General Motors 2012 Annual Report Download - page 161

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Common Stock
Holders of our common stock are entitled to dividends at the sole discretion of our Board of Directors. However, the terms of the
Series A Preferred Stock and Series B Preferred Stock prohibit, subject to exceptions, the payment of dividends on our common stock
unless all accrued and unpaid dividends on the Series A Preferred Stock and Series B Preferred Stock are paid in full. Holders of
common stock are entitled to one vote per share on all matters submitted to our stockholders for a vote. The liquidation rights of
holders of our common stock are secondary to the payment or provision for payment of all our debts and liabilities and to holders of
our Series A Preferred Stock and Series B Preferred Stock, if any such shares are then outstanding.
In the year ended December 31, 2011 we issued 61 million shares of common stock to the U.S. hourly and salaried pension plans,
3,500,000 shares for exercised warrants and 500,000 shares for the settlement of salary and other restricted stock awards.
In December 2012 we purchased 200 million shares of our common stock from the UST at a price of $27.50 per share for a total of
$5.5 billion. The purchase price represented a premium to the prior day’s closing price of $25.49. We allocated the purchase price
between a direct reduction to shareholder’s equity of $5.1 billion and a charge to earnings of $402 million representing the premium.
This premium was recorded in Other automotive expenses, net. These shares were retired by the Board and returned to authorized but
unissued status. In the year ended December 31, 2012 we issued 1,300,000 shares of common stock for the settlement of restricted
stock and salary stock awards and 400,000 shares for exercised warrants.
The UST agreed to irrevocably waive certain of its rights under the stockholders agreement by and among us and certain other
stockholders and covenants under the UST Credit Agreement as part of this agreement. These rights and covenants included, among
other items, a reduction in certain reporting requirements and a release from the vitality commitment, which contained certain
manufacturing volume requirements.
Warrants
In connection with the 363 Sale we issued two tranches of warrants, each to acquire 136 million shares of common stock, to MLC
which have all been distributed to creditors of Old GM and to the GUC Trust by MLC and one tranche of warrants to acquire
46 million shares of common stock to the New VEBA. The first tranche of MLC warrants is exercisable at any time prior to July 10,
2016 at an exercise price of $10.00 per share and the second tranche of MLC warrants is exercisable at any time prior to July 10, 2019
at an exercise price of $18.33 per share. The New VEBA warrants are exercisable at any time prior to December 31, 2015 at an
exercise price of $42.31 per share. Upon exercise of the warrants, the shares issued will be included in the number of basic shares
outstanding used in the computation of earnings per share. The number of shares of common stock underlying each of the warrants
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. The outstanding balance of warrants at December 31, 2012 and 2011 was 313 million.
General Motors Company 2012 ANNUAL REPORT158