General Motors 2010 Annual Report Download - page 261

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Series A Preferred Stock
At December 31, 2010 we had 276 million shares of Series A Preferred Stock issued and outstanding. The Series A Preferred Stock
ranks senior with respect to liquidation preference and dividend rights to our common stock and Series B Preferred Stock and any
other class or series of stock that we may issue. In the event of any voluntary or involuntary liquidation, dissolution, or winding up of
our affairs, a holder of Series A Preferred Stock will be entitled to be paid, before any distribution or payment may be made to any
holders of common stock or Series B Preferred Stock, the liquidation amount of $25.00 per share and the amount of any accrued and
unpaid dividends, if any, whether or not declared, prior to such distribution or payment date. Holders of the Series A Preferred Stock
are entitled to receive dividends at the sole discretion of our Board of Directors at a rate of 9.0% per annum. Unless all accrued and
unpaid dividends on the Series A Preferred Stock are paid in full, no dividends or distributions may be paid on common stock or
Series B Preferred Stock and no shares of common stock or Series B Preferred Stock may be purchased or redeemed by us (subject to
certain exceptions that are specified in the certificate of designations for the Series A Preferred Stock). Dividends, if declared, will be
payable on March 15, June 15, September 15 and December 15 of each year. In the year ended December 31, 2010 we paid dividends
on our Series A Preferred Stock of $810 million or $2.25 per share. In the year ended December 31, 2009 we paid dividends on our
Series A Preferred Stock of $349 million or $0.97 per share. We may not redeem the Series A Preferred Stock prior to December 31,
2014. On or after December 31, 2014, the Series A Preferred Stock may be redeemed, in whole or in part, for cash at a price per share
equal to the $25.00 per share liquidation amount, plus any accrued and unpaid dividends.
The Series A Preferred Stock was originally classified as temporary equity because the holders of Series A Preferred Stock, as a
class, owned greater than 50% of our common stock and therefore had the ability to exert control, through its 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. In December 2010 we purchased 84 million shares of Series A Preferred Stock, held by
the UST, at a price equal to 102% of the aggregate liquidation amount, for $2.1 billion. The purchase of the UST’s Series A Preferred
Stock resulted in a charge of $0.7 billion recorded in Cumulative dividends on and charge related to purchase of preferred stock. 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 because 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. Upon a redemption or purchase
of any or all Series A Preferred Stock, the difference, if any, between the recorded amount of the Series A Preferred Stock being
redeemed or purchased and the consideration paid would be recorded as a charge to Net income attributable to common stockholders.
If all of the Series A preferred Stock were to be redeemed or purchased at its par value, the amount of the charge would be $1.4
billion.
Series B Preferred Stock
At December 31, 2010 we had 100 million shares of Series B Preferred Stock issued and outstanding. The Series B Preferred Stock,
with respect to dividend rights and rights upon our liquidation, winding-up or dissolution, ranks: (1) senior to our common stock and
to each other class of capital stock or series of preferred stock the terms of which do not expressly provide that such class or series
ranks senior to, or on a parity with, the Series B Preferred Stock; (2) on a parity with any class of capital stock or series of preferred
stock the terms of which expressly provide that such class or series will rank on a parity with the Series B Preferred Stock; (3) junior
to our Series A Preferred Stock and to each class of capital stock or series of preferred stock the terms of which expressly provide that
such class or series will rank senior to the Series B Preferred Stock; and (4) junior to all of our existing and future debt obligations.
Holders of our Series B Preferred Stock are entitled to dividends that accumulate at a rate of 4.75% per annum. Dividends, if declared
based on the sole discretion of our Board of Directors, will be payable on March 1, June 1, September 1 and December 1. The Series
B Preferred Stock is not redeemable and has a liquidation preference in the amount of $50.00 per share. The holders of the Series B
Preferred Stock do not have voting rights, except with respect to certain fundamental changes in the terms of the Series B Preferred
Stock, in the case of certain dividend arrearages and as required under Delaware law. Each share of the Series B Preferred Stock,
unless previously converted, will automatically convert on December 1, 2013 (mandatory conversion date) into a number of shares of
General Motors Company 2010 Annual Report 259