General Motors 2010 Annual Report Download - page 130

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Refer to Note 19 for additional information on the UST Loans, VEBA Notes and the Canadian Loan.
Issuance of Common Stock, Preferred Stock and Warrants
On July 10, 2009 we issued the following securities to the UST, Canada GEN Investment Corporation (formerly 7176384 Canada
Inc.), a corporation organized under the laws of Canada (Canada Holdings), the New VEBA and MLC (shares in millions):
Common Stock
Series A
Preferred Stock
UST .............................................................................. 912 84
Canada Holdings .................................................................... 175 16
New VEBA (a) ...................................................................... 263 260
MLC(a) ........................................................................... 150 —
1,500 360
(a) New VEBA also received a warrant to acquire 46 million shares of our common stock and MLC received two warrants, each to
acquire 136 million shares of our common stock.
Preferred Stock
The shares of Series A Preferred Stock have a liquidation amount of $25.00 per share and accrue cumulative dividends at 9.0% per
annum (payable quarterly on March 15, June 15, September 15 and December 15) that are payable if, as and when declared by our
Board of Directors. So long as any share of the Series A Preferred Stock remains outstanding, no dividend or distribution may be
declared or paid on our common stock or our Series B Preferred Stock unless all accrued and unpaid dividends have been paid on the
Series A Preferred Stock, subject to exceptions, such as dividends on our common stock payable solely in shares of our common
stock. On or after December 31, 2014 we may redeem, in whole or in part, the shares of Series A Preferred Stock outstanding, at a
redemption price per share equal to $25.00 per share plus any accrued and unpaid dividends, subject to limited exceptions.
The Series A Preferred Stock was previously classified as temporary equity because the holders of the Series A Preferred Stock, as
a class, owned greater than 50% of our common stock and therefore had the ability to exert control, through the power to vote for the
election of our directors, over various matters, which could include compelling us to redeem the Series A Preferred Stock in 2014 or
later. In December 2010 we purchased 84 million shares of Series A Preferred Stock, held by the UST. Since the remaining holders of
our Series A Preferred Stock, Canada Holdings and the New VEBA, do not own a majority of our common stock and therefore do not
have the ability to exert control, through the power to vote for the election of our directors, over various matters, including compelling
us to redeem the Series A Preferred Stock when it becomes callable by us on or after December 31, 2014, our classification of the
Series A Preferred Stock as temporary equity is no longer appropriate. As such, upon the purchase of the Series A Preferred Stock
held by the UST, the Series A Preferred Stock held by Canada Holdings and the New VEBA was reclassified to permanent equity at
its carrying amount of $5.5 billion. Refer to Note 29 for additional information on the purchase of shares of Series A Preferred Stock.
Warrants
The first tranche of warrants issued to MLC is exercisable at any time prior to July 10, 2016, with an exercise price of $10.00 per
share. The second tranche of warrants issued to MLC is exercisable at any time prior to July 10, 2019, with an exercise price of
$18.33 per share. The warrant issued to the New VEBA is exercisable at any time prior to December 31, 2015, with an exercise price
of $42.31 per share. The number of shares of our common stock underlying each of the warrants issued to MLC and the New VEBA
and the per share exercise price are subject to adjustment as a result of certain events, including stock splits, reverse stock splits and
stock dividends.
128 General Motors Company 2010 Annual Report