Filed by HEC Holdings, Inc.
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 19, 2002:
EMPLOYEE QUESTIONS & ANSWERS - JUNE 2002
This is the third update to employee questions and answers about the EchoStar
Transition. HUGHES Corporate Communications will publish updates on the
HUGHESNet Transition News website,
http://hughesnet.hughes.com/transition/index.html. If you have a question,
please send it to employee.communications@hughes.com or call (888) 832-5306 or
(310) 662-5208 or FAX to (310) 647-6213. Thanks for the questions sent in so
far. We will continue to work on getting answers for you in the weeks ahead.
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NOTE: Many of you have specific questions regarding impacts to your own
department, work group and job in the merger with EchoStar. We understand the
importance of receiving answers to these questions, however, until the
transition teams have completed their work and any recommendations are made for
integrating organizations, specific answers on individual impacts are not
possible. Specifics regarding particular work groups and individual employees
are expected to be addressed sometime after the closing of the merger.
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GENERAL QUESTIONS:
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1. What is the impact of the Federal Communications Commission (FCC) delaying
its review of the merger until June?
The FCC announced in April that it would delay its review of our pending
merger with EchoStar so that it could seek additional public comment
through June 4 on the plan of the merged entity to deliver local service
to all 210 markets in the United States using a new spot beam satellite.
We do not expect this delay in the review process to impact the overall
timing of the merger. We feel that it's important that the FCC conduct a
thorough review of our plan for the merged entity to provide local channel
service in 210 markets. Approval of the additional satellite is an
essential part of our plan and it is normal practice for this satellite
request to go through a public comment period. Overall review of the
merger remains on track.
2. How significant is the opposition of the National Association of
Broadcasters (NAB)? Do they have a lot of influence over the approval
process?
While they are permitted as part of the public notice process of the
Federal Communications Commission (FCC) to comment on and oppose the
proposed transaction, no special interest group, such as the NAB, has
direct influence over the regulatory process being conducted by the FCC
and the Department of Justice (DOJ). The opposition voiced by the NAB
seems to be at odds with the best interests of their membership. Coverage
of local broadcast stations will ultimately be increased as a result of
the merger, when the new company provides local broadcast coverage in
every market. So, broadcasters represented by the NAB will benefit from
expanded reach as a result of the merger.
[TRANSITION NEWS BANNER]
3. Are we concerned about the debt that EchoStar will bring to the new
combined company?
The combined company will assume substantial indebtedness of EchoStar upon
completion of the merger, and will likely incur or assume additional
indebtedness in connection with financing activities required to complete
the merger. However, General Motors and HUGHES believe the merger with
EchoStar is a sound business decision and that the operations of the
combined company will be strong enough to support its debt.
STOCK OPTIONS
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4. Can the new EchoStar company cancel my stock options that were existing
prior to the merger?
HUGHES (GMH) stock options will be cancelled and replaced at Close with
new EchoStar stock options on a one-for-one basis. Under the current
HUGHES Incentive Plan, stock options generally would be cancelled as of
the date of the triggering event only for employees who:
1) resign from the company or are terminated for cause at any time, or
2) terminate employment with the company for any reason, including layoff,
retirement or death, prior to holding their options for 12 months*, or
3) violate the incentive plan provisions by engaging in activity that is
harmful to the company (including by way of example, engaging in
competitive activity, such as disclosing to or utilizing confidential or
proprietary information with a competitor or soliciting employees to work
for a competitor.)
*In this case, only the options held less than 12 months would be
cancelled.
RETIREMENT
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5. Will the formulas to compute employee pension plan benefits stay the same?
EchoStar has agreed with HUGHES to maintain the Non-Contributory Plan for
12 months following the Closing Date and the Contributory Plan for 5 years
following the Closing Date. Although EchoStar is free to alter the
formulas after this period of time, no accrued benefits under the plan
earned up to the date of change may be reduced by such changes.
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NOTE: General retirement plan questions should be directed to SPECTRUM at
1-800-457-5700.
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NOTE: This is a general summary highlighting certain employee compensation and
benefits issues. It is not intended as a Summary Plan Description or Plan
Document.
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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
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.