Filed by General Motors Corporation
Subject Company - General Motors Corporation
and Hughes Electronics Corporation
and EchoStar Communications Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and Deemed Filed Pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Commission File No.: 333-84472
The following was distributed by DIRECTV to its employees on May 17, 2002:
SUBJECT: MERGER UPDATE #3
MERGER NEWS AT A GLANCE
In April, HUGHES vice president Dave Baker was named to spearhead various HUGHES
and EchoStar merger related activities, and DIRECTV's Stephanie Campbell was
named to the core team for the transition. A series of coordination meetings
between major functional areas at DIRECTV and EchoStar has also begun.
On the regulatory front, for the spot-beam satellite application filed by HUGHES
and EchoStar, the Federal Communications Commission has announced a 45-day
public comment cycle that will run through early June.
DAVE BAKER NAMED TO COORDINATE MERGER-RELATED ACTIVITIES
In early April, Dave Baker, vice president of HUGHES, was named to coordinate a
variety of merger-related activities. He reports to Larry Hunter, HUGHES
corporate vice president and associate general counsel. Baker has extensive
experience in transition leadership gained during the spin-off and merger of
Hughes Aircraft Company with Raytheon. Most recently he served as vice president
of DIRECTV Latin America and as executive vice president and chief financial
officer/chief operating officer of DIRECTV Japan.
STEPHANIE CAMPBELL NAMED TO CORE TEAM FOR TRANSITION
Stephanie Campbell, DIRECTV's senior vice president of Programming, has been
named to the core team of executives supporting the merger and transition
activities. Campbell will represent DIRECTV in working with Dave Baker to
coordinate and facilitate transition activities within DIRECTV. The balance of
the core team includes HUGHES' Larry Hunter and EchoStar's Nolan Daines and Rex
Povenmire.
This core team will set up the initial functional area meetings and work with
the teams to resolve issues, create planning assumptions and develop
recommendations that impact various business units. The team will also maintain
and communicate a master list of these planning assumptions and the
recommendations and decisions that have been made to the management transition
committee, along with creating and maintaining an integrated schedule for all
transition team activities.
As previously announced, the management transition committee consists of HUGHES
President and CEO Jack Shaw, DIRECTV Chairman and CEO Eddy Hartenstein, EchoStar
Chairman and CEO Charlie Ergen, and EchoStar President Michael Dugan. In
addition, Dugan and DIRECTV President Roxanne Austin will provide executive
oversight along with strategic and tactical decision-making and implementation
for all transition planning activities.
FUNCTIONAL AREA MEETINGS BRING DIRECTV AND ECHOSTAR LEADERS TOGETHER
In April, DIRECTV and EchoStar had additional limited transitional meetings. The
purpose of such meetings is for the leaders of each function to get to know each
other and begin the process of identifying "big ticket" issues, opportunities
and decisions that require significant investments of time and money before the
close of the merger or shortly thereafter.
Because DIRECTV and EchoStar must continue to compete before the merger is
approved, as well as protect their ability to compete in the future if the
merger is not approved, competitively sensitive information is not being shared
in these meetings and those departments with competitively sensitive functions
will not be meeting.
By the end of May, many of DIRECTV's major departments will have completed their
initial coordination meeting, according to HUGHES vice president Dave Baker. The
meetings to date have been collegial and productive, Baker says.
UPDATE ON FCC REVIEW
GM, HUGHES and EchoStar have filed with the FCC for approval to transfer control
of the FCC licenses held by HUGHES, EchoStar and their respective subsidiaries
to the combined company in connection with the merger. Subsequently, the parties
also filed an application with the FCC to launch and operate a spot-beam
satellite in support of the "Local Channels, All Americans" plan.
In April, the FCC announced it is seeking public comment on the spot-beam
satellite application filed by HUGHES and EchoStar, and it began a 45-day
comment cycle that concludes on June 4. During this time, HUGHES, DIRECTV and
EchoStar are continuing to provide information requested by the FCC. The FCC's
decision on the transfer of licenses is expected to be issued at about the same
time as the Department of Justice clearance, some time in the September -
November time frame.
* * * * *
In connection with the proposed transactions, on March 18, 2002, General Motors
Corporation ("GM"), HEC Holdings, Inc. ("Hughes Holdings") and EchoStar
Communications Corporation ("EchoStar") filed preliminary materials with the
Securities and Exchange Commission ("SEC"), including a Registration Statement
of Hughes Holdings on Form S-4 that contains a consent solicitation
statement/information statement/prospectus. These materials are not yet final
and will be amended. Holders of GM $1-2/3 and GM Class H common stock are urged
to read the definitive versions of these materials, as well as any other
relevant documents filed or that will be filed with the SEC, as they become
available, because these documents contain or will contain important
information. The preliminary materials filed on March 18, 2002, the definitive
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versions of these materials and other relevant materials (when they become
available), and any other documents filed by GM, Hughes Electronics Corporation
("Hughes"), Hughes Holdings or EchoStar with the SEC may be obtained for free at
the SEC's website, www.sec.gov, and GM stockholders will receive information at
an appropriate time on how to obtain transaction-related documents for free from
GM.
GM and its directors and executive officers, Hughes and certain of its officers,
and EchoStar and certain of its executive officers may be deemed to be
participants in GM's solicitation of consents from the holders of GM $1-2/3
common stock and GM Class H common stock in connection with the proposed
transactions. Information regarding the participants and their interests in the
solicitation was filed pursuant to Rule 425 with the SEC by EchoStar on November
1, 2001 and by each of GM and Hughes on November 16, 2001. Investors may obtain
additional information regarding the interests of the participants by reading
the preliminary consent solicitation statement/information statement/prospectus
filed with the SEC on March 18, 2002 and the definitive consent solicitation
statement/information statement/prospectus when it becomes available.
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended.
Materials included in this document contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that could cause our actual results to be materially different
from historical results or from any future results expressed or implied by such
forward-looking statements. The factors that could cause actual results of GM,
EchoStar, Hughes, or a combined EchoStar and Hughes, to differ materially, many
of which are beyond the control of EchoStar, Hughes, Hughes Holdings or GM
include, but are not limited to, the following: (1) the businesses of EchoStar
and Hughes may not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected benefits and
synergies from the combination may not be realized within the expected time
frame or at all; (3) revenues following the transaction may be lower than
expected; (4) operating costs, customer loss and business disruption including,
without limitation, difficulties in maintaining relationships with employees,
customers, clients or suppliers, may be greater than expected following the
transaction; (5) generating the incremental growth in the subscriber base of the
combined company may be more costly or difficult than expected; (6) the
regulatory approvals required for the transaction may not be obtained on the
terms expected or on the anticipated schedule; (7) the effects of legislative
and regulatory changes; (8) an inability to obtain certain retransmission
consents; (9) an inability to retain necessary authorizations from the FCC; (10)
an increase in competition from cable as a result of digital cable or otherwise,
direct broadcast satellite, other satellite system operators, and other
providers of subscription television services; (11) the introduction of new
technologies and competitors into the subscription television business; (12)
changes in labor, programming, equipment and capital costs; (13) future
acquisitions, strategic partnership and divestitures; (14) general business and
economic conditions; and (15) other risks described from time to time in
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periodic reports filed by EchoStar, Hughes or GM with the Securities and
Exchange Commission. You are urged to consider statements that include the words
"may," "will," "would," "could," "should," "believes," "estimates," "projects,"
"potential," "expects," "plans," "anticipates," "intends," "continues,"
"forecast," "designed," "goal," or the negative of those words or other
comparable words to be uncertain and forward-looking. This cautionary statement
applies to all forward-looking statements included in this document.
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