Frequently Asked Questions: Warrant Holder Information
- Q: Please explain why I received Warrant A and Warrant B.
- A: The warrants for General Motors Company (New GM) common stock were issued to Motors Liquidation Company in connection with the creation of New GM. Motors Liquidation Company was responsible for the distribution of common stock and warrants in the New GM to unsecured creditors in accordance with the bankruptcy plan, which was confirmed by the bankruptcy court on March 31, 2011.
- Q: Are the warrants currently exercisable and/or tradable?
- A: Both Warrant A, expiring July 10, 2016 with CUSIP 37045V118, and Warrant B, expiring July 10, 2019 with CUSIP 37045V126, are currently exercisable and tradable. The exercise price for Warrant A expiring July 10, 2016 (CUSIP 37045V118) is $10 and the exercise price for warrant B expiring July 10, 2019 (CUSIP 37045V126) is $18.33. Strike prices may change due to certain events, such as a stock dividend or stock split. There are no restrictions on shares of common stock post exercise.
- Q: How was the amount determined for the number of shares and warrants that I received?
- A: Motors Liquidation Company was responsible for the distribution of common stock and warrants in the new GM to unsecured creditors in accordance with the bankruptcy plan, which was confirmed by the bankruptcy court on March 31, 2011.
- Q: Do the warrants expire and if so, when?
- A: Warrant A (CUSIP 37045V118) may be exercised on any trading day until July 10, 2016 at 5 p.m. Eastern Time, Warrant B (CUSIP 37045V126) on any trading day until July 10, 2019 until 5 p.m. Eastern Time. The Warrants do not automatically exercise. Any warrant not exercised prior to the expiration date will expire unexercised and the holder will not receive any shares of GM common stock.
- Q: Please describe my options to exercise the Warrant A and Warrant B.
- A: Holders have the right to full physical settlement or net share settlement. In full physical settlement, holders must pay the exercise price, which currently is $10 for Warrant A (CUSIP 37045V118) and $18.33 for Warrant B (CUSIP 37045V126), (plus any associated fees charged by the broker, etc) in order to receive one share of common stock for each warrant exercised. In a net share settlement, the transaction is cashless (unless there are associated fees charged by the broker, etc) where the number of shares of common stock to be delivered is equal to the Net Share Settlement Price (equal to the volume weighted average price of prior 20 trading days on the New York Stock Exchange for common stock) minus the associated exercise price divided by the Net Share Settlement Price. All fractional shares will be paid in cash. Please check with your broker or financial advisor for exact details and definitions.
- Q: What is my cost basis for the warrants and common stock I received from the MLC bankruptcy?
- A: The receipt of new GM stock and warrants by Motors Liquidation Company (MLC) bondholders was generally not a taxable event. Your historic cost basis in your Motors Liquidation Company debt is your basis in the GM stock and warrants received. The basis should be spread to the assets received pro rata based on value. You may want to seek the advice of a tax advisor and or your financial advisor for assistance in determining your cost basis and allocation between the various assets received, or if you received additional assets from MLC.
- Q: How can I obtain further information about the warrants I received pursuants to the confirmed bankruptcy plan?
- A: You should contact your broker or financial advisor for assistance specific to your investment, including assistance to exercise your warrants. There is additional information available at www.mlcguctrust.com.
- Q: Describe the option to exercise Warrant C.
Warrant holders have the right to net share settlement. In a net share settlement, the transaction is cashless (unless there are associated fees charged by the broker, etc.).
An exercising warrant holder will be entitled to receive on settlement date for each warrant being exercised a number of shares of GM common stock (the “net share amount”) (which in no event will be less than zero) equal to (A) the net share settlement price on the relevant exercise date, minus the exercise price, divided by (B) such net share settlement price. The settlement date for an exercised warrant will be the third trading day immediately following the exercise date for such warrant.
- Q: What is the net share settlement price for Warrant C?
- A: The net share settlement price means, as of any date, the volume weighted average price per share of General Motors Company’s common stock for the 20 trading days prior to the date of determination of the net share settlement price for the regular trading session (including any extensions thereof, without regard to pre-open or after hours trading outside of such regular trading session) as reported on the NYSE.
- Q: Where can I find the prospectus for Warrant C?
- A: The prospectus for Warrant C was filed on August 7, 2013, Form 424B7, and can be found on the SEC Edgar website, http://www.sec.gov/edgar.shtml, or on GM’s Investors website http://www.gm.com/company/investors/sec-filings.html.
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