EXHIBIT 10.1
SETTLEMENT AGREEMENT
     This settlement agreement (which, together with the Exhibits hereto, is
referred to as the “Settlement Agreement”), dated February 21, 2008, is between
General Motors Corporation (“GM”), by and through its attorneys, and the
International Union, United Automobile, Aerospace and Agricultural Implement
Workers of America (“UAW”), by and through its attorneys, and the Class
Representatives, on behalf of the Class, by and through Class Counsel, in
(1) the class action of Int’l Union, UAW, et. al. v. General Motors Corp., Civil
Action No. 07-14074 (E.D. Mich. filed Sept. 9, 2007) (“Henry II”), and/or
(2) the class action of UAW et al. v. General Motors Corp., No. 05-CV-73991,
2006 WL 891151 (E.D. Mich. Mar. 31, 2006, aff’d, Int’l Union, UAW v. General
Motors Corp., 497 F.3d 615 (6th Cir. 2007) (“Henry I”). This Settlement
Agreement shall cover and has application to:
     (i) the Class;
     (ii) the Covered Group;
     (iii) the Existing External VEBA;
     (iv) the trustee and committee that administer the Existing External VEBA;
     (v) the UAW;
     (vi) the GM Plan; and
     (vii) GM.
     With regard to GM, the UAW and the Class, this Settlement Agreement:
(i) resolves and settles all claims that arise in connection with Henry II;
(ii) resolves and settles all claims, motions and other issues pertaining to or
remaining in Henry I; (iii) amends, supersedes or otherwise supplants the
settlement agreement dated December 16, 2005 approved in Henry I (“Henry I
Settlement Agreement”); and (iv) provides the basis upon which the judgment
entered March 31, 2006 in Henry I shall be satisfied, superseded or amended as
necessary to give full force and effect to the terms of this Settlement
Agreement. This Settlement Agreement also resolves and settles any and all
claims for GM contributions to the Existing External VEBA, and provides for the
termination of the Existing External VEBA and the transfer of all assets and
liabilities of the Existing External VEBA to the New VEBA. However, except as
otherwise specifically set forth herein, nothing in this Settlement Agreement is
intended to alter the eligibility provisions of the GM Plan or to provide GM
contributions or benefits to individuals who are not otherwise entitled to such
under the GM Plan.
     This Settlement Agreement is subject to approval by the Court and the
parties shall request that the Court incorporate the entirety of this Settlement
Agreement in the Approval Order. In the event of an inconsistency between this
Settlement Agreement and any prior agreements or documents, including the
Memorandum of Understanding Post-Retirement Medical Care September 26, 2007
(“MOU”), this Settlement Agreement shall control. In the event of an
inconsistency between the body of this Settlement Agreement and the Exhibits
hereto, this Settlement Agreement shall control, unless explicitly stated
otherwise in this Settlement Agreement.

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     This Settlement Agreement recognizes and approves on the basis set forth
herein: (i) the amendment of the GM Plan to terminate coverage for and exclude
from coverage the Class and the Covered Group; (ii) the division of the Existing
Internal VEBA into the UAW Related Account and Non-UAW Related Account and the
transfer of the UAW Related Account to the New VEBA; (iii) the termination of
participation by the Class and the Covered Group under the Existing Internal
VEBA; (iv) the termination of the Existing External VEBA in conjunction with the
establishment of the New Plan, and the transfer to the New VEBA of all assets
and liabilities of the Existing External VEBA; (v) that all claims for Retiree
Medical Benefits incurred on or after the Implementation Date by the Class and
the Covered Group, including but not limited to COBRA continuation coverage
where such election is or had been made on or after retirement and any coverage
provided on a self-paid basis in retirement, shall be solely the responsibility
and liability of the New Plan and the New VEBA; (vi) the Committee’s designation
under the New Plan and New VEBA as named fiduciary and administrator of the New
Plan; (vii) that the New Plan shall replace the GM Plan regarding the provision
of Retiree Medical Benefits to the Class and the Covered Group; (viii) that the
New VEBA shall receive certain payments as described herein from the Existing
Internal VEBA, the Existing External VEBA, and GM; (ix) that GM’s obligation to
pay into the New VEBA is fixed and capped as described herein; and (x) that the
New VEBA shall serve as the exclusive funding mechanism for the New Plan.
     1. Definitions
     Actuary. The term “Actuary” is defined in Exhibit A to this Settlement
Agreement.
     Adjustment Event. The term “Adjustment Event” is defined in Section 13 of
this Settlement Agreement.
     Admissions. The term “Admissions” shall mean any statement, whether written
or oral, any act or conduct, or any failure to act, that could be used (whether
pursuant to Rules 801(d)(2) or 804(b)(3) of the Federal Rules of Evidence, a
similar rule or standard under other applicable law, the doctrines of waiver or
estoppel, other rule, law, doctrine or practice, or otherwise) as evidence in a
proceeding of proof of agreement with another party’s position or proof of
adoption of, or acquiescence to, a position that is contrary to the interest of
the party making such statement, taking such action, or failing to act.
     Alternative Convertible Note. The term “Alternative Convertible Note” is
defined in Section 12.F of this Settlement Agreement.
     Approval Order or Judgment. The terms “Approval Order” or “Judgment” shall
mean an order obtained from the Court approving and incorporating this
Settlement Agreement in all respects as set forth in Section 28 of this
Settlement Agreement. In the event that the Court enters separate orders
certifying the Class and approving this Settlement Agreement, the terms
“Approval Order” or “Judgment” shall apply to both orders collectively.
     Base Amounts. The term “Base Amounts” shall mean the payment(s) to be made
by GM that are specified in Sections 7.D and 8.E of this Settlement Agreement.
     Board of Directors. The term “Board of Directors” shall mean the Board of
Directors of GM or any committee established by the Board of Directors.

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     Cash Flow Projections. The term “Cash Flow Projections” shall mean the cash
flow projections described in Exhibit A to this Settlement Agreement, which is
for the purpose of determining whether payment of a Shortfall Amount is required
in a given year.
     Class or Class Members. The term “Class” or “Class Members” shall mean all
persons who are:
     (i) GM-UAW Represented Employees who, as of October 15, 2007, were retired
from GM with eligibility for Retiree Medical Benefits under the GM Plan, and
their eligible spouses, surviving spouses and dependents;
     (ii) surviving spouses and dependents of any GM-UAW Represented Employees
who attained seniority and died on or prior to October 15, 2007 under
circumstances where such employee’s surviving spouse and/or dependents are
eligible to receive Retiree Medical Benefits from GM and/or under the GM Plan;
     (iii) UAW retirees of Delphi Corporation (“Delphi”) who as of October 15,
2007 were retired and as of that date were entitled to or thereafter become
entitled to Retiree Medical Benefits from GM and/or the GM Plan under the terms
of the UAW-Delphi-GM Memorandum of Understanding Delphi Restructuring dated
June 22, 2007, Attachment B to the UAW-Delphi-GM Memorandum of Understanding
Delphi Restructuring dated June 22, 2007 (without regard to whether any of the
conditions described in Section K.2 of such Memorandum of Understanding or
Section 2 of such Attachment B occur), or the Benefit Guarantee agreement
between GM and the UAW dated September 30, 1999, and their eligible spouses,
surviving spouses and dependents of all such retirees;
     (iv) surviving spouses and dependents of any UAW-represented employee of
Delphi who attained seniority and died on or prior to October 15, 2007 under
circumstances where such employee’s surviving spouse and/or dependents are
eligible to receive Retiree Medical Benefits from GM and/or the GM Plan under
the terms of the UAW-Delphi-GM Memorandum of Understanding Delphi Restructuring
dated June 22, 2007, Attachment B to the UAW-Delphi-GM Memorandum of
Understanding Delphi Restructuring dated June 22, 2007 (without regard to
whether any of the conditions described in Section K.2 of such Memorandum of
Understanding or Section 2 of such Attachment B occur), or the Benefit Guarantee
agreement between GM and the UAW dated September 30, 1999;
     (v) GM-UAW Represented Employees or former UAW-represented employees who,
as of October 15, 2007, were retired from any previously sold, closed, divested
or spun-off GM business unit (other than Delphi) with eligibility to receive
Retiree Medical Benefits from GM and/or the GM Plan by virtue of any other
agreement(s) between GM and the UAW, and their eligible spouses, surviving
spouses, and dependents; and

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     (vi) surviving spouses and dependents of any GM-UAW Represented Employee or
any UAW-represented employee of a previously sold, closed, divested or spun-off
GM business unit (other than Delphi), who attained seniority and died on or
prior to October 15, 2007 under circumstances where such employee’s surviving
spouse and/or dependents are eligible to receive Retiree Medical Benefits from
GM and/or the GM Plan.
     Class Certification Order. The term “Class Certification Order” shall mean
the final order entered by the Court as described in Section 28.A of this
Settlement Agreement.
     Class Counsel. The term “Class Counsel” shall mean the law firm of Stember,
Feinstein, Doyle & Payne, LLC, or its successor.
     Class Representatives. The term “Class Representatives” shall mean Earl L.
Henry, Bonnie J. Lauria, Raymond B. Bailey, Theodore J. Genco, Marvin C. Marlow,
Charles R. Miller, Laverne M. Soriano, and John Huber.
     Committee. The term “Committee” shall mean the governing body set forth in
Section 4.A of this Settlement Agreement that acts on behalf of the EBA and
serves as the named fiduciary and administrator of the New Plan, as those terms
are defined in ERISA and that is so described in the Trust Agreement.
     Convertible Note. The term “Convertible Note” shall mean the
$4.3725 billion aggregate principal amount of 6.75% Series U Convertible Senior
Debentures Due December 31, 2012 issued under that Indenture, dated as of
January 8, 2008, between GM and the Bank of New York, as Trustee, including all
supplemental indentures thereto, substantially in the form attached as Exhibit B
to this Settlement Agreement.
     Court. The term “Court” shall mean the United States District Court for the
Eastern District of Michigan.
     Covered Group. The term “Covered Group” shall mean:
     (i) all GM Active Employees who have attained seniority as of September 14,
2007, and who retire after October 15, 2007 under the GM-UAW National
Agreements, or any other agreement(s) between GM and the UAW, and who upon
retirement are eligible for Retiree Medical Benefits under the GM Plan or the
New Plan, as applicable, and their eligible spouses, surviving spouses and
dependents;
     (ii) all UAW-represented active employees of Delphi or a former Delphi unit
who retire from Delphi or such former Delphi unit on or after October 15, 2007,
and upon retirement are entitled to or thereafter become entitled to Retiree
Medical Benefits from GM and/or the GM Plan or the New Plan under the terms of
the UAW-Delphi-GM Memorandum of Understanding Delphi Restructuring dated
June 22, 2007, Attachment B to the UAW-Delphi-GM Memorandum of Understanding
Delphi Restructuring dated June 22, 2007 (without regard to whether any of the
conditions described in Section K.2 of such Memorandum of Understanding or
Section 2 of such Attachment B occur), or the Benefit Guarantee agreement
between GM and the UAW dated September 30, 1999, and the eligible spouses,
surviving spouses and dependents of all such retirees;

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     (iii) all surviving spouses and dependents of any UAW-represented employee
of Delphi or a former Delphi unit who dies after October 15, 2007 but prior to
retirement under circumstances where such employee’s surviving spouse and/or
dependents are eligible or thereafter become eligible for Retiree Medical
Benefits from GM and/or the GM Plan or the New Plan under the terms of the
UAW-Delphi-GM Memorandum of Understanding Delphi Restructuring dated June 22,
2007, Attachment B to the UAW-Delphi-GM Memorandum of Understanding Delphi
Restructuring dated June 22, 2007 (without regard to whether any of the
conditions described in Section K.2 of such Memorandum of Understanding or
Section 2 of such Attachment B occur), or the Benefit Guarantee agreement
between GM and the UAW dated September 30, 1999;
     (iv) all former GM-UAW Represented Employees and all UAW-represented
employees who, as of October 15, 2007, remain employed in a previously sold,
closed, divested, or spun-off GM business unit (other than Delphi), and upon
retirement are eligible for Retiree Medical Benefits from GM and/or the GM Plan
or the New Plan by virtue of any other agreement(s) between GM and the UAW, and
their eligible spouses, surviving spouses and dependents; and
     (v) all eligible surviving spouses and dependents of a GM Active Employee,
former GM-UAW Represented Employee or UAW-represented employee identified in
(i) or (iv) above who attained seniority on or prior to September 14, 2007 and
die after October 15, 2007 but prior to retirement under circumstances where
such employee’s surviving spouse and/or dependents are eligible for Retiree
Medical Benefits from GM and/or the GM Plan or the New Plan.
     Debt. The term “Debt” shall mean notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed.
     Derivative Contracts. The term “Derivative Contracts” shall mean those
various derivative instruments substantially in the forms set forth in
Exhibit H.
     Dispute Party. The term “Dispute Party” is defined in Section 26.B of this
Settlement Agreement.
     DOL. The term “DOL” shall mean the United States Department of Labor.
     Employees Beneficiary Association or EBA. The term “Employees Beneficiary
Association” or “EBA” shall mean the employee organization within the meaning of
section 3(4) of ERISA that is organized for the purpose of establishing and
maintaining the New Plan, with a membership consisting of the individuals who
are members of the Class and the Covered Group, and on behalf of which the
Committee acts.
     ERISA. The term “ERISA” shall mean the Employee Retirement Income Security
Act of 1974, as amended.
     Existing External VEBA. The term “Existing External VEBA” shall mean the
defined contribution – Voluntary Employees’ Beneficiary Association trust
established pursuant to the Henry I Settlement Agreement.

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     Existing Internal VEBA. The term “Existing Internal VEBA” shall mean the
General Motors Welfare Benefit Trust that is funded and maintained by GM.
     Fairness Hearing. The term “Fairness Hearing” is defined in Section 27 of
this Settlement Agreement.
     Final Effective Date. The term “Final Effective Date” shall mean the first
date after any appeals from, or other challenges to, the Approval Order have
been exhausted or the time periods for filing such appeal(s) or challenge(s)
have expired, provided that the Final Effective Date shall be deemed to have
occurred only if, at such time, (i) the Approval Order has not been disapproved
or modified as a result of any appeal(s) or other challenge(s) and (ii) GM has
completed, on a basis reasonably satisfactory to GM, its discussions with the
Securities and Exchange Commission (“SEC”) regarding the accounting treatment
with respect to the New Plan and the New VEBA as set forth in Section 21 of this
Settlement Agreement.
     General Motors Asset Management Valuation Policies and Procedures. The term
“General Motors Asset Management Valuation Policies and Procedures” shall mean
GMAM’s valuation policies and procedures, copies of which have been provided to
the UAW and Class Counsel, as the same may be amended from time to time by GMAM
(who shall notify the UAW and the Committee about any such intended amendments
in a timely manner).
     GM Active Employees. The term “GM Active Employees” shall mean those hourly
employees of GM who, as of September 14, 2007 or any date thereafter, are
covered by the 2007 GM-UAW National Agreement or are covered by any subsequent
GM-UAW National Agreement. For purposes of this definition, “active employee”
shall include hourly employees on vacation, layoff, protected status, medical or
other leave of absence, and any other employees who have not broken seniority as
of September 14, 2007.
     GM Actuary. The term “GM Actuary” is defined in Exhibit A to this
Settlement Agreement.
     GMAM. The term “GMAM” shall mean General Motors Asset Management
Corporation and its subsidiaries, and as specifically referring to the
investment manager for the Existing Internal VEBA, refers to General Motors
Investment Management Corporation. GMAM is a wholly owned subsidiary of General
Motors Corporation.
     GM Plan. The term “GM Plan” shall mean the collectively bargained General
Motors Health Care Program for Hourly Employees as set forth in Exhibit C-1 of
the 2007 and prior GM-UAW National Agreements, as applicable to those GM-UAW
Represented Employees who had attained seniority prior to September 14, 2007.
     GM-UAW National Agreements. The term “GM-UAW National Agreements” shall
mean the agreement(s) negotiated on a multi-facility basis and entered into
between GM and the UAW covering GM employees represented by the UAW. The current
GM-UAW National Agreement is dated October 15, 2007.
     GM-UAW Represented Employees. The term “GM-UAW Represented Employees” shall
mean those individuals who were represented by the UAW in their employment with
GM.

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     Implementation Date. The term “Implementation Date” shall mean the later of
January 1, 2010 or the Final Effective Date.
     Indemnified Party. The term “Indemnified Party” is defined in Section 23 of
this Settlement Agreement.
     Indemnification Liabilities. The term “Indemnification Liabilities” is
defined in Section 23 of this Settlement Agreement.
     Indemnity Expenses. The term “Indemnity Expenses” is defined in Section 23
of this Settlement Agreement.
     Independent Attestation. The term “Independent Attestation” shall mean an
agreed-upon procedures engagement performed for GM, the UAW and the Committee by
a nationally recognized independent registered public accounting firm selected
by GM and conducted in accordance with the attestation standards of the Public
Company Accounting Oversight Board, the subject matter of which would be (a) in
the case of an Adjustment Event under Section 13.A(i) of this Settlement
Agreement whether the balance of the Existing Internal VEBA and/or specified
assets therein have been valued in accordance with the General Motors Asset
Management Valuation Policies and Procedures; or (b) in the case of an
Adjustment Event under Section 13.A(ii) or (iii) of this Settlement Agreement
whether specified assets of the Existing Internal VEBA have been valued in
accordance with the General Motors Asset Management Valuation Policies and
Procedures. The agreed-upon procedures shall be mutually agreed among the
accounting firm, GM and the Committee in connection with any such engagement.
     Independent Audit. The term “Independent Audit” shall mean an audit of the
consolidated financial statements of GM performed in accordance with the
standards of the Public Company Accounting Oversight Board by the independent
registered public accounting firm that has been designated by GM.
     Initial Accounting Period. The term “Initial Accounting Period” shall mean
the period before the later of the date that (a) GM determines that its
obligations, if any, with respect to the New Plan made available to the Class
and Covered Group are subject to settlement accounting as contemplated by
paragraphs 90-95 of FASB Statement No. 106, as amended, or its functional
equivalent; or (b) GM is no longer obligated to make any further payments or
deposits to the New VEBA, including, but not limited to, any Shortfall Amounts.
     Initial Effective Date. The term “Initial Effective Date” shall mean the
date on which the Court enters the Approval Order.
     Initial Shortfall Amount. The term “Initial Shortfall Amount” is defined in
Section 7.D of this Settlement Agreement.
     Interest. The term “Interest” shall mean an interest rate of 9 percent (9%)
per annum (computed on the basis of a 360-day year consisting of twelve 30-day
months and the number of days elapsed in any partial month), credited and
compounded annually, unless otherwise specified in this Settlement Agreement.

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     Limited Liability Company. The term “Limited Liability Company” or “LLC”
shall mean LBK, LLC, a Delaware limited liability company created by GM under
Section 7.B of this Settlement Agreement for the purpose of holding the
Convertible Note and the Short Term Note, entering into and holding the
Derivative Contracts, and receiving interest on the Convertible Note as
described in this Settlement Agreement.
     Manufacturing Subsidiary. The term “Manufacturing Subsidiary” shall mean
any Subsidiary (A) substantially all the property of which is located within the
continental United States of America, (B) which owns a Principal Domestic
Manufacturing Property and (C) in which GM’s investment, direct or indirect and
whether in the form of equity, debt, advances or otherwise, is in excess of U.S.
$2,500,000,000 as shown on the books of GM as of the end of the fiscal year
immediately preceding the date of determination; provided, however, that
“Manufacturing Subsidiary” shall not include GMAC, LLC and its Subsidiaries (or
any corporate successor of any of them) or any other Subsidiary which is
principally engaged in leasing or in financing installment receivables or
otherwise providing financial or insurance services to GM or others or which is
principally engaged in financing GM’s operations outside the continental United
States of America.
     Mitigation. The term “Mitigation” shall have the same meaning as in the
Henry I Settlement Agreement.
     Mortgage. The term “Mortgage” shall mean any mortgage, pledge, lien,
security interest, conditional sale or other title retention agreement or other
similar encumbrance.
     National Institute for Health Care Reform or Institute. The term “National
Institute for Health Care Reform” or “Institute” is defined in Section 31 of
this Settlement Agreement.
     New Plan. The term “New Plan” shall mean the new retiree welfare benefit
plan that is the subject of this Settlement Agreement, and that is funded in
part by the GM Separate Retiree Account (as defined in the Trust Agreement),
which New Plan shall provide Retiree Medical Benefits to the Class and Covered
Group.
     New VEBA. The term “New VEBA” shall mean a new trust fund to be established
as described in Section 4 of this Settlement Agreement.
     Non-UAW Related Account. The term “Non-UAW Related Account” is defined in
Section 6.A of this Settlement Agreeement.
     Notice Order. The term “Notice Order” is defined in Section 27 of this
Settlement Agreement.
     Pension Plan. The term “Pension Plan” shall mean the General Motors
Hourly-Rate Employees Pension Plan.
     Principal Domestic Manufacturing Property. The term “Principal Domestic
Manufacturing Property” shall mean any manufacturing plant or facility owned by
GM or any Manufacturing Subsidiary which is located within the continental
United States of America and, in the opinion of the Board of Directors, is of
material importance to the total business conducted by GM and its consolidated
affiliates as an entity.

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     Retiree Medical Benefits. The term “Retiree Medical Benefits” shall mean
all post retirement medical benefits, including but not limited to hospital
surgical medical, prescription drug, vision, dental, hearing aid and the $76.20
Special Benefit related to Medicare.
     Short Term Note. The term “Short Term Note” is defined in Section 7.C of
this Settlement Agreement.
     Shortfall Amounts. The term “Shortfall Amount” shall mean the payment(s) to
be made by GM that are defined in Section 10 of this Settlement Agreement.
     State. The term “State” shall mean any state of the United States.
     Subsidiary. The term “Subsidiary” shall mean any corporation or other
entity of which at least a majority of the outstanding stock or other beneficial
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other governing body of such corporation or other
entity (irrespective of whether or not at the time stock or other beneficial
interests of any other class or classes of such corporation or other entity
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned by GM, or by one or more Subsidiaries, or by
GM and one or more Subsidiaries.
     Temporary Asset Account. The term “Temporary Asset Account” or “TAA” shall
mean the temporary account controlled at all times by GM that is established by
GM or a wholly owned subsidiary of GM under Section 7.A of this Settlement
Agreement for the purpose of holding certain GM payments as described in this
Settlement Agreement.
     Trust Agreement. The term “Trust Agreement” shall mean the New VEBA trust
agreement the form of which is set forth in Exhibit E to this Settlement
Agreement.
     UAW OPEB 12/31/07 Split. The term “UAW OPEB 12/31/07 Split” is defined in
Section 6.A of this Settlement Agreement.
     UAW Related Account. The term “UAW Related Account” is defined in
Section 6.A of this Settlement Agreeement.
     UAW Releasees. The term “UAW Releasees” shall mean the UAW, the Class
Representatives, the Class, Class Counsel, the Covered Group and anyone claiming
on behalf of, through or under them by way of subrogation or otherwise.
     Wages/COLA Amount. The term “Wages/COLA Amount” shall mean the payments to
be made by GM that are defined in Sections 7.D and 8.F of this Settlement
Agreement.
     2. Purpose of New Plan and New VEBA
     The New Plan and the New VEBA will, as of the Implementation Date, be the
employee welfare benefit plan and trust that are exclusively responsible for all
Retiree Medical Benefits for

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which GM, the GM Plan and any other GM entity or benefit plan formerly would
have been responsible with regard to the Class and the Covered Group. All assets
paid or transferred by GM to the New VEBA (including any investment returns
thereon) will be credited to a GM Separate Retiree Account and must be used for
the exclusive purpose of providing Retiree Medical Benefits to the participants
of the New Plan and their eligible beneficiaries, and to defray the reasonable
expenses of administering the New Plan, as set forth in the Trust Agreement. All
obligations of GM, the GM Plan and any other GM entity or benefit plan for
Retiree Medical Benefits for the Class and the Covered Group arising from any
agreement(s) between GM and the UAW shall be forever terminated as of the
Implementation Date. GM’s sole obligations to the New Plan and the New VEBA are
those set forth in this Settlement Agreement. Eligibility rules for the New Plan
shall be the same as those currently included in the GM Plan, and may not be
expanded.
     3. Factual Investigation and Legal Inquiry and Decision to Settle
     Throughout the 2007 negotiations between GM and the UAW over the terms of a
new National Agreement, the parties engaged in extended discussions concerning
the impact of rising health care costs on GM’s financial condition and its
ability to compete in the North American marketplace. GM provided the UAW with
extensive information as to its financial condition and health care
expenditures. On behalf of the UAW, a team of investment bankers, actuaries, and
legal experts have reviewed GM’s information, and provided the UAW with an
assessment as to the state of GM’s financial condition and analyzed the benefits
of entering into the MOU. GM officials also met with representatives of the UAW
and its team of experts and answered questions and provided further detail, as
requested. The UAW and its team of experts have now analyzed, inter alia, the
funds necessary to provide ongoing Retiree Medical Benefits through the New Plan
and the New VEBA.
     During these discussions, GM asserted, as it had in Henry I, that it has
the right to unilaterally modify and/or terminate the health care benefits
applicable to its hourly retirees and that, without this Settlement Agreement,
GM would exercise its right to terminate the Henry I Settlement Agreement
according to its terms as well as exercise its right to unilaterally modify
retiree health care benefits. Although the UAW acknowledges GM’s right to
terminate the Henry I Settlement Agreement, it continues to assert that the
retiree health care benefits are vested and GM does not have the right to
unilaterally modify or terminate retiree health care benefits.
     On behalf of the Class, Class Counsel has conducted a substantial factual
investigation and legal inquiry prior to entering into this Settlement
Agreement. Similar to what was done by the UAW, this included, inter alia,
review of GM’s financial information, review and analysis of collective
bargaining agreements, relevant health care plan documents, and actuarial
information, and review of material on GM’s health care costs. Class Counsel
retained experts to review the financial and actuarial information and, with the
assistance of these experts, conducted an extensive review of GM’s projected
financial condition, GM’s ability to provide Retiree Medical Benefits over the
long term, and the proposed New VEBA’s ability to provide Retiree Medical
Benefits over the long term with the funds available from the proposed
Settlement Agreement. Class Counsel has also thoroughly investigated the law
applicable to the Class Members’ claims and has done so considering the
collective bargaining agreements and health care plan

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documents affecting these claims. Class Counsel examined the benefits and
certainty to be obtained under the proposed Settlement Agreement for an aging
Class, and has considered the costs, risks and delays associated with the
prosecution of complex and time-consuming litigation, the likely appeals of any
rulings in favor of any party. Class Counsel has considered the fact that, under
the proposed Settlement Agreement, the benefits of Henry I through 2011 are
preserved. Class Counsel believes that, in consideration of all the
circumstances, the proposed settlement embodied in this Settlement Agreement is
fair, reasonable, adequate and in the best interest of all members of the Class.
Class Counsel participated in the negotiation of this Settlement Agreement.
     4. New Plan and New VEBA
     A. Committee. The Approval Order shall provide that the New Plan and New
VEBA, both subject to ERISA, shall be administered by the Committee. The
Committee shall be in place within 120 days after the Initial Effective Date.
The Committee shall consist of 11 members, 5 of which are to be appointed by the
UAW, and 6 independent members. The Approval Order shall designate the initial
public members who are set forth in Attachment 1 of Exhibit E to this Settlement
Agreement. In the event that any member of the Committee resigns, dies, becomes
incapacitated or otherwise ceases to be a member, a replacement member shall be
appointed as described in the Trust Agreement.
     B. Establish and Maintain. The EBA, acting through the Committee, shall
establish and maintain the New Plan for the purpose of providing Retiree Medical
Benefits to the Class and Covered Group as set forth in this Settlement
Agreement. The Committee shall begin administering the New Plan so as to be able
to provide Retiree Medical Benefits for the Class and Covered Group with respect
to claims incurred on or after the Implementation Date. The Committee shall
implement the New VEBA at the earlier of (i) the expiration of 180 days
following the Initial Effective Date, or (ii) the Implementation Date. The New
Plan shall be ERISA-covered and the New VEBA shall meet the requirements of
Section 501(c)(9) of the Internal Revenue Code.
     C. Limitation on GM Role. No member of the Committee shall be a current or
former officer, director or employee of GM or any member of the GM controlled
group; provided however, that a retiree who was represented by the UAW in
his/her employment with GM or an employee of GM who is on leave from GM and who
is represented by the UAW is not precluded by this provision from serving on the
Committee. No member of the Committee shall be authorized to act for GM or shall
be an agent or representative of GM for any purpose. Furthermore, GM shall not
be a fiduciary with respect to the New Plan or New VEBA, and will have no rights
or responsibilities with respect to the New Plan or New VEBA other than as
specifically set forth in this Settlement Agreement.
     5. Provision and Scope of Retiree Medical Benefits
     A. Before Implementation Date. With respect to claims incurred prior to the
Implementation Date, Retiree Medical Benefits for the Class and the Covered
Group will continue to be provided by the GM Plan and the Existing External VEBA
at the same level and scope as provided for by the GM Plan and the Existing
External VEBA under the Henry I

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Settlement Agreement, including Mitigation from the Existing External VEBA (for
those entitled to it). The payment by GM and/or the GM Plan of Retiree Medical
Benefits for claims incurred prior to the Implementation Date will not reduce
GM’s payment obligations to the New Plan and the New VEBA under this Settlement
Agreement.
     B. On and After Implementation Date. With respect to claims incurred on and
after the Implementation Date, the New Plan and the New VEBA shall have sole
responsibility for and be the exclusive source of funds to provide Retiree
Medical Benefits for the Class and the Covered Group, including but not limited
to COBRA continuation coverage where such election is made after retirement.
Neither GM, the GM Plan, the Existing Internal VEBA, nor any other GM person,
entity, or benefit plan shall have any responsibility or liability for Retiree
Medical Benefits for individuals in the Class or in the Covered Group for claims
incurred on or after the Implementation Date. GM’s sole obligations to the New
Plan and the New VEBA are those set forth in this Settlement Agreement.
     From the Implementation Date until December 31, 2011, the Retiree Medical
Benefits under the New Plan and the New VEBA will continue to be provided at the
levels described in the Henry I Settlement Agreement and as set forth in the
Trust Agreement, except for the additional monthly contribution attributable to
the pension cost pass-through described in Section 15 of this Settlement
Agreement. On and after January 1, 2012, the Committee shall have such authority
to establish Benefits as described in the Trust Agreement, including raising or
lowering benefits. However, in no event may the Committee amend the New Plan or
New VEBA to provide benefits other than Retiree Medical Benefits until the
expiration of the Initial Accounting Period. The ability of the New Plan and the
New VEBA to pay for Retiree Medical Benefits will depend on numerous factors,
many of which are outside of the control of UAW, the Committee, the New Plan and
the New VEBA, including, without limitation, the investment returns, actuarial
experience and other factors.
     C. Amendment of GM Plan and Reimbursement of GM. The Approval Order shall
provide that all obligations of GM and all provisions of the GM Plan in any way
related to Retiree Medical Benefits for the Class and/or the Covered Group, and
all provisions of applicable collective bargaining agreements, contracts,
letters and understandings in any way related to Retiree Medical Benefits for
the Class and the Covered Group are terminated on the Implementation Date, or
otherwise amended so as to be consistent with this Settlement Agreement and the
fundamental understanding that all GM obligations regarding Retiree Medical
Benefits for the Class and the Covered Group are terminated as set forth in this
Settlement Agreement. Summary Plan Descriptions of the GM Plan are amended to
reflect the termination of GM and GM Plan responsibilities for Retiree Medical
Benefits for the Class and the Covered Group for claims incurred on or after the
Implementation Date as set forth herein.
     The New Plan and New VEBA shall reimburse GM or the GM Plan, as applicable,
for any Retiree Medical Benefits advanced or provided by GM or the GM Plan with
regard to claims incurred by members of the Class and the Covered Group on or
after the Implementation Date, including, but not limited to situations where a
retirement is made retroactive and the medical claims were incurred on or after
the Implementation Date or where GM is notified of an intent by a member of the
Class and the Covered Group to retire under circumstances where there is
insufficient time to transfer responsibility for Retiree Medical Benefits to the
New Plan and GM

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or the GM Plan provides interim coverage for Retiree Medical Benefits. To the
extent such reimbursement may not be permitted by law, the UAW, the Class,
Class Counsel and the Committee will fully cooperate with GM in securing any
legal or regulatory approvals that are necessary to permit such reimbursement.
     6. Division of Existing Internal VEBA
     A. UAW Related Account. Effective January 1, 2008 for bookkeeping purposes
only, GM will take the necessary steps to divide the Existing Internal VEBA into
two bookkeeping accounts. One account will consist of the percentage of the
Existing Internal VEBA’s assets as of January 1, 2008 that is equal to the
estimated percentage of GM’s hourly OPEB liability covered by the Existing
Internal VEBA attributable to Non-UAW represented employees and retirees, their
eligible spouses, surviving spouses and dependents (“Non-UAW Related Account”).
The second account will consist of the remaining percentage of the assets in the
Existing Internal VEBA as of January 1, 2008 (“UAW Related Account”). GM shall
use the same actuarial assumptions, generally consistent with past practice, in
respect of both the Non-UAW Related Account and the UAW Related Account, for
estimating the percentage of GM’s hourly OPEB liability attributable to the
Non-UAW Related Account and the UAW Related Account.
     The value of the UAW Related Account as of January 1, 2008 shall be equal
to: (i) the percentage of GM’s hourly OPEB liability as of December 31, 2007
attributable to UAW associated employees and retirees, their eligible spouses,
surviving spouses and dependents (“UAW OPEB 12/31/07 Split”), multiplied by
(ii) the Existing Internal VEBA balance as of December 31, 2007. The UAW OPEB
12/31/07 Split shall be determined based on the percentage of (i) the discounted
actuarial cash flows for health care and life insurance of OPEB obligations
attributable to UAW associated employees and retirees, their eligible spouses,
surviving spouses and dependents, over (ii) the discounted actuarial cash flows
for health care and life insurance of the entire GM hourly OPEB liability
covered by the Existing Internal VEBA. Both calculations will be made as of
December 31, 2007 using the valuation discount rate of the hourly health care
obligation of 6.35%.
     The Existing Internal VEBA balance as of December 31, 2007 shall be
determined using the December 31, 2007 valuation from State Street Bank and
Trust, which shall be based on the existing General Motors Asset Management
Valuation Policies and Procedures. GM’s hourly OPEB obligation as of
December 31, 2007 shall be determined in accordance with generally accepted
accounting principles in the United States, including Statement of Financial
Accounting Standards 106 and 158.
     Both the determination of the Existing Internal VEBA balance as of
December 31, 2007 and the GM hourly OPEB obligation as of December 31, 2007
shall be final and binding on GM, the UAW, the Committee, the
Class Representatives, the Class, the Covered Group and Class Counsel for
purposes of this Settlement Agreement upon an Independent Audit. The
determination of the Existing Internal VEBA balance as of December 31 of each
succeeding year shall also be final and binding on GM, the UAW, the Committee,
the Class Representatives, the Class, the Covered Group and Class Counsel for
purposes of this Settlement Agreement upon an Independent Audit of each
respective succeeding year.

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     Utilizing the process referenced above, GM has determined that the UAW OPEB
12/31/07 Split is 92.6 percent. GM shall provide the UAW and Class Counsel as
soon as possible with background information and work papers used to determine
the UAW OPEB 12/31/07 Split. Thereafter, the UAW and Class Counsel shall advise
GM as soon as practicable after receipt of such materials of any concerns
regarding GM’s calculation. If any concerns are identified regarding GM’s
calculation, the parties will meet, confer and resolve any concerns by March 3,
2008 so that the face amount of the Short Term Note is set by such date.
     B. Investment of Assets. GMAM will continue to oversee the investment of
the assets in the Existing Internal VEBA (both in the Non-UAW Related Account
and the UAW Related Account) and all such assets shall continue to be invested
under the existing investment policy (as may be amended from time to time by GM
who shall notify the UAW and the Committee about intended amendments in a timely
manner) applicable to the Existing Internal VEBA. Investment returns, net of
Existing Internal VEBA trust expenses (this shall only include expenses to the
extent permitted by ERISA), on all assets of the Existing Internal VEBA on and
after January 1, 2008 will be applied to these accounts proportionally in
relation to the value of the assets in the UAW Related Account in relation to
the total amount of assets in the Existing Internal VEBA. In other words,
investment returns (i.e., the percentage return on the total Existing Internal
VEBA), net of Existing Internal VEBA trust expenses (this shall only include
expenses to the extent permitted by ERISA), will be applied to the value of the
UAW Related Account and separately to the value of the Non-UAW Account (as
adjusted to reflect any withdrawals by GM). However, neither GM nor GMAM
guarantee or warrant the investment returns on the assets in the Existing
Internal VEBA.
     C. Disposition of Assets. No amounts will be withdrawn by GM from the UAW
Related Account, including its investment returns, from January 1, 2008 until
transfer to the New VEBA under Section 12 or termination of this Settlement
Agreement under Section 30 of this Settlement Agreement. GM will retain any and
all rights to withdraw amounts from the Non-UAW Related Account, subject to the
rights of the UAW and the Committee pursuant to Section 13 of this Settlement
Agreement. If the Final Effective Date occurs, GM will cause the pro rata share
attributable to the UAW Related Account of all assets in the Existing Internal
VEBA, including investment returns thereon, net of a pro rata share of trust
expenses (this shall only include expenses to the extent permitted by ERISA) not
previously taken into account in determining investment returns, to be
transferred from the Existing Internal VEBA to the New VEBA as set forth in
Sections 8.A and 12.B of this Settlement Agreement. GMAM and the Committee shall
enter into discussions in advance of such transfer with regard to the method of
allocating, transfering and/or otherwise handling any illiquid or otherwise
non-transferable investments in the Existing Internal VEBA so as to preserve as
much as possible the economic value of such investments and minimize any losses
due to the liquidation of assets. Such discussions shall be completed by
June 30, 2009. The determinations made by GMAM as a product of these discussions
with the Committee regarding the way to transfer illiquid or otherwise
non-transferable investments in the Existing Internal VEBA shall be final and
binding on GM, the UAW, the Committee, the Class Representatives, the Class, the
Covered Group and Class Counsel.

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     7. Temporary Asset Account and Limited Liability Company
     A. Creation of TAA. Prior to April 1, 2008, GM shall establish the TAA to
be held by GM or a wholly owned subsidiary thereof. Subject to termination of
this Settlement Agreement, the sole purpose of the TAA is to serve as tangible
evidence of the availability of assets equal to the sum that GM agrees to pay on
the Implementation Date to the New VEBA in this Settlement Agreement. Neither
the TAA nor the assets therein shall be used for any purposes other than as set
forth in this Settlement Agreement. GM shall keep true and correct books and
records regarding the assets held in the TAA as well as all amounts credited to
and debited against the TAA, including investment returns.
     B. Creation of LLC. As of the date of this Settlement Agreement, GM has
created LBK, LLC, a Delaware limited liability company (“LLC”) to hold the
Convertible Note and the Short Term Note, enter into and hold the Derivative
Contracts, and receive interest on the Convertible Note. Interest on the
Convertible Note will be deposited in the TAA in accordance with Section 7.D of
this Settlement Agreement. Subject to termination of this Settlement Agreement,
the sole purpose of the LLC is to hold the Convertible Note and the Short Term
Note and enter into and hold the Derivative Contracts, which serve as tangible
evidence of the availability of assets equal to the Convertible Note, the Short
Term Note and the Derivative Contracts that GM agrees to pay and/or transfer on
or after the Implementation Date to the New VEBA as provided in this Settlement
Agreement. The LLC shall engage in no activities other than holding the notes,
entering into and holding the Derivative Contracts, and transferring the
Convertible Note, the Derivative Contracts and the amounts payable under the
Short Term Note to the New VEBA. The LLC shall not exercise any conversion
rights under the Convertible Note. The LLC shall not agree to any amendments to
the Convertible Note or the Derivative Contracts without the consent of the
Committee. Subject to termination of this Agreement, neither GM nor the LLC will
terminate the Derivative Contracts before their transfer to the New VEBA. If any
of the events specified in Section 1(a) of the Convertible Note occur prior to
the transfer of the Convertible Note and the Derivative Contracts to the New
VEBA, the parties will meet and discuss an appropriate alternative (if any)
which provides equivalent economic value to the New VEBA taking into account the
impact (if any) of such event(s) on the Convertible Note and the Derivative
Contracts. If any of the events specified in clauses (iii) – (vi) of Section
1(a) of the Convertible Note occur after the transfer of the Convertible Note
and the Derivative Contracts to the New VEBA, the parties will meet and discuss
an appropriate alternative (if any) which provides equivalent economic value to
the New VEBA taking into account the impact (if any) of such event(s) on the
Derivative Contracts for which the New VEBA is acting in the capacity of “Buyer”
and “Counterparty” under and as defined in the Derivative Contracts. Promptly
after creation of the LLC, GM shall cause the LLC to execute and deliver an
instrument of accession in which it agrees to be bound by and to perform the
provisions of Sections 7, 8 and 12 of this Settlement Agreement to the extent
applicable to the LLC.
     C. GM Deposits in LLC. GM shall make the following deposits in the LLC
during the time period from January 1, 2008 to termination of the TAA.
(i) Convertible Note. GM shall issue the Convertible Note to the LLC on February
22, 2008 or as soon as reasonably practicable thereafter. GM hereby represents
that, since September 26, 2007, no event has occurred that would have given rise
to an adjustment

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of the Conversion Rate (as defined in the Convertible Note) pursuant to
Section 3 of the Convertible Note if such event had occurred after the issuance
of the Convertible Note and GM agrees to adjust the initial Conversion Rate
included in the form attached hereto as Exhibit B accordingly if such an event
occurs prior to the issuance of the Convertible Note. Notwithstanding any
provisions in the Convertible Note to the contrary, GM shall (x) not be entitled
to exercise the right to redeem the Convertible Note on or after January 1,
2011, pursuant to the first paragraph of Section 5 of the Convertible Note,
unless the Implementation Date has occurred and the Convertible Note has been
transferred to the New VEBA in accordance with Sections and 8.C. and 12.F. of
this Settlement Agreement, and (y) only be entitled to make a Termination
Redemption (as defined in the Convertible Note) upon termination of the TAA and
LLC as provided in Section 7.G of this Settlement Agreement or upon
determination of an appropriate alternative to transferring the Convertible Note
or the Alternative Convertible Note to the New VEBA as provided in Section 22 of
this Settlement Agreement which is satisfactory to the UAW and Class Counsel.
(ii) Short Term Note. GM shall issue to the LLC a short term note, substantially
in the form attached as Exhibit C to this Settlement Agreement, with the face
amount of $4,015,187,871.00 (the difference between $18.5 billion and the
estimated value of the UAW Related Account on January 1, 2008 (“Short Term
Note”), as may be amended in accordance with Section 6.A). The Short Term Note
shall carry Interest on such face amount from and including the date of the
Short Term Note to, but excluding, the date of payment to the New VEBA pursuant
to Sections 8.B and 12.E. The parties agree that $1 billion of the Short Term
Note represents the present value of the COLA adjustments agreed to by GM and
the UAW with respect to the time period between December 1, 2007 and
September 1, 2011 of up to four cents per hour per quarter and continued in
perpetuity, and another $1.5 billion of the Short Term Note represents GM’s
agreement to pre-fund what would have been the impact of providing a 3% general
wage increase to UAW represented employees in 2009.
     D. GM Deposits in TAA. GM shall make the following deposits in the TAA
during the time period from January 1, 2008 to termination of the TAA.
(i) Shortfall Amount. On April 1, 2008 or as soon as reasonably practicable
thereafter, GM shall deposit in the TAA $165 million (“Initial Shortfall
Amount”) plus Interest on such amount from and including April 1, 2008 to, but
excluding, the date of deposit. The Initial Shortfall Amount represents the
Shortfall Amount payable to the TAA on April 1, 2008 as set forth in the
Shortfall Amount column of the amortization schedule in Exhibit D to this
Settlement Agreement. If prior to the Implementation Date any additional
Shortfall Amount payment is required pursuant to Section 10 and the Shortfall
Amount column of the amortization schedule in Exhibit D to this Settlement
Agreement, such Shortfall Amount payment will also be made by GM to the TAA. At
all times, these payments shall be subject to GM’s right to pre-fund all
then-remaining Shortfall Amount payments by paying the applicable Buyout Amount
set forth in the Shortfall Amount column of the amortization schedule in
Exhibit D.

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(ii) Interest on Convertible Note. On June 30, 2008, GM shall cause the LLC to
deposit $147,571,875 in the TAA. This amount represents the first 6.75% interest
payment payable under the terms of the Convertible Note plus an amount
representing a 6.75% return on the principal amount of the Convertible Note from
January 1, 2008 to the date of the Convertible Note. If $147,571,875 is not
deposited in the TAA on June 30, 2008, Interest shall accrue on such amount from
and including June 30, 2008 to but excluding the date of deposit. If prior to
the Implementation Date any additional interest payments are payable under the
terms of the Convertible Note, GM shall cause the LLC to make such payments to
the TAA.
(iii) Henry I Increase in Stock Value and Dividends. On September 1, 2009, GM
shall pay to the TAA (i) the difference between $240 million and the aggregate
amount of the payments related to the “Increase in Stock Value” and “Dividends”
as set forth in section 13.D and 13.E of the Henry I Settlement Agreement plus
(ii) Interest (x) on $240 million from and including January 1, 2008 to but
excluding the date, if any, on which GM makes a cash contribution related to the
“Increase in Stock Value” and “Dividends,” and thereafter (y) on the difference
between $240 million (plus Interest accrued pursuant to clause (x) through the
date of any applicable cash contribution) and the aggregate of any such cash
contributions made from and including the date of each such cash contribution in
each case to but excluding the date of the following cash contribution, if any,
or September 1, 2009 whichever is earlier. Any payments under this
Section 7.D(iii) are further subject to provisions set forth in Section 11 of
this Settlement Agreement.
(iv) Additional Deposits in TAA. As soon as reasonably practicable following the
Initial Effective Date, GM will make the following additional deposits in the
TAA.
(a)  Base Amount. A lump sum payment of $1.8 billion plus Interest from
January 1, 2008 to the date of deposit in the TAA, or, in GM’s discretion, as
set forth in the Base column of the amortization schedule in Exhibit D to this
Settlement Agreement, annual payments and/or a Buyout Amount as applicable to
the time period up to the date of transfer of the TAA to the New VEBA under
Section 12.D of this Settlement Agreement; provided that GM specifically
reserves the right to pre-fund all then-remaining Base Amount payments by paying
the applicable Buyout Amount set forth in Exhibit D.
(b) Wages/COLA Amount. A lump sum payment of $3.8 billion (which represents the
present value of the future Henry I wage deferrals described in Section 9.A of
this Settlement Agreement), plus Interest from January 1, 2008 to the date of
deposit in the TAA, or, in GM’s discretion, as set forth in the Wages/COLA
column of the amortization schedule in Exhibit D to this Settlement Agreement,
annual payments and/or a Buyout Amount as applicable to the time period up to
the date of transfer of the TAA to the New VEBA under Section 12.D of this
Settlement Agreement; provided that GM specifically reserves the right to
pre-fund all then-remaining Wages/COLA payments by paying the applicable Buyout
Amount set forth in Exhibit D. Any such Wages/COLA payments shall be reduced by
the value of the wage and COLA deferrals paid or payable by GM to the Existing
External VEBA pursuant to the

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terms of Henry I Settlement Agreement (with Interest on such deferrals) from
January 1, 2008 until the date of deposit by GM of a Wages/COLA payment into the
TAA.
     E. Derivative Contracts. As soon as reasonably practicable after issuance
of the Convertible Note, GM and the LLC shall enter into the Derivative
Contracts which shall be held by the LLC as provided for in Section 7.B of this
Settlement Agreement.
     F. Control of TAA and LLC. Control of the TAA and the LLC and all the
assets therein shall be solely within GM’s discretion. GM agrees to retain GMAM
to oversee the investment of the assets in the TAA. To the extent practicable
given the differences in time horizon and other investment parameters, GMAM
shall invest the assets in the TAA in a manner that is consistent with the
investment policy of the Existing Internal VEBA. However, neither GM nor GMAM
guarantee or warrant the investment returns on the assets in the TAA and/or LLC.
     G. Termination of TAA and LLC. If the Final Effective Date does not occur
because (a) the Approval Order has not been entered as described in
Section 28.B, (b) the Approval Order has been disapproved or modified, or (c) GM
has not completed, on a basis reasonably satisfactory to GM, its discussions
with the SEC regarding the accounting treatment with respect to the New Plan and
New VEBA as set forth in Section 21 of this Settlement Agreement, or (d) this
Settlement Agreement has been terminated for any other reason as provided in
Section 30 of this Settlement Agreement, the TAA and LLC shall be terminated. In
addition, if the Final Effective Date has not occurred by December 31, 2011, the
TAA and LLC shall be terminated; provided however, that this date may be
extended by agreement between GM, the UAW and Class Counsel. Upon termination of
the TAA and LLC for any reason, GM may use the assets of the TAA and LLC for any
corporate purpose.
     H. Communications Regarding Investment Results. GM agrees to cause GMAM to
periodically inform and hold discussions with the UAW, Class Counsel and the
Committee about the investment results of and decisions regarding the assets in
the TAA and the Existing Internal VEBA. GMAM shall, with respect to the
performance of its duties in managing the Existing Internal VEBA and the TAA,
participate in the following meetings and provide the following reports to the
UAW and the Committee: (i) quarterly reports of TAA and Existing Internal VEBA
asset class and benchmark performance for relevant time periods; and
(ii) semi-annual or quarterly meetings with UAW and/or Committee representatives
to report on TAA and Existing Internal VEBA returns and analysis of performance,
and to review significant activities affecting investments. Any input from the
UAW, Class Counsel and/or the Committee shall not be a basis of GM’s or GMAM’s
investment decisions within the meaning of the DOL regulations set forth at 29
CFR § 2510-3.21(c).
     8. GM Payments to New Plan and New VEBA
     GM’s financial obligation and payments to the New Plan and New VEBA are
fixed and capped by the terms of this Settlement Agreement. The timing of all
payments to the New VEBA shall be as set forth in Section 12 of this Settlement
Agreement; it being agreed and acknowledged that the New Plan, funded by the New
VEBA, shall provide Retiree Medical Benefits for the Class and the Covered Group
on and after the Implementation Date, and that all

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obligations of GM and the GM Plan for Retiree Medical Benefits for the Class and
the Covered Group shall terminate as of the Implementation Date, as set forth in
this Settlement Agreement. All assets shall be transferred or paid by GM free
and clear of any liens, claims or other encumbrances. Pursuant to this
Settlement Agreement, GM shall have the following, and only the following,
obligations to the New VEBA and the New Plan, and all payments and transfers in
this Section 8 and in Sections 9 through 11 of this Settlement Agreement shall
be credited to the GM Separate Retiree Account of the New VEBA:
     A. UAW Related Account. Provide for the transfer to the New VEBA of the
assets (or, with regard to any illiquid or otherwise non-transferable
investments, equivalent alternatives resulting from discussions between GMAM and
the Committee pursuant to Section 6.C of this Settlement Agreement) of the UAW
Related Account in the Existing Internal VEBA, net of Existing Internal VEBA
trust expenses (this shall only include expenses to the extent permitted by
ERISA), as described in Section 12.B of this Settlement Agreement.
     B. Short Term Note. GM shall cause the LLC to pay to the New VEBA
$4,015,187,871.00 in cash (which amount is equal to the face amount of the Short
Term Note), plus cash in an amount equal to the Interest accrued on such amount
from and including the date of the Short Term Note to, but excluding, the date
of deposit in the New VEBA, as described in Section 12.E of this Settlement
Agreement.
     C. Convertible Note. Cause the LLC to transfer to the New VEBA the
Convertible Note issued to the LLC or, at GM’s option, issue to the New VEBA the
Alternative Convertible Note, as described in Section 12.F of this Settlement
Agreement. In the event that the transfer of the Convertible Note (or the
issuance of the Alternative Convertible Note) to the New VEBA occurs subsequent
to a Record Date and on or prior to the Interest Payment Date (as such terms are
defined in the Convertible Note), GM shall cause the LLC to transfer to the New
VEBA immediately upon receipt the interest payment that the LLC will receive
that corresponds to such Interest Payment Date. GM shall pay any and all
documentary, stamp or similar issue or transfer taxes that may be payable in
requesting the issue or transfer of the Convertible Note or Alternative
Convertible Note to the New VEBA.
     D. Interest on Convertible Note. Transfer to the New VEBA the assets in the
TAA that represent the value in the TAA, as of the date of transfer to the New
VEBA, of the interest paid on the Convertible Note, and the investment returns
thereon, net of expenses (but limited to those expenses that could be charged
under ERISA if the TAA was a plan subject to ERISA), or at GM’s option cash in
lieu of some or all of these assets in the TAA. Thereafter, pay to the New VEBA
any additional interest amounts due under the terms of the Convertible Note.
     E. Base Amount. Transfer to the New VEBA the assets in the TAA that
represent the value in the TAA, as of the date of transfer to the New VEBA, of
the Base Amount described in Section 7.D of this Settlement Agreement and the
investment returns thereon, net of expenses (but limited to those expenses that
could be charged to the TAA under ERISA if the TAA was a plan subject to ERISA),
or at GM’s option cash in lieu of some or all of these assets in the TAA.
Thereafter, subject to GM’s option to buy out the Base Amount at any time, pay
an annual Base Amount to the New VEBA as set forth in Exhibit D to this
Settlement Agreement. In addition, GM may at any time request to make a partial
pre-payment of a Buyout Amount of the Base

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Amount on terms that provide economically equivalent present value to the New
VEBA, provided that such partial pre-payment shall be made only if mutually
agreed between GM and the Committee. The Committee shall be entitled to accept
or reject any such request in its sole discretion.
     F. Wages/COLA Amount. Transfer to the New VEBA the assets in the TAA that
represent the value in the TAA, as of the date of transfer to the New VEBA of
the Wages/COLA Amount described in Section 7.D of this Settlement Agreement and
the investment returns thereon, net of expenses (but limited to those expenses
that could be charged to the TAA under ERISA if the TAA was a plan subject to
ERISA), or at GM’s option cash in lieu of some or all of these assets.
Thereafter, subject to GM’s option to buyout the Wages/COLA Amount at any time,
pay an annual Wages/COLA Amount to the New VEBA as described in Section 9 and
Exhibit D to this Settlement Agreement. In addition, GM may at any time request
to make a partial pre-payment of a Buyout Amount of the Wages/COLA Amount on
terms that provide economically equivalent present value to the New VEBA,
provided that such partial pre-payment shall be made only if mutually agreed
between GM and the Committee. The Committee shall be entitled to accept or
reject any such request in its sole discretion.
     G. Shortfall Amount. Transfer to the New VEBA the assets in the TAA that
represent the value in the TAA, as of the date of transfer to the New VEBA, of
the Initial Shortfall Amount and any additional Shortfall Amount payment(s)
described in Section 7.D of this Settlement Agreement made to the TAA and the
investment returns thereon, net of expenses (but limited to those expenses that
could be charged to the TAA under ERISA if the TAA was a plan subject to ERISA),
or at GM’s option cash in lieu of some or all of these assets. Thereafter,
subject to GM’s option to buy out the Shortfall Amount at any time, pay an
annual Shortfall Amount to the New VEBA as described in Section 10 and Exhibit D
to this Settlement Agreement.
     H. Final Henry I Cash Contribution. GM’s final cash payment of $1 billion
required by section 13.A of the Henry I Settlement Agreement will continue to be
payable by GM as set forth in the Henry I Settlement Agreement and judgment. The
Approval Order shall provide that such payment will be made to the New VEBA,
rather than the Existing External VEBA, if the payment is payable after the
Implementation Date.
     I. Henry I Increase in Stock Value and Dividends. Transfer to the New VEBA
the assets in the TAA that represent the value in the TAA, as of the date of
transfer to the New VEBA, of the Henry I Increase in Stock Value and Dividends
payment described in Section 7.D of this Settlement Agreement, if any, and the
investment returns thereon, net of account expenses (but limited to those
expenses that could be charged to the TAA under ERISA if the TAA was a plan
subject to ERISA), or at GM’s option cash in lieu of some or all of these
assets.
     J. Derivative Contracts. Cause the LLC to transfer to the New VEBA the
Derivative Contracts held by the LLC as described in Section 12.F of this
Settlement Agreement.
     The payments described in this Section 8 are subject to reduction for the
amounts set forth in Sections 11 and 12.A of this Settlement Agreement.

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     9. Wage and COLA Deferrals
     A. Impact on Henry I Wage and COLA Deferral. GM will continue to deposit
into the Existing External VEBA the wage and COLA deferrals set forth in
Section 13.C. of the Henry I Settlement Agreement (including all COLA
subtraction and non-payment of the September 18, 2006 general increase to the
hourly wage rate) until the Initial Effective Date. The Wages/COLA Amount set
forth in Sections 7.D and 8.F and Exhibit D to this Settlement Agreement
represent the future wage deferral cash flow impact of such wage and COLA
deferrals from the Henry I settlement and judgment. As a result of GM agreeing
to deposit into the TAA and pay to the New VEBA such Wages/COLA Amount, the
Approval Order shall provide that as of the Initial Effective Date (i) GM will
no longer be required to make deposits of the wage and COLA deferrals from Henry
I into the Existing External VEBA, (ii) the Wages/COLA Amount paid by GM
pursuant to this Settlement Agreement shall be in full satisfaction of any and
all of GM’s obligations under Section 13.C of the Henry I Settlement Agreement
and the provisions of the judgment in Henry I regarding wage and COLA deferrals,
(iii) GM will have no further obligations as to such payments or contributions
to the Existing External VEBA, and (iv) the Henry I wage and COLA deferrals will
inure thereafter solely to the benefit of GM and continue in perpetuity
increasing at $0.02 per hour per quarter as described in Section 13.C of the
Henry I Settlement Agreement.
     If the TAA is terminated prior to the Final Effective Date, GM shall
contribute cash to the Existing External VEBA in an amount equal to the amount
that would have otherwise been contributed to the Existing External VEBA
pursuant to the terms of the Henry I Settlement Agreement between the Initial
Effective Date and the date of termination of the TAA, plus an amount equal to
the investment returns that would have been earned on such amounts, at the rate
equal to the overall investment return of the Existing External VEBA for the
respective period, if such amounts had been contributed to the Existing External
VEBA in accordance with the terms of the Henry I Settlement Agreement, and
obligations pursuant to the Henry I Settlement Agreement will be reinstated.
     B. 2009 Wage Deferral. In negotiating the MOU and 2007 GM-UAW National
Agreement, GM and UAW agreed that there shall be no general increase to the
hourly wage rate for GM Active Employees in 2009 regardless of whether or not
the Final Effective Date occurs. As a result, GM agreed to include in the Short
Term Note the $1.5 billion referred to in Section 7.C of this Settlement
Agreement. This $1.5 billion represents the future impact of a 3% wage increase
in 2009 for GM Active Employees. If the Final Effective Date does not occur, the
wage increase will not be reinstated.
     C. 2007 COLA Diversion. In negotiating the MOU and 2007 GM-UAW National
Agreement, GM and UAW also agreed that, effective with the December 1, 2007 COLA
adjustment and ending September 1, 2011, up to four cents ($0.04) per hour per
quarter will be diverted from COLA otherwise calculated for GM Active Employees.
These deferred amounts will inure solely to the benefit of GM and will not be
reinstated after September 1, 2011 but will continue to be deferred in
perpetuity. As a result, GM agreed to include in the Short Term Note the
$1 billion referred to in Section 7.C of this Settlement Agreement. This
$1 billion represents the future cash flow impact of this 2007 COLA diversion.
If the Final Effective Date does not occur, the cumulative effect of four cents
($0.04) per hour per quarter of COLA will be reinstated and GM and the UAW will
agree on the disposition of such COLA adjustment.

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     10. Shortfall Amounts
     If in 2009 or any year thereafter, the Cash Flow Projection as set forth in
Exhibit A to this Settlement Agreement shows that the GM account or sub-account
of the New VEBA will become insolvent within 25 years following the January 1
immediately preceding such Cash Flow Projection, GM shall pay to the New VEBA
(or the TAA for periods prior to the Implementation Date) by April 1 of that
year $165 million per occurrence (“Shortfall Amount”); provided however, that
the maximum number of Shortfall Amount payments, excluding the Initial Shortfall
Amount on April 1, 2008, shall be nineteen (19). Beginning in 2009, for any year
in which the Cash Flow Projection shows that the GM account or sub-account of
the New VEBA will maintain solvency for at least 25 years beyond the January 1
immediately preceding such Cash Flow Projection, no Shortfall Amount payment
will be required. Further, GM reserves the right to pre-pay, at any time, all
then-remaining future possible annual Shortfall Amounts by paying the applicable
Buyout Amount (which represents the present value of the remaining possible
Shortfall Amount payments as of January 1 of the year of the buyout, plus
Interest from January 1 until the date of the buyout amount) as shown in the
amortization schedule for Shortfall Amount in Exhibit D to this Settlement
Agreement.
     11. Other Payments to Existing External VEBA
     The Approval Order shall provide that any obligation of GM related to the
amounts called for in the “Benefit Change Profits” or the “Incremental Amount,”
as set forth and defined in section 13.B of the Henry I Settlement Agreement,
shall cease upon the Initial Effective Date. In the event that any amounts
related to such items have been paid by GM to the Existing External VEBA prior
to the Final Effective Date, the required payments set forth in Section 8 of
this Settlement Agreement will be reduced by such amount plus interest at 6% per
annum (computed on the basis of a 360-day year consisting of twelve 30-day
months and the number of days elapsed in any partial month), credited and
compounded annually.
     The Approval Order shall also provide that if the aggregate amount of the
payments related to “Increase in Stock Value” and “Dividends” as set forth in
section 13.D and 13.E of the Henry I Settlement Agreement is less than
$240 million, then GM will pay to the New VEBA on September 1, 2009 the amounts
set forth in Section 7.D(iii) of this Settlement Agreement.
     If the aggregate amount of the payments related to “Increase in Stock
Value” and “Dividends” as set forth in section 13.D and 13.E of the Henry I
Settlement Agreement is more than $240 million, GM shall deduct from the amount
required to be transferred from the TAA to the New VEBA under Sections 8 and 12
of this Settlement Agreement (i) the amount of aggregate cash payments paid to
the Existing External VEBA in excess of $240 million plus (ii) Interest on the
portion of the first such cash payment that resulted in the aggregate exceeding
$240 million from and including the date of its payment and on the amount of
each of the following cash payments from and including their respective payment
dates, in each case to but excluding the date of transfer of the amounts from
the TAA to the New VEBA under Sections 8 and 12 of this Settlement Agreement.

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     12. Sequencing of Initial Deposits to the New VEBA and Termination of
Existing External VEBA, LLC and TAA
     The initial deposits to the New VEBA shall be made and credited to the GM
Separate Retiree Account, and the Existing External VEBA and TAA shall be
terminated, as provided below.
     A. Deposit No. 1: Within 30 days of the Initial Effective Date or the
establishment of the New VEBA, whichever is later, GM shall cause a transfer of
$1 million from the TAA to the New VEBA. Thereafter, and until the Implemenation
Date, within 30 days of any request by the Committee, GM shall cause the
transfer of such additional amount as the Committee shall request, provided that
there shall be no more than five such requests prior to the Implementation Date
and the aggregate of all such transfers, including the initial transfer, shall
not exceed $20 million. Such amounts shall represent an advance to the New VEBA
to cover reasonable and necessary preparatory expenses incurred by the New Plan
or New VEBA in anticipation of the transition of responsibility for Retiree
Medical Benefits as of the Implementation Date as set forth in Section 5 of this
Settlement Agreement. These advance payments shall not increase or add to the
amounts GM has agreed to pay under this Settlement Agreement.
     B. Deposit No. 2. Within 10 business days after the Implementation Date, GM
shall direct the trustee of the Existing Internal VEBA to transfer to the New
VEBA the UAW Related Account’s share of assets in the Existing Internal VEBA,
the amount of which shall be determined as provided in Section 6 of this
Settlement Agreement. The Approval Order shall provide that, upon such transfer,
the Existing Internal VEBA shall be deemed to be amended to terminate
participation and coverage regarding Retiree Medical Benefits for the Class and
the Covered Group, effective as of the Implementation Date. Accruals for trust
expenses (this shall only include expenses to the extent permitted by ERISA)
through the date of transfer will be made and an amount equal to the UAW Related
Account’s share of such accruals will be retained within the Existing Internal
VEBA to pay such expenses. After payment of these trust expenses is completed, a
reconciliation of the accruals and the actual expenses (this shall only include
expenses to the extent permitted by ERISA) will be performed. GM agrees to cause
the payment to the New VEBA by the Existing Internal VEBA of any overaccruals
for the UAW Related Account’s share of such expenses. Similarly, in the event of
an underaccrual the New VEBA will return to the Existing Internal VEBA the
amount of the underaccrual of expenses for the UAW Related Account.
     C. Deposit No. 3. The Approval Order shall direct the committee and the
trustees of the Existing External VEBA to transfer all assets and liabilities
into the New VEBA and terminate the Existing External VEBA within 15 days after
the Implementation Date. This transfer of assets and liabilities shall include,
but not be limited to, the transfer of all rights and obligations granted to or
imposed on the Existing External VEBA under Section 14.C(e) of the Henry I
Settlement Agreement and GM agrees that, following the Implementation Date, the
New VEBA shall be substituted for the Existing External VEBA for such purposes.
     D. Deposit No. 4. The balance in the TAA as of the date of transfer, or at
GM’s discretion, cash in lieu of some or all of the assets in the TAA as of the
date of transfer, shall be paid to the New VEBA before the 20th business day
after the Implementation Date. If GM elects

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to pay cash in lieu of some or all of the investments in the TAA, the cash GM
will pay shall include an amount equivalent to accrued and unpaid interest and
dividends on such investments net of reasonable liquidation costs. Accruals for
expenses (but limited to those expenses that could be charged to the TAA under
ERISA if the TAA was a plan subject to ERISA) through the date of transfer will
be made and an amount equal to the TAA’s share of such accruals will be retained
within the TAA to pay such expenses. After payment of these expenses is
completed, a reconciliation of the accruals and the actual expenses (but limited
to those expenses that could be charged to the TAA under ERISA if the TAA was a
plan subject to ERISA) will be performed. GM agrees to cause the payment to the
New VEBA by the TAA of any overaccruals for the TAA’s share of such expenses.
Similarly, in the event of an underaccrual the New VEBA will return to the TAA,
or to GM, as applicable, the amount of the underaccrual for the TAA’s share of
the expenses.
     E. Deposit No. 5. On or before the 20th business day after the
Implementation Date, GM shall cause the LLC to pay to the New VEBA in cash the
face value of the Short Term Note, plus cash in an amount equal to the Interest
accrued on such amount from and including the date of the Short Term Note to,
but excluding, the date of payment to the New VEBA.
     F. Transfer of Convertible Note and Derivative Contracts. GM will cause the
LLC to transfer the Convertible Note and the Derivative Contracts to the New
VEBA after Payments No. 4 and No. 5 have been made, within 25 business days
after the Implementation Date if no legal or regulatory approvals are required,
or within 10 business days of securing final legal or regulatory approval. In
lieu of causing the LLC to transfer the Convertible Note, GM, in its sole
discretion, may elect to transfer to the New VEBA a convertible note containing
economic terms and conditions identical to those of the Convertible Note
(“Alternative Convertible Note”), including accrued interest. The transfer of
the Convertible Note or the Alternative Convertible Note and the Derivative
Contracts will only occur as permitted by law. GM and/or the New Plan, as
applicable, will apply for any necessary legal or regulatory approvals,
including but not limited to the prohibited transaction exemptions described in
Section 22 of this Settlement Agreement and any required federal or state bank
regulatory approvals. The UAW, the Class and Class Counsel will support and
cooperate with any such requests for legal or regulatory approvals. If GM and
the New VEBA cannot timely obtain necessary legal or regulatory approvals, the
parties will meet and discuss appropriate alternatives to the transfer of the
Convertible Note that provide equivalent economic value to the New VEBA.
Notwithstanding the foregoing, any transfer of the Convertible Note or
Alternative Convertible Note will be conditioned upon execution and delivery by
the New VEBA of a Security Holder and Registration Rights Agreement
substantially in the form of Exhibit F to this Settlement Agreement.
     The parties acknowledge that, upon completion of GM’s transfer of the
assets in the TAA to the New VEBA as contemplated by this Settlement Agreement,
no assets should remain in the TAA and the TAA shall be terminated. If, however,
assets remain in the TAA as the result of GM’s exercise of its option to
transfer cash in lieu of TAA assets, GM’s deduction for payments related to the
Increase in Stock Value and Dividends under Section 11 of this Settlement
Agreement, or other deductions permitted under this Settlement Agreement, then
GM may thereafter use or dispose of such assets, including any investment
returns thereon, for any corporate purpose. After deposit Nos. 4 and 5 have been
made and after transfer of the

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Convertible Note or transfer of the Alternative Convertible Note and the
Derivative Contracts, the LLC shall be terminated. All assets transferred or
contributed to the New VEBA shall be free and clear of any liens, claims or
other encumbrances.
     If a deposit or payment or any portion thereof is made by GM to the TAA or
the New VEBA by mistake under any provision of this Settlement Agreement,
including, but not limited to Sections 7 through 12 of this Settlement
Agreement, (i) as to the TAA, GM may deduct such amount from the TAA plus
earnings thereon from the date of deposit in the TAA up to, but excluding, the
date of deduction, and (ii) as to the New VEBA, the Committee shall, upon
written direction of GM, return such amounts as may be permitted by law to GM
(plus earnings thereon from the date of payment to but excluding the date of
return) within 30 days of notification by GM that such payment was made by
mistake. If a dispute arises with regard to such payment, the dispute will be
resolved pursuant to Section 26 of this Settlement Agreement.
     13. Adjustment Events
     A. Adjustment Event. “Adjustment Event” shall mean:
(i) the determination of the Existing Internal VEBA balance as of any day on
which amounts are withdrawn by GM from the Non-UAW Related Account as set forth
in Section 6 of this Settlement Agreement and the determination of the value of
any assets transferred to GM or liquidated to effect the withdrawal by GM, other
than a withdrawal on December 31 of any year after January 1, 2008;
(ii) the determination of the value of any assets in lieu of which GM elects to
transfer cash to the New VEBA pursuant to Sections 8 and 12 of this Settlement
Agreement; or
(iii) the determination of the value of any illiquid or otherwise
non-transferable investments in the Existing Internal VEBA in case that the
discussions between GMAM and the Committee as set forth in Section 6.C of this
Settlement Agreement result in transferring something other than a pro rata
share of such investment.
     B. Due Diligence and Adjustment Mechanism.
     In connection with any Adjustment Event, GM shall deliver, as soon as
practicable, to the Committee (or the UAW prior to establishment of the
Committee) information in reasonable detail about the determinations made by GM
with regard to such Adjustment Event and the work papers, underlying
calculations and other documents and materials on which such determinations are
based, including non-privileged materials from GM’s advisors, if any
(collectively, the “Determination Materials”).
     The Committee shall have 30 days from receipt of the Determination
Materials from GM to submit to GM a written request for an Independent
Attestation of a determination(s) by GM listed in Section 13.A(i), (ii) and
(iii) of this Settlement Agreement. As a part of this review process, the
Committee may ask for additional information regarding the calculations, and the
data and information provided by GM. GM shall as promptly as practicable,
respond to all reasonable requests from the Committee for such additional
information. However, a request for additional information shall not extend the
30 day review period, unless an extension is reasonably necessary to allow the
Committee to review such additional information, but in no event longer than
45 days from receipt of the Determination Materials.

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     All determinations made by GM with regard to a determination(s) listed in
Section 13.A(i), (ii) and (iii) of this Settlement Agreement shall be final and
binding on GM, the UAW, the Class Representatives, the Class, the Covered Group,
Class Counsel, the Committee and the New Plan and New VEBA, unless the Committee
timely submits a request for an Independent Attestation. If the Committee timely
submits such a request, GM shall engage a nationally recognized independent
registered public accounting firm to conduct an Independent Attestation
regarding a determination(s) by GM listed in Section 13.A(i), (ii) and (iii) of
this Settlement Agreement The Independent Attestation shall be final and binding
on GM, the UAW, the Class Representatives, the Class, the Covered Group,
Class Counsel, the Committee and the New Plan and New VEBA.
     Nothing in the foregoing paragraphs shall prevent the division, deposit,
withdrawal or transfer of any assets the valuation of which is not in dispute
pending resolution of the disputed amounts.
     C. Confidentiality. All information and data provided by GM to the UAW
and/or the Committee under Section 7.H of this Settlement Agreement and as a
part of this due diligence and adjustment process shall be considered
confidential. The UAW and the Committee shall use such information and data
solely for the purpose set forth in this Section 13 of the Settlement Agreement.
The UAW and the Committee shall not disclose such information or data to any
other person without GM’s written consent, provided that the UAW and the
Committee may disclose such information and data to their attorneys and
professional advisors subject to the agreement of such attorneys and advisors to
the confidentiality restrictions set forth herein.
     14. Future Contributions
     The UAW, the Class and the Covered Group may not negotiate any increase of
GM’s funding or payment obligations set out herein. The UAW also agrees not to
seek to obligate GM to: (i) provide any additional payments to the New VEBA
other than those specifically required by this Settlement Agreement; (ii) make
any other payments for the purpose of providing Retiree Medical Benefits to the
Class or the Covered Group; or (iii) provide or assume the cost of Retiree
Medical Benefits for the Class or the Covered Group through any other means.
Provided that, the UAW may propose that GM Active Employees be permitted to make
contributions to the New VEBA of amounts otherwise payable in profit sharing,
COLA, wages and/or signing bonuses, if not prohibited by law.
     15. Pension Benefits
     GM and the UAW agree to amend the Pension Plan on the Implementation Date
to provide to retirees and eligible surviving spouses who are members of the
Class or the Covered Group a flat monthly special lifetime benefit of $66.70
(which will not be escalated) commencing on the first of the month immediately
following the Implementation Date. This same benefit will also be provided to
retirees who retire after the Implementation Date and eligible surviving spouses
who are members of the Covered Group, commencing with their

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entitlement to pension benefits. This special lifetime benefit is intended to
serve as a cost pass-through of an equivalent after-tax increase in the monthly
contribution regarding Retiree Medical Benefits for the Class and the Covered
Group. As a result, the New Plan and New VEBA shall, as of the Implementation
Date, assess an additional non-escalating monthly contribution payable by
retirees and eligible surviving spouses of the Class and the Covered Group for
Retiree Medical Benefits of $51.67 per month, to be credited to the GM Separate
Retiree Account in the New VEBA.
     Retirees and surviving spouses who are members of the Class and the Covered
Group but who do not receive a monthly benefit from the Pension Plan will not be
entitled to receive the flat monthly special lifetime benefit of $66.70, and the
terms of the New Plan and the New VEBA shall not require them to make the
additional monthly contribution to the New VEBA of $51.67. For purposes of
determining a Class or Covered Group member’s status as a Protected Retiree
under the terms of the Henry I settlement agreement, the flat monthly special
lifetime benefit described above and any other new pension increase negotiated
in the 2007 GM-UAW National Agreement shall not be included in the determination
of pension income.
     Nothing in this Section 14 shall detract from the discretion afforded the
Committee as set forth in the Trust Agreement.
     16. Administrative Costs
     The New VEBA will be responsible for all costs to administer the New Plan
and the New VEBA commencing on the Implementation Date and continuing
thereafter. The New Plan and the New VEBA trust agreement shall be drafted
consistent with this requirement.
     17. Trust Agreement; Segregated Account; Indemnification
     Assets paid or transferred to the New VEBA by or at the direction of GM,
including all investment returns thereon, shall be used solely to provide
Retiree Medical Benefits to the Class and the Covered Group as defined in this
Settlement Agreement until expiration of the Initial Accounting Period.
Thereafter, Benefits will be provided to the Class and the Covered Group as
described in the Trust Agreement. The Trust Agreement shall provide: (i) for the
GM Separate Retiree Account to be credited with the assets deposited or
transferred to the New VEBA by GM, or at GM’s direction, under this Settlement
Agreement; (ii) that the assets in the GM Separate Retiree Account may be used
only to provide Benefits (as defined in the Trust Agreement) for such Class and
such Covered Group; and (iii) that under no circumstances will GM or the GM
Separate Retiree Account be liable or responsible for the obligations of any
other employer or for the provision of Retiree Medical Benefits or any other
benefits for the employees or retirees of any other employer.
     Further, the Trust Agreement shall provide that the Committee, on behalf of
the New VEBA, shall take all such reasonable action as may be needed to rebut
any presumption of control that would limit the New VEBA’s ability to own GM
common stock or the Convertible Note or as may be required to comply with all
applicable laws and regulations, including but not limited to federal and state
banking laws and regulations.

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     To the extent permitted by law, the New VEBA shall indemnify and hold the
Committee, the UAW, GM, the GM Plan, and the employees, officers and agents of
each of them harmless from and against any liability that they may incur in
connection with the New Plan and New VEBA, unless such liability arises from
their gross negligence or intentional misconduct, or breach of this Settlement
Agreement. The Committee shall not be required to give any bond or any other
security for the faithful performance of its duties under the Trust Agreement,
except as such may be required by law.
     18. Subsidies
     With regard to claims incurred on or after the Implementation Date, the New
VEBA shall be entitled to receive any Medicare Part D subsidies and other health
care related subsidies regarding benefits actually paid by the New VEBA which
may result from future legislative changes, and GM shall not be entitled to
receive any such subsidies related to prescription drug benefits and other
health care related benefits provided to the Class and the Covered Group by the
New Plan and New VEBA.
     19. Default and Cure
          A. General. The Committee will have the right to accelerate some or
all of the payment obligations of GM under this Settlement Agreement (other than
the Shortfall Amount payments set forth in Sections 8.G and 10 and Exhibit D of
this Settlement Agreement) if GM defaults on any payment obligations under this
Settlement Agreement and such default is not cured within 15 business days after
the Committee gives GM notice of such default. To cure such default, GM will pay
the amount then in default plus accrued Interest on such amount. Payments due
under the Convertible Note may also be accelerated under this provision only to
the extent that the Convertible Note is then held by the New VEBA.
          B. Limitation on Liens. Effective as of the Implementation Date and
until all payments required of GM under this Settlement Agreement, other than
the Shortfall Amount payments set forth in Sections 8.G and 10 and Exhibit D of
this Settlement Agreement, have been made, GM will not, nor will it permit any
Manufacturing Subsidiary to, issue or assume any Debt secured by a Mortgage upon
any Principal Domestic Manufacturing Property of GM or any Manufacturing
Subsidiary or upon any shares of stock or indebtedness of any Manufacturing
Subsidiary (whether such Principal Domestic Manufacturing Property, shares of
stock or indebtedness are now owned or hereafter acquired) without in any such
case effectively providing concurrently with the issuance or assumption of any
such Debt that the payment obligations by GM under this Settlement Agreement,
other than the Shortfall Amount payments set forth in Sections 8.G and 10 and
Exhibit D of this Settlement Agreement, (together with, if GM shall so
determine, any other indebtedness of GM or such Manufacturing Subsidiary ranking
equally with the payment obligations by GM under this Settlement Agreement and
then existing or thereafter created) shall be secured equally and ratably with
such Debt, unless the aggregate amount of Debt issued or assumed and so secured
by Mortgages, together with all other Debt of GM and its Manufacturing
Subsidiaries which (if originally issued or assumed at such time) would
otherwise be subject to the foregoing restrictions, but not including Debt
permitted to be secured under clauses (i) through (vi) of the immediately
following paragraph, does not at the time exceed 20% of the stockholders’ equity
of GM and its consolidated subsidiaries, as

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determined in accordance with generally accepted accounting principles and shown
on the audited consolidated balance sheet contained in the latest published
annual report to the stockholders of GM.
     The above restrictions shall not apply to Debt secured by (i) Mortgages on
property, shares of stock or indebtedness of any corporation or other entity
existing at the time such corporation or other entity becomes a Manufacturing
Subsidiary; (ii) Mortgages on property existing at the time of acquisition of
such property by GM or a Manufacturing Subsidiary, or Mortgages to secure the
payment of all or any part of the purchase price of such property upon the
acquisition of such property by GM or a Manufacturing Subsidiary or to secure
any Debt incurred prior to, at the time of, or within 180 days after, the later
of the date of acquisition of such property and the date such property is placed
in service, for the purpose of financing all or any part of the purchase price
thereof, or Mortgages to secure any Debt incurred for the purpose of financing
the cost to GM or a Manufacturing Subsidiary of improvements to such acquired
property; (iii) Mortgages securing Debt of a Manufacturing Subsidiary owing to
GM or to another Subsidiary; (iv) Mortgages on property of a corporation or
other entity existing at the time such corporation or other entity is merged or
consolidated with GM or a Manufacturing Subsidiary or at the time of a sale,
lease or other disposition of the properties of a corporation or other entity as
an entirety or substantially as an entirety to GM or a Manufacturing Subsidiary;
(v) Mortgages on property of GM or a Manufacturing Subsidiary in favor of the
United States of America or any State thereof, or any department, agency or
instrumentality or political subdivision of the United States of America or any
State thereof, or in favor of any other country, or any political subdivision
thereof, to secure partial, progress, advance or other payments pursuant to any
contract or statute or to secure any indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of construction of
the property subject to such Mortgages; or (vi) any extension, renewal or
replacement (or successive extensions, renewals or replacements) in whole or in
part of any Mortgage referred to in the foregoing clauses (i) to (v),
inclusively; provided, however, that the principal amount of Debt secured
thereby shall not exceed by more than 115% the principal amount of Debt so
secured at the time of such extension, renewal or replacement and that such
extension, renewal or replacement shall be limited to all or a part of the
property which secured the Mortgage so extended, renewed or replaced (plus
improvements on such property).
     C. Dispute Resolution. The dispute resolution process set forth in
Section 26 of this Settlement Agreement shall apply in the event of a dispute
over whether GM has defaulted on any payment obligation under this Settlement
Agreement. In this regard, the time limit applicable to GM’s right to cure a
default shall be 15 business days after agreement by the parties that GM has
defaulted, or entry by the Court of a final ruling determining that GM has
defaulted on its payment obligations. Application of the dispute resolution
process set forth in Section 26 of this Settlement Agreement does not relieve GM
of the obligation to pay accrued Interest for the period of time that the
dispute resolution process is in effect in order to cure a default.
     20. Cooperation
     A. Cooperation by GM. GM will cooperate with the UAW and the Committee and
at the Committee’s request undertake such reasonable actions as will assist the
Committee in the

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transition of responsibility for administration of the Retiree Medical Benefits
by the Committee for the New Plan and the New VEBA. Such cooperation will
include assisting the Committee in educational efforts and communications with
respect to the Class and the Covered Group so that they understand the terms of
the New Plan, the New VEBA and the transition, and understand the claims
submission process and any other initial administrative changes undertaken by
the Committee. Before and after the Implementation Date, at the Committee’s
request and as permitted by law, GM will furnish to the Committee such
information and shall provide such cooperation as may be reasonably necessary to
permit the Committee to effectively administer the New Plan and the New VEBA,
including, without limitation, the retrieval of data in a form and to the extent
maintained by GM regarding age, amounts of pension benefits, service, pension
and medical benefit eligibility, marital status, mortality, claims history,
births, deaths, dependent status and enrollment information of the Class and the
Covered Group. At the request of the Committee, GM will continue to perform the
necessary eligibility work for a reasonable period of time, not to exceed
90 days after the Implementation Date in order to allow the Committee to
establish and test the eligibility database, and for which GM will be entitled
to reimbursement for reasonable costs. GM shall also assist the Committee in
transitioning benefit provider contracts to the New VEBA. GM shall also
cooperate with the UAW and the Committee and undertake such reasonable actions
as will enable the Committee to perform its administrative functions with
respect to the New Plan and the New VEBA, including insuring an orderly
transition from GM administration of Retiree Medical Benefits to the New Plan
and the New VEBA.
     To the extent permitted by law, GM will also allow retiree participants to
voluntarily have required contributions withheld from pension benefits and to
the extent reasonably practical, credited to the GM Separate Retiree Account of
the New VEBA on a monthly basis. A retiree participant may elect or withdraw
consent for pension withholdings at any time by providing 45 days written notice
to the Pension Plan administrator or such shorter period that may be required by
law.
     To the extent permitted by law, GM will also cooperate with the Committee
to make provision for the New VEBA payments of the $76.20 Special Benefit to be
incorporated into monthly GM pension checks for eligible retirees and surviving
spouses. It will be the responsibility of the Committee and the New VEBA to
advise GM’s pension administrator in a timely manner of eligibility changes with
regard to the Special Benefit payment. The timing of the information provided to
GM’s pension administrator will determine the timing for the incorporation into
the monthly pension check. It will be the responsibility of the Committee and
the New VEBA to establish a bank account for the funding of the Special Benefit
payments, and GM’s pension administrator will be provided with the approval to
draw on that account for the payment of the benefit. The Committee and the New
VEBA will assure that the bank account is adequately funded for any and all such
payments. If adequate funds do not exist for the payments, then GM’s pension
administrator will not make such payments until the required funding is
established in the account. It will be the responsibility of the Committee and
the New VEBA to audit the eligibility for, and payment of, the Special Benefit.
Additionally, the Committee and the New VEBA will be responsible for the payment
of reasonable costs associated with GM’s administration of the payment of this
Special Benefit and the pension withholdings, including development of
administrative and recordkeeping processes, monthly payment processing, audit
and reconciliation functions and the like.

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     GM will be financially responsible for reasonable costs associated with the
transition of coverage for the Class and the Covered Group to the New Plan and
New VEBA. This shall include the cost of educational efforts and communications
with respect to retirees, the New Plan’s initial creation of administrative
procedures, initial development of record sharing procedures, the testing of
computer systems, the Committee’s initial vendor selection and contracting, and
other activities incurred on or before the Implementation Date, including but
not limited to costs associated with drafting the trust agreement for the New
VEBA, seeking from the Internal Revenue Service a determination of the
tax-exempt status of the New VEBA, plan design and actuarial and other
professional work necessary for initiation of the New Plan and New VEBA and the
benefits to be provided thereunder. GM payments described in this Section shall
not reduce its payment obligations under this Settlement Agreement, and if the
New VEBA is a multi-employer welfare trust, the costs described in this Section,
to the extent not allocable to a specific employer, shall be pro-rated among the
participating companies based on the ratio of required funding for each company.
Payment of these costs shall be set forth explicitly in the Approval Order.
     B. Cooperation With GM. The UAW and the Committee will cooperate and shall
timely furnish GM with such information related to the New Plan and New VEBA, in
a form and to the extent maintained by the UAW and the Committee, as may be
reasonably necessary to permit GM to comply with requirements of the SEC,
including, but not limited to, any disclosures contemplated or agreed to with
the staff of the SEC as a result of GM’s discussions with the staff pursuant to
Section 21 of this Settlement Agreement and any schedules supporting such
information, and Generally Accepted Accounting Principles, including but not
limited to SFAS 87, SFAS 106, SFAS 132R, SFAS 157, and SFAS 158 (as amended),
for disclosure in GM’s financial statements and any filings with the SEC.
     21. Accounting Treatment
     Throughout the negotiations of the MOU and this Settlement Agreement, GM
has maintained that a necessary element in its decision to enter into the MOU
and this Settlement Agreement is securing accounting treatment that is
reasonably satisfactory to GM regarding the transactions contemplated by the MOU
and this Settlement Agreement. In the event that the economic substance of the
transaction does not meet the specific requirements for settlement accounting as
determined by paragraphs 90-95 of FASB Statement No. 106, as amended, it is
expected that the terms of this Settlement Agreement would give rise to
substantive plan amendment accounting. For purposes of this provision,
substantive plan amendment accounting would limit GM’s OPEB obligation to the
revised, fixed and capped obligations as determined under this Settlement
Agreement. The parties agree that this Settlement Agreement and Final Effective
Date are contingent on GM securing the appropriate accounting treatment
regarding GM’s obligations to the Class and the Covered Group for Retiree
Medical Benefits. As soon as practicable, GM will discuss the accounting for the
New Plan and the New VEBA and its obligations to the Class and the Covered Group
for Retiree Medical Benefits with the staff of the SEC. If, as a result of those
discussions, GM believes that the accounting for the transaction may not be a
settlement as contemplated by paragraphs 90-95 of FASB Statement No. 106, as
amended, or a substantive negative plan amendment reasonably satisfactory to GM,
the parties will meet in an effort to restructure the transaction to achieve
such accounting. If the parties are unable to reach an agreement on terms that
GM reasonably believes will provide such accounting, this Settlement Agreement
will terminate.

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     22. Prohibited Transaction Exemptions
     The parties agree that the assets of the TAA and LLC shall not be “plan
assets” of the New Plan and New VEBA until actual transfer or payment to the New
VEBA. The UAW, GM, and the Class and Class Counsel acknowledge that the
instrument establishing the TAA and communications to the Class regarding the
TAA, shall be consistent with the principles set forth in DOL Advisory Opinions
92-02A, 92-24 and 94-31A so as to avoid the assets in the TAA being deemed “plan
assets” within the meaning of ERISA. If GM determines that the assets in the TAA
and/or LLC as described in Section 7 of this Settlement Agreement are likely to
be deemed “plan assets,” GM will apply for a prohibited transaction exemption
from the DOL to permit the acquisition and holding of the employer security in
the TAA and/or LLC. The UAW, the Class and Class Counsel will fully cooperate
with GM in securing any such legal or regulatory approvals.
     If GM elects to transfer the Convertible Note or the Alternative
Convertible Note to the New VEBA and such note is not a qualifying employer
security, and/or if the Derivative Contracts are not qualifying employer
securities, GM and the New VEBA timely will apply for a prohibited transaction
exemption from the DOL to permit the New VEBA to acquire and hold such
securities. Similarly, if qualifying employer securities and employer real
property would exceed 10 percent of the total assets in the New VEBA immediately
after transfer of the Convertible Note or the Alternative Convertible Note and
the Derivative Contracts to the New VEBA, then GM and the New VEBA timely will
apply for a prohibited transaction exemption to permit the New VEBA to acquire
and hold such securities. The UAW, the Class and Class Counsel will fully
cooperate with GM and the New VEBA in securing any such legal or regulatory
approvals. If GM and the New VEBA cannot timely obtain any necessary exemptions,
the parties will meet and discuss an appropriate alternative which provides
equivalent economic value to the New VEBA.
     23. Indemnification
     Subject to approval by the Court as part of the Judgment, GM hereby agrees
to indemnify and hold harmless the UAW, and its officers, directors, employees
and expert advisors (each, an “Indemnified Party”), to the extent permitted by
law, from and against any and all losses, claims, damages, obligations,
assessments, penalties, judgments, awards, and other liabilities related to any
decision, recommendations or other actions taken prior to the date of this
Settlement Agreement (collectively, “Indemnification Liabilities”), and will
fully reimburse any Indemnified Party for any and all reasonable and documented
attorney fees and expenses (collectively, “Indemnity Expenses”), as and when
incurred, of investigating, preparing or defending any claim, action, suit,
proceeding or investigation, arising out of or in connection with any
Indemnification Liabilities incurred as a result of an Indemnified Party’s
entering into, or participation in the negotiations for, this Settlement
Agreement and the MOU and the transactions contemplated in connection herewith;
provided, however, that such indemnity shall not apply to any portion of any
such Liability or Expense that resulted from the gross negligence, illegal or
willful misconduct by an Indemnified Party; provided, further, that such
indemnity shall not apply to any Indemnification Liabilities to a GM Active
Employee for breach of the duty of fair representation.

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     Nothing in this Section 23 or any provision of this Settlement Agreement
shall be construed to provide an indemnity for any member or any actions of the
Committee; provided however, that an Indemnified Party who becomes a member of
the Committee shall remain entitled to any indemnity to which the Indemnified
Party would otherwise be entitled pursuant to this Section 23 for actions taken,
or for a failure to take actions, in any capacity other than as a member of the
Committee; and provided further, that nothing in this Section 23 or any other
provision of this Settlement Agreement shall be construed to provide an
indemnity for any Indemnification Liabilities or Indemnity Expenses relating to
(i) management of the assets of the New VEBA or (ii) for any action, amendment
or omission of the Committee with respect to the provision and administration of
Retiree Medical Benefits.
     If an Indemnified Party receives notice of any action, proceeding or claim
as to which the Indemnified Party proposes to demand indemnification hereunder,
it shall provide GM prompt written notice thereof. Failure by an Indemnified
Party to so notify GM shall relieve GM from the obligation to indemnify the
Indemnified Party hereunder only to the extent that GM suffers actual prejudice
as a result of such failure, but GM shall not be obligated to provide
reimbursement for any Indemnity Expenses incurred for work performed prior to
its receipt of written notice of the claim. If an Indemnified Party is entitled
to indemnification hereunder, GM will have the right to participate in such
proceeding or elect to assume the defense of such action or proceeding at its
own expense and through counsel chosen by GM (such counsel being reasonably
satisfactory to the Indemnified Party). The Indemnified Party will cooperate in
good faith in such defense. Upon the assumption by GM of the defense of any such
action or proceeding, the Indemnified Party shall have the right to participate
in, but not control the defense of, such action and retain its own counsel but
the expenses and fees shall be at its expense unless (a) GM has agreed to pay
such Indemnity Expenses, (b) GM shall have failed to employ counsel reasonably
satisfactory to an Indemnified Party in a timely manner, or (c) the Indemnified
Party shall have been advised by counsel that there are actual or potential
conflicting interests between GM and the Indemnified Party that require separate
representation, and GM has agreed that such actual or potential conflict exists
(such agreement not to be unreasonably withheld); provided, however, that GM
shall not, in connection with any such action or proceeding arising out of the
same general allegations, be liable for the reasonable fees and expenses of more
than one separate law firm at any time for all Indemnified Parties not having
actual or potential conflicts among them, except to the extent that local
counsel, in addition to its regular counsel, is required in order to effectively
defend against such action or proceeding. All such fees and expenses shall be
invoiced to GM, with such detail and supporting information as GM may reasonably
require, in such intervals as GM shall require under its standard billing
processes.
     If the Indemnified Party receives notice from GM that GM has elected to
assume the defense of the action or proceeding, GM will not be liable for any
attorney fees or other legal expenses subsequently incurred by the Indemnified
Party in connection with the matter.
     GM shall not be liable for any settlement of any claim against an
Indemnified Party made without GM’s written consent, which consent shall not be
unreasonably withheld. GM shall not,

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without the prior written consent of an Indemnified Party, which consent shall
not be unreasonably withheld or delayed, settle or compromise any claim, or
permit a default or consent to the entry of any judgment, that would create any
financial obligation on the part of the Indemnified Party not otherwise within
the scope of the indemnified liabilities.
     The termination of this Settlement Agreement shall not affect the indemnity
provided hereunder, which shall remain operative and in full force and effect.
Notwithstanding anything in this Section 23 to the contrary, this Section 23 of
the Settlement Agreement shall not be applicable with respect to any of the
matters covered by Article VI of the Securityholder and Registration Rights
Agreement.
     24. Costs and Attorneys Fees
          A. Fees and Expenses. GM agrees to support the application by the UAW
and Class Counsel to the Court for reimbursement by GM of reasonable attorney
and professional fees and expenses based on hours worked and determined in
accordance with the current market rates (not to include any upward adjustments
such as any lodestar multipliers, risk enhancements, success fee, completion
bonus or rate premiums) incurred in connection with the court proceedings to
obtain the Approval Order and any appeals therefrom. Approval of these fee
requests will be included in the Judgment.
          B. Fees After The Final Effective Date. Each party to this Settlement
Agreement agrees not to seek any other future fees or expenses from any other
party in connection with either Henry II or Henry I, except that the
Class Representatives or any other party prevailing in any action to enforce the
terms of this Settlement Agreement may seek such fees and costs as may be
allowed by law.
     25. Releases and Certain Related Matters
     A. In consideration of GM’s entry into this Settlement Agreement, and the
other obligations of GM contained herein, the Class Representatives, the
Class Counsel and the UAW hereby consent to the entry of the Judgment, which
shall be binding upon all Class Members pursuant to Rule 23(b)(2) of the Federal
Rules of Civil Procedure.
     B. As of the Final Effective Date, each UAW Releasee releases and forever
discharges each other UAW Releasee and each other Indemnified Party and shall be
forever released and discharged with respect to any and all rights, claims or
causes of action that such UAW Releasee had, has or hereafter may have, whether
known or unknown, suspected or unsuspected, concealed or hidden, arising out of
or based upon or otherwise related to (a) any of the claims arising, or which
could have been raised, in connection with either Henry I or Henry II concerning
the provision of Retiree Medical Benefits and the terms of this Settlement
Agreement, (b) any claims that this Settlement Agreement, any document referred
to or contemplated herein is not in compliance with applicable laws and
regulations, and (c) any action taken to carry out this Settlement Agreement in
accordance with this Settlement Agreement and applicable law.
     C. As of the Final Effective Date, the UAW Releasees release and forever
discharge GM, and its officers, directors, employees, agents, and subsidiaries,
and the GM Plan and its

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fiduciaries, with respect to any and all rights, claims or causes of action that
any UAW Releasee had, has or hereafter may have, whether known or unknown,
suspected or unsuspected, concealed or hidden, arising out of, based upon or
otherwise related to (a) any of the claims arising, or which could have been
raised, in connection with Henry I or Henry II concerning the provision of
Retiree Medical Benefits and the terms of this Settlement Agreement, (b) any
claims that this Settlement Agreement, any document referred to or contemplated
herein is not in compliance with applicable laws and regulations, and (c) any
action taken to carry out this Settlement Agreement in accordance with this
Settlement Agreement and applicable law.
     D. As of the Final Effective Date, the UAW Releasees release and forever
discharge the Existing External VEBA and the fiduciaries, trustees, and
committee that administer the Existing External VEBA, and the Existing Internal
VEBA and the fiduciaries, trustees, and committee that administer the Existing
Internal VEBA with respect to any and all rights, claims or causes of action
that any UAW Releasee had, has or hereafter may have, whether known or unknown,
suspected or unsuspected, concealed or hidden, arising out of, based upon or
otherwise related to (a) any of the claims arising, or which could have been
raised, in connection with Henry I or Henry II concerning the provision of
Retiree Medical Benefits and the terms of this Settlement Agreement, (b) any
claims that this Settlement Agreement, any document referred to or contemplated
herein is not in compliance with applicable laws and regulations, and (c) any
action taken by such fiduciaries, trustee and/or committees to carry out this
Settlement Agreement and to transfer assets of the Existing External VEBA and
Existing Internal VEBA to the New VEBA in accordance with this Settlement
Agreement and applicable law.
     E. As of the Final Effective Date, GM releases and forever discharges the
Class Representatives and Class Counsel from any and all claims, demands,
liabilities, causes of action or other obligations of whatever nature, including
attorney fees, whether known or unknown, that arise from their participation or
involvement with respect to the filing of the Henry II lawsuit or in the
negotiations leading to this Settlement Agreement. This release does not extend
to obligations arising from the terms of the Settlement Agreement itself.
     F. Neither the entry into this Settlement Agreement nor the consent to the
Judgment is, may be construed as, or may be used as, an Admission by or against
GM or any UAW Releasee of any fault, wrongdoing or liability whatsoever.
     26. Dispute Resolution
     A. Coverage. Any controversy or dispute arising out of or relating to, or
involving the enforcement, implementation, application or interpretation of this
Settlement Agreement shall be enforceable only by GM, the Committee, the UAW,
and if prior to the Implementation Date, Class Counsel, and the Approval Order
will provide that the Court will retain exclusive jurisdiction to resolve any
such disputes. Notwithstanding the foregoing, any disputes relating solely to
eligibility for participation or entitlement to benefits under the New Plan
shall be resolved in accordance with the applicable procedures such Plan shall
establish, and nothing in this Settlement Agreement precludes Class Members from
pursuing appropriate judicial review regarding such disputes; provided however,
that no claims related to Retiree Medical Benefits for claims incurred after the
Implementation Date may be brought against GM, any of its affiliates, or the GM
Plan.

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     B. Attempt at Resolution. Although the Court retains exclusive jurisdiction
to resolve disputes arising out of or relating to the enforcement,
implementation, application or interpretation of this Settlement Agreement, the
parties agree that prior to seeking recourse to the Court, the parties shall
attempt to resolve the dispute through the following process:
     (i) The aggrieved party shall provide the party alleged to have violated
this Settlement Agreement (“Dispute Party”) with written notice of such dispute,
which shall include a description of the alleged violation and identification of
the Section(s) of the Settlement Agreement allegedly violated. Such notice shall
be provided so that it is received by the Dispute Party no later than 180
calendar days from the date of the alleged violation or the date on which the
aggrieved party knew or should have known of the facts that give rise to the
alleged violation, whichever is later, but in no event longer than 3 years from
the date of the alleged violation.
     (ii) If the Dispute Party fails to respond within 21 calendar days from its
receipt of the notice, the aggrieved party may seek recourse to the Court;
provided however, that the aggrieved party waives all claims related to a
particular dispute against the Dispute Party if the aggrieved party fails to
bring the dispute before the Court within 180 calendar days from the date of
sending the notice. Provided, however, with respect to disputes relating to
assumptions or methodology used by the GM Actuary or the Actuary in calculating
the Cash Flow Projection as set forth in Exhibit A to this Settlement Agreement
the parties may not seek recourse to the Court but will submit such dispute to a
neutral actuary in accordance with Exhibit A.
     All the time periods in Section 26 of this Settlement Agreement may be
extended by agreement of the parties to the particular dispute.
     C. Alternate Means of Resolution. Nothing in this Section shall preclude
GM, the UAW, the Committee, or Class Counsel from agreeing on any other form of
alternative dispute resolution or from agreeing to any extensions of the time
periods specified in this Section.
     27. Submission of the Settlement Agreement and Class Action Notice Order
     The parties shall submit this Settlement Agreement to the Court and jointly
work diligently to have this Settlement Agreement approved by the Court as soon
as possible either through Henry II or Henry I as deemed appropriate. In either
event, the parties shall seek the Court’s approval of this Settlement Agreement
as superseding or satisfying the Henry I Settlement Agreement. The parties shall
seek from the Court an order (the “Notice Order”) providing that notice of the
hearing on the proposed settlement (the “Fairness Hearing”) shall be given at
GM’s expense to the Class, as defined herein, by mailing a copy of the notice
contemplated in the Notice Order to the Class, and by publishing a notice
approved by the Court in the Detroit News/Free Press weekend edition, and a
national newspaper such as USA Today. Until entry of Judgment, copies of this
Settlement Agreement shall also be made available for inspection by
Class Members at the Court, at the UAW offices in Detroit, Michigan, and at the
offices of Class Counsel.

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     28. Conditions
     This Settlement Agreement is conditioned upon the occurrence or resolution
of the conditions described in subparagraphs A, B, and C of this Section. The
failure of subparagraphs A and B will render this Settlement Agreement voidable
at the discretion of any party. The failure of subparagraph C will render this
Settlement Agreement voidable at the sole discretion of GM.
     A. Class Certification Order. A final order must be entered by the Court
certifying Henry II as a non-opt out class action, or amending and re-certifying
the Henry I class, such that the Class is defined as stated in Section 1 of this
Settlement Agreement. This condition shall be deemed to have failed upon the
Court’s issuance of a Class Order denying certification of Henry II as a class
action or denial of the motion to amend and re-certify the class in Henry I to
include the Class as defined in this Settlement Agreement, if applicable, or
upon issuance of a Class Order certifying Henry II as a class action or amending
and re-certifying a new class in Henry I but whose membership is less inclusive
than as described in this Settlement Agreement unless GM, the UAW and
Class Counsel agree in writing to such alternative class description.
     B. Judgment/Approval Order. A Judgment must be entered by the Court in
either Henry I or Henry II approving this Settlement Agreement in all respects
and as to all parties, including GM, the UAW, and the Class. The Judgment shall
be acceptable in form and substance to GM, the UAW and Class Counsel. This
condition shall be deemed to have failed upon issuance of an order disapproving
this Settlement Agreement, or upon the issuance of an order approving only a
portion of this Settlement Agreement but disapproving other portions, unless GM,
the UAW and Class Counsel agree otherwise in writing. Such Approval Order shall,
inter alia, contain the conditions set forth in this Settlement Agreement and
direct the transfer of all the assets and liabilities of the Existing External
VEBA into the New VEBA and the termination of the Existing External VEBA.
     C. Accounting Treatment Satisfactory to GM. The discussions between GM and
the SEC regarding accounting treatment shall have been completed in a manner
reasonably satisfactory to GM as set forth in Section 21 of this Settlement
Agreement.
     29. No Admission; No Prejudice
     A. Notwithstanding anything to the contrary, whether set forth in this
Settlement Agreement, the MOU, the Judgment, the Notice Order, any documents
filed with the Court in either Henry I or Henry II, any documents, whether
provided in the course of or in any manner whatsoever relating to the 2007
discussions between GM and UAW with respect to health care benefits or relating
to this Settlement Agreement or the MOU, whether distributed, otherwise made
available to or obtained by any person or organization, including without limit,
GM Active Employees, Class Members, or their spouses, surviving spouses or
dependents, or to the UAW or GM in the course of the negotiations that led to
entry into this Settlement Agreement, or otherwise:
     (a) GM denies and continues to deny any wrongdoing or legal liability
arising out of any of the allegations, claims and contentions made against GM in
Henry I or

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Henry II and in the course of the negotiation of the MOU or this Settlement
Agreement. Neither the MOU, nor any disputes or discussions between GM and the
UAW with respect to health care benefits or entry into this Settlement Agreement
occurring on or after January 1, 2007, nor this Settlement Agreement, nor any
document referred to or contemplated herein, nor any action taken to carry out
this Settlement Agreement, nor any retiree health care benefits provided
hereunder or any action related in any way to the ongoing administration of such
retiree health care benefits (collectively, the “Settlement Actions”) may be
construed as, or may be viewed or used as, an Admission by or against GM of any
fault, wrongdoing or liability whatsoever, or as an Admission by GM of the
validity of any claim or argument made by or on behalf of the UAW, Active
Employees, the Class or the Covered Group, that retiree health benefits are
vested. Without limiting in any manner whatsoever the generality of the
foregoing, the performance of any Settlement Actions by GM may not be construed,
viewed or used as an Admission by or against GM that, following the termination
of the December 16, 2005 Settlement Agreement in Henry I, it does not have the
unilateral right to modify or terminate retiree health care benefits.
     (b) Each of the UAW, the Class Representatives and the Class Members claim
and continue to claim that the allegations, claims and contentions made against
GM in Henry II have merit. Neither this Settlement Agreement nor any document
referred to or contemplated herein nor any Settlement Actions may be construed
as, or may be viewed or used as, an Admission by or against any of the UAW, the
Class Representatives or the Class Members of any fault, wrongdoing or liability
whatsoever or of the validity of any claim or argument made by or on behalf of
GM that GM has a unilateral right to modify or terminate retiree health care
benefits or that retiree health care benefits are not vested. Without limiting
in any manner whatsoever the generality of the foregoing, the performance of any
Settlement Actions by any of the UAW, the Class Representatives or the
Class Members, including without limitation, the acceptance of any retiree
health care benefits under any of the GM health care plans set forth in this
Settlement Agreement, may not be construed, viewed or used as an Admission by or
against any of the UAW, the Class Representatives or the Class that, following
the termination of the December 16, 2005 Settlement Agreement, GM has the
unilateral right to modify or terminate retiree health care benefits.
     (c) There has been no determination by any court as to the factual
allegations made against GM in Henry I or Henry II. Entering into this
Settlement Agreement and performance of any of the Settlement Actions shall not
be construed as, or deemed to be evidence of, an Admission by any of the parties
hereto, and shall not be offered or received in evidence in any action or
proceeding against any party hereto in any court, administrative agency or other
tribunal or forum for any purpose whatsoever other than to enforce the
provisions of this Settlement Agreement or to obtain or seek approval of this
Settlement Agreement in accordance with Rule 23 of the Federal Rules of Civil
Procedure and the Class Action Fairness Act of 2005.
     For the purposes of this Section 29, GM and the UAW refer to General Motors
Corporation and the Union, respectively, as organizations, as well as any and
all of their respective directors, officers, employees, and agents.

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     This Settlement Agreement and anything occurring in connection with
reaching this Settlement Agreement are without prejudice to GM, the UAW and the
Class. The parties may use this Settlement Agreement to assist in securing the
Judgment approving the settlement. It is intended that GM, the UAW, the
Committee, the Class Representatives, the Class, the Covered Group and
Class Counsel shall not use this Settlement Agreement, or anything occurring in
connection with reaching this Agreement, as evidence against GM, the UAW, the
Class or the Covered Group in any circumstance except where the parties are
operating under or enforcing this Settlement Agreement or the Judgment approving
this Settlement Agreement.
     30. Duration and Termination of Settlement Agreement
     This Settlement Agreement will remain in effect unless and until terminated
in accordance with this Section and as provided for in Section 28 of this
Settlement Agreement. If this Settlement Agreement is terminated, then the Henry
I Settlement Agreement and judgment shall remain in full force and effect and
the parties will be restored to their respective positions immediately before
execution of this Settlement Agreement except as specifically noted herein.
     Termination of this Settlement Agreement may occur as follows:
     (i) If Henry II is enjoined or stayed, or withdrawn, dismissed, or
otherwise terminated, or if the Judgment is denied in whole or in material part,
either GM, the UAW, or Class Counsel on behalf of the Class Representatives may
terminate this Settlement Agreement by 30 days’ written notice to the other
party; provided however, that the Settlement Agreement may not be terminated
pursuant to this subparagraph (i) if Henry II is stayed, withdrawn, or dismissed
by the parties because this Settlement Agreement is approved as a superseding
settlement through the Henry I litigation.
     (ii) If a Class Order satisfactory to the parties, as described in
Section 28.A of this Settlement Agreement, is entered by the Court and
subsequently overturned in whole or in part on appeal or otherwise, either GM,
the UAW, or Class Counsel on behalf of the Class may terminate this agreement
upon 30 days’ written notice to the other parties.
     (iii) If an Approval Order satisfactory to the parties, as described in
Section 28.B of this Settlement Agreement, is entered by the Court, but
overturned in whole or in part on appeal or otherwise, either GM, the UAW, or
Class Counsel on behalf of the Class Representatives may terminate this
Settlement Agreement upon 30 days’ written notice to the other parties.
     (iv) If after GM’s discussions with the SEC, GM does not believe the
accounting treatment for the New Plan and the New VEBA is reasonably
satisfactory to GM as set forth in Section 21 of this Settlement Agreement, GM
may immediately terminate this Settlement Agreement upon written notice to the
other parties.
     (v) If any court, agency or other tribunal of competent jurisdiction issues
a determination that any part of this Settlement Agreement is prohibited or
unenforceable, either GM, the UAW, or Class Counsel on behalf of the
Class Representatives may terminate this Settlement Agreement by 30 days’
written notice to the other party.

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Notwithstanding the foregoing, Sections 7.G, 8.H, 9.A, 9.B and 9.C to the extent
these Sections create rights and obligations relating to the non-occurrence of
the Final Effective Date as well as 22, 23, 26 and 29, shall survive the
termination of this Settlement Agreement.
          31. National Institute for Health Care Reform
     In recognition of the interest of GM, the UAW, the Class and the Covered
Group in improving the quality, affordability, and accountability of health care
in the United States, the parties agree that as a part of this settlement GM and
the UAW shall establish a National Institute for Health Care Reform
(“Institute”). The Institute shall be established and receive its first annual
funding payment as soon as practicable after the Initial Effective Date on the
basis set forth in the term sheet attached hereto as Exhibit G to this
Settlement Agreement. The annual funding payment will be payable in four equal
quarterly installments. The funding and operation of the Institute shall be
separate, independent and distinct from the New Plan and the New VEBA. Any
payments by GM to the Institute shall be governed exclusively by the term sheet
and are not in any way related to GM’s payment obligations as described in
Sections 8 and 12 of this Settlement Agreement. Additionally, Section 19 of this
Settlement Agreement shall not apply to any obligation GM may have to make
payments with regard to the Institute.
          32. Other Provisions
          A. References in this Settlement Agreement to “Sections,” “Paragraphs”
and “Exhibits” refer to the Sections, Paragraphs, and Exhibits of this
Settlement Agreement unless otherwise specified.
          B. The Court will, subject to Section 26 of this Settlement Agreement,
retain exclusive jurisdiction to resolve any disputes relating to or arising out
of or in connection with the enforcement, interpretation or implementation of
this Settlement Agreement. Each of the parties hereto expressly and irrevocably
submits to the jurisdiction of the Court and expressly waives any argument it
may have with respect to venue or forum non conveniens.
          C. This Settlement Agreement constitutes the entire agreement between
the parties regarding the matters set forth herein, and no representations,
warranties or inducements have been made to any party concerning this Settlement
Agreement, other than representations, warranties and covenants contained and
memorialized in this Settlement Agreement. This Settlement Agreement supersedes
any prior understandings, agreements or representations by or between the
parties, written or oral, regarding the matters set forth in this Settlement
Agreement.
          D. The captions used in this Settlement Agreement are for convenience
of reference only and do not constitute a part of this Settlement Agreement and
will not be deemed to limit, characterize or in any way affect any provision of
this Settlement Agreement, and all provisions of this Settlement Agreement will
be enforced and construed as if no captions had been used in this Settlement
Agreement.
          E. The Class Representatives expressly authorize Class Counsel to take
all appropriate action required or permitted to be taken by the
Class Representatives pursuant to this Settlement Agreement to effectuate its
terms and also expressly authorize Class Counsel to enter into any non-material
modifications or amendments to this Settlement Agreement on behalf of

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them that Class Counsel deems appropriate from the date this Settlement
Agreement is signed until the Effective Date; provided, however, that the
effectiveness of any such amendment which adversely impacts the level of
benefits to any Class Member as well as any material amendment shall be subject
to the approval of the Court.
     F. This Settlement Agreement may be executed in two or more counterparts.
All executed counterparts and each of them shall be deemed to be one and the
same instrument, provided that counsel for the parties to this Settlement
Agreement shall exchange among themselves original signed counterparts.
     G. No party to this Settlement Agreement may assign any of its rights
hereunder without the prior written consent of the other parties, and any
purported assignment in violation of this sentence shall be void. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
     H. Each of GM, the UAW, the Committee, Class Representatives, Class Members
and the Class Counsel shall do any and all acts and things, and shall execute
and deliver any and all documents, as may be necessary or appropriate to effect
the purposes of this Settlement Agreement.
     I. This Settlement Agreement shall be construed in accordance with
applicable federal laws of the United States of America.
     J. Any provision of this Settlement Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent any provision of this Settlement Agreement is
invalid or unenforceable as provided for in Section 32.J of this Settlement
Agreement , it shall be replaced by a valid and enforceable provision agreed to
by GM, the UAW and Class Counsel (which agreement shall not be unreasonably
withheld) that preserves the same economic effect for the parties under this
Settlement Agreement; provided however, that to the extent that such prohibited
or unenforceable provision cannot be replaced as contemplated and the
consequences of such prohibited or unenforceable provision causes this
Settlement Agreement to fail of its essential purpose then this Settlement
Agreement may be voided at the sole discretion of the party seeking the benefit
of the prohibited or unenforceable provision. Class Counsel is expressly
authorized to take all appropriate action to implement this provision.
     K. In the event that any payment referenced in this Settlement Agreement is
due to be made on a weekend or a holiday, the payment shall be made on the first
business day following such weekend or holiday.
     L. In the event that any legal or regulatory approvals are required to
effectuate the provisions of this Settlement Agreement, GM, the UAW, the Class,
the Committee and Class Counsel will fully cooperate in securing any such legal
or regulatory approvals.
     M. Any notice, request, information or other document to be given under
this Settlement Agreement to any of the parties by any other party shall be in
writing and delivered

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personally, or sent by Federal Express or other carrier which guarantees
next-day delivery, transmitted by facsimile, transmitted by email if in an Adobe
Acrobat PDF file, or sent by registered or certified mail, postage prepaid, at
the following addresses. All such notices and communication shall be effective
when delivered by hand, or, in the case of registered or certified mail, Federal
Express or other carrier, upon receipt, or, in the case of facsimile or email
transmission, when transmitted (provided, however, that any notice or
communication transmitted by facsimile or email shall be immediately confirmed
by a telephone call to the recipient.):
     If to the Class Representatives or Class Counsel, addressed to:
William T. Payne
Stember Feinstein Doyle & Payne, LLC
Pittsburgh North Office
1007 Mt. Royal Boulevard
Pittsburgh, PA 15222
Tel: (412) 492-8797
wpayne@stargate.net
     In each case with copies to:
John Stember
Edward Feinstein
Stember Feinstein Doyle & Payne, LLC
1705 Allegheny Building
429 Forbes Avenue
Pittsburgh, PA 15219
Tel: (412) 338-1445
jstember@stemberfeinstein.com
efeinstein@stemberfeinstein.com

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     If to GM, addressed to:
Diana Tremblay
GMNA Vice President of Labor Relations
General Motors Corporation
2000 Centerpoint Parkway
Pontiac, MI 48341
Tel: (248) 753-2243
     in each case with copies to:
Francis S. Jaworski
Office of the General Counsel
General Motors Corporation
Mail Code 482-C25-B21
300 Renaissance Center
P.O. Box 300
Detroit, MI 48265-3000
Tel: (313) 665-4914
francis.s.jaworski@gm.com
     If to UAW, addressed to:
Daniel W. Sherrick
General Counsel
International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America
8000 East Jefferson Avenue
Detroit, MI 48214
Tel: (313) 926-5216
     with a copy to:
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, New York 10006
Attention: A. Richard Susko/Richard S. Lincer/David I. Gottlieb
Tel: (212) 225-2000
Each party may substitute a designated recipient upon written notice to the
other parties.

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     IN WITNESS THEREOF, the parties hereto have caused this Settlement
Agreement to be executed by themselves or their duly authorized attorneys.

          AGREED:    
 
       
By:
  /s/ Francis S. Jaworski (with consent)   Date: February 21, 2008
 
 
 
   
 
  Francis S. Jaworski    
 
  Office of the General Counsel    
 
  General Motors Corporation    
 
  Mail Code 482-C25-B21    
 
  300 Renaissance Center    
 
  P.O. Box 300    
 
  Detroit, MI 48265-3000    
 
  Tel: (313) 665-4914    
 
  francis.s.jaworski@gm.com    
 
       
 
  COUNSEL FOR DEFENDANT    
 
  GENERAL MOTORS CORPORATION    
 
       
By:
  /s/ Daniel W. Sherrick (with consent)   Date: February 21, 2008
 
 
 
   
 
  Daniel W. Sherrick (P37171)    
 
  8000 East Jefferson Avenue    
 
  Detroit, MI 48214    
 
  Tel: (313) 926-5216    
 
       
 
  COUNSEL FOR PLAINTIFF    
 
  INTERNATIONAL UNION, UNITED AUTOMOBILE,    
 
  AEROSPACE AND AGRICULTURAL IMPLEMENT
WORKERS OF AMERICA    
 
       
By:
  /s/ William T. Payne (with consent)   Date: February 21, 2008
 
 
 
   
 
  William T. Payne    
 
  Stember Feinstein Doyle & Payne, LLC    
 
  Pittsburgh North Office    
 
  1007 Mt. Royal Boulevard    
 
  Pittsburgh, PA 15222    
 
  Tel: (412) 492-8797    
 
  wpayne@stargate.net    
 
       
 
  COUNSEL FOR PLAINTIFFS    
 
  HENRY, LAURIA, BAILEY, GENCO, MARLOW,
MILLER, SORIANO, HUBER AND THE CLASS    

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