UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
---
ACT OF 1934
For the fiscal year ended November 30, 2002
-----------------
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
---
ACT OF 1934
For the transition period from to
--------------------- ---------------------
Commission file number 33-4663
-------
HUGHES NON-BARGAINING EMPLOYEES THRIFT AND SAVINGS PLAN
AND
HUGHES SAVINGS PLUS PLAN
Hughes Electronics Corporation
200 N. Sepulveda Blvd.
El Segundo, California 90245-0956
----------------------------------
(Full titles and address of the plans)
General Motors Corporation
300 Renaissance Center, Detroit, Michigan 48265-3000
----------------------------------------------------
(Name of issuer of the securities held pursuant to
the plans and the address of its
principal executive offices)
Registrant's telephone number, including area code (313) 556-5000
Notices and communications from the Securities and Exchange Commission
relative to this report should be forwarded to:
Peter R. Bible
Chief Accounting Officer
General Motors Corporation
300 Renaissance Center
Detroit, Michigan 48265-3000
- 1 -
FINANCIAL STATEMENTS AND EXHIBIT
--------------------------------
(a) FINANCIAL STATEMENTS
------------------
The Hughes Non-Bargaining Employees Thrift and Savings Plan
("Non-Bargaining Plan") and the Hughes Savings Plus Plan ("Savings Plus Plan").
Page No.
--------
Independent Auditors' Report............................... 5
Financial Statements:
--------------------
Statements of Net Assets Available for Benefits by Plan as of
November 30, 2002.......................................... 6
Statements of Net Assets Available for Benefits by Plan as of
November 30, 2001.......................................... 7
Statements of Changes in Net Assets Available for Benefits
by Plan for the year ended November 30, 2002............... 8
Statements of Changes in Net Assets Available for Benefits
By Plan for the year ended November 30, 2001............... 9
Notes to Financial Statements................................ 10
Supplemental Schedules Omitted
------------------------------
Supplemental schedules are omitted because of the absence of conditions
under which they are required.
(b) EXHIBIT
-------
Exhibit 23 - Consent of Independent Auditors................. 20
- 2 -
SIGNATURE
The Non-Bargaining Plan. Pursuant to the requirements of the Securities
Exchange Act of 1934, the Hughes Non-Bargaining Employees Thrift and Savings
Plan has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Hughes Non-Bargaining Employees
Thrift and Savings Plan
------------------------------
(Name of Plan)
Date: May 19, 2003 By
/s/Sandra L. Harrison
-----------------------
(Sandra L. Harrison,
Chairman, Administrative
Committee)
- 3 -
SIGNATURE (concluded)
The Savings Plus Plan. Pursuant to the requirements of the Securities
Exchange Act of 1934, the Hughes Savings Plus Plan has duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
Hughes Savings Plus Plan
--------------------------
(Name of Plan)
Date: May 19, 2003 By
/s/Sandra L. Harrison
-----------------------
(Sandra L. Harrison,
Chairman, Administrative
Committee)
- 4 -
INDEPENDENT AUDITORS' REPORT
----------------------------
Hughes Non-Bargaining Employees Thrift and Savings Plan and Hughes Savings Plus
Plan:
We have audited the accompanying Statements of Net Assets Available for Benefits
by Plan of the Hughes Non-Bargaining Employees Thrift and Savings Plan, and the
Hughes Savings Plus Plan (collectively, the "Plans") as of November 30, 2002 and
2001 and the related Statements of Changes in Net Assets Available for Benefits
by Plan for the years then ended. These financial statements are the
responsibility of the Plans' management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plans at November 30,
2002 and 2001 and the changes in their net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
/s/DELOITTE & TOUCHE LLP
------------------------
DELOITTE & TOUCHE LLP
Los Angeles, California
May 19, 2003
- 5 -
HUGHES NON-BARGAINING EMPLOYEES THRIFT
AND SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS BY PLAN
NOVEMBER 30, 2002
NON-BARGAINING SAVINGS PLUS TOTAL
-------------- ------------ -----
(Dollars in Thousands)
INVESTMENT IN HUGHES MASTER
TRUST (Notes 2 and 6) $2,078,838 $95,432 $2,174,270
CONTRIBUTIONS RECEIVABLE:
Employee 589 19 608
Employer 286 14 300
--------- --------- ---------
Total contributions
receivable 875 33 908
--------- --------- ---------
NET ASSETS AVAILABLE
FOR BENEFITS $2,079,713 $95,465 $2,175,178
========= ========= =========
See notes to financial statements.
- 6 -
HUGHES NON-BARGAINING EMPLOYEES THRIFT
AND SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS BY PLAN
NOVEMBER 30, 2001
NON-BARGAINING SAVINGS PLUS TOTAL
-------------- ------------ -----
(Dollars in Thousands)
INVESTMENT IN HUGHES MASTER
TRUST (Notes 2 and 6) $2,557,911 $121,529 $2,679,440
CONTRIBUTIONS RECEIVABLE:
Employee 618 17 635
Employer 313 12 325
--------- --------- ---------
Total contributions
receivable 931 29 960
--------- --------- ---------
NET ASSETS AVAILABLE
FOR BENEFITS $2,558,842 $121,558 $2,680,400
========= ========= =========
See notes to financial statements.
- 7-
HUGHES NON-BARGAINING EMPLOYEES THRIFT
AND SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY PLAN
FOR THE YEAR ENDED NOVEMBER 30, 2002
NON-
BARGAINING SAVINGS PLUS TOTAL
---------- ------------ ---------
(Dollars in Thousands)
INVESTMENT ACTIVITIES:
Net investment loss
from Hughes Master
Trust (Note 6) $(282,624) $(11,768) $(294,392)
--------- ------- ---------
OTHER INCREASE/(DECREASE)
IN ACTIVITIES:
Employee contributions 28,548 994 29,542
Employer contributions 12,378 671 13,049
Benefit payments (237,573) (15,848) (253,421)
Plan transfer 142 (142) -
--------- ------- ---------
Net decrease
in other activities (196,505) (14,325) (210,830)
--------- ------- ---------
DECREASE IN NET ASSETS
AVAILABLE FOR BENEFITS (479,129) (26,093) (505,222)
NET ASSETS AVAILABLE
FOR BENEFITS AT:
BEGINNING OF YEAR 2,558,842 121,558 2,680,400
--------- ------- ---------
END OF THE YEAR $2,079,713 $95,465 $2,175,178
========= ======= =========
See notes to financial statements.
- 8-
HUGHES NON-BARGAINING EMPLOYEES THRIFT
AND SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY PLAN
FOR THE YEAR ENDED NOVEMBER 30, 2001
NON-
BARGAINING SAVINGS PLUS TOTAL
---------- ------------ ---------
(Dollars in Thousands)
INVESTMENT ACTIVITIES:
Net investment loss
from Hughes Master
Trust (Note 6) $(354,493) $(17,882) $(372,375)
--------- ------- ---------
OTHER INCREASE/(DECREASE)
IN ACTIVITIES:
Employee contributions 33,730 928 34,658
Employer contributions 14,138 605 14,743
Benefit payments (273,356) (18,478) (291,834)
Plan transfer (1,228) 1,228 -
--------- ------- ---------
Net decrease
in other activities (226,716) (15,717) (242,433)
--------- ------- ---------
DECREASE IN NET ASSETS
AVAILABLE FOR BENEFITS (581,209) (33,599) (614,808)
NET ASSETS AVAILABLE
FOR BENEFITS AT:
BEGINNING OF YEAR 3,140,051 155,157 3,295,208
--------- ------- ---------
END OF THE YEAR $2,558,842 $121,558 $2,680,400
========= ======= =========
See notes to financial statements.
- 9 -
HUGHES NON-BARGAINING EMPLOYEES THRIFT AND
SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED NOVEMBER 30, 2002 AND 2001
NOTE 1. PLAN DESCRIPTION AND RELATED INFORMATION
The following description of the Hughes Non-Bargaining Employees Thrift and
Savings Plan and Hughes Savings Plus Plan (collectively "the Plans") provides
only general information. Participants should refer to the respective plan
documents for a more complete description of the Plans' provisions.
Description of the Plans - The financial statements comprise the accounts of the
Hughes Non-Bargaining Employees Thrift and Savings Plan ("Non-Bargaining Plan")
and the Hughes Savings Plus Plan ("Savings Plus Plan"). The Plans were restated
on November 6, 2002, to incorporate the various amendments made throughout the
years, and to conform with current regulations as required. The Plans are
subject to the provisions of the Employee Retirement Income Security Act of
1974("ERISA").
Plan Administration - The Plans are administered by an Administrative Committee
whose members are appointed by Hughes Electronics Corporation (the "Company" or
"Hughes"), a wholly owned subsidiary of General Motors Corporation ("GM"). The
trustee of the Plans is Deutsche Bank Trust Company Americas("Deutsche Bank"),
formerly known as Bankers Trust Company. Additional Plan information is provided
to the participants by the Company in the form of Summary Annual Reports. The
Plans' expenses are paid by the plan participants, as provided by the Plans'
documents.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements of the Plans have
been prepared in accordance with accounting principles generally accepted in the
United States of America.
Investments - The Plans participate in the Hughes Electronics Corporation
Savings Plan Master Trust (the "Master Trust"). See further discussion in Note
6. The Plans' investments in the Master Trust are presented at estimated fair
value, which has been determined based on the fair value of the investments of
the Master Trust.
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates, judgements and assumptions that affect
the reported amounts of net assets available for benefits and changes therein.
Management bases its estimates, judgements and assumptions on historical
experience and on various other factors that are believed to be reasonable under
the circumstances. Due to the inherent uncertainty involved in making estimates,
actual results reported in future periods may be affected by changes in those
estimates.
Financial Instruments and Investments - The Plans invest in a master trust which
utilizes various investment instruments. Investment securities, in general, are
exposed to various risks, such as interest rate risk, credit risk, and overall
market volatility. Due to the level of risk associated with certain investment
securities, it is reasonably possible that changes in the values of investment
securities could occur in the near term and that such changes could have a
materially adverse effect on the Plans' financial statements.
- 10 -
HUGHES NON-BARGAINING EMPLOYEES THRIFT AND
SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED NOVEMBER 30, 2002 AND 2001 - Continued
Income Taxes - The Internal Revenue Service has ruled that the Plans are
qualified under Section 401 of the Internal Revenue Code (the "Code") and are,
therefore, not subject to Federal income taxes under present income tax laws.
Accordingly, no provision for Federal income taxes has been made in the
accompanying financial statements. Contributions by participants made on a
"pre-tax" basis, the Company's matching contributions, and the earnings thereon
are not subject to Federal income taxes to the participants until distributed
from the Plans.
NOTE 3. PLAN PARTICIPATION
All employees of the Company and its domestic subsidiaries that have adopted the
respective Plans are eligible to participate in the Plans as soon as
administratively feasible following one hour of service. Effective January 1,
2002, the Plans provide that eligible non-highly compensated participants may
contribute from 1 percent to 20 percent (in whole percentages) of his or her
compensation to the Plans. Eligible highly compensated participants may
contribute from 1 percent to 12 percent (in whole percentages) of his or her
compensation to the Plans. The participants may direct these contributions to
any of the investment funds included in the Master Trust described in Note 6.
The Company contributes to the General Motors Class H Common Stock Fund an
amount equal to 100 percent of the individual employee's contribution to the
Plans up to 4 percent of the employee's compensation, subject to certain
limitations.
Participants are vested immediately in their contributions plus actual earnings
thereon. Vesting in the Company's contributions is based on years of continuous
service. Effective December 1, 2002, participants become fully vested after
three years of service. Forfeited Company contributions, if any, are used to
reduce future Company contributions to the Plans.
The Company reserves the right to terminate the Plans at any time subject to the
provisions set forth in ERISA. Upon such termination, the participants' rights
to the Company's contributions vest immediately, and the account balances are to
be fully paid to the participants.
NOTE 4. PARTICIPANT LOANS
The Plans allow participants to borrow from their vested account balances,
subject to certain limitations as set forth in the Plans. The loans bear
interest at 1 percent over the Prime Rate as published in the Eastern edition of
The Wall Street Journal (which is fixed at the inception of the loan), and
maturities may not exceed four years.
The loans are deducted from the participants' vested account balances using a
source hierarchy. The funds are withdrawn from sources in the following order:
old after-tax employee contributions, new after-tax employee contributions,
pre-tax employee contributions, rollover contributions, company match
unrestricted, and company match restricted. Funds are withdrawn pro-rata from
the funds for each source. Loan repayments are reinvested in the inverse order
of the sources that the loan was redeemed from and into the funds based on
current investment mixes.
- 11 -
HUGHES NON-BARGAINING EMPLOYEES THRIFT AND
SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED NOVEMBER 30, 2002 AND 2001 - Continued
NOTE 5. BENEFITS TO WITHDRAWING PARTICIPANTS
Benefit payments to participants are recorded upon distribution. Net assets
available for benefits include the following amounts allocated to accounts of
persons who have elected to withdraw from the Plans, but have not yet been paid
from the Plans:
Plans 2002 2001
------------------ ------- -------
(Dollars in Thousands)
Non-Bargaining $413 $1,184
Savings Plus 21 66
----- -----
Total $434 $1,250
===== =====
NOTE 6. INFORMATION CONCERNING THE MASTER TRUST
The Master Trust was created pursuant to a trust agreement between Hughes and
Bankers Trust (now Deutsche Bank), as trustee of the funds, to permit the
commingling of trust assets of the Plans for investment and administrative
purposes. Each plan has an undivided interest in the net assets of the Master
Trust and changes therein. The assets of the Master Trust are held by Deutsche
Bank. Although assets of both plans are commingled in the master trust, the
Plans' record keeper (Fidelity Investments) maintains supporting records for the
purpose of allocating the net gain or loss of the investments to each of the
Plans. The net investment income or loss of the investment assets is allocated
by the record keeper to each plan based on account balances for participants by
plan.
- 12-
HUGHES NON-BARGAINING EMPLOYEES THRIFT AND
SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED NOVEMBER 30, 2002 AND 2001 - Continued
The following schedules summarize the net assets and net investment income of
the Master Trust.
a) NET ASSETS OF THE MASTER TRUST
NOVEMBER 30, 2002
TOTAL
-----
(Dollars in thousands)
INVESTMENTS:
Short-term
investment funds $ 131,923
Certificates of
deposit 52,010
Short-term U.S.
Govt. obligations 84,753
Short-term corporate
obligations 308,110
Common stock 589,156
Common stocks-GM
Class H 262,730
Pooled investments 100,969
Preferred stock 3,248
Insurance contracts 5,620
Mutual funds 396,333
Participant loans 22,213
Other 221,814
---------
Total investments 2,178,879
Dividends and interest
receivable 2,463
Receivable for
securities sold 1,543
Payable for securities
purchased (8,281)
Contributions
receivable 908
Other (334)
---------
NET ASSETS OF THE
MASTER TRUST $2,175,178
=========
- 13 -
HUGHES NON-BARGAINING EMPLOYEES THRIFT AND
SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED NOVEMBER 30, 2002 AND 2001 - Continued
a) NET ASSETS OF THE MASTER TRUST
NOVEMBER 30, 2001
TOTAL
-----
(Dollars in thousands)
INVESTMENTS:
Short-term
investment funds $ 131,044
Certificates of
deposit 9,992
Short-term U.S.
Govt. obligations 99,278
Short-term corporate
obligations 301,495
Common stock 810,093
Common stocks-GM
Class H 357,718
Pooled investments 163,588
Preferred stock 1,676
Insurance contracts 24,917
Mutual funds 445,446
Participant loans 32,959
Other 298,540
---------
Total investments 2,676,746
Dividends and interest
receivable 4,224
Receivable for
securities sold 3,370
Payable for securities
purchased (4,270)
Contributions
receivable 960
Other (630)
---------
NET ASSETS OF THE
MASTER TRUST $2,680,400
=========
- 14 -
HUGHES NON-BARGAINING EMPLOYEES THRIFT AND
SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED NOVEMBER 30, 2002 AND 2001 - Continued
b) NET INVESTMENT INCOME/(LOSS) OF THE MASTER TRUST
FOR THE YEAR ENDED NOVEMBER 30, 2002
TOTAL
-------
(Dollars in Thousands)
INVESTMENT INCOME/(LOSS) AND
EXPENSES:
Net appreciation/(depreciation) in fair
value of investments
Hughes Equity Fund $ (166,466)
Hughes Fixed Income Fund (9,823)
GM Class H Common Stock Fund (61,792)
Hughes Balanced Fund (30,952)
Raytheon Class A
Common Stock Fund (5,208)
Fidelity Combined Funds (65,176)
-------
Net depreciation in fair
value of investments (339,417)
Dividends 16,053
Interest and other
income 34,271
Investment management
and trustee fees (5,299)
-------
NET INVESTMENT LOSS $ (294,392)
=======
- 15 -
HUGHES NON-BARGAINING EMPLOYEES THRIFT AND
SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED NOVEMBER 30, 2002 AND 2001 - Continued
b) NET INVESTMENT INCOME/(LOSS) OF THE MASTER TRUST
FOR THE YEAR ENDED NOVEMBER 30, 2001
TOTAL
-------
(Dollars in Thousands)
INVESTMENT INCOME/(LOSS) AND
EXPENSES:
Net appreciation/(depreciation) in fair
value of investments
Hughes Equity Fund $ (155,873)
Hughes Fixed Income Fund (644)
GM Class H Common Stock Fund (185,367)
Hughes Balanced Fund (22,001)
Raytheon Class A
Common Stock Fund 366
Fidelity Combined Funds (100,831)
-------
Net depreciation in fair
value of investments (464,350)
Dividends 43,066
Interest and other
income 54,121
Investment management
and trustee fees (5,212)
-------
NET INVESTMENT LOSS $ (372,375)
=======
- 16 -
HUGHES NON-BARGAINING EMPLOYEES THRIFT AND
SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED NOVEMBER 30, 2002 AND 2001 - Continued
NOTE 7. RELATED PARTY
Investments of the Master Trust are managed by independent investment advisors,
with the exception of one account in the Hughes Fixed Income Fund managed
directly by a subsidiary of the Company which also performs certain other duties
in relation to the oversight of the investments of the Plans (with asset values
at November 30, 2002 and 2001 of approximately $488,682,000 and $487,773,000,
respectively). Investment management fees paid by the Plans to the subsidiary
for the account it manages were as follows:
Plans 2002 2001
---------------------------------- ---- ----
(Dollars in Thousands)
Non-Bargaining $705 $340
Savings Plus 32 18
---- ----
Total investment management fees $737 $358
==== ====
The Master Trust invests in certain General Motors Acceptance Corporation bonds
and GM common stocks. The plan sponsor is a wholly owned subsidiary of GM and,
therefore, these transactions qualify as party-in-interest transactions.
Note 8. PLAN AMENDMENTS
The Plans were amended to include the following changes:
Effective December 1, 2001, payment of minimum required distributions are
permitted in order to comply with the 2001 proposed IRS regulations.
Effective January 1, 2002, the Plan Administrator is allowed to approve
changes in contribution rates to the Plans as permitted by law and where such
changes are in the best interest of the Plans and their participants.
Effective January 1, 2002, Non-Highly Compensated Employees may contribute up
to 20% of pre-tax or after-tax compensation (in the aggregate) to the Plans
during any Plan Year.
Effective January 1, 2002, acceptance of rollover contributions from a
401(k), 403(b), and 457 plan, as well as taxable rollovers from a non-conduit
IRA and from spousal beneficiaries are allowed.
Effective January 1, 2002, acceptance of after-tax employee contributions
included in an eligible rollover distribution from another qualified plan is
allowed.
Effective July 1, 2002, participants who are age 50 or older are permitted
supplemental "catch-up" pre-tax contributions.
NOTE 9. SUBSEQUENT EVENTS
The Plans were amended to include the following changes:
Effective December 1, 2002, participants vest in the company match on a
three-year cliff vesting schedule.
Effective January 1, 2003, the Plans maintain the Raytheon Stock Fund as an
investment option beyond December 31, 2002.
- 17 -
HUGHES NON-BARGAINING EMPLOYEES THRIFT AND
SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED NOVEMBER 30, 2002 AND 2001 - Continued
Effective April 1, 2003, the Company is permitted to use forfeited, nonvested
company matching contributions of terminated employees whose vested account
balance was fully distributed.
On January 31, 2003, State Street Corporation ("State Street") acquired the
investment servicing businesses of Deutsche Bank. State Street agreed to service
the existing trust agreement on behalf of Deutsche Bank until such time Hughes
and State Street mutually agree to a transition to the State Street platform.
NOTE 10. OTHER MATTERS
On April 9, 2003, GM, Hughes and The News Corporation Limited ("News Corp.")
announced the signing of definitive agreements that provide for, among other
things, the split-off of Hughes from GM and the simultaneous sale of GM's
approximately 19.9% economic interest in Hughes to News Corp. for $14 per share,
or approximately $3.8 billion. GM would receive at least $3.1 billion in cash
with the remainder payable in News Corp. preferred American Depositary Shares
("News Corp. ADSs") and/or cash at News Corp.'s election. News Corp. would
acquire an additional 14.1% stake in Hughes from the holders of GM Class H
common stock through a mandatory exchange of a portion of their Hughes common
stock received in the split-off, which would provide News Corp. with a total of
34% of the outstanding capital stock of Hughes. In addition, GM would receive a
cash dividend from Hughes of $275 million in connection with the transactions.
Hughes expects to pay this dividend using available cash balances.
Under the terms of the proposed transactions, holders of GM Class H common stock
would first exchange their shares for Hughes common stock on a share-for-share
basis in the split-off, followed immediately by an exchange of approximately
17.6% of the Hughes common stock they receive in the split-off for approximately
$14 per share in News Corp. ADSs and/or cash. The number of News Corp. ADSs
payable to GM and Hughes common stockholders, based on a fixed-price of $14 per
Hughes share, will be adjusted within a collar range of 20% above or below the
News Corp. ADS price of $22.40. This mandatory exchange of about 17.6% of the
shares of Hughes common stock for News Corp. ADSs and/or cash would be taxable
to the Hughes common stockholders at the time. The transactions are structured
in a manner that will not result in the recapitalization of GM Class H common
stock into GM $1-2/3 par value common stock at a 120% exchange ratio, as
currently provided for under certain circumstances in the General Motors
Restated Certificate of Incorporation, as amended.
If the transactions are completed, Rupert Murdoch, chairman and chief executive
officer of News Corp., would become chairman of Hughes, and Chase Carey, who is
currently serving as an advisor to News Corp., would become president and chief
executive officer of Hughes. Eddy Hartenstein, Hughes' senior executive vice
president, would be named vice chairman of Hughes. Hughes would have 11
directors, the majority of whom would be independent directors.
- 18 -
HUGHES NON-BARGAINING EMPLOYEES THRIFT AND
SAVINGS PLAN AND HUGHES SAVINGS PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED NOVEMBER 30, 2002 AND 2001 - Concluded
The transactions are subject to a number of conditions, including, among other
things, obtaining U.S. antitrust and Federal Communications Commission
approvals, approval by a majority of each class of GM stockholders--GM $1- 2/3
and GM Class H--voting both as separate classes and together as a single class
and a favorable ruling from the Internal Revenue Service that the split-off of
Hughes from GM would be tax-free to GM and its stockholders for U.S. federal
income tax purposes. No assurances can be given that the approvals will be
obtained or the transactions will be completed.
NOTE 11. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
Non-Bargaining Plan 2002 2001
-------------------- ------ ------
Net assets available for benefits per the
Financial statements $2,079,713 $2,558,842
Payable to participants 413 1,184
--------- ---------
Net assets available for benefits per Form 5500 $2,079,300 $2,557,658
========= =========
Benefit payments per the financial statements $237,573 $273,356
Payable to participants - Current Year 413 1,184
Payable to participants - Prior Year (1,184) (3,475)
--------- ---------
Benefit payments per Form 5500 $236,802 $271,065
========= =========
Savings Plus Plan 2002 2001
---------------------------------- ------ ------
Net assets available for benefits per the
Financial statements $95,465 $121,558
Payable to participants 21 66
------- -------
Net assets available for benefits per Form 5500 $95,444 $121,492
======= =======
Benefit payments per the financial statements $15,848 $18,478
Payable to participants - Current Year 21 66
Payable to participants - Prior Year (66) (210)
------- -------
Benefit payments per Form 5500 $15,803 $18,334
======= =======
- 19 -