General Motors 2010 Annual Report Download - page 35

GENERAL MOTORS COMPANY AND SUBSIDIARIES
liabilities. In the year ended December 31, 2010 the liability was adjusted quarterly based on available information. Based on
information which became available in the three months ended December 31, 2010, we concluded it was no longer probable that
general unsecured claims would exceed $35 billion and we reversed to income our previously recorded liability of $231 million for
the contingently issuable Adjustment Shares.
Agreements with the UST, EDC and New VEBA
On July 10, 2009, we entered into the UST Credit Agreement and assumed debt of $7.1 billion Old GM incurred under the DIP
Facility (UST Loans). Through our wholly-owned subsidiary GMCL, we entered into the Canadian Loan Agreement with EDC and
assumed a CAD $1.5 billion (equivalent to $1.3 billion when entered into) term loan maturing on July 10, 2015. Proceeds of the DIP
Facility of $16.4 billion were deposited in escrow, to be distributed to us at our request if certain conditions were met and returned to
us after the UST Loans and the Canadian Loan were repaid in full. Immediately after entering into the UST Credit Agreement, we
made a partial pre-payment due to the termination of the U.S. government sponsored warranty program, reducing the UST Loans
principal balance to $6.7 billion. We also entered into the VEBA Note Agreement and issued the VEBA Notes to the New VEBA in
the principal amount of $2.5 billion pursuant to the VEBA Note Agreement.
In December 2009 and March 2010 we made quarterly payments of $1.0 billion and $1.0 billion on the UST Loans and GMCL
made quarterly payments of $192 million and $194 million on the Canadian Loan. In April 2010, we used funds from our escrow
account to repay in full the outstanding amount of the UST Loans of $4.7 billion, and GMCL repaid in full the outstanding amount of
the Canadian Loan of $1.1 billion. Both loans were repaid prior to maturity. On October 26, 2010 we repaid in full the outstanding
amount (together with accreted interest thereon) of the VEBA Notes of $2.8 billion.
Refer to Note 19 to our consolidated financial statements 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 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.
General Motors Company 2010 Annual Report 33