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 September 25, 2002:
Employee Questions & Answers - September 2002
This is the fourth 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, 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 schedule for merger integration planning and
implementation?
The transition team from EchoStar and HUGHES is working on
integration planning for the companies, currently focused primarily
on the U.S. DTH businesses, but has not yet established an overall
schedule for merger integration activities and implementation.
2. Do we have contingency plans if this transaction isn't completed?
GM, HUGHES and EchoStar believe that the transaction should be
approved on its merits. If the transaction is not completed we
believe HUGHES will have a variety of options to consider. However,
we believe it is in the best interest of HUGHES, GM and all company
stakeholders for the merger to be completed and that is the focus of
our activities.
LAYOFFS/SEVERANCE
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3. What are the severance provisions for layoffs due to the merger?
For 24 months following the Closing Date, EchoStar has agreed with
HUGHES to continue to provide severance benefits as described in the
current plans applicable to HUGHES and its operating companies and
subsidiaries. These plans vary. Please refer to your company intranet
or your Human Resources group for specific details.
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TRANSITION NEWS
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4. In the event of layoffs, will employees receive 8 weeks notice?
The Employee Transition Assistance Plan (ETA) says management will
try to give 4 to 8 weeks notice, barring unusual circumstances.
5. Is there a severance package for DIRECTV U.S. employees who are
offered a job with the merged company and a relocation package, but
who do not want to relocate?
A DIRECTV U.S. employee may qualify for SPECIAL SEVERANCE or regular
EMPLOYEE TRANSITION ASSISTANCE (ETA), depending upon the individual
circumstances:
SPECIAL SEVERANCE:
If an employee's current job is eliminated at its current location
due to the merger with EchoStar, and within two years following the
Closing Date, but the employee is offered a job with the new company
at another location, the employee could decline the job offer and
WOULD BE ELIGIBLE for Special Severance if:
a) The employee's commute increases by more than 50 miles
and he is not offered a relocation package comparable to
the existing DIRECTV relocation package
OR
b) The employee is not offered total compensation greater
than or equal to 90% of what he or she currently receives
ETA:
If the employee in the situation described above is not eligible for
Special Severance because he has been offered a comparable relocation
package, he would still be eligible for regular ETA benefits if the
offered position is more than 50 miles away from the current work
location, subject to meeting the other terms and conditions of the
ETA Plan.
In any case, an employee cannot receive BOTH Special Severance and
regular ETA. Payment of Special Severance or regular ETA severance
benefits remains subject to the terms of the applicable plan.
COMPENSATION & STOCK OPTIONS
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6. How will the 2002 bonus payout be handled after the merger closes?
Who determines the individual payouts?
EchoStar has agreed with HUGHES to continue certain bonus plans (such
as AIP, Results Sharing and Sales) for at least 12 months after the
Closing Date. The management of the new company may or may not choose
to make changes to the performance targets for these bonus plans
after the Closing Date. If there are no changes by the management of
the new company for the remainder of the 2002 bonus cycle, bonuses
will continue to be provided pursuant to the
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terms of the applicable bonus plan. Please refer to your company
intranet or your Human Resources group for specific details about
these bonus plans.
If the management of the new company decides to revise the
performance targets for the post-close through year-end period, then
the management of the new company, in a manner consistent with past
practice and the terms and conditions of the applicable plan, will
assess the January 2002 through Close date performance based on the
original plan targets and "freeze" a pro-rated award for each
participant. This would constitute the Minimum Bonus Amount. The
remaining performance in 2002 under the new company's performance
targets would then be evaluated in January and, to the extent the
performance targets have been achieved, added to the Minimum Bonus
Amount. If there is a change to the performance targets (post-close)
in 2002, employees would be notified as soon as possible.
7. Will there be additional GMH stock option grants prior to the close
of the merger?
No. There will be no additional GMH stock option grants prior to the
close of the merger.
8. If the merger is approved, will employees be subject to a pay cut?
EchoStar has agreed with HUGHES not to reduce salaries and hourly
wage rates for current employees as of the Closing Date, for at least
12 months following the Closing Date. Decisions about any future
changes to pay (more than 12 months after the Closing Date) will be
made by the management of the new company.
9. What happens to my unvested GMH stock options after the Close of the
merger with EchoStar?
At Close, all GMH stock options, including the Stock Up On Hughes
stock options, will convert automatically into New EchoStar Class C
stock options. There will be no change in the number of shares or in
the grant price. Stock options that are unvested at Close will
immediately and automatically become fully vested and exercisable,
except for stock options granted on June 22, 2001, and options
granted after the announcement of the EchoStar Transaction (these
unvested options will continue to vest according to the schedule set
up on the grant dates).
All restrictions and conditions on stock options, as described in the
HUGHES Incentive Plan, will remain in effect.
(For additional information, please see previous employee
communications, such as the Employee Summary Sheet dated October 29,
2001, Q&As #2 and #3 in the Employee Question and Answer dated
November 8, 2001, and Q&A #4 in the Transition News Employee
Questions and Answers - June 2002.)
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RETIREMENT
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10. Can employees in the contributory retirement plan receive a
projection now of potential benefits in case they might subsequently
receive a layoff notice due to the merger?
Employees in the Contributory Retirement Plan can ask for and receive
a projection of their regular retirement benefits at any time by
contacting SPECTRUM. However, projections of benefits provided if
selected for layoff due to the Change in Control, either under our
current 50/15 layoff benefit or under the Special Pension Window for
change in control, are not available until the employee is actually
selected for layoff.
11. Will we lose our retirement earnings if EchoStar changes the
Retirement Plans 12 months after the Close of the merger?
You do not lose vested benefits that you have accrued, regardless of
what happens to the Hughes Non-bargaining Employee Retirement Plan in
the future. You are fully vested in the Plan once you have five years
of service.
EchoStar has agreed with HUGHES to keep the Contributory Retirement
Plan in place for 5 years following the Closing Date and to keep the
Non-Contributory/Cash Balance Plan in place for 12 months following
the Closing Date.
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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 which remains subject to the terms of the Employee Matters
Agreement between HUGHES and EchoStar and does not apply to union employees. 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.
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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.
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