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 to employees of Hughes and its subsidiaries
beginning June 14, 2002:
TRANSITION NEWS UPDATE - JUNE 2002
This Transition News Update will bring you up to speed on recent developments
with the transition team and planning for the pending merger of HUGHES and
EchoStar. We will provide you with additional updates periodically, as plans and
schedules continue to unfold.
Several Core Team members have been selected to plan and coordinate transition
team efforts. Coordination meetings between major functional areas at DIRECTV
and EchoStar, and PanAmSat and EchoStar have begun. The primary focus for the
advance transition planning will be on the integration of DIRECTV and EchoStar,
due to the synergies between these businesses. Transition planning for Hughes
Network Systems, DIRECTV Latin America and the HUGHES Corporate Office will ramp
up on a later timeframe.
TRANSITION TEAM STRUCTURE
The Transition Team's objective is to develop a plan for a successful, rapid and
cost effective integration of EchoStar and HUGHES. The team, which is not yet
fully formed, will consist of Subject Matter Groups, a Core Team, the U.S.
Direct-To-Home executives (EchoStar President Michael Dugan and DIRECTV
President and COO Roxanne Austin) and the Management Transition Committee
(HUGHES President and CEO Jack Shaw, DIRECTV Chairman and CEO Eddy Hartenstein,
EchoStar Chairman and CEO Charlie Ergen and EchoStar President Michael Dugan).
NOTE: Additional information about the roles and activities of these groups can
be found in the sections on "Core Team" and "Transition Team Process."
HUGHES' DAVE BAKER NAMED TO COORDINATE MERGER-RELATED ACTIVITIES
Dave Baker, vice president of HUGHES, will coordinate merger-related activities.
Baker has experience in transition leadership gained during the spin-off and
merger of Hughes Aircraft Company with Raytheon. He has served as vice president
of DIRECTV Latin America and as executive vice president and chief financial
officer/chief operating officer of DIRECTV Japan. Dave reports to Larry Hunter,
HUGHES corporate vice president and associate general counsel.
CORE TEAM
Stephanie Campbell, DIRECTV's senior vice president of Programming, will
represent DIRECTV on the Core Team, working with Dave Baker to coordinate and
facilitate transition activities within DIRECTV.
The Core Team also includes HUGHES' Larry Hunter, Nolan Daines, a member of
EchoStar's Board of Directors, and Rex Povenmire,VP of Strategic Initiatives for
EchoStar. Povenmire will coordinate and facilitate transition activities within
EchoStar. Hunter and Daines provide executive guidance for the team (i.e.,
priority setting, conflict resolution, etc.)
Core Team members to represent Hughes Network Systems and DIRECTV Latin America
have not yet been named. The initial focus for the transition team will be the
integration of DIRECTV U.S. and
EchoStar. However, high-level introductory meetings have been held between HNS
and EchoStar senior leadership to discuss plans for the broadband data
businesses.
[TRANSITION NEWS BANNER]
TRANSITION TEAM PROCESS
The first step in the planning process involves FUNCTIONAL AREA MEETINGS with
representatives of DIRECTV and EchoStar. In some cases, such as Information
Technology and the Technical Platform functional areas, these meetings have
already begun and issues are already being identified and worked. Initial
Functional Area Meetings have also been held with Finance, Home Services and
Customer Service. In the meetings, both DIRECTV and EchoStar provide a basic
operations overview. Competitively sensitive information is not discussed and
some functional areas will not be meeting due to the competitive nature of their
work. The teams identify high priority transition issues, based on 1) potential
financial impact to the organization, 2) lead time needed to address the issue,
3) critical path items as they relate to other transition issues.
Following the Functional Area Meetings, SUBJECT MATTER GROUPS will be formed.
These groups will include functional areas that have similar or inter-related
transition issues, so that the issues can be identified and worked efficiently.
Some functional areas may need to be represented in more than one subject matter
group. Subject Matter Groups will include representatives from DIRECTV U.S. and
EchoStar, as well as members from other business units, as needed. One of the
first Subject Matter Groups to span all the business units met in May to discuss
Ground Stations.
Subject Matter Groups are responsible for identifying key integration issues,
planning assumptions and decisions that should be made pre-close or shortly
after close. They will also develop recommendations and schedules.
The CORE TEAM will be the central point for communicating and documenting
planning assumptions, transition recommendations and decisions. They will also
create and maintain the integrated schedule for all Transition Team activities
and work with teams to resolve issues.
EchoStar President Michael Dugan and DIRECTV President Roxanne Austin will
provide executive oversight along with strategic and tactical decision-making
and implementation for all DIRECTV-DISH Network transition planning activities.
Ultimate policy decision making for transition planning activities is the role
of the MANAGEMENT TRANSITION COMMITTEE (Shaw, Hartenstein, Ergen and Dugan).
This committee has the responsibility under the Merger Agreement to assure a
smooth and fair transition of the two companies to a combined management team.
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.
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[TRANSITION NEWS BANNER]
PANAMSAT AND ECHOSTAR LEADERS MEET
Charlie Ergen and Joe Wright addressed PanAmSat employees in a video broadcast
in March. Since then, EchoStar and PanAmSat leadership has been meeting to
review the business and discuss the pending transition. Ergen says he sees
similarities between the early history and culture of PanAmSat and EchoStar, and
feels the transition to EchoStar will be a smooth one. The transition process
for PanAmSat and EchoStar is being worked separately from the overall
HUGHES/EchoStar transition process. Jim Cuminale, PanAmSat's executive vice
president, corporate development and general counsel, has been named to
coordinate the effort for PanAmSat.
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[TRANSITION NEWS BANNER]
UPDATE ON FCC REVIEW
GM, HUGHES and EchoStar have filed an application 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.
The FCC has requested additional information with respect to this application.
During this time, HUGHES, DIRECTV and EchoStar are continuing to provide
information requested by the FCC.
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 concluded on June 4. 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 around October of 2002.
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[TRANSITION NEWS BANNER]
HUGHES-ECHOSTAR MERGER TIMELINE MILESTONES
(Note: Future dates are estimates only, actual timing is unknown)
Activity to Date:
-----------------
November 2001 Initial Filing with DOJ
December 2001 Second Information Request from DOJ
Initial Filing with FCC
IRS Ruling Request Filed
February 2002 Public Comments filed with FCC
Additional Information Request from FCC
HUGHES responds to Public Comments
March 2002 Response to Additional FCC Information Request
Filed S-4 Filing with SEC
June 2002 Public Comments for New EchoStar 1 Satellite
Application
Projected Future Milestones:
----------------------------
June- October
2002 Receipt of IRS Ruling
S-4 Declared Effective
Shareholder Vote
Receipt of DOJ Clearance
Receipt of FCC Clearance
In connection with the proposed transactions, General Motors Corporation ("GM"),
HEC Holdings, Inc. ("Hughes Holdings") and EchoStar Communications Corporation
("EchoStar") have filed amended 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 further
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, the definitive 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
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the amended preliminary consent solicitation statement/information
statement/prospectus filed with the SEC 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
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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