SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND AMENDMENT TO SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
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CHRYSLER CORPORATION
(Name of Subject Company)
TRACINDA CORPORATION
(Bidder)
_________________
Common Stock, $1.00 Par Value
(Title of Class of Securities)
171196 10 8
(CUSIP Number of Common Stock)
Anthony L. Mandekic
Tracinda Corporation
4835 Koval Lane
Las Vegas, NV 89109
(702) 737-8060
(Names, Address and Telephone Numbers of Persons Authorized to Receive
Notices and Communications on Behalf of Bidder)
Copies to:
Stephen Fraidin, Esq.
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, NY 10004
(212) 859-8000
Stephen Silbert, Esq.
Christensen, White, Miller, Fink & Jacobs
2121 Avenue of the Stars
Eighteenth Floor
Los Angeles, CA 90067
(310) 553-3000
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This Amendment No. 2 amends and supplements the Tender Offer
Statement on Schedule 14D-1 (the "Schedule 14D-1") filed on June 26,
1995, relating to a tender offer by Tracinda Corporation, a Nevada
corporation (the "Offeror"), to purchase up to 14,000,000 shares of
common stock, par value $1.00 per share (including the associated
Preferred Stock Purchase Rights) of Chrysler Corporation, a Delaware
corporation (the "Company"), at a purchase price of $50.00 per Share,
net to the seller in cash.
Item 10. Additional Information.
(b) and (f) The information set forth in Exhibits (a) (10) and (11) is
incorporated herein by this reference.
(e) The litigation commenced by the Offeror in the United States
District Court for the Western District of Michigan against the
Commission was dismissed without prejudice.
Item 11. Material to be Filed as Exhibits.
Item 11 is hereby amended by adding thereto the following exhibits:
(a)(10) -Press Release issued by Offeror on June 27, 1995.
(a)(11) -Order granting petition for disclaimer of affiliation
from the Company granted to the Offeror by the Commissioner
of the Michigan Insurance Bureau dated June 27, 1995.
2
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SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated: June 28, 1995
TRACINDA CORPORATION
By: /s/ Anthony L. Mandekic
Name: Anthony L. Mandekic
Title: Secretary/Treasurer
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EXHIBIT INDEX
Exhibit Description
(a)(10) -Press Release issued by Offeror on June 27, 1995.
(a)(11) -Order granting petition for disclaimer of affiliation from
the Company granted to the Offeror by the Commissioner of the
Michigan Insurance Bureau dated June 27, 1995.
4
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FOR IMMEDIATE RELEASE
Contact: George Sard/Anna Cordasco Michael Claes
Sard Verbinnen & Co. Burson Marsteller
(212) 687-8080 (212) 614-5236
TRACINDA RECEIVES EXEMPTION FROM MICHIGAN INSURANCE STATUTE
LAS VEGAS, NV, June 27, 1995 -- Tracinda Corporation announced
today that the Commissioner of Insurance of the State of Michigan has
granted it a "disclaimer of affiliation" which will permit Tracinda to
complete its tender offer for up to 14 million shares of common stock
of Chrysler Corporation (NYSE: C) at a price of $50 per share.
The disclaimer would satisfy the condition to Tracinda's tender
offer relating to the Michigan Insurance law. Accordingly, Tracinda
will withdraw its lawsuit seeking to invalidate the insurance statute.
The tender offer is scheduled to be completed on July 25, 1995.
# # #
5
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STATE OF MICHIGAN
DEPARTMENT OF COMMERCE
INSURANCE BUREAU
Before the Commissioner of Insurance
In the matter of a disclaimer
by Tracinda Corporation with
respect to its acquisition of an Order No. 95-368-M
additional 14 million shares of
the common stock of Chrysler
Corporation
Issued and entered
this 27th day of June 1995
by D. Joseph Olson
Commissioner of Insurance
ORDER APPROVING DISCLAIMER
I
BACKGROUND
Tracinda Corporation ("Tracinda") currently owns 9.75% of the common
stock of Chrysler Corporation ("Chrysler"). On June 26, 1995, Tracinda
announced a tender offer by which it plans to acquire an additional 14
million shares of the common stock of Chrysler. The acquisition will
raise its percentage of ownership of the outstanding shares of
Chrysler's common stock to approximately 13.5%.
Chrysler owns two Michigan domiciled insurance companies, Chrysler
Insurance Company and Chrysler Life Insurance Company (the "Insurers").
Before the change in control of a Michigan insurer, the acquiring party
must secure the approval of the Commissioner of Insurance
("commissioner"). This applies also where a person acquires control of
a corporation, such as Chrysler, that owns or controls a Michigan
domestic
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insurer. There is a presumption of control if any person owns 10% or
more of the voting securities of a corporation.
In letters to the commissioner dated June 26, 1995 (the "Petition for
Disclaimer"), Tracinda contends that it will not control Chrysler or the
Insurers by its acquisition of the 14 million additional shares of
common stock. If so, the acquisition of these additional shares is not
subject to the approval of the commissioner. Tracinda the same date
also filed a lawsuit in federal district court challenging the validity
of the applicable state laws.
II
ISSUE
This key issue in this matter is whether, by its acquisition of 14
million additional shares of Chrysler common stock, Tracinda will gain
control of Chrysler as "control" is defined in Section 115 of the
Insurance Code of 1956, as amended ("Code"), MCL 500.115; MSA 24.1115.
III
ANALYSIS
The acquisition of control of a Michigan domestic insurer is governed by
the Holding Company Act, which is contained in Chapter 13 of the
Insurance Code of 1956, as amended ("Code"), MCL 500.1301 et seq.; MSA
24.11301 et seq. According to Section 1311(1) of the Code, MCL
500.1311(1); MSA 24.11311(1), this may occur through the direct
acquisition of control of the insurer or by acquiring control of a
person, such as Chrysler, that controls an insurer:
A person shall not enter into an agreement to merge with or
otherwise to acquire control of a domestic insurer or any person
controlling a domestic insurer unless, at the time an
offer,request, or invitation is made or an agreement is entered
into, or prior to the acquisition of the securities if no offer of
agreement is involved, the person has filed with the commissioner
and has sent to the insurer which has sent to its shareholders, a
statement containing the information required by this chapter and
the offer, request, invitation, agreement or acquisition has been
approved by the commissioner in the manner prescribed in this
chapter.
If Tracinda's purchase of an additional 14 million shares of Chrysler
common stock will give it control of Chrysler, then it must secure the
commissioner's approval of the tender
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offer. The definition of "control" is set forth in Section 115(b) of
the Code, MCL 500.115(b); MSA 24.1115(b), as follows:
"Control" including the terms "controlling", "controlled by", and
"under common control with" mean the possession or the contingent
or noncontingent right to acquire possession, direct or indirect,
of the power to direct or cause the direction of the management
and policies of a person, whether through the ownership of voting
securities, by contract including acquisition of assets or bulk
reinsurance, other than a commercial contract for goods or
nonmanagement services, by pledge or securities, or otherwise,
unless the power is the result of an official position with or
corporate office held by the person. Control is presumed to exist
if any person, by formal or informal arrangement, device, or
understanding, directly or indirectly, owns, controls, holds with
the power to vote, or holds proxies representing 10% or more of
the voting securities of any other person or for a mutual insurer
owns 10% or more of the insurer's surplus through surplus notes,
guarantee fund certificates or other evidence of indebtedness
issued by the insurer. This presumption may be rebutted by a
showing made in the manner provided by section 1332 that control
does not in fact exist. The commissioner may determine after
furnishing to all persons in interest notice and an opportunity to
be heard and making specific findings of fact to support the
determination that control in fact exists notwithstanding the
absence of a presumption to that effect.
After the purchase of the additional shares, Tracinda will own
approximately 13.5% of the common stock of Chrysler. Thus, control of
Chrysler would be presumed to exist. However, Tracinda has sought to
rebut this presumption by its Petition for Disclaimer filed in
accordance with Section 1332 of the Code, MCL 500.1332; MSA 24.11332,
which provides:
Any person may file with the commissioner a petition for
disclaimer of affiliation with an authorized insurer or an insurer
or any member of an insurance holding company system may file such
a petition for disclaimer. The petition for disclaimer shall
fully disclose all material relationships and bases for
affiliation between the person and the insurer as well as the
basis for disclaiming the affiliation and shall be subject to
approval by the commissioner. The burden of proof for
establishing that an affiliation does not exist shall rest with
the petitioner. After a petition for disclaimer is filed with and
approved by the commissioner, the insurer is relieved of any duty
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to register or report under this chapter that may arise out of the
insurer's relationship with the person unless the commissioner
subsequently disallows the disclaimer. The commissioner may
disallow a disclaimer that has been previously approved only after
furnishing all parties in interest with notice and opportunity to
be heard and after making specific findings of fact to support the
disallowance.
Tracinda sets forth several bases for disclaiming that its purchase of
the additional shares will give it control of Chrysler or the Insurers.
By information presented in its Petition for Disclaimer, Tracinda has
met its burden of proof. Principal reasons for this are as follows:
1. Under Chrysler's certificate of incorporation and bylaws, in most
cases the taking of any action by shareholders requires the
approval of a majority of the shares of common stock present and
voting.
2. Chrysler has resisted Tracinda attempts to purchase a majority of
its common stock. It has a "poison pill" shareholder rights plan.
On December 1, 1994, Chrysler raised the trigger point for the
poison pill from 10% to 15%. This shows that Chrysler itself does
not believe that Tracinda will obtain control by attaining 13.5%
of its common stock.
3. Approximately five times the number of shares held by Tracinda are
owned by independent financial institutions and investment funds.
Tracinda reports that it has no control over how they vote their
shares and does not have any arrangement with any of those
institutions or funds with respect to their Chrysler shares.
4. Tracinda has no officers or directors on the boards of Chrysler or
its Insurers.
In addition to establishing that it will not obtain control of Chrysler
or the Insurers by its purchase of an additional 14 million shares of
Chrysler's common stock, Tracinda provides certain assurances in its
Petition for Disclaimer regarding its future conduct with respect to the
Insurers. For the protection of policyholders and securityholders of
the Insurers, it is appropriate to condition any approval of the
disclaimer upon Tracinda's formal agreement to adhere to those
assurances. It should be further conditioned upon Tracinda's agreement
to immediately take action to dismiss the federal lawsuit in its
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entirety. Lastly, it should also be provided that this order approving
the disclaimer is limited to the stock purchase described in the
Petition for Disclaimer.
IV
ORDER
Therefore, it is ORDERED that:
1. The scope of this approval is strictly limited to Tracinda's
proposed acquisition of 14 million additional shares of Chrysler
common stock described in its Petition for Disclaimer. This
approval does not apply to any other future activity Tracinda may
choose to pursue with respect to Chrysler, including the purchase
of additional Chrysler shares or undertaking a proxy or consent
solicitation in which Tracinda would name a slate of candidates
for the Chrysler board.
2. The Petition for Disclaimer is approved effective the date that
Tracinda agrees to adhere to the conditions set forth below.
3. Tracinda shall not take any of the following actions with respect
to the Insurers without first obtaining the consent of the
commissioner:
a. change management personnel or otherwise be involved with
the Insurers,
b. seek any extraordinary dividends or distributions; or
c. pledge the assets or stock.
4. Tracinda shall immediately take action to dismiss without
prejudice the federal lawsuit in its entirety.
/s/ D. Joseph Olson
D. Joseph Olson
Commissioner of Insurance
AGREEMENT
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In consideration of the commissioner's issuing and entering this Order
Approving Disclaimer, Tracinda agrees to adhere to the conditions set
forth immediately above in Part IV of this order. In consideration of
Tracinda's dismissing without prejudice the federal lawsuit in its
entirety, the commissioner agrees to give Tracinda ten (10) calendar
days' notice of intent to file any lawsuit in state court against
Tracinda to enforce provisions of the Michigan Insurance Holding Company
Act and further agrees that if such a lawsuit is filed he will not
oppose its removal to federal court. The commissioner further agrees he
will not raise federal constitutional issues in any lawsuit filed in
state court with respect to Tracinda or contend that such federal
constitutional issues should be litigated in state court.
/s/ D. Joseph Olson /s/ Scott L. Mandel
D. Joseph Olson Scott L. Mandel
Commissioner of Insurance Foster, Swift, Collins &
Smith, P.C.
Attorneys for Tracinda
Date signed: June 27, 1995 Date signed: 6/27/95
