DTC, and making or receiving payment in accordance
with normal procedures for same day funds settlement applicable to DTC.
Clearstream Participants and Euroclear Participants may not deliver instructions
directly to their respective U.S. Depositaries.
S-5
Because of time zone differences, credits of Bonds received through
Clearstream or Euroclear as a result of a transaction with a DTC participant
will be made during subsequent securities settlement processing and dated the
business day following the DTC settlement date. Such credits or any transactions
in such Bonds settled during such processing will be reported to the relevant
Euroclear Participants or Clearstream Participants on such business day. Cash
received in Clearstream or Euroclear as a result of sales of Bonds by or through
a Clearstream Participant or a Euroclear Participant to a DTC participant will
be received with value on the DTC settlement date but will be available in the
relevant Clearstream or Euroclear cash account only as of the business day
following settlement in DTC.
Although DTC, Clearstream and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Bonds among participants of DTC,
Clearstream and Euroclear, they are under no obligation to perform or continue
to perform such procedures and such procedures may be modified or discontinued
at any time. Neither GM nor the paying agent will have any responsibility for
the performance by DTC, Euroclear or Clearstream or their respective direct or
indirect participants of their obligations under the rules and procedures
governing their operations.
S-6
U.S. TAX CONSIDERATIONS
The following summary describes the material U.S. federal income and
certain estate tax consequences of ownership and disposition of the Bonds to an
initial investor purchasing a Bond at its "issue price" (that is, the first
price at which a substantial amount of the Bonds is sold for money to the public
(excluding sales to bond houses, brokers or similar persons or organizations
acting in the capacity of underwriters, placement agents or wholesalers)). This
summary is based on the Internal Revenue Code of 1986, as amended to the date
hereof (the "Code"), administrative pronouncements, judicial decisions and
existing and proposed Treasury regulations, and interpretations of the
foregoing, changes to any of which subsequent to the date of this prospectus
supplement may affect the tax consequences described herein, possibly with
retroactive effect. This summary discusses only Bonds held by initial purchasers
as capital assets within the meaning of Section 1221 of the Code. It does not
discuss all of the tax consequences that may be relevant to holders in light of
their particular circumstances, and does not describe tax consequences of
ownership or disposition of Bonds by holders that are subject to special rules,
such as certain financial institutions, insurance companies, dealers in
securities, partnerships or other entities classified as partnerships for U.S.
federal income tax purposes, persons holding Bonds in connection with a hedging
transaction, "straddle," conversion transaction or other integrated transaction,
persons subject to the alternative minimum tax, or U.S. Holders (as defined
below) whose functional currency is not the U.S. dollar, or persons who have
ceased to be U.S. citizens or to be taxed as resident aliens.
Prospective investors should consult their tax advisers with regard to the
application of U.S. federal tax laws to their particular situations, as well as
any tax consequences of ownership or disposition of Bonds under the laws of any
state, local or foreign taxing jurisdiction.
U.S. Holders
"U.S. Holder" means a beneficial owner of a Bond that is, for U.S. federal
income tax purposes, (i) a citizen or resident of the U.S., (ii) a corporation
or other entity treated as a corporation for U.S. federal income tax purposes,
created or organized in or under the laws of the U.S. or any political
subdivision thereof, (iii) an estate the income of which is subject to U.S.
federal income taxation regardless of its source, or (iv) a trust if (a) a court
within the United States is able to exercise primary supervision over the
administration of the trust and (b) one or more United States persons have the
authority to control all substantial decisions of the trust.
Payment of Interest
Stated interest on a Bond will be taxable to a U.S. Holder as ordinary
interest income at the time it accrues or is received, in accordance with the
U.S. Holder's method of federal income accounting for tax purposes. The notes
will be issued at par and will not be treated as bearing original issue discount
for federal income tax purposes.
Sale, Exchange or Retirement
Upon the sale, exchange or retirement of a Bond, a U.S. Holder will
recognize taxable gain or loss equal to the difference between the U.S. Holder's
adjusted tax basis in the Bond and the amount realized on the sale, exchange or
retirement. For these purposes, the amount realized does not include unpaid
interest that has accrued to the date of sale but has not previously been
included in income. (See "Description of the Bonds--Trading Characteristics.")
Such amounts are treated as interest as described under "Payment of Interest"
above. A U.S. Holder's adjusted tax basis in a Bond will generally equal the
cost of the Bond to the U.S. Holder. Gain or loss realized on the sale, exchange
or retirement of a Bond will be capital gain or loss. Prospective investors
should consult their tax advisers regarding the treatment of capital gains
(which may be taxed at lower rates than ordinary income for taxpayers who are
individuals, trusts or estates and have held their Bonds for more than one year)
and losses (the deductibility of which is subject to limitations).
Non-U.S. Holders
"Non-U.S. Holder" means a beneficial owner of a Bond that is, for U.S.
federal income tax purposes, (i) a nonresident alien individual, (ii) a foreign
corporation or (iii) a nonresident alien fiduciary of a foreign estate or trust.
"Non-U.S. Holder" does not include a beneficial owner of a Bond who is an
individual present in the United States for 183 days or more in the taxable year
of disposition and who is not otherwise a resident for U.S. federal income tax
purposes. Such owner is urged to consult his or her own tax adviser regarding
the U.S. federal tax consequences of the sale, exchange or other disposition of
a Bond.
S-7
Under present U.S. federal tax law, and subject to the discussion below
concerning backup withholding:
(a) Payments of principal, interest and premium on the Bonds to any
Non-U.S. Holder will be exempt from the 30% U.S. federal withholding tax,
provided that in the case of interest, the Non-U.S. Holder does not own,
actually or constructively, 10% or more of the total combined voting power
of all classes of GM stock entitled to vote, is not a controlled foreign
corporation related, directly or indirectly, to GM through stock ownership,
and is not a bank receiving certain types of interest. Interest will not,
however, be exempt from withholding tax unless the beneficial owner of the
Bond certifies, generally on Internal Revenue Service ("IRS") Form W-8BEN
or, if income from the Bond is effectively connected to the Non-U.S.
Holder's conduct of a U.S. trade or business, Form W-8ECI, under penalties
of perjury that it is not a U.S. person. Prospective investors, including
foreign partnerships and their partners, should consult their tax advisers
regarding possible additional reporting requirements;
(b) a Non-U.S. Holder of a Bond will not be subject to U.S. federal
income tax on gain realized on the sale, exchange or other disposition of
the Bond, unless the gain is effectively connected with the Non-U.S.
Holder's conduct of a trade or business in the U.S.; and
(c) a Non-U.S. Holder who is an individual and who is not, for U.S.
federal estate tax purposes, a resident or citizen of the U.S. at the time
of his death generally will not be subject to U.S. federal estate tax as a
result of the individual's death, provided that the individual does not
own, actually or constructively, 10% or more of the total combined voting
power of all classes of GM stock entitled to vote and, at the time of the
individual's death, payments with respect to the Bond would not have been
effectively connected to the conduct by the individual of a trade or
business in the U.S.
If a Non-U.S. Holder of a Bond is engaged in a trade or business in the
U.S., and if interest on the Bond (or gain realized on its sale, exchange or
other disposition) is effectively connected with the conduct of the trade or
business, the Non-U.S. Holder, although exempt from the withholding tax
discussed in the preceding paragraphs upon proper certification of exempt
status, will be subject to regular U.S. income tax on the effectively connected
income, generally in the same manner as if it were a U.S. Holder. See "U.S.
Holders" above. In addition, if the Non-U.S. Holder is a foreign corporation, it
may be subject to a 30% branch profits tax (unless reduced or eliminated by an
applicable treaty) on its earnings and profits for the taxable year that are
attributable to the effectively connected income, subject to certain
adjustments.
Backup Withholding and Information Reporting
U.S. Holders
Information reporting requirements apply to payments of interest on a Bond,
and to proceeds of disposition of a Bond. A U.S. Holder will be subject to
backup withholding tax (at rates specified from time to time in the Code) if the
U.S. Holder fails to provide the payer with correct taxpayer identification
numbers and other information or fail to comply with certain other requirements.
GM, its paying agent, or a broker, as the case may be, will be required to
withhold the required amount from any payment that is subject to backup
withholding unless the holder furnishes the payer with its taxpayer
identification number in the manner prescribed in applicable Treasury
regulations (generally on an IRS Form W-9) and certain other conditions are met.
Non-U.S. Holders
Information returns will be filed with the IRS in connection with payments
on the Bonds. Backup withholding will not apply to payments of interest made on
a Bond or to proceeds from a sale or other disposition of a Bond if the
certifications required to claim the exemption from withholding tax on interest
described above are received, provided that GM or its paying agent, as the case
may be, does not have actual knowledge that the payee is a U.S. person.
Holders of Bonds should consult their tax advisers regarding the
application of information reporting and backup withholding in their particular
situations, the availability of an exemption therefrom and the procedure for
obtaining such an exemption, if available. Backup withholding is not an
additional tax. Any amounts withheld from a payment to a holder under the backup
withholding rules will be allowed as a credit against such holder's U.S. federal
income tax liability and may entitle the holder to a refund, provided that the
required information is furnished to the IRS.
S-9
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
dated June 23, 2004 (the "Underwriting Agreement"), we have agreed to sell to
each of the underwriters named below, and each of the underwriters, for whom
Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and UBS Securities LLC are
acting as representatives (the "Representatives"), has severally agreed to
purchase the principal amount of the Bonds set forth opposite its name below. In
the Underwriting Agreement, the several underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all the Bonds offered hereby
if any of the Bonds are purchased.
Principal
Amount of
Underwriters Bonds
------------ ---------
Citigroup Global Markets Inc................................... 73,233,375
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................................. 73,233,375
Morgan Stanley & Co. Incorporated.............................. 73,233,375
UBS Securities LLC............................................. 73,233,375
A.G.Edwards & Sons, Inc........................................ 73,233,275
Wachovia Capital Markets, LLC.................................. 73,233,275
Banc One Capital Markets, Inc.................................. 18,308,325
Bear, Stearns & Co. Inc........................................ 18,308,325
Deutsche Bank Securities Inc................................... 18,308,325
HSBC Securities (USA) Inc...................................... 18,308,325
RBC Dain Rauscher Inc.......................................... 18,308,325
TD Securities (USA) Inc........................................ 18,308,325
ABN AMRO Incorporated.......................................... 3,250,000
Banc of America Securities LLC................................. 3,250,000
BNP Paribas Securities Corp.................................... 3,250,000
Comerica Securities, Inc....................................... 3,250,000
Credit Suisse First Boston LLC................................. 3,250,000
Fahnestock & Co. Inc........................................... 3,250,000
Goldman, Sachs & Co............................................ 3,250,000
Guzman & Company............................................... 3,250,000
H&R Block Financial Advisors, Inc.............................. 3,250,000
J.P.Morgan Securities Inc...................................... 3,250,000
Lehman Brothers Inc............................................ 3,250,000
McDonald Investment Inc........................................ 3,250,000
Quick and Reilly, Inc.......................................... 3,250,000
Charles Schwab & Co., Inc...................................... 3,250,000
Wells Fargo Brokerage Services, LLC............................ 3,250,000
U.S. Bancorp Piper Jaffray Inc................................. 3,250,000
Advest, Inc.................................................... 1,625,000
BB&T Capital Markets, Inc...................................... 1,625,000
Blaylock & Partners, L.P....................................... 1,625,000
CIBC World Markets Corp........................................ 1,625,000
D.A. Davidson & Co............................................. 1,625,000
David A. Noyes & Company....................................... 1,625,000
Doley Securities, Inc.......................................... 1,625,000
Ferris Baker Watts Incorporated................................ 1,625,000
Fidelity Capital Markets, a division of National
Financial Services LLC...................................... 1,625,000
Fifth Third Securities, Inc.................................... 1,625,000
Janney Montgomery Scott LLC.................................... 1,625,000
J.J.B. Hilliard, W.L. Lyons, Inc............................... 1,625,000
S-9
Principal
Amount of
Underwriters Bonds
------------ ---------
C.L. King & Associates, Inc.................................... 1,625,000
Legg Mason Wood Walker, Incorporated........................... 1,625,000
Loop Capital Markets........................................... 1,625,000
McGinn, Smith & Co. Inc........................................ 1,625,000
Mesirow Financial, Inc......................................... 1,625,000
Morgan Keegan & Company, Inc................................... 1,625,000
Muriel Siebert & Co., Inc...................................... 1,625,000
Pershing LLC................................................... 1,625,000
Raymond James & Associates, Inc................................ 1,625,000
Samuel A. Ramirez & Co., Inc................................... 1,625,000
Robert W. Baird & Co. Incorporated............................. 1,625,000
Ryan, Beck & Co. LLC........................................... 1,625,000
Scotia Capital (USA) Inc....................................... 1,625,000
Southwest Securities, Inc...................................... 1,625,000
Stifel, Nicolaus & Company Incorporated........................ 1,625,000
SunTrust Capital Markets, Inc.................................. 1,625,000
Utendahl Capital Partners, L.P................................. 1,625,000
The Williams Capital Group, L.P................................ 1,625,000
------------
Total $650,000,000
The underwriters have agreed to reimburse us for certain expenses incurred
in connection with the offering.
-------------------------------------------------------------------------------
The Representatives of the underwriters have advised us that the
underwriters propose initially to offer the Bonds to the public at the offering
price set forth on the cover page of this prospectus supplement and to certain
securities dealers at such price less a concession of $0.50 per Bond. The
underwriters may allow, and such dealers may reallow a concession not in excess
of $0.45 per Bond to certain brokers and dealers. After the initial public
offering, the public offering price and concession may be changed.
We have granted the underwriters a right to request from us the opportunity
to purchase up to an additional $97,500,000 aggregate principal amount of Bonds
to cover overallotments, if any, at the initial offering price to the public
less the underwriting discounts set forth above and within 30 days from the date
of this prospectus supplement. Whether or not to approve the underwriters'
request is totally at our discretion. To the extent that we approve of the
exercise of such option and the underwriters exercise such option, each of the
underwriters will have a firm commitment, subject to certain conditions, to
purchase from us approximately the same percentages of the aggregate principal
amount of Bonds as the amount set forth next to such underwriter's name in the
above table bears to the aggregate principal amount of Bonds set forth as the
total to be purchased in the above table.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
Prior to the offering, there has been no public market for the Bonds. We
intend to list the Bonds on the New York Stock Exchange, and we expect trading
in the Bonds on the New York Stock Exchange to begin within 30 days after the
original issue date. In order to meet one of the requirements for listing the
Bonds, the underwriters will undertake to sell the Bonds to a minimum of 400
beneficial holders.
The Bonds are a new issue of securities with no established trading market.
The underwriters have advised us that the underwriters intend to make a market
in the Bonds but are not obligated to do so and may discontinue market making at
any time without notice. Neither we nor the underwriters can assure you that the
trading market for the Bonds will be liquid.
In connection with the sale of the Bonds, certain of the underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Bonds. Specifically, the underwriters may overallot the offering, creating a
short position. In addition, the underwriters may bid for and purchase the Bonds
in the open market to cover short positions or to stabilize the price of the
Bonds. Any of these activities may stabilize or maintain the market price of the
Bonds above independent market levels. The underwriters will not be required to
engage in these activities, and may end any of these activities at any time.
S-10
E. Stanley O'Neal, a director of Merrill Lynch & Co. Inc., of which Merrill
Lynch, Pierce, Fenner & Smith Incorporated is a direct wholly-owned subsidiary,
is a director of GM. John H. Bryan, a director of our company, is also a
director of The Goldman Sachs Group, Inc., an affiliate of Goldman, Sachs & Co.,
and a director of Bank One Corporation, an affiliate of Banc One Capital
Markets, Inc. Citibank N.A., an affiliate of Citigroup Global Markets Inc., acts
as trustee under the indenture. In the ordinary course of their respective
businesses, the underwriters and their affiliates have engaged, and will in the
future engage, in commercial banking and investment banking transactions with GM
and certain of our affiliates for which they have received customary fees and
expenses.
We will deliver the Bonds to the underwriters at the closing of this
offering when the underwriters pay us the purchase price of the Bonds. The
underwriting agreement provides that the closing will occur on June 30, 2004,
which is five business days after the date of the prospectus supplement. Rule
15c6-1 under the Securities Exchange Act of 1934 generally requires that
securities trades in the secondary market settle in three business days, unless
the parties to a trade expressly agree otherwise.
LEGAL OPINIONS
The validity of the Bonds offered pursuant to this prospectus supplement
will be passed on for GM by Martin I. Darvick, Esq., Attorney, GM Legal Staff,
and for the underwriters by Davis Polk & Wardwell. Mr. Darvick owns shares, and
has options to purchase shares, of General Motors Corporation common stock,
$1-2/3 par value.
The firm of Davis Polk & Wardwell acts as counsel to the Executive
Compensation Committee of our Board of Directors and has acted as our counsel
and as counsel for certain of our subsidiaries in various matters.
S-11
PROSPECTUS
$10,000,000,000
GENERAL MOTORS CORPORATION
Debt Securities
Common Stock (par value $1 2/3)
Preference Stock (par value $0.10)
Preferred Stock (without par value)
Purchase Contracts
Depositary Shares
Warrants
Units
-----------------------------------------------------
We may offer from time to time debt securities, $1 2/3 par value common
stock, preference stock, preferred stock, purchase contracts, depositary shares,
warrants or units. The aggregate initial offering price of all securities sold
by us under this prospectus will not exceed $10,000,000,000. We will provide
specific terms of these securities in supplements to this prospectus. You should
read this prospectus and any supplement carefully before you invest.
Our $1 2/3 par value common stock is listed in the United States on the New
York Stock Exchange, the Chicago Stock Exchange, the Pacific Stock Exchange and
the Philadelphia Stock Exchange under the symbol "GM."
-----------------------------------------------------
We reserve the sole right to accept and, together with our agents from time
to time, to reject in whole or in part any proposed purchase of securities to be
made directly or through any agents.
-----------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
March 25, 2004
You should rely only on the information contained in or incorporated by
reference into this prospectus or any accompanying supplemental prospectus. We
have not authorized anyone to provide you with different information or make any
additional representations. We are not making an offer of these securities in
any state or other jurisdiction where the offer is not permitted. You should not
assume that the information contained in or incorporated by reference into this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of each of such documents. The terms "General Motors,"
"GM," "we," "us," and "our" refer to General Motors Corporation.
-----------------------------------------------------
TABLE OF CONTENTS
About this Prospectus 1
Principal Executive Offices 2
Where You Can Find More Information 2
Incorporation of Certain Documents by Reference 3
Description of General Motors Corporation 4
Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed
Charges and Preference Stock Dividends 5
Use of Proceeds 5
Overview of Our Capital Stock 6
Description of $1 2/3 Par Value Common Stock 8
Description of Preferred Stock 10
Description of Preference Stock 11
Description of Debt Securities 13
Description of Purchase Contracts 21
Description of Depositary Shares 22
Description of Warrants 25
Description of Units 28
Forms of Securities 31
Plan of Distribution 33
Legal Matters 36
Experts 36
-----------------------------------------------------
ABOUT THIS PROSPECTUS
This prospectus, along with a prospectus for General Motors Nova Scotia
Finance Company, a wholly owned subsidiary of GM, is part of a registration
statement that we filed with the Securities and Exchange Commission, referred to
as the SEC in this prospectus, utilizing a "shelf" registration process. Under
this shelf process, we may sell any combination of our securities and General
Motors Nova Scotia Finance Company may sell its debt securities, guaranteed by
us, as described in the related prospectus, in one or more offerings. The
aggregate initial offering price of all securities sold by us under this
prospectus will not exceed $10,000,000,000. This prospectus provides you with a
general description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may also
add, update or change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with additional
information described below under "Incorporation of Certain Documents By
Reference.
1
PRINCIPAL EXECUTIVE OFFICES
Our principal executive offices are located at 300 Renaissance Center,
Detroit, Michigan 48265-3000, and our telephone number is (313) 556-5000.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document that we file at the
Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. You may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet
site at www.sec.gov that contains reports, proxy statements and other
information regarding registrants that file electronically, including GM. We are
not incorporating the contents of the SEC website into this prospectus. Reports
and other information can also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005, where our $1 2/3 par
value common stock is listed, as well as at the offices of the following stock
exchanges where our $1 2/3 par value common stock is also listed in the United
States: the Chicago Stock Exchange, Inc., One Financial Place, 440 South LaSalle
Street, Chicago, Illinois 60605; the Pacific Stock Exchange, Inc., 233 South
Beaudry Avenue, Los Angeles, California 90012 and 301 Pine Street, San
Francisco, California 94104; and the Philadelphia Stock Exchange, Inc., 1900
Market Street, Philadelphia, Pennsylvania 19103.
2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information that we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
by us under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 until we sell all of the securities, except as noted below:
SEC Filings (File No. 1-143) Period
--------------------------- ------
Annual Report on Form 10-K Year ended December 31, 2003
Current Reports on Form 8-K Dates filed: January 5, 2004,
January 8, 2004*, January 20, 2004
(2)*, February 3, 2004, February 4,
2004 and March 2, 2004
The description of the $1 2/3 par value common stock set forth in Article Fourth
of General Motors' Certificate of Incorporation filed as Exhibit 3(i) to the
Annual Report on Form 10-K of General Motors for the year ended December 31,
2003 filed on March 10, 2004.
------------
* This asterisk indicates reports submitted to the Securities and Exchange
Commission which include information "furnished" pursuant to Items 9 and
12 of Form 8-K, which pursuant to General Instruction B of Form 8-K is
not deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934. The information furnished pursuant
to Items 9 and 12 in such reports is not subject to the liabilities of
Section 18 of the Securities Exchange Act of 1934, is not incorporated
into this prospectus and GM does not intend to incorporate these reports
by reference into any filing under the Securities Act or the Exchange Act.
You may request a copy of the documents incorporated by reference into this
prospectus, except exhibits to such documents unless those exhibits are
specifically incorporated by reference in such documents, at no cost, by writing
or telephoning the office of Paul W. Schmidt, Controller, at the following
address and telephone number:
General Motors Corporation
300 Renaissance Center
Detroit, Michigan 48265-3000
(313) 556-5000
3
DESCRIPTION OF GENERAL MOTORS CORPORATION
We are primarily engaged in the automotive industry. We are the world's
largest manufacturer of automotive vehicles. We also have financing and
insurance operations and, to a lesser extent, are engaged in other industries.
Our automotive segment is comprised of four regions:
o GM North America;
o GM Europe;
o GM Latin America/Africa/Mid-East; and
o GM Asia Pacific.
GM North America designs, manufactures and/or markets vehicles primarily in
North America under the following nameplates:
o Chevrolet o GMC o Buick o Saturn
o Pontiac o Oldsmobile o Cadillac o HUMMER
GM Europe, GM Latin America/Africa/Mid-East and GM Asia Pacific meet the
demands of customers outside North America with vehicles designed, manufactured
and/or marketed under the following nameplates:
o Opel o Holden o Buick o GMC
o Vauxhall o Saab o Chevrolet o Cadillac
Our automotive regions also have investments in Fiat Auto Holdings, Fuji
Heavy Industries Ltd., Suzuki Motor Corporation, Isuzu Motors Limited, Shanghai
General Motors Corporation, SAIC-GM-Wuling Automobile Company Ltd. and GM Daewoo
Auto & Technology Company. These investees design, manufacture and market
vehicles under the following nameplates:
o Fiat o Subaru o Isuzu o Wuling
o Alfa Romeo o Suzuki o Buick o Daewoo
o Lancia
Certain of these investees also design, manufacture and market vehicles under
the Chevrolet nameplate.
Our financing and insurance operations primarily relate to General Motors
Acceptance Corporation, which provides a broad range of financial services,
including consumer vehicle financing, automotive dealership and other commercial
financing, residential and commercial mortgage services, automobile service
contracts, personal automobile insurance coverage and selected commercial
insurance coverage. For more information about GMAC, see the documents filed
separately by GMAC with the SEC, including GMAC's most recent Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q and various Current Reports on Form
8-K.
Our other industrial operations include the design, manufacturing and
marketing of locomotives and heavy-duty transmissions.
Substantially all automotive-related products are marketed through retail
dealers and distributors in the United States, Canada, and Mexico, and through
distributors and dealers overseas. At December 31, 2003, there were
approximately 7,700 GM vehicle dealers in the United States, 800 in Canada, and
260 in Mexico. Additionally, there were a total of approximately 15,500 outlets
overseas which include dealers and authorized sales, service, and parts outlets.
4
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERENCE STOCK DIVIDENDS
The following table presents the ratio of our earnings to fixed charges for
the periods indicated:
Years Ended December 31,
----------------------------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
1.33 1.29 1.28 1.59 2.21
We compute the ratio of earnings to fixed charges by dividing earnings
before income taxes and fixed charges by the fixed charges. This ratio includes
the earnings and fixed charges of us and our consolidated subsidiaries. Fixed
charges consist of interest and discount and the portion of rentals for real and
personal properties in an amount deemed to be representative of the interest
factor.
The following table presents the ratio of our earnings to fixed charges and
preference stock dividends for the periods indicated:
Years Ended December 31,
----------------------------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
1.33 1.28 1.25 1.56 2.17
We compute the ratio of earnings to fixed charges and preference stock
dividends by dividing earnings before income taxes and fixed charges by the sum
of fixed charges and preference stock dividends. This ratio includes the
earnings and fixed charges of us and our consolidated subsidiaries. Preference
stock dividends consist of pre-tax earnings that are required to pay dividends
on outstanding preference securities.
USE OF PROCEEDS
We will add the net cash proceeds from the sale by us of any securities to
our general funds and they will be available for general corporate purposes,
including the repayment of existing indebtedness. In addition, we intend to
cancel or retire any indebtedness or other outstanding liabilities of GM that we
acquire in exchange for the sale of any securities.
5
OVERVIEW OF OUR CAPITAL STOCK
The following description of our capital stock is based upon our restated
certificate of incorporation, as amended ("Certificate of Incorporation"), our
bylaws, as amended ("Bylaws"), and applicable provisions of law. We have
summarized certain portions of our Certificate of Incorporation and Bylaws
below. The summary is not complete. Our Certificate of Incorporation and Bylaws
have been filed as exhibits to the registration statement of which this
prospectus is a part and are incorporated by reference into this prospectus. You
should read our Certificate of Incorporation and Bylaws for the provisions that
are important to you.
Certain provisions of the Delaware General Corporation Law ("DGCL"), our
Certificate of Incorporation and our Bylaws summarized in the following
paragraphs may have an anti-takeover effect. This may delay, defer or prevent a
tender offer or takeover attempt that a stockholder might consider in its best
interests, including those attempts that might result in a premium over the
market price for its shares.
Authorized Capital Stock
Our Certificate of Incorporation authorizes us to issue 2,106,000,000
shares of capital stock, consisting of:
o 6,000,000 shares of preferred stock, without par value;
o 100,000,000 shares of preference stock, $0.10 par value; and
o 2,000,000,000 shares of $1 2/3 par value common stock.
As of December 31, 2003:
o 561,997,725 shares of $1 2/3 par value common stock were outstanding (and
an additional 146,741,400 shares were reserved for possible issuance upon
conversion of our outstanding convertible debt securities); and
o No shares of preferred stock or preference stock were outstanding.
Certain Provisions of Our Certificate of Incorporation and Bylaws
Amendments to our Certificate of Incorporation. Under the DGCL, the
affirmative vote of a majority of the outstanding shares entitled to vote and a
majority of the outstanding stock of each class entitled to vote is required to
amend a corporation's certificate of incorporation. Under the DGCL, the holders
of the outstanding shares of a class of our capital stock shall be entitled to
vote as a class upon a proposed amendment, whether or not entitled to vote
thereon by the certificate of incorporation, if the amendment would:
o increase or decrease the aggregate number of authorized shares of such
class;
o increase or decrease the par value of the shares of such class; or
o alter or change the powers, preferences or special rights of the shares
of such class so as to affect them adversely.
If any proposed amendment would alter or change the powers, preferences or
special rights of one or more series of any class of our capital stock so as to
affect them adversely, but shall not so affect the entire class, then only the
shares of the series so affected by the amendment shall be considered a separate
class for the purposes of this provision.
Vacancies in the Board of Directors. Our Bylaws provide that any vacancy
occurring in our board of directors for any cause may be filled by a majority of
the remaining members of our board, although such majority is less than a
quorum.
Special Meetings of Stockholders. Under our Bylaws, only our board of
directors or the chairman of our board may call special meetings of stockholders
at such place, date and time and for such purpose or purposes as shall be set
forth in the notice of such meeting.
Requirements for Notice of Stockholder Director Nominations and Stockholder
Business. If a stockholder wishes to bring any business before an annual or
special meeting or nominate a person for election to our board of directors, our
Bylaws contain certain procedures that must be followed in terms of the advance
timing required for delivery of stockholder notice of such business and the
information that such notice must contain. The information required in a
stockholder notice includes general information regarding the stockholder, a
description of the proposed business and, with respect to nominations for the
board of directors, certain specified information regarding the nominee(s).
6
In addition to the information required in a stockholder notice described
above, our Bylaws require a representation that the stockholder is a holder of
our voting stock and intends to appear in person or by proxy at the meeting to
make the nomination or bring up the matter specified in the notice. In terms of
the timing of the stockholder notice, our Bylaws require that the notice must be
received by our secretary:
o in the case of an annual meeting, not more than 180 days and not less
than 120 days in advance of the annual meeting; and
o in the case of a special meeting, not later than the fifteenth day
following the day on which notice of the meeting is first mailed to
stockholders.
Certain Anti-Takeover Effects of Delaware Law
We are subject to Section 203 of the DGCL ("Section 203"). In general,
Section 203 prohibits a publicly held Delaware corporation from engaging in
various "business combination" transactions with any interested stockholder for
a period of three years following the date of the transaction(s) in which the
person became an interested stockholder, unless:
o the transaction is approved by the board of directors prior to the date
the interested stockholder obtained such status;
o upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced; or
o on or subsequent to such date the business combination is approved by the
board and authorized at an annual or special meeting of stockholders by
the affirmative vote of at least 66 2/3% of the outstanding voting stock
which is not owned by the interested stockholder.
A "business combination" is defined to include mergers, asset sales, and
other transactions resulting in financial benefit to an "interested
stockholder." In general, an "interested stockholder" is a person who, together
with affiliates and associates, owns (or is an affiliate or associate of the
corporation and, within the prior three years, did own) 15% or more of a
corporation's voting stock. The statute could prohibit or delay mergers or other
takeover or change in control attempts with respect to us and, accordingly, may
discourage attempts to acquire us even though such a transaction may offer our
stockholders the opportunity to sell their stock at a price above the prevailing
market price.
7
DESCRIPTION OF $1 2/3 PAR VALUE COMMON STOCK
Our only class of common stock is our $1 2/3 par value common stock.
In addition to the following description of our $1 2/3 par value common
stock, please refer to our Certificate of Incorporation which sets forth in full
detail the terms of our $1 2/3 par value common stock. Our Certificate of
Incorporation has been filed as an exhibit to the registration statement of
which this prospectus is a part and is incorporated by reference into this
prospectus. For information regarding how you can obtain a copy of our
Certificate of Incorporation, see "Where You Can Find More Information."
There are no redemption or sinking fund provisions applicable to our $1 2/3
par value common stock. All outstanding shares of $1 2/3 par value common stock
are fully paid and non-assessable, and any shares of $1 2/3 par value common
stock to be issued upon completion of this offering will be fully paid and
non-assessable.
Dividends
The DGCL and our Certificate of Incorporation do not require our board of
directors to declare dividends on our $1 2/3 par value common stock. The
declaration of any dividend on our $1 2/3 par value common stock is a matter to
be acted upon by our board of directors in its sole discretion. Our board of
directors reserves the right to reconsider from time to time its policies and
practices regarding dividends on our $1 2/3 par value common stock and to
increase or decrease the dividends paid on our $1 2/3 par value common stock.
Our board of directors may reconsider such matters on the basis of, among other
things, our consolidated financial position, which includes liquidity and other
factors.
Both the DGCL and our Certificate of Incorporation restrict the power of
our board of directors to declare and pay dividends on our $1 2/3 par value
common stock. The amounts which may be declared and paid by our board of
directors as dividends on our $1 2/3 par value common stock are subject to the
amount legally available for the payment of dividends by us under the DGCL. In
particular, under the DGCL, we can only pay dividends to the extent that we have
surplus--the extent by which the fair market value of our net assets exceeds the
amount of our capital--or the extent of our net profits for the then current
and/or the preceding fiscal year. In addition, dividends on our $1 2/3 par value
common stock are subject to any preferential rights on any outstanding series of
preferred stock or preference stock created by our board of directors in
accordance with our Certificate of Incorporation. Further if dividends have been
declared but not paid on any outstanding shares of our preferred stock, our
Certificate of Incorporation provides that dividends may not be paid on or set
apart for the $1 2/3 par value common stock until all declared but unpaid
dividends on any outstanding shares of our preferred stock have been paid. Also,
our Certificate of Incorporation provides that dividends may not be declared on
our $1 2/3 par value common stock until a sum sufficient for the payment of the
next ensuing quarterly dividend of any preferred stock outstanding has been set
aside from the surplus or net profits.
Any dividends declared or paid on our $1 2/3 par value common stock from
time to time will reduce the amount available for future payments of dividends.
The amount available for dividends on each class will also depend upon any
adjustments to our capital or surplus due to repurchases or issuances of shares
of our $1 2/3 par value common stock. In addition, the DGCL permits our board of
directors to adjust for any reason it deems appropriate the amounts of capital
and surplus within certain parameters and therefore the amount available for
dividends.
Voting Rights
Our Certificate of Incorporation entitles holders of $1 2/3 par value
common stock to one vote per share on all matters submitted to our stockholders
for a vote.
Liquidation Rights
In the event of the liquidation, dissolution or winding up of our business,
whether voluntary or involuntary, our Certificate of Incorporation provides
that, after the holders of any outstanding shares of our preferred stock and
preference stock receive their full preferential amounts, holders of $1 2/3 par
value common stock will receive the assets remaining for distribution to our
stockholders-ratably on a per share basis.
Stock Exchange Listing
Our $1 2/3 par value common stock is listed in the United States on the New
York Stock Exchange, the Chicago Stock Exchange, the Pacific Stock Exchange and
the Philadelphia Stock Exchange under the ticker symbol "GM."
8
Transfer Agent and Registrar
The transfer agent and registrar for our $1 2/3 par value common stock is
EquiServe Trust Company, N.A., a federally chartered trust company doing
business at 150 Royall Street, Canton, Massachusetts 02021.
Direct Registration System
Our $1 2/3 par value common stock is registered in book-entry form through
the direct registration system. Under this system, unless a $1 2/3 par value
common stockholder requests a physical stock certificate, ownership of our $1
2/3 par value common stock is reflected in account statements periodically
distributed to $1 2/3 par value common stockholders by EquiServe, our transfer
agent, who holds the book-entry shares on behalf of our $1 2/3 par value common
stockholders. However, any $1 2/3 par value common stockholder who wishes to
receive a physical stock certificate evidencing his or her shares may at any
time obtain a stock certificate at no charge by contacting our transfer agent.
9
DESCRIPTION OF PREFERRED STOCK
This prospectus describes certain general terms and provisions of our
preferred stock. When we offer to sell a particular series of preferred stock,
we will describe the specific terms of the securities in a supplement to this
prospectus. The prospectus supplement will also indicate whether the general
terms and provisions described in this prospectus apply to the particular series
of preferred stock. The preferred stock will be issued under a certificate of
designations relating to each series of preferred stock and is also subject to
our Certificate of Incorporation.
Under our Certificate of Incorporation, our board of directors has the
authority to issue shares of preferred stock from time to time in distinctly
designated series, with each series ranking equally and identical in all
respects except as to the dividend rate and redemption price.
Terms of a Particular Series
The prospectus supplement will describe the terms of any preferred stock
being offered, including:
o the number of shares and designation or title of the shares;
o any liquidation preference per share;
o any date of maturity;
o any redemption, repayment or sinking fund provisions;
o any dividend rate or rates and the dates of payment (or the method for
determining the dividend rates or dates of payment);
o if other than the currency of the United States, the currency or
currencies including composite currencies in which the preferred stock
is denominated and/or in which payments will or may be payable;
o whether the preferred stock is convertible or exchangeable and, if so,
the securities or rights into which the preferred stock is convertible or
exchangeable (which could include any securities issued by us or any
third party, including any of our affiliates), and the terms and
conditions of conversion or exchange;
o the place or places where dividends and other payments on the preferred
stock will be payable; and
o any additional dividend, liquidation, redemption and other rights,
preferences, privileges, limitations and restrictions.
All shares of preferred stock offered will be fully paid and
non-assessable.
Dividends
Holders of preferred stock would be entitled to receive quarterly
cumulative dividends when and as declared by the board of directors at the rates
fixed for the respective series in the resolution or certificate of designation
for the respective series. In addition, if any preferred stock were issued, it
would rank senior to our preference stock and our $1 2/3 par value common stock
with respect to the payment of dividends.
Voting
If any shares of our preferred stock were issued, holders of such shares
would not be entitled to vote except that they would vote upon the question of
disposing of our assets as an entirety and except as otherwise required by the
DGCL.
Liquidation
Any shares of preferred stock that are issued will have priority over the
preference stock and our $1 2/3 par value common stock with respect to
liquidation rights.
Transfer Agent and Registrar
The transfer agent for each series of preferred stock will be described in
the prospectus supplement.
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DESCRIPTION OF PREFERENCE STOCK
This prospectus describes certain general terms and provisions of our
preference stock. When we offer to sell a particular series of preference stock,
we will describe the specific terms of the securities in a supplement to this
prospectus. The prospectus supplement will also indicate whether the general
terms and provisions described in this prospectus apply to the particular series
of preference stock. The preference stock will be issued under a certificate of
designations relating to each series of preference stock and is also subject to
our Certificate of Incorporation.
Under our Certificate of Incorporation, our board of directors has the
authority to issue shares of preference stock from time to time in distinctly
designated series up to the maximum number of shares of preference stock
authorized, with the terms of each series fixed by our board in the resolutions
providing for the issuance of such series.
Terms of a Particular Series
The prospectus supplement will describe the terms of any preference stock
being offered, including:
o the number of shares and designation or title of the shares;
o any liquidation preference per share;
o any date of maturity;
o any redemption, repayment or sinking fund provisions;
o any dividend (which may be cumulative or non-cumulative) rate or rates
and the dates of payment (or the method for determining the dividend
rates or dates of payment);
o any voting rights;
o if other than the currency of the United States, the currency or
currencies including composite currencies in which the preferred stock is
denominated and/or in which payments will or may be payable;
o whether the preference stock is convertible or exchangeable and, if so,
the securities into which the preference stock is convertible or
exchangeable (which could include any securities issued by us or any
third party, including any of our affiliates), and the terms and
conditions of conversion or exchange;
o the place or places where dividends and other payments on the preference
stock will be payable; and
o any additional voting, dividend, liquidation, redemption and other
rights, preferences, privileges, limitations and restrictions.
All shares of preference stock offered will be fully paid and
non-assessable.
Dividends
If any preference stock were issued, it would rank junior to our preferred
stock, if any, and it could rank senior to our $1 2/3 par value common stock
with respect to the payment of dividends.
Liquidation
If any preference stock were issued, it would rank junior to our preferred
stock, if any, and it could rank senior to our $1 2/3 par value common stock
with respect to liquidation rights.
Transfer Agent and Registrar
The transfer agent for each series of preference stock will be described in
the prospectus supplement.
Miscellaneous
Our board of directors has the authority to create and issue a series of
preference stock with rights, privileges or restrictions which effectively
discriminates against an existing or prospective holder of preference stock as a
result of the holder beneficially owning or commencing a tender offer for a
substantial amount of common stock. One of the effects of authorized but
unissued and unreserved shares of capital stock may be to make it more difficult
or discourage an attempt by a potential acquirer to obtain control of us by
means of a merger, tender offer, proxy contest or otherwise. This protects the
continuity of our management. The issuance of these shares of capital stock may
defer or prevent a change in control in us without any further stockholder
action.
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DESCRIPTION OF DEBT SECURITIES
This prospectus describes certain general terms and provisions of the debt
securities. The debt securities will constitute either senior or subordinated
debt. We will issue debt securities that will be senior debt under the senior
debt indenture dated December 7, 1995 between us and Citibank, N.A., as senior
debt trustee, as supplemented. We will issue debt securities that will be
subordinated debt under the subordinated debt indenture dated as of December 20,
2001 between us and Citibank, N.A, as subordinated debt trustee. This prospectus
refers to the senior debt indenture and the subordinated debt indenture
individually as the "indenture" and collectively as the "indentures." This
prospectus refers to the senior debt trustee and the subordinated debt trustee
individually as the "trustee" and collectively as the "trustees." When we offer
to sell a particular series of debt securities, we will describe the specific
terms of the securities in a supplement to this prospectus. The prospectus
supplement will also indicate whether the general terms and provisions described
in this prospectus apply to a particular series of debt securities.
We have summarized certain terms and provisions of the indentures. The
summaries are not complete and are subject to the terms of the senior debt
indenture and the subordinated debt indenture, respectively, which are
incorporated herein by reference. You should read the indentures for the
provisions which may be important to you. The indentures are subject to and
governed by the Trust Indenture Act of 1939, as amended. The indentures are
substantially identical, except for the provisions relating to subordination and
covenants. See "--Subordinated Debt" and "--Certain Covenants."
Neither indenture limits the amount of debt securities which we may issue.
We may issue debt securities up to an aggregate principal amount as we may
authorize from time to time.
Terms of a Particular Offering
The prospectus supplement will describe the terms of any debt securities
being offered, including:
o classification as senior or subordinated debt securities;
o the designation of the debt securities;
o the aggregate principal amount of the debt securities;
o the percentage of their principal amount at which the debt securities
will be issued;
o if the debt securities are subordinated, the aggregate amount of
outstanding indebtedness, as of a recent date, that is senior to the
subordinated securities, and any limitation on the issuance of additional
senior indebtedness;
o the date or dates on which the debt securities will mature;
o the rate or rates per annum, if any, at which the debt securities will
bear interest;
o the times at which the interest will be payable;
o whether the debt securities are convertible or exchangeable and, if so,
the securities or rights into which the debt securities are convertible
or exchangeable (which could include any securities issued by us or any
third party, including any of our affiliates), and the terms and
conditions of conversion or exchange;
o the date after which or other circumstances in which the debt securities
may be redeemed and the redemption price or any prepayment or sinking
fund provisions;
o if other than denominations of $1,000 or multiples of $1,000, the
denominations the debt securities will be issued in;
o the currency or currencies in which the debt securities are issuable or
payable;
o the exchanges on which the debt securities may be listed;
o whether the debt securities shall be issued in book-entry form; and
o any other specific terms, including any additional events of default or
covenants.
Principal and interest, if any, will be payable, and, unless the debt
securities are issued in book-entry form, the debt securities being offered will
be transferable, at the principal corporate trust office of the trustees, which
at the date hereof is 111 Wall Street, New York, New York 10005, Attention:
Citibank Agency & Trust, provided that payment of interest may be made at our
option by check mailed to the address of the person entitled thereto.
12
Some of the debt securities may be issued as discounted debt securities,
bearing no interest or interest at a rate, which at the time of issuance, is
below market rates, to be sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any such discounted debt securities will be
described in a prospectus supplement.
Debt securities will include debt securities denominated in United States
dollars or, at our option if so specified in a prospectus supplement, in any
other currency.
If a prospectus supplement specifies that debt securities are denominated
in a currency other than United States dollars, the prospectus supplement will
also specify the denomination in which such debt securities will be issued and
the coin or currency in which the principal, premium, if any, and interest on
the debt securities, where applicable, will be payable, which may be United
States dollars based upon the exchange rate for such other currency existing on
or about the time a payment is due.
If a prospectus supplement specifies that the debt securities will have a
redemption option, our election to exercise such an option will constitute an
issuer tender offer under the Exchange Act. We will comply with all issuer
tender offer rules and regulations under the Exchange Act, including Rule 14e-1,
if such redemption option is elected. We will make any required filings with the
SEC and furnish certain information to the holders of the debt securities.
Senior Debt
We will issue under the senior debt indenture the debt securities that will
constitute part of our senior debt. These senior debt securities will rank
equally and pari passu with all of our other unsecured and unsubordinated debt
(other than obligations preferred by mandatory provisions of law).
Subordinated Debt
We will issue under the subordinated debt indenture the debt securities
that will constitute part of our subordinated debt. These subordinated debt
securities will be subordinate and junior in right of payment, to the extent and
in the manner set forth in the subordinated debt indenture, to all of our
"senior indebtedness." The subordinated debt indenture defines "senior
indebtedness" as obligations of, or guaranteed or assumed by, us for borrowed
money or leased property in capitalized lease or sale and leaseback
transactions, or evidenced by bonds, debentures, notes or other similar
instruments, and amendments, renewals, extensions, modifications and refundings
of any such indebtedness or obligation. "Senior indebtedness" does not include
nonrecourse obligations, the subordinated debt securities or any other
obligations specifically designated as being subordinate in right of payment to
senior indebtedness. See the subordinated debt indenture, section 13.
In general, the holders of all senior indebtedness are first entitled to
receive payment of the full amount unpaid on senior indebtedness before the
holders of any of the subordinated debt securities or coupons are entitled to
receive a payment on account of the principal or interest on the indebtedness
evidenced by the subordinated debt securities in certain events. These events
include:
o any insolvency or bankruptcy proceedings, or any receivership,
liquidation, reorganization or other similar proceedings which concern us
or a substantial part of our property;
o a default having occurred for the payment of principal, premium, if any,
or interest on or other monetary amounts due and payable on any senior
indebtedness or any other default having occurred concerning any senior
indebtedness, which permits the holder or holders of any senior
indebtedness to accelerate the maturity of any senior indebtedness with
notice or lapse of time, or both. Such an event of default must have
continued beyond the period of grace, if any, provided for such event of
default, and such an event of default shall not have been cured or
waived or shall not have ceased to exist;
o the principal of, and accrued interest on, any series of the subordinated
debt securities having been declared due and payable upon an event of
default pursuant to section 6 of the subordinated debt indenture; this
declaration must not have been rescinded and annulled as provided in the
subordinated debt indenture; or
o any different or additional events described in a prospectus supplement.
If this prospectus is being delivered in connection with a series of
subordinated debt securities, the accompanying prospectus supplement or the
information incorporated in this prospectus by reference will set forth the
approximate amount of senior indebtedness outstanding as of the end of the most
recent fiscal quarter.
If the trustee under the subordinated debt indenture or any holders of the
subordinated debt securities receive any payment or distribution that is
prohibited under the subordination provisions, then the trustee or the holders
will have to repay that money to the holders of the senior indebtedness.
13
Even if the subordination provisions prevent us from making any payment
when due on the subordinated debt securities of any series, we will be in
default on our obligations under that series if we do not make the payment when
due. This means that the trustee under the subordinated debt indenture and the
holders of debt securities of that series can take action against us, but they
will not receive any money until the claims of the holders of senior
indebtedness have been fully satisfied.
Certain Covenants
Definitions Applicable to Covenants Under Our Senior Debt Indenture. The
following definitions shall be applicable to the senior debt covenants specified
below:
(i) "Attributable Debt" means, at the time of determination as to any
lease, the present value (discounted at the actual rate, if stated, or, if
no rate is stated, the implicit rate of interest of such lease transaction
as determined by our chairman, president or any vice chairman, any vice
president, our treasurer or any assistant treasurer), calculated using the
interval of scheduled rental payments under such lease, of the obligation
of the lessee for net rental payments during the remaining term of such
lease (excluding any subsequent renewal or other extension options held by
the lessee). The term "net rental payments" means, with respect to any
lease for any period, the sum of the rental and other payments required to
be paid in such period by the lessee thereunder, but not including,
however, any amounts required to be paid by such lessee (whether or not
designated as rental or additional rental) on account of maintenance and
repairs, insurance, taxes, assessments, water rates, indemnities or similar
charges required to be paid by such lessee thereunder or any amounts
required to be paid by such lessee thereunder contingent upon the amount of
sales, earnings or profits or of maintenance and repairs, insurance, taxes,
assessments, water rates, indemnities or similar charges; provided,
however, that, in the case of any lease which is terminable by the lessee
upon the payment of a penalty in an amount which is less than the total
discounted net rental payments required to be paid from the later of the
first date upon which such lease may be so terminated and the date of the
determination of net rental payments, "net rental payments" shall include
the then current amount of such penalty from the later of such two dates,
and shall exclude the rental payments relating to the remaining period of
the lease commencing with the later of such two dates.
(ii) "Debt" means notes, bonds, debentures or other similar evidences
of indebtedness for money borrowed.
(iii) "Manufacturing Subsidiary" means any Subsidiary (A) substantially
all the property of which is located within the continental United States
of America, (B) which owns a Principal Domestic Manufacturing Property and
(C) in which our investment, direct or indirect and whether in the form of
equity, debt, advances or otherwise, is in excess of $2,500,000,000 as
shown on our books as of the end of the fiscal year immediately preceding
the date of determination; provided, however, that "Manufacturing
Subsidiary" shall not include General Motors Acceptance Corporation and its
Subsidiaries (or any corporate successor of any of them) or any other
Subsidiary which is principally engaged in leasing or in financing
installment receivables or otherwise providing financial or insurance
services to us or others or which is principally engaged in financing our
operations outside the continental United States of America.
(iv) "Mortgage" means any mortgage, pledge, lien, security interest,
conditional sale or other title retention agreement or other similar
encumbrance.
(v) "Principal Domestic Manufacturing Property" means any manufacturing
plant or facility owned by us or any Manufacturing Subsidiary which is
located within the continental United States of America and, in the opinion
of our Board of Directors, is of material importance to the total business
conducted by us and our consolidated affiliates as an entity.
(vi) "Subsidiary" means any corporation of which at least a majority of
the outstanding stock having by the terms thereof ordinary voting power to
elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or
classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time owned by us, or by one
or more Subsidiaries, or by us and one or more Subsidiaries.
Limitation on Liens. For the benefit of the senior debt securities, we will
not, nor will we permit any Manufacturing Subsidiary to, issue or assume any
Debt secured by a Mortgage upon any Principal Domestic Manufacturing Property of
ours or any Manufacturing Subsidiary or upon any shares of stock or indebtedness
of any Manufacturing Subsidiary (whether such Principal Domestic Manufacturing
Property, shares of stock or indebtedness are now owned or hereafter acquired)
without in any such case effectively providing concurrently with the issuance or
assumption of any such Debt that the senior debt securities (together with, if
we shall so determine, any other indebtedness of us or such Manufacturing
Subsidiary ranking equally with the senior debt securities and then existing or
thereafter created) shall be secured equally and ratably with such Debt, unless
the aggregate amount of Debt issued or assumed and so secured by Mortgages,
together with all other Debt of ours and our Manufacturing Subsidiaries which
(if originally issued or assumed at such time) would otherwise be subject to the
foregoing restrictions, but not including Debt permitted to be secured under
clauses (i) through (vi) of the immediately following paragraph, does not at the
time exceed 20% of the stockholders equity of us and our consolidated
subsidiaries, as determined in accordance with accounting principles generally
accepted in the U.S. and shown on the audited consolidated balance sheet
contained in the latest published annual report to our stockholders.
14
The above restrictions shall not apply to Debt secured by:
(i) Mortgages on property, shares of stock or indebtedness of any
corporation existing at the time such corporation becomes a Manufacturing
Subsidiary;
(ii) Mortgages on property existing at the time of acquisition of such
property by us or a Manufacturing Subsidiary, or Mortgages to secure the
payment of all or any part of the purchase price of such property upon the
acquisition of such property by us or a Manufacturing Subsidiary or to
secure any Debt incurred prior to, at the time of, or within 180 days
after, the later of the date of acquisition of such property and the date
such property is placed in service, for the purpose of financing all or any
part of the purchase price thereof, or Mortgages to secure any Debt
incurred for the purpose of financing the cost to us or a Manufacturing
Subsidiary of improvements to such acquired property;
(iii) Mortgages securing Debt of a Manufacturing Subsidiary owing to us
or to another Subsidiary;
(iv) Mortgages on property of a corporation existing at the time such
corporation is merged or consolidated with us or a Manufacturing Subsidiary
or at the time of a sale, lease or other disposition of the properties of a
corporation as an entirety or substantially as an entirety to us or a
Manufacturing Subsidiary;
(v) Mortgages on property of ours or a Manufacturing Subsidiary in
favor of the United States of America or any State thereof, or any
department, agency or instrumentality or political subdivision of the
United States of America or any State thereof, or in favor of any other
country, or any political subdivision thereof, to secure partial, progress,
advance or other payments pursuant to any contract or statute or to secure
any indebtedness incurred for the purpose of financing all or any part of
the purchase price or the cost of construction of the property subject to
such Mortgages; or
(vi) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Mortgage referred to
in the foregoing clauses (i) to (v); provided, however, that the principal
amount of Debt secured thereby shall not exceed by more than 115% the
principal amount of Debt so secured at the time of such extension, renewal
or replacement and that such extension, renewal or replacement shall be
limited to all or a part of the property which secured the Mortgage so
extended, renewed or replaced (plus improvements on such property).
The subordinated debt indenture does not include any limitation on our
ability to incur these types of liens.
Limitation on Sales and Lease-Backs. For the benefit of the senior debt
securities, we will not, nor will we permit any Manufacturing Subsidiary to,
enter into any arrangement with any person providing for the leasing by us or
any Manufacturing Subsidiary of any Principal Domestic Manufacturing Property
owned by us or any Manufacturing Subsidiary on the date that the senior debt
securities are originally issued (except for temporary leases for a term of not
more than five years and except for leases between us and a Manufacturing
Subsidiary or between Manufacturing Subsidiaries), which property has been or is
to be sold or transferred by us or such Manufacturing Subsidiary to such person,
unless either:
(i) we or such Manufacturing Subsidiary would be entitled, pursuant to
the provisions of the covenant on limitation on liens described above, to
issue, assume, extend, renew or replace Debt secured by a Mortgage upon
such property equal in amount to the Attributable Debt in respect of such
arrangement without equally and ratably securing the senior debt
securities; provided, however, that from and after the date on which such
arrangement becomes effective the Attributable Debt in respect of such
arrangement shall be deemed for all purposes under the covenant on
limitation on liens described above and this covenant on limitation on sale
and lease-back to be Debt subject to the provisions of the covenant on
limitation on liens described above (which provisions include the
exceptions set forth in clauses (i) through (vi) of such covenant); or
(ii) we shall apply an amount in cash equal to the Attributable Debt in
respect of such arrangement to the retirement (other than any mandatory
retirement or by way of payment at maturity), within 180 days of the
effective date of any such arrangement, of Debt of ours or any
Manufacturing Subsidiary (other than Debt owned by us or any Manufacturing
Subsidiary) which by its terms matures at or is extendible or renewable at
the option of the obligor to a date more than twelve months after the date
of the creation of such Debt.
The subordinated debt indenture does not include any limitations on sales
and lease-backs.
Defeasance
If the terms of a particular series of debt securities so provide, we may,
at our option, (a) discharge our indebtedness and our obligations under the
applicable indenture with respect to such series or (b) not comply with certain
covenants contained in the applicable indenture with respect to such series, in
each case by depositing funds or obligations issued or guaranteed by the United
States of America with the trustee sufficient to pay and discharge the entire
indebtedness of all outstanding debt securities of such series. Such defeasance
15
is subject to other conditions including receipt of a tax opinion to the effect
that the holders of the debt securities will not recognize income, gain or loss
for United States Federal income tax purposes as a result of such defeasance and
will be subject to United States Federal income tax on the same amounts and in
the same manner and at the same times as would have been the case if such
defeasance had not occurred.
Consolidation, Merger or Sale of Assets
The indentures provide that we will not merge or consolidate with another
corporation or sell or convey all or substantially all of our assets unless
either we are the continuing corporation or the new corporation shall expressly
assume the interest and principal due under the debt securities. In either case,
the indentures provide that neither we nor a successor corporation may be in
default of performance immediately after a merger or consolidation.
Additionally, the indentures provide that in the case of any such merger or
consolidation, either we or the successor corporation may continue to issue
securities under the indentures.
Modification of the Indenture
The indentures contain provisions permitting us and the applicable trustee
to modify or amend such indenture or any supplemental indenture or the rights of
the holders of the debt securities issued thereunder, with the consent of the
holders of not less than a majority in aggregate principal amount of the debt
securities of all series at the time outstanding under either such indenture
which are affected by such modification or amendment, voting as one class,
provided that, without the consent of the holder of each debt security so
affected, no such modification shall:
o change the fixed maturity of any debt securities, or reduce the principal
amount thereof, or premium, if any, or reduce the rate or extend the time
of payment of interest thereon, or reduce the amount due and payable upon
acceleration of the maturity thereof or the amount provable in
bankruptcy, or make the principal of, or premium, if any, or interest,
on any debt securities payable in any currency other than so provided in
such debt securities; or
o in the case of debt securities that are convertible, change in any manner
adverse to the holders, the amounts payable upon the redemption of the
debt securities, the date, if any, on which the holders have the right to
require us to repurchase the debt securities, or the transactions or
events upon which the holders have the right to require us to repurchase
the debt securities or the amounts payable upon the repurchase, or the
circumstances under which the holders have the right to convert the debt
securities or the amounts receivable upon conversion thereof (but
excluding any adjustment to the conversion rate); or
o reduce the aforesaid percentage of debt securities, the consent of the
holders of which is required for any such modification.
The indentures contain provisions permitting us and the applicable trustee
to enter into indentures supplemental to the indenture, without the consent of
the holders of the debt securities at the time outstanding, for one or more of
the following purposes:
o to evidence the succession of another corporation to us, or successive
successions, and the assumption by any successor corporation of certain
covenants, agreements and obligations;
o to add to our covenants such further covenants, restrictions,
conditions or provisions as our Board of Directors and the trustee
shall consider to be for the protection of the holders of securities
of any or all series, or the coupons appertaining to such securities;
o to permit or facilitate the issuance of securities of any series in
bearer form, registrable or not registrable as to principal, and
with or without interest coupons, and to provide for exchangeability
of such securities with securities issued thereunder in fully registered
form and to permit or facilitate the issuance of uncertificated
securities of any series;
o to cure any ambiguity or to correct or supplement any provision contained
therein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained therein or in any
supplemental indenture; to convey, transfer, assign, mortgage or pledge
any property to or with the trustee; or to make such other provisions in
regard to matters or questions arising under the indenture as shall not
adversely affect the interests of the holders of any series of securities
or any coupons appertaining to such securities;
o to evidence and provide for the acceptance and appointment by a successor
trustee;
o to establish the form or terms of securities of any series as
permitted by the indenture; and
o to change or eliminate any provision of the indenture, provided that any
such change or elimination (i) shall become effective only when there is
no security outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such
provision or (ii) shall not apply to any security outstanding.
16
Events of Default
An event of default with respect to any series of debt securities issued
subject to the indentures is defined in the indentures as being:
o default in payment of any principal or premium, if any, on such series;
o default for 30 days in payment of any interest on such series;
o default for 90 days after notice in performance of any other covenant
o in the indentures; or
o certain events of bankruptcy, insolvency or reorganization.
If the terms of any series of subordinated debt provide for additional
events of default, they will be described in a prospectus supplement.
No event of default with respect to a particular series of debt securities
issued under the indentures necessarily constitutes an event of default with
respect to any other series of debt securities issued thereunder. In case an
event of default as set out in the first, second and third items listed above
shall occur and be continuing with respect to any series, the trustee or the
holders of not less than 25% in aggregate principal amount of debt securities of
each such series then outstanding may declare the principal, or, in the case of
discounted debt securities, the amount specified in the terms thereof, of such
series to be due and payable. In case an event of default as set out in the
fourth item listed above shall occur and be continuing, the trustee or the
holders of not less than 25% in aggregate principal amount of all the debt
securities then outstanding under the applicable indenture, voting as one class,
may declare the principal, or, in the case of discounted debt securities, the
amount specified in the terms thereof, of all outstanding debt securities to be
due and payable. Any event of default with respect to a particular series of
debt securities may be waived and a declaration of acceleration of payment
rescinded by the holders of a majority in aggregate principal amount of the
outstanding debt securities of such series, or of all the outstanding debt
securities, as the case may be, if sums sufficient to pay all amounts due other
than amounts due upon acceleration are provided to the trustee and all defaults
are remedied. For such purposes, if the principal of all series shall have been
declared to be payable, all series shall be treated as a single class. We are
required to file with each trustee annually an officers' certificate as to the
absence of certain defaults under the terms of the applicable indenture. The
indentures provide that the trustees may withhold notice to the securityholders
of any default, except in payment of principal, premium, if any, or interest, if
it considers it in the interest of the securityholders to do so.
Subject to the provisions of the indentures relating to the duties of the
trustees in case an event of default shall occur and be continuing, the trustees
shall be under no obligation to exercise any of their respective rights or
powers under the indentures at the request, order or direction of any of the
securityholders, unless such securityholders shall have offered to the trustees
reasonable indemnity or security.
Subject to such provisions for the indemnification of the trustees and to
certain other limitations, the holders of a majority in principal amount of the
debt securities of each series affected, with each series voting as a separate
class, at the time outstanding shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the trustees,
or exercising any trust or power conferred on the trustees.
Further Issues
GM may from time to time, without notice to or the consent of the
registered holders of any series of debt securities, create and issue further
debt securities ranking pari passu with such debt securities in all respects, or
in all respects except for the payment of interest accruing prior to the issue
date of such further debt securities or except for the first payment of interest
following the issue date of such further debt securities. Such further debt
securities may be consolidated and form a single series with the debt securities
and have the same terms as to status, redemption or otherwise as the debt
securities.
Concerning our Relationships with the Trustees
Citibank, N.A. is the trustee under both the senior debt indenture and the
subordinated debt indenture. It is also the trustee under an indenture for
General Motors Nova Scotia Finance Company, for which we are the guarantor, as
well as under various other indentures covering our outstanding notes and
debentures. Citibank, N.A. and its affiliates act as depositary for funds of,
make loans to, act as trustee and perform certain other services for, certain of
our affiliates and us in the normal course of its business. As trustee of
various trusts, it has purchased our securities and those of certain of our
affiliates.
17
DESCRIPTION OF PURCHASE CONTRACTS
We may issue purchase contracts for the purchase or sale of debt securities
or equity securities issued by us or securities of third parties (including any
of our affiliates), a basket of such securities, an index or indices of such
securities or any combination of the above as specified in the applicable
prospectus supplement.
We may issue purchase contracts obligating holders to purchase from us, and
obligating us to sell to holders, a specified or varying number of securities at
a purchase price, which may be based on a formula, at a future date.
Alternatively, we may issue purchase contracts obligating us to purchase from
holders, and obligating holders to sell to us, a specified or varying number of
securities at a purchase price, which may be based on a formula, at a future
date. We may satisfy our obligations, if any, with respect to any purchase
contract by delivering the subject securities or by delivering the cash value of
such purchase contract or the cash value of the property otherwise deliverable,
as set forth in the applicable prospectus supplement. The applicable prospectus
supplement will specify the methods by which the holders may purchase or sell
such securities and any acceleration, cancellation or termination provisions or
other provisions relating to the settlement of a purchase contract. The purchase
contracts may be entered into separately or as a part of units.
The purchase contracts may require us to make periodic payments to the
holders thereof or vice versa, and these payments may be unsecured or prefunded
and may be paid on a current or deferred basis. The purchase contracts may
require holders thereof to secure their obligations under the contracts in a
specified manner to be described in the applicable prospectus supplement.
Alternatively, purchase contracts may require holders to satisfy their
obligations thereunder when the purchase contracts are issued as described in
the applicable prospectus supplement.
18
DESCRIPTION OF DEPOSITARY SHARES
We may, at our option, elect to offer fractional shares of preferred stock
or preference stock, rather than full shares of preferred stock or preference
stock. If we exercise this option, we will issue receipts for depositary shares,
and each of these depositary shares will represent a fraction (to be set forth
in a prospectus supplement) of a share of a particular series of preferred stock
or preference stock.
The shares of any series of preferred stock or preference stock underlying
the depositary shares will be deposited under a deposit agreement between us and
a bank or trust company selected by us. The depositary will have its principal
office in the United States and a combined capital and surplus of at least
$50,000,000. Subject to the terms of the deposit agreement, each owner of a
depositary share will be entitled, in proportion to the applicable fraction of a
share of preferred stock or preference stock underlying the depositary share, to
all the rights and preferences of the preferred stock or preference stock
underlying that depositary share. Those rights may include dividend, voting,
redemption, conversion and liquidation rights.
The depositary shares will be evidenced by depositary receipts issued under
a deposit agreement. Depositary receipts will be distributed to those persons
purchasing the fractional shares of preferred stock or preference stock
underlying the depositary shares in accordance with the terms of the offering.
The following description of the material terms of the deposit agreement, the
depositary shares and the depositary receipts is only a summary and you should
refer to the forms of the deposit agreement and depositary receipts, forms of
which have been filed as exhibits to the registration statement.
Pending the preparation of definitive engraved depositary receipts, the
depositary may, upon our written order, issue temporary depositary receipts
substantially identical to the definitive depositary receipts but not in
definitive form. These temporary depositary receipts entitle their holders to
all the rights of definitive depositary receipts. Temporary depositary receipts
will then be exchangeable for definitive depositary receipts at our expense.
Dividends and Other Distributions
The depositary will distribute all cash dividends or other cash
distributions received with respect to the underlying stock to the record
holders of depositary shares in proportion to the number of depositary shares
owned by those holders.
If there is a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary shares
that are entitled to receive the distribution, unless the depositary determines
that it is not feasible to make the distribution. If this occurs, the depositary
may, with our approval, sell the property and distribute the net proceeds from
the sale to the applicable holders.
Withdrawal of Underlying Preferred Stock or Preference Stock
Unless we say otherwise in a prospectus supplement, holders may surrender
depositary receipts at the principal office of the depositary and, upon payment
of any unpaid amount due to the depositary, be entitled to receive the number of
whole shares of underlying preferred stock or preference stock and all money and
other property represented by the related depositary shares. We will not issue
any partial shares of preferred stock or preference stock. If the holder
delivers depositary receipts evidencing a number of depositary shares that
represent more than a whole number of shares of preferred stock or preference
stock, the depositary will issue a new depositary receipt evidencing the excess
number of depositary shares to that holder.
Redemption of Depositary Shares
If a series of preferred stock or preference stock represented by
depositary shares is subject to redemption, the depositary shares will be
redeemed from the proceeds received by the depositary resulting from the
redemption, in whole or in part, of that series of underlying stock held by the
depositary. The redemption price per depositary share will be equal to the
applicable fraction of the redemption price per share payable with respect to
that series of underlying stock. Whenever we redeem shares of underlying stock
that are held by the depositary, the depositary will redeem, as of the same
redemption date, the number of depositary shares representing the shares of
underlying stock so redeemed. If fewer than all the depositary shares are to be
redeemed, the depositary shares to be redeemed will be selected by lot or
proportionately, as may be determined by the depositary.
Voting
Upon receipt of notice of any meeting at which the holders of the
underlying stock are entitled to vote, the depositary will mail the information
contained in the notice to the record holders of the depositary shares
underlying the preferred stock or preference stock. Each record holder of the
depositary shares on the record date (which will be the same date as the record
date for the underlying stock) will be entitled to instruct the depositary as to
the exercise of the voting rights pertaining to the amount of the underlying
stock represented by that holder's depositary shares. The depositary will then
try, as far as practicable, to vote the number of shares of preferred stock or
preference stock underlying those depositary shares in accordance with those
instructions, and we will agree to take all actions which may be deemed
necessary by the depositary to enable the depositary to do so. The depositary
will not vote the underlying shares to the extent it does not receive specific
instructions from the holders of depositary shares underlying the preferred
stock or preference stock.
19
Conversion of Preferred Stock or Preference Stock
If the prospectus supplement relating to the depositary shares says that
the deposited preferred stock or preference stock is convertible into or
exchangeable for our $1 2/3 par value common stock or shares of another series
of our preferred stock or preference stock or the securities of any third party,
including any of our affiliates, the following will apply. The depositary
shares, as such, will not be convertible into or exchangeable for any of our
securities. Rather, any holder of the depositary shares may surrender the
related depositary receipts to the depositary with written instructions
directing the conversion or exchange of the preferred stock or preference stock
represented by the depositary shares into or for whole shares of the applicable
securities. Upon receipt of those instructions and any amounts payable by the
holder in connection with the conversion or exchange, we will cause the
conversion or exchange using the same procedures as those provided for
conversion or exchange of the deposited preferred stock or preference stock. If
only some of the depositary shares are to be converted or exchanged, a new
depositary receipt or receipts will be issued for any depositary shares not to
be converted or exchanged.
Amendment and Termination of the Depositary Agreement
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time be amended by agreement
between us and the depositary. However, any amendment which materially and
adversely alters the rights of the holders of depositary shares will not be
effective unless the amendment has been approved by the holders of at least a
majority of the depositary shares then outstanding. The deposit agreement may be
terminated by us or by the depositary only if (a) all outstanding depositary
shares have been redeemed or converted or exchanged for any other securities
into which the underlying preferred stock or preference stock is convertible or
exchangeable or (b) there has been a final distribution of the underlying stock
in connection with our liquidation, dissolution or winding up and the underlying
stock has been distributed to the holders of depositary receipts.
Charges of Depositary
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will also pay
charges of the depositary in connection with the initial deposit of the
underlying stock and any redemption of the underlying stock. Holders of
depositary receipts will pay other transfer and other taxes and governmental
charges and those other charges, including a fee for any permitted withdrawal of
shares of underlying stock upon surrender of depositary receipts, as are
expressly provided in the deposit agreement to be for their accounts.
Reports
The depositary will forward to holders of depositary receipts all reports
and communications from us that we deliver to the depositary and that we are
required to furnish to the holders of the underlying stock.
Limitation on Liability
Neither we nor the depositary will be liable if either of us is prevented
or delayed by law or any circumstance beyond our control in performing our
respective obligations under the deposit agreement. Our obligations and those of
the depositary will be limited to performance in good faith of our respective
duties under the deposit agreement. Neither we nor the depositary will be
obligated to prosecute or defend any legal proceeding in respect of any
depositary shares or underlying stock unless satisfactory indemnity is
furnished. We and the depositary may rely upon written advice of counsel or
accountants, or upon information provided by persons presenting underlying stock
for deposit, holders of depositary receipts or other persons believed to be
competent and on documents believed to be genuine.
Resignation and Removal of Depositary
The depositary may resign at any time by delivering notice to us of its
election to resign. We may remove the depositary at any time. Any resignation or
removal will take effect upon the appointment of a successor depositary and its
acceptance of the appointment. The successor depositary must be appointed within
60 days after delivery of the notice of resignation or removal and must be a
bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000.
20
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt securities, equity
securities or securities of third parties (including any of our affiliates) or
other rights to receive payment in cash or securities based on the value, rate
or price of one or more specified securities. We may offer warrants separately
or together with any other securities in the form of units, as described in the
applicable prospectus supplement. Each series of warrants will be issued under a
separate warrant agreement to be entered into between us and a bank or trust
company, as warrant agent.
The terms of any warrants to be issued and a description of the material
provisions of the applicable warrant agreement will be set forth in a prospectus
supplement.
Warrants
The prospectus supplement will describe the terms of any warrants being
offered, including:
o the title and the aggregate number of warrants;
o the price or prices at which the warrants will be issued;
o the currency or currencies in which the price of the warrants will be
payable;
o the securities or other rights, including rights to receive payment in
cash or securities based on the value, rate or price of one or more
specified securities purchasable upon exercise of the warrants;
o the price at which, and the currency or currencies in which, the
securities or other rights purchasable upon exercise of such warrants may
be purchased;
o the periods during which, and places at which, the warrants are
exercisable;
o the date or dates on which the warrants shall commence and the date or
dates on which the warrants will expire;
o the terms of any mandatory or optional call provisions;
o the price or prices, if any, at which the warrants may be redeemed at the
option of the holder or will be redeemed upon expiration;
o whether the warrants will be sold separately or with other securities
as part of a unit;
o if applicable, the designation and terms of the securities with which the
warrants are issued and the number of warrants issued with each such
security;
o if applicable, the date on and after which the warrants and the related
securities will be separately transferable;
o any provisions for the adjustment of the number or amount of securities
receivable upon exercise of warrants;
o the identity of the warrant agent;
o the exchanges, if any, on which the warrants may be listed;
o the maximum or minimum number of warrants which may be exercised at any
time;
o if applicable, a discussion of any material United States Federal
income tax considerations;
o whether the warrants shall be issued in book-entry form; and
o any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.
We will issue warrants under one or more warrant agreements to be entered
into between us and a bank or trust company, as warrant agent, in one or more
series, which will be described in a prospectus supplement for the warrants. The
following summaries of significant provisions of the warrant agreements are not
intended to be comprehensive and you should review the detailed provisions of
the relevant warrant agreement to be filed with the SEC in connection with the
offering of specific warrants for a full description and for other information
regarding the warrants.
21
Significant Provisions of the Warrant Agreements
The following terms and conditions of the warrant agreement will apply to
each warrant, unless otherwise specified in the applicable prospectus
supplement:
Modifications without Consent of Warrant Holders. We and the warrant agent
may amend the terms of the warrants and the warrant certificates without the
consent of the holders to:
o cure any ambiguity;
o cure, correct or supplement any defective or inconsistent provision;
o amend the terms in any other manner which we may deem necessary or
desirable and which will not adversely affect the interests of the
affected holders in any material respect; or
o reduce the exercise price of the warrants.
Modifications with Consent of Warrant Holders. We and the warrant agent,
with the consent of the holders of not less than a majority in number of the
then outstanding unexercised warrants affected, may modify or amend the warrant
agreements. However, we and the warrant agent may not make any of the following
modifications or amendments without the consent of each affected warrant holder:
o change the exercise price of the warrants;
o reduce the amount or number receivable upon exercise, cancellation or
expiration of the warrants other than in accordance with the antidilution
provisions or other similar adjustment provisions included in the terms
of the warrants;
o shorten the period of time during which the warrants may be exercised;
o materially and adversely affect the rights of the owners of the warrants;
or
o reduce the percentage of outstanding warrants the consent of whose owners
is required for the modification of the applicable warrant agreement.
Consolidation, Merger or Sale of Assets. If at any time we merge or
consolidate or transfer substantially all of our assets, the successor
corporation will succeed to and assume all of our obligations under each warrant
agreement and the warrant certificates. We will then be relieved of any further
obligation under the warrant agreements and the warrants issued thereunder. See
"Description of Debt Securities--Certain Covenants" and "Description of Debt
Securities--Consolidation, Merger or Sale of Assets."
Enforceability of Rights of Warrant Holders. The warrant agents will act
solely as our agents in connection with the warrant certificates and will not
assume any obligation or relationship of agency or trust for or with any holders
of warrant certificates or beneficial owners of warrants. Any holder of warrant
certificates and any beneficial owner of warrants may, without the consent of
any other person, enforce by appropriate legal action, on its own behalf, its
right to exercise the warrants evidenced by the warrant certificates in the
manner provided for in that series of warrants or pursuant to the applicable
warrant agreement. No holder of any warrant certificate or beneficial owner of
any warrants will be entitled to any of the rights of a holder of the debt
securities or any other securities, including $1 2/3 par value common stock,
preference stock or preferred stock, or any other warrant property purchasable
upon exercise of the warrants, including, without limitation, the right to
receive dividends, if any, or interest on any securities, the right to receive
payments on debt securities or any other warrant property or to enforce any of
the covenants or rights in the relevant indenture or any other similar
agreement.
Registration and Transfer of Warrants. Subject to the terms of the
applicable warrant agreement, warrants in registered, definitive form may be
presented for exchange and for registration of transfer, at the corporate trust
office of the warrant agent for that series of warrants, or at any other office
indicated in the prospectus supplement relating to that series of warrants,
without service charge. However, the holder will be required to pay any taxes
and other governmental charges as described in the warrant agreement. The
transfer or exchange will be effected only if the warrant agent for the series
of warrants is satisfied with the documents of title and identity of the person
making the request.
New York Law to Govern. The warrants and each warrant agreement will be
governed by, and construed in accordance with, the laws of the State of New
York.
22
DESCRIPTION OF UNITS
We may issue units consisting of one or more debt securities or other
securities, including $1 2/3 par value common stock, preference stock, preferred
stock, purchase contracts, depositary shares, warrants or any combination
thereof, as described in a prospectus supplement.
The applicable prospectus supplement will describe:
o the designation and the terms of the units and of the debt securities,
preferred stock, preference stock, $1 2/3 par value common stock,
purchase contracts, depositary shares and warrants constituting the
units, including whether and under what circumstances the securities
comprising the units may be traded separately;
o any additional terms of the governing unit agreement;
o any additional provisions for the issuance, payment, settlement, transfer
or exchange of the units or of the debt securities, preferred stock,
preference stock, $1 2/3 par value common stock, purchase contracts,
depositary shares or warrants constituting the units; and
o any applicable United States federal income tax consequences.
The terms and conditions described under "Description of Debt Securities,"
"Description of Preferred Stock," "Description of Preference Stock,"
"Description of $1 2/3 Par Value Common Stock," "Description of Purchase
Contracts," "Description of Depositary Shares," "Description of Warrants" and
those described below under "--Significant Provisions of the Unit Agreement"
will apply to each unit and to any debt security, preferred stock, preference
stock, $1 2/3 par value common stock, purchase contract, depositary share or
warrant included in each unit, respectively, unless otherwise specified in the
applicable prospectus supplement.
We will issue the units under one or more unit agreements, each referred to
as a unit agreement, to be entered into between us and a bank or trust company,
as unit agent. We may issue units in one or more series, which will be described
in a prospectus supplement. The following descriptions of material provisions
and terms of the unit agreement and units are not complete, and you should
review the detailed provisions of the unit agreement to be filed with the SEC in
connection with the offering of specific units for a full description, including
the definition of some of the terms used in this prospectus and for other
information regarding the units.
Significant Provisions of the Unit Agreement
The following terms and conditions of the unit agreement will apply to each
unit and to any debt security, preferred stock, preference stock, $1 2/3 par
value common stock, purchase contract, depositary share or warrant included in
each unit, respectively, unless otherwise specified in the applicable prospectus
supplement:
Obligations of Unit Holder. Under the terms of the unit agreement, each
owner of a unit consents to and agrees to be bound by the terms of the unit
agreement.
Assumption of Obligations by Transferee. Upon the registration of transfer
of a unit, the transferee will assume the obligations, if any, of the transferor
under any security constituting that unit, and the transferor will be released
from those obligations. Under the unit agreement, we consent to the transfer of
these obligations to the transferee, to the assumption of these obligations by
the transferee and to the release of the transferor, if the transfer is made in
accordance with the provisions of the unit agreement.
Remedies. Upon the acceleration of the debt securities constituting any
units, our obligations may also be accelerated upon the request of the owners of
not less than 25% of the affected purchase contracts, on behalf of all the
owners.
Limitation on Actions by You as an Individual Holder. No owner of any unit
will have any right under the unit agreement to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise regarding the unit
agreement, or for the appointment of a trustee, receiver, liquidator, custodian
or other similar official, unless the owner will have given written notice to
the unit agent and to us of the occurrence and continuance of a default
thereunder and in the case of an event of default under the debt securities or
the relevant indenture, unless the procedures, including notice to us and the
trustee, described in the applicable indenture have been complied with.
If these conditions have been satisfied, any owner of an affected unit may
then, but only then, institute an action or proceeding.
23
Absence of Protections against All Potential Actions. There are no
covenants or other provisions in the unit agreement providing for a put right or
increased interest or otherwise that would afford holders of units additional
protection in the event of a recapitalization transaction, a change of control
or a highly leveraged transaction.
Modification without Consent of Holders. We and the unit agent may amend
the unit agreement without the consent of the holders to:
o cure any ambiguity;
o correct or supplement any defective or inconsistent provision; or
o amend the terms in any other manner which we may deem necessary or
desirable and which will not adversely affect the interests of the
affected holders in any material respect.
Modification with Consent of Holders. We and the unit agent, with the
consent of the holders of not less than a majority of all series of outstanding
units affected, voting as one class, may modify the rights of the holders of the
units of each series so affected. However, we and the unit agent may not make
any of the following modifications without the consent of the holder of each
outstanding unit affected by the modification:
o materially adversely affect the holders' units or the terms of the unit
agreement (other than terms related to the three clauses described above
under "--Modification without Consent of Holders"); or
o reduce the percentage of outstanding units the consent of whose owners is
required for the modification of the provisions of the unit agreement
(other than terms related to the three clauses described above under
"--Modification without Consent of Holders").
Modifications of any debt securities included in units may only be made in
accordance with the applicable indenture, as described under "Description of
Debt Securities--Modification of the Indenture."
Consolidation, Merger or Sale of Assets. The unit agreement provides that
we will not consolidate or combine with or merge with or into or, directly or
indirectly, sell, assign, convey, lease, transfer or otherwise dispose of all or
substantially all of our properties and assets to any person or persons in a
single transaction or through a series of transactions, unless:
o we shall be the continuing person or, if we are not the continuing
person, the resulting, surviving or transferee person (the "surviving
entity") is a company organized and existing under the laws of the
United States or any State or territory;
o the surviving entity will expressly assume all of our obligations under
the debt securities and each indenture, and will, if required by law to
effectuate the assumption, execute supplemental indentures which will be
delivered to the unit agents and will be in form and substance reasonably
satisfactory to the trustees;
o immediately after giving effect to such transaction or series of
transactions on a pro forma basis, no default has occurred and is
continuing; and
o we or the surviving entity will have delivered to the unit agents an
officers' certificate and opinion of counsel stating that the transaction
or series of transactions and a supplemental indenture, if any, complies
with this covenant and that all conditions precedent in the applicable
indenture relating to the transaction or series of transactions have been
satisfied.
If any consolidation or merger or any sale, assignment, conveyance, lease,
transfer or other disposition of all or substantially all of our assets occurs
in accordance with the indentures, the successor corporation will succeed to,
and be substituted for, and may exercise our rights and powers under the
indentures with the same effect as if such successor corporation had been named
as us.
Unit Agreement Not Qualified Under Trust Indenture Act. The unit agreement
will not be qualified as an indenture under, and the unit agent will not be
required to qualify as a trustee under, the Trust Indenture Act. Accordingly,
the holders of units will not have the benefits of the protections of the Trust
Indenture Act. However, any debt securities issued as part of a unit will be
issued under an indenture qualified under the Trust Indenture Act, and the
trustee under that indenture will be qualified as a trustee under the Trust
Indenture Act.
Title. We, the unit agent, the trustees, the warrant agent and any of their
agents will treat the registered owner of any unit as its owner, notwithstanding
any notice to the contrary, for all purposes.
New York Law to Govern. The unit agreement, the units and the purchase
contracts constituting part of the units will be governed by, and construed in
accordance with, the laws of the State of New York.
24
FORMS OF SECURITIES
Unless otherwise indicated in a prospectus supplement, the debt securities,
purchase contracts, warrants and units will be issued in the form of one or more
fully registered global securities (a "Global Security") which will be deposited
with, or on behalf of, The Depository Trust Company, New York, New York (the
"Depository" or "DTC") and registered in the name of the Depository's nominee.
Beneficial interests in a Global Security will be represented through book-entry
accounts of financial institutions acting on behalf of beneficial owners as
direct and indirect participants of the Depository. Investors may elect to hold
interests in the Global Securities through DTC. Except as set forth below, a
Global Security may be transferred, in whole and not in part, only to another
nominee of the Depository or to a successor of the Depository or its nominee.
The Depository has advised us that it is a limited-purpose trust company
which was created to hold securities for its participating organizations and to
facilitate the clearance and settlement of securities transactions between
participants in such securities through electronic book-entry changes in
accounts of its participants. Participants include:
o securities brokers and dealers, including the underwriters named in the
accompanying prospectus supplement;
o banks and trust companies;
o clearing corporations; and
o certain other organizations.
Access to the Depository's system is also available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Persons who are not participants may beneficially own securities held by the
Depository only through participants or indirect participants.
The Depository advises that pursuant to procedures established by it:
o upon issuance of a Global Security, the Depository will credit the
account of participants designated by any dealers, underwriters or agents
participating in the distribution of the securities with the
respective principal or face amounts of securities beneficially owned
by such participants; and
o ownership of beneficial interests in a Global Security will be shown on,
and the transfer of that ownership will be effected only through, records
maintained by the Depository (with respect to participants' interests),
the participants and the indirect participants (with respect to the
owners of beneficial interests in the Global Security).
The laws of some states require that certain persons take physical delivery
in definitive form of securities which they own. Consequently, the ability to
own, transfer or pledge beneficial interests in a Global Security is limited to
such extent.
As long as the Depository's nominee is the registered owner of a Global
Security, such nominee for all purposes will be considered the sole owner or
holder of the securities represented by the Global Security. Except as provided
below, you will not:
o be entitled to have any of the securities registered in your name;
o receive or be entitled to receive physical delivery of the securities
in definitive form; or
o be considered the owners or holders of the securities under the
applicable indenture, purchase contract agreement, warrant agreement or
unit agreement.
Principal, premium, if any, and interest payments on debt securities, and
any payments to holders with respect to purchase contracts, warrants or units,
represented by a Global Security registered in the name of a Depository or its
nominee will be made to the Depository or its nominee, as the case may be, as
the registered owner of the Global Security. Neither we, the trustees, any unit
agent, purchase contract agent, warrant agent, paying agent or any other agent
for payment on or registration of transfer or exchange of any Global Security
nor the Depository will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in Global Securities or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
If the Depository is at any time unwilling or unable to continue as
depositary and we have not appointed a successor depositary within 90 days, we
will issue securities in definitive form in exchange for the Global Securities.
In addition, we may at any time determine not to have the securities represented
by Global Securities and, in such event, will issue securities in definitive
form in exchange for the Global Securities. In either instance, an owner of a
beneficial interest in a Global Security will be entitled to have securities
equal in principal amount to the beneficial interest registered in its name and
will be entitled to physical delivery of the securities in definitive form. No
service charge will be made for any transfer or exchange of the securities, but
we may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
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PLAN OF DISTRIBUTION
We may offer from time to time debt securities, $1 2/3 par value common
stock, preference stock, preferred stock, purchase contracts, depositary shares,
warrants and units. The aggregate initial offering price of all securities sold
by us under this prospectus will not exceed $10,000,000,000. Some of these
securities may, pursuant to their terms, be mandatorily convertible into or
mandatorily exchangeable for securities issued or to be issued by us or any
third party, including any of our affiliates.
A prospectus supplement will set forth the terms of the offering of the
securities described in this prospectus, including:
o the name or names of any underwriters, dealers or agents and the amounts
of securities underwritten or purchased by each of them;
o the initial public offering price of the securities and the proceeds to
us and any discounts, commissions or concessions allowed or reallowed or
paid to dealers; and
o any securities exchanges on which the securities may be listed.
Any initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time.
We may sell the securities for cash, or in exchange for satisfaction of our
outstanding liabilities to certain of our creditors, in any of the following
ways (or in any combination thereof):
o directly to purchasers;
o through agents;
o through underwriters;
o through dealers;
o through remarketing firms; and
o through direct sales or auctions performed by utilizing the Internet or a
bidding or ordering system.
Direct Sales
We may directly solicit offers to purchase securities. In this case, no
underwriters or agents would be involved.
By Agents
We may use agents to sell the securities. Any such agent, who may be deemed
to be an underwriter as that term is defined in the Securities Act of 1933,
involved in the offer or sale of the securities in respect of which this
prospectus is delivered will be named, and any commissions payable by us to such
agent will be set forth, in a prospectus supplement. Unless otherwise indicated
in a prospectus supplement, any such agent will be acting on a best efforts
basis for the period of its appointment, which is ordinarily three business days
or less.
By Underwriters
If an underwriter or underwriters are utilized in the sale of securities,
we will enter into an underwriting agreement or exchange agreement, as
applicable, with such underwriters at the time of sale to them and the names of
the underwriters and the terms of the transaction will be set forth in a
prospectus supplement which will be used by the underwriters to make resales of
the securities in respect of which this prospectus is delivered to the public.
If underwriters are used in the sale of any securities, the securities will
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at the time of
sale. The securities may be either offered to the public through underwriting
syndicates represented by managing underwriters or directly by underwriters.
Generally, the underwriters' obligations to purchase the securities will be
subject to certain conditions precedent. The underwriters will be obligated to
purchase all of the securities if they purchase any of the securities.
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By Dealers
If a dealer is utilized in the sale of securities in respect of which this
prospectus is delivered, we will sell such securities to the dealer as
principal. The dealer may then resell such securities to the public at varying
prices to be determined by such dealer at the time of resale.
Remarketing Firms
We may use a remarketing firm to offer or sell the securities in connection
with a remarketing arrangement upon their purchase. Remarketing firms will act
as principals for their own account or as agents for us. These remarketing firms
will offer or sell the securities pursuant to the terms of the securities. A
prospectus supplement will identify any remarketing firm and the terms of its
agreement, if any, with us and will also describe the remarketing firm's
compensation. Remarketing firms may be deemed to be underwriters in connection
with the securities they remarket.
Delayed Delivery Contracts
If so indicated in a prospectus supplement, we will authorize agents and
underwriters to solicit offers by certain institutions to purchase securities
from us at the public offering price set forth in such prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on the
date stated in the prospectus supplement. Each delayed delivery contract will be
for an amount not less than the respective amounts stated in the prospectus
supplement. Unless we otherwise agree, the aggregate principal amount of
securities sold pursuant to delayed delivery contracts shall be not less nor
more than the respective amounts stated in the prospectus supplement.
Institutions with whom delayed delivery contracts, when authorized, may be made
include:
o commercial and savings banks;
o insurance companies;
o pension funds;
o investment companies;
o educational and charitable institutions; and
o other institutions.
All delayed delivery contracts are subject to our approval. Delayed
delivery contracts will not be subject to any conditions except that the
purchase by an institution of the securities covered by its delayed delivery
contract shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject. A
commission indicated in the prospectus supplement will be paid to underwriters
and agents soliciting purchases of securities pursuant to contracts accepted by
us.
Derivatives and Hedging Transactions
We may enter into derivative or other hedging transactions with financial
institutions. These financial institutions may in turn engage in sales of $1 2/3
par value common stock to hedge their position, deliver this prospectus in
connection with some or all of those sales and use the shares covered by this
prospectus to close out any short position created in connection with those
sales. We may also sell shares of $1 2/3 par value common stock short using this
prospectus and deliver $1 2/3 par value common stock covered by this prospectus
to close out such short positions, or loan or pledge $1 2/3 par value common
stock to financial institutions that in turn may sell the shares of $1 2/3 par
value common stock using this prospectus. We may pledge or grant a security
interest in some or all of the $1 2/3 par value common stock covered by this
prospectus to support a derivative or hedging position or other obligation and,
if we default in the performance of our obligations, the pledgees or secured
parties may offer and sell the $1 2/3 par value common stock from time to time
pursuant to this prospectus.
Through the Internet or Bidding or Ordering System
We may also offer securities directly to the public, with or without the
involvement of agents, underwriters or dealers and may utilize the Internet or
another electronic bidding or ordering system for the pricing and allocation of
such securities. Such a system may allow bidders to directly participate,
through electronic access to an auction site, by submitting conditional offers
to buy that are subject to acceptance by us, and which may directly affect the
price or other terms at which such securities are sold.
The final offering price at which securities would be sold and the
allocation of securities among bidders, would be based in whole or in part on
the results of the Internet bidding process or auction. Many variations of the
Internet auction or pricing and allocating systems are likely to be developed in
the future, and we may utilize such systems in connection with the sale of
securities. We will describe in a supplement to this prospectus how any auction
or bidding process will be conducted to determine the price or any other terms
of the securities, how potential investors may participate in the process and,
where applicable, the nature of the underwriters' obligations with respect to
the auction or ordering system.
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General Information
The place and time of delivery for the securities described in this
prospectus will be set forth in the accompanying prospectus supplement.
We may have agreements with the agents, underwriters and dealers to
indemnify them against certain liabilities, including liabilities under the
Securities Act of 1933.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, us in the ordinary course of business.
In connection with the sale of the securities, certain of the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the securities. Specifically, the underwriters may overallot the
offering, creating a short position. In addition, the underwriters may bid for,
and purchase, the securities in the open market to cover short positions or to
stabilize the price of the securities. Any of these activities may stabilize or
maintain the market price of the securities above independent market levels. The
underwriters will not be required to engage in these activities, and may end any
of these activities at any time.
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LEGAL MATTERS
The validity of the securities in respect of which this prospectus is being
delivered will be passed on for us by Martin I. Darvick, Esq., an attorney on
our legal staff, and for the agents by Davis Polk & Wardwell. Mr. Darvick owns
shares and holds options to purchase shares of our $1 2/3 par value common
stock. Davis Polk & Wardwell acts as counsel to the Executive Compensation
Committee of our Board of Directors and has acted as counsel to us and certain
of our affiliates in various matters.
EXPERTS
The consolidated financial statements and related financial statement
schedules of General Motors Corporation incorporated into this document by
reference from the General Motors Corporation Annual Report on Form 10-K for the
year ended December 31, 2003 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference and have been so incorporated in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing. The report of
Deloitte & Touche LLP expresses an unqualified opinion and includes an
explanatory paragraph relating to changes in accounting for the adoption of: 1)
FASB Interpretation No. 46, "Consolidation of Variable Interest Entities," 2)
Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation" relating to the expensing of the fair market value of
newly granted stock options and other stock-based compensation awards issued to
employees and 3) SFAS No. 142, "Goodwill and Other Intangible Assets" relating
to the change in the method of accounting for goodwill and other intangible
assets.
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