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FORM 10-K - ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
/X/ Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1993
or
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____________________ to _______________________
Commission file number 1-9161
CHRYSLER CORPORATION
(Exact name of registrant as specified in its charter)
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STATE OF DELAWARE 38-2673623
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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12000 Chrysler Drive, Highland Park, Michigan 48288-0001
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code (313) 956-5741
Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange on
Title of each class which registered
--------------------------------- -------------------------
Common Stock, $1.00 par value; New York Stock Exchange
Rights to Purchase Junior Participating Chicago Stock Exchange
Cumulative Preferred Stock, $1.00 Pacific Stock Exchange
par value Philadelphia Stock Exchange
13% Debentures Due 1997 New York Stock Exchange
9.60% Notes Due 1994 New York Stock Exchange
10.95% Debentures Due 2017 New York Stock Exchange
10.40% Notes Due 1999 New York Stock Exchange
Auburn Hills Trust Guaranteed
Exchangeable Certificates Due 2020 New York Stock Exchange
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continued
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The Common Stock of the Registrant is listed for trading on the following
additional stock exchanges:
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Montreal Stock Exchange Montreal, Quebec, Canada
Toronto Stock Exchange Toronto, Ontario, Canada
The Stock Exchange, London London, England
Paris Stock Exchange Paris, France
Geneva Stock Exchange Geneva, Switzerland
Basel Stock Exchange Basel, Switzerland
Zurich Stock Exchange Zurich, Switzerland
Frankfurt Stock Exchange Frankfurt, Germany
Tokyo Stock Exchange Tokyo, Japan
Vienna Stock Exchange Vienna, Austria
Berlin Stock Exchange Berlin, Germany
Munich Stock Exchange Munich, Germany
Amsterdam Stock Exchange Amsterdam, Netherlands
Luxembourg Stock Exchange Luxembourg
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of voting Common Stock held by nonaffiliates of the
registrant was approximately $18.84 billion as of December 31, 1993.
The registrant had 353,728,225 shares of Common Stock outstanding as of
December 31, 1993.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information in Chrysler Corporation's definitive Proxy Statement for
its 1994 Annual Meeting of Stockholders, which will be filed with the
Securities and Exchange Commission pursuant to Regulation 14A, not later than
120 days after the end of the fiscal year, is incorporated by reference in Part
III (Items 10, 11, 12 and 13) of this Form 10-K.
2
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CHRYSLER CORPORATION
FORM 10-K
YEAR ENDED DECEMBER 31, 1993
INDEX
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Page No.
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PART I.
Item 1. Business 4-15
Item 2. Properties 15-16
Item 3. Legal Proceedings 16-17
Item 4. Submission of Matters to a Vote
of Security Holders 17
Executive Officers of the Registrant 18
(Unnumbered Item)
PART II.
Item 5. Market for the Registrant's Common Equity
and Related Stockholder Matters 19
Item 6. Selected Financial Data 20
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations 21-26
Item 8. Financial Statements and Supplementary Data 27-55
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 56
PART III.
Items 10, 11, 12 and 13. (Incorporated by reference
from Chrysler Corporation's definitive
Proxy Statement which will be filed with
the Securities and Exchange Commission,
pursuant to Regulation 14A, not later
than 120 days after the end of the fiscal
year) 56
PART IV.
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 56-70
SIGNATURES 71-73
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3
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PART I
Item 1. BUSINESS
CHRYSLER CORPORATION
GENERAL
Chrysler Corporation was incorporated under the laws of the State of
Delaware on March 4, 1986, and is the continuing corporation of mergers into
itself of a number of its operating subsidiaries, including Chrysler Motors
Corporation, which was originally incorporated in 1925.
Chrysler Corporation and its consolidated subsidiaries ("Chrysler")
operates in two principal industry segments: automotive operations and
financial services. Automotive operations include the research, design,
manufacture, assembly and sale of cars, trucks and related parts and
accessories. Financial services include the operations of Chrysler Financial
Corporation and its consolidated subsidiaries ("CFC"), which is engaged in
wholesale and retail vehicle financing, servicing nonautomotive leases and
loans, and property, casualty and other insurance. Chrysler also participates
in short-term vehicle rental activities through its subsidiaries (the "Car
Rental Operations") and manufactures electronics products and systems through
its Chrysler Technologies Corporation subsidiary. Chrysler's principal
executive offices are located at Chrysler Center, 12000 Chrysler Drive,
Highland Park, Michigan 48288-0001. The telephone number of those offices is
(313) 956-5741.
AUTOMOTIVE OPERATIONS
Chrysler and its subsidiaries manufacture, assemble and sell cars and
trucks under the brand names Chrysler, Dodge, Plymouth, Eagle and Jeep, and
related automotive parts and accessories, primarily in the United States,
Canada and Mexico. Passenger cars are offered in various size classes and
models. Chrysler produces trucks in light-duty, sport-utility and van/wagon
models, which constitute the largest segments of the truck market. Chrysler
also purchases and distributes under the Dodge, Plymouth and Eagle brand names
certain passenger cars and trucks manufactured in Japan by Mitsubishi Motors
Corporation ("MMC"), as well as cars manufactured in the United States by MMC's
subsidiary, Diamond-Star Motors Corporation ("Diamond-Star").
Although Chrysler currently sells most of its vehicles in
the United States, Canada and Mexico, Chrysler also participates in other
international markets through its wholly-owned subsidiary, Chrysler Motors de
Venezuela, S.A., and indirectly through its minority investments in Beijing
Jeep Corporation, Ltd. and Arab American Vehicles Company. In addition,
Chrysler distributes in Europe and other world markets vehicles produced in
North America and by Eurostar Automobilwerk Ges.m.b.H & Co. KG ("Eurostar"), a
joint venture between Chrysler and Steyr-Daimler-Puch Fahrzeugtechnik of Graz,
Austria. Eurostar began producing and distributing Chrysler minivans in March
1992. During 1993, Chrysler also entered into an agreement with
Steyr-Daimler-Puch Fahrzeugtechnik to assemble up to 47,000 right and left-hand
drive Jeep Grand Cherokees per year in Austria beginning in late 1994.
Chrysler's automotive operations, including product
design and development efforts, manufacturing operations and sales, are
conducted mainly in North America. Chrysler's principal domestic competitors
in the United States are General Motors Corporation and Ford Motor Company. In
addition, a number of Japanese automotive companies own and operate
manufacturing and/or assembly facilities in the United States ("transplants")
and there are a number of other foreign manufacturers that distribute
automobiles and light-duty trucks in the United States.
Chrysler's plan is to focus on its core automotive
business. As part of this plan, Chrysler has sold certain assets and
businesses which are not related to its core automotive business, and may sell
other such assets in the future.
The automotive industry in North America is highly
competitive with respect to a number of factors, including product quality,
price, appearance, size, special options, distribution organization,
warranties, reliability, fuel economy, dealer service and financing terms. As
a result, Chrysler's ability to increase vehicle prices and the effectiveness
of its use of special sales incentives to improve sales are significantly
affected by the pricing actions and special sales programs of its principal
competitors. Moreover, the introduction of new products by other manufacturers
may adversely affect the market shares of competing products made by Chrysler.
Also, many of Chrysler's competitors have larger worldwide sales volumes and
greater financial resources, which may place Chrysler at a competitive
disadvantage in responding to substantial changes in consumer preferences or
governmental regulations that require major additional capital expenditures.
Adverse economic conditions in North America may also be more readily absorbed
by Chrysler's larger and more diversified competitors.
4
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Item 1. BUSINESS - Continued Part I - Continued
Automotive Operations - Continued
Chrysler's long-term profitability depends upon its
ability to introduce and market its new products successfully. The success of
Chrysler's new products will depend on a number of factors, including the
economy, competition, consumer acceptance, Chrysler's ability to fund its new
product development and facility modernization programs, the effect of
governmental regulation and the strength of Chrysler's marketing and dealer
networks. As both Chrysler and its competitors plan to introduce new products,
Chrysler cannot predict the market shares its new products will achieve.
Moreover, Chrysler is substantially committed to the types of vehicles
contemplated by its product plans and would be adversely affected by
developments requiring a major shift in product design.
The Automotive Industry in the United States
The tables below set forth (a) comparative market share
data for domestic retail sales of cars and trucks for the major domestic
manufacturers (including cars and trucks imported by them) and for
foreign-based manufacturers and (b) unit sales of passenger cars and trucks
(including imports to the United States) by Chrysler.
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Year Ended December 31
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1993 1992 1991 1990 1989
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U.S. Car Market Share (1): (percent of total industry)
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U.S. Manufacturers (Including Imports):
General Motors 34.1% 34.6% 35.6% 35.6% 35.2%
Ford 22.1 21.6 20.1 20.9 22.3
Chrysler 9.8 8.3 8.6 9.3 10.4
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Total U.S. Manufacturers 66.0 64.5 64.3 65.8 67.9
Foreign-Based Manufacturers (2):
Japanese 29.1 30.1 30.4 27.8 25.3
All Other 4.9 5.4 5.3 6.4 6.8
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Total Foreign-Based Manufacturers 34.0 35.5 35.7 34.2 32.1
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Total 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
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U.S. Truck Market Share (1) (3):
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U.S. Manufacturers (Including Imports):
General Motors 31.4% 32.2% 32.9% 34.3% 33.6%
Ford 30.5 29.7 28.9 29.2 28.7
Chrysler 21.4 21.1 18.4 17.3 19.4
All Other 1.9 1.8 2.0 2.0 2.3
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Total U.S. Manufacturers 85.2 84.8 82.2 82.8 84.0
Foreign-Based Manufacturers (2):
Japanese 13.2 13.9 16.5 15.7 14.4
All Other 1.6 1.3 1.3 1.5 1.6
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Total Foreign-Based Manufacturers 14.8 15.2 17.8 17.2 16.0
----- ----- ----- ----- -----
Total 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
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Unit Sales: (In thousands)
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U.S. Car Retail Deliveries (1):
Total Industry 8,518 8,214 8,174 9,293 9,768
Chrysler 834 680 703 861 1,020
U.S. Truck Retail Deliveries (1) (3):
Total Industry 5,681 4,904 4,367 4,854 5,077
Chrysler 1,214 1,033 805 837 984
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____________________________________
(1) All U.S. retail sales data are based on publicly available information on
manufacturers from the American Automobile Manufacturers Association and
data on foreign company imports from Ward's Automotive Reports, a trade
publication.
(2) "Foreign-Based Manufacturers" include imports and vehicles assembled and
sold in the United States by foreign companies.
(3) U.S. truck retail market share includes minivans.
5
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Item 1. BUSINESS - Continued Part I - Continued
Automotive Operations - Continued
The Automotive Industry in the United States - Continued
Competition from foreign car and truck manufacturers, particularly
Japanese manufacturers, in the form of both exports to the United States and
sales by transplants, has been significant in recent years. The market share
for foreign passenger cars sold in the United States (including transplants)
increased from 32.1 percent in 1989 to 35.7 percent in 1991 but decreased to
34.0 percent during 1993. The market share for foreign trucks sold in the
United States (including transplants) increased from 16.0 percent in 1989 to
17.8 percent in 1991, but decreased to 14.8 percent during 1993. The Japanese
transplants enjoy several competitive advantages over domestic producers, such
as more flexible work rules, a younger, lower-cost work force and the absence
of significant numbers of retired workers and their attendant costs. Sales of
vehicles assembled in the United States by Japanese manufacturers have
increased to approximately 14.8 percent of the U.S. passenger car market and
5.4 percent of the U.S. truck market in 1993 from 14.1 percent and 5.3 percent,
respectively, in 1992.
Japanese manufacturers' exports to the United States are currently
subject to voluntary restraints limiting exports of new passenger cars
(excluding station wagons) from Japan to the United States. These restraints
have been in effect since 1981 and will continue in effect through March 1994
by a unilateral decision of the Japanese Government. For the 12 months ended
March 31, 1993, the Japanese export limit was 1.65 million cars while actual
exports during that period were 1.56 million cars. For the 12 months ending
March 31, 1994, Japanese exports are still limited to 1.65 million cars.
Estimated exports during the nine month period ended December 31, 1993 were
approximately 912,000 cars. There are no assurances as to what the restraints
on exports from Japan to the United States, if any, will be after March 31,
1994. A significant increase in the number of vehicles manufactured in Japan
and exported to the United States could adversely affect Chrysler's sales
levels and profitability.
Chrysler Canada Ltd.
Chrysler's consolidated subsidiary, Chrysler Canada Ltd. ("Chrysler
Canada"), operates manufacturing and assembly facilities and sales and
distribution networks in Canada. Chrysler Canada, whose operations are
substantially integrated with Chrysler's U.S. operations, manufactures
components and assembles front-wheel-drive minivan/wagons, front-wheel-drive
mid-size and large sedans, and rear-wheel-drive van/wagons. Chrysler Canada
began production of the mid-size and large sedans at its Bramalea, Ontario
facility in mid-1992 and early 1993, respectively. The Brampton, Ontario
facility was closed in 1992 when production of the Jeep Wrangler sport-utility
vehicle was transferred to Toledo, Ohio.
In 1993, Chrysler Canada produced 643,371 vehicles, of which 566,388
were sold outside of Canada. In 1992, Chrysler Canada produced 464,565
vehicles, of which 416,204 were sold outside of Canada. Chrysler Canada's
retail sales totaled 226,819 vehicles in 1993 and 205,071 vehicles in 1992, of
which 158,373 and 156,244, respectively, were produced outside of Canada. In
1993, Chrysler Canada's factory unit sales to Canadian dealerships accounted
for approximately 9.1 percent of Chrysler's total car and truck sales, compared
with 8.9 percent in 1992.
Chrysler Canada's retail unit sales of cars accounted for 14.7 percent
and 12.3 percent of the Canadian car market in 1993 and 1992, respectively. In
1993, retail unit sales of trucks accounted for 26.3 percent of the Canadian
truck market compared with 25.1 percent in 1992. In 1993, Chrysler Canada
ranked third in the Canadian industry in retail unit sales of both cars and
trucks.
Chrysler de Mexico
Chrysler's consolidated subsidiary, Chrysler de Mexico S.A. ("Chrysler
Mexico"), operates assembly and manufacturing facilities in Mexico, producing
vehicles and components for both Mexican and export markets. Chrysler Mexico
also distributes in the Mexican market finished vehicles imported from
Chrysler's U.S. and Canadian operations.
Chrysler Mexico's vehicle sales accounted for 16.0 percent of the
wholesale car market and 17.2 percent of the wholesale truck market in 1993,
compared with 19.7 percent and 19.6 percent, respectively, in 1992. Within the
Mexican industry, Chrysler Mexico's wholesale unit sales ranked third in cars
and trucks in both 1993 and 1992. In 1993, overall wholesale industry sales in
Mexico were 585,200 units, compared with 710,623 units in 1992, a decrease of
17.6 percent.
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Item 1. BUSINESS - Continued Part I - Continued
Automotive Operations - Continued
Chrysler de Mexico - Continued
In 1993, Chrysler Mexico exported 104,712 automobiles, consisting of
Plymouth Acclaims, Dodge Spirits, Dodge Shadow coupes and convertibles,
Plymouth Sundances and Chrysler LeBaron sedans, compared with 70,395 units in
1992. In 1993, Chrysler Mexico also exported 36,660 trucks, consisting of
Dodge Ramchargers, Dodge Club Cab pickups, and selected models of the all-new
full-size Dodge Ram pickup trucks, compared with 30,331 units in 1992. In
addition, Chrysler Mexico provides certain major automobile components to
Chrysler, including engines and air conditioner condensers.
North American Free Trade Agreement
The North American Free Trade Agreement ("NAFTA") unites Mexico, Canada
and the United States into the world's largest trading region, a market with
more than 360 million consumers. NAFTA provides for the phase-out of trade
regulations which restricted vehicle imports and exports between Mexico and the
U.S. and Canada. Mexico represents a growing economy, and Chrysler ranks third
among worldwide manufacturers in wholesale unit sales in the Mexican car and
truck market. While Chrysler's management believes that NAFTA may result in
overall improvements in the North American automobile industry in the future,
the immediate impact of the agreement cannot be determined.
International Operations
Chrysler's automotive operations outside North America consist
primarily of Eurostar's manufacturing operations in Austria and the export of
finished vehicles and component kits produced in North America to independent
foreign distributors and local manufacturers. Chrysler has equity interests
in companies with manufacturing and assembly facilities in China, Venezuela,
and Egypt, and has established joint ventures with certain other foreign
manufacturers.
Chrysler's European shipments were 60,566 in 1993, consisting primarily
of 33,109 minivans and 21,895 Jeep vehicles, an increase of 11 percent from
1992. In addition, Chrysler sold 46,354 units in other world markets, primarily
in the Middle East, Taiwan and to U.S. military personnel. Chrysler continues
to export its newly designed Jeep Grand Cherokee, mid-size sedans and
right-hand drive Jeep Cherokees. In addition, Chrysler plans to export the new
Neon and Stratus passenger cars that will be introduced during 1994. Chrysler
also exported 19,946 kits to worldwide affiliates for overseas assembly of Jeep
vehicles. Most of the kits were shipped to Beijing Jeep Corporation Ltd. in
China and Chrysler's wholly-owned subsidiary in Venezuela.
Eurostar began production and distribution of Chrysler minivans in
March 1992 for the European market. Eurostar sold 33,738 minivans in 1993,
compared to 15,100 in 1992. The Eurostar facility launched a second shift
during 1993 and has a capacity of 55,000 vehicles per year. During 1993,
Chrysler entered into an agreement with Steyr-Daimler-Puch Fahrzeugtechnik to
assemble up to 47,000 right and left-hand drive Jeep Grand Cherokees annually
in Austria for the European and other world markets beginning in late 1994.
Mitsubishi Motors Corporation
Chrysler imports and distributes in the United States and Canada
selected models of passenger cars and light-duty trucks manufactured by MMC in
Japan and by its affiliates overseas. In 1993, Chrysler sold 69,646
MMC-manufactured vehicles in the United States (of which 67,988 were passenger
cars) representing 3.4 percent of Chrysler's U.S. retail vehicle sales during
1993. In 1992, Chrysler sold 67,474 MMC-manufactured vehicles in the United
States (of which 62,174 were passenger cars), representing 3.9 percent of
Chrysler's U.S. retail vehicle sales. In addition to passenger cars and light-
duty trucks, Chrysler purchases 3.0-liter V-6 engines for use in the production
of the Dodge Caravan and Plymouth Voyager minivans and other vehicles, and
intends to buy approximately 428,000 of these engines from MMC during the 1994
model year.
7
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Item 1. BUSINESS - Continued Part I - Continued
Automotive Operations - Continued
Mitsubishi Motors Corporation - Continued
Diamond-Star produces small sporty cars in the United States for
Chrysler and Mitsubishi Motor Sales of America ("MMSA"). The Plymouth Laser
and Eagle Talon (marketed in the United States and Canada) and the Mitsubishi
Eclipse (marketed in the United States, Europe and Japan) are produced by
Diamond-Star. Chrysler sold its 50 percent interest in Diamond-Star to MMC,
its partner in the joint venture, in October 1991. Pursuant to a distribution
agreement that terminates in July 1999, Chrysler retains the right to purchase
a portion of Diamond-Star's production capacity. As long as Chrysler purchases
at least 60,000 units per year, Chrysler will also have co-exclusive rights for
the Eagle Talon replacement vehicle and exclusive rights for a replacement for
the Dodge Daytona and Chrysler LeBaron Coupe, both of which are planned for the
1994-95 period. In addition, Chrysler will provide engines and transmissions
for use in a portion of Diamond-Star's FJ-platform vehicles. During 1993,
Diamond-Star produced 135,610 units, of which 38,432 were for Chrysler and
97,178 were for MMSA. In 1992, Diamond-Star produced 140,156 units, of which
57,261 were for Chrysler and 82,895 were for MMSA. Chrysler's sales of
Diamond-Star cars in 1993 and 1992 represented 2.1 and 3.6 percent,
respectively, of Chrysler's U.S. retail vehicle sales volume in each period.
Under the terms of the United States Distribution Agreement ("USDA") in
effect between Chrysler and MMC, which terminates in March 1998, Chrysler and
MMSA share co-exclusive rights to distribute various MMC passenger car and
light-duty truck models which are available for sale in the United States. In
practice, Chrysler and MMSA share the distribution of certain models and
exclusively distribute other models. In connection with Chrysler's sale of its
50 percent interest in Diamond-Star to MMC in October 1991, the USDA was
amended to reassign a portion of MMC's total voluntary restraint agreement
quota from Chrysler to MMSA and to designate three vehicles as exclusive models
for MMSA.
Agreements similar to the USDA are in effect covering the Canadian
market. In practice, Chrysler Canada acts as sole distributor of MMC products.
The Japanese Government does not presently limit exports from Japan to the
Canadian vehicle market. Chrysler Canada distributes a two-door and four-door
subcompact Dodge and Plymouth Colt 100 and the Eagle Vista car imported from
MMC Sittipol Motors of Thailand (a MMC joint venture).
In 1992 and 1993, Chrysler sold 93.9 million shares of its equity
interest in MMC for approximately $544 million in cash, net of related
expenses, ending its equity interest in MMC.
Segment Information
Industry segment and geographic area data for 1993, 1992 and 1991 are
summarized in Part II, Item 8, Notes to Consolidated Financial Statements, Note
18.
Seasonal Nature of Business
Reflecting retail sales fluctuations of a seasonal nature, production
varies from month to month in the automotive business. In addition, the
changeover period related to new model introductions has traditionally occurred
in the third quarter of each year. Accordingly, third quarter operating
results are generally less favorable than those in the other quarters of the
year.
Automotive Product Plans
In the late 1970's and early 1980's, Chrysler concentrated on the
development of fuel efficient, front-wheel drive cars.
Chrysler created a new market segment with the introduction of the
first minivan in 1983. The Dodge Caravan, Plymouth Voyager, and Chrysler Town
and Country were redesigned for the 1991 model year, freshened slightly for the
1994 model year and have captured 46.7 percent of the U.S. minivan market
segment for the 1993 calendar year versus 50.5 percent in 1992 despite new
competitive entries in the segment.
The 1987 acquisition of American Motors Corporation ("AMC") provided
Chrysler with the highly regarded Jeep nameplate and four-wheel-drive
technology. In the spring of 1992, the Jeep division introduced the all new
Grand Cherokee as an upscale companion to the existing Jeep lineup. The Jeep
Grand Cherokee and the Jeep Cherokee have collectively attained 32.5% of the
small sport-utility segment in calendar year 1993, up from 24.7% in 1992.
8
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Item 1. BUSINESS - Continued Part I - Continued
Automotive Operations - Continued
Automotive Product Plans - Continued
In 1989, Chrysler initiated a strategic plan to replace all of its
passenger car platforms and its full-size pickup truck by 1995. Chrysler's
objective is to maintain and improve its positions in the minivan, small
sport-utility, and full-size pickup markets, while strengthening its passenger
car offerings.
To accomplish this goal, Chrysler changed the organizational structure
of its automotive design and development efforts by establishing
cross-functional product development groups called "platform teams." There are
four Platform teams: Small Car, Large Car, Minivan, and Jeep and Truck. Each
team includes designers, engineers, purchasing agents, manufacturing personnel,
financial analysts, sales and marketing personnel and supplier representatives.
Chrysler's platform team system is designed to (a) improve
communications and enhance collaborative problem solving as early as possible
in the design and development process; (b) reduce the cycle time required to
design and develop new vehicles, enhancing Chrysler's ability to respond to
market changes more quickly; (c) improve the quality of its new products
through the identification of potential problems early in the development
process; and (d) reduce the costs of developing new vehicle lines.
In the fall of 1992, Chrysler introduced the first of its all-new
passenger car platforms resulting from the new platform team concept. The
Chrysler Concorde, Dodge Intrepid, and Eagle Vision compete primarily in the
important upper-middle segment. These cars employ a "cab-forward" design, with
the windshield steeply raked forward over the front axle. This design creates
more interior passenger space without significantly increasing vehicle size or
weight. The early success of these vehicles resulted in expanding production
to a second facility. Chrysler's share of the basic middle segment was 9.7
percent for 1993, compared to 5.3 percent for 1992. In early 1993, a new
Chrysler New Yorker and a touring derivative called the LHS were introduced
based on this platform.
In 1993, Dodge introduced the first truck designed under this platform
team system, a new full-size Ram pickup. This new pickup also marks the first
full-scale production use of a new "big gas" V-10 engine which was also used as
a basis for the design of the Dodge Viper V-10 engine.
The Small Car platform team introduced the subcompact Dodge and
Plymouth Neon in January 1994. The Neon introduces an all new family of
16-valve 4-cylinder engines, provides both driver and passenger airbags, and
also applies the "cab-forward" design used by the successful upper-middle
segment vehicles.
The Large Car platform team is expected to introduce, in the third
quarter of 1994, an all new compact car marketed as the Chrysler Cirrus and
Dodge Stratus. The Cirrus and Stratus will introduce two new engines, a
2.4-liter 16-valve double overhead cam 4-cylinder engine and a 2.5-liter
24-valve single overhead cam V-6 engine, provide driver and passenger airbags,
dynamic side impact protection, and also apply the "cab-forward" design used by
the successful upper-middle segment vehicles.
Automotive Marketing
New passenger cars and trucks are sold at retail principally by dealers
who have sales and service agreements with the manufacturer. The dealers
purchase cars, trucks, parts and accessories from the manufacturer for sale to
retail customers. In the United States, Chrysler had 4,726 dealers at December
31, 1993 compared with 4,779 at December 31, 1992. The U.S. dealers sold an
average of 433 vehicles per dealer in 1993 compared with an average of 358 in
1992. Chrysler Canada had 601 dealers at December 31, 1993 compared with 606
dealers at December 31, 1992. The Canadian dealers sold an average of 377 and
338 vehicles per dealer in 1993 and 1992, respectively.
Chrysler's ability to maintain, expand and improve the quality of its
dealer organization will have an important impact on future sales. Chrysler
maintains programs to provide dealership operating capital by equity
investments where sufficient private capital is not available. The programs
anticipate that the dealer receiving such assistance will eventually purchase
Chrysler's equity investment from the dealer's share of the dealership profits.
Chrysler's equity interest in U.S. and Canadian dealerships totaled $37 million
in 91 dealerships as of December 31, 1993, compared with $40 million in 116
dealerships as of December 31, 1992.
Chrysler continues to focus on improving customer satisfaction
throughout the corporation. Chrysler has improved their Owner Relations
capabilities as they relocated the group to modern facilities with the latest
technology and added 49 representatives to assist owners requesting information
or assistance.
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Item 1. BUSINESS - Continued Part I - Continued
Automotive Operations - Continued
Manufactured and Purchased Components and Materials
Chrysler manufactures most of its requirements for eight-cylinder,
8.0-liter V-10, 3.5-liter V-6, 3.9-liter V-6, 3.8-liter V-6, 3.3-liter V-6,
in-line six-cylinder, four-cylinder, and derivative gasoline engines for cars
and trucks, gray iron casting for cylinder blocks for such engines, stampings
for passenger car and truck bodies, transmissions for cars and trucks,
automatic and manual transaxles, engine controllers, alternators, voltage
regulators, distributors, instrument clusters, radios and automotive air
conditioners, and processes about two-thirds of its requirements for fabricated
glass parts.
In the second quarter of 1993, Chrysler sold the plastics operations of
its Acustar division for $132 million, net of related expenses.
Chrysler uses approximately 16,600 suppliers for services, materials,
parts and components, and purchases from one or more of such firms
substantially all of its requirements for 3.0-liter V-6 engines and 5.9-liter
diesel engines, constant velocity joints, batteries, bearings, axles, bumpers,
carpets, cloth for trim and seat covers, vinyl trim and seat cushion back
covers, cylinder heads for four, six, and eight cylinder gasoline engines,
decorative die castings, fuel management systems, malleable iron, nuts, bolts
and other fasteners, radiators, raw glass, seat belts, steel, tires, wheels and
certain other items. Chrysler purchases a larger portion of its materials,
parts and other components from unaffiliated suppliers than do its principal
domestic competitors. Chrysler expects to continue purchasing its requirements
for these items rather than manufacturing them.
Government Regulation
Vehicle Regulation
Fuel economy, safety and emissions regulations and standards applicable
to motor vehicles have been issued from time to time under a number of federal
statutes, including the National Traffic and Motor Vehicle Safety Act of 1966
(the "Safety Act"), the Clean Air Act, Titles I and V of the Motor Vehicle
Information and Cost Savings Act and the Noise Control Act of 1972. In
addition, the State of California has promulgated exhaust emission standards,
some of which are more stringent than the federal standards. Other states may,
under the Clean Air Act, adopt vehicle emission standards identical to those
adopted by the State of California. The States of New York and Massachusetts
have adopted such standards and several other states are considering similar
action. The American Automobile Manufacturers Association and the Association
of International Automobile Manufacturers have challenged the legality of
portions of both states' action on behalf of a number of vehicle manufacturers,
including Chrysler.
Vehicle Emissions Standards - Under the Clean Air Act, auto
manufacturers are required, among other things, to reduce significantly
tailpipe emissions of polluting gases from automobiles and light trucks and to
increase the length of time vehicles are subject to recall for failure to meet
emission standards to ten years or 100,000 miles, whichever occurs first. This
Act imposes standards for model years through 2003 that require further
significant reductions in motor vehicle emissions. This Act also may require
production of certain vehicles capable of operating on fuels other than
gasoline or diesel fuel (alternative fuels) under a pilot test program to be
conducted principally in California beginning in the 1996 model year. Chrysler
is actively pursuing the development of flexible fuel vehicles capable of
operating on both gasoline and M-85 methanol blend fuels as well as development
of vehicles capable of operating on compressed natural gas.
The California Air Resources Board has received federal approval,
pursuant to the Clean Air Act, for a series of passenger car and light truck
emission standards, effective through the 2003 model year, that are more
stringent than those prescribed by the Clean Air Act for the corresponding
periods of time. These California standards are intended to promote the
development of various classes of low emission vehicles. California also
requires that a specified percentage of each manufacturer's California sales
volume, beginning at two percent in 1998 and increasing to ten percent in 2003,
must be zero-emission vehicles ("ZEVs") that produce no emissions of regulated
pollutants. A number of states located in the Northeast have indicated that
they will petition the United States Environmental Protection Agency ("EPA") to
impose a regional vehicle emissions program similar to the California program.
Chrysler has entered into a consortium of vehicle manufacturers, electric
utilities and the Department of Energy to develop new battery technology for
use in electric vehicles which would qualify as ZEVs and has built a limited
number of experimental prototype electric vehicles using existing advanced
battery technology.
10
<PAGE> 11
Item 1. BUSINESS - Continued Part I - Continued
Automotive Operations - Continued
Government Regulation - Continued
Vehicle Regulation - Continued
CAFE - The Motor Vehicle Information and Cost Savings Act, as amended by the
Energy Policy and Conservation Act, requires vehicle manufacturers to provide
vehicles that comply with federally mandated fuel economy standards. Under
this Act, a manufacturer earns credits for exceeding the applicable fuel
economy standards; however, fuel economy credits earned on cars may not be used
for trucks. Failure to meet the average fleet fuel economy standards can
result in the imposition of penalties unless a manufacturer has sufficient fuel
economy credits from the preceding three years or projects that it will
generate sufficient credits over the succeeding three years. Chrysler is in
substantial compliance with existing CAFE requirements and anticipates
continued compliance with such requirements. In addition, the Energy Tax Act
of 1978 imposes a graduated "Gas Guzzler" tax on automobiles with a fuel
economy rating below specified levels.
There have been recent legislative initiatives in Congress that would
increase corporate average fuel economy standards from their current levels. A
significant increase in those requirements could be costly to Chrysler and
could result in significant restrictions on the products Chrysler offers.
Vehicle Safety - Under the Safety Act, the National Highway Traffic Safety
Administration ("NHTSA") is required to establish appropriate federal motor
vehicle safety standards that are practicable, meet the need for motor vehicle
safety and are stated in objective terms. NHTSA has announced its intention to
establish additional standards in the near future, which Chrysler supports in
principle. Chrysler expects to be able to comply with those standards.
Vehicle Recalls - The Safety Act and the Clean Air Act require product recalls
under certain circumstances. Recalls vary as to cause; some involve problems
that are relatively serious in nature, while others are much less significant.
In addition, since it is often unknown which vehicles may contain a defect,
large numbers of vehicles must be recalled to find, in many cases, a very low
percentage of vehicles with defects. The number of vehicles recalled and the
cost of such recalls vary widely from year to year. While Chrysler has not had
significant recalls in recent years, it cannot assure that there will not be
such recalls in the future.
Stationary Source Regulation
Chrysler's assembly, manufacturing and other operations are subject to
substantial environmental regulation under the Clean Air Act, the Clean Water
Act, the Resource Conservation and Recovery Act, the Pollution Prevention Act
of 1990 and the Toxic Substances Control Act, as well as a substantial volume
of state legislation paralleling and, in some cases, imposing more stringent
obligations than the federal requirements. These regulations impose severe
restrictions on air and water-born discharges of pollution from Chrysler
facilities, the handling of hazardous materials at Chrysler facilities and the
disposal of wastes from Chrysler operations. Chrysler is faced with many
similar requirements in its operations in Canada and is facing increased
governmental regulation and environmental enforcement in Mexico.
Clean Air Act - Pursuant to the Clean Air Act, the states are required
to amend their implementation plans to require more stringent limitations and
other controls on the quantity of pollutants which may be emitted into the
atmosphere to achieve national ambient air quality standards established by the
EPA. In addition, the Clean Air Act requires reduced emissions of substances
that are classified as hazardous, toxic or that contribute to acid deposition,
imposes comprehensive permit requirements for manufacturing facilities in
addition to those required by various states, and expands federal authority to
impose severe penalties and criminal sanctions. The Clean Air Act also allows
states to adopt standards more stringent than those required by the Clean Air
Act. Most recent reports filed with the EPA pursuant to the Superfund
Amendments and Reauthorization Act of 1986 indicate that for calendar year 1992
releases and emissions of chemicals and toxics by Chrysler were reduced by more
than 70 percent from comparable 1987 levels.
Chrysler is unable to predict the exact level of expenditures that will
be required by the Clean Air Act but believes that the cost of complying with
the legislation will be substantial. While Chrysler is unable to predict the
exact level of expenditures that will be required to develop and implement new
technology in its North American facilities, since federal and state
requirements are not fully defined, it expects that in excess of $1.0 billion
will be spent during the period 1994 through 1998, including the impact of
annual emissions fees. Of this total, Chrysler estimates that $190 million
will be spent in 1994 and $200 million will be spent in 1995. In addition, the
extensive federal-state permit program established by the Clean Air Act may
reduce operational flexibility and cause delays in upgrading of Chrysler's
production facilities in the United States.
11
<PAGE> 12
Item 1. BUSINESS - Continued Part I - Continued
Automotive Operations - Continued
Government Regulation - Continued
Stationary Source Regulation - Continued
Environmental Liabilities - The EPA and various state agencies have
notified Chrysler that it may be a potentially responsible party ("PRP") for
the cost of cleaning up hazardous waste storage or disposal facilities
pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") and other federal and state environmental laws.
Chrysler is also a party to a number of lawsuits in various jurisdictions which
allege conduct by Chrysler in violation of CERCLA or other environmental laws
which seek to recover costs associated with remedial action. In virtually all
instances, Chrysler is only one of a number of PRPs who may be found to be
jointly and severally liable for remediation costs at the 116 sites involved in
the foregoing matters at December 31, 1993. Chrysler may also incur
remediation costs at an additional 45 of its active or deactivated facilities.
In particular, the Ohio Environmental Protection Agency notified Chrysler
on October 12, 1993 of its intention to institute a proceeding concerning a
Chrysler facility in Dayton, and the Indiana Department of Environmental
Management initiated an administrative proceeding in August 1985 concerning a
Chrysler facility in Indianapolis. Each proceeding alleges improper disposal
of waste, and each may result in the imposition of civil penalties in excess of
$100,000. The Indiana proceeding also seeks to require Chrysler to conduct a
site assessment and undertake remedial action.
Estimates of future costs of pending environmental matters are necessarily
imprecise due to numerous uncertainties, including the enactment of new laws
and regulations, the development and application of new technologies, and the
apportionment and collectibility of remediation costs among responsible
parties. Chrysler may ultimately incur significant expenditures over an
extended period of time in connection with the foregoing environmental matters,
and therefore has established reserves totalling $287 million for the estimated
costs associated with all of its environmental remediation efforts. Chrysler
believes that these reserves will be sufficient to resolve these matters.
After giving effect to these reserves, management believes, based on currently
known facts and circumstances and existing laws and regulations, that the
disposition of these matters will not have a material adverse effect on
Chrysler's consolidated financial position. Future developments could cause
Chrysler to change its estimate of the total costs associated with these
matters, and such changes could be material to Chrysler's consolidated results
of operations for the period in which such developments occur.
FINANCIAL SERVICES
Chrysler's principal subsidiary, CFC, is a financial services organization
engaged in wholesale and retail vehicle financing, servicing nonautomotive
leases and loans, property, casualty and other insurance, and automotive
dealership facility development and management. All of CFC's common stock is
owned by Chrysler. CFC, a Michigan corporation, is the continuing corporation
resulting from a merger on June 1, 1967 of a financial services subsidiary of
Chrysler into a newly acquired, previously unaffiliated finance company
incorporated in 1926. CFC's primary objective is to provide financing for
automotive dealers and retail purchasers of Chrysler's products. CFC sells
significant amounts of automotive receivables acquired in transactions subject
to limited recourse provisions. CFC remains as servicer for which it is paid a
servicing fee. At the end of 1993, CFC had nearly 3,100 employees and its
portfolio of receivables managed totaled $28.3 billion.
CFC's financial condition and liquidity improved during 1993 as it
regained full access to the investment grade markets, continued to sell
significant amounts of automotive receivables and repaid all borrowings under
its revolving credit facilities. In addition, CFC realized aggregate cash
proceeds of $2.4 billion from the sales of certain nonautomotive assets during
1993. The sales of nonautomotive assets over the last two years have made CFC
more dependent upon Chrysler. Thus, lower levels of production and sales of
Chrysler products could result in a reduction in the level of finance operations
of CFC.
CFC's portfolio of finance receivables managed includes receivables owned and
receivables serviced for others. Receivables serviced for others primarily
represent sold receivables which CFC services for a fee. At December 31, 1993,
receivables serviced for others accounted for 69 percent of CFC's portfolio of
receivables managed. Total finance receivables managed at the end of each of
the five most recent years were as follows:
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
--------- ---------- --------- --------- ---------
(in millions of dollars)
<S> <C> <C> <C> <C> <C>
Automotive financing $ 25,011 $ 22,481 $ 24,220 $ 25,117 $ 24,648
Nonautomotive financing 3,251 7,657 9,486 10,709 10,763
---------- ---------- ---------- ---------- ----------
Total $ 28,262 $ 30,138 $ 33,706 $ 35,826 $ 35,411
========== ========== ========== ========== ==========
</TABLE>
12
<PAGE> 13
Item 1. BUSINESS - Continued Part I - Continued
Financial Services - Continued
Automotive Financing - CFC conducts its automotive finance business
principally through its subsidiaries Chrysler Credit Corporation ("Chrysler
Credit"), Chrysler Credit Canada Ltd., and, in Mexico, Chrysler Comercial S.A.
de C.V. Chrysler Credit is the major source of automobile and light-duty truck
wholesale (also referred to as "floor plan") and retail financing for Chrysler
dealers and their customers throughout North America. At December 31, 1993,
Chrysler Credit was providing financing to approximately 2,600 Chrysler dealers
who exclusively sell Chrysler products. Chrysler Credit also finances
approximately 1,400 dealers who sell non-Chrysler products (either exclusively
or together with Chrysler products). Chrysler Credit also offers its floor plan
dealers working capital loans, real estate and equipment financing, and
financing plans for fleet buyers, including daily rental car companies
independent of, and affiliated with, Chrysler. The automotive financing
operations of Chrysler Credit and such other subsidiaries are conducted through
100 branches in the United States, Canada, Mexico and Puerto Rico.
During 1993, CFC financed or leased approximately 766,000 vehicles at
retail in the United States, including approximately 516,000 new Chrysler
passenger cars and light-duty trucks, representing 25 percent of Chrysler's
U.S. retail and fleet deliveries. In 1993, the average monthly payment for new
vehicle retail installment sale contracts acquired in the United States was
$341. The average percentage of dealer cost financed was 91 percent and the
average original term was 55 months. CFC also financed at wholesale
approximately 1,510,000 new Chrysler passenger cars and light-duty trucks
representing 75 percent of Chrysler's U.S. factory shipments in 1993. Wholesale
vehicle financing accounted for 74 percent of the total automotive financing
volume of CFC in 1993 and represented 16 percent of automotive finance
receivables outstanding at December 31, 1993.
Nonautomotive Financing - CFC has downsized its nonautomotive operations
through sales and liquidations over the last several years. During 1993, CFC
realized $2.4 billion of aggregate cash proceeds from the sale of substantially
all of the consumer and inventory financing businesses of Chrysler First Inc.
("Chrysler First") and the sale of certain assets of Chrysler Capital
Corporation ("Chrysler Capital").
Chrysler Capital manages nonautomotive leases and loans to clients in
over 30 industries through 16 offices throughout the United States. At
December 31, 1993, Chrysler Capital managed $2.7 billion of nonautomotive
finance receivables compared to $3.2 billion at December 31, 1992. In
addition, CFC managed a portfolio of secured small business loans totalling
$0.6 billion at December 31, 1993.
Insurance - Chrysler Insurance Company and its subsidiaries ("Chrysler
Insurance") provide specialized insurance coverages to automotive dealers and
their customers in the United States and Canada. The property and casualty
segment of Chrysler Insurance's business includes physical damage, garage
liability, workers' compensation and property and contents coverage provided
directly to automotive dealers. During 1993, the inventories of approximately
2,800 automotive dealerships that were financed by Chrysler Credit were insured
by Chrysler Insurance. During 1993, 1,875 Chrysler and non-Chrysler automotive
dealerships were insured by CFC's multi-line property and casualty insurance
program known as the Pentastar Protection program. Chrysler Insurance also
provides collateral protection and single interest insurance to retail
automobile customers and their financing sources.
Real Estate Management - Chrysler Realty Corporation ("Chrysler Realty"), which
is engaged in the ownership, development and management of Chrysler automotive
dealership properties in the United States, typically purchases, leases or
options dealership facilities and then leases or subleases these facilities to
Chrysler dealers. At December 31, 1993, Chrysler Realty controlled 923 sites
(of which 297 were owned by Chrysler Realty).
Funding - CFC's primary objective is to provide financing for
automotive dealers and retail purchasers of Chrysler's products. CFC's
liquidity improved during 1993. Proceeds from nonautomotive asset sales and
CFC's improved access to the capital markets enabled it to issue $2.3 billion
of term debt and increase the level of short-term notes outstanding (primarily
commercial paper) to $2.8 billion and repay all borrowings outstanding under
revolving credit facilities. Receivable sales continued to be a significant
source of funding during 1993, as CFC realized $7.8 billion of net proceeds
from the sale of automotive retail receivables compared to $5.8 billion of net
proceeds from the sale of automotive and nonautomotive receivables in 1992.
13
<PAGE> 14
Item 1. BUSINESS - Continued Part I - Continued
Financial Services - Continued
CFC's outstanding debt at December 31, of each of the five most recent
years was as follows:
<TABLE>
<CAPTION>
December 31
-------------------------------------------------------
1993 1992 1991 1990 1989
--------- -------- -------- -------- ---------
(in millions of dollars)
<S> <C> <C> <C> <C> <C>
Short-term notes (primarily commercial paper) $ 2,772 $ 352 $ 339 $ 1,114 $ 10,061
Bank borrowings under
revolving credit facilities - 5,924 6,633 6,241 -
Senior term debt 5,139 4,436 6,742 9,233 11,107
Subordinated term debt 77 585 949 1,686 2,434
Mexico borrowings and other 447 455 518 431 614
---------- ---------- ---------- ---------- ----------
Total $ 8,435 $ 11,752 $ 15,181 $ 18,705 $ 24,216
========== ========== ========== ========== ==========
</TABLE>
CAR RENTAL OPERATIONS
Through its Pentastar Transportation Group, Inc. ("Pentastar")
subsidiary, Chrysler owns Thrifty Rent-A-Car System, Inc. ("Thrifty"), Snappy
Car Rental, Inc. ("Snappy") and Dollar Rent A Car System, Inc. ("Dollar").
Both Thrifty and Dollar are engaged in leasing vehicles to independent
businesses they have licensed to use their trade names, systems and
technologies in the daily rental of cars for business, personal and leisure
use. They also maintain and operate a number of their own locations. Snappy,
through corporate-owned locations, is engaged in renting automobiles on a
short-term basis, primarily to customers whose insurance coverage entitles them
to a replacement vehicle if their own cars are damaged, stolen or require major
repairs. In September 1992, Chrysler announced a realignment of a part of the
Car Rental Operations under Pentastar and the consolidation and phase out of
certain of those operations. As part of that realignment, Chrysler
subsequently transferred to Dollar ownership of General Rent-A-Car, which also
rents cars for business, leisure and personal use, exclusively through
corporate owned locations. The consolidation process will be completed in
1994.
RESEARCH AND DEVELOPMENT
For the years ended December 31, 1993, 1992 and 1991, Chrysler spent
$1.2 billion, $1.1 billion, and $955 million, respectively, for
company-sponsored research and development activities. These activities relate
to the development of new products and services and the improvement of existing
products and services, as well as compliance with standards that have been and
are being promulgated by the government.
EMPLOYEES
At December 31, 1993, Chrysler and its consolidated subsidiaries had a
total of approximately 128,000 employees worldwide, approximately 91,000 of
which were employed in the United States. In the United States and Canada,
approximately 93 percent of Chrysler's hourly employees and 21 percent of its
salaried employees are represented by unions. Of these represented employees,
98 percent of hourly and 90 percent of salaried employees are represented by
the United Automotive, Aerospace, and Agricultural Implement Workers of America
("UAW") or the National Automobile, Aerospace and Agricultural Implement
Workers of Canada ("CAW").
In 1993, Chrysler negotiated three-year national agreements with the
UAW and CAW in the United States and Canada, respectively, without an
interruption of production. The UAW contract patterns the prior 1990 agreement
in that it provides moderate wage and pension benefit improvements, and retains
the job and income security protection program and health care coverage. The
job and income security benefit caps were negotiated at the previous contract
amount of $660 million with new Supplemental Unemployment Benefits Contingency
Accounts of $106 million. The contract also adopted provisions expected to
abate future increases in labor costs including Cost of Living Allowance
diversions, lower wage rates for new hires, and a broadened approach to managed
health care.
14
<PAGE> 15
Item 1. BUSINESS - Continued Part I - Continued
Employees - Continued
Chrysler estimates that, when the UAW contract expires September 14,
1996, its total hourly labor costs, including employee and retiree benefits,
will have increased approximately 14 percent over the estimated $44 per hour in
effect when the prior UAW contract expired September 14, 1993. Chrysler
projects its labor cost at the end of the contract to be competitive compared
to the domestic automobile manufacturers' average.
Chrysler's pension plans, group life, and health care benefits for
active, inactive, and retired employees generally follow the structure of
benefits common to the automotive industry. See Part II, Item 8, Notes to
Consolidated Financial Statements, Notes 1, 11 and 12 for further information
on postemployment benefits, pension plans, and postretirement benefits.
INTELLECTUAL PROPERTY
Chrysler has intellectual property rights which include patents,
proprietary technology, trademarks, service marks, copyrights, and licenses
under such rights of others, relating to its businesses, products, and
manufacturing equipment and processes. Chrysler grants licenses to others
under its intellectual property rights and receives fees and royalties under
some of these licenses. While Chrysler does not consider any particular
intellectual property right to be essential, it does consider the aggregate of
such rights important to the overall conduct of its businesses.
Item 2. PROPERTIES
AUTOMOTIVE OPERATIONS
The statements concerning ownership of Chrysler's properties are made
without regard to taxes or assessment liens, rights of way, contracts,
easements or like encumbrances or questions of survey and are based on the
records of Chrysler. Chrysler knows of no material defects in title to, or
adverse claims against, any of such properties, nor any existing material liens
or encumbrances against Chrysler or its properties, except the mortgage loan on
Chrysler's Sterling Heights Assembly Plant (Sterling Heights, Michigan), and a
mortgage granted to a state industrial development authority and various banks
on the vehicle paint facility at its Toledo Assembly Plant (Toledo, Ohio).
Chrysler's credit agreement with its commercial banks enables the banks to
obtain a security interest, to be shared equally and ratably with holders of
other senior indebtedness and guarantees of Chrysler, in Chrysler's principal
domestic plants and related machinery, equipment and tooling under certain
circumstances, including when borrowings under the amended agreement exceed
$500 million, and if Chrysler's senior debt does not have investment grade
credit ratings. None of the commitment was drawn upon at December 31, 1993.
Chrysler's manufacturing plants include a foundry, machining plants,
metal stamping plants, engine plants, transmission plants, trim plants,
electronic parts plants, an air conditioning equipment plant, a glass
fabricating plant and other component parts plants. In addition to Michigan,
other manufacturing plants in the United States are located in Alabama,
Illinois, Indiana, New York, Ohio, Texas and Wisconsin.
Chrysler's U.S. passenger car assembly plants are located in Sterling
Heights and Detroit, Michigan; Belvidere, Illinois and Newark, Delaware. The
U.S. truck assembly plants are located in Warren and Detroit, Michigan; Fenton,
Missouri; and Toledo, Ohio. An assembly facility located in Fenton, Missouri
was idled in 1991. The parts depots, warehouses and sales offices are situated
in various sections of the United States, while Chrysler's principal
engineering and research facilities and its general offices are located in
Michigan.
Automotive properties outside the U.S. are owned or leased principally
by Chrysler Canada and Chrysler Mexico. Other manufacturing and assembly
plants of subsidiaries outside the U.S. are located in Venezuela and Austria.
In 1991, Chrysler dedicated its new technology center in Auburn Hills,
Michigan and began the relocation of employees into the facility. By the end
of 1993, Chrysler had moved 99.6 percent of the employees expected to occupy
the technology center. The initial project is in the final stages of
completion and will be completed in the first half of 1994. The center
includes design, vehicle engineering, manufacturing engineering and pilot build
facilities associated with the development of new Chrysler cars and trucks, and
has total floor space of 3.3 million square feet. In the third quarter of
1992, the Board of Directors approved a subsequent project to build an
administrative building which is currently under construction.
In the opinion of management, Chrysler's properties include facilities
which are suitable and adequate for the conduct of its present assembly and
component plant requirements.
15
<PAGE> 16
Item 2. PROPERTIES - Continued Part I - Continued
FINANCIAL SERVICES
At December 31, 1993, the following facilities were utilized by
CFC in conducting its business:
(a) executive offices of CFC, Chrysler Credit, Chrysler
Insurance and certain other domestic subsidiaries of CFC
in Southfield, Michigan;
(b) a total of 86 branches of Chrysler Credit located
throughout the United States;
(c) headquarters of remaining Chrysler First operations in Allentown,
Pennsylvania, and a total of 3 offices of such corporation in the
United States;
(d) headquarters of Chrysler Capital in Stamford, Connecticut and a
total of 16 offices of such corporation located throughout the
United States;
(e) headquarters of Chrysler Realty in Troy, Michigan; and
(f) a total of 15 offices used as headquarters and branch offices in
Canada, Mexico and Puerto Rico.
All of the facilities described above were leased by CFC.
At December 31, 1993, a total of 297 automobile dealership properties
generally consisting of land and improvements were owned by Chrysler Realty
for lease to dealers franchised by Chrysler.
Item 3. LEGAL PROCEEDINGS
Chrysler and its subsidiaries are parties to various legal proceedings,
including some purporting to be class actions, and some which demand large
monetary damages or other relief that would require significant expenditures.
Chrysler believes that each of the product and environmental proceedings
described below constitutes ordinary routine litigation incidental to the
business conducted by Chrysler and its subsidiaries. See also Note 8 of Notes
To Consolidated Financial Statements.
Product Matters
Many of the legal proceedings seek damages for personal injuries claimed to
have resulted from alleged defects in the design or manufacture of products
distributed by Chrysler. The complaints filed in such matters specify
approximately $930 million in compensatory and $965 million in punitive damages
in the aggregate as of December 31, 1993. These amounts represent damages
sought by plaintiffs and, therefore, do not necessarily constitute an accurate
measure of Chrysler's ultimate cost to resolve such matters. Further, many
complaints do not specify a dollar amount of damages or specify only the
jurisdictional minimum. These amounts may vary significantly from one period
to the next depending on the number of new complaints filed or pending cases
resolved in a given period.
Numerous complaints seek damages for personal injuries sustained in
accidents involving alleged rollovers of Jeep CJ vehicles. These complaints
represent approximately $335 million of the compensatory and $763 million of
the punitive damages specified above. Pursuant to an indemnification agreement
with Chrysler, Renault has agreed to indemnify Chrysler against a portion of
certain costs arising from accidents involving alleged Jeep CJ vehicle rollovers
occurring between April 1, 1985 and March 31, 1994.
Many of the remaining complaints seek compensatory and punitive damages for
personal injuries sustained in accidents involving alleged defects in occupant
restraint systems, seats, heater cores, or various other components in several
different vehicle models. Some complaints seek repair of the vehicles or
compensation for the alleged reduction in vehicle value.
Chrysler may ultimately incur significant expenditures over an extended
period of time in connection with the foregoing matters, and therefore has
established reserves which it believes will be sufficient to resolve such
matters. After giving effect to these reserves, management believes, based on
currently known facts and circumstances, that the disposition of these matters
will not have a material adverse effect on Chrysler's consolidated financial
condition. Future developments could cause Chrysler to change its estimate of
the ultimate cost of resolving these matters, and such changes could be
material to Chrysler's consolidated results of operations for the period in
which such developments occur.
16
<PAGE> 17
Item 3. LEGAL PROCEEDINGS -Continued Part I - Continued
Environmental Matters
The United States Environmental Protection Agency and various state
agencies have notified Chrysler that it may be a potentially responsible party
("PRP") for the cost of cleaning up hazardous waste storage or disposal
facilities pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA") and other federal and state environmental laws.
Chrysler is also a party to a number of lawsuits in various jurisdictions which
allege conduct by Chrysler in violation of CERCLA or other environmental laws
which seek to recover costs associated with remedial action. In virtually all
instances, Chrysler is only one of a number of PRPs who may be found to be
jointly and severally liable for remediation costs at the 116 sites involved in
the foregoing matters at December 31, 1993. Chrysler may also incur
remediation costs at an additional 45 of its active or deactivated facilities.
In particular, the Ohio Environmental Protection Agency notified Chrysler
on October 12, 1993 of its intention to institute a proceeding concerning a
Chrysler facility in Dayton, and the Indiana Department of Environmental
Management initiated an administrative proceeding in August 1985 concerning a
Chrysler facility in Indianapolis. Each proceeding alleges improper disposal
of waste, and each may result in the imposition of civil penalties in excess of
$100,000. The Indiana proceeding also seeks to require Chrysler to conduct a
site assessment and undertake remedial action.
Estimates of future costs of pending environmental matters are necessarily
imprecise due to numerous uncertainties, including the enactment of new laws
and regulations, the development and application of new technologies, and the
apportionment and collectibility of remediation costs among responsible
parties. Chrysler may ultimately incur significant expenditures over an
extended period of time in connection with the foregoing environmental matters,
and therefore has established reserves totalling $287 million for the estimated
costs associated with all of its environmental remediation efforts. Chrysler
believes that these reserves will be sufficient to resolve these matters.
After giving effect to these reserves, management believes, based on currently
known facts and circumstances and existing laws and regulations, that the
disposition of these matters will not have a material adverse effect on
Chrysler's consolidated financial position. Future developments could cause
Chrysler to change its estimate of the total costs associated with these
matters, and such changes could be material to Chrysler's consolidated results
of operations for the period in which such developments occur.
Other Matters
In December 1990 and January 1991, eight class action lawsuits were
commenced by separate plaintiffs against Chrysler and certain of its directors
in the Court of Chancery of the State of Delaware for New Castle County,
Delaware. The Complaints in these suits are very similar and allege that the
directors breached their fiduciary duties to stockholders by amending
Chrysler's Share Purchase Rights Plan in a manner designed to entrench
themselves in office and to impair the right of stockholders to avail
themselves of offers to purchase their shares by an acquiror not favored by
management. The Complaints ask for (a) certification of the class, (b)
rescission of and an injunction against implementation of the Rights Plan
amendments, (c) an order that Chrysler cooperate with Kirk Kerkorian, the
holder of 9.8% of Chrysler's common stock at the time the complaints were
filed, and take steps to enhance its attractiveness as a merger/acquisition
candidate, and (d) damages and costs. On January 9, 1991, the eight suits were
consolidated into one. On January 28, 1991, Chrysler filed an Answer and
Affirmative Defenses in the consolidated case. On March 7, 1991, the parties
agreed to allow an Amended Complaint to be filed which purports to assert a
derivative claim brought on behalf of Chrysler, in addition to class action
claims as originally filed. In this regard, the Amended Complaint alleges
injury to Chrysler as a direct result of violations of fiduciary duties by the
individual defendants. On July 25, 1991, Chrysler filed a motion to dismiss
the consolidated lawsuit. On July 27, 1992, the Court entered a memorandum
opinion dismissing the complaint as to all claims for relief other than
rescission. Chrysler later filed a Motion for Reargument which was denied on
August 11, 1992. The Corporation and the named directors are continuing with
the defense of this matter.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None during the fourth quarter ended December 31, 1993.
17
<PAGE> 18
EXECUTIVE OFFICERS OF THE REGISTRANT
(AS OF FEBRUARY 4, 1994)
<TABLE>
<CAPTION>
Officer
Name Age Since * Present Position
- ------------------------- ------ --------------------- ---------------------------------------------
<S> <C> <C> <C>
R. J. Eaton 54 March 14, 1992 Chairman of the Board and Chief Executive Officer **
R. A. Lutz 62 June 3, 1986 President and Chief Operating Officer **
T. G. Denomme 54 April 9, 1981 Executive Vice President and Chief Administrative Officer **
T. R. Cunningham 47 September 3, 1987 Executive Vice President - Sales and Marketing
D. K. Pawley 52 April 11, 1991 Executive Vice President - Manufacturing
G. C. Valade 51 June 7, 1990 Executive Vice President and Chief Financial Officer
T. P. Capo 42 November 7, 1991 Vice President and Treasurer
J. E. Cappy 59 August 5, 1987 Vice President - Chrysler Technologies and Rental Car
Operations
F. J. Castaing 48 August 5, 1987 Vice President - Vehicle Engineering
J. D. Donlon, III 47 January 1, 1992 Vice President and Controller
T. C. Gale 50 April 4, 1985 Vice President - Product Design and International Operations
J. P. Holden 42 June 18, 1993 Vice President - Corporate Personnel
A. C. Liebler 51 May 17, 1990 Vice President - Communications and Marketing
W. J. O'Brien 50 September 3, 1987 Vice President, General Counsel and Secretary
E. T. Pappert 54 November 5, 1981 Vice President - Sales
L. C. Richie 52 June 12, 1986 Vice President and General Counsel - Automotive Legal
Affairs
</TABLE>
__________________________
* The "Officer Since" date shown is the date from which the named individual
has served continuously as an officer of either Chrysler Corporation or the
former Chrysler Motors Corporation which, effective December 31, 1989, was
merged with and into Chrysler Corporation.
** Also a member of the Board of Directors.
There are no family relationships, as defined for reporting purposes,
between any of the executive officers named above and there is no arrangement
or understanding between any of the executive officers named above and any
other person pursuant to which he was selected as an officer. All of the
executive officers named above, except Messrs. Eaton and Pawley, have been in
the employ of Chrysler Corporation or its subsidiaries for more than five
years. During the last five years, and immediately preceding employment by
Chrysler Corporation, Mr. Eaton was a high-level executive at General Motors
Corporation and Mr. Pawley was employed as a high-level manufacturing
executive by the Otis Group, United Technologies Corporation and prior to that
time as an executive for the Mazda Motor Corporation.
18
<PAGE> 19
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Chrysler's common stock is listed on the stock exchanges specified on
pages 1 and 2 of this Form 10-K under the trading symbol (C). The approximate
number of shareholders of Chrysler's common stock at December 31, 1993 was
145,000. The following table sets forth the high and low sale prices of
Chrysler's common stock as reported on the composite tape and the quarterly
dividends declared for the last two years.
<TABLE>
<CAPTION>
Dividends
1993 High Low Declared
----------------- -------- -------- -----------------
<S> <C> <C> <C>
First Quarter $41.125 $31.750 $0.15
Second Quarter 47.625 37.000 0.15
Third Quarter 49.625 39.500 0.15
Fourth Quarter 58.375 47.625 0.20
1992
-----------------
First Quarter $18.500 $11.500 $0.15
Second Quarter 21.875 16.625 0.15
Third Quarter 24.000 18.250 0.15
Fourth Quarter 33.875 20.000 0.15
</TABLE>
On December 2, 1993, Chrysler's Board of Directors increased the quarterly
dividend on Chrysler's common stock to $0.20 per share. The quarterly dividend
had been $0.15 per common share since the first quarter of 1991. Dividends on
the common stock are payable at the discretion of the Chrysler's Board of
Directors out of funds legally available therefor. Chrysler's ability to pay
dividends in the future will depend upon its financial results, liquidity and
financial condition and its ability to meet its new product development and
facility modernization spending programs. Chrysler's ability to pay dividends
is also affected by the provision in its credit agreement that it must maintain
net worth (as defined) at the end of each quarter at certain specified levels.
19
<PAGE> 20
Item 6. SELECTED FINANCIAL DATA Part II - Continued
The table below summarizes recent financial information for Chrysler.
For further information, refer to Chrysler's consolidated financial statements
and notes thereto presented under Item 8 of this Form 10-K.
<TABLE>
<CAPTION>
1993(1) 1992(2) 1991(3) 1990(4) 1989(5)
---------- ---------- ---------- ---------- ----------
(Dollars and shares in millions except per common share data)
<S> <C> <C> <C> <C> <C>
Total sales and revenues $ 43,600 $ 36,897 $ 29,370 $ 30,620 $ 35,186
Earnings (loss) from continuing operations
before cumulative effect of changes
in accounting principles 2,415 505 (538) 68 323
Per common share 6.77 1.47 (2.22) 0.30 1.39
Net earnings (loss) (2,551) 723 (795) 68 359
Primary earnings (loss) per common
share (7.62) 2.21 (3.28) 0.30 1.55
Fully diluted earnings per common
share -- 2.13 -- 0.30 1.54
Dividends declared per common share 0.65 0.60 0.60 1.20 1.20
Total assets 43,830 40,653 43,076 46,374 51,112
Total debt 11,451 15,551 19,438 22,900 27,552
Convertible preferred stock (in shares) 1.7 1.7 -- -- --
</TABLE>
___________________________
(1) Results for the year ended December 31, 1993 include a
pre-tax gain of $205 million ($128 million after
applicable income taxes) on the sale of Chrysler's
remaining 50.3 million shares of MMC stock, a pre-tax
gain of $60 million ($39 million after applicable income
taxes) on the sale of the plastics operations of Chrysler's
Acustar division, a $4.68 billion after-tax charge for
the adoption of Statement of Financial Accounting Standards
("SFAS") No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," and a $283 million after-tax
charge for the adoption of SFAS No. 112, "Employers'
Accounting for Postemployment Benefits."
(2) Earnings for the year ended December 31, 1992 include a
pre-tax gain of $142 million ($88 million after applicable
income taxes) on the sale of 43.6 million shares of MMC
stock, a $218 million favorable effect of a change in
accounting principle relating to the adoption of SFAS No.
109, "Accounting for Income Taxes," a $101 million
pre-tax charge ($79 million after applicable income taxes)
relating to the restructuring of Chrysler's short- term
vehicle rental subsidiaries, and a $110 million pre-tax
charge ($69 million after applicable income taxes)
relating to investment losses experienced by Chrysler
Canada.
(3) Results for the year ended December 31, 1991 include a
pre-tax gain of $205 million ($127 million after
applicable income taxes) on the sale of Chrysler's 50
percent equity interest in Diamond-Star, the favorable
effect of a $391 million ($242 million after
applicable income taxes) noncash, nonrecurring credit
provision relating to a plant capacity adjustment and a $257
million after-tax charge for the cumulative effect of a
change in accounting principle related to the timing of the
recognition of the costs of special sales incentive programs.
(4) Earnings for the year ended December 31, 1990 include a
pre-tax return to income of $101 million ($63 million after
applicable income taxes) resulting from a reduction in the
estimated costs recognized in 1989 in connection with the
restructuring of Chrysler's automotive operations.
(5) Earnings for the year ended December 31, 1989 include a
pre-tax charge of $931 million ($577 million after
applicable income taxes) for costs associated with a
restructuring of Chrysler's automotive operations and a
pre-tax gain of $503 million ($309 million after applicable
income taxes) on the sale of 75 million shares of MMC stock.
20
<PAGE> 21
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL Part II - Continued
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in
conjunction with the consolidated financial statements and notes thereto.
FINANCIAL REVIEW
Chrysler reported earnings before income taxes and the
cumulative effect of changes in accounting principles of $3.8 billion in 1993,
compared with $934 million in 1992. The earnings in 1993 included a gain on
sales of automotive assets and investments of $265 million. Earnings in 1992
included a gain on the sale of an automotive investment of $142 million, a
$110 million charge for reducing investments of Chrysler Canada, and certain
of its employee benefit plans in a real estate investment concern to their
estimated net realizable value, and a $101 million restructuring charge
related to the realignment of the Car Rental Operations. Excluding the
effect of these items, Chrysler's pre-tax earnings for 1993 and 1992 were
$3.6 billion and $1.0 billion, respectively.
The improvement in 1993 over 1992 was primarily the result of
a substantial increase in unit sales volume, pricing actions, including
significantly lower per unit sales incentives, and an improved mix of
higher-margin products, partially offset by increased labor and benefit costs.
Chrysler's worldwide factory car and truck sales increased 14 percent during
1993 to 2,475,738 units. U.S. and Canadian dealers' days supply of vehicle
inventory decreased to 63 days at December 31, 1993 from 72 days at December
31, 1992.
Including the provision for income taxes and the cumulative
effect of changes in accounting principles, Chrysler reported a net loss for
1993 of $2.6 billion, or $7.62 per common share, compared with net earnings of
$723 million, or $2.21 per common share, for 1992. The net loss for 1993
resulted from a charge of $4.68 billion, or $13.57 per common share, for the
cumulative effect of a change in accounting principle related to the adoption
of SFAS No. 106, "Employers'Accounting for Postretirement Benefits Other Than
Pensions." Also included in the 1993 results was a charge of $283 million, or
$0.82 per common share, for the cumulative effect of a change in accounting
principle relating to the adoption of SFAS No. 112, "Employers' Accounting for
Postemployment Benefits." Net earnings for 1992 included a $218 million, or
$0.74 per common share, favorable cumulative effect of a change in accounting
principle relating to the adoption of SFAS No. 109, "Accounting for Income
Taxes."
During 1993, North American vehicle industry retail sales were
15.4 million cars and trucks, an increase of 7.7 percent from the 14.3 million
units sold in 1992. In addition to the improvements in the overall automotive
industry, Chrysler's U.S. and Canada combined retail car and truck market share
increased 1.4 percentage points in 1993, as shown below:
<TABLE>
<CAPTION>
Market Share
1993 1992 Increase
---------- ---------- ----------------
<S> <C> <C> <C>
U.S. Retail Market Share (1):
Car 9.8 % 8.3 % 1.5 %
Truck 21.4 % 21.1 % 0.3 %
Combined U.S. Car and Truck 14.4 % 13.1 % 1.3 %
U.S. and Canada Combined Retail Car
and Truck Market Share (1) 14.8 % 13.4 % 1.4 %
</TABLE>
________________________________
(1) All market share data include fleet sales.
The increase in U.S. retail car market share during 1993
resulted from the fall 1992 introduction and subsequent market success of
Chrysler's upper-middle segment sedans, the Dodge Intrepid, Eagle Vision and
Chrysler Concorde. The increase in U.S. truck market share in 1993 is the
result of increased sales in the small sport-utility vehicle segment, primarily
the result of the spring 1992 introduction and subsequent market success of the
Jeep Grand Cherokee, partially offset by reduced sales in the small pickup
segment, as a portion of the Dodge Dakota production was relocated among
Chrysler's assembly facilities.
In addition to these 1992 new product introductions, Chrysler
launched the Chrysler New Yorker and Chrysler LHS, which compete in the large
car segment, in the first quarter of 1993. During the fourth quarter of 1993,
Chrysler introduced its all new full-size Dodge Ram pickup truck. New product
introductions which will occur in 1994 include a new subcompact, the Dodge and
Plymouth Neon, in January 1994 and an all new compact car platform in the third
quarter of 1994, which will be marketed as the Chrysler Cirrus and Dodge
Stratus.
21
<PAGE> 22
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL Part II - Continued
CONDITION AND RESULTS OF OPERATIONS - Continued
FINANCIAL REVIEW - Continued
The earnings of CFC before income taxes and the cumulative
effect of changes in accounting principles were $267 million in 1993, compared
to $295 million in 1992. The decline in 1993 was primarily due to increased
borrowing costs incurred under CFC's revolving credit agreements. CFC reported
net earnings of $129 million and $231 million for 1993 and 1992, respectively.
CFC's net earnings for 1993 included charges totaling $30 million for the
adoptions of SFAS No. 106 and SFAS No. 112. Net earnings for 1992 included a
$51 million favorable adjustment for the adoption of SFAS No. 109.
During 1992 and 1993, Chrysler took various actions to
strengthen its financial condition, improve liquidity and add to its
equity base in order to ensure its ability to carry out its new product
development and facility modernization programs without significant
interruption. In the second and third quarters of 1993, Chrysler sold its
remaining 50.3 million shares of MMC stock for net proceeds of $329 million and
sold the plastics operations of its Acustar division for net proceeds of $132
million. In February 1993, Chrysler issued 52 million shares of common stock
for net proceeds of $1.95 billion. In 1992, Chrysler sold 43.6 million shares
of MMC stock for net proceeds of $215 million and issued 1.7 million shares of
convertible preferred stock for net proceeds of $836 million.
Both Chrysler and CFC regained investment grade credit ratings
in 1993. The improved credit ratings reflect Chrysler's improved operating
results, the significant improvements in Chrysler's balance sheet (including
reductions in its outstanding debt and unfunded pension obligation), and CFC's
improved liquidity.
Chrysler's operating results have improved during 1992 and
1993, despite the slower than normal economic and automobile industry
recoveries in the U.S. and declining automobile industry sales in Canada,
Mexico and most European countries. The consensus of major economic
forecasters suggests that automobile industry sales will continue to increase
in the U.S. in 1994, and will begin to recover in Canada, Mexico and Europe.
Chrysler's new products may enable it to benefit from these market
improvements. However, due to Chrysler's dependence on the North American
market, a deterioration in North American economic conditions would adversely
affect Chrysler's operating results.
COMPARISON OF SELECTED ELEMENTS OF REVENUE AND COSTS
Chrysler's total sales and revenues were as follows:
<TABLE>
<CAPTION>
1993 vs. 1992 1992 vs. 1991
Increase/ Increase/
1993 1992 (Decrease) 1991 (Decrease)
---------- ---------- -------------- ---------- ---------------
(in millions of dollars) (in millions of dollars)
<S> <C> <C> <C> <C> <C>
Sales of manufactured products $ 40,831 $ 33,548 22 % $ 25,575 31 %
Finance and insurance income 1,429 1,953 (27)% 2,587 (25)%
Other income 1,340 1,396 (4)% 1,208 16 %
----------- ----------- -----------
Total sales and revenues $ 43,600 $ 36,897 18 % $ 29,370 26 %
========== ========== ==========
</TABLE>
The increase in sales of manufactured products in 1993
primarily reflects the 14 percent increase in factory unit sales to 2,475,738
units in 1993. The 1992 increase is largely due to a 17 percent increase in
factory unit sales from the 1,866,101 units in 1991. Average revenue per unit,
net of sales incentives, was $16,461, $15,086 and $14,109 in 1993, 1992 and
1991, respectively. The increases in average revenue per unit in 1993 and 1992
were principally due to an improved mix of higher-priced products (primarily
small sport-utility vehicles and upper-middle segment cars in 1993 and small
sport-utility vehicles and minivans in 1992), lower per unit sales incentives
and pricing actions.
22
<PAGE> 23
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL Part II - Continued
CONDITION AND RESULTS OF OPERATIONS - Continued
COMPARISON OF SELECTED ELEMENTS OF REVENUE AND COSTS - Continued
The decreases in finance and insurance income in 1993 and 1992
were primarily attributable to lower levels of earning assets and declining
interest rates. Total automotive financing volume in 1993, 1992 and
1991 was $59.8 billion, $46.6 billion and $41.5 billion, respectively. The
increase in automotive financing volume over the last two years was largely due
to higher amounts of wholesale financing provided to automotive dealers.
Financing support provided in the United States by CFC for new Chrysler vehicle
retail deliveries (including fleet) and wholesale vehicle sales to dealers and
the number of vehicles financed during the last three years were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
------------- ------------- -------------
<S> <C> <C> <C>
United States Penetration:
Retail 25 % 24 % 31 %
Wholesale 75 % 69 % 68 %
Number of New Chrysler Vehicles Financed in
the United States (in thousands):
Retail 516 413 470
Wholesale 1,510 1,199 982
</TABLE>
Other income, which was relatively consistent between 1993 and
1992, primarily represents revenues generated by the Car Rental Operations.
The increase in 1992 over 1991 was due to the acquisition of General Rent-A-Car
in March 1991.
Total costs and expenses were as follows:
<TABLE>
<CAPTION>
1993 vs. 1992 1992 vs. 1991
Increase/ Increase/
1993 1992 (Decrease) 1991 (Decrease)
---------- ---------- --------------- ---------- ---------------
(in millions of dollars) (in millions of dollars)
<S> <C> <C> <C> <C> <C>
Costs, other than items below $ 32,382 $ 28,396 14 % $ 22,922 24 %
Depreciation of property and equipment 969 969 -- % 821 18 %
Amortization of special tools 671 641 5 % 644 -- %
Selling and administrative expenses 3,377 3,387 -- % 2,974 14 %
Pension expense 756 837 (10)% 804 4 %
Nonpension postretirement benefit
expense 768 369 108 % 351 5 %
Interest expense 1,104 1,405 (21)% 1,869 (25)%
Restructuring charge -- 101 -- -- --
Gain on sales of automotive assets
and investments (265) (142) 87 % (205) (31)%
----------- ----------- -----------
Total costs and expenses $ 39,762 $ 35,963 11 % $ 30,180 19 %
=========== =========== ===========
</TABLE>
Costs, other than items below increased in 1993 primarily due
to the 14 percent increase in factory unit sales volume and an increased
proportion of sales of higher-priced products, primarily small sport-utility
vehicles and upper-middle segment sedans. The increase in costs, other than
items below in 1992 compared to 1991 was due to the 17 percent increase in
factory unit sales volume and new-product-related pre-production and launch
costs in 1992. Included in costs, other than items below in 1992 is a $110
million investment loss for reducing investments of Chrysler Canada and certain
of its employee benefit plans in a real estate concern to their estimated net
realizable value. Included in costs, other than items below in 1991 was a $391
million credit provision which resulted from a reduction in planned capacity
adjustments related to facilities acquired in connection with Chrysler's
acquisition of AMC in 1987. Excluding the 1992 investment loss and the 1991
plant capacity credit provision, costs, other than items below as a percent of
net sales of manufactured products were 79 percent, 84 percent, and 91 percent
in 1993, 1992 and 1991, respectively. These improvements were primarily due to
increased capacity utilization and an increased mix of higher-margin products.
23
<PAGE> 24
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL Part II - Continued
CONDITION AND RESULTS OF OPERATIONS - Continued
COMPARISON OF SELECTED ELEMENTS OF REVENUE AND COSTS - Continued
Depreciation of property and equipment for 1993 remained
consistent with 1992, as increases resulting from Chrysler's capital spending
program were offset by reductions at CFC resulting from the sales and
downsizing of its nonautomotive financing operations. The increase in
depreciation of property and equipment in 1992 compared to 1991 was principally
the result of Chrysler's capital spending program, coupled with higher
obsolescence costs at renovated facilities. Amortization of special tooling
has remained relatively constant over the three years, as tooling amortization
associated with new vehicles has approximated prior year write-offs of tooling
related to discontinued models.
Selling and administrative expenses in 1993 remained
consistent with 1992, as increased employee costs were offset by reduced costs
at CFC due to the downsizing of its nonautomotive financing operations. The
increase in selling and administrative expenses in 1992 over 1991 was primarily
due to increased employee costs and increased advertising expenses related to
Chrysler's new products.
Pension expense decreased in 1993 as compared to 1992 due to
improved funding of the plans. Nonpension postretirement benefit expense
increased significantly in 1993 due to the adoption of SFAS No. 106, which
requires that the costs of health and life insurance benefits for retirees be
accrued as expense in the period in which employees provide services.
The decline in interest expense over the three years was
primarily due to CFC's lower average borrowings. The reduced average borrowings
in 1993 as compared to 1992 resulted from CFC's sales and downsizing of its
nonautomotive financing operations, the proceeds from which were used to reduce
outstanding indebtedness. The reduction in average borrowings in 1992 from
1991 was principally due to CFC's increased reliance on receivable sales as a
funding source. CFC's average effective cost of borrowings was 8.6 percent,
7.8 percent and 8.7 percent in 1993, 1992 and 1991, respectively. Despite
improved credit ratings and lower market interest rates, CFC's average
effective cost of borrowings increased in 1993, primarily as a result of the
amortization of up-front fees and costs associated with CFC's U.S. and Canadian
revolving credit agreements commencing in August 1992 and January 1993,
respectively. The decrease in the 1992 average effective cost of borrowings
from 1991 was the result of lower market interest rates.
The results of operations for 1992 included a restructuring
charge of $101 million relating to the realignment of the Car Rental Operations
under Pentastar Transportation Group and the consolidation and phase-out of
certain of these operations. This restructuring charge included the write-down
of goodwill, lease termination costs, losses associated with the disposal of
tangible assets, and other related charges.
Operating results for 1993, 1992 and 1991 included gains on
sales of automotive assets and investments of $265 million, $142 million and
$205 million, respectively. The 1993 gain was comprised of the $205 million
pre-tax gain on the sales of an aggregate of 50.3 million shares of MMC stock
and a $60 million pre-tax gain on the sale of the plastics operations of
Chrysler's Acustar division. The 1992 gain represented the pre-tax gain on the
sale of 43.6 million shares of MMC stock. The 1991 gain resulted from
Chrysler's sale of its 50 percent equity interest in Diamond-Star to MMC, its
partner in the joint venture.
Chrysler's effective tax rate was 37.1 percent in 1993,
compared with 45.9 percent in 1992 and 33.5 percent in 1991. The decrease in
the effective tax rate in 1993 was largely due to the favorable adjustment of
Chrysler's deferred tax assets and liabilities to the new 35 percent U.S.
income tax rate, partially offset by the increase in the 1993 income tax
provision to reflect this one percent increase in the U.S. income tax rate.
Nondeductible expenses, primarily goodwill amortization were higher in 1992 as
compared to 1993 and 1991.
LIQUIDITY AND CAPITAL RESOURCES
Chrysler's combined cash, cash equivalents and marketable
securities totaled $5.1 billion at December 31, 1993 (including $613 million
held by CFC), an increase of $1.4 billion from December 31, 1992. The increase
in 1993 was the result of cash generated by operating activities, the issuance
of 52 million shares of new common stock and the sale of assets and
investments, partially offset by debt repayments, pension contributions and
capital expenditures. During 1992, Chrysler increased its consolidated cash,
cash equivalents and marketable securities by $614 million, as cash generated
by operating activities, the issuance of 1.7 million shares of convertible
preferred stock and the sale of automotive assets exceeded capital expenditures
and debt repayments. Chrysler believes that cash from operations and its cash
position will provide sufficient liquidity to meet its funding requirements.
24
<PAGE> 25
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL Part II - Continued
CONDITION AND RESULTS OF OPERATIONS - Continued
LIQUIDITY AND CAPITAL RESOURCES - Continued
Both Chrysler and CFC regained investment grade credit ratings
in 1993. The improved credit ratings reflect Chrysler's improved operating
results, the significant improvements in Chrysler's balance sheet (including
reductions in its outstanding debt and unfunded pension obligation), and CFC's
improved liquidity.
Chrysler's long-term profitability will depend on its ability
to introduce and market its products successfully. Chrysler expects to spend
approximately $20 billion over the next five years for new product development
and the acquisition of productive assets. At December 31, 1993, Chrysler had
commitments for capital expenditures, including commitments for assets
currently under construction, totaling $1.1 billion.
Chrysler's projected pension benefit obligation in excess of
pension plan assets was $2.2 billion at December 31, 1993, as compared to $3.9
billion at December 31, 1992. This reduction in the unfunded pension
obligation during 1993 resulted from Chrysler's contributions of $3.5 billion
to the pension fund, which exceeded the significant increases in the projected
pension benefit obligation caused by a reduction in the discount rate used to
measure such obligations and pension benefit increases which were included in
Chrysler's new national labor agreements with its principal collective
bargaining units. Chrysler's objective is to fully fund its remaining unfunded
pension obligation by the end of 1995.
At December 31, 1993, Chrysler (excluding CFC) had debt
maturities of $500 million in 1994, $412 million in 1995 and $42 million in
1996. Chrysler (excluding CFC) redeemed early $769 million of its outstanding
debt during the fourth quarter of 1993.
On June 30, 1993, Chrysler entered into an agreement with its
bank lenders which extended the maturity of its $1.5 billion bank
facility to June 30, 1996. At Chrysler's option, up to 50 percent of the total
commitment under the amended agreement may be used by CFC. The agreement
enables the banks to obtain a security interest, to be shared equally and
ratably with holders of other senior indebtedness and guarantees of Chrysler,
in Chrysler's principal domestic plants and related machinery, equipment and
tooling, Chrysler's equity interest in CFC and certain other assets under
certain circumstances, including when borrowings under the agreement exceed
$500 million, and if Chrysler's senior debt does not have investment grade
credit ratings. Under the agreement, Chrysler is subject to, and has complied
with, financial covenants relating to minimum net worth and the ratio of
liabilities and guarantees to net worth. None of the commitment was drawn upon
during 1993.
Chrysler's ability to market its products successfully depends
significantly on the availability of inventory financing for its dealers and,
to a lesser extent, the availability of financing for retail and fleet
customers, both of which CFC provides. CFC's liquidity improved during 1993
following the sales and downsizing of its nonautomotive financing operations
and the achievement of investment grade credit ratings. CFC's improved access
to the credit markets enabled it to issue $2.3 billion of term debt and
increase the level of its short-term notes (primarily commercial paper)
outstanding to $2.8 billion.
Receivable sales continued to be a significant source of
funding, as CFC realized $7.8 billion of net proceeds from the sale of
automotive retail receivables during 1993, as compared to $5.8 billion of net
proceeds from the sale of automotive and nonautomotive retail receivables
during 1992. In addition, CFC's revolving wholesale receivable sale
arrangements provided funding which aggregated $4.6 billion and $4.3 billion at
December 31, 1993 and 1992, respectively.
During 1993, $2.4 billion in aggregate cash proceeds were
received from the sale of substantially all of the net assets of the consumer
and inventory financing businesses of Chrysler First and the sale of
certain assets of Chrysler Capital. Proceeds from these sales were
used to reduce outstanding indebtedness.
At December 31, 1993, CFC had U.S. and Canadian credit
facilities aggregating $5.2 billion, consisting of contractually committed U.S.
credit lines of $4.7 billion expiring in August 1995 and $489 million of
Canadian credit lines expiring in December 1995. CFC also has receivable sale
agreements totaling $2.9 billion, consisting of a $2.5 billion U.S. automotive
receivable sale agreement (which will be reduced to $1.25 billion in September
1994) which expires in September 1996, and a $414 million Canadian receivable
sale agreement which expires in December 1995. At December 31, 1993, none of
CFC's U.S. and Canadian credit facilities or receivable sale agreements were
utilized.
At December 31, 1993, CFC had debt maturities of $4.1 billion
in 1994 (including $2.8 billion of short-term notes), $626 million in 1995, and
$1.0 billion in 1996. CFC believes that cash provided by operations,
receivable sales, issuance of term debt, and issuance of commercial paper
backed by unused revolving credit facilities will provide sufficient liquidity.
25
<PAGE> 26
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL Part II - Continued
CONDITION AND RESULTS OF OPERATIONS - Continued
NEW ACCOUNTING STANDARDS
In May 1993, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 114, "Accounting by Creditors for Impairment of a Loan,"
effective for fiscal years beginning after December 15, 1994. This new
accounting standard requires creditors to evaluate the collectibility of both
contractual interest and principal of receivables when evaluating the need for
a loss accrual. Chrysler has not determined the impact that the adoption of
this accounting standard will have on its consolidated operating results or
financial position. Chrysler plans to adopt this standard on or before January
1, 1995, as required.
In May 1993, the FASB issued SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," effective for fiscal years
beginning after December 15, 1993. This accounting standard specifies the
accounting and reporting requirements for changes in the fair values of
investments in certain debt and equity securities. Based upon its initial
assessment, Chrysler believes that the implementation of this new accounting
standard will not have a material impact on its consolidated operating results
and financial position. Chrysler plans to adopt this standard effective
January 1, 1994, as required.
26
<PAGE> 27
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(in millions of dollars)
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------------
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
Sales of manufactured products $ 40,831 $ 33,548 $ 25,575
Finance and insurance income 1,429 1,953 2,587
Other income 1,340 1,396 1,208
---------- ---------- ----------
TOTAL SALES AND REVENUES 43,600 36,897 29,370
---------- ---------- ----------
Costs, other than items below (Notes 2 and 15) 32,382 28,396 22,922
Depreciation of property and equipment 969 969 821
Amortization of special tools 671 641 644
Selling and administrative expenses 3,377 3,387 2,974
Pension expense (Note 11) 756 837 804
Nonpension postretirement benefit expense (Note 12) 768 369 351
Interest expense 1,104 1,405 1,869
Gain on sales of automotive assets and investments (Note 13) (265) (142) (205)
Restructuring charge (Note 14) -- 101 --
---------- ---------- ----------
TOTAL COSTS AND EXPENSES 39,762 35,963 30,180
---------- ---------- ----------
EARNINGS (LOSS) BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES 3,838 934 (810)
Provision (credit) for income taxes (Note 7) 1,423 429 (272)
---------- ---------- ----------
EARNINGS (LOSS) BEFORE CUMULATIVE EFFECT
OF CHANGES IN ACCOUNTING PRINCIPLES 2,415 505 (538)
Cumulative effect of changes in accounting
principles (Notes 1, 7 and 12) (4,966) 218 (257)
---------- ---------- ----------
NET EARNINGS (LOSS) $ (2,551) $ 723 $ (795)
Preferred stock dividends (Note 10) 80 69 --
---------- ---------- ----------
NET EARNINGS (LOSS) ON COMMON STOCK $ (2,631) $ 654 $ (795)
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
(in dollars or millions of shares)
<S> <C> <C> <C>
Primary earnings (loss) per common share (Note 10):
Earnings (loss) before cumulative effect of changes in
accounting principles $ 6.77 $ 1.47 $ (2.22)
Cumulative effect of changes in accounting principles (14.39) 0.74 (1.06)
---------- ---------- ----------
Net earnings (loss) per common share $ (7.62) $ 2.21 $ (3.28)
========== ========== ==========
Average common and dilutive equivalent shares outstanding 345.1 295.9 242.6
Fully diluted earnings per common share (Note 10):
Earnings before cumulative effect of changes in
accounting principles $ -- $ 1.49 $ --
Cumulative effect of changes in accounting principles -- 0.64 --
---------- ---------- ----------
Net earnings per common share $ -- $ 2.13 $ --
========== ========== ==========
Average common and dilutive equivalent shares outstanding -- 339.2 --
Common stock dividends declared $ 0.65 $ 0.60 $ 0.60
</TABLE>
____________________
Amounts for the prior periods have been reclassified to conform with current
period classifications. See notes to consolidated financial statements.
27
<PAGE> 28
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions of dollars)
<TABLE>
<CAPTION>
December 31
----------------------------------------
1993 1992
-------------- -------------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 4,040 $ 2,357
Marketable securities 1,055 1,292
Accounts receivable - trade and other (less allowance for doubtful
accounts: 1993 - $52 million; 1992 - $63 million) 1,799 1,848
Inventories (Note 2) 3,629 3,090
Prepaid taxes, pension and other expenses 833 747
Nonautomotive assets held for sale -- 2,393
Finance receivables and retained interests in sold receivables
and other related amounts - net (Note 3) 10,208 11,134
Property and equipment (Note 4) 9,319 8,635
Special tools 3,455 2,896
Intangible assets (Note 1) 4,328 4,619
Deferred tax assets (Note 7) 2,210 27
Other assets 2,954 1,615
------------- -----------
TOTAL ASSETS $ 43,830 $ 40,653
============= ===========
LIABILITIES:
Accounts payable $ 6,863 $ 5,798
Short-term debt 3,297 779
Payments due within one year on long-term debt (Note 6) 1,283 1,338
Accrued liabilities and expenses (Note 5) 4,650 4,090
Long-term debt (Note 6) 6,871 13,434
Accrued noncurrent employee benefits (Notes 1, 11 and 12) 10,613 4,187
Other noncurrent liabilities 3,417 3,489
------------- -----------
TOTAL LIABILITIES 36,994 33,115
------------- -----------
COMMITMENTS AND CONTINGENT LIABILITIES (Note 8)
SHAREHOLDERS' EQUITY (Note 10): (shares in millions)
Preferred stock - $1 per share par value; authorized 20.0 shares;
Series A Convertible Preferred Stock; issued: 1993 and 1992 -
1.7 shares; aggregate liquidation preference $863 million 2 2
Common stock - $1 per share par value; authorized 500.0 shares;
issued: 1993 - 364.1 shares; 1992 - 312.1 shares 364 312
Additional paid-in capital 5,533 3,657
Retained earnings 1,170 3,924
Treasury stock - at cost: 1993 - 10.4 shares; 1992 - 16.2 shares (233) (357)
------------- -----------
TOTAL SHAREHOLDERS' EQUITY 6,836 7,538
------------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 43,830 $ 40,653
============= ===========
</TABLE>
_______________________
Amounts for the prior period have been reclassified to conform with current
period classifications. See notes to consolidated financial statements.
28
<PAGE> 29
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions of dollars)
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------------
1993 1992 1991
----------- ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ (2,551) $ 723 $ (795)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization 1,640 1,610 1,465
Provision for restructuring charge -- 101 --
Plant capacity adjustment -- -- (391)
Provision for credit losses 209 345 579
Deferred income taxes 803 229 (288)
Gain on sales of automotive assets and investments (265) (142) (205)
Cumulative effect of changes in accounting principles 4,966 (218) 257
Change in accounts receivable 49 100 1,801
Change in inventories (557) 535 (167)
Change in prepaid expenses and other assets (1,472) (51) (492)
Change in accounts payable and accrued and other liabilities 183 525 1,152
Other 47 (8) (22)
----------- ------------ -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,052 3,749 2,894
----------- ------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (4,700) (18,084) (8,001)
Sales and maturities of marketable securities 4,937 17,786 8,788
Proceeds from sales of automotive assets and investments 461 215 100
Finance receivables acquired (16,809) (17,290) (17,476)
Finance receivables collected 8,893 10,605 13,652
Proceeds from sales of finance receivables 8,630 8,034 6,465
Proceeds from sales of nonautomotive assets 2,375 903 --
Expenditures for property and equipment (1,761) (1,417) (1,553)
Expenditures for special tools (1,234) (872) (708)
Other 146 (51) (241)
----------- ------------ -----------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 938 (171) 1,026
----------- ------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt (less than 90-day maturities) 2,518 (110) (635)
Proceeds under revolving lines of credit and long-term borrowings 6,995 44,597 68,231
Payments on revolving lines of credit and long-term borrowings (13,592) (48,334) (71,058)
Proceeds from issuance of common stock, net of expenses 1,952 -- 385
Proceeds from issuance of preferred stock, net of expenses -- 836 --
Redemption of subsidiary preferred stock -- (75) (210)
Dividends paid (281) (225) (169)
Other 101 49 5
----------- ------------ -----------
NET CASH USED IN FINANCING ACTIVITIES (2,307) (3,262) (3,451)
----------- ------------ -----------
Change in cash and cash equivalents 1,683 316 469
Cash and cash equivalents at beginning of year 2,357 2,041 1,572
----------- ------------ -----------
Cash and cash equivalents at end of year $ 4,040 $ 2,357 $ 2,041
=========== ============ ===========
</TABLE>
______________________
Amounts for the prior periods have been reclassified to conform with current
period classifications. See notes to consolidated financial statements.
29
<PAGE> 30
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies
Consolidation and Financial Statement Presentation
The consolidated financial statements of Chrysler Corporation and its
consolidated subsidiaries ("Chrysler") include the accounts of all significant
majority-owned subsidiaries and entities. Intercompany accounts and
transactions have been eliminated in consolidation.
Revenue Recognition
Vehicle and parts sales are generally recorded when such products are
shipped to dealers. Provisions for normal dealer sales allowances are made at
the time of sale and treated as sales reductions. Prior to 1991, the cost of
special sales incentive programs was recognized when a retail sale was made.
Due to the increased frequency and significance of special sales incentive
programs, Chrysler changed its method of accounting, effective January 1, 1991,
to recognize the cost of such programs as sales reductions at the time a
vehicle is sold to a dealer. The cumulative effect of this change in
accounting principle resulted in an after-tax charge of $257 million, or $1.06
per common share.
Interest income from owned finance receivables is recognized using the
interest method. Lending fees and certain direct loan origination costs are
deferred and amortized to interest income using the interest method over the
contractual terms of the finance receivables. Recognition of interest income
is generally suspended when a loan becomes contractually delinquent for periods
ranging from 60 to 90 days. Income recognition is resumed when the loan
becomes contractually current, at which time all past due interest income is
recognized.
Chrysler Financial Corporation ("CFC"), a wholly-owned subsidiary of
Chrysler, sells significant amounts of automotive receivables subject to
limited recourse provisions. CFC generally sells its receivables to a trust,
and remains as servicer, for which it is paid a servicing fee. In a
subordinated capacity, CFC retains excess servicing cash flows, a limited
interest in the principal balances of the sold receivables and certain cash
deposits provided as credit enhancements for investors.
Gains or losses from the sale of retail receivables are recognized in the
period that such sale occurs. In determining the gain or loss for each
qualifying sale, the investment in the sold receivable pool is allocated
between the portion sold and the portion retained based on their relative fair
values on the date of sale. Gains on sales of wholesale receivables are not
material. The portion of the receivables sold is removed from the balance
sheet.
Depreciation and Tool Amortization
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is generally provided on a straight-line basis. At December 31,
1993, the weighted-average service lives of assets were 32 years for buildings
(including improvements and building equipment), 11 years for machinery and
equipment and 12 years for furniture and fixtures. Special tooling costs are
amortized over the years that a model using that tooling is expected to be
produced, and within each year based on the units produced. Amortization is
deducted directly from the asset account. During any given model year, special
tools will contain tooling with varying useful lives.
Product-Related Costs
Expenditures for advertising, sales promotion and other product-related
costs are expensed as incurred. Estimated costs of product warranty are
accrued at the time of sale. Research and development costs are expensed as
incurred and were $1.2 billion, $1.1 billion, and $955 million in 1993, 1992,
and 1991, respectively.
Cash and Cash Equivalents
Highly liquid investments with an original maturity of three months or less
from the date of purchase are classified as cash equivalents.
30
<PAGE> 31
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 1. Summary of Significant Accounting Policies - Continued
Marketable Securities
Marketable equity securities are carried at cost, which approximates
market. Debt securities are carried at cost adjusted for amortized premium or
discount and accrued interest.
Allowance for Credit Losses
An allowance for credit losses is generally established during the period
in which finance receivables are acquired. The allowance for credit losses is
maintained at a level deemed appropriate based on loss experience and other
factors. Retail automotive receivables not supported by a dealer guaranty are
charged to the allowance for credit losses net of the estimated value of
repossessed collateral at the time of repossession. Nonautomotive finance
receivables are reduced to the estimated fair value of the collateral when
determined to be uncollectible.
Inventories
Inventories are valued at the lower of cost or market. The cost of
approximately 42 percent and 44 percent of inventories at December 31, 1993 and
1992, respectively, was determined on a Last-In, First-Out ("LIFO") basis. The
balance of inventory cost was determined on a First-In, First-Out ("FIFO")
basis.
Intangible Assets
The purchase price of companies in excess of the value of net tangible
assets acquired is amortized on a straight-line basis over periods of up to 40
years. The amount is reported net of accumulated amortization of $643 million
and $558 million at December 31, 1993 and 1992, respectively. As a result of
the adoption of Statement of Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes," previously unrecognized net operating loss
("NOL") and tax credit carryforwards totaling $188 million, which were
purchased as part of acquisitions, have been recorded as a reduction to
goodwill. As part of Chrysler's purchase in 1987 of the interest of Regie
Nationale des Usines Renault ("Renault") in American Motors Corporation
("AMC"), Chrysler made a $211 million payment in 1992 to Renault, which was
recorded as an adjustment to intangible assets, based on the volume of sales of
certain Jeep vehicles manufactured from 1987 through 1991. Intangible assets
also included an intangible pension asset of $2.1 billion and $2.3 billion at
December 31, 1993 and 1992, respectively.
Postemployment Benefits
Effective January 1, 1993, Chrysler adopted SFAS No. 112, "Employers'
Accounting for Postemployment Benefits." This new accounting standard requires
the accrual of benefits provided to former or inactive employees after
employment but prior to retirement. Prior to 1993, Chrysler accrued for
certain of these benefits at the time an employee's active service ended and
expensed certain other benefits on the basis of cash expenditures. Adoption of
this accounting standard resulted in the recognition of an after-tax charge of
$283 million, or $0.82 per common share, for the cumulative effect of this
change in accounting principle. Adoption of SFAS No. 112 resulted in a nominal
increase in the annual expense recognized for these benefits and no cash
impact.
Off-Balance-Sheet Financial Instruments
Chrysler enters into various interest rate and foreign currency exchange
agreements to reduce its exposure to fluctuations in interest rates and foreign
currency exchange rates. Net interest differentials to be paid or received
relating to interest rate exchange agreements are accrued and included as
interest expense. Debt obligations denominated in foreign currencies and
subject to foreign currency swap agreements are included in the consolidated
balance sheet at the contractual rate of exchange in the respective foreign
currency swap agreement. Gains and losses on forward contracts and purchased
options, designated as hedges of known or anticipated contractual obligations
and export sales revenues, are deferred and included in the settlement of the
related transaction.
31
<PAGE> 32
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 2. Inventories and Cost of Sales
Inventories, summarized by major classification, were as follows:
<TABLE>
<CAPTION>
December 31
----------------------------------
1993 1992
------------- -----------
(in millions of dollars)
<S> <C> <C>
Finished products, including service parts $ 1,016 $ 1,039
Raw materials, finished production parts and supplies 1,177 1,001
Vehicles held for short-term lease 1,436 1,050
------------ -----------
Total $ 3,629 $ 3,090
============ ===========
</TABLE>
Inventories valued on the LIFO basis would have been $259 million and $238
million higher than reported had they been valued on the FIFO basis at December
31, 1993 and 1992, respectively.
Total manufacturing cost of sales aggregated $33.5 billion, $28.6 billion
and $24.9 billion for 1993, 1992, and 1991, respectively.
Note 3. Finance Receivables, Retained Interests in Sold Receivables and Other
Related Amounts and Allowance for Credit Losses
Finance receivables outstanding were as follows:
<TABLE>
<CAPTION>
December 31
-----------------------------------
1993 1992
----------- -----------
(in millions of dollars)
<S> <C> <C>
Automotive financing $ 3,880 $ 4,754
Nonautomotive financing 2,803 3,328
----------- -----------
Total finance receivables 6,683 8,082
Allowance for credit losses (213) (269)
----------- -----------
Net finance receivables $ 6,470 $ 7,813
=========== ===========
</TABLE>
Contractual maturities of total finance receivables outstanding as of
December 31, 1993, were (in millions of dollars): 1994 - $1,863; 1995 -
$1,421; 1996 - $743; 1997 - $513; 1998 - $376; thereafter - $1,767. Actual
cash flow experience will vary from contractual cash flow due to future sales
of finance receivables and prepayments.
CFC's retained interests in sold receivables and other related amounts are
generally restricted and subject to limited recourse provisions. Retained
interests in sold receivables and other related amounts were comprised as
follows:
<TABLE>
<CAPTION>
December 31
-------------------------------------
1993 1992
------------ -----------
(in millions of dollars)
<S> <C> <C>
Cash and investments $ 586 $ 526
Senior interests in wholesale receivables 967 562
Subordinated interests in receivables 1,783 1,751
Excess servicing 200 231
Other restricted and securitized assets 496 484
Allowance for credit losses (294) (233)
------------ -----------
Total $ 3,738 $ 3,321
============ ===========
</TABLE>
32
<PAGE> 33
item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 3. Finance Receivables, Retained Interests in Sold Receivables and Other
Related Amounts and Allowance for Credit Losses - Continued
Changes in the allowance for credit losses including receivables sold
subject to limited recourse and amounts included as assets held for sale were
as follows:
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------------
1993 1992 1991
---------- ---------- ----------
(in millions of dollars)
<S> <C> <C> <C>
Balance at beginning of year $ 603 $ 630 $ 477
Provision for credit losses 209 345 579
Net credit losses (207) (389) (444)
Adjustments related to nonautomotive asset sales (79) -- --
Other adjustments (19) 17 18
--------- ---------- ---------
Balance at end of year $ 507 $ 603 $ 630
========= ========== =========
</TABLE>
Nonearning finance receivables, including receivables sold subject to
limited recourse, totaled $333 million and $735 million at December 31, 1993
and 1992, respectively, which represented 1.21 percent and 2.49 percent of such
receivables outstanding, respectively.
In May 1993, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 114, "Accounting by Creditors for Impairment of a Loan," effective for
fiscal years beginning after December 15, 1994. This new accounting standard
requires creditors to evaluate the collectibility of both contractual interest
and principal of receivables when evaluating the need for a loss accrual.
Chrysler has not determined the impact that the adoption of this accounting
standard will have on its consolidated operating results or financial position.
Chrysler plans to adopt this standard on or before January 1, 1995, as
required.
Note 4. Property and Equipment
Property and equipment, summarized by major classification, were as follows:
<TABLE>
<CAPTION>
December 31
-----------------------------------
1993 1992
-------------- -------------
(in millions of dollars)
<S> <C> <C>
Land $ 427 $ 407
Buildings 4,501 4,202
Machinery and equipment 9,130 8,275
Furniture and fixtures 462 447
Construction in progress 1,379 1,483
----------- ----------
15,899 14,814
Less accumulated depreciation 6,580 6,179
----------- ----------
Total $ 9,319 $ 8,635
=========== ==========
</TABLE>
Note 5. Accrued Liabilities and Expenses
Accrued liabilities and expenses consisted of the following:
<TABLE>
<CAPTION>
December 31
--------------------------------------
1993 1992
-------------- -------------
(in millions of dollars)
<S> <C> <C>
Dealer and customer claims and discounts $ 1,609 $ 1,682
Employee compensation and benefits 1,653 907
Accrued payroll and other taxes 393 302
Accrued interest 197 260
Other 798 939
----------- ----------
Total $ 4,650 $ 4,090
=========== ==========
</TABLE>
33
<PAGE> 34
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 6. Long-term Debt
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
December 31, 1993
---------------------------------- December 31
Weighted Average ------------------------------
Interest Rate Maturity 1993 1992
-------------------- ---------- ---------- ----------
(in millions of dollars)
<S> <C> <C> <C> <C>
Chrysler, excluding CFC:
Debentures 12.0% 1997-2017 $ 564 $ 1,328
Notes and other debt 10.7% 1994-2020 2,352 2,437
--------- ---------
2,916 3,765
Less payments due within one year 400 58
--------- ---------
Total 2,516 3,707
--------- ---------
CFC:
Bank borrowings -- 5,924
Senior notes and debentures 7.3% 1994-2018 5,139 4,436
Senior subordinated notes and debentures 5.5% 1994-1995 77 420
Junior subordinated notes -- 165
Mortgage notes, capital leases and other 22 62
--------- ---------
5,238 11,007
Less payments due within one year 883 1,280
--------- ---------
Total 4,355 9,727
--------- ---------
Total long-term debt $ 6,871 $ 13,434
========= =========
</TABLE>
The weighted average interest rates include the effects of interest rate
exchange agreements and have been calculated on the basis of rates in effect at
December 31, 1993.
Interest rate exchange agreements have been entered into with major
financial institutions, which are expected to fully perform under the terms of
the agreements. These agreements are generally used as hedges and are matched
with specific financial instruments. At December 31, 1993, the notional amount
of Chrysler's portfolio of interest rate exchange agreements totaled $1.8
billion. While the notional amount is used to measure the volume of these
agreements, it does not represent exposure to credit loss.
CFC has entered into foreign currency swap arrangements which provide for
payment of foreign currency principal and interest obligations in U.S. or
Canadian dollars based on the contractual exchange rate in the respective
agreement. As a result, the underlying debt obligations are recorded at the
contractual rate totaling $535 million at December 31, 1993. If the debt
obligations had been translated at the various exchange rates in effect at
December 31, 1993, the recorded amount would have been $121 million higher.
On June 30, 1993, Chrysler entered into an agreement with its bank
lenders which extended the maturity of its $1.5 billion bank facility to June
30, 1996. At Chrysler's option, up to 50 percent of the total commitment under
the amended agreement may be used by CFC. The agreement enables the banks to
obtain a security interest, to be shared equally and ratably with holders of
other senior indebtedness and guarantees of Chrysler, in Chrysler's principal
domestic plants and related machinery, equipment and tooling, Chrysler's equity
interest in CFC and certain other assets under certain circumstances, including
when borrowings under the agreement exceed $500 million, and if Chrysler's
senior debt does not have investment grade credit ratings. Under the
agreement, Chrysler is subject to, and has complied with, financial covenants
relating to minimum net worth and the ratio of liabilities and guarantees to
net worth. None of the commitment was drawn upon at December 31, 1993.
34
<PAGE> 35
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 6. Long-term Debt - Continued
At December 31, 1993, CFC had contractually committed credit lines of $5.2
billion and receivable sale agreements of $2.9 billion. At December 31, 1993,
CFC had no borrowings outstanding under any of its credit lines or receivable
sale arrangements.
At December 31, 1993, aggregate annual maturities of consolidated debt,
including principal payments on capital leases, were as follows (in millions of
dollars): 1994 - $4,580; 1995 - $1,038; 1996 - $1,103; 1997 - $516; 1998 -
$737.
Note 7. Income Taxes
Effective January 1, 1992, Chrysler adopted SFAS No. 109, "Accounting for
Income Taxes," which requires the liability method of accounting for deferred
income taxes and the recognition of net deferred tax assets subject to an
ongoing assessment of realizability. The principal difference between the
liability method and the method previously used is that under the liability
method, deferred tax assets and liabilities are adjusted to reflect changes in
statutory tax rates, as income adjustments, in the period changes are enacted.
At January 1, 1992, the adjustment of deferred tax assets and liabilities
resulted in a favorable cumulative effect of the change in accounting principle
of $218 million, or $0.74 per common share. Also during 1992, adjustments to
deferred tax assets and liabilities recognized in retained earnings resulted in
an increase of $37 million in shareholders' equity.
Earnings (loss) before income taxes and cumulative effect of changes in
accounting principles was attributable to the following sources:
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------------
1993 1992 1991
---------- ---------- ----------
(in millions of dollars)
<S> <C> <C> <C>
United States $ 3,191 $ 618 $ (1,165)
Foreign 647 316 355
--------- ---------- -----------
Total $ 3,838 $ 934 $ (810)
========= ========== ===========
</TABLE>
The provision (credit) for income taxes on earnings (loss) before income
taxes and cumulative effect of changes in accounting principles in the
consolidated statement of earnings included the following:
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------------
1993 1992 1991
---------- ---------- ----------
(in millions of dollars)
<S> <C> <C> <C>
Currently Payable (Refundable):
United States $ 523 $ 66 $ (89)
Foreign 69 123 94
State and local 28 11 11
--------- ---------- ----------
620 200 16
--------- ---------- ----------
Deferred:
United States 528 220 (265)
Foreign 131 (27) 36
State and local 144 36 (59)
--------- ---------- ----------
803 229 (288)
--------- ---------- ----------
Total $ 1,423 $ 429 $ (272)
========= ========== ==========
</TABLE>
35
<PAGE> 36
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 7. Income Taxes - Continued
Chrysler does not provide U.S. income tax or foreign withholding taxes on
the undistributed earnings of foreign subsidiaries as such earnings of $1.6
billion are intended to be permanently reinvested in those operations. It is
not practicable to estimate the amount of unrecognized deferred tax liability
for the undistributed foreign earnings.
A reconciliation of income taxes determined using the statutory U.S. rate
(35 percent for 1993; 34 percent for 1992 and 1991) to actual income taxes
provided was as follows:
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------------
1993 1992 1991
---------- ---------- ----------
(in millions of dollars)
<S> <C> <C> <C>
Tax at U.S. statutory rate $ 1,343 $ 318 $ (275)
State and local taxes net of federal tax benefit 114 33 (34)
Rate adjustment of U.S. deferred tax assets and liabilities (72) -- --
Foreign tax differential (13) 14 22
Nondeductible goodwill 28 60 29
Other 23 4 (14)
--------- ---------- -----------
Provision (credit) for income taxes $ 1,423 $ 429 $ (272)
========= ========== ===========
Effective tax rate 37.1% 45.9% 33.5%
========= ========== ===========
</TABLE>
The tax-effected temporary differences and carryforwards which comprised
deferred tax assets and liabilities were as follows:
<TABLE>
<CAPTION>
December 31, 1993 December 31, 1992
----------------------------- -----------------------------
Deferred Deferred Deferred Deferred
Tax Tax Tax Tax
Assets Liabilities Assets Liabilities
------------ ------------- ------------ -----------
(in millions of dollars)
<S> <C> <C> <C> <C>
Accrued expenses $ 2,415 $ -- $ 2,090 $ --
Lease transactions -- 1,742 -- 1,660
Depreciation -- 1,596 -- 1,585
NOL carryforwards 136 -- 891 --
Tax credit carryforwards 342 -- 423 --
Alternative minimum tax credit carryforwards 825 -- 411 --
Pensions 3 488 44 159
Postretirement benefits other than pensions 2,783 -- 70 --
State and local taxes 421 91 74 82
Other 75 641 85 423
---------- ---------- ---------- ----------
7,000 4,558 4,088 3,909
Valuation allowance (146) -- (130) --
---------- ---------- ---------- ----------
Total $ 6,854 $ 4,558 $ 3,958 $ 3,909
========== ========== ========== ==========
</TABLE>
The valuation allowance was principally related to net operating loss
carryforwards of certain domestic and foreign subsidiaries of $389 million at
December 31, 1993, which may be used through the year 2008. At December 31,
1993, Chrysler had tax credit carryforwards of $342 million, which expire at
various dates through the year 2008, and alternative minimum tax credit
carryforwards of $825 million, which have no expiration date.
36
<PAGE> 37
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 8. Commitments and Contingent Liabilities
Litigation
Various claims and legal proceedings have been asserted or instituted
against Chrysler, including some purporting to be class actions, and some which
demand large monetary damages or other relief which would require significant
expenditures. Although the ultimate cost of resolving these matters cannot be
precisely determined at December 31, 1993, Chrysler has established reserves
which it believes will be sufficient to resolve these matters. After giving
effect to these reserves, management believes, based on currently known facts
and circumstances, that the disposition of these matters will not have a
material adverse effect on Chrysler's consolidated financial position. Future
developments could cause Chrysler to change its estimate of the ultimate cost
of resolving these matters, and such changes could be material to Chrysler's
consolidated results of operations for the period in which such developments
occur.
Environmental Matters
The United States Environmental Protection Agency and various state
agencies have notified Chrysler that it may be a potentially responsible party
("PRP") for the cost of cleaning up hazardous waste storage or disposal
facilities pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA") and other federal and state environmental laws.
Chrysler is also a party to a number of lawsuits filed in various jurisdictions
alleging CERCLA or other environmental claims. In virtually all cases,
Chrysler is only one of a number of PRPs who may be found to be jointly and
severally liable. In addition, Chrysler has identified additional active or
deactivated facilities at which it may be responsible for closure activities or
cleaning up hazardous waste. Estimates of future costs of such environmental
matters are necessarily imprecise due to numerous uncertainties, including the
enactment of new laws and regulations, the development and application of new
technologies, the identification of new sites for which Chrysler may have
remediation responsibility and the apportionment and collectibility of
remediation costs among responsible parties. Chrysler may ultimately incur
significant expenditures over an extended period of time in connection with the
foregoing environmental matters, and therefore has established reserves for the
estimated costs associated with all of its environmental remediation efforts,
including CERCLA and related matters, expected closure activities and voluntary
environmental cleanup efforts. Chrysler believes that these reserves will be
sufficient to resolve these matters. After giving effect to these reserves,
management believes, based on currently known facts and circumstances and
existing laws and regulations, that the disposition of these matters will not
have a material adverse effect on Chrysler's consolidated financial position.
Future developments could cause Chrysler to change its estimate of the total
costs associated with these matters, and such changes could be material to
Chrysler's consolidated results of operations for the period in which such
developments occur.
Other Matters
The majority of Chrysler's lease payments are for operating leases. At
December 31, 1993, Chrysler had the following minimum rental commitments under
noncancelable operating leases (in millions of dollars):
<TABLE>
<S> <C>
1994 $ 268
1995 204
1996 142
1997 96
1998 48
1999 and thereafter 160
----------
Total $ 918
==========
</TABLE>
Future minimum lease commitments have not been reduced by minimum sublease
rentals of $325 million due in the future under noncancelable subleases.
Rental expense for operating leases, with original expiration dates beyond
one year, was $410 million, $383 million and $343 million in 1993, 1992 and
1991, respectively. Sublease rentals of $61 million, $60 million, and $61
million were received in 1993, 1992, and 1991, respectively.
37
<PAGE> 38
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 8. Commitments and Contingent Liabilities - Continued
Other Matters - Continued
Chrysler had commitments for capital expenditures, including commitments
for facilities currently under construction, totaling $1.1 billion at December
31, 1993.
At December 31, 1993, Chrysler had guaranteed obligations of others in the
amount of $115 million, none of which are secured by collateral.
Note 9. Stock Options and Performance-Based Compensation
The Chrysler Corporation 1991 Stock Compensation Plan (the "1991 Plan")
provides that Chrysler may grant stock options to officers, key employees and
nonemployee directors and also may grant reload stock options (which are
options granted when outstanding options are exercised by payment in stock),
stock appreciation rights (payable in cash or stock, at the sole discretion of
the Stock Option Committee) and limited stock appreciation rights (payable in
cash in the event of a change in control). The 1991 Plan also provides for
awarding restricted stock units and performance stock units, which reward
service for specified periods or attainment of performance objectives. The
Chrysler Corporation Stock Option Plan (the "Plan"), initially adopted in 1972
and readopted in 1982, was amended to incorporate certain features of the 1991
Plan.
Under the Plan and the 1991 Plan, outstanding options, consisting of
ten-year nonqualified stock options, have exercise prices of not less than 100
percent of the market value of Chrysler common stock at date of grant. Options
generally become exercisable on up to 40 percent of the shares after one year
from the date of grant, 70 percent after two years and 100 percent after three
years.
Information with respect to options granted under the Plan and the 1991
Plan was as follows:
<TABLE>
<CAPTION>
Shares Under
Options Option Price
Outstanding Per Share
----------------- -----------------
(in millions)
<S> <C> <C>
Outstanding at January 1, 1991 13.1* $ 3.06 -$68.85*
Granted 2.8 11.75 - 14.13
Exercised: Options Nil 3.06 - 11.25
SARs Nil 3.06 - 12.38
Terminated (0.5)
-----
Outstanding at December 31, 1991 15.4* 7.51 - 68.85*
Granted 3.2 16.07 - 32.82
Exercised: Options (3.1) 7.51 - 25.88
SARs (0.6) 12.13 - 25.76
Terminated (0.1)
-----
Outstanding at December 31, 1992 14.8* 11.75 - 68.85*
Granted 3.0 36.88 - 56.44
Exercised: Options (6.3) 11.75 - 44.13
SARs (0.1) 12.25 - 34.82
Terminated (0.2)
-----
Outstanding at December 31, 1993 11.2* 11.75 - 56.44
=====
</TABLE>
________________________
* Includes conversion of AMC options outstanding at date of acquisition.
38
<PAGE> 39
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 9. Stock Options and Performance-Based Compensation - Continued
Shares available for granting options at the end of 1993, 1992, and 1991
were 1.5 million, 4.4 million, and 8.1 million, respectively. At December 31,
1993, 5.5 million options with prices ranging from $11.75 to $56.44 were not
yet exercisable under the terms of the Plan and the 1991 Plan.
In addition to the Plan and the 1991 Plan, Chrysler has programs under
which additional compensation is paid to hourly and salaried employees based
upon various measures of Chrysler's performance. Such performance-based
compensation programs include incentive compensation and profit sharing paid to
certain hourly and salaried employees.
Note 10. Shareholders' Equity
Information with respect to shareholders' equity was as follows (shares in
millions):
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------------
1993 1992 1991
---------- ---------- ----------
(in millions of dollars)
<S> <C> <C> <C>
Preferred Stock:
Balance at beginning of year $ 2 $ -- $ --
Shares issued (1992 - 1.7) -- 2 --
--------- ----------- ---------
Balance at end of year $ 2 $ 2 $ --
========= =========== =========
Common Stock:
Balance at beginning of year $ 312 $ 312 $ 245
Shares issued (1993 - 52.0; 1991 - 40.2) 52 -- 40
Issuance and contribution of shares to pension fund (1991 - 27.2) -- -- 27
--------- ----------- ---------
Balance at end of year $ 364 $ 312 $ 312
========= =========== =========
Additional Paid-in Capital:
Balance at beginning of year $ 3,657 $ 2,905 $ 2,291
Issuance of common stock 1,900 -- 345
Issuance of preferred stock -- 834 --
Issuance and contribution of common stock to pension fund -- -- 273
Shares issued under employee benefit plans (24) (82) (4)
--------- ---------- ---------
Balance at end of year $ 5,533 $ 3,657 $ 2,905
========= ========== =========
Retained Earnings:
Balance at beginning of year $ 3,924 $ 3,385 $ 4,813
Net earnings (loss) (2,551) 723 (795)
Dividends declared (308) (245) (145)
Adjustment of minimum pension liability in excess of
unrecognized prior service cost 64 27 (482)
Previously unrecognized tax benefit - pension liabilty -- 182 --
Adjustment of previously recognized tax benefits -- (145) --
Translation and other adjustments 41 (3) (6)
--------- ---------- ---------
Balance at end of year $ 1,170 $ 3,924 $ 3,385
========= ========== =========
Treasury Stock:
Balance at beginning of year $ (357) $ (493) $ (500)
Shares issued under employee benefit plans (1993 - 5.8;
1992 - 3.6; 1991 - 0.1) 124 136 7
--------- ---------- ---------
Balance at end of year $ (233) $ (357) $ (493)
========= ========== =========
</TABLE>
39
<PAGE> 40
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 10. Shareholders' Equity - Continued
The annual dividend on the Series A Convertible Preferred Stock (the
"Convertible Preferred Stock") is $46.25 per share. The Convertible Preferred
Stock is convertible unless previously redeemed, at a rate (subject to
adjustment in certain events) of 27.78 shares of common stock for each share of
Convertible Preferred Stock. The Convertible Preferred Stock is not redeemable
prior to January 22, 1997. Thereafter, Chrysler may redeem the Convertible
Preferred Stock, in whole or in part, at $523.13 per share of Convertible
Preferred Stock for the period ending December 31, 1997, and thereafter
declining ratably annually to $500.00 per share after December 31, 2001, plus
accrued and unpaid dividends.
In February 1988, the Board of Directors declared and distributed a
dividend of one Preferred Share Purchase Right (a "Right") for each then
outstanding share of Chrysler's common stock and authorized the distribution of
one right with respect to each subsequently issued share of common stock. Each
Right, as amended, entitles a shareholder to purchase one one-hundredth of a
share of Junior Participating Cumulative Preferred Stock of Chrysler at a price
of $120. The Rights are attached to the common stock and are not represented
by separate certificates or exercisable until the earliest to occur of (i) 10
days after a person or group of persons acquires or obtains the right to
acquire 10 percent or more of Chrysler's outstanding common stock, and (ii) 10
business days after a person or group announces or commences a tender offer
that would result, if successful, in the bidder owning 10 percent or more of
Chrysler's outstanding common stock. If the acquiring person or group acquires
more than 10 percent of the common stock (except pursuant to a tender offer
made for all of Chrysler's common stock, and determined by Chrysler's
independent directors to be fair and in the best interests of Chrysler and its
shareholders) each Right (other than those held by the acquiror) will entitle
its holder to buy, for $120, a number of shares of Chrysler's common stock
having a market value of $240. Similarly, if after the Rights become
exercisable, Chrysler is acquired in a merger or other business combination and
is not the surviving corporation, or 50 percent or more of its assets, cash
flow or earning power is sold, each Right (other than those held by the
surviving or acquiring company) will entitle its holder to purchase, for $120,
shares of the surviving or acquiring company having a market value of $240.
Chrysler's directors may redeem the Rights at $0.05 per Right, and may amend
the Rights or extend the time during which the Rights may be redeemed until 10
business days following the date the Rights first become exercisable.
Additionally, at any time after a person acquires 10 percent or more, but less
than 50 percent, of Chrysler's common stock, Chrysler's directors may exchange
the Rights (other than those held by the acquiror), in whole or in part, at an
exchange ratio of one share of common stock per right. The Rights will expire
on February 22, 1998.
Of the 500 million shares of authorized common stock at December 31, 1993,
7.9 million shares were reserved for the Chrysler Salaried Employees' Savings
Plan, 11.0 million shares were reserved for the 1991 Plan, 13.2 million shares
were reserved for the Plan and 47.9 million shares were reserved for issuance
on conversion of the Convertible Preferred Stock.
CFC did not pay cash dividends to Chrysler in 1993, 1992 or 1991. Under
CFC's credit facility, CFC is effectively prohibited from paying cash
dividends.
Earnings (loss) per common share amounts were computed by dividing earnings
(loss) after deduction of preferred stock dividends by the average number of
common and dilutive equivalent shares outstanding. Fully diluted per common
share amounts assume conversion of the Convertible Preferred Stock, the
elimination of the related preferred stock dividend requirement, and the
issuance of common stock for all other potentially dilutive equivalents
outstanding. Fully diluted per common share amounts are not applicable for
loss periods.
Note 11. Pension Plans
Chrysler's pension plans provide noncontributory and contributory benefits.
The noncontributory pension plans cover substantially all of the hourly and
salaried employees of Chrysler and certain of its consolidated subsidiaries.
Benefits are based on a fixed rate for each year of service. Additionally,
contributory benefits and supplemental noncontributory benefits are provided to
substantially all salaried employees of Chrysler and certain of its
consolidated subsidiaries under the Salaried Employees' Retirement Plan. This
plan provides contributory benefits based on the employee's cumulative
contributions and a supplemental noncontributory benefit based on years of
service during which employee contributions were made, and the employee's
average salary during the consecutive five years in which salary was highest in
the 15 years preceding retirement.
40
<PAGE> 41
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 11. Pension Plans - Continued
Annual contributions to the pension trust fund for U.S. plans are in
compliance with the Employee Retirement Income Security Act of 1974, as
amended. All pension trust fund assets and income accruing thereon are used
solely to administer the plans and pay pension benefits. Chrysler made pension
fund contributions totaling $3.5 billion in 1993, $816 million in 1992, and
$327 million in 1991.
The components of pension expense were as follows:
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------------------------------
1993 1992 1991
------------------- -------------------- --------------------
Non- Non- Non-
U.S. U.S. U.S. U.S. U.S. U.S.
Plans Plans Plans Plans Plans Plans
-------- -------- -------- --------- -------- ---------
(in millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned
during the year $ 218 $ 20 $ 171 $ 18 $ 125 $ 16
Interest on projected benefit
obligation ("PBO") 779 79 742 71 737 65
Return on plan assets:
Actual return (1,283) (35) (945) 80 (883) (70)
Deferred (loss) gain 617 (40) 492 (156) 426 (5)
------- ------- -------- -------- -------- --------
Expected return on plan assets (666) (75) (453) (76) (457) (75)
Net amortization and other 366 35 344 20 379 14
------- ------- -------- -------- -------- --------
Total $ 697 $ 59 $ 804 $ 33 $ 784 $ 20
======= ======= ======== ======== ======== ========
</TABLE>
Pension expense is determined using assumptions at the beginning of the
year. The PBO is determined using the assumptions at the end of the year.
Assumptions used to determine pension expense and the PBO were:
<TABLE>
<CAPTION>
December 31
-------------------------------------------------------------------------------
U.S. Plans Non-U.S. Plans
------------------------------------- -------------------------------------
1993 1992 1991 1990 1993 1992 1991 1990
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Discount rate 7.38% 8.38% 8.50% 9.65% 8.25% 9.50% 9.50% 9.50%
Rate of increase in future
compensation levels 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
Long-term rate of return on
plan assets 10.00% 10.00% 10.00% 10.00% 9.00% 9.50% 9.50% 9.50%
</TABLE>
The reduction in the discount rate for U.S. Plans from 8.38 percent as of
December 31, 1992 to 7.38 percent as of December 31, 1993 resulted in a $1.0
billion increase in the PBO at December 31, 1993, and is expected to result in
a $89 million increase in the 1994 expense. Scheduled increases in benefits
under the 1993 U. S. collective bargaining agreements resulted in a $642
million increase in the PBO in 1993, and is expected to result in a $112
million increase in the 1994 expense. These increases in 1994 expense are
expected to be more than offset by reductions in 1994 expense resulting from
the increased fair value of U.S. plan assets at December 31, 1993, which is
largely the result of Chrysler's contributions to the pension fund and higher
than expected returns on plan assets in 1993.
41
<PAGE> 42
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 11. Pension Plans - Continued
The following table presents a reconciliation of the funded status of the
plans with amounts recognized in the consolidated balance sheet:
<TABLE>
<CAPTION>
U.S. Plans
------------------------------------------------------
December 31
------------------------------------------------------
1993 1992
------------------------- -------------------------
Assets Accum. Assets Accum.
Exceed Benefits Exceed Benefits
Accum. Exceed Accum. Exceed
Benefits Assets Benefits Assets
---------- ---------- ---------- -----------
(in millions of dollars)
<S> <C> <C> <C> <C>
Actuarial present value of benefits:
Vested $ 3,563 $ 5,160 $ 1,361 $ 6,015
Nonvested 517 2,090 62 1,898
---------- ---------- ---------- -----------
Accumulated benefit obligation 4,080 7,250 1,423 7,913
Effect of projected future salary increases 237 7 190 5
---------- ---------- ---------- -----------
PBO 4,317 7,257 1,613 7,918
Plan assets at fair value 4,599 4,767 1,772 4,110
---------- ---------- ---------- -----------
PBO (in excess of) less than plan assets 282 (2,490) 159 (3,808)
Unrecognized net loss (gain) 263 1,016 (8) 846
Unrecognized prior service cost 258 1,216 (1) 935
Unamortized net obligation at date of adoption 283 858 69 1,216
Adjustment required to recognize minimum liability -- (3,088) -- (2,996)
---------- ---------- ---------- -----------
Net prepaid pension (liability) recognized in the
consolidated balance sheet $ 1,086 $ (2,488) $ 219 $ (3,807)
========== ========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
Non-U.S. Plans
------------------------------------------------------
December 31
------------------------------------------------------
1993 1992
------------------------- -------------------------
Assets Accum. Assets Accum.
Exceed Benefits Exceed Benefits
Accum. Exceed Accum. Exceed
Benefits Assets Benefits Assets
---------- ---------- ---------- -----------
(in millions of dollars)
<S> <C> <C> <C> <C>
Actuarial present value of benefits:
Vested $ 1,020 $ 4 $ -- $ 740
Nonvested 12 2 -- 12
---------- ---------- ---------- -----------
Accumulated benefit obligation 1,032 6 -- 752
Effect of projected future salary increases 18 -- -- 16
---------- ---------- ---------- -----------
PBO 1,050 6 -- 768
Plan assets at fair value 1,062 -- -- 559
---------- ---------- ---------- -----------
PBO (in excess of) less than plan assets 12 (6) -- (209)
Unrecognized net loss (gain) 434 1 -- 290
Unrecognized prior service cost 233 -- -- 95
Unamortized net obligation at date of adoption 6 -- -- 8
Adjustment required to recognize minimum liability -- (1) -- (377)
---------- ---------- ---------- -----------
Net prepaid pension (liability) recognized in the
consolidated balance sheet $ 685 $ (6) $ -- $ (193)
========== ========== ========== ===========
</TABLE>
42
<PAGE> 43
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 11. Pension Plans - Continued
At December 31, 1993, plan assets were invested in a diversified portfolio
that consisted primarily of debt and equity securities, including 19.2 million
shares of Chrysler common stock.
During 1993, 1992, and 1991, Chrysler offered voluntary early retirement
opportunities to certain salaried and hourly employees. The cost of early
retirement programs offered in 1993, 1992, and 1991 was $40 million, $48
million, and $158 million, respectively.
Note 12. Postretirement Benefits Other Than Pensions
Chrysler provides health insurance and life insurance benefits to
substantially all of its hourly and salaried employees and those of certain of
its consolidated subsidiaries. Upon retirement from Chrysler, employees may
become eligible for continuation of these benefits. However, benefits and
eligibility rules may be modified periodically. Prior to 1993, the expense
recognized for these benefits was based primarily on cash expenditures for the
period. Effective January 1, 1993, Chrysler adopted SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" ("OPEB"), which
requires the accrual of such benefits during the years the employees provide
services.
The adoption of this accounting standard resulted in an after-tax charge of
$4.68 billion, or $13.57 per common share, in 1993. This one-time charge
represented the immediate recognition of the OPEB transition obligation of
$7.44 billion, partially offset by $2.76 billion of estimated tax benefits.
The OPEB transition obligation is the aggregate amount that would have been
accrued in the years prior to the adoption of SFAS No. 106, had this standard
been in effect for those years. Implementation of SFAS No. 106 did not
increase Chrysler's cash expenditures for postretirement benefits.
Components of nonpension postretirement benefit expense were as follows for
the year ended December 31, 1993 (in millions of dollars):
<TABLE>
<S> <C> <C>
Benefits attributed to employees' service $ 142
Interest on accumulated postretirement benefit obligation ("APBO") 626
---------
Total $ 768
=========
</TABLE>
The following table summarizes the components of the postretirement benefit
obligation recognized in the consolidated balance sheet at December 31, 1993,
and upon implementation of this standard on January 1, 1993:
<TABLE>
<CAPTION>
December 31, January 1,
1993 1993
----------------- -----------------
(in millions of dollars)
<S> <C> <C>
APBO attributable to:
Retirees $ 4,550 $ 4,174
Active employees eligible for benefits 1,173 957
Other active employees 3,388 2,514
---------- -----------
Total APBO 9,111 7,645
Unrecognized net gain (loss) (1,126) --
---------- -----------
Postretirement benefit obligation recognized
in the consolidated balance sheet $ 7,985 $ 7,645
========== ===========
</TABLE>
43
<PAGE> 44
Note 12. Postretirement Benefits Other Than Pensions - Continued
Nonpension postretirement benefit expense is determined using assumptions
at the beginning of the year. The APBO is determined using the assumptions at
the end of the year. Assumptions at December 31, 1993 were:
<TABLE>
<S> <C>
Discount rate 7.5 %
Base health care inflation rate (1994) 9.2 %
Ultimate health care inflation rate (2001) 5.4 %
Average health care inflation rate through 2001 6.3 %
</TABLE>
The APBO at January 1, 1993 was determined using a discount rate of 8.6
percent. The reduction in the discount rate from 8.6 percent to 7.5 percent as
of December 31, 1993 resulted in a $1.1 billion increase in the APBO in 1993,
and is expected to result in a $53 million increase in nonpension
postretirement benefit expense in 1994.
A one percentage point increase in the assumed health care inflation rates
in each year would increase the APBO by $1.1 billion and would increase the
aggregate of the service and interest cost components of nonpension
postretirement benefit expense in 1994 by $99 million.
Note 13. Gain on Sales of Automotive Assets and Investments
In 1993, Chrysler sold the plastics operations of its Acustar division for
net proceeds of $132 million. The sale resulted in a pre-tax gain of $60
million ($39 million after applicable income taxes). Also during 1993,
Chrysler sold its remaining 50.3 million shares of Mitsubishi Motors
Corporation ("MMC") stock for net proceeds of $329 million, which resulted in a
pre-tax gain of $205 million ($128 million after applicable income taxes).
In 1992, Chrysler sold 43.6 million shares of MMC stock for net proceeds of
$215 million. This sale resulted in a pre-tax gain of $142 million ($88 million
after applicable income taxes).
In 1991, Chrysler sold its 50 percent equity interest in Diamond-Star
Motors Corporation ("DSM") to MMC, its partner in the joint venture, for $100
million. The sale resulted in a pre-tax gain of $205 million ($127 million
after applicable income taxes). Chrysler was released from its guarantees of
DSM's financial obligations.
Note 14. Restructuring Charge
The results of operations for the year ended December 31, 1992 included a
$101 million pre-tax restructuring charge ($79 million after applicable income
taxes) relating to the realignment of a part of Chrysler's short-term vehicle
rental subsidiaries (the "Car Rental Operations") under Pentastar
Transportation Group, Inc. and to provide for the consolidation and phase out
of certain of those operations. This restructuring charge included the
write-down of goodwill, lease termination costs, losses associated with the
disposal of tangible assets and other related charges.
Note 15. Investment and Plant Capacity Adjustments
The results of operations for the year ended December 31, 1992 included a
pre-tax charge of $110 million ($69 million after applicable income taxes) as a
result of a reduction to the estimated net realizable value of investments of
Chrysler Canada Ltd. and certain of its employee benefit plans in a real estate
investment concern, which filed reorganization proceedings in February 1992 and
was subsequently placed in bankruptcy, and in certain of its affiliated
companies.
In 1991, the results of operations included a noncash, nonrecurring pre-tax
credit provision of $391 million ($242 million after applicable income taxes)
which was the result of a reduction in planned capacity adjustments related to
facilities which were acquired by Chrysler in connection with its purchase of
AMC in 1987.
44
<PAGE> 45
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 16. Supplemental Cash Flow Information
Supplemental disclosures to the consolidated statement of cash flows were
as follows:
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------
1993 1992 1991
---------- ---------- ----------
(in millions of dollars)
<S> <C> <C> <C>
Interest paid (net of amounts capitalized):
Chrysler, excluding CFC $ 326 $ 406 $ 407
CFC 847 1,250 1,536
Interest capitalized 176 176 162
Income taxes paid, net of refunds received 535 93 49
Noncash investing and financing activities:
Common stock contribution to pension fund -- -- 300
</TABLE>
Note 17. Financial Instruments
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
"Disclosures About Fair Value of Financial Instruments." The estimated fair
value amounts have been determined by Chrysler using available market
information and the valuation methodologies described below. However,
considerable judgment is required in interpreting market data to develop the
estimates of fair value. Accordingly, the estimates presented herein may not
be indicative of the amounts that Chrysler could realize in a current market
exchange. The use of different assumptions or valuation methodologies may
have a material effect on the estimated fair value amounts.
The carrying amounts and estimated fair values of Chrysler's financial
instruments were as follows:
<TABLE>
<CAPTION>
December 31, 1993 December 31, 1992
-------------------------- ------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
---------- ---------- ----------- ----------
(in millions of dollars)
<S> <C> <C> <C> <C>
Balance Sheet financial instruments
Marketable securities $ 1,055 $ 1,061 $ 1,292 $ 1,300
Finance receivables, retained interests in sold
receivables and other related amounts - net (1) 8,233 8,311 8,822 8,899
Noncurrent equity and debt investments 6 6 163 286
Debt (2) 11,429 12,455 15,521 16,301
Off-Balance Sheet financial instruments
Interest rate swaps and interest rate caps -- (80) -- (37)
Foreign currency forward contracts -- 53 -- 55
Foreign currency swaps -- 145 -- 213
</TABLE>
________________________________
(1) The carrying value of finance receivables excludes $2.0 billion and $2.3
billion of direct finance and leveraged leases classified as finance
receivables in Chrysler's Consolidated Balance Sheet at December 31, 1993
and 1992, respectively.
(2) The carrying value of debt excludes $22 million and $30 million of
obligations under capital leases classified as debt in Chrysler's
Consolidated Balance Sheet at December 31, 1993 and 1992, respectively.
The carrying values of cash and cash equivalents, accounts receivable and
accounts payable approximated fair values due to the short-term maturities of
these instruments.
45
<PAGE> 46
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 17. Financial Instruments - Continued
The methods and assumptions used to estimate the fair values of other
financial instruments are summarized as follows:
Marketable securities and noncurrent equity and debt investments
The fair values of marketable securities and noncurrent equity and debt
investments were estimated using quoted market prices.
Finance receivables, retained interests in sold receivables and other related
amounts - net
The carrying value of variable-rate finance receivables was assumed to
approximate fair value since they are priced at current market rates. The
fair value of fixed-rate finance receivables was estimated by discounting
expected cash flows using the current rates at which loans of similar
credit quality and maturity would be made as of the date of the
consolidated balance sheet. The fair values of excess servicing cash flows
and other subordinated amounts due CFC arising from receivable sale
transactions were estimated by discounting expected cash flows using
current market rates.
Debt
The fair value of public debt was estimated using quoted market prices.
The fair value of other long-term debt was estimated by discounting future
cash flows using rates currently available for debt of similar terms and
remaining maturities. The carrying value of borrowings under revolving
credit facilities was assumed to approximate fair value due to their short
maturities.
Interest rate swaps and interest rate caps
The fair values of interest rate swaps and interest rate caps were
estimated by discounting expected cash flows using quoted market interest
rates.
Foreign currency forward contracts
The fair value of foreign currency forward contracts was estimated based on
quoted market prices for contracts of similar terms.
Foreign currency swaps
The fair value of foreign currency swap agreements was estimated by
discounting expected cash flows using market exchange rates and relative
market interest rates over the remaining term of the swap.
The fair value estimates presented herein were based on information
available as of the date of the consolidated balance sheet. Although
management is not aware of any factors that would significantly affect the
estimated fair value amounts, such amounts have not been revalued since the
date of the consolidated balance sheet and, therefore, current estimates of
fair value may differ significantly from the amounts presented herein.
Note 18. Industry Segment and Geographic Area Data
Industry Segment Data
Chrysler operates in two principal industry segments, Car and Truck and
Financial Services. The Car and Truck segment is composed of the automotive
operations of Chrysler, which includes the research, design, manufacture,
assembly and sale of cars, trucks and related parts and accessories. The Car
Rental Operations and Chrysler's defense electronics business, Chrysler
Technologies Corporation, each represents less than 10 percent of consolidated
revenues, operating profits and identifiable assets, and have been included in
the Car and Truck segment. The Financial Services segment is composed of CFC,
which is engaged in wholesale and retail vehicle financing, property and
casualty insurance, and servicing nonautomotive loans and leases. Information
concerning operations by industry segment was as follows:
46
<PAGE> 47
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 18. Industry Segment and Geographic Area Data - Continued
Industry Segment Data - Continued
<TABLE>
<CAPTION>
Car Financial
and Truck Services Consolidated
------------ ------------- ---------------
(in millions of dollars)
<S> <C> <C> <C>
December 31, 1993
- -----------------
Sales and Revenues:
To unaffiliated customers $ 41,681 $ 1,919 $ 43,600
Intersegment revenues 34 120 --
---------- --------- ----------
Total sales and revenues 41,715 2,039 43,600
Operating earnings 3,842 267 3,992
Interest expense 237 -- 120
Equity in loss of unconsolidated subsidiaries and affiliates 34 -- 34
Earnings before income taxes 3,571 267 3,838
Depreciation/amortization 1,530 110 1,640
Capital expenditures 2,977 18 2,995
Identifiable assets 31,273 14,402 43,830
Liabilities 27,568 11,271 36,994
December 31, 1992
- -----------------
Sales and Revenues:
To unaffiliated customers $ 34,406 $ 2,455 $ 36,897
Intersegment revenues 34 120 --
---------- --------- ----------
Total sales and revenues 34,440 2,575 36,897
Operating earnings 970 295 1,147
Interest expense 311 -- 194
Equity in loss of unconsolidated subsidiaries and affiliates 19 -- 19
Earnings before income taxes 640 295 934
Depreciation/amortization 1,451 159 1,610
Capital expenditures 2,260 29 2,289
Identifiable assets 25,144 17,548 40,653
Liabilities 20,604 14,550 33,115
December 31, 1991
- -----------------
Sales and Revenues:
To unaffiliated customers $ 26,139 $ 3,073 $ 29,370
Intersegment revenues 43 148 --
---------- --------- ----------
Total sales and revenues 26,182 3,221 29,370
Operating earnings (loss) (798) 402 (540)
Interest expense 370 -- 240
Equity in loss of unconsolidated subsidiaries and affiliates 30 -- 30
Earnings (loss) before income taxes (1,198) 402 (810)
Depreciation/amortization 1,319 146 1,465
Capital expenditures 2,207 55 2,262
Indentifiable assets 23,050 21,280 43,076
Liabilities 19,708 18,513 36,967
</TABLE>
Interest expense of the Financial Services segment has been netted against
operating earnings, which is consistent with industry practice. The individual
segments do not add to the consolidated amounts due to the elimination of
intersegment transactions and adjustments for the minority interest in CFC.
47
<PAGE> 48
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
Note 18. Industry Segment and Geographic Area Data - Continued
Geographic Area Data
Information concerning operations by principal geographic area was as
follows:
<TABLE>
<CAPTION>
United Adjmts.
States Canada Other & Elims. Consolidated
-------- ----------- -------- ---------- ---------------
(in millions of dollars)
<S> <C> <C> <C> <C> <C>
December 31, 1993
- -----------------
Sales and revenues:
To unaffiliated customers $ 37,847 $ 3,349 $ 2,404 $ -- $ 43,600
Transfers between geographic areas 6,571 6,807 1,934 (15,312) --
----------- ---------- --------- --------- ---------
Total sales and revenues 44,418 10,156 4,338 (15,312) 43,600
Earnings before income taxes 3,191 329 318 -- 3,838
Identifiable assets 37,625 3,750 2,455 -- 43,830
December 31, 1992
- -----------------
Sales and revenues:
To unaffiliated customers $ 31,529 $ 2,906 $ 2,462 $ -- $ 36,897
Transfers between geographic areas 5,759 4,611 1,483 (11,853) --
----------- ---------- --------- --------- ---------
Total sales and revenues 37,288 7,517 3,945 (11,853) 36,897
Earnings before income taxes 618 19 297 -- 934
Identifiable assets 35,137 3,210 2,306 -- 40,653
December 31, 1991
- -----------------
Sales and revenues:
To unaffiliated customers $ 24,537 $ 3,396 $ 1,437 $ -- $ 29,370
Transfers between geographic areas 4,954 3,878 1,163 (9,995) --
----------- ---------- --------- --------- ---------
Total sales and revenues 29,491 7,274 2,600 (9,995) 29,370
Earnings (loss) before income taxes (1,165) 99 256 -- (810)
Identifiable assets 37,136 3,945 1,995 -- 43,076
</TABLE>
Transfers between geographic areas are based on prices negotiated between
the buying and selling locations.
48
<PAGE> 49
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CONFORMED
INDEPENDENT AUDITORS' REPORT
Shareholders and Board of Directors
Chrysler Corporation
Highland Park, Michigan
We have audited the accompanying consolidated balance sheet of Chrysler
Corporation and consolidated subsidiaries as of December 31, 1993 and 1992, and
the related consolidated statements of earnings and cash flows for each of the
three years in the period ended December 31, 1993. Our audits also included
the financial statement schedules listed in the Index at Item 14(a)2. These
financial statements and financial statement schedules are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and financial statement schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Chrysler Corporation and consolidated
subsidiaries at December 31, 1993 and 1992, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting principles.
Also in our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
As discussed in the notes to the financial statements, the Company has
adopted recently issued Statements of Financial Accounting Standards and,
accordingly, changed its methods of accounting for postretirement benefits
other than pensions and postemployment benefits in 1993, and its method of
accounting for income taxes in 1992. In addition, the Company changed its
method of accounting for the cost of special sales incentive programs in 1991.
DELOITTE & TOUCHE
Detroit, Michigan
January 18, 1994
49
<PAGE> 50
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued Conformed
MANAGEMENT REPORT ON RESPONSIBILITY FOR FINANCIAL REPORTING
Chrysler's management is responsible for preparing the financial statements
and other financial information in this Annual Report. This responsibility
includes maintaining the integrity and objectivity of financial data and the
presentation of Chrysler's results of operations and financial position in
accordance with generally accepted accounting principles. The financial
statements include amounts that are based on management's best estimates and
judgments.
Chrysler's financial statements have been audited by Deloitte & Touche,
independent auditors. Their audits were conducted in accordance with generally
accepted auditing standards and included consideration of the internal control
system and tests of transactions as part of planning and performing their
audits.
Chrysler maintains a system of internal controls that provides reasonable
assurance that its records reflect its transactions in all material respects
and that significant misuse or loss of assets will be prevented. Management
believes the system of internal controls is adequate to accomplish these
objectives on a continuous basis. Chrysler maintains a strong internal
auditing program that independently assesses the effectiveness of the internal
controls and recommends possible improvements. Management considers the
General Auditor's and Deloitte & Touche's recommendations concerning the system
of internal controls and takes appropriate actions to respond to these
recommendations.
The Board of Directors, acting through its Audit Committee composed solely
of nonemployee directors, is responsible for determining that management
fulfills its responsibilities in the preparation of financial statements and
the maintenance of internal controls. In fulfilling its responsibility, the
Audit Committee recommends independent auditors to the Board of Directors for
appointment by the shareholders. The Committee also reviews the consolidated
financial statements and adequacy of internal controls. The Audit Committee
meets regularly with management, the General Auditor and the independent
auditors. Both the independent auditors and the General Auditor have full and
free access to the Audit Committee, without management representatives present,
to discuss the scope and results of their audits and their views on the
adequacy of internal controls and the quality of financial reporting.
It is the business philosophy of Chrysler Corporation and its subsidiaries
to obey the law and to require that its employees conduct their activities
according to the highest standards of business ethics. Management reinforces
this philosophy by numerous actions, including issuing a Code of Ethical
Behavior and maintaining a Business Practices Committee and a Business
Practices Office to support compliance with the Corporation's policies.
R. J. Eaton G. C. Valade
- --------- ----------
R. J. EATON G. C. VALADE
Chairman of the Board and Executive Vice President and
Chief Executive Officer Chief Financial Officer
50
<PAGE> 51
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
SUPPLEMENTAL INFORMATION
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA
(unaudited)
<TABLE>
<CAPTION>
Year Ended December 31, 1993
-----------------------------------------------------------------------
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
--------------- --------------- --------------- -------------
(in millions of dollars except per common share data)
<S> <C> <C> <C> <C>
Sales of manufactured products $ 10,238 $ 10,307 $ 8,995 $ 11,291
Finance, insurance and other income 666 724 718 661
------------- --------------- -------------- ---------------
Total sales and revenues 10,904 11,031 9,713 11,952
Total costs and expenses 10,024 9,909 9,101 10,728
------------- --------------- -------------- ---------------
Earnings before income taxes and
cumulative effect of changes
in accounting principles 880 1,122 612 1,224
Provision for income taxes 350 437 189 447
------------- --------------- -------------- ---------------
Earnings before cumulative effect of
changes in accounting principles 530 685 423 777
Cumulative effect of changes in
accounting principles (4,966) -- -- --
------------- ------------- ----------- --------------
Net earnings (loss) $ (4,436) $ 685 $ 423 $ 777
Preferred stock dividends 20 20 20 20
------------- ------------- ----------- --------------
Net earnings (loss) on common stock $ (4,456) $ 665 $ 403 $ 757
============= ============= =========== ==============
Primary earnings (loss) per common share:
Earnings before cumulative effect of
changes in accounting principles $ 1.57 $ 1.86 $ 1.13 $ 2.11
Cumulative effect of changes in
accounting principles (15.25) -- -- --
------------ ------------- ----------- --------------
Net earnings (loss) per common share $ (13.68) $ 1.86 $ 1.13 $ 2.11
============= ============= =========== ==============
Fully diluted earnings per common share:
Earnings before cumulative effect
of changes in accounting principles $ -- $ 1.69 $ 1.04 $ 1.91
Cumulative effect of changes in
accounting principles -- -- -- --
------------- ------------- ----------- --------------
Net earnings per common share $ -- $ 1.69 $ 1.04 $ 1.91
============= ============= =========== ==============
</TABLE>
_________________________________
(1) Results for the first quarter of 1993 included the unfavorable effects of
changes in accounting principles of $4.68 billion related to the adoption
of SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions," and $283 million related to the adoption of SFAS No. 112,
"Employers' Accounting for Postemployment Benefits." Previously reported
results for the first quarter of 1993 have been restated to reflect the
adoption of SFAS No. 112 effective January 1, 1993.
(2) Earnings for the second quarter of 1993 included a gain of $60 million ($39
million after applicable income taxes) related to the sale of the plastics
operations of Chrysler's Acustar division, and a gain of $111 million ($70
million after applicable income taxes) related to the sale of 27 million
shares of Mitsubishi Motors Corporation ("MMC") stock.
(3) Earnings for the third quarter of 1993 included a gain of $94 million ($58
million after applicable income taxes) related to the sale of Chrysler's
remaining 23.3 million shares of MMC stock.
51
<PAGE> 52
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
SUPPLEMENTAL INFORMATION
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA
(unaudited)
<TABLE>
<CAPTION>
Year Ended December 31, 1992
-------------------------------------------------------------------------
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
--------------- --------------- --------------- ---------------
(in millions of dollars except per common share data)
<S> <C> <C> <C> <C>
Sales of manufactured products $ 7,366 $ 8,487 $ 8,362 $ 9,333
Finance, insurance and other income 828 824 854 843
------------ -------------- ------------- --------------
Total sales and revenues 8,194 9,311 9,216 10,176
Total costs and expenses 8,479 9,097 8,857 9,530
------------ -------------- ------------- --------------
Earnings (loss) before income taxes and
cumulative effect of change in
accounting principle (285) 214 359 646
Provision (credit) for income taxes (54) 36 157 290
------------ -------------- ------------- --------------
Earnings (loss) before cumulative effect
of change in accounting principle (231) 178 202 356
Cumulative effect of change in
accounting principle 218 -- -- --
------------ -------------- ------------- --------------
Net earnings (loss) $ (13) $ 178 $ 202 $ 356
Preferred stock dividends 9 20 20 20
------------ -------------- ------------- --------------
Net earnings (loss) on common stock $ (22) $ 158 $ 182 $ 336
============ ============== ============= ==============
Primary earnings (loss) per common share:
Earnings (loss) before cumulative effect
of change in accounting principle $ (0.82) $ 0.54 $ 0.62 $ 1.12
Cumulative effect of change in
accounting principle 0.75 -- -- --
----------- -------------- ------------- --------------
Net earnings (loss) per common share $ (0.07) $ 0.54 $ 0.62 $ 1.12
=========== ============== ============= ==============
Fully diluted earnings per common share:
Earnings before cumulative effect
of change in accounting principle $ -- $ 0.52 $ 0.58 $ 1.02
Cumulative effect of change in
accounting principle -- -- -- --
----------- -------------- ------------- --------------
Net earnings per common share $ -- $ 0.52 $ 0.58 $ 1.02
=========== ============== ============= ==============
</TABLE>
_______________________________
(1) Results for the first quarter of 1992 included a gain of $142 million ($88
million after applicable income taxes) related to the sale of 43.6 million
shares of MMC stock, the favorable effect of a change in accounting
principle of $218 million related to the adoption of SFAS No. 109,
"Accounting for Income Taxes," and a $98 million charge ($63 million after
applicable income taxes) related to an investment loss experienced by
Chrysler Canada Ltd.
(2) Earnings for the third quarter of 1992 included a charge of $101 million
($79 million after applicable income taxes) related to the restructuring of
Chrysler's short-term vehicle rental subsidiaries.
52
<PAGE> 53
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
STATEMENT OF EARNINGS (unaudited)
(in millions of dollars)
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Sales of manufactured products $ 41,247 $ 33,409 $ 26,707
Equity in earnings of unconsolidated subsidiaries and affiliates 187 131 288
Other income 12 26 30
----------- ----------- -----------
TOTAL SALES AND REVENUES 41,446 33,566 27,025
----------- ----------- -----------
Costs, other than items below 32,066 27,424 23,191
Depreciation of property and equipment 853 802 667
Amortization of special tools 671 641 644
Selling and administrative expenses 2,619 2,467 2,112
Pension expense 749 832 796
Nonpension postretirement benefit expense 762 368 351
Interest expense 153 240 279
Gain on sales of automotive assets and investments (265) (142) (205)
----------- ----------- -----------
TOTAL COSTS AND EXPENSES 37,608 32,632 27,835
----------- ----------- -----------
EARNINGS (LOSS) BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF CHANGES
IN ACCOUNTING PRINCIPLES 3,838 934 (810)
Provision (credit) for income taxes 1,423 429 (272)
------------ ----------- -----------
EARNINGS (LOSS) BEFORE CUMULATIVE EFFECT
OF CHANGES IN ACCOUNTING PRINCIPLES 2,415 505 (538)
Cumulative effect of changes in accounting
principles (4,966) 218 (257)
------------ ----------- -----------
NET EARNINGS (LOSS) $ (2,551) $ 723 $ (795)
Preferred stock dividends 80 69 --
------------ ----------- -----------
NET EARNINGS (LOSS) ON COMMON STOCK $ (2,631) $ 654 $ (795)
============ =========== ===========
</TABLE>
This Supplemental Information, "Chrysler (with CFC and Car Rental Operations on
an Equity Basis)", reflects the results of operations of Chrysler with its
investments in Chrysler Financial Corporation ("CFC") and its investments in
short-term vehicle rental subsidiaries ("Car Rental Operations") accounted for
on an equity basis rather than as consolidated subsidiaries. This Supplemental
Information does not purport to present results of operations in accordance
with generally accepted accounting principles because it does not comply with
Statement of Financial Accounting Standards ("SFAS") No. 94, "Consolidation of
All Majority-Owned Subsidiaries." The financial covenants contained in certain
of Chrysler's credit facilities are based on this Supplemental Information. In
addition, because the operations of CFC and the Car Rental Operations are
different in nature than Chrysler's manufacturing operations, management
believes that this disaggregated financial data enhances an understanding of
the consolidated financial statements.
53
<PAGE> 54
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
BALANCE SHEET (unaudited)
(in millions of dollars)
<TABLE>
<CAPTION>
December 31
--------------------------------
1993 1992
------------- -------------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 3,777 $ 2,009
Marketable securities 707 959
Accounts receivable - trade and other (net) 805 936
Inventories 2,483 2,330
Prepaid taxes, pension and other expenses 713 543
Property and equipment 8,820 8,097
Special tools 3,455 2,896
Investments in and advances to unconsolidated subsidiaries
and affiliated companies 3,685 3,687
Intangible assets 3,882 4,136
Deferred tax assets 3,642 1,480
Other assets 2,051 571
------------- -------------
TOTAL ASSETS $ 34,020 $ 27,644
============= =============
LIABILITIES:
Accounts payable $ 6,074 $ 5,013
Short-term debt 100 86
Payments due within one year on long-term debt 399 56
Accrued liabilities and expenses 4,422 3,793
Long-term debt 2,281 3,643
Accrued noncurrent employee benefits 10,562 4,187
Other noncurrent liabilities 3,346 3,328
------------- -------------
TOTAL LIABILITIES 27,184 20,106
------------- -------------
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY: (shares in millions)
Preferred stock - $1 per share par value; authorized 20.0 shares; Series
A Convertible Preferred Stock; issued: 1993 and 1992 - 1.7 shares;
aggregate liquidation preference $863 million 2 2
Common stock - $1 per share par value; authorized 500.0 shares; issued:
1993 - 364.1 shares; 1992 - 312.1 shares 364 312
Additional paid-in capital 5,533 3,657
Retained earnings 1,170 3,924
Treasury stock - at cost: 1993 - 10.4 shares; 1992 - 16.2 shares (233) (357)
------------- -------------
TOTAL SHAREHOLDERS' EQUITY 6,836 7,538
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 34,020 $ 27,644
============= =============
</TABLE>
This Supplemental Information, "Chrysler (with CFC and Car Rental Operations on
an Equity Basis)", reflects the financial position of Chrysler with its
investments in CFC and the Car Rental Operations accounted for on an equity
basis rather than as consolidated subsidiaries. This Supplemental Information
does not purport to present financial position in accordance with generally
accepted accounting principles because it does not comply with Statement of
Financial Accounting Standards ("SFAS") No. 94, "Consolidation of All
Majority-Owned Subsidiaries." The financial covenants contained in certain of
Chrysler's credit facilities are based on this Supplemental Information. In
addition, because the operations of CFC and the Car Rental Operations are
different in nature than Chrysler's manufacturing operations, management
believes that this disaggregated financial data enhances an understanding of
the consolidated financial statements.
54
<PAGE> 55
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
STATEMENT OF CASH FLOWS (unaudited)
(in millions of dollars)
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------------
1993 1992 1991
----------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ (2,551) $ 723 $ (795)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization 1,524 1,443 1,311
Equity in earnings of unconsolidated subsidiaries and affiliates (187) (131) (288)
Plant capacity adjustment -- -- (391)
Deferred income taxes 803 229 (288)
Gain on sales of automotive assets and investments (265) (142) (205)
Cumulative effect of changes in accounting principles 4,966 (218) 257
Change in accounts receivable 131 (300) 69
Change in inventories (171) 159 174
Change in prepaid expenses and other assets (1,587) 74 25
Change in accounts payable and accrued and other liabilities 365 953 963
Other 224 181 199
---------- -------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,252 2,971 1,031
---------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (3,149) (14,188) (6,442)
Sales and maturities of marketable securities 3,401 13,925 7,217
Proceeds from sales of automotive assets and investments 461 215 100
Expenditures for property and equipment (1,738) (1,374) (1,482)
Expenditures for special tools (1,234) (872) (708)
Other (13) (209) (121)
---------- -------- ---------
NET CASH USED IN INVESTING ACTIVITIES (2,272) (2,503) (1,436)
---------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt (less than 90-day maturities) 14 (165) 49
Proceeds under revolving lines of credit and long-term borrowings 23 39 183
Payments on revolving lines of credit and long-term borrowings (1,021) (497) (37)
Proceeds from issuance of preferred stock, net of expenses -- 836 --
Proceeds from issuance of common stock, net of expenses 1,952 -- 385
Dividends paid (281) (225) (169)
Other 101 48 8
---------- -------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 788 36 419
---------- -------- ---------
Change in cash and cash equivalents 1,768 504 14
Cash and cash equivalents at beginning of year 2,009 1,505 1,491
---------- -------- ---------
Cash and cash equivalents at end of year $ 3,777 $ 2,009 $ 1,505
========== ======== =========
</TABLE>
This Supplemental Information, "Chrysler (with CFC and Car Rental Operations on
an Equity Basis)", reflects the cash flows of Chrysler with its investments in
CFC and the Car Rental Operations accounted for on an equity basis rather than
as consolidated subsidiaries. This Supplemental Information does not purport
to present cash flows in accordance with generally accepted accounting
principles because it does not comply with Statement of Financial Accounting
Standards ("SFAS") No. 94, "Consolidation of All Majority-Owned Subsidiaries."
The financial covenants contained in certain of Chrysler's credit facilities
are based on this Supplemental Information. In addition, because the
operations of CFC and the Car Rental Operations are different in nature than
Chrysler's manufacturing operations, management believes that this
disaggregated financial data enhances an understanding of the consolidated
financial statements.
55
<PAGE> 56
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS Part II - Continued
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Items 10, 11, 12, and 13
Information required by Part III (Items 10, 11, 12, and 13) of this Form
10-K is incorporated by reference from Chrysler Corporation's definitive Proxy
Statement for its 1994 Annual Meeting of Stockholders, which will be filed with
the Securities and Exchange Commission, pursuant to Regulation 14A, not later
than 120 days after the end of the fiscal year, all of which information is
hereby incorporated by reference in, and made part of, this Form 10-K, except
that the information required by Item 10 with respect to executive officers of
the Registrant is included in Part I of this report.
PART IV.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements
Financial statements filed as part of this Form 10-K are listed
under Part II, Item 8 of this Form 10-K.
<TABLE>
<CAPTION>
2. Financial Statement Schedules
Page No.
--------------
<S> <C>
Schedule V - Property, plant and equipment 74-76
Schedule VI - Accumulated depreciation, depletion and amortization
of property, plant and equipment 77
Schedule VII - Guarantees of securities of other issuers 78
Schedule VIII - Valuation and qualifying accounts 79
Schedule IX - Short-term borrowings 80
Schedule X - Supplementary income statement information 81
Financial Statement Schedules omitted:
Schedules other than those listed above are omitted because they are
not required under the instructions contained in Regulation S-X or
because the information called for is shown in the financial
statements and notes thereto.
</TABLE>
56
<PAGE> 57
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K
3. Exhibits:
3-A Copy of Certificate of Incorporation of Chrysler Corporation, as
amended and restated and in effect on May 21, 1987. Filed as
Exhibit 3-A to Registration Statement No. 33-15544 on Form S-4 of
Chrysler Corporation, and incorporated herein by reference.
3-B Copy of By-Laws of Chrysler Corporation, as amended as of June 10,
1993. Filed as Exhibit 3-B to Chrysler Corporation Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 1993, and
incorporated herein by reference.
3-C Copy of Certificate of Designation for Chrysler Corporation Junior
Participating Cumulative Preferred Stock. Filed as Exhibit 3-D to
Chrysler Corporation Annual Report on Form 10-K for the year ended
December 31, 1987, and incorporated herein by reference.
3-D Copy of Certificate of Designation, Preferences and Rights of Series
A Convertible Preferred Stock. Filed as Exhibit 3- D to Chrysler
Corporation Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1992 and incorporated herein by reference.
4-A Certificate of Incorporation and By-Laws of Chrysler Corporation.
See Exhibits 3-A through 3-D above.
4-B-1 Copy of Certificate of Ownership and Merger merging Chrysler Motors
Corporation into Chrysler Corporation, effective on December 31,
1989. Filed as Exhibit 4-B-1 to Chrysler Corporation Annual Report
on Form 10-K for the year ended December 31, 1989, and incorporated
herein by reference.
4-B-2 Copy of Agreement of Merger and Plan of Reorganization, dated as of
March 6, 1986, among Chrysler Corporation, Chrysler Holding
Corporation (now Chrysler Corporation) and New Chrysler, Inc.,
annexed as Exhibit A to Registration Statement No. 33-4537 on Form
S-4 of Chrysler Holding Corporation (now Chrysler Corporation), and
incorporated herein by reference.
4-C Copy of Rights Agreement, dated as of February 4, 1988, and amended
and restated as of December 14, 1990, between Chrysler Corporation
and First Chicago Trust Company of New York (formerly Morgan
Shareholder Services Trust Company), as Rights Agent, relating to
Rights to purchase Chrysler Corporation Junior Participating
Cumulative Preferred Stock. Filed as Exhibit 1 to Chrysler
Corporation Current Report on Form 8-K, dated December 14, 1990, and
incorporated herein by reference.
4-D-1 Conformed copy of Indenture, dated as of July 15, 1987, between
Chrysler Corporation and Manufacturers Hanover Trust Company, as
Trustee, relating to Debt Securities, Appendix B thereto relating to
9.60% Notes Due 1994, Appendix B thereto relating to 10.95%
Debentures Due 2017 and Appendix C thereto relating to 10.40% Notes
Due 1999. Filed as Exhibit 4-D-1 to Chrysler Corporation Annual
Report on Form 10-K for the year ended December 31, 1987, and
incorporated herein by reference.
4-D-2 Conformed copy of Indenture, dated as of March 1, 1985, between
Chrysler Corporation and Manufacturers Hanover Trust Company, as
Trustee, relating to Debt Securities and Appendix B thereto relating
to 13% Debentures Due 1997. Filed as Exhibit 4-B to Chrysler
Corporation Annual Report on Form 10-K for the year ended December
31, 1985, and incorporated herein by reference.
4-D-3 Form of Supplemental Indenture, dated as of May 30, 1986, between
Chrysler Holding Corporation (now Chrysler Corporation), Chrysler
Corporation and Manufacturers Hanover Trust Company, as Trustee,
relating to Debt Securities. Filed as Exhibit 4-E-2 to the
Post-Effective Amendment No. 1 to Registration Statement No. 33-4537
on Form S-4 of Chrysler Holding Corporation (now Chrysler
Corporation), and incorporated herein by reference.
4-D-4 Copy of Supplemental Indenture, dated as of December 31, 1989,
between Chrysler Corporation and Manufacturers Hanover Trust
Company, as Trustee, relating to Debt Securities. Filed as Exhibit
4-D-4 to Chrysler Corporation Annual Report on Form 10-K for the
year ended December 31, 1989, and incorporated herein by reference.
57
<PAGE> 58
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
4-D-5 Conformed copy of Third Supplemental Indenture, dated as of May 1,
1990, between Chrysler Corporation and Manufacturers Hanover Trust
Company, as Trustee, relating to Debt Securities and Appendix D to
Indenture dated as of March 1, 1985 between Chrysler Corporation and
Manufacturers Hanover Trust Company relating to Debentures Due 2020.
Filed as Exhibit 4-D-5 to Chrysler Corporation Annual Report on Form
10-K for the year ended December 31, 1990, and incorporated herein
by reference.
4-D-6 Conformed copy of Trust Agreement, dated as of May 1, 1990, between
Chrysler Corporation and Manufacturers Hanover Bank (Delaware),
Trustee, relating to the Auburn Hills Trust. Filed as Exhibit 4-D-6
to Chrysler Corporation Annual Report on Form 10-K for the year
ended December 31, 1990, and incorporated herein by reference.
4-E-1 Conformed copy of $2,640,000,000 Amended and Restated Revolving
Credit Agreement, dated as of December 31, 1989, among Chrysler
Corporation, the several Banks parties to the Agreement and
Manufacturers Hanover Trust Company, as agent for such Banks. Filed
as Exhibit 4-E to Chrysler Corporation Annual Report on Form 10-K
for the year ended December 31, 1989, and incorporated herein by
reference.
4-E-2 Form of $1,750,000,000 Second Amendment and Waiver, dated as of
March 22, 1991, amending the $2,640,000,000 Amended and Restated
Revolving Credit Agreement, dated as of December 31, 1989, among
Chrysler Corporation, the several Banks parties to the Agreement and
Manufacturers Hanover Trust Company, as agent for such Banks. Filed
as Exhibit 4-E-2 to Chrysler Corporation Annual Report on Form 10-K
for the year ended December 31, 1990 and incorporated herein by
reference.
4-E-3 Copy of Third Amendment, dated as of April 30, 1991, amending the
$2,640,000,000 Amended and Restated Revolving Credit Agreement,
dated as of December 31, 1989, as amended by the $1,750,000,000
Second Amendment and Waiver, dated as of March 22, 1991, among
Chrysler Corporation, the several Banks parties to the Agreement and
Manufacturers Hanover Trust Company, as agent for such Banks. Filed
as Exhibit 4-D-3 to Chrysler Corporation Quarterly Report on Form
10-Q for the quarter ended June 30, 1991, and incorporated herein by
reference.
4-E-4 Conformed copy of $1,500,000,000 Amended and Restated Revolving
Credit Agreement, dated as of June 30, 1993, among Chrysler
Corporation, the several Banks parties to the Agreement and Chemical
Bank, as Agent for the Banks. Filed as Exhibit 4-E to the Chrysler
Corporation Quarterly Report on Form 10-Q for the quarter ended June
30, 1993, and incorporated herein by reference.
4-F-1 Copy of Indenture, dated as of June 1, 1985, between Chrysler
Financial Corporation and Manufacturers Hanover Trust Company,
Trustee, United States Trust Company of New York, as successor
Trustee, related to Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-A to the Quarterly Report of
Chrysler Financial Corporation on Form 10-Q for the quarter ended
June 30, 1985, and incorporated herein by reference.
4-F-2 Copy of First Supplemental Indenture, dated as of June 1, 1986,
between Chrysler Financial Corporation and Manufacturers Hanover
Trust Company, Trustee, United States Trust Company of New York, as
Successor Trustee, to the Indenture dated as of June 1, 1985 between
such parties, related to Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-B to the Quarterly Report of
Chrysler Financial Corporation on Form 10-Q for the quarter ended
September 30, 1986, and incorporated herein by reference.
4-F-3 Copy of Indenture, dated as of September 15, 1986, between Chrysler
Financial Corporation and Manufacturers Hanover Trust Company,
Trustee, United States Trust Company of New York, as Successor
Trustee, related to Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-E to the Quarterly Report of
Chrysler Financial Corporation on Form 10-Q for the quarter ended
September 30, 1986, and incorporated herein by reference.
4-F-4 Copy of Amended and Restated Indenture, dated as of September 15,
1986, between Chrysler Financial Corporation and Manufacturers
Hanover Trust Company, Trustee, United States Trust Company of New
York, as Successor Trustee, related to Chrysler Financial
Corporation Senior Debt Securities. Filed as Exhibit 4-H to the
Quarterly Report of Chrysler Financial Corporation on Form 10-Q for
the quarter ended June 30, 1987, and incorporated herein by
reference.
58
<PAGE> 59
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
4-F-5 Copy of Indenture, dated as of February 15, 1988, between Chrysler
Financial Corporation and Manufacturers Hanover Trust Company,
Trustee, United States Trust Company of New York, as Successor
Trustee, related to Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-A to Registration No. 33-23479 of
Chrysler Financial Corporation, and incorporated herein by
reference.
4-F-6 Copy of First Supplemental Indenture, dated as of March 1, 1988,
between Chrysler Financial Corporation and Manufacturers Hanover
Trust Company, Trustee, United States Trust Company of New York, as
successor Trustee, to the Indenture, dated as of February 15, 1988,
between such parties, related to Chrysler Financial Corporation
Senior Debt Securities. Filed as Exhibit 4-L to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q for the
quarter ended December 31, 1987, and incorporated herein by
reference.
4-F-7 Copy of the Second Supplemental Indenture, dated as of September 7,
1990, between Chrysler Financial Corporation and Manufacturers
Hanover Trust Company, Trustee, United States Trust Company of New
York, as Successor Trustee, to the Indenture, dated as of February
15, 1988, between such parties, related to Chrysler Financial
Corporation Senior Debt Securities. Filed as Exhibit 4-M to the
Quarterly Report of Chrysler Financial Corporation on Form 10-Q for
the quarter ended September 30, 1990, and incorporated herein by
reference.
4-F-8 Copy of Third Supplemental Indenture, dated as of May 4, 1992,
between Chrysler Financial Corporation and United States Trust
Company of New York, as Successor Trustee, to the Indenture, dated
as of February 15, 1988 between such parties, relating to Chrysler
Financial Corporation Senior Debt Securities. Filed as Exhibit 4-N
to the Quarterly report of Chrysler Financial Corporation on Form
10-Q for the quarter ended June 30, 1992, and incorporated herein by
reference.
4-G-1 Copy of Indenture, dated as of June 1, 1985, between Chrysler
Financial Corporation and Irving Trust Company, Trustee, related to
Chrysler Financial Corporation Junior Subordinated Debt Securities.
Filed as Exhibit 4-B to the Quarterly Report of Chrysler Financial
Corporation on Form 10-Q for the quarter ended June 30, 1985, and
incorporated herein by reference.
4-G-2 Copy of Indenture, dated as of September 15, 1986, between Chrysler
Financial Corporation and Irving Trust Company, Trustee, related to
Chrysler Financial Corporation Junior Subordinated Debt Securities.
Filed as Exhibit 4-G to the Quarterly Report of Chrysler Financial
Corporation on Form 10-Q for the quarter ended September 30, 1986,
and incorporated herein by reference.
4-G-3 Copy of Amended and Restated Indenture, dated as of September 15,
1986, between Chrysler Financial Corporation and Irving Trust
Company, Trustee, related to Chrysler Financial Corporation Junior
Subordinated Debt Securities. Filed as Exhibit 4-J to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q for the
quarter ended June 30, 1987, and incorporated herein by reference.
4-G-4 Copy of Indenture, dated as of February 15, 1988, between Chrysler
Financial Corporation and IBJ Schroder Bank & Trust Company,
Trustee, related to Chrysler Financial Corporation Subordinated Debt
Securities. Filed as Exhibit 4-B to Registration No. 33-23479 of
Chrysler Financial Corporation, and incorporated herein by
reference.
4-G-5 Copy of First Supplemental Indenture, dated as of September 1, 1989,
between Chrysler Financial Corporation and IBJ Schroder Bank & Trust
Company, Trustee, to the Indenture, dated as of February 15, 1988,
between such parties, related to Chrysler Financial Corporation
Subordinated Debt Securities. Filed as Exhibit 4-N to the Current
Report of Chrysler Financial Corporation on Form 8-K dated September
1, 1989 and filed September 13, 1989, and incorporated herein by
reference.
4-H-1 Copy of Indenture, dated as of July 15, 1985, between Chrysler
Financial Corporation and Bankers Trust Company, Trustee, related to
Chrysler Financial Corporation Subordinated Debt Securities, J.
Henry Schroder Bank and Trust Company having subsequently succeeded
Banker's Trust Company as Trustee. Filed as Exhibit 4-C to the
Quarterly Report of Chrysler Financial Corporation on Form 10-Q for
the quarter ended June 30, 1985, and incorporated herein by
reference.
59
<PAGE> 60
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
4-H-2 Copy of Indenture, dated as of September 15, 1986, between Chrysler
Financial Corporation and J. Henry Schroder Bank & Trust Company,
Trustee, related to Chrysler Financial Corporation Subordinated Debt
Securities. Filed as Exhibit 4-F to the Quarterly Report of
Chrysler Financial Corporation on Form 10-Q for the quarter ended
September 30, 1986, and incorporated herein by reference.
4-H-3 Copy of Amended and Restated Indenture, dated as of September 15,
1986, between Chrysler Financial Corporation and IBJ Schroder Bank &
Trust Company, Trustee, related to Chrysler Financial Corporation
Subordinated Debt Securities. Filed as Exhibit 4-I to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q for the
quarter ended June 30, 1987, and incorporated herein by reference.
4-H-4 Copy of Indenture, dated as of February 15, 1988, between Chrysler
Financial Corporation and Irving Trust Company, Trustee, related to
Chrysler Financial Corporation Junior Subordinated Debt Securities.
Filed as Exhibit 4-C to Registration No. 33-23479 of Chrysler
Financial Corporation, and incorporated herein by reference.
4-H-5 Copy of First Supplemental Indenture dated as of September 1, 1989,
between Chrysler Financial Corporation and Irving Trust Company,
Trustee, to the Indenture, dated as of February 15, 1988, between
such parties, related to Chrysler Financial Corporation Junior
Subordinated Debt Securities. Filed as Exhibit 4-O to the Current
Report of Chrysler Financial Corporation on Form 8-K dated September
1, 1989 and filed on September 13, 1989, and incorporated herein by
reference.
10-A-1 Copy of Chrysler Corporation Stock Option Plan, as amended and in
effect on and after December 8, 1983 and before May 14, 1986,
assumed by Chrysler Corporation (formerly Chrysler Holding
Corporation). Filed as Exhibit 10-D-8 to Chrysler Corporation
Annual Report on Form 10-K for the year ended December 31, 1983, and
incorporated herein by reference.
10-A-2 Copy of Chrysler Corporation Stock Option Plan, as amended and in
effect on and after May 14, 1986 and before November 5, 1987,
assumed by Chrysler Corporation (formerly Chrysler Holding
Corporation). Filed as Exhibit 10-A-8 to Chrysler Corporation
Annual Report on Form 10-K for the year ended December 31, 1986, and
incorporated herein by reference.
10-A-3 Copy of Chrysler Corporation Stock Option Plan, as amended and in
effect on and after November 5, 1987 and before February 4, 1988.
Filed as Exhibit 10-A-8 to Chrysler Corporation Annual Report on
Form 10-K for the year ended December 31, 1987, and incorporated
herein by reference.
10-A-4 Copy of Chrysler Corporation Stock Option Plan, as amended and in
effect on and after February 4, 1988 and before June 7, 1990. Filed
as Exhibit 10-A-9 to Chrysler Corporation Annual Report on Form 10-K
for the year ended December 31, 1987, and incorporated herein by
reference.
10-A-5 Copy of Chrysler Corporation Stock Option Plan, as amended and in
effect on and after June 7, 1990 and before May 16, 1992. Filed as
Exhibit 10-A-10 to Chrysler Corporation Annual Report on Form 10-K
for the year ended December 31, 1990 and incorporated herein by
reference.
*10-A-6 Copy of Chrysler Corporation Stock Option Plan, as amended through
December 2, 1993.
10-A-7 Copy of American Motors Corporation 1980 Stock Option Plan as in
effect on August 5, 1987. Filed as Exhibit 28-B to Post-Effective
Amendment No. 1 on Form S-8 to Registration Statement No. 33-15544
on Form S-4 of Chrysler Corporation, and incorporated herein by
reference.
10-A-8 Copy of Chrysler Corporation 1991 Stock Compensation Plan as in
effect on and after May 16, 1991 and before December 2, 1993.
Filed as Exhibit 10-A-32 to the Chrysler Corporation Annual Report
on Form 10-K for the year ended December 31, 1991, and incorporated
herein by reference.
*10-A-9 Copy of Chrysler Corporation 1991 Stock Compensation Plan, as
amended and in effect on and after December 2, 1993.
_______________
*Filed herewith
60
<PAGE> 61
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
10-B-1 Copy of Chrysler Corporation Incentive Compensation Plan, as amended
through June 7, 1990 and currently in effect. Filed as Exhibit
10-B-1 to Chrysler Corporation Annual Report on Form 10-K for the
year ended December 31, 1990 and incorporated herein by reference.
*10-B-2 Copy of Chrysler Corporation Long-Term Performance Plan, as amended
and in effect on and after December 2, 1993.
*10-B-3 Copy of Chrysler Supplemental Executive Retirement Plan,
as amended through December 20, 1993.
10-C-1 Copy of agreement, dated July 12, 1990, between Chrysler Corporation
and Lee A. Iacocca. Filed as Exhibit 10-C-5 to Chrysler Corporation
Annual Report on Form 10-K for the year ended December 31, 1990 and
incorporated herein by reference.
10-C-2 Copy of agreement, dated June 22, 1992 between Chrysler Corporation
and Lee A. Iacocca, amending agreement dated July 12, 1990, between
Chrysler Corporation and Lee A. Iacocca. Filed as Exhibit 10-C-6 to
the Chrysler Corporation Annual Report on Form 10-K for the year
ended December 31, 1992 and incorporated herein by reference.
10-C-3 Copy of agreement, dated June 11, 1992, between Chrysler Corporation
and Lee A. Iacocca. Filed as Exhibit 10-C-7 to the Chrysler
Corporation Annual Report on Form 10-K for the year ended December
31, 1992 and incorporated herein by reference.
10-C-4 Copy of agreement, dated March 14, 1992, between Chrysler
Corporation and Robert J. Eaton. Filed as Exhibit 10-C-8 to the
Chrysler Corporation Annual Report on Form 10-K for the year ended
December 31, 1992 and incorporated herein by reference.
10-D Conformed copy of Participation Agreement for Sale and Leaseback
Financing of Chrysler Technology Center Facilities among Chrysler
Corporation, Manufacturers Hanover Bank (Delaware), as Trustee, and
AH Service Corporation, dated as of May 1, 1990. Filed as Exhibit
10-E-11 to Chrysler Corporation Annual Report on Form 10-K for the
year ended December 31, 1990 and incorporated herein by reference.
10-E-1 Copy of Income Maintenance Agreement made December 20, 1968 among
Chrysler Financial Corporation, Chrysler Corporation and Chrysler
Motors Corporation (now dissolved). Filed as Exhibit 13-D to
Registration Statement No. 2-32037 of Chrysler Financial
Corporation, and incorporated herein by reference.
10-E-2 Copy of Agreement made April 19, 1971 among Chrysler Financial
Corporation, Chrysler Corporation and Chrysler Motors Corporation
(now dissolved), amending the Income Maintenance Agreement among
such parties. Filed as Exhibit 13-B to Registration Statement No.
2-40110 of Chrysler Financial Corporation and Chrysler Corporation,
and incorporated herein by reference.
10-E-3 Copy of Agreement made May 29, 1973 among Chrysler Financial
Corporation, Chrysler Corporation and Chrysler Motors Corporation
(now dissolved), further amending the Income Maintenance Agreement
among such parties. Filed as Exhibit 5-C to Registration Statement
No. 2-49615 of Chrysler Financial Corporation, and incorporated
herein by reference.
10-E-4 Copy of Agreement made as of July 1, 1975 among Chrysler Financial
Corporation, Chrysler Corporation and Chrysler Motors Corporation
(now dissolved), further amending the Income Maintenance Agreement
among such parties. Filed as Exhibit D to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1975, and incorporated herein by reference.
10-E-5 Copy of Agreement made June 4, 1976 between Chrysler Financial
Corporation and Chrysler Corporation further amending the Income
Maintenance Agreement between such parties. Filed as Exhibit 5-H to
Registration Statement No. 2-56398 of Chrysler Financial
Corporation, and incorporated herein by reference.
_______________________
*Filed herewith
61
<PAGE> 62
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
10-E-6 Copy of Agreement made March 27, 1986 between Chrysler Financial
Corporation, Chrysler Holding Corporation (now Chrysler Corporation)
and Chrysler Corporation further amending the Income Maintenance
Agreement among such parties. Filed as Exhibit 10-F to the Annual
Report of Chrysler Financial Corporation on Form 10-K for the year
ended December 31, 1986, and incorporated herein by reference.
10-G-1 Copy of Amended and Restated Revolving Term Credit Facility, dated
as of January 17, 1993, among Chrysler Credit Canada Ltd., as the
Borrower, Chrysler Financial Corporation, as the Guarantor, the
several financial institutions parties thereto, and Royal Bank of
Canada, as Agent Bank. Filed as Exhibit 10-G to the Annual Report
of Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1992, and incorporated herein by reference.
10-G-2 Copy of Standby Receivables Purchase Agreement, dated as of January
17, 1993 among Chrysler Credit Canada, Ltd., Chrysler Financial
Corporation, Royal Bank of Canada and the several other financial
institutions parties thereto dated as of January 15, 1993. Filed as
Exhibit 10-H to the Annual Report of Chrysler Financial Corporation
on Form 10-K for the year ended December 31, 1992, and incorporated
herein by reference.
10-G-3 Copy of Retail Purchase and Servicing Agreement, dated as of January
17, 1993 among Royal Bank of Canada, Chrysler Credit Canada Ltd.,
Chrysler Financial Corporation and the several other financial
institutions parties thereto. Filed as Exhibit 10-I to the Annual
Report of Chrysler Financial Corporation on Form 10-K for the year
ended December 31, 1992 and incorporated herein by reference.
10-G-4 Copy of Bank Series Supplement, dated as of January 17, 1993, among
Chrysler Credit Canada Ltd., Royal Bank of Canada, the several bank
parties thereto and The Royal Trust Company, to the Master Custodial
and Servicing Agreement, dated as of September 1, 1992. Filed as
Exhibit 10-J to the Annual Report of Chrysler Financial Corporation
on Form 10-K for the year ended December 31, 1992 and incorporated
herein by reference.
10-H-1 Copy of Amendment dated as of December 1, 1992, to the Series 1992-1
Supplement dated as of February 1, 1992, among U.S. Auto Receivables
Company, as Seller, Chrysler Credit Corporation, as Servicer, and
Security Pacific National Trust Company (New York), as Trustee, with
respect to DRAC Auto Loan Master Trust. Filed as Exhibit 10-DDDD to
the Annual Report of Chrysler Financial Corporation on Form 10-K for
the year ended December 31, 1991, and incorporated herein by
reference.
10-H-2 Copy of Series 1992-1 Supplement dated as of February 1, 1992, among
U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Security Pacific National Trust
Company (New York), as Trustee, with respect to DRAC Auto Loan
Master Trust. Filed as Exhibit 10-YYYY to the Registration
Statement on Form S-2 of Chrysler Financial Corporation
(Registration Statement No. 33-51302) on November 24, 1992, and
incorporated herein by reference.
10-H-3 Copy of Series 1992-2 Supplement dated as of December 1, 1992 among
U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Security Pacific National Bank (New
York), as Trustee, with respect to DRAC Auto Loan Master Trust.
Filed as Exhibit 10-FFFF to the Annual Report of Chrysler Financial
Corporation on Form 10-K for the year ended December 31, 1991, and
incorporated herein by reference.
10-I Copy of Pooling and Servicing Agreement, dated as of January 1,
1992, among Chrysler Auto Receivables Company, as Seller, Chrysler
Credit Corporation, as Servicer, and LaSalle National Bank, as
Trustee, with respect to CFC-16 Grantor Trust. Filed as Exhibit
10-QQQQ to the Annual Report of Chrysler Financial Corporation on
Form 10-K for the year ended December 31, 1991, and incorporated
herein by reference.
10-J Copy of Standard Terms and Conditions of Agreement, dated as of
January 1, 1992, between Chrysler Auto Receivables Company, as
Seller, and Chrysler Credit Corporation, as Servicer, with respect
to CFC-16 Grantor Trust. Filed as Exhibit 10-RRRR to the Annual
Report of Chrysler Financial Corporation on Form 10-K for the year
ended December 31, 1991, and incorporated herein by reference.
10-K Copy of Purchase Agreement, dated as of January 1, 1992, between
Chrysler Financial Corporation and Chrysler Auto Receivables Company
with respect to CFC-16 Grantor Trust. Filed as Exhibit 10-SSSS to
the Annual Report of Chrysler Financial Corporation on Form 10-K for
the year ended December 31, 1991, and incorporated herein by
reference.
62
<PAGE> 63
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
10-L-1 Copy of Sale and Servicing Agreement, dated as of January 1, 1992,
among Premier Auto Trust 1992-1, as Issuer, U.S. Auto Receivables
Company, as Seller and Chrysler Credit Corporation, as Servicer,
with respect to Premier Auto Trust 1992-1. Filed as Exhibit 10-QQQQ
to the Registration Statement of Chrysler Financial Corporation on
Form S-2 (Registration Statement No. 33-51302) on November 24, 1992
and incorporated herein by reference.
10-L-2 Copy of Trust Agreement, dated as of January 1, 1992, between U.S.
Auto Receivables Company and Chemical Bank Delaware, as Owner
Trustee, with respect to Premier Auto Trust 1992-1. Filed as
Exhibit 10-RRRR to the Registration Statement of Chrysler Financial
Corporation on Form S-2 (Registration Statement No. 33-51302) on
November 24, 1992 and incorporated herein by reference.
10-L-3 Copy of Purchase Agreement, dated as of January 1, 1992, between
Chrysler Financial Corporation, as Seller, and U.S. Auto
Receivables Company, as Purchaser, with respect to Premier Auto
Trust 1992-1. Filed as Exhibit 10-SSSS to the Registration
Statement of Chrysler Financial Corporation on Form S-2
(Registration Statement No. 33-51302) on November 24, 1992 and
incorporated herein by reference.
10-M Copy of Pooling and Servicing Agreement, dated as of January 1,
1992, among Chrysler Financial Corporation, as Master Servicer,
Chrysler First Business Credit Corporation, as Seller, and Security
Pacific National Bank, as Trustee, with respect to U.S. Business
Equity Loan Trust 1992-1. Filed as Exhibit 4-A to the Quarterly
Report on Form 10-Q of U.S. Business Equity Loan Trust 1992-1 for
the quarter ended March 31, 1992, and incorporated herein by
reference.
10-N-1 Copy of Series B Supplement, dated as of March 1, 1992, among U.S.
Auto Receivables Company, as Seller, Chrysler Credit Corporation, as
Servicer, and Manufacturers and Traders Trust Company, as Trustee,
with respect to CARCO Auto Loan Master Trust. Filed as Exhibit 4-H
to the Quarterly Report on Form 10-Q of CARCO Auto Loan Master Trust
for the quarter ended March 31, 1992, and incorporated herein by
reference.
10-N-2 Copy of Series C Supplement, dated as of May 1, 1992, among U.S.
Auto Receivables Company, as Seller, Chrysler Credit Corporation, as
Servicer, and Manufacturers and Traders Trust Company, as Trustee,
with respect to CARCO Auto Loan Master Trust. Filed as Exhibit 4-J
to the Quarterly Report on Form 10-Q of CARCO Auto Loan Master Trust
for the quarter ended June 30, 1992, and incorporated herein by
reference.
10-O-1 Copy of Series 1992-1 Supplement, dated as of February 1, 1992,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Security Pacific National Trust
Company (New York), as Trustee, with respect to DRAC Auto Loan
Master Trust. Filed as Exhibit 10-YYYY to the Quarterly Report on
Form 10-Q of CARCO Auto Loan Master Trust for the quarter ended June
30, 1992, and incorporated herein by reference.
10-P-1 Copy of Indenture, dated as of March 1, 1992, between Premier Auto
Trust 1992-2 and Bankers Trust Company, with respect to Premier Auto
Trust 1992-2 Asset Backed Notes. Filed as Exhibit 4-A to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1992-2 for the
quarter ended March 31, 1992, and incorporated herein by reference.
10-P-2 Copy of a 6-3/8% Asset Backed Note with respect to Premier Auto
Trust 1992-2 Asset Backed Notes. Filed as Exhibit 4-B to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1992-2 for the
quarter ended March 31, 1992, and incorporated herein by reference.
10-P-3 Copy of Trust Agreement, dated as of March 1, 1992, between U.S.
Auto Receivables Company and Manufacturers Hanover Bank (Delaware)
with respect to Premier Auto Trust 1992-2 Asset Backed Certificates.
Filed as Exhibit 4-C to the Quarterly Report on Form 10-Q of Premier
Auto Trust 1992-2 for the quarter ended March 31, 1992, and
incorporated herein by reference.
10-Q-1 Copy of Pooling and Servicing Agreement, dated as of March 1, 1992
among Chrysler Financial Corporation, as Master Servicer, Financial
Acceptance Corporation, as Seller, and The First National Bank of
Chicago, as Trustee, with respect to CFC-17 Grantor Trust. Filed as
Exhibit 4-A to the Quarterly report on Form 10-Q of CFC-17 Grantor
Trust for the quarter ended June 30, 1992, and incorporated herein
by reference.
63
<PAGE> 64
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
10-Q-2 Copy of Standard Terms and Conditions of Agreement, dated as of
March 1, 1992, among Chrysler Financial Corporation, as Master
Servicer, Financial Acceptance Corporation, as Seller, and The First
National Bank of Chicago, as Trustee, with respect to CFC-17 Grantor
Trust. Filed as Exhibit 4-B to the Quarterly Report on Form 10-Q of
CFC-17 Grantor Trust for the quarter ended June 30, 1992, and
incorporated herein by reference.
10-Q-3 Copy of Purchase Agreement, dated as of March 1, 1992, between
Chrysler First Inc. and Financial Acceptance Corporation with
respect to CFC-17 Grantor Trust. Filed as Exhibit 4-C to the
Quarterly Report on Form 10-Q of CFC-17 Grantor Trust for the
quarter ended June 30, 1992, and incorporated herein by reference.
10-R-1 Copy of Indenture, dated as of May 1, 1992, between Premier Auto
Trust 1992-3 and Bankers Trust Company with respect to Premier Auto
Trust 1992-3. Filed as Exhibit 4-N to the Quarterly Report on Form
10-Q of Premier Auto Trust 1992-3 for the quarter ended June 30,
1992, and incorporated herein by reference.
10-R-2 Copy of a 5.90% Asset Backed Note with respect to Premier Auto Trust
1992-3. Filed as Exhibit 4-B to the Quarterly Report on Form 10-Q
of Premier Auto Trust 1992-3 for the quarter ended June 30, 1992,
and incorporated herein by reference.
10-R-3 Copy of Trust Agreement, dated as of April 1, 1992, as amended and
restated as of May 1, 1992, between Premier Auto Receivables Company
and Manufacturers Hanover Bank (Delaware) with respect to Premier
Auto Trust 1992-3. Filed as Exhibit 4-C to the Quarterly Report on
Form 10-Q of Premier Auto Trust 1992-3 for the quarter ended June
30, 1992, and incorporated herein by reference.
10-R-4 Copy of Receivables Purchase Agreement, dated as of April 15, 1992,
between Chrysler Credit Canada Ltd., Chrysler Financial Corporation
and Associated Assets Acquisition Inc. with respect to Canadian Auto
Receivables Securitization 1992-1. Filed as Exhibit 10-IIIII to the
Registration Statement on Form S-2 of Chrysler Financial Corporation
(Registration Statement No. 33-51302) on November 24, 1992, and
incorporated herein by reference.
10-S-1 Copy of Combined and Restated Revolving Credit Agreement, dated as
of July 29, 1992, among Chrysler Financial Corporation, as Borrower,
Chemical Bank, as Agent and Arranger, and Swiss Bank Corporation,
New York Branch, as Managing Co-Agent and Co-Arranger including as
Exhibit G thereto forms of the Trust Agreement and related security
documents executed and delivered concurrently therewith. Filed as
Exhibit 10-A to the Current Report on Form 8-K of Chrysler Financial
Corporation dated August 17, 1992 and filed August 19, 1992, and
incorporated herein by reference.
10-S-2 Copy of Second Amended and Restated Commitment Transfer Agreement,
dated as of July 29, 1992, between Chrysler Financial Corporation,
as Borrower, and Chemical Bank, as Agent. Filed as Exhibit 10-B to
the Current Report on Form 8-K of Chrysler Financial Corporation,
dated August 17, 1992 and filed August 19, 1992 and incorporated
herein by reference.
10-S-3 Copy of Amended and Restated Standby Receivables Purchase Agreement,
dated as of September 15, 1993, among Chrysler Financial
Corporation, Chrysler Credit Corporation, U.S. Auto Receivables
Company, American Auto Receivables Company, Chemical Bank, as Agent,
and Chemical Bank Agency Services Corporation, as Administrative
Agent. Filed as Exhibit 10-YY to the Quarterly Report on Form 10-Q
of Chrysler Financial Corporation for the quarter ended September
30, 1993, and incorporated herein by reference.
10-S-4 Copy of Participation and Servicing Agreement, dated as of July 29,
1992, among American Auto Receivables Company, Chrysler Credit
Corporation, the Purchasers named therein, Chemical Bank, as Agent,
and Chemical Bank Agency Services Corporation, as Administrative
Agent, with respect to the Standby Receivable Purchase Agreement.
Filed as Exhibit 10-D to the Current Report on Form 8-K of Chrysler
Financial Corporation dated August 17, 1992 and filed August 19,
1992, and incorporated herein by reference.
10-S-5 Copy of Bank Supplement, dated as of July 29, 1992, to the Pooling
and Servicing Agreement, dated as of May 31, 1992, among U.S. Auto
Receivables Company, as Seller, Chrysler Credit Corporation, as
Servicer, and Manufacturers and Traders Trust Company, as Trustee,
with respect to the Standby Receivables Purchase Agreement. Filed
as Exhibit 10-E to the Current Report on Form 8-K of Chrysler
Financial Corporation dated August 17, 1992 and filed on August 19,
1992, and incorporated herein by reference.
64
<PAGE> 65
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
10-S-6 Copy of Short Term Standby Receivables Purchase Agreement, dated as
of September 15, 1993, among Chrysler Financial Corporation,
Chrysler Credit Corporation, U.S. Auto Receivables Company, American
Auto Receivables Company, Chemical Bank, as Agent, and Chemical Bank
Agency Services Corporation, as Administrative Agent. Filed as
Exhibit 10-BBB to the Quarterly Report on Form 10-Q of Chrysler
Financial Corporation for the quarter ended September 30, 1993, and
incorporated herein by reference.
10-S-7 Copy of Participation and Servicing Agreement, dated as of September
15, 1993, among American Auto Receivables Company, Chrysler Credit
Corporation, the Purchasers named therein, Chemical Bank, as Agent,
and Chemical Bank Agency Services Corporation, as Administrative
Agent. Filed as Exhibit 10-CCC to the Quarterly Report on Form 10-Q
of Chrysler Financial Corporation for the quarter ended September
30, 1993, and incorporated herein by reference.
10-S-8 Copy of Short Term Bank Supplement, dated as of September 15, 1993,
to the Pooling and Servicing Agreement, dated as of May 31, 1991,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers and Traders Trust
Company, as Trustee, with respect to Short Term Standby Receivables
Purchase Agreement. Filed as Exhibit 10-DDD to the Quarterly Report
on Form 10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein by reference.
10-S-9 Copy of Receivables Purchase Agreement, dated as of August 18, 1992,
between Chrysler Credit Canada Ltd., Chrysler Financial Corporation
and Associated Assets Acquisition Inc. with respect to Canadian Auto
Receivables Securitization 1992-2. Filed as Exhibit 10-OOOOO to the
Registration Statement on Form S-2 of Chrysler Financial Corporation
(Registration Statement No. 33-51302) on November 24, 1992, and
incorporated herein by reference.
10-T-1 Copy of Indenture, dated as of September 1, 1992, between Premier
Auto Trust 1992-5 and Bankers Trust Company with respect to Premier
Auto Trust 1992-5. Filed as Exhibit 4-A to the Quarterly Report on
Form 10-Q of Premier Auto Trust 1992-5 for the quarter ended
September 30, 1992, and incorporated herein by reference.
10-T-2 Copy of a 4.55% Asset Backed Note with respect to Premier Auto Trust
1992-5. Filed as Exhibit 4-B to the Quarterly Report on Form 10-Q
of Premier Auto Trust 1992-5 for the quarter ended September 30,
1992, and incorporated herein by reference.
10-T-3 Copy of Trust Agreement, dated as of September 1, 1992, between
Premier Auto Receivables Company and Manufacturers Hanover Bank
(Delaware) with respect to Premier Auto Trust 1992-5. Filed as
Exhibit 4-C to the Quarterly Report on Form 10-Q of Premier Auto
Trust 1992-5 for the quarter ended September 30, 1992, and
incorporated herein by reference.
10-U Copy of Series 1992-2 Supplement to the Pooling and Servicing
Agreement, dated as of October 1, 1992, among U.S. Auto Receivables
Company, as Seller, Chrysler Credit Corporation, as Servicer, and
Manufacturers and Traders Trust Company, as Trustee, with respect to
CARCO Auto Loan Master Trust, Series 1992-2. Filed as Exhibit 3 to
Form 8-K of CARCO Auto Loan Master Trust on October 30, 1992, and
incorporated herein by reference.
10-V-1 Copy of Master Custodial and Servicing Agreement, dated as of
September 1, 1992 between Chrysler Credit Canada Ltd. and The Royal
Trust Company, as Custodian. Filed as Exhibit 10-TTTTT to the
Registration Statement on Form S-2 of Chrysler Financial Corporation
(Registration Statement No. 33-51302) on November 24, 1992, and
incorporated herein by reference.
10-V-2 Copy of Trust Indenture, dated as of September 1, 1992, among
Canadian Dealer Receivables Corporation and Montreal Trust Company
of Canada, as Trustee. Filed as Exhibit 10-UUUUU to the
Registration Statement on Form S-2 of Chrysler Financial Corporation
(Registration statement No. 33-51302) on November 24, 1992, and
incorporated herein by reference.
65
<PAGE> 66
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
10-W-1 Copy of Loan Asset Purchase Agreement by and between NationsBank of
Texas, N.A. and Chrysler First Inc., and the Subsidiaries of
Chrysler First Inc. named therein, dated as of November 17, 1992,
with respect to the sale of certain loan assets of Chrysler First
Inc. and its subsidiaries. Filed as Exhibit 10-VVVVV to the
Registration Statement on Form S-2 of Chrysler Financial Corporation
(Registration Statement No. 33-51302) on November 24, 1992, and
incorporated herein by reference.
10-W-2 Copy of Business Asset Purchase Agreement by and among NationsBank
Financial Services Corporation and the Purchasers named therein and
Chrysler First Inc. and the Sellers named therein, dated as of
November 17, 1992, with respect to the sale of certain business
assets of Chrysler First Inc. and its subsidiaries. Filed as
Exhibit 10-WWWWW to the Registration Statement on Form S-2 of
Chrysler Financial Corporation (Registration Statement No. 33-51302)
on November 24, 1992, and incorporated herein by reference.
10-X-1 Copy of Securitization Closing Agreement, dated as of February 1,
1993, among Chrysler Financial Corporation, certain Sellers, certain
Purchasers, and certain Purchaser Parties. Filed as Exhibit 2-E to
the Current Report of Chrysler Financial Corporation on Form 8-K
dated February 1, 1993, and incorporated herein by reference.
10-X-2 Copy of First Amendment to Loan Asset Purchase Agreement, dated
December 30, 1992, among NationsBank of Texas, N.A. and Chrysler
Financial Corporation, for and on behalf of Chrysler First Inc. and
the Asset Sellers parties thereto. Filed as Exhibit 2-B to the
Current Report of Chrysler Financial Corporation on Form 8-K dated
February 1, 1993, and incorporated herein by reference.
10-X-3 Copy of First Amendment to Business Asset Purchase Agreement dated
as of January 29, 1993, among NationsBank Financial Services
Corporation, the other Purchasers parties thereto and the Sellers
parties thereto and Chrysler Financial Corporation. Filed as
Exhibit 2-D to the Current Report of Chrysler Financial Corporation
on Form 8-K dated February 1, 1993, and incorporated herein by
reference.
10-Y-1 Copy of Asset Purchase Agreement, dated as of May 15, 1992, between
Chrysler Capital Public Finance Corporation and Koch Financial
Corporation. Filed as Exhibit 10-DDDDDD to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1992, and incorporated herein by reference.
10-Y-2 Copy of Asset Purchase Agreement, dated as of June 1, 1992, among
General Electric Capital Corporation, Chrysler Financial
Corporation, Chrysler Capital Corporation, Chrysler Asset Management
Corporation and Chrysler Credit Corporation. Filed as Exhibit
10-EEEEEE to the Annual Report of Chrysler Financial Corporation on
Form 10-K for the year ended December 31, 1992, and incorporated
herein by reference.
10-Y-3 Copy of Purchase Agreement, dated as of August 1, 1992, among
General Electric Capital Corporation, Chrysler Financial
Corporation, Chrysler Capital Corporation and Chrysler Asset
Management Corporation. Filed as Exhibit 10-FFFFFF to the Annual
Report of Chrysler Financial Corporation on Form 10-K for the year
ended December 31, 1992, and incorporated herein by reference.
10-Z-1 Copy of Asset Purchase Agreement, dated as of September 30, 1992,
between Chrysler Rail Transportation Corporation and United States
Rail Services, a division of United States Leasing International,
Inc. Filed as Exhibit 10-GGGGGG to the Annual Report of Chrysler
Financial Corporation on Form 10-K for the year ended December 31,
1992, and incorporated herein by reference.
10-Z-2 Copy of Asset Purchase Agreement, dated as of December 18, 1992,
among Chrysler Rail Transportation Corporation, Greenbrier
Transportation Limited Partnership and Greenbrier Capital
Corporation. Filed as Exhibit 10-HHHHHH to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1992, and incorporated herein by reference.
10-Z-3 Copy of Asset Purchase Agreement, dated as of February 1, 1993,
among Chrysler Rail Transportation Corporation, Chrysler Capital
Transportation Services, Inc. and United States Rail Services, a
division of United States Leasing International, Inc. Filed as
Exhibit 10-IIIIII to the Annual Report of Chrysler Financial
Corporation on Form 10-K for the year ended December 31, 1992, and
incorporated herein by reference.
66
<PAGE> 67
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
10-AA-1 Copy of Asset Purchase Agreement between Chrysler Leaserve, Inc. (a
subsidiary of General Electric Capital Auto Lease, Inc.), Chrysler
Financial Corporation and Chrysler Credit Corporation, dated as of
October 20, 1992, with respect to the sale of Gold Key Leases.
Filed as Exhibit 10-XXXXX to the Registration Statement on Form S-2
of Chrysler Financial Corporation (Registration Statement No.
33-51302) on November 24, 1992, and incorporated herein by
reference.
10-AA-2 Copy of Servicing Agreement, dated as of October 20, 1992, between
Chrysler Leaserve, Inc. (a subsidiary of General Electric Capital
Auto Lease, Inc.) and Chrysler Credit Corporation, with respect to
the sale of Gold Key Leases. Filed as Exhibit 10-YYYYY to the
Registration Statement on Form S-2 of Chrysler Financial Corporation
(Registration Statement No. 33-51302) on November 24, 1992, and
incorporated herein by reference.
10-BB-1 Copy of First Amendment dated as of August 24, 1992 to the Series
1991-1 Supplement dated as of May 31, 1991, among U.S. Auto
Receivables Company ("USA"), as seller (the "Seller"), Chrysler
Credit Corporation, as servicer (the "Servicer") and Manufacturers
and traders Trust Company, as Trustee (the "Trustee"), to the
Pooling and Servicing Agreement dated as of May 31, 1991, as
assigned by Chrysler Auto Receivables Company to USA on August 8,
1991, as amended by the First Amendment dated as of August 6, 1992,
among the Seller, the Servicer and the Trustee, with respect to
CARCO Auto Loan Master Trust. Filed as Exhibit 4-M to the Quarterly
Report on Form 10-Q of CARCO Auto Loan Master Trust for the quarter
ended September 30, 1992, and incorporated herein by reference.
10-BB-2 Copy of Second Amendment dated as of August 24, 1992 to the Series
1991-2 Supplement dated as of June 30, 1991, among U.S. Auto
Receivables Company ("USA"), as seller (the "Seller"), Chrysler
Credit Corporation, as servicer (the "Servicer") and Manufacturers
and Traders Trust Company, as Trustee (the "Trustee"), to the
Pooling and Servicing Agreement dated as of May 31, 1991, as
assigned by Chrysler Auto Receivables Company to USA on August 8,
1991, as amended by the First Amendment dated as of August 6, 1992,
among the Seller, the Servicer and the Trustee, with respect to
CARCO Auto Loan Master Trust. Filed as Exhibit 4-N to the Quarterly
Report on Form 10-Q of CARCO Auto Loan Master Trust for the quarter
ended September 30, 1992, and incorporated herein by reference.
10-BB-3 Copy of Second Amendment dated as of August 24, 1992 to the Series
1991-3 Supplement dated as of June 30, 1991, among U.S. Auto
Receivables Company ("USA"), as seller (the "Seller"), Chrysler
Credit Corporation, as servicer (the "Servicer") and Manufacturers
and Traders Trust Company, as Trustee (the "Trustee"), to the
Pooling and Servicing Agreement dated as of May 31, 1991, as
assigned by Chrysler Auto Receivables Company to USA on August 8,
1991, as amended by the First Amendment dated as of August 6, 1992,
among the Seller, the Servicer and the Trustee, with respect to
CARCO Auto Loan Master Trust. Filed as Exhibit 4-O to the Quarterly
Report on Form 10-Q of CARCO Auto Loan Master trust for the quarter
ended September 30, 1992, and incorporated herein by reference.
10-BB-4 Copy of First Amendment dated as of August 24, 1992 to the Series
1991-4 Supplement dated as of September 30, 1991, among U.S. Auto
Receivables Company ("USA"), as seller (the "Seller"), Chrysler
Credit Corporation, as servicer (the "Servicer") and Manufacturers
and Traders Trust Company, as Trustee (the "Trustee"), to the
Pooling and Servicing Agreement dated as of May 31, 1991, as
assigned by Chrysler Auto Receivables Company to USA on August 8,
1991, as amended by the First Amendment dated as of August 6, 1992,
among the Seller, the Servicer and the Trustee, with respect to
CARCO Auto Loan Master Trust. Filed as Exhibit 4-P to the Quarterly
Report on Form 10-Q of CARCO Auto Loan Master Trust for the quarter
ended September 30, 1992, and incorporated herein by reference.
10-CC-1 Copy of Sale and Servicing Agreement, dated as of November 1, 1992,
among Premier Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Premier Auto Trust 1992-6, as
Purchaser, with respect to Premier Auto Trust 1992-6. Filed as
Exhibit 10-PPPPPP to the Annual Report of Chrysler Financial
Corporation on Form 10-K for the year ended December 31, 1992, and
incorporated herein by reference.
10-CC-2 Copy of Trust Agreement, dated as of November 1, 1992, among ML
Asset Backed Corporation, Premier Auto Receivables Company and
Chemical Bank Delaware as Owner Trustee, with respect to Premier
Auto Trust 1992-6. Filed as Exhibit 10-QQQQQQ to the Annual Report
of Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1992, and incorporated herein by reference.
67
<PAGE> 68
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
10-CC-3 Copy of Sale and Servicing Agreement, dated as of January 1, 1993,
among Premier Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Premier Auto Trust 1993-1, as
Purchaser, with respect to Premier Auto Trust 1993-1. Filed as
Exhibit 10-RRRRRR to the Annual Report of Chrysler Financial
Corporation on Form 10-K for the year ended December 31, 1992, and
incorporated herein by reference.
10-CC-4 Copy of Trust Agreement, dated as of January 1, 1993, among ML Asset
Backed Corporation, Premier Auto Receivables Company and Chemical
Bank Delaware, as Owner Trustee, with respect to Premier Auto Trust
1992-6. Filed as Exhibit 10- SSSSSS to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1992, and incorporated herein by reference.
10-CC-5 Copy of Receivables Purchase Agreement, dated as of November 25,
1992, between Chrysler Credit Canada Ltd., Chrysler Financial
Corporation and Associated Assets Acquisitions Inc. with respect to
Canadian Auto Receivables Securitization 1992-3. Filed as Exhibit
10-TTTTTT to the Annual Report of Chrysler Financial Corporation on
Form 10-K for the year ended December 31, 1992, and incorporated
herein by reference.
10-CC-6 Copy of Purchase Agreement, dated as of January 25, 1993, among
Chrysler Credit Canada Ltd., Chrysler Canada Ltd., Auto 1 Limited
Partnership and Chrysler Financial Corporation, with respect to Auto
1 Trust. Filed as Exhibit 10-UUUUUU to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1992, and incorporated herein by reference.
10-CC-7 Copy of Master Lease Agreement, dated as of January 25, 1993, among
Chrysler Credit Canada Ltd., Chrysler Canada Ltd. and Auto 1
Limited Partnership, with respect to Auto 1 Trust. Filed as Exhibit
10-VVVVVV to the Annual Report of Chrysler Financial Corporation on
Form 10-K for the year ended December 31, 1992, and incorporated
herein by reference.
10-DD Copy of Amended and Restated Trust Agreement, dated as of April 1,
1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1993-2. Filed as Exhibit 4.1 to the
Quarterly Report of Premier Auto Trust 1993-2 on Form 10-Q for the
quarter ended June 30, 1993, and incorporated herein by reference.
10-EE Copy of Indenture, dated as of April 1, 1993, between Premier Auto
Trust 1993-2 and Bankers Trust Company, as Indenture Trustee, with
respect to Premier Auto Trust 1993-2. Filed as Exhibit 4.2 of the
Quarterly Report of Premier Auto Trust 1993-2 on Form 10-Q for the
quarter ended June 30, 1993, and incorporated herein by reference.
10-FF Copy of Amended and Restated Trust Agreement, dated as of June 1,
1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with
respect to Premier Auto Trust 1993-3. Filed as Exhibit 4.1 to the
Quarterly Report of Premier Auto Trust 1993-3 on Form 10-Q for the
quarter ended June 30, 1993, and incorporated herein by reference.
10-GG Copy of Indenture, dated as of June 1, 1993, between Premier Auto
Trust 1993-3 and Bankers Trust Company, as Indenture Trustee. Filed
as Exhibit 4.2 to the Quarterly Report of Premier Auto Trust 1993-3
on Form 10-Q for the quarter ended June 30, 1993, and incorporated
herein by reference.
10-HH Copy of Series 1993-1 Supplement, dated as of February 1, 1993,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and Manufacturers Hanover Trust Company,
as Trustee, with respect to CARCO Auto Loan Master Trust. Filed as
Exhibit 3 to the Trust's Registration Statement on Form 8-A dated
March 15, 1993, and incorporated herein by reference.
10-II Copy of Receivables Purchase Agreement, made as of April 7, 1993,
among Chrysler Credit Canada Ltd., Chrysler Financial Corporation
and Association Assets Acquisition Inc., with respect to CARS
1993-1. Filed as Exhibit 10-OOOO to the Quarterly Report on Form
10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein by reference.
10-JJ Copy of Receivables Purchase Agreement, made as of June 29, 1993,
among Chrysler Credit Canada Ltd., Chrysler Financial Corporation
and Associated Assets Acquisition Inc., with respect to CARS 1993-2.
Filed as Exhibit 10-PPPP to the Quarterly Report on Form 10-Q of
Chrysler Financial Corporation for the quarter ended September 30,
1993, and incorporated herein by reference.
68
<PAGE> 69
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
10-KK Copy of Pooling and Servicing Agreement, dated as of August 1, 1993,
among Auto Receivables Corporation, Chrysler Credit Canada Ltd.,
Montreal Trust Company of Canada and Chrysler Financial Corporation,
with respect to CARCO 1993-1. Filed as Exhibit 10-QQQQ to the
Quarterly Report on Form 10-Q of Chrysler Financial Corporation for
the quarter ended September 30, 1993, and incorporated herein by
reference.
10-LL Copy of Standard Terms and Conditions of Agreement, dated as of
August 1, 1993, among Auto Receivables Corporation, Chrysler Credit
Canada Ltd. and Chrysler Financial Corporation, with respect to
CARCO 1993-1. Filed as Exhibit 10-RRRR to the Quarterly Report on
Form 10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein by reference.
10-MM Copy of Purchase Agreement, dated as of August 1, 1993, between
Chrysler Credit Canada Ltd., and Auto Receivables Corporation, with
respect to CARCO 1993-1. Filed as Exhibit 10-SSSS to the Quarterly
Report on Form 10-Q of Chrysler Financial Corporation for the
quarter ended September 30, 1993, and incorporated herein by
reference.
10-NN Copy of Lease Receivables Purchase Agreement, dated as of December
23, 1992, among Chrysler Systems Leasing Inc., Chrysler Financial
Corporation and Sanwa Business Credit Corporation. Filed as Exhibit
10-TTTT to the Quarterly Report on Form 10-Q of Chrysler Financial
Corporation for the quarter ended September 30, 1993, and
incorporated herein by reference.
10-OO Copy of Lease Receivables Purchase Agreement, dated September 3,
1993, among CXC Incorporated, Chrysler Systems Inc., and Chrysler
Financial Corporation. Filed as Exhibit 10-UUUU to the Quarterly
Report on Form 10-Q of Chrysler Financial Corporation for the
quarter ended September 30, 1993, and incorporated herein by
reference.
10-PP Copy of Lease Receivables Purchase Agreement, dated September 22,
1993, among the CIT Group/Equipment Financing, Inc., Chrysler
Systems Inc., and Chrysler Financial Corporation. Filed as Exhibit
10-VVVV to the Quarterly Report on Form 10-Q of Chrysler Financial
Corporation for the quarter ended September 30, 1993, and
incorporated herein by reference.
10-QQ Copy of Asset Purchase Agreement, dated as of July 31, 1993, between
Chrysler Rail Transportation Corporation and General Electric
Railcar Leasing Services Corporation. Filed as Exhibit 10-WWWW to
the Quarterly Report on Form 10-Q of Chrysler Financial Corporation
for the quarter ended September 30, 1993, and incorporated herein by
reference.
10-RR Copy of Amended and Restated Loan Agreement, dated as of June 1,
1993, between Chrysler Realty Corporation and Chrysler Credit
Corporation. Filed as Exhibit 10-XXXX to the Quarterly Report on
Form 10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein by reference.
10-SS Copy of Loan Agreement, dated as of March 31, 1993, between Manatee
Leasing, Inc. and Chrysler Credit Corporation. Filed as Exhibit
10-YYYY to the Quarterly Report on Form 10-Q of Chrysler Financial
Corporation for the quarter ended September 30, 1993, and
incorporated herein by reference.
10-TT Copy of Origination and Servicing Agreement, dated as of June 4,
1993, among Chrysler Leaserve, Inc., General Electric Capital Auto
Lease, Inc., Chrysler Credit Corporation and Chrysler Financial
Corporation. Filed as Exhibit 10-ZZZZ to the Quarterly Report on
Form 10-Q of Chrysler Financial Corporation for the quarter ended
September 30, 1993, and incorporated herein by reference.
10-UU Copy of Amended and Restated Trust Agreement, dated as of September
1, 1993, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Trustee, with respect to
Premier Auto Trust 1993-5. Filed as Exhibit 4.1 to the Quarterly
Report of Premier Auto Trust 1993-5 on Form 10-Q for the quarter
ended September 30, 1993, and incorporated herein by reference.
10-VV Copy of Indenture, dated as of September 1, 1993, between Premier
Auto Trust 1993-5 and Bankers Trust Company, as Indenture Trustee,
with respect to Premier Auto Trust 1993-5. Filed as Exhibit 4.2 to
the Quarterly Report of Premier Auto Trust 1993-5 on Form 10-Q for
the quarter ended September 30, 1993, and incorporated herein by
reference.
69
<PAGE> 70
Part IV - Continued
Item 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K -
Continued
10-WW Copy of Asset Purchase Agreement, dated as of October 29, 1993,
between Marine Asset Management Corporation and Trico Marine Assets,
Inc. Filed as Exhibit 10-CCCCC to the Quarterly Report on Form 10-Q
of Chrysler Financial Corporation for the quarter ended September
30, 1993, and incorporated herein by reference.
10-XX Copy of Asset Purchase Agreement, dated as of December 3, 1993,
between Chrysler Rail Transportation Corporation and Allied Railcar
Company. Filed as Exhibit 10-OOOO to the Annual Report on Form 10-K
of Chrysler Financial Corporation and incorporated herein by
reference.
10-YY Copy of Secured Loan Purchase Agreement, dated as of December 15,
1993, among Chrysler Credit Canada Ltd., Leaf Trust and Chrysler
Financial Corporation. Filed as Exhibit 10-PPPP to the Annual
Report on Form 10-K of Chrysler Financial Corporation and
incorporated herein by reference.
*11 Statement regarding computation of earnings per common share.
*12 Statement regarding computation of ratios of earnings to fixed
charges and preferred stock dividends.
*21 Subsidiaries of the Registrant.
*23 Consent of Deloitte & Touche, independent auditors for Chrysler
Corporation.
*24 Powers of Attorney executed by officers and directors who signed
this Annual Report on Form 10-K by an attorney-in-fact.
In lieu of filing certain instruments with respect to the long-term debt of the
type described in Item 601 (b)(4) of Regulation S-K with respect to the
long-term debt of Chrysler Corporation and its consolidated subsidiaries,
Chrysler Corporation agrees to furnish a copy of such instruments to the
Securities and Exchange Commission on request.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the three months ended December 31,
1993.
__________________
* Filed herewith
70
<PAGE> 71
CONFORMED
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
<TABLE>
<S> <C>
CHRYSLER CORPORATION
By R.J. Eaton
-----------------------------------------
R.J. EATON
Chairman of the Board and
Chief Executive Officer
February 4, 1994
</TABLE>
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
Principal executive officers:
R. J. Eaton Chairman of the Board February 4, 1994
- ---------------------------------- and Chief Executive
R. J. EATON Officer
R. A. Lutz President and February 4, 1994
- ---------------------------------- Chief Operating
R. A. LUTZ Officer
Principal financial officer:
G. C. Valade Executive Vice President and February 4, 1994
- ---------------------------------- Chief Financial Officer
G. C. VALADE
Principal accounting officer:
J. D. Donlon, III Vice President and February 4, 1994
- ---------------------------------- Controller
J. D. DONLON, III
</TABLE>
71
<PAGE> 72
CONFORMED
SIGNATURES
<TABLE>
<S> <C> <C> <C>
Board of Directors:
Lilyan H. Affinito * Director February 4, 1994
- ----------------------------------
LILYAN H. AFFINITO
Joseph E. Antonini * Director February 4, 1994
- ----------------------------------
JOSEPH E. ANTONINI
Joseph A. Califano, Jr. * Director February 4, 1994
- ----------------------------------
JOSEPH A. CALIFANO, JR.
A. Jean de Grandpre * Director February 4, 1994
- ----------------------------------
A. JEAN de GRANDPRE
Thomas G. Denomme * Director February 4, 1994
- ----------------------------------
THOMAS G. DENOMME
Robert J. Eaton * Director February 4, 1994
- ----------------------------------
ROBERT J. EATON
Earl G. Graves * Director February 4, 1994
- ----------------------------------
EARL G. GRAVES
Kent Kresa * Director February 4, 1994
- ----------------------------------
KENT KRESA
Robert J. Lanigan * Director February 4, 1994
- ----------------------------------
ROBERT J. LANIGAN
Robert A. Lutz * Director February 4, 1994
- ----------------------------------
ROBERT A. LUTZ
* By R. D. Houtman
---------------------------------
R. D. HOUTMAN
Attorney-in-Fact
February 4, 1994
</TABLE>
72
<PAGE> 73
CONFORMED
SIGNATURES
<TABLE>
<S> <C> <C> <C>
Board of Directors:
Peter A. Magowan * Director February 4, 1994
- ----------------------------------
PETER A. MAGOWAN
William G. Milliken * Director February 4, 1994
- ----------------------------------
WILLIAM G. MILLIKEN
Malcolm T. Stamper * Director February 4, 1994
- ----------------------------------
MALCOLM T. STAMPER
* By R. D. Houtman
---------------------------------
R. D. HOUTMAN
Attorney-in-Fact
February 4, 1994
</TABLE>
73
<PAGE> 74
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
Year ended December 31, 1993
(in millions of dollars)
<TABLE>
<CAPTION>
Balance at Other Balance
beginning Additions changes - at end
Classification of year at cost Retirements add (deduct) of year
- ----------------------------- -------------- -------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
(a)
Land $ 407 $ 39 $ (c) (15) $ (4) $ 427
Buildings (including im-
provements and
building equipment) 4,202 401 (c) (93) (9) 4,501
Machinery and equipment 8,275 1,389 (c) (521) (13) 9,130
Furniture and fixtures 447 52 (c) (33) (4) 462
Construction in progress
(buildings and improve-
ments, machinery and
equipment and furni-
ture and fixtures, in
process of construction
or installation) 1,483 (98) -- (6) 1,379
------------- ------------ ------------ ------------ ------------
14,814 1,783 (662) (36) 15,899
Special tools 2,896 1,245 -- (a,b) (686) 3,455
------------- ------------ ------------ ------------ ------------
Total $ 17,710 $ 3,028 $ (662) $ (722) $ 19,354
============== ============ ============ ============ ============
</TABLE>
_______________________
(a) Reclassifications.
(b) Amortization charged to cost of products sold.
(c) Includes the sale of the plastics operations of Chrysler's Acustar
division.
74
<PAGE> 75
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
Year ended December 31, 1992
(in millions of dollars)
<TABLE>
<CAPTION>
Balance at Other Balance
beginning Additions changes - at end
Classification of year at cost Retirements add (deduct) of year
- ------------------------------ -------------- -------------- -------------- -------------- ------------
(a)
<S> <C> <C> <C> <C> <C>
Land $ 398 $ 14 $ (5) $ -- $ 407
Buildings (including im-
provements and
building equipment) 3,393 768 (51) (b) 92 4,202
Machinery and equipment 7,145 1,304 (241) (b) 67 8,275
Furniture and fixtures 402 91 (11) (b) (35) 447
Construction in progress
(buildings and improve-
ments, machinery and
equipment and furni-
ture and fixtures, in
process of construction
or installation) 1,627 (162) (2) (b) 20 1,483
------------ ------------ ------------ ------------ -----------
12,965 2,015 (310) 144 14,814
Special tools 2,640 901 -- (b,c) (645) 2,896
------------ ------------ ------------ ------------ -----------
Total $ 15,605 $ 2,916 $ (310) $ (501) $ 17,710
============ ============ ============ ============ ============
</TABLE>
_______________________
(a) Includes consolidation of New Venture Gear, Inc.
(b) Reclassifications.
(c) Amortization charged to cost of products sold.
75
<PAGE> 76
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
Year ended December 31, 1991
(in millions of dollars)
<TABLE>
<CAPTION>
Balance at Other Balance
beginning Additions changes - at end
Classification of year at cost Retirements add (deduct) of year
- ------------------------------ -------------- -------------- -------------- ------------- ------------
(a)
<S> <C> <C> <C> <C> <C>
Land $ 397 $ 7 $ (9) $ (b) 3 $ 398
Buildings (including im-
provements and
building equipment) 3,001 428 (53) (b) 17 3,393
Machinery and equipment 6,539 700 (216) (b) 122 7,145
Furniture and fixtures 364 54 (16) -- 402
Construction in progress
(buildings and improve-
ments, machinery and
equipment and furni-
ture and fixtures, in
process of construction
or installation) 1,258 372 (1) (b) (2) 1,627
------------- ------------ ------------ ------------ ------------
11,559 1,561 (295) 140 12,965
Special tools 2,507 708 -- (b,c) (575) 2,640
------------- ------------ ------------ ------------ ------------
Total $ 14,066 $ 2,269 $ (295) $ (435) $ 15,605
============= ============ ============ ============ ============
</TABLE>
__________________________
(a) Includes fixed assets of General Rent-A-Car.
(b) Reclassifications.
(c) Amortization charged to cost of products sold.
76
<PAGE> 77
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
Years ended December 31, 1993, 1992 and 1991
(in millions of dollars)
<TABLE>
<CAPTION>
Additions
Balance at charged Other Balance
beginning to costs changes - at end
Classification of year and expenses Retirements add (deduct) of year
- ------------------------------ -------------- -------------- ------------- -------------- ------------
(a)
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993
- ----------------------------
Buildings (including im-
provements and
building equipment) 1,392 150 (d) (46) (1) 1,495
Machinery and equipment 4,574 688 (d) (399) (7) 4,856
Furniture and fixtures 213 39 (d) (28) 5 229
------------- ------------ ------------ ------------ ------------
Total $ 6,179 $ 877 $ (473) $ (3) $ 6,580
============= ============ ============ ============ ============
Year ended December 31, 1992
- ----------------------------
Buildings (including im-
provements and
building equipment) 1,146 (b) 178 (32) 100 1,392
Machinery and equipment 3,746 (b) 973 (178) 33 4,574
Furniture and fixtures 205 (b) 40 (8) (24) 213
------------- ------------ ------------ ------------ ------------
Total $ 5,097 $ 1,191 $ (218) $ 109 $ 6,179
============= ============ ============ ============ ============
Year ended December 31, 1991
- -----------------------------
Buildings (including im-
provements and
building equipment) 1,068 (c) 112 (37) 3 1,146
Machinery and equipment 3,357 (c) 555 (137) (29) 3,746
Furniture and fixtures 173 (c) 44 (9) (3) 205
------------- ------------ ------------ ------------ ------------
Total $ 4,598 $ 711 $ (183) $ (29) $ 5,097
============= ============ ============ ============ ============
</TABLE>
_____________________
(a) Reclassifications.
(b) Includes consolidation of New Venture Gear, Inc.
(c) Includes fixed assets of General Rent-A-Car.
(d) Includes the sale of the plastics operations of Chrysler's Acustar
division.
77
<PAGE> 78
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
SCHEDULE VII - GUARANTEES OF SECURITIES OF OTHER ISSUERS
December 31, 1993
(in millions of dollars)
<TABLE>
<CAPTION>
Nature of any
default by issuer
of securities
guaranteed in
principal,
Title of Total Amount in interest,
issue of amount treasury of sinking fund, or
Issuer each class guaranteed Amount issuer of redemption pro-
of securities of securities and out- owned by securities Nature of visions or payment
guaranteed guaranteed standing Chrysler guaranteed guarantee of dividends
- --------------- ---------------- ---------- ------------ ------------ ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Chrysler Motors
de Venezuela, Payment guar- Principal
S.A. antee to Bank $ 5 None None & Interest None
Automobili Payment guar-
Lamborghini antees to various
S.p.A. financial Principal
institutions 6 None None & Interest None
Local Devl. Fin. Guarantee
Authority of of Auburn Hills
Auburn Hills, Tax Increment Principal
Michigan Bonds, Series 1989A 20 None None & Interest None
Local Devl. Fin. Guarantee
Authority of of Auburn Hills
Auburn Hills, Tax Increment Principal
Michigan Bonds, Series 1989B 11 None None & Interest None
Arab American Payment guar- Principal
Vehicles Co. antee to Bank 3 None None & Interest None
Oklahoma Guarantee of Junior
City Airport Lien Taxable Bonds, Lease
Trustees Fifteenth Series 10 None None Payments None
City of Detroit Guarantee of
Local Devl. Tax Increment Principal
Fin. Authority Bonds, Series A 44 None None & Interest None
Detroit Economic Guarantee of Principal
Growth Corp. revolving loan 1 None None & Interest None
Dollar Rent Guarantees of
A Car Systems, franchisee auto
Inc. and other Lease
Franchisees financing 13 None None Payments None
Thrifty
Rent-A-Car Guarantees of
System, Inc. franchisee auto Lease
Franchisees and other financing 2 None None Payments None
---------- ------------ ------------ ------------
TOTAL $ 115 None None None
========== ============ ============ ============
</TABLE>
78
<PAGE> 79
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31, 1993, 1992 and 1991
(in millions of dollars)
<TABLE>
<CAPTION>
Additions
--------------------------------
Balance Charged Charged
at beginning to costs to other Balance at
Description of year and expenses accounts Deductions end of year
- ---------------------------- --------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993
- ----------------------------
Allowance for doubtful ac-
counts (deducted from
accounts receivable) $ 63 $ 28 $ -- $ (a) 39 $ 52
Valuation allowance (deducted
from deferred tax assets) 130 36 -- (d) 20 146
Year ended December 31, 1992
- ----------------------------
Allowance for doubtful ac-
counts (deducted from
accounts receivable) $ 76 $ 41 $ -- $ (a) 54 $ 63
Valuation allowance (deducted
from deferred tax assets) (b) 107 23 -- -- 130
Year ended December 31, 1991
- ----------------------------
Allowance for doubtful ac-
counts (deducted from
accounts receivable) $ 57 $ 50 $ (c) 15 $ (a) 46 $ 76
</TABLE>
_______________________
(a) Losses charged to reserve.
(b) Chrysler adopted SFAS No. 109, "Accounting for Income Taxes," effective
January 1, 1992.
(c) Acquisition of General Rent-A-Car in March 1991.
(d) Principally utilization of foreign net operating loss carryforwards.
79
<PAGE> 80
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS
Years ended December 31, 1993, 1992 and 1991
(in millions of dollars)
<TABLE>
<CAPTION>
Maximum Average Weighted
Weighted amount amount average
Category of aggregate Balance at average outstanding outstanding interest rate
short-term borrowings end of period interest rate during period during period during period
- ---------------------------- -------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993
- ----------------------------
Commercial paper:
Chrysler, excluding CFC $ -- -- $ -- $ -- $ --
CFC 2,772 3.74% 2,951 (b) 1,799 (c) 4.71%
Bank borrowings:
Chrysler, excluding CFC -- -- 29 (a) 12 (a,d) 8.51%
CFC 425 (d) 17.51% 437 (b) 376 (c,d) 20.49%
Other 100 4.50% 105 (a) 99 (a) 5.37%
Year ended December 31, 1992
- ----------------------------
Commercial paper:
Chrysler, excluding CFC $ -- -- $ 98 $ (a) 12 (a,d) 19.58%
CFC 295 4.47% 559 (b) 434 (c) 5.19%
Bank borrowings:
Chrysler, excluding CFC 8 7.39% 270 (a) 91 (a) 8.01%
CFC 393 (d) 24.35% 393 (b) 352 (c,d) 20.70%
Other 83 6.14% 105 (a) 96 (a) 6.04%
Year ended December 31, 1991
- -----------------------------
Commercial paper:
Chrysler, excluding CFC $ 97 (d) 20.26% $ 97 $ (a) 16 (a,d) 22.11%
CFC 339 6.13% 1,361 (b) 560 (c) 7.58%
Bank borrowings:
Chrysler, excluding CFC 84 (d) 18.24% 197 (a) 80 (a,d) 9.91%
CFC 332 (d) 21.31% 406 (b) 319 (c,d) 19.29%
Other 71 6.92% 77 (a) 68 (a) 7.21%
</TABLE>
_______________________
(a) Based on month-end averages.
(b) Computed by dividing total daily outstanding principal balances by 365 or
366 days, as applicable.
(c) Computed by dividing actual short-term interest expense by the average
short-term debt outstanding after adjustments for compensating balances
and fees applicable to such borrowings.
(d) Weighted average interest rates are inflated due to high interest rates on
Peso borrowings in Mexico.
80
<PAGE> 81
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
Years ended December 31, 1993, 1992 and 1991
(in millions of dollars)
<TABLE>
<CAPTION>
Amount charged to
Item costs and expenses
------------------------------------------------- ---------------------
<S> <C>
Year ended December 31, 1993
----------------------------
Maintenance and repairs $ 894
Depreciation and amortization of intangible assets,
preoperating costs and similar deferrals *
Taxes, other than payroll and income taxes *
Royalties *
Advertising costs 858
Year ended December 31, 1992
----------------------------
Maintenance and repairs $ 740
Depreciation and amortization of intangible assets,
preoperating costs and similar deferrals *
Taxes, other than payroll and income taxes *
Royalties *
Advertising costs 873
Year ended December 31, 1991
----------------------------
Maintenance and repairs $ 587
Depreciation and amortization of intangible assets,
preoperating costs and similar deferrals *
Taxes, other than payroll and income taxes *
Royalties *
Advertising costs 752
</TABLE>
Note: Amounts denoted by "*" are not presented because they are less than 1%
of total sales and revenues.
81
<PAGE> 1
EXHIBIT 10-A-6
(AS AMENDED THROUGH DECEMBER 2, 1993)
CHRYSLER CORPORATION
STOCK OPTION PLAN
1. PURPOSE
The purpose of the Stock Option Plan is to enable Chrysler Corporation
(below called the Corporation) to be thoroughly competitive in encouraging
salaried officers and key employees and nonemployee Directors who are
responsible for the Corporation's future growth and success to remain in its
service and to attract others to it.
2. AMOUNT OF STOCK SUBJECT TO THIS PLAN
The total number of shares of Common Stock of the Corporation that may be
sold pursuant to options granted under this Plan shall not exceed (a) 1,500,000
shares as constituted at the time of the annual meeting of stockholders on April
19, 1966 reduced by the number of shares as to which options have been granted
and exercised since that time under any other stock option plan of the
Corporation, plus (b) 1,500,000 shares as constituted at the time of the annual
meeting of stockholders on May 3, 1977, plus (c) 3,500,000 shares as constituted
at the time of the annual meeting of stockholders on June 3, 1982 (all before
the three-for-two split of the Common Stock that became effective on February
20, 1986), plus (d) 7,500,000 shares as constituted at the time of the annual
meeting of stockholders on May 14, 1986. The shares sold under this Plan may be
either authorized and unissued shares or issued shares reacquired by the
Corporation at any time, as the Board of Directors from time to time may
determine. Unless and until the Board of Directors shall determine to purchase
shares in the market for the purpose of this Plan or to use treasury shares, the
shares sold under this Plan shall be authorized and unissued shares reserved for
that purpose. If any options granted under this Plan shall terminate, lapse or
expire for any reason without having been exercised in full, the shares not
purchased under the options shall be available again for the purposes of this
Plan; provided, however, that this sentence shall not apply to any shares as to
which an option is forfeited upon the exercise of a Stock Appreciation Right or
a Limited Stock Appreciation Right, as defined below.
3. ELIGIBILITY AND PARTICIPATION
Nonemployee Directors of the Corporation and salaried officers and key
employees of the Corporation, its subsidiaries and its Related Entities (as
defined below) who are responsible for or contribute to the management, growth
or profitability of the business of the Corporation, its subsidiaries or its
Related Entities shall be eligible to be granted options, and any former
employees of the Corporation, its subsidiaries and its Related Entities shall be
eligible to be granted Reload Options (as defined in paragraph 4 below) with
respect to stock options granted to such former employees; provided, however,
with respect to an employee of a Related Entity, that such person was an
employee of the Corporation, a subsidiary or, if originally an employee of the
Corporation or a subsidiary, or another Related Entity immediately prior to
becoming employed by such Related Entity and accepted employment with such
Related Entity at the request of the Corporation or a subsidiary. The term
"Related Entity" when used herein shall mean any corporation, joint venture or
other entity, domestic or foreign, other than a subsidiary, in which the
Corporation owns, directly or indirectly, a substantial equity interest.
4. GRANTING OF OPTIONS
The Board of Directors of the Corporation shall appoint a Stock Option
Committee (below called the Committee), consisting of not less than three
members of the Board, all of the members of which shall be "disinterested
persons", which shall have the power and authority granted to it in this and
other paragraphs of this Plan; provided, however, that the Board of Directors
shall have the right to exercise any and all such power and authority and to
perform each and every function of the Committee whenever, in the sole
discretion of the Board, this seems expedient, except that, (a) the selection of
any Director who is a salaried officer or key employee of the Corporation to
whom an option may be issued and the determination of the number of
<PAGE> 2
shares to be subject to such option may be made by the Board of Directors only
if a majority of the Board and a majority of the Directors acting in the matter
are "disinterested persons", and (b) the Board may not exercise the power and
authority vested in the Committee in its sole discretion, (i) to determine
whether the option price to be paid in accordance with the provisions of
paragraph 6 of this Plan shall be paid in cash or shares of Common Stock and to
prescribe conditions relating to payment, and (ii) to determine, where
necessary, whether the appreciation to be paid in accordance with the provisions
of paragraph 6 of this Plan shall be paid in cash or shares of Common Stock or
any combination thereof. As used herein, the term "disinterested persons" shall
have the meaning ascribed to it in Rule 16b-3 under the Securities Exchange Act
of 1934, as amended (below called the Exchange Act), or in any amendment of Rule
16b-3 in effect at the relevant time. The Committee shall designate a Secretary
and may designate one or more Assistant Secretaries and an Administrator, none
of whom need be Directors of the Corporation.
Subject to the express provisions of this Plan, the Committee shall have
authority in its discretion from time to time, (a) to determine the salaried
officers and key employees of the Corporation, its subsidiaries and its Related
Entities to receive options, the times when they shall receive them, the number
of shares to be subject to each option, and the option price, (b) to determine
the terms and provisions of the option agreements applicable to options granted
under this Plan, to construe such terms and provisions, and to correct any
defect or supply any omission or reconcile any inconsistency in any option
agreement, (c) in its sole discretion, (i) to determine whether the option price
to be paid in accordance with the provisions of paragraph 6 of this Plan shall
be paid in cash or shares of Common Stock and to prescribe conditions relating
to payment, and (ii) to determine, where necessary, whether the appreciation to
be paid in accordance with the provisions of paragraph 6 of this Plan shall be
paid in cash or shares of Common Stock or any combination thereof, and (d) to
prescribe, amend, and rescind rules and regulations relating to this Plan. The
determination of the Committee with respect to such matters shall be conclusive.
The Committee may permit a person to whom an option has been granted and whose
employment with the Corporation or any subsidiary is terminated in connection
with the acceptance of employment, at the Corporation's or any subsidiary's
request, with a Related Entity, to exercise his or her options through their
stated terms, provided the option holder maintains his or her employment with
such Related Entity through the date of exercise of the option.
Unless otherwise expressly provided by the Committee in any specific
instance, the action of the Committee naming a salaried officer or key employee
of the Corporation, any subsidiary or any Related Entity to receive an option
pursuant to this Plan (or any of the appreciation rights permitted under
paragraph 6 of this Plan), determining the number of shares to be subject to the
option (or such appreciation rights), and setting the option price of the shares
subject to the option (or such appreciation rights) shall constitute the
granting of the option (or such appreciation rights), and the date when the
Committee shall take the action shall be the date of granting the option (or
such appreciation rights).
The Committee shall designate each option granted to a salaried officer or
key employee of the Corporation, any subsidiary or any Related Entity under this
Plan as either an Incentive Stock Option or a Nonqualified Stock Option. An
Incentive Stock Option shall be subject to all of the requirements of this Plan,
including those specified in paragraph 5 of this Plan. A Nonqualified Stock
Option shall be subject to all of the requirements of this Plan, except those
specified in paragraph 5 of this Plan.
The Committee shall have the authority to specify, at the time of grant or,
with respect to Nonqualified Stock Options, at or after the time of grant, that
the person to whom an option is or was granted under this Plan (which may
include a former salaried officer or key employee of the Corporation, any
subsidiary or any Related Entity) shall be granted a Nonqualified Stock Option
(a "Reload Option") in the event such person exercises all or a part of a stock
option (an "Original Option") by surrendering in accordance with paragraph 6 of
this Plan already owned shares of unrestricted Common Stock in full or partial
payment of the option price under such Original Option, subject to the
availability of shares of stock under this Plan at the time of such exercise;
provided, however, that no Reload Option shall be granted to a nonemployee
Director. Each Reload Option shall cover a number of shares of stock equal to
the number of shares of stock surrendered in payment of the option price under
such Original Option, shall have an option price per share of stock equal to the
Fair Market Value (as defined below) of the stock on the date of grant of such
Reload Option and shall expire on the stated expiration date of the Original
Option. A Reload Option shall be exercisable at any time and from
2
<PAGE> 3
time to time from and after the date of grant of such Reload Option (or, as the
Committee in its sole discretion shall determine at or after the time of grant,
at such time or times as shall be specified in the Reload Option); provided,
however, that a Reload Option granted to a director or officer of the
Corporation shall not be exercisable during the first six months from the date
of grant of such Reload Option. Any Reload Option may provide for the grant,
when exercised, of subsequent Reload Options to the extent and upon such terms
and conditions, consistent with this paragraph 5, as the Committee in its sole
discretion shall specify at or after the time of grant of such Reload Option. A
Reload Option shall contain such other terms and conditions, which may include a
restriction on the transferability of the shares of stock received upon exercise
of the Original Option representing at least the after-tax profit received upon
exercise of the Original Option, as the Committee in its sole discretion shall
deem desirable and which may be set forth in rules or guidelines adopted by the
Committee or in the Stock Option Agreements evidencing the Reload Options. The
term "Fair Market Value" when used herein shall mean, as of any given date, the
mean of the high and low trading price of the Common Stock of the Corporation on
such date as reported on the New York Stock Exchange or, if the stock is not
then traded on the New York Stock Exchange, on such other national securities
exchange on which the stock is admitted to trade or, if none, on the National
Association of Securities Dealers Automated Quotation System if the stock is
admitted for quotation thereon; provided, however, that if any such exchange or
quotation system is closed on any day on which Fair Market Value is to be
determined, Fair Market Value shall be determined as of the first day
immediately preceding such day on which such exchange or quotation system was
open for trading.
5. INCENTIVE STOCK OPTIONS
An option designated by the Committee as an Incentive Stock Option is
intended to qualify as an "incentive stock option" within the meaning of
Subsection (b) of Section 422(A) of the Internal Revenue Code, and shall, in
addition to all other requirements of this Plan, be subject to the requirements
of this paragraph 5. An Incentive Stock Option may not be exercised by a person
while there is "outstanding", within the meaning of Section 422(A)(c)(7) of the
Internal Revenue Code or any amendment thereof in effect at the relevant time,
any Incentive Stock Option which was granted before the granting of such option,
to such person to purchase stock of the Corporation. An Incentive Stock Option
may not be granted to a person who at the time the option is granted owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Corporation, unless the option price of the shares of Common Stock
for which the option is granted to such person is not less than 110% of the Fair
Market Value of such stock at the time the option is granted and such option by
its terms is not exercisable after the expiration of five years from the date
such option is granted. The aggregate Fair Market Value, determined as of the
time the option is granted, of shares of Common Stock as to which any person may
be granted Incentive Stock Options in any calendar year shall not exceed
$100,000 plus any unused limit carryover to such year. In applying such calendar
year limitation, (a) the term "unused limit carryover" shall mean one-half of
the amount by which $100,000 exceeds the aggregate Fair Market Value, determined
as of the time the option is granted, of shares of Common Stock as to which the
person was granted options in any calendar year after 1980, (b) the amount of
options granted during a calendar year to a person shall be treated as first
using up the $100,000 limitation for that year, (c) to the extent that the
aggregate Fair Market Value, determined as of the time the option is granted, of
shares of Common Stock as to which options are granted to a person in any
calendar year, exceeds $100,000, the excess shall be treated as using up unused
limit carryovers to such year in the order of the calendar years in which the
carryovers arose, and (d) the amount of the unused limit carryover from any
calendar year which may be taken into account in any succeeding calendar year
shall be the amount of such carryover reduced by the amount of such carryover
which was used in prior calendar years; provided, however, that no unused limit
carryover may be carried over except to the three calendar years succeeding the
year in which it arose.
6. OPTION PRICE, PAYMENT AND APPRECIATION DISTRIBUTION
The option price of the shares of Common Stock subject to each option
granted to a salaried officer or key employee of the Corporation, any subsidiary
or any Related Entity pursuant to this Plan shall be set by the Committee and,
except as otherwise provided in paragraph 5 of this Plan, shall not be less than
100% of the
3
<PAGE> 4
Fair Market Value on the date of the granting of the option, as determined by
the Committee. Except as otherwise provided in this paragraph 6, the option
price shall be paid in full upon exercise of the option, in cash or shares of
Common Stock, at the sole discretion of the Committee, which may prescribe
conditions relating to payment. The proceeds of sale of stock subject to the
options are to be added to the general funds of the Corporation and used for its
corporate purposes.
The person to whom an option is granted under this Plan may, at the
discretion of the Committee, be granted at the time the option is granted, the
right (below called a Stock Appreciation Right) to elect as an alternative means
of exercising the option, to forfeit his option with respect to a number of
shares up to the Maximum Number of Shares, as defined below, in which case he
shall receive in cash or shares of Common Stock or any combination thereof, at
the sole discretion of the Committee, with respect to those shares as to which
he elects to forfeit his option, the Stock Appreciation, as defined below.
The person to whom an option is granted under this Plan may, at the
discretion of the Committee, be granted, at the time the option is granted, the
right (below called an Additional Appreciation Right) to receive at the time the
option is exercised, in cash or shares of Common Stock or any combination
thereof, at the sole discretion of the Committee, an amount equal to (a) the
number of shares he then purchased, multiplied by (b) the Stock Appreciation on
an equal number of shares; provided, however, that nonemployee Directors may not
be granted Additional Appreciation Rights.
The person to whom an option is granted under this Plan may, at the
discretion of the Committee, be granted at the time the option is granted (or,
in the case of a Nonqualified Stock Option, at any time after such option has
been granted, or in the case of an Incentive Stock Option, at any time after
such option has been granted and the holder thereof has requested that he be
granted the appreciation right provided for in this subparagraph and consents to
any conversion of such option into a Nonqualified Stock Option as a result of
such grant), the right (below called a Limited Stock Appreciation Right) to
elect during the sixty day period following a Change in Control, as defined
below, as an alternative means of exercising the option, to forfeit his option
with respect to a number of shares up to the total number of shares subject
thereto, in which case he shall receive in cash with respect to those shares as
to which he elects to forfeit his option, the Change in Control Appreciation, as
defined below.
Any shares as to which an option is forfeited through the exercise of a
Stock Appreciation Right or a Limited Stock Appreciation Right shall no longer
be subject to the option or the related Stock Appreciation Right or Limited
Stock Appreciation Right and shall not be available for granting further options
under this Plan.
For purposes of this paragraph 6, (a) "Maximum Number of Shares" shall mean
(i) if the option is a Nonqualified Stock Option and the Committee has directed
that the Stock Appreciation shall be paid all in cash, the total number of
shares that the holder then could have purchased under the option, or (ii) if
the option is a Nonqualified Stock Option and the Committee has directed that
the Stock Appreciation shall be paid all in shares of Common Stock or in a
combination of cash and shares of Common Stock, or if the option is an Incentive
Stock Option, the lesser of (A) the number of shares he then purchased or (B)
the remaining number of shares that he then could have purchased under the
option, and (b) "Stock Appreciation" with respect to any shares of Common Stock
shall mean an amount equal to the difference between the option price of such
shares and the Fair Market Value of such shares on the date the option is
exercised.
For purposes of this Plan, "Change in Control" shall mean a Change in
Control of the Corporation, which shall be deemed to have occurred if:
(a) any Person, as defined below, is or becomes the Beneficial Owner,
as defined below, of securities of the Corporation representing 20% or more
of the combined voting power of the Corporation's then outstanding
securities (unless the event causing the 20% threshold to be crossed is an
acquisition of securities directly from the Corporation);
(b) during any period of two consecutive years beginning after June 7,
1990, individuals who at the beginning of such period constitute the Board
of Directors and any new Director (other than a Director designated by a
Person who has entered into an agreement with the Corporation to effect a
transaction
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described in clauses (a), (c) or (d) of this Change in Control definition)
whose election or nomination for election was approved by a vote of at
least two-thirds of the Directors then still in office who either were
Directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute
a majority of the Board of Directors;
(c) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation (other than a
merger or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the entity surviving such merger or consolidation), in
combination with voting securities of the Corporation or such surviving
entity held by a trustee or other fiduciary pursuant to any employee
benefit plan of the Corporation or such surviving entity or of any
subsidiary of the Corporation or such surviving entity, at least 80% of the
combined voting power of the securities of the Corporation or such
surviving entity outstanding immediately after such merger or
consolidation); or
(d) the stockholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation or an agreement for the sale
or disposition by the Corporation of all or substantially all the
Corporation's assets.
For purposes of the definition of Change in Control, "Person" shall have
the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act as
supplemented by Section 13(d)(3) of the Exchange Act, provided, however, that
Person shall not include (a) the Corporation, any subsidiary of the Corporation
or any other Person controlled by the Corporation, (b) any trustee or other
fiduciary holding securities under any employee benefit plan of the Corporation
or of any subsidiary of the Corporation, or (c) a corporation owned, directly or
indirectly, by the stockholders of the Corporation in substantially the same
proportions as their ownership of securities of the Corporation.
For purposes of the definition of Change in Control, a Person shall be
deemed the "Beneficial Owner" of any securities which such Person, directly or
indirectly, has the right to vote or dispose of or has "beneficial ownership" of
(within the meaning of Rule 13d-3 under the Exchange Act), including pursuant to
any agreement, arrangement or understanding (whether or not in writing);
provided, however, that: (a) a Person shall not be deemed the Beneficial Owner
of any security as a result of an agreement, arrangement or understanding to
vote such security (i) arising solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the Exchange Act and the applicable rules and regulations
thereunder or (ii) made in connection with, or to otherwise participate in, a
proxy or consent solicitation made, or to be made, pursuant to, and in
accordance with, the applicable provisions of the Exchange Act and the
applicable rules and regulations thereunder, in either case described in clause
(i) or clause (ii) above, whether or not such agreement, arrangement or
understanding is also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); and (b) a Person engaged
in business as an underwriter of securities shall not be deemed to be the
Beneficial Owner of any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the expiration of forty
days after the date of such acquisition.
For purposes of this paragraph 6, "Change in Control Stock Appreciation"
with respect to any share of Common Stock shall mean an amount equal to the
excess, if any, of
(a) the higher of (i) the Market Value of such share on the date the
option is exercised or (ii) (A) in the case of transactions described in
clauses (a) or (c) of the Change in Control definition, the highest per
share price paid (below called the Highest Price) for shares of Common
Stock of the Corporation in the transaction constituting the Change in
Control, (B) in the case of a transaction described in clause (b) of the
Change in Control definition which occurs in connection with a transaction
described in clauses (a), (c) or (d) of the Change in Control definition,
the Highest Price, (C) in the case of a transaction described in clause (b)
of the Change in Control definition which does not occur in connection with
a transaction described in clauses (a), (c) or (d) of the Change in Control
definition, the average of the daily closing prices per share of Common
Stock of the Corporation on the New York Stock Exchange, if such shares are
traded thereon, or, if not, such other national securities exchange on
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which such shares are admitted to trade or, if none, the National
Association of Securities Dealers Automated Quotation System if such shares
are admitted for quotation thereon, on the thirty consecutive trading days
immediately preceding the Change in Control or (D) in the case of a
transaction described in clause (d) of the Change in Control definition,
the equivalent of the Highest Price as determined by the Committee, over
(b) the option price of such share, provided, however, that with
respect to a Limited Stock Appreciation Right associated with an option
which is an Incentive Stock Option immediately prior to the exercise of
such Limited Stock Appreciation Right, the Change in Control Stock
Appreciation thereon shall not exceed the maximum amount which will permit
such option to continue to qualify as an Incentive Stock Option.
7. PERIOD OF OPTION AND CERTAIN LIMITATIONS ON THE RIGHT TO EXERCISE
The person to whom an option is granted under this Plan (below called the
Option Holder) must remain in the continuous employ of the Corporation, any
subsidiary or any Related Entity of the Corporation for twelve consecutive
months from the date the option is granted before he can exercise any part of
the option, except that such requirement shall not apply to the exercise of
options, Stock Appreciation Rights, Additional Appreciation Rights or Limited
Stock Appreciation Rights following a Change in Control and except as provided
in paragraphs 8, 9 and 10 of this Plan. Thereafter,
(a) on and after the first anniversary of the date of granting the
option and before the second anniversary, he may buy not more than 40% of
the number of shares covered by the option,
(b) on and after the second anniversary and before the third
anniversary, he may buy not more than 70% thereof, and
(c) on and after the third anniversary and before the expiration of
the term of the option, which shall be not more than ten years from the
date of granting the option, he may buy all or from time to time any part
thereof
(the provisions of the foregoing clauses (a), (b) and (c) being hereinafter
called the Normal Exercise Provisions); provided, however, that
(x) the Committee shall have authority in its discretion to determine
that an option shall be exercisable under provisions other than the Normal
Exercise Provisions, so long as such other provisions do not at any time
permit the Option Holder to purchase a greater percentage of the shares
subject to the option than the Option Holder could purchase at such time
under the Normal Exercise Provisions, and in connection with any such
determination the Committee
(i) may retain the discretion to subsequently change any such other
provisions to the Normal Exercise Provisions or to other provisions not
more favorable than the Normal Exercise Provisions, and
(ii) may alter the application of paragraphs 8 and 9 of this Plan
with respect to any of the types of termination of employment referred
to therein but only during the period that any such other provisions
determined or changed pursuant to this proviso are in effect,
(y) except as otherwise determined pursuant to proviso (x) above, no
options may be exercised unless the Option Holder has been in the employ of
the Corporation, a subsidiary or a Related Entity continuously from the
date of granting the option or his employment was terminated for one of the
reasons referred to in paragraphs 8 and 9 of this Plan, and
(z) upon the occurrence of a Change in Control, all options, Stock
Appreciation Rights and Additional Appreciation Rights outstanding on the
date of such Change in Control shall become immediately and fully
exercisable.
In no case may an option be exercised for a fraction of a share. In
addition, an option, Stock Appreciation Right or Additional Appreciation Right
held by a director or officer of the Corporation may not be exercised
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during the first six months from the date of granting of such option, Stock
Appreciation Right or Additional Appreciation Right, and a Limited Stock
Appreciation Right must be held for a period of six months prior to a Change in
Control, provided, however, that such limitations shall not apply in the event
of the director's or officer's death or disability.
8. TERMINATION OF EMPLOYMENT
All the rights of an Option Holder under his option shall lapse if his
employment with the Corporation, any subsidiary or any Related Entity is
terminated for any reason other than those referred to in this paragraph 8 or in
paragraph 9 of this Plan.
If the employment of an Option Holder with the Corporation, any subsidiary
or any Related Entity is terminated (a) by reason of retirement or permanent
total disability, or (b) at or after age 55 under circumstances which the
Committee, in its discretion, deems equivalent to retirement, and in either case
he has been in the employ of the Corporation, any subsidiary or any Related
Entity continuously from the date of granting the option until the termination
of his employment, the Option Holder may exercise the option (and any associated
Stock Appreciation Right, Additional Appreciation Right or Limited Stock
Appreciation Right) after such termination of employment at any time within the
five year period commencing on the date of termination of his employment, but
not beyond the term of his option, and only to the extent that he would on the
date of exercise have been entitled under paragraph 7 of this Plan to exercise
the option (or any associated Stock Appreciation Right, Additional Appreciation
Right or Limited Stock Appreciation Right) if he had continued to be employed by
the Corporation, such subsidiary or such Related Entity.
If the employment of an Option Holder with the Corporation or any
subsidiary is terminated by the Corporation or such subsidiary under mutually
satisfactory conditions, or if an Option Holder's employment with a Related
Entity is terminated under conditions mutually satisfactory to such Related
Entity and the Option Holder, and he has been in the employ of the Corporation,
any subsidiary or any Related Entity continuously from the date of granting the
option until the termination of his employment, the Committee, in its
discretion, may permit the Option Holder to exercise the option (and any
associated Stock Appreciation Right, Additional Appreciation Right or Limited
Stock Appreciation Right) after such termination of employment at any time
within the one year period commencing on the date of termination of his
employment, but not beyond the term of his option, and only to the extent that
he would on the date of exercise have been entitled under paragraph 7 of this
Plan to exercise the option (or any associated Stock Appreciation Right,
Additional Appreciation Right or Limited Stock Appreciation Right) if he had
continued to be employed by the Corporation, such subsidiary or such Related
Entity.
Notwithstanding the above, the exercise of any option after termination of
employment shall be subject to satisfaction of the conditions precedent that the
Option Holder neither, (a) takes other employment or renders services to others
without the written consent of the Corporation, nor (b) conducts himself in a
manner adversely affecting the Corporation.
Notwithstanding the foregoing provisions of this paragraph 8 (including,
without limitation, the immediately preceding subparagraph of this paragraph 8),
if the employment of an Option Holder is terminated by the Corporation, any
subsidiary or any Related Entity for any reason within the two year period
immediately following a Change in Control, and he has been in the employ of the
Corporation, any subsidiary or any Related Entity continuously from the date of
granting the option until the termination of his employment, the Option Holder
shall be permitted to exercise the option (and any associated Stock Appreciation
Right, Additional Appreciation Right or Limited Stock Appreciation Right) after
such termination of employment at any time within the three month period
commencing on the date of termination of his employment, but not beyond the term
of his option, and only to the extent that he would on the date of exercise have
been entitled under paragraph 7 of this Plan to exercise the option (or any
related Stock Appreciation Right, Additional Appreciation Right or Limited Stock
Appreciation Right) if he had continued to be employed by the Corporation.
Options granted under this Plan shall not be affected by any change of
employment so long as the Option Holder continues to be an employee of the
Corporation, any subsidiary or any Related Entity. The option
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agreements may contain such provisions as the Committee shall approve regarding
the effect of approved leaves of absence. Nothing in this Plan or in any option
granted under it shall confer any right to continue in the employ of the
Corporation, any subsidiary or any Related Entity, or interfere in any way with
the right of the Corporation, any subsidiary or any Related Entity, to terminate
any employment at any time.
9. DEATH OF OPTION HOLDER
If (a) the employment of an Option Holder terminates by reason of death,
(b) an Option Holder dies within the five year period following termination of
employment (i) by reason of retirement or permanent total disability, or (ii) at
or after age 55 under circumstances which the Committee, in its discretion,
deems equivalent to retirement, (c) an Option Holder dies within the one year
period following termination of employment under mutually satisfactory
conditions and the Committee has determined that he may exercise the option
after such termination of employment, or (d) an Option Holder dies within the
three month period following termination of employment for any reason within the
two year period immediately following a Change in Control and if in any such
case he has been in the employ of either the Corporation, any subsidiary or any
Related Entity continuously from the date of granting the option until the
termination of his employment, the option theretofore granted to him may be
exercised by the legal representative of the deceased Option Holder at any time
within a period of one year after his death, but not beyond the term of the
option, and only to the extent that he was entitled to exercise the option on
the date of his death, plus, a pro rata portion of the additional number of
shares, if any, he would have become entitled to purchase under the option on
the anniversary of the date of granting the option that next follows the date of
his death (such pro rata portion to be 2 1/2% of the full number of shares for
which the option was granted for each full month during the twelve month period
preceding such anniversary that the Option Holder was alive).
10. GRANTING OF OPTIONS TO NONEMPLOYEE DIRECTORS
Each person who is not an employee of the Corporation or any of its
subsidiaries and who on and after May 14, 1986 is elected or reelected as a
Director of the Corporation at any annual or special meeting of stockholders of
the Corporation, shall as of the date of each such election or reelection
automatically be granted an option to purchase 1,000 shares of Common Stock (as
constituted at the time of the annual meeting of stockholders on May 14, 1986)
for an option price equal to 100% of Market Value on such date (and,
notwithstanding the discretion of the Committee under paragraph 6 of this Plan,
each such option granted on or after May 14, 1986 shall automatically have
associated with it a Stock Appreciation Right, the Stock Appreciation on which
shall be payable all in cash, and each such option granted on or after June 7,
1990 shall automatically have associated with it a Limited Stock Appreciation
Right, subject, in each case, to applicable law). The action of the stockholders
in electing or reelecting a nonemployee Director shall constitute the granting
of the option (and the associated Stock Appreciation Right and Limited Stock
Appreciation Right), and the date when the stockholders shall take such action
shall be the date of granting the option (and the associated Stock Appreciation
Right and Limited Stock Appreciation Right). All such options shall be
designated as Nonqualified Stock Options and, except as otherwise expressly
provided in this Plan, shall be subject to the same terms and provisions as are
then in effect with respect to granting of Nonqualified Stock Options to
salaried officers and key employees of the Corporation. Subject to the
foregoing, all provisions of this Plan not inconsistent with the foregoing shall
apply to options granted to nonemployee Directors, except that with respect to
an option (and the associated Stock Appreciation Right and Limited Stock
Appreciation Right) granted to a nonemployee Director, (a) any requirement for
employment with the Corporation, any subsidiary or any Related Entity shall be
deemed to be a requirement for service as a Director, (b) any requirement of
continuous employment shall be deemed to be a requirement of continuous service
as a Director, and (c) any reference to termination of employment shall be
deemed to mean termination of service as a Director. The maximum number of
shares as to which options may be granted to any nonemployee Director under this
Plan, as in effect through April 17, 1992, shall be 6,000 shares (as constituted
at the time of the annual meeting of stockholders on May 14, 1986).
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11. NONTRANSFERABILITY OF OPTIONS; DEFERRAL OF PROCEEDS
No option granted under this Plan shall be transferable by the Option
Holder otherwise than by will or the laws of descent and distribution, and any
option may be exercised during the lifetime of the Option Holder only by him.
The Option Holder may elect, on or after the date of grant of an option
hereunder, to defer receipt of all or any portion of the proceeds, whether in
the form of cash or shares of Common Stock, deliverable to such Option Holder
upon the exercise of an option or Stock Appreciation Right hereunder set forth,
in each case to the extent permitted by and subject to the terms and conditions
set forth in any deferral or similar plan or arrangement enacted by the Board of
Directors or the Committee in its sole discretion.
12. ADJUSTMENT FOR CHANGES IN CAPITALIZATION
Notwithstanding any other provision of this Plan, in the event of any
change in the outstanding Common Stock of the Corporation by reason of a stock
dividend, recapitalization, merger, consolidation, split-up, combination or
exchange of shares, and the like, the aggregate number and class of shares
available under this Plan and the number and class of shares subject to each
outstanding option and the option prices shall be appropriately adjusted by the
Board of Directors, whose determination shall be conclusive.
13. INTERPRETATION
The Board of Directors shall have full power and authority to interpret and
construe this Plan and its interpreting and construing of this Plan and acts
pursuant to this Plan in good faith shall be final and conclusive. The Board of
Directors may correct any defect or supply any omission or reconcile any
inconsistency in such a manner and to such an extent as it shall find expedient
to carry this Plan into effect, and it shall be the sole and final judge of the
expediency. If any such interpreting or construing shall involve a question of
law, the Board of Directors may rely and act upon the opinion of counsel (who
may be of counsel to the Corporation) on the question of law.
This Plan is intended to satisfy the conditions of Rule 16b-3 under the
Exchange Act, and all interpretations of this Plan shall to the extent permitted
by law, regulations and rulings be made in a manner consistent with and so as to
satisfy the conditions of Rule 16b-3. In interpreting and applying the
provisions of this Plan any option granted as an Incentive Stock Option pursuant
to this Plan shall to the extent permitted by law, regulations and rulings be
construed as, and any ambiguity shall be resolved in favor of preserving its
status as, an "incentive stock option" within the meaning of Subsection (b) of
Section 422(A) of the Internal Revenue Code.
Notwithstanding any provision to the contrary in this Plan or in any
Incentive Stock Option granted pursuant to this Plan, if any change in law or
any regulation or ruling of the Internal Revenue Service shall have the effect
of disqualifying any Incentive Stock Option granted under this Plan as an
"incentive stock option" within the meaning of Subsection (b) of Section 422(A)
of the Internal Revenue Code, the option granted shall nevertheless continue to
be outstanding as and shall be deemed to be a Nonqualified Stock Option under
this Plan, and in such event paragraph 5 of this Plan shall cease to be
operative with respect to such option.
14. AMENDMENT AND TERMINATION
The Board of Directors of the Corporation may at any time terminate this
Plan or make such changes in it and additions to it as the Board of Directors
shall deem advisable, including but not limited to, provisions changing the
percentage of shares as to which an option that so provides must be exercised
relative to shares forfeited in connection with the receipt of the appreciation
on the forfeited shares; provided, however, that except as provided in paragraph
12 hereof, the Board of Directors may not, without further approval by the
holders of a majority of the shares of Common Stock of the Corporation then
outstanding and entitled to vote, increase the maximum number of shares as to
which options may be granted under this Plan or reduce the minimum option price
or extend the period during which options may be granted or exercised or change
the
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class of persons eligible to receive options under this Plan. Unless terminated
earlier by the Board of Directors, this Plan shall terminate on April 17, 1992,
and no options under it shall be granted thereafter; provided, however, that
options granted prior to April 17, 1992 may extend beyond that date; and
provided, further, however, that Reload Options may be granted prior to and on
and after April 17, 1992, but no Reload Option shall be exercisable after any
date which is later than the date on which a Stock Option granted prior to April
17, 1992 could be exercised. No termination or amendment of this Plan may,
without the written consent of the Option Holder of an option then existing,
terminate his option or materially and adversely affect his rights under the
Option.
15. EFFECTIVE PERIOD
The effective date of this Plan was originally January 13, 1972, subject,
however, to approval of this Plan by the vote of the holders of a majority of
the shares of Common Stock of the Corporation outstanding and entitled to vote,
which approval was obtained at the annual meeting of the stockholders on April
18, 1972. This Plan was readopted by the Board of Directors following approval
by the vote of the holders of a majority of the shares of Common Stock of the
Corporation outstanding and entitled to vote at the annual meeting of the
stockholders on June 3, 1982. Subject to the express provisions of this Plan,
options may be granted under this Plan at any time and from time to time prior
to termination of this Plan.
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EXHIBIT 10-A-9
(AS AMENDED ON DECEMBER 2, 1993)
CHRYSLER CORPORATION
1991 STOCK COMPENSATION PLAN
SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of the plan is the Chrysler Corporation 1991 Stock Compensation
Plan (the "Plan"). The purpose of the Plan is to enable the Company (as
hereinafter defined) and its Subsidiaries (as hereinafter defined) to obtain and
retain competent personnel who will contribute to the Company's success by their
ability, ingenuity and industry and to provide incentives to the participating
officers, key employees and nonemployee directors which are related to increases
in stockholder value and will therefore inure to the benefit of all stockholders
of the Company.
For purposes of the Plan, the following terms shall be defined as set forth
below:
(a) "Award" means any grant under the Plan in the form of Stock
Options, Stock Appreciation Rights, Limited Stock Appreciation Rights,
Performance Stock Units, Restricted Stock Units or any combination of the
foregoing.
(b) "Board" means the Board of Directors of the Company.
(c) "Change in Control" has the meaning given in Section 12 of the
Plan.
(d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor thereto.
(e) "Committee" means the Stock Option Committee, or any other
committee the Board may subsequently appoint to administer the Plan. The
Committee shall be composed entirely of directors who meet the
qualifications referred to in Section 2 of the Plan.
(f) "Company" means Chrysler Corporation, a corporation incorporated
under the laws of the State of Delaware (or any successor corporation).
(g) "Disability" means being permanently and totally disabled under
any insurance program of the Company, any Subsidiary or any Related Entity.
(h) "Disinterested Person" shall have the meaning set forth in Rule
16b-3 ("Rule 16b-3"), as promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended from time
to time (the "Exchange Act"), or any successor definition adopted by the
Securities and Exchange Commission.
(i) "Eligible Employee" means an employee of the Company, any
Subsidiary or any Related Entity as described in Section 4 of the Plan.
(j) "Fair Market Value" means, as of any given date, with respect to
any Awards granted hereunder, the mean of the high and low trading price of
the Stock on such date as reported on the New York Stock Exchange or, if
the Stock is not then traded on the New York Stock Exchange, on such other
national securities exchange on which the Stock is admitted to trade or, if
none, on the National Association of Securities Dealers Automated Quotation
System if the Stock is admitted for quotation thereon; provided, however,
that if any such exchange or quotation system is closed on any day on which
Fair Market Value is to be determined, Fair Market Value shall be
determined as of the first day immediately preceding such day on which such
exchange or quotation system was open for trading.
(k) "Incentive Stock Option" means any Stock Option intended to
qualify as an "incentive stock option" within the meaning of Section 422 of
the Code.
(l) "Limited Stock Appreciation Right" means a Stock Appreciation
Right that can be exercised only in the event of a Change in Control.
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(m) "Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(n) "Optionee" means a Participant granted a Stock Option pursuant to
Section 5 of the Plan which remains outstanding.
(o) "Participant" means any Eligible Employee selected by the
Committee, pursuant to the Committee's authority in Section 2 of the Plan,
to receive Awards and, solely to the extent provided by Section 9 of the
Plan, nonemployee directors of the Company.
(p) "Performance Stock Unit" means the right to receive one share of
Stock as set forth in an Award granted pursuant to Section 8 of the Plan,
the vesting of which is subject to restrictions that will lapse upon the
attainment of performance objectives.
(q) "Related Entity" means any corporation, joint venture or other
entity, domestic or foreign, other than a Subsidiary, in which the Company
owns, directly or indirectly, a substantial equity interest.
(r) "Restricted Stock Unit" means the right to receive one share of
Stock as set forth in an Award granted pursuant to Section 8 of the Plan,
the vesting of which is subject to restrictions that will lapse with the
passage of time.
(s) "Retirement" means (i) retirement from active employment under a
pension plan of the Company, any Subsidiary or Related Entity or under an
employment contract with any of them or (ii) termination of employment at
or after age 55 under circumstances which the Committee, in its sole
discretion, deems equivalent to retirement.
(t) "Stock" means the common stock of the Company.
(u) "Stock Appreciation Right" means the right pursuant to an Award
granted under Section 6 of the Plan, (i) in the case of a Related Stock
Appreciation Right (as defined in Section 6 of the Plan), to surrender to
the Company all or a portion of the related Stock Option and receive an
amount equal to the excess of the Fair Market Value of one share of Stock
as of the date such Stock Option or portion thereof is surrendered over the
option price per share specified in such Stock Option, multiplied by the
number of shares of Stock in respect of which such Stock Option is being
surrendered, and (ii) in the case of a Freestanding Stock Appreciation
Right (as defined in Section 6 of the Plan), to exercise such Freestanding
Stock Appreciation Right and receive an amount equal to the excess of the
Fair Market Value of one share of Stock as of the date of exercise over the
price per share specified in such Freestanding Stock Appreciation Right,
multiplied by the number of shares of Stock in respect of which such
Freestanding Stock Appreciation Right is being exercised.
(v) "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5 of the Plan, including any Reload Option (as
defined in Section 5 of the Plan).
(w) "Subsidiary" means any corporation in an unbroken chain of
corporations, beginning with the Company, if each of the corporations
(other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Committee, composed of not less than
three directors who are Disinterested Persons, who shall be appointed by the
Board and who shall serve at the pleasure of the Board.
The Committee shall have the power and authority in its sole discretion to
grant Awards to Eligible Employees pursuant to the terms and provisions of the
Plan.
In particular, the Committee shall have full authority, not inconsistent
with the Plan:
(a) to select Participants from among the Eligible Employees;
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(b) to determine whether and to what extent Awards are to be granted
to Eligible Employees hereunder;
(c) to determine the number of shares of Stock to be covered by each
such Award granted hereunder, but in no case shall such number be in the
aggregate greater than that allowed under the Plan;
(d) to determine the terms and conditions of any Award granted
hereunder (including, without limitation, (i) the restricted periods
applicable to Restricted Stock Unit Awards and (ii) the performance
objectives and periods applicable to Performance Stock Unit Awards);
(e) to waive compliance by a Participant with any obligation to be
performed by him or her under any Award and to waive any term or condition
of any such Award (provided, however, that no such waiver shall
detrimentally affect the rights of a Participant without such Participant's
consent); and
(f) to determine the terms and conditions which shall govern all
written agreements evidencing the Awards.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the provisions of the Plan and
the terms and conditions of any Award issued, expired, terminated, cancelled or
surrendered under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the Plan
and as to the terms and conditions of any Award (and any agreements relating
thereto) shall be final and binding on all persons, including the Company and
the Participants.
SECTION 3. NUMBER OF SHARES OF STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for issuance
under the Plan shall be eleven (11) million. Such shares of Stock may consist,
in whole or in part, of authorized and unissued shares of Stock or issued shares
of Stock reacquired by the Company at any time, as the Board may determine.
To the extent that (a) a Stock Option expires or is otherwise terminated,
cancelled or surrendered without being exercised (including, without limitation,
in connection with the grant of a replacement option) or (b) any Restricted
Stock Unit Award or Performance Stock Unit Award granted hereunder expires or is
otherwise terminated or is cancelled, the shares of Stock underlying such Stock
Option or subject to such Restricted Stock Unit Award or Performance Stock Unit
Award shall again be available for issuance in connection with future Awards
under the Plan.
Upon the exercise of a Related Stock Appreciation Right or Related Limited
Stock Appreciation Right (as defined in Section 7 of the Plan), the Stock
Option, or the part thereof to which such Related Stock Appreciation Right or
Related Limited Stock Appreciation Right is related, shall be deemed to have
been exercised for the purpose of the limitation on the number of shares of
Stock to be issued under the Plan, but only to the extent of the number of
shares of Stock in respect of which the Related Stock Appreciation Right or
Related Limited Stock Appreciation Right was exercised.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure or
capitalization affecting the Stock, the Committee in its sole discretion may
make an adjustment or substitution in the number and class of shares reserved
for issuance under the Plan, the number and class of shares covered by
outstanding Awards and the option price per share of Stock Options or the
applicable price per share specified in Stock Appreciation Rights or Limited
Stock Appreciation Rights to reflect the effect of such change in corporate
structure or capitalization on the Stock; provided, however, that any fractional
shares resulting from such adjustment shall be eliminated; provided, further,
however, that if by reason of any such change in corporate structure or
capitalization a Participant holding a Restricted Stock Unit Award or
Performance Stock Unit Award shall be entitled, subject to the terms and
conditions of such Award, to additional or different shares of any security, the
issuance of such additional or different shares shall thereupon be subject to
all of the terms and conditions (including restrictions and performance
criteria) which
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were applicable to such Award prior to such change in corporate structure or
capitalization; and, provided, further, however, that unless the Committee in
its sole discretion determines otherwise, any issuance by the Company of shares
of stock of any class or securities convertible into shares of stock of any
class shall not affect, and no such adjustment or substitution by reason thereof
shall be made with respect to, the number or class of shares reserved for
issuance under the Plan, the number or class of shares covered by outstanding
Awards or any option price or applicable price.
SECTION 4. ELIGIBILITY.
Officers and other key employees of the Company, its Subsidiaries and its
Related Entities who are responsible for or contribute to the management, growth
or profitability of the business of the Company, its Subsidiaries or its Related
Entities shall be eligible to be granted Awards and any former employees of the
Company, its Subsidiaries and its Related Entities shall be eligible to be
granted Reload Options with respect to Stock Options granted to such former
employees; provided, however, with respect to an employee of a Related Entity,
that such person was an employee of the Company, a Subsidiary or, if originally
an employee of the Company or a Subsidiary, or another Related Entity
immediately prior to becoming employed by such Related Entity and accepted
employment with such Related Entity at the request of the Company or a
Subsidiary. The Participants under the Plan shall be selected, from time to
time, by the Committee, in its sole discretion, from among those Eligible
Employees.
SECTION 5. STOCK OPTIONS.
(a) Grant and Exercise. Stock Options may be granted either alone or in
addition to other Awards granted under the Plan. Any Stock Option granted under
the Plan shall be in such form as the Committee may, from time to time, approve,
and the terms and conditions of Stock Option Awards need not be the same with
respect to each Optionee. Optionees shall enter into a Stock Option agreement
("Stock Option Agreement") with the Company, in such form as the Committee shall
determine, which agreement shall set forth, among other things, the option price
of the option, the term of the option and conditions regarding exercisability of
the option granted thereunder.
(i) Nature of Options. The Committee shall have the authority to grant
any Participant either Incentive Stock Options, Nonqualified Stock Options
or both types of Stock Options (in each case with or without Stock
Appreciation Rights or Limited Stock Appreciation Rights), except that the
Committee shall not grant any Incentive Stock Options to an employee of a
Related Entity. Any Stock Option which does not qualify as an Incentive
Stock Option, or the terms of which at the time of its grant provide that
it shall not be treated as an Incentive Stock Option, shall constitute a
Nonqualified Stock Option.
(ii) Exercisability. Subject to such terms and conditions as shall be
determined by the Committee in its sole discretion at or after the time of
grant, Stock Options shall be exercisable from time to time to the extent
of 40% of the number of shares of Stock covered by the Stock Option on and
after the first anniversary and before the second anniversary of the date
of grant of the Stock Option, to the extent of 70% of the number of shares
of Stock covered by the Stock Option on and after the second anniversary
and before the third anniversary of the date of grant of the Stock Option
and to the extent of 100% of the number of shares of Stock covered by the
Stock Option on and after the third anniversary of the date of grant of the
Stock Option and before the expiration of the stated term of the Stock
Option (or to such lesser extent as the Committee in its sole discretion
shall determine at the time of grant or to such greater extent as the
Committee in its sole discretion shall determine at or after the time of
grant).
(iii) Method of Exercise. Stock Options may be exercised by giving
written notice of exercise delivered in person or by mail as required by
the terms of any Stock Option Agreement at the Company's principal
executive office, specifying the number of shares of Stock with respect to
which the Stock Option is being exercised, accompanied by payment in full
of the option price in cash or its equivalent as determined by the
Committee in its sole discretion. If requested by the Committee, the
Optionee shall deliver to the Company the Stock Option Agreement evidencing
the Stock Option being exercised for notation thereon of such exercise and
return thereafter of such agreement to the Optionee. As determined
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by the Committee in its sole discretion at or after the time of grant,
payment of the option price in full or in part may also be made in the form
of shares of unrestricted Stock already owned by the Optionee (based on the
Fair Market Value of the Stock on the date the Stock Option is exercised);
provided, however, that in the case of an Incentive Stock Option, the right
to make payment of the option price in the form of already owned shares of
Stock may be authorized only at the time of grant. An Optionee shall
generally have the rights to dividends or other rights of a stockholder
with respect to shares of Stock subject to the Stock Option when the
Optionee has given written notice of exercise, has paid in full for such
shares of Stock, and, if requested, has made the representations described
in Section 13(a) of the Plan.
(iv) Reload Options. The Committee shall have the authority to
specify, at the time of grant or, with respect to Nonqualified Stock
Options, at or after the time of grant, that an Optionee shall be granted a
Nonqualified Stock Option (a "Reload Option") in the event such Optionee
exercises all or a part of a Stock Option (an "Original Option") by
surrendering in accordance with Section 5(a)(iii) of the Plan already owned
shares of unrestricted Stock in full or partial payment of the option price
under such Original Option, subject to the availability of shares of Stock
under the Plan at the time of such exercise; provided, however, that no
Reload Option shall be granted to a Nonemployee Director (as defined in
Section 9 of the Plan). Each Reload Option shall cover a number of shares
of Stock equal to the number of shares of Stock surrendered in payment of
the option price under such Original Option, shall have an option price per
share of Stock equal to the Fair Market Value of the Stock on the date of
grant of such Reload Option and shall expire on the stated expiration date
of the Original Option. A Reload Option shall be exercisable at any time
and from time to time from and after the date of grant of such Reload
Option (or, as the Committee in its sole discretion shall determine at or
after the time of grant, at such time or times as shall be specified in the
Reload Option); provided, however, that a Reload Option granted to a
director or officer of the Company shall not be exercisable during the
first six months from the date of grant of such Reload Option. Any Reload
Option may provide for the grant, when exercised, of subsequent Reload
Options to the extent and upon such terms and conditions, consistent with
this Section 5(a)(iv), as the Committee in its sole discretion shall
specify at or after the time of grant of such Reload Option. A Reload
Option shall contain such other terms and conditions, which may include a
restriction on the transferability of the shares of Stock received upon
exercise of the Original Option representing at least the after-tax profit
received upon exercise of the Original Option, as the Committee in its sole
discretion shall deem desirable and which may be set forth in rules or
guidelines adopted by the Committee or in the Stock Option Agreements
evidencing the Reload Options.
(b) Terms and Conditions. Stock Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable.
(i) Option Price. The option price per share of Stock purchasable
under a Stock Option (other than a Reload Option) shall be determined by
the Committee at the time of grant, but shall be not less than 100% of the
Fair Market Value of the Stock on the date of the grant; provided, however,
that if any Participant owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the Company or any
Subsidiary when an Incentive Stock Option is granted to such Participant,
the option price of such Incentive Stock Option (to the extent required by
the Code at the time of grant) shall be not less than 110% of the Fair
Market Value of the Stock on the date such Incentive Stock Option is
granted.
(ii) Option Term. The term of each Stock Option shall be fixed by the
Committee at the time of grant, but no Stock Option shall be exercisable
more than ten years after the date such Stock Option is granted; provided,
however, that if any Participant owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the Company or any
Subsidiary when an Incentive Stock Option is granted to such Participant,
such Stock Option (to the extent required by the Code at time of grant)
shall not be exercisable more than five years from the date such Incentive
Stock Option is granted.
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(iii) Transferability of Options. No Stock Options shall be
transferable by the Optionee otherwise than by will or by the laws of
descent and distribution and all Stock Options shall be exercisable, during
the Optionee's lifetime, only by the Optionee.
(iv) Option Exercise After Termination by Reason of Disability or
Retirement. If an Optionee's employment with the Company, any Subsidiary or
any Related Entity terminates by reason of Disability or Retirement, any
Stock Option held by such Optionee may thereafter be exercised for a period
of five years (or such shorter period as the Committee in its sole
discretion shall specify at or after the time of grant) from the date of
such termination or until the expiration of the stated term of such Stock
Option, whichever period is shorter, to the extent to which the Optionee
would on the date of exercise have been entitled to exercise the Stock
Option if such Optionee had continued to be employed by the Company, such
Subsidiary or such Related Entity (or to such greater or lesser extent as
the Committee in its sole discretion shall determine at or after the time
of grant). In the event of a termination of employment by reason of
Disability or Retirement, if an Incentive Stock Option is exercised after
the expiration of the exercise period that applies for purposes of Section
422 of the Code, such Stock Option will thereafter be treated as a
Nonqualified Stock Option.
(v) Option Exercise After Termination by Consent. If an Optionee's
employment with the Company or any Subsidiary is terminated by the Company
or such Subsidiary under mutually satisfactory conditions or if an
Optionee's employment with a Related Entity is terminated under conditions
mutually satisfactory to such Related Entity and the Optionee, the
Committee, in its sole discretion, may permit the Optionee to exercise any
Stock Option held by such Optionee for a period of one year (or such
shorter period as the Committee in its sole discretion shall specify at or
after the time of grant) from the date of such termination or until the
expiration of the stated term of such Stock Option, whichever period is
shorter, to the extent to which the Optionee would on the date of exercise
have been entitled to exercise the Stock Option if such Optionee had
continued to be employed by the Company, such Subsidiary or such Related
Entity (or to such greater or lesser extent as the Committee in its sole
discretion shall determine at or after the time of grant). If an Optionee's
employment with the Company or any Subsidiary is terminated in connection
with such Optionee's acceptance of employment, at the request of the
Company or a Subsidiary, with a Related Entity (or an Optionee's employment
with one Related Entity is terminated in connection with such Optionee's
acceptance of employment, at the request of the Company or a Subsidiary,
with another Related Entity), the Committee in its sole discretion may
permit the Optionee to exercise any Stock Option held by such Optionee
after the date of such termination at any time until the expiration of the
stated term of such Stock Option (or such shorter period as the Committee
in its sole discretion shall specify at or after the time of grant), to the
extent that the Optionee would on the date of exercise have been entitled
to exercise such Stock Option if such Optionee had continued to be employed
by the Company or such Subsidiary (or such initial Related Entity),
provided that the Optionee has been in continuous employ with the Related
Entity to which such Optionee has moved from the date of acceptance of
employment therewith until the date of exercise. In the event of a
termination of employment by the Company, any Subsidiary or any Related
Entity under mutually satisfactory conditions, if an Incentive Stock Option
is exercised after the expiration of the exercise period that applies for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
(vi) Option Exercise After Termination by Death. If (x) an Optionee's
employment with the Company, any Subsidiary or any Related Entity
terminates by reason of death, (y) an Optionee dies within the five year
period (or such shorter period as the Committee shall have specified for
exercise in accordance with Section 5(a)(iv) of the Plan) following
termination by reason of Disability or Retirement as set forth in Section
5(a)(iv) of the Plan or (z) an Optionee dies within the one year period (or
such shorter period as the Committee shall have specified for exercise in
accordance with Section 5(a)(v) of the Plan) following termination under
mutually satisfactory conditions as set forth in the first sentence of
Section 5(a)(v) of the Plan, any Stock Option held by such Optionee may
thereafter be exercised by the legal representative of the estate or by the
legatee of the Optionee under the will of the Optionee for a period of one
year (or such shorter period as the Committee in its sole discretion shall
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specify at or after the time of grant) from the date of such death or until
the expiration of the stated term of such Stock Option, whichever period is
shorter, to the extent to which the Optionee would on the date of exercise
have been entitled to exercise the Stock Option if such Optionee had
continued to be employed by the Company, such Subsidiary or such Related
Entity (or to such greater or lesser extent as the Committee in its sole
discretion shall determine at or after the time of grant).
(vii) Restriction on Exercise After Termination. Notwithstanding the
provisions of this Section 5, but subject to the provisions of Section 12
of the Plan, the exercise of any Stock Option after termination of
employment shall be subject to satisfaction of the conditions precedent
that the Optionee neither, (x) takes other employment or renders services
to others without the written consent of the Company, nor (y) conducts
himself in a manner adversely affecting the Company.
(viii) Other Termination. Except as otherwise provided in this Section
5 or Section 12 of the Plan, or as determined by the Committee in its sole
discretion, if an Optionee's employment with the Company, any Subsidiary or
any Related Entity terminates, all Stock Options held by the Optionee will
terminate.
(ix) Annual Limit on Incentive Stock Options. To the extent required
for "incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of the shares of Stock with respect to which Incentive
Stock Options granted under the Plan and all other option plans of the
Company or any Subsidiary become exercisable for the first time by an
Optionee during any calendar year shall not exceed $100,000; provided,
however, that if the aggregate Fair Market Value (so determined) of the
shares of Stock covered by such options exceeds $100,000 during any year in
which they become exercisable, such options with a Fair Market Value in
excess of $100,000 will be Nonqualified Stock Options.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights may be granted either in
conjunction with all or part of any Stock Option granted under the Plan
("Related Stock Appreciation Rights") or alone ("Freestanding Stock Appreciation
Rights") and, in either case, in addition to other Awards granted under the
Plan. Participants shall enter into a Stock Appreciation Rights agreement with
the Company if requested by the Committee, in such form as the Committee shall
determine.
(i) Time of Grant. Related Stock Appreciation Rights related to a
Nonqualified Stock Option may be granted either at or after the time of the
grant of such Nonqualified Stock Option. Related Stock Appreciation Rights
related to an Incentive Stock Option may be granted only at the time of the
grant of such Incentive Stock Option. Freestanding Stock Appreciation
Rights may be granted at any time.
(ii) Exercisability. Related Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the Stock
Options to which they relate shall be exercisable in accordance with the
provisions of Section 5(a)(ii) of the Plan and Freestanding Stock
Appreciation Rights shall be exercisable, subject to such terms and
conditions as shall be determined by the Committee in its sole discretion
at or after the time of grant, from time to time, to the extent that Stock
Options are exercisable in accordance with the provisions of Section
5(a)(ii) of the Plan; provided, however, that any Stock Appreciation Right
granted to a director or officer of the Company shall not be exercisable
during the first six months from the date of grant of such Stock
Appreciation Right, except that this additional limitation shall not apply
in the event of death or Disability of the director or officer prior to the
expiration of the six-month period. A Related Stock Appreciation Right
granted in connection with an Incentive Stock Option may be exercised only
if and when the Fair Market Value of the Stock subject to the Incentive
Stock Option exceeds the option price of such Stock Option.
(iii) Method of Exercise. Stock Appreciation Rights shall be exercised
by a Participant by giving written notice of exercise delivered in person
or by mail as required by the terms of any agreement evidencing the Stock
Appreciation Right at the Company's principal executive office, specifying
the number of shares of Stock in respect of which the Stock Appreciation
Right is being exercised. If
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requested by the Committee, the Participant shall deliver to the Company
the agreement evidencing the Stock Appreciation Right being exercised and,
in the case of a Related Stock Appreciation Right, the Stock Option
Agreement evidencing any related Stock Option, for notation thereon of such
exercise and return thereafter of such agreements to the Participant.
(iv) Amount Payable. Upon the exercise of a Related Stock Appreciation
Right, an Optionee shall be entitled to receive an amount in cash or shares
of Stock equal in value to the excess of the Fair Market Value of one share
of Stock on the date of exercise over the option price per share specified
in the related Stock Option, multiplied by the number of shares of Stock in
respect of which the Related Stock Appreciation Right shall have been
exercised, with the Committee having in its sole discretion the right to
determine the form of payment.
Upon the exercise of a Freestanding Stock Appreciation Right, a Participant
shall be entitled to receive an amount in cash or shares of Stock equal in
value to the excess of the Fair Market Value of one share of Stock on the
date of exercise over the price per share specified in the Freestanding
Stock Appreciation Right, which shall be not less than 100% of the Fair
Market Value of the Stock on the date of grant, multiplied by the number of
shares of Stock in respect of which the Freestanding Stock Appreciation
Right shall have been exercised, with the Committee having in its sole
discretion the right to determine the form of payment.
(b) Terms and Conditions. Stock Appreciation Rights granted under the Plan
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable.
(i) Term of Stock Appreciation Rights. The term of a Related Stock
Appreciation Right shall be the same as the term of the related Stock
Option. A Related Stock Appreciation Right or applicable portion thereof
shall terminate and no longer be exercisable upon the exercise,
termination, cancellation or surrender of the related Stock Option, except
that, unless otherwise provided by the Committee in its sole discretion at
or after the time of grant, a Related Stock Appreciation Right granted with
respect to less than the full number of shares of Stock covered by a
related Stock Option shall terminate and no longer be exercisable if and to
the extent that the number of shares of Stock covered by the exercise,
termination, cancellation or surrender of the related Stock Option exceeds
the number of shares of Stock not covered by the Related Stock Appreciation
Right.
The term of each Freestanding Stock Appreciation Right shall be fixed by
the Committee, but no Freestanding Stock Appreciation Right shall be
exercisable more than ten years after the date such right is granted.
(ii) Transferability of Stock Appreciation Rights. Stock Appreciation
Rights shall be transferable only when and to the extent that a Stock
Option would be transferable under Section 5(b) (iii) of the Plan.
(iii) Termination of Employment. In the event of the termination of
employment of an Optionee holding a Related Stock Appreciation Right, such
right shall be exercisable to the same extent that the related Stock Option
is exercisable after such termination.
In the event of the termination of employment of the holder of a
Freestanding Stock Appreciation Right, such right shall be exercisable to
the same extent that a Stock Option with the same terms and conditions as
such Freestanding Stock Appreciation Right would have been exercisable in
the event of the termination of employment of the holder of such Stock
Option.
SECTION 7. LIMITED STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Limited Stock Appreciation Rights may be granted
either in conjunction with all or part of any Stock Option granted under the
Plan ("Related Limited Stock Appreciation Rights") or alone ("Freestanding
Limited Stock Appreciation Rights") and, in either case, in addition to other
Awards
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granted under the Plan. Participants shall enter into a Limited Stock
Appreciation Rights agreement with the Company if requested by the Committee, in
such form as the Committee shall determine.
(i) Time of Grant. Related Limited Stock Appreciation Rights related
to a Nonqualified Stock Option may be granted either at or after the time
of the grant of such Nonqualified Stock Option. Related Limited Stock
Appreciation Rights related to an Incentive Stock Option may be granted
only at the time of the grant of such Incentive Stock Option. Freestanding
Limited Stock Appreciation Rights may be granted at any time.
(ii) Exercisability. Limited Stock Appreciation Rights can only be
exercised within the sixty-day period following a Change in Control;
provided, however, that any Limited Stock Appreciation Right granted to a
director or officer of the Company must be held for a period of six months
prior to a Change in Control, except that this additional limitation shall
not apply in the event of death or Disability of the director or officer
prior to the expiration of the six-month period.
(iii) Amount Payable. Upon the exercise of a Limited Stock
Appreciation Right, a Participant shall be entitled to receive an amount in
cash equal to the Change in Control Stock Appreciation (as defined in
Section 12 of the Plan) of one share of Stock on the date of exercise,
multiplied by the number of shares of Stock in respect of which the Limited
Stock Appreciation Right shall have been exercised.
(b) Other Provisions. The other provisions of Section 6 of the Plan shall
apply to Limited Stock Appreciation Rights to the extent not inconsistent with
the provisions of this Section 7.
SECTION 8. RESTRICTED STOCK UNITS AND PERFORMANCE STOCK UNITS.
(a) Grant. Awards of Restricted Stock Units or Performance Stock Units may
be granted either alone or in addition to other Awards granted under the Plan.
Each Restricted Stock Unit or Performance Stock Unit represents the right to
receive, subject to the terms and provisions of the Plan and any agreements
evidencing such Awards, one share of Stock. If the Committee in its sole
discretion so determines at the time of grant, a Participant to whom a
Restricted Stock Unit Award or Performance Stock Unit Award has been granted may
be credited with an amount equivalent to all cash dividends ("Dividend
Equivalents") that would have been paid to the holder of such Restricted Stock
Unit Award or Performance Stock Unit Award if one share of Stock for every
Restricted Stock Unit or Performance Stock Unit awarded had been issued to the
holder on the date of grant of such Restricted Stock Unit Award or Performance
Stock Unit Award. The Committee shall determine the terms and conditions of each
Restricted Stock Unit Award and Performance Stock Unit Award including, without
limitation, the number of Restricted Stock Units or Performance Stock Units to
be covered by such Award, the restricted period applicable to Restricted Stock
Unit Awards and the performance objectives applicable to Performance Stock Unit
Awards. The Committee in its sole discretion may prescribe terms and conditions
applicable to the vesting of such Restricted Stock Unit Awards or Performance
Stock Unit Awards in addition to those provided in the Plan. The Committee shall
establish such rules and guidelines governing the crediting of Dividend
Equivalents, including the timing, form of payment and payment contingencies of
Dividend Equivalents, as it may deem desirable. The Committee in its sole
discretion may at any time accelerate the time at which the restrictions on ail
or any part of a Restricted Stock Unit Award lapse or deem the performance
objectives with respect to all or any part of a Performance Stock Unit Award to
have been attained. Restricted Stock Unit Awards and Performance Stock Unit
Awards shall not be transferable otherwise than by will or by the laws of
descent and distribution. Shares of Stock shall be deliverable upon the vesting
of Restricted Stock Unit Awards and Performance Stock Unit Awards for no
consideration other than services rendered or, in the Committee's sole
discretion, the minimum amount of consideration other than services (such as the
par value per share of Stock) required to be received by the Company in order to
assure compliance with applicable state law, which amount shall not exceed 10%
of the Fair Market Value of such shares of Stock on the date of issuance. Each
such Award shall be evidenced by a Restricted Stock Unit Award agreement
("Restricted Stock Unit Award Agreement") or Performance Stock Unit Award
agreement ("Performance Stock Unit Award Agreement").
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(b) Terms and Conditions. Unless otherwise determined by the Committee in
its sole discretion:
(i) a breach of any term or condition provided in the Plan, the
Restricted Stock Unit Award Agreement or the Performance Stock Unit Award
Agreement or established by the Committee with respect to such Restricted
Stock Unit Award or Performance Stock Unit Award will cause a cancellation
of the unvested portion of such Restricted Stock Unit Award or Performance
Stock Unit Award (including any unvested Dividend Equivalents credited in
respect thereof) and the Participant shall not be entitled to receive any
consideration in respect of such cancellation; and
(ii) subject to Section 12 of the Plan, termination of such holder's
employment with the Company, any Subsidiary or any Related Entity prior to
the lapsing of the applicable restriction period or attainment of
applicable performance objectives will cause a cancellation of the unvested
portion of such Restricted Stock Unit Award or Performance Stock Unit Award
(including any Dividend Equivalents credited in respect thereof) and the
Participant shall not be entitled to receive any consideration in respect
of such cancellation.
(c) Completion of Restriction Period and Attainment of Performance
Objectives. To the extent that restrictions with respect to any Restricted Stock
Unit Award lapse or performance objectives with respect to any Performance Stock
Unit Award are attained and provided that other applicable terms and conditions
have then been satisfied:
(i) such of the Restricted Stock Units or Performance Stock Units as
to which restrictions have lapsed or performance objectives have been
attained shall become vested and the Committee shall cause to be issued and
delivered to the Participant a stock certificate representing a number of
shares of Stock equal to such number of Restricted Stock Units or
Performance Stock Units, free of all restrictions, except as provided in
Section 13(a) of the Plan; and
(ii) any Dividend Equivalents credited in respect of such Restricted
Stock Units or Performance Stock Units shall become vested to the extent
that such Restricted Stock Units or Performance Stock Units shall have
become vested and the Committee shall cause such Dividend Equivalents to be
delivered to the Participant.
Any such Restricted Stock Unit Award or Performance Stock Unit Award
(including any Dividend Equivalents credited in respect thereof) that shall not
have become vested at the end of the applicable restricted period or the period
given for the attainment of performance objectives shall expire, terminate and
be cancelled and the Participant shall not thereafter have any rights with
respect to the Restricted Stock Units or Performance Stock Units (or any
Dividend Equivalents credited in respect thereof) covered thereby.
SECTION 9. GRANT OF STOCK OPTIONS, STOCK APPRECIATION RIGHTS AND LIMITED STOCK
APPRECIATION RIGHTS TO NONEMPLOYEE DIRECTORS
Each person who is not an employee of the Company, any Subsidiary or any
Related Entity and who on and after May 16, 1991 is elected or reelected as a
director (a "Nonemployee Director") of the Company at any annual or special
meeting of stockholders of the Company, shall as of the date of each such
election or reelection automatically be granted an Award consisting of (a) a
Stock Option to purchase 1,500 shares of Stock (as constituted at the time of
the annual meeting of stockholders on May 16, 1991) for an option price equal to
100% of the Fair Market Value of the Stock on the date of such election or
reelection and, (b) with respect to such number of shares of Stock, (i) a
Related Stock Appreciation Right, the stock appreciation on which shall be
payable all in cash, and (ii) a Limited Stock Appreciation Right, subject, in
each case, to applicable law. The action of the stockholders in electing or
reelecting a Nonemployee Director shall constitute the granting of the Award and
the date on which the stockholders shall take such action shall be the date of
granting of such Award. All such Stock Options shall be designated as
Nonqualified Stock Options. Subject to Section 12 of the Plan, a Nonemployee
Director must serve continuously as a Nonemployee Director of the Company for a
period of twelve consecutive months from the date such Award is granted before
he or she can exercise any part of such Award. Thereafter, on and after the
first anniversary of the date of granting the Award and before the second
anniversary, the Nonemployee Director may exercise the Award
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<PAGE> 11
with respect to not more than 40% of the number of shares of Stock covered
thereby, on and after the second anniversary and before the third anniversary,
the Nonemployee Director may exercise the Award with respect to not more than
70% of the number of shares of Stock covered thereby, and on and after the third
anniversary and before the expiration of the stated term of the Award, which
shall be ten years from the date of its granting, the Nonemployee Director may
at any time or from time to time exercise the Award with respect to all or any
portion of the shares of Stock covered thereby. The Related Limited Stock
Appreciation Right component of the Award shall be exercisable only as set forth
in Section 7(a)(ii) of the Plan. If a Nonemployee Director's service with the
Company terminates by reason of permanent and total disability or retirement
from active service as a director of the Company, any Award held by such
Nonemployee Director may be exercised for a period of five years from the date
of such termination or until the expiration of the Award, whichever is shorter,
to the extent to which the individual would on the date of exercise have been
entitled to exercise the Award if such individual had continued to serve as a
Nonemployee Director. If a Nonemployee Director's service with the Company
terminates by reason of death or under mutually satisfactory conditions, or if a
Nonemployee Director dies within the five-year period following termination by
reason of permanent and total disability or retirement from active service as a
director of the Company or within the one-year period following termination
under mutually satisfactory conditions, any Award held by such Nonemployee
Director may be exercised for a period of one year from the date of such
termination or post-termination death, as the case may be, or until the
expiration of the stated term of the Award, whichever is shorter, to the extent
to which the individual would on the date of exercise have been entitled to
exercise the Award if such individual had continued to serve as a Nonemployee
Director. All applicable provisions of the Plan not inconsistent with this
Section 9 shall apply to Awards granted to Nonemployee Directors; provided,
however, that the Committee may not exercise discretion under any provision of
the Plan with respect to Awards granted under this Section 9 to the extent that
such discretion is inconsistent with Rule 16b-3. The maximum number of shares of
Stock as to which Stock Options may be granted to any Nonemployee Director under
both the Plan, as in effect through May 16, 2001, and under the Company's 1972
Stock Option Plan, as in effect through April 17, 1992, shall be 22,500 shares
of Stock (as constituted at the time of the annual meeting of stockholders on
May 16, 1991).
SECTION 10. AMENDMENT AND TERMINATION.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of a
Participant under any Award theretofore granted without such Participant's
consent, or which, without the approval of the stockholders of the Company
(where such approval is necessary to satisfy then-applicable requirements of
Rule 16b-3, any Federal tax law relating to Incentive Stock Options or
applicable state law), would:
(a) except as provided in Section 3 of the Plan, increase the total
number of shares of Stock which may be issued under the Plan;
(b) except as provided in Section 3 of the Plan, decrease the option
price of any Stock Option to less than 100% of the Fair Market Value on the
date of the grant of the option;
(c) change the class of employees eligible to participate in the Plan;
or
(d) extend (i) the period during which Stock Options may be granted or
(ii) the maximum period of any Award under Sections 5(b)(ii) or 6(b)(i) of
the Plan.
Except as restricted herein with respect to Incentive Stock Options, the
Committee may amend or alter the terms and conditions of any Award theretofore
granted, and of any agreement evidencing such Award, prospectively or
retroactively, but no such amendment or alteration shall impair the rights of
any Participant under such Award or agreement without such Participant's
consent.
11
<PAGE> 12
SECTION 11. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan. With respect to any
payments not yet made and due to a Participant by the Company, nothing contained
herein shall give any such Participant any rights that are greater than those of
a general unsecured creditor of the Company.
SECTION 12. CHANGE IN CONTROL.
The following acceleration and valuation provisions shall apply in the
event of a Change in Control notwithstanding other provisions of the Plan or any
provisions of any applicable agreement to the contrary:
(a) In the event of a Change in Control:
(i) any Stock Appreciation Right and any Stock Option awarded under
the Plan not previously exercisable in full shall become fully
exercisable, provided that any Stock Appreciation Right granted to a
director or officer within six months prior to the date of a Change in
Control shall not, except in the event of death or disability, be
exercisable during the first six months from the date of granting of
such Stock Appreciation Right;
(ii) the restriction period applicable to any Restricted Stock Unit
Award shall lapse, the performance objectives applicable to any
Performance Stock Unit Award shall be deemed attained, and any other
restrictions or conditions applicable to any Restricted Stock Unit Award
or Performance Stock Unit Award shall be waived and the shares of Stock
covered thereby and all unrestricted Dividend Equivalents credited in
respect thereof shall be deemed fully vested; and
(iii) any Participant holding an Award who is terminated by the
Company or any Subsidiary for any reason within the two year period
immediately following a Change in Control shall be permitted to exercise
any Stock Option, Stock Appreciation Right or Limited Stock Appreciation
Right after such termination of employment at any time (x) within the
three month period commencing on the later of the date of termination of
his or her employment or the date on which such Award would first be
exercisable in accordance with the terms of the Plan had such
termination not occurred or (y) until the stated term of such Award,
whichever period is shorter.
(b) For purposes of the Plan, "Change in Control" shall mean a Change
in Control of the Company, which shall be deemed to have occurred if:
(i) any Person (as defined in this Section 12) is or becomes the
Beneficial Owner (as defined in this Section 12) of securities of the
Company representing 20% or more of the combined voting power of the
Company's then outstanding securities (unless the event causing the 20%
threshold to be crossed is an acquisition of securities directly from
the Company);
(ii) during any period of two consecutive years beginning after May
16, 1991, individuals who at the beginning of such period constitute the
Board and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a
transaction described in clause (i), (iii) or (iv) of this Change in
Control definition) whose election or nomination for election was
approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved cease for
any reason to constitute a majority of the Board;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (other than a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the entity surviving such merger or consolidation),
in combination with voting securities of the Company or such surviving
entity held by a trustee or other fiduciary pursuant to any employee
benefit plan of the Company or such surviving entity or of any
Subsidiary of the Company or such surviving entity, at least 80% of the
combined voting power of the securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation); or
12
<PAGE> 13
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or an agreement for the sale
or disposition by the Company of all or substantially all of the
Company's assets.
(c) For purposes of the definition of Change in Control, "Person"
shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act is supplemented by Section 13(d)(3) of the Exchange Act;
provided, however, that Person shall not include (i) the Company, any
Subsidiary or any other Person controlled by the Company, (ii) any trustee
or other fiduciary holding securities under any employee benefit plan of
the Company or of any Subsidiary, or (iii) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of securities of the Company.
(d) For purposes of the definition of Change in Control, a Person
shall be deemed the "Beneficial Owner" of any securities which such Person,
directly or indirectly, has the right to vote or dispose of or has
"beneficial ownership" (within the meaning of Rule 13d-3 under the Exchange
Act) of, including pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that: (i) a Person shall
not be deemed the Beneficial Owner of any security as a result of an
agreement, arrangement or understanding to vote such security (x) arising
solely from a revocable proxy or consent given in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
Exchange Act and the applicable rules and regulations thereunder or (y)
made in connection with, or to otherwise participate in, a proxy or consent
solicitation made, or to be made, pursuant to, and in accordance with, the
applicable provisions of the Exchange Act and the applicable rules and
regulations thereunder; in either case described in clause (x) or clause
(y) above, whether or not such agreement, arrangement or understanding is
also then reportable by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report); and (ii) a Person engaged in
business as an underwriter of securities shall not be deemed to be the
Beneficial Owner of any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(e) For purposes of this Section 12, "Change in Control Stock
Appreciation" with respect to any share of Stock shall mean an amount equal
to the excess, if any, of
(i) the higher of (x) the Fair Market Value of such share on the
date the Limited Stock Appreciation Right is exercised or (y) (A) in the
case of transactions described in clauses (i) or (iii) of the Change in
Control definition, the highest per share price paid (below called the
"Highest Price") for shares of Stock in the transaction constituting the
Change in Control, (B) in the case of a transaction described in clause
(ii) of the Change in Control definition which occurs in connection with
a transaction described in clauses (i), (iii), or (iv) of the Change in
Control definition, the Highest Price, (C) in the case of a transaction
described in clause (ii) of the Change in Control definition which does
not occur in connection with a transaction described in clauses (i),
(iii) or (iv) of the Change in Control definition, the average of the
daily closing prices per share of Stock of the Company on the New York
Stock Exchange, if such shares are traded thereon, or, if not, such
other national securities exchange on which such shares are admitted to
trade or, if none, the National Association of Securities Dealers
Automated Quotation System if such shares are admitted for quotation
thereon, on the thirty consecutive trading days immediately preceding
the Change in Control or (D) in the case of a transaction described in
clause (iv) of the Change in Control definition, the equivalent of the
Highest Price as determined by the Committee, over
(ii) in the case of a Related Limited Stock Appreciation Right, the
option price specified in the related Stock Option and, in the case of a
Freestanding Limited Stock Appreciation Right, the price per share
specified therein, which shall not be less than 100% of the Fair Market
Value of the Stock on the date of grant; provided, however, that with
respect to a Related Limited Stock Appreciation Right associated with a
Stock Option which is an Incentive Stock Option immediately prior to the
exercise of such Limited Related Stock Appreciation Right, the Change in
Control Stock
13
<PAGE> 14
Appreciation thereon shall not exceed the maximum amount which will
permit such Stock Option to continue to qualify as an Incentive Stock
Option.
SECTION 13. GENERAL PROVISIONS.
(a) The Committee may require each Optionee purchasing shares of Stock
pursuant to a Stock Option to represent to and agree with the Company in writing
that such Optionee is acquiring the shares of Stock without a view to
distribution thereof.
All certificates for shares of Stock delivered under the Plan and, to the
extent applicable, all evidences of ownership with respect to Dividend
Equivalents delivered under the Plan, shall be subject to such stock-transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Stock is then listed or quotation
system on which the Stock is admitted for trading and any applicable federal or
state securities law, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.
(b) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required, and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan shall
not confer upon any employee of the Company, any Subsidiary or any Related
Entity any right to continued employment with the Company, any Subsidiary or any
Related Entity, as the case may be, nor shall it interfere in any way with the
right of the Company, any Subsidiary or any Related Entity to terminate the
employment of any of its employees at any time.
(c) Each Participant shall be deemed to have been granted any Award on the
date the Committee took action to grant such Award under the Plan or such later
date as the Committee in its sole discretion shall determine at the time such
grant is authorized; provided, however, that a Reload Option shall be deemed to
have been granted on the date on which is exercised the Original Option in
respect of the exercise of which such Reload Option is granted or such later
date as the Committee in its sole discretion shall determine prior to the date
on which such exercise occurs.
(d) Unless the Committee otherwise determines, each Participant shall, no
later than the date as of which the value of an Award first becomes includible
in the gross income of the Participant for federal income tax purposes, pay to
the Company, or make arrangements satisfactory to the Committee regarding
payment of, any federal, state or local taxes of any kind required by law to be
withheld with respect to the Award. The obligations of the Company under the
Plan shall be conditional on such payment or arrangements and the Company (and,
where applicable, its Subsidiaries and its Related Entities) shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Participant.
A Participant (other than a Nonemployee Director) may elect to have such
tax withholding obligation satisfied, in whole or in part, by (i) authorizing
the Company to withhold from shares of Stock to be issued upon the exercise of a
Stock Option or Stock Appreciation Right or upon the vesting of any Restricted
Stock Unit Award or Performance Stock Unit Award a number of shares of Stock
with an aggregate Fair Market Value that would satisfy the withholding amount
due, or (ii) transferring to the Company shares of Stock owned by the
Participant with an aggregate Fair Market Value that would satisfy the
withholding amount due. With respect to any Participant who is a director or
officer, the following additional restrictions shall apply:
(i) the election to satisfy tax withholding obligations relating to
the exercise of a Stock Option or Stock Appreciation Right or to the
vesting of a Restricted Stock Unit Award or Performance Stock Unit Award in
the manner permitted by this subsection (d) shall be made either (x) during
the period beginning on the third business day following the date of
release of quarterly or annual summary statements of sales and earnings and
ending on the twelfth business day following such date, or (y) at least six
months prior to the date on which the amount of tax to be withheld upon the
exercise of such Stock Option or Stock Appreciation Right or the vesting of
such Restricted Stock Unit Award or Performance Stock Unit Award is
determinable;
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<PAGE> 15
(ii) such election shall be irrevocable;
(iii) such election shall be subject to the consent or disapproval of
the Committee; and
(iv) such election shall not be made within six months of the date of
the grant of such Award.
(e) No member of the Board or the Committee, nor any officer or employee of
the Company acting on behalf of the Board or the Committee, shall be personally
liable for any action, failure to act, determination or interpretation taken or
made in good faith with respect to the Plan, and all members of the Board or the
Committee and each and any officer or employee of the Company acting on their
behalf shall, to the extent permitted by law, be fully indemnified and protected
by the Company in respect of any such action, failure to act, determination or
interpretation.
(f) The Plan is intended to satisfy the conditions of Rule 16b-3, and all
interpretations of the Plan shall, to the extent permitted by law, regulations
and rulings, be made in a manner consistent with and so as to satisfy the
conditions of Rule 16b-3. The phrase "director or officer" as used in the Plan
means any director or officer who is subject to the provisions of Section 16(b)
of the Exchange Act. Any provision of the Plan or the application of any
provision of the Plan inconsistent with Rule 16b-3 shall be inoperative and
shall not affect the validity of the Plan.
In interpreting and applying the provisions of the Plan, any Stock Option
granted as an Incentive Stock Option pursuant to the Plan shall to the extent
permitted by law, regulations and rulings be construed as, and any ambiguity
shall be resolved in favor of preserving its status as, an "incentive stock
option" within the meaning of Section 422 of the Code. Once an Incentive Stock
Option has been granted, no action by the Committee that would cause such Stock
Option to lose its status under the Code as an "incentive stock option" shall be
effective as to such Incentive Stock Option unless taken at the request of or
with the consent of the Optionee.
Notwithstanding any provision to the contrary in the Plan or in any
Incentive Stock Option granted pursuant to the Plan, if any change in law or any
regulation or ruling of the Internal Revenue Service shall have the effect of
disqualifying any Stock Option granted under the Plan which is intended to be an
"incentive stock option" within the meaning of Section 422 of the Code, the
Stock Option granted shall nevertheless continue to be outstanding as and shall
be deemed to be a Nonqualified Stock Option under the Plan.
(g) A Participant may elect, on or after the date of grant of any Award, to
defer receipt of all or any portion of the proceeds of such Award or any
Dividend Equivalents in connection therewith, whether in the form of cash or
shares of Stock, deliverable to such Participant upon the exercise, vesting or
payment of any such Award or Dividend Equivalents, in each case to the extent
permitted by and subject to the terms and conditions set forth in any deferral
or similar plan or arrangement enacted by the Board or the Committee in its sole
discretion.
SECTION 14. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the date it is approved by the affirmative
vote of the holders of a majority of the shares of Stock of the Company present
in person or by proxy at the Annual Meeting of Stockholders on May 16, 1991.
SECTION 15. TERM OF PLAN.
No Award shall be granted under the Plan on or after the tenth anniversary
of the date the Plan is approved by the Company's stockholders, provided,
however, that Awards granted prior to such tenth anniversary may extend beyond
that date; and provided, further, however, that Reload Options may be granted on
or after such tenth anniversary, but no Reload Option shall be exercisable after
any date which is later than the date on which a Stock Option granted prior to
such tenth anniversary could be exercised.
15
<PAGE> 1
EXHIBIT 10-B-2
(As amended on December 2, 1993)
CHRYSLER CORPORATION
LONG-TERM PERFORMANCE PLAN
(Being the Terms and Conditions of the Performance
Stock Unit Provisions of the Chrysler Corporation
1991 Stock Compensation Plan)
Effective May 16, 1991
1. PURPOSE
The purpose of the Chrysler Corporation Long-Term Performance Plan
(below called the Plan) is to provide an incentive to the officers and
key executives (below called collectively Employees) of Chrysler
Corporation (below called Chrysler), its subsidiaries and its Related
Entities (as defined in the Stock Compensation Plan) (Chrysler, its
subsidiaries and Related Entities collectively below called the
Corporation) by enabling them to earn shares of common stock of
Chrysler (below called the Chrysler Common Stock) as a reward for the
achievement of long-term goals and objectives of the Corporation. The
Plan sets forth the terms and conditions of performance stock unit
awards granted by the Committee (as defined below) under the Stock
Compensation Plan (as defined below). All capitalized terms used below
shall have the meanings ascribed to them in Section 2 below.
2. DEFINITIONS
"Board" - means the Board of Directors of Chrysler.
"Change in Control" - has the meaning set forth in the Stock
Compensation Plan.
"Committee" - means the Stock Option Committee of the Board, being the
committee appointed by the Board to administer the performance stock
unit provisions of the Stock Compensation Plan.
"Fair Market Value" - means for purposes of Performance Shares, the
mean of the high and low trading prices of Chrysler Common Stock on
the date on which it is to be valued hereunder, as reported on the New
York Stock Exchange, or if the Exchange is closed on such day, the next
preceding day on which the Exchange was open for trading.
"Participant" - means an Employee who is selected by the Committee to
receive an award of Performance Shares under the Stock Compensation
Plan.
<PAGE> 2
-2-
"Performance Cycle" or "Cycle" - means the period of years determined
by the Committee during which the performance of the Corporation is
measured for the purpose of determining the extent to which an award of
Performance Shares has been earned.
"Performance Goals" - means the objectives for the Corporation
established by the Committee for a Performance Cycle, for the purpose
of determining the extent to which Performance Shares which have been
contingently awarded for such Cycle are earned.
"Performance Share" - means an award expressed as one share of Chrysler
Common Stock contingently awarded under the Stock Compensation Plan
(also termed, under the Stock Compensation Plan, a Performance Stock
Unit), the terms and conditions of which award are governed by this
Plan.
"Stock Compensation Plan" - means the Chrysler Corporation 1991 Stock
Compensation Plan.
3. STOCK OPTION COMMITTEE
The Board has appointed not less than three Directors of Chrysler to be
the Committee to administer this Plan. All of the members of the
Committee are "disinterested persons" (which term as used herein shall
have the meaning ascribed to it in Rule 16b-3 under the Securities
Exchange Act of 1934, or in any amendment thereof in effect at the
relevant time). The Committee shall have authority, in its discretion,
to amend the terms of this Plan and to prescribe, amend, and rescind
rules and regulations relating to this Plan.
4. ELIGIBILITY
All Eligible Employees (as defined in the Stock Compensation Plan) are
eligible to be Participants under the Stock Compensation Plan.
5. PERFORMANCE CYCLES
During 1991 the Committee shall establish Performance Cycles for the
years 1991 through 1993. During each of the years 1992 and thereafter
the Committee may, but may not be required to, establish a new
Performance Cycle with respect to a future period, which shall not be
less than two nor more than five years. The Committee shall have sole
and complete authority to determine the duration of each Performance
Cycle. More than one Performance Cycle may be in effect at any one
time, and the duration of one Performance Cycle may differ from
another.
<PAGE> 3
-3-
6. PERFORMANCE GOALS
The Committee shall establish Performance Goals for each Performance
Cycle consisting of such criteria and for the accomplishment of such
corporate objectives as the Committee may from time to time select.
During any Cycle, the Committee may adjust the Performance Goals for
such Cycle as it deems equitable in recognition of unusual or
non-recurring events affecting the Corporation or changes in applicable
tax laws or accounting principles.
7. PERFORMANCE AWARDS
At the commencement of each Performance Cycle the Committee shall (a)
award to each Participant the number of Performance Shares that would
be deliverable to the Participant after the end of the Performance
Cycle if the Performance Goals for that Cycle are fully achieved at a
100% level of performance and (b) establish a range within which
greater or lesser percentages (including a minimum and maximum
percentage) of the number of shares awarded as Performance Shares would
be earned. The maximum of such range shall not exceed 125% of the
number of shares awarded as Performance Shares.
When a person becomes employed by the Corporation in, or is promoted by
the Corporation to, a position that constitutes him an Employee
eligible to participate in the Plan, the Committee may, in its sole
discretion, award to such person Performance Shares for one or more
Performance Cycles commenced and then in progress.
The Committee may, in its sole discretion, supplement any award
previously made to any Participant and not yet earned out and paid.
8. PAYMENT OF PERFORMANCE SHARES
After the end of each Performance Cycle, the Committee shall determine
the percentage of the Performance Shares which were earned by each
Participant. Such determination shall be made by considering the
Corporation's performance in relation to the Performance Goals
established for that Performance Cycle and deriving therefrom a
percentage of attainment of the Performance Goals. Such percentage
(but not more than 125%) multiplied by the number of shares awarded as
Performance Shares to each Participant shall be the number of shares of
Chrysler Common Stock earned and to be delivered to such Participant.
Such shares shall be shares held by the Corporation in its treasury.
Effective on and after December 2, 1993, a Participant may elect, on or
after the date of grant of any award and before
<PAGE> 4
-4-
the year in which such award is to be paid, to defer receipt of all or
any portion of the Performance Shares deliverable to such Participant
upon earning such award, subject to the terms and conditions contained
in any applicable deferral, savings or similar plan or arrangement.
9. DIVIDEND EQUIVALENTS
Participants shall be entitled to receive cash payments equivalent to
the dividend payments, if any, made to the owners of Chrysler Common
Stock during the Performance Cycle, on the dates such dividend payments
are made. Such payments are payable from and after the date
Performance Shares are awarded (i.e., during the relevant Performance
Cycle) without regard to the attainment of Performance Goals.
10. TERMINATION OF EMPLOYMENT
A Participant must be an Employee at the end of a Performance Cycle in
order to be entitled to payment of Performance Shares in respect of
such Cycle; provided, however, that in the event a Participant ceases
to be an Employee prior to the end of that Cycle (a) by reason of
death, disability under any disability plan of the Corporation, or
retirement at or after age 65 under a pension plan of the Corporation,
he (or the legal representative of his estate or his legatees) shall
continue to earn, as if he had not ceased to be an Employee, any
Performance Shares awarded to him for that Cycle, or (b) by reason of
layoff, or by reason of retirement before age 65 under a pension plan
of the Corporation, the Committee, in its discretion and after taking
into consideration the performance of such Participant and the
performance of the Corporation during the Cycle, may authorize payment
to such Participant with respect to some or all of the Performance
Shares awarded to him for that Cycle. No award of Performance Shares
shall confer upon any Employee any right to continued employment with
the Corporation nor shall it interfere with the right of the
Corporation to terminate the employment of any Employee at any time.
11. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate
structure or capitalization affecting the Chrysler Common Stock,
outstanding awards of Performance Shares shall be adjusted as and to
the extent provided in Section 3 of the Stock Compensation Plan.
<PAGE> 5
-5-
12. CHANGE IN CONTROL
A Change in Control shall have the effects set forth in Section 12 of
the Stock Compensation Plan.
13. INTERPRETATION
The Committee shall have full power and authority to interpret and
construe this Plan and its interpreting and construing of this Plan and
acts and determinations pursuant to this Plan in good faith shall be
final and conclusive, and binding upon the Participants. This Plan
sets forth the terms and conditions of awards of Performance Shares
under the Stock Compensation Plan; the provisions of the Stock
Compensation Plan and the interpretations thereof, to the extent
applicable, shall govern in the event of any conflict with the
provisions of this Plan and the interpretations thereof.
<PAGE> 1
EXHIBIT 10-B-3
(AS AMENDED THROUGH DECEMBER 20, 1993)
__________________________________________
CHRYSLER
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
CONSOLIDATED
AS OF JANUARY 1, 1994
__________________________________________
<PAGE> 2
CHRYSLER
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
DATED AS OF JANUARY 1, 1994
Chrysler Corporation (or between June 1, 1986 and December 31, 1989
its subsidiary Chrysler Motors Corporation), a corporation organized and
existing under the laws of the State of Delaware (hereinafter called the
"Corporation"), has had in effect since January 1, 1985 a plan called the
Chrysler Supplemental Executive Retirement Plan (prior to June 1, 1986 called
the Chrysler Corporation Supplemental Executive Retirement Plan and hereinafter
called the "Plan"). The Corporation amended the Plan in certain respects as of
June 12, 1986, July 11, 1986, August 26, 1986, August 14, 1987, January 5,
1988, July 29, 1988, December 14, 1988, January 19, 1989, May 30, 1989, August
15, 1989, October 17, 1989, December 29, 1989, January 17, 1990, March 30,
1990, June 7, 1990, April 5, 1991, December 6, 1991, February 20, 1992, March
5, 1992, March 31, 1992, May 19, 1992, June 11, 1992, January 15, 1993,
February 17, 1993, April 30, 1993, November 19, 1993, December 2, 1993, and
December 20, 1993. Chrysler Corporation superseded Chrysler Motors Corporation
as Plan sponsor and Plan Administrator effective January 1, 1990.
The Corporation now desires to consolidate the Plan and all subsequent
amendments.
<PAGE> 3
<TABLE>
<CAPTION>
CHRYSLER
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AS OF JANUARY 1, 1994
PAGE
----
<S> <C> <C> <C>
ARTICLE I Purpose of Plan 4
ARTICLE II Definitions 9
ARTICLE III Participation 16
ARTICLE IV Retirement and Deferred Retirement Benefits 17
4.01 Normal Retirement 17
4.02 Special Early Retirement 18
4.03 Early Retirement at Employee Option 21
4.04 PTD Retirement 23
4.05 Retirement Under Employment Contract 24
4.06 Deferred Vested Benefits 26
4.07 - 4.14 Other Provisions 28
ARTICLE V Death Benefits 35
ARTICLE VI Payment of Benefits 40
ARTICLE VII Contributions 52
ARTICLE VIII Plan Administration 53
ARTICLE IX Amendment, Termination 58
ARTICLE X General 60
</TABLE>
2
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE XI Special Provisions Applicable to 63
Designated Participants
APPENDIX A Actuarial Assumptions Under the Plan 65
</TABLE>
3
<PAGE> 5
CHRYSLER
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I. PURPOSE OF PLAN
1.01 The Plan is maintained for the purpose of providing the
following supplemental retirement benefits to Employees:
A. Incentive Compensation Retirement Benefit
This benefit is based on the aggregate awards earned out and paid to
Employees under the Incentive Compensation Plan, the Long Term
Incentive Plan and the Long Term Performance Plan.
B. ERISA Excess Retirement Benefit
This benefit is based on the excess of retirement benefits calculated
under the Salaried Employees' Retirement Plan without regard to the
limitations under Section 415 or Section 401(a)(17) of the Internal
Revenue Code, as amended, over the benefits payable under the Salaried
Employees' Retirement Plan because of such limitations.
This benefit includes a contributory benefit based on any
Employee contributions made pursuant to Section VII of this Plan that
otherwise could have been contributed under the Salaried Employees'
Retirement Plan were it not for contribution limitations imposed under
Section 401(a)(17) of the Internal Revenue Code, as amended. Although
this benefit shall be calculated and paid based solely on
contributions made within this Plan, it shall be computed in the same
manner as the contributory benefit is calculated under the Salaried
Employees' Retirement Plan.
The Benefit as calculated above, shall be further increased
(prior to the time the Salaried Employees'
4
<PAGE> 6
Retirement Plan is amended to comply with applicable provisions of the
Tax Reform Act of 1986) to include the amount, if any, of additional
non-contributory benefits excluded from payment under the Salaried
Employees' Retirement Plan by provisions of the Internal Revenue
Service Model Amendment #2, included in IRS Notice 88-31, as
referenced in Subsection 4.01C of the Salaried Employees' Retirement
Plan. In respect to Employees who are participants in the Chrysler
First Retirement Account, all above references in this paragraph to
the Salaried Employees' Retirement Plan shall be deemed to mean the
Chrysler First Retirement Account. In respect to Employees who are
participants in the Gulfstream Aerospace Corporation Pension Plan, all
such references in this paragraph to the Salaried Employees'
Retirement Plan shall be deemed to mean the Gulfstream Aerospace
Corporation Pension Plan. The forms of benefits payable under this
Plan to Employees who are participants in the Chrysler First
Retirement Account or the Gulfstream Aerospace Corporation Pension
Plan are the forms of benefits payable under such plans.
C. Post Retirement Supplemental Benefit
This benefit is payable to Employees who retired as elected officers
of Chrysler Corporation and is based on the excess, if any, of the
Basic Pension Rate in effect on January 1, 1986 under the Chrysler
Pension Plan over the Basic Pension Rate in effect under the Pension
Plan on the date the officers retired, multiplied by the Employees'
years of Credited Service.
5
<PAGE> 7
D. American Motors Supplemental Pension Plan Benefit
This benefit is payable to Employees eligible for benefits under the
American Motors Corporation Supplemental Pension Plan, a plan
terminated by merger into this Plan effective December 31, 1989.
Benefits under the American Motors Supplemental Pension Plan shall be
frozen as of date of merger. If any Employee is eligible to receive a
benefit under the non-contributory part of the Chrysler Salaried
Employees' Retirement Plan and under an American Motors Corporation
Pension Plan (including for this purpose any frozen American Motors
Corporation Pension Plan that has been merged into this or any other
Chrysler Pension Plan) and if his total benefit amount under Chrysler
and American Motors Corporation Pension Plans exceeds the amount he
would have received under Chrysler plans had he participated under
Chrysler plans for the entire period he was employed by American
Motors Corporation and Chrysler, his benefit under the
non-contributory part of the Chrysler Salaried Employees' Retirement
Plan will be reduced (but not below zero) by the amount of such
excess. This reduction shall supersede the minimum benefit guarantee
that would otherwise be applicable under the American Motors
Supplemental Pension Plan benefit payable under this Plan.
6
<PAGE> 8
E. Modified Special Early Retirement Program Special Leave of
Absence Benefit
This benefit is payable, prior to retirement under the Salaried
Employees' Retirement Plan, to all very highly compensated employees
(within the meaning of the Internal Revenue Code) and highly
compensated employees (as defined by such Code) designated by the
Corporation who choose to cease active employment with the Corporation
between July 31, 1989 and October 31, 1989 or between January 31, 1990
and May 31, 1990 under terms of the 1989 or 1990 Chrysler Modified
Special Early Retirement Programs. The benefit payable pursuant to
this paragraph shall equal the benefit which would have been payable
under the Salaried Employees' Retirement Plan, the Pension Plan and
the ERISA Excess Retirement Benefits portion of this Plan had the
Employees retired at Corporation option under the Salaried Employees'
Retirement Plan at the date he ceased active employment.
7
<PAGE> 9
SUPPLEMENTARY MINIMUM BENEFIT
This benefit is payable to Salaried Employees (as defined in the
Salaried Employees' Retirement Plan) who cease active employment with
the Corporation under the 1989 or 1990 Chrysler Modified Special Early
Retirement Programs (either through retirement or through a Special
Leave of Absence as described in the first paragraph of this Section
1.01E). Such benefit is equal to the amount by which a Salaried
Employee's combined monthly benefit for retirement at Corporation
option under whichever is applicable of the Salaried Employees'
Retirement Plan, the Pension Plan, the ERISA Excess Retirement
Benefits portion of this Plan and the Special Leave of Absence Benefit
provisions of this Section 1.01E are less than 115% of what his total
retirement benefits would have been under the Salaried Employees'
Retirement Plan, the Pension Plan and, if applicable, the ERISA Excess
Retirement Benefits portion of this Plan had he retired at his own
option.
Notwithstanding the foregoing provisions of this Section 1.01E, no
benefits of any kind shall be payable pursuant to this Section 1.01E
for periods commencing on or after January 1, 1992.
8
<PAGE> 10
ARTICLE II. DEFINITIONS
Unless the text clearly indicates otherwise:
2.01 "Actuarial Equivalent" means an amount of equal value
actuarially, determined pursuant to actuarial tables or factors adopted by the
Committee as set forth in Appendix A to this Plan.
2.02 "Actuary" means the actuary for the Plan appointed by Chrysler
Corporation.
2.03 "Basic Pension Rate" means the monthly basic pension rate for
each year of service as established from time to time under the Pension Plan.
2.04 "Beneficiary" means any one or more individuals, partnerships,
corporations, fiduciaries or other entities designated under the Salaried
Employees' Retirement Plan as the beneficiary or contingent beneficiary to
receive any death benefits payable under this Plan, unless a separate
designation under the Plan is received by the Committee. If no beneficiary
designation has been filed under the Salaried Employees' Retirement Plan or
under the Plan, the beneficiary shall be the executor of the former Employee's
will or the probate administrator, on behalf of the former Employee's estate.
2.05 "Committee" means the Employee Benefits Committee established
by the Board of Directors of Chrysler Corporation by Resolution dated December
10, 1975, as constituted from time to time.
2.06 "Commuted Value" means an amount equal to the lump sum value
at the date of determination of periodic payments payable thereafter discounted
from the respective payment dates of such periodic payments to the date of
determination at the rate of
9
<PAGE> 11
interest adopted by the Committee and set forth in Appendix A to this Plan.
2.07 "Corporation" means Chrysler Corporation and (i) any
corporation organized under the laws of the United States or any state thereof,
all or substantially all of the stock of which is owned by Chrysler Corporation
directly or through one or more subsidiaries which the Committee has designated
by resolution as a corporation to which, and to the salaried employees of
which, this Plan shall apply, and (ii) any corporation organized under the laws
of a foreign government or subdivision thereof, all or substantially all of the
stock of which is owned by Chrysler Corporation directly or through one or more
subsidiaries, which is a subsidiary corporation with respect to which there is
in effect an agreement entered into by Chrysler Corporation under Section 3121
(1) of the Internal Revenue Code or under any amendment thereof in effect at
the relevant time, and which at the time the Committee shall have designated by
resolution as a corporation to which, and to the salaried employees of which,
this Plan shall apply, but such corporation shall be included in the term
"Corporation" only with respect to those of its Employees who have been
transferred to such employment with such subsidiary from employment in the
United States with Chrysler Corporation or one of its subsidiary corporations,
and (iii) for purposes of the Incentive Compensation Retirement Benefits only,
any corporation organized under the laws of a foreign government or subdivision
thereof, all or substantially all of the stock of which is owned by Chrysler
Corporation directly or through one or more subsidiaries, which the Committee
has designated by resolution as a corporation
10
<PAGE> 12
to which, and to the salaried employees of which, this Plan shall apply.
2.08 "Credited Service" means the credited service an Employee has
under a Pension Plan or, in the case of an Employee who is an elected officer
or director of the Corporation, the credited service he would have if elected
officers and directors were eligible under a pension plan. Notwithstanding the
above, however, in the case of an individual who has become an Employee of the
Corporation or of Chrysler Corporation or one of its subsidiaries (excluding
American Motors Corporation and its subsidiaries as of August 5, 1987) upon
transfer after August 5, 1987 from employment with American Motors Corporation
or one of its subsidiaries, employment by American Motors Corporation or any of
its subsidiaries up to and including the last day he was so employed shall be
deemed to be included in Credited Service under this Plan for all purposes
other than for computation of benefit amounts.
2.09 "Employee" means a person (i) who, at the time, is employed by
the Corporation or a Non-Participating Subsidiary, or (ii) who, for the
purposes of the Incentive Compensation Retirement Benefits only, is employed by
Chrysler Canada Ltd., or Chrysler Credit Canada Ltd., and (iii) who is, or who
has been but no longer is, a Salaried Employee. Notwithstanding the foregoing,
the term "Employee" shall in no event include (i) persons employed on a
temporary, fixed term, project or daily basis, (ii) persons who are retained
under a consultant or independent contractor agreement, or on a Service
Agreement basis or who are assigned by an employment agency, supplier,
subcontractor or other provider of personnel. Where used in this Plan the
terms "former Employee," "retired
11
<PAGE> 13
Employee" or "terminated Employee" shall mean a person who at one time was an
Employee but who, by reason of retirement or other termination of employment is
no longer employed by the Corporation, a Non-Participating Subsidiary, Chrysler
Canada Ltd., or Chrysler Credit Canada Ltd., as applicable.
2.10 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
2.11 "ERISA Excess Death Benefits" means the death benefit
calculated by reference to the ERISA Excess Retirement Benefit of an Employee
or former Employee as determined in whichever is applicable of Sections 5.01,
5.02, or 5.03.
2.12 "ERISA Excess Retirement Benefit" means a monthly retirement
benefit equal to the excess of the retirement benefit calculated under the
Salaried Employees' Retirement Plan without regard to the benefit and
compensation limitations set forth in that plan or imposed under Section 415 or
Sub-paragraph 401(a)(17) of the Internal Revenue Code over the benefit payable
under the Salaried Employees' Retirement Plan, determined as provided in
Section 4.01, because of such limitation.
2.13 "Incentive Compensation Plan" means the Chrysler Corporation
Incentive Compensation Plan, as in effect from time to time, established under
a stockholders' resolution adopted in 1929, as amended.
2.14 "Incentive Compensation Death Benefit" means the death benefit
calculated by reference to Incentive Compensation Retirement Benefits of an
Employee or retired Employee as determined in whichever is applicable of
Sections 5.01, 5.02, 5.03, or 5.04.
12
<PAGE> 14
2.15 "Incentive Compensation Retirement Benefit" means a monthly
retirement benefit calculated by reference to the aggregate awards made to an
Employee under (a) the Incentive Compensation Plan, (b) the Chrysler
Corporation Long-Term Incentive Plan under the Incentive Compensation Plan
(herein called the "Long-Term Incentive Plan") and (c) the Chrysler Corporation
Long-Term Performance Plan under the Chrysler Corporation 1991 Stock
Compensation Plan (herein called the "Long-Term Performance Plan"), determined
as provided in Section 4.01.
2.16 "Non-Participating Subsidiary" means any branch of Chrysler
Corporation, or any of its wholly-owned subsidiaries, located outside the
United States and its possessions and any subsidiary of Chrysler Corporation
whether organized under the laws of the United States or of any state thereof
or of a foreign government or subdivision thereof, a majority of the voting
stock of which Chrysler Corporation owns at the time directly or through one or
more wholly-owned subsidiaries, and which branch or subsidiary the Committee
shall at the time have designated by resolution as a branch or corporation to
which and to the Employees of which the provisions of the Plan relating to a
Non- Participating Subsidiary shall apply. A branch of Chrysler Corporation,
or any of its wholly-owned subsidiaries, located outside the United States and
its possessions or a subsidiary described in clause (ii) of Section 2.07 may be
a Non-Participating Subsidiary with respect to those of its Employees who were
not transferred to such branch or subsidiary from employment in the United
States with Chrysler Corporation or one of its subsidiary corporations.
13
<PAGE> 15
2.17 "Normal Retirement Date" means the last day of the month in
which an Employee attains his 65th birthday.
2.18 "Pension Plan" means the Chrysler Pension Plan or the Chrysler
Financial Corporation Pension Plan, as applicable.
2.19 "Permanent Total Disability" means that the person is
receiving permanent total disability benefits under a Pension Plan or a group
insurance program of the Corporation.
2.20 "Plan" means this Supplemental Executive Retirement Plan.
2.21 "Plan Year" means the period of 12 calendar months ending with
the last day of the month of December in each year.
2.22 "Post Retirement Supplemental Benefit" means a monthly
retirement benefit payable to an Employee who retired or retires as an elected
officer of Chrysler Corporation, determined as provided in Section 4.08.
2.23 "Salaried Employee" means a person (i) who at the relevant time
is employed by the Corporation or a Non-Participating Subsidiary, or (ii) who,
for purposes of the Incentive Compensation Retirement Benefits only, is employed
by Chrysler Canada Ltd., or Chrysler Credit Canada Ltd., and who receives
regular compensation in the form of a base Salary, except that a person who is
employed either by a subsidiary of Chrysler Corporation described in clause (ii)
of Section 2.07 or a branch of Chrysler Corporation located outside the United
States and its possessions shall, in either such case, be deemed to be a
Salaried Employee only if he has been transferred to such employment, either
with such subsidiary or such branch, from employment in the United States.
2.24 "Salaried Employees' Retirement Plan (SERP)" means the
Chrysler Salaried Employees' Retirement Plan or the Chrysler
14
<PAGE> 16
Financial Corporation Salaried Employees' Retirement Plan, as applicable, as in
effect from time to time.
2.25 "Salary" means the base salary payable monthly (after any
deductions or any salary deferral pursuant to an agreement entered into under
the Chrysler Salaried Employees' Savings Plan, as amended, or the Chrysler
Salaried Employees' Supplemental Savings Plan, as amended) not including any
contingent, incentive or deferred compensation, bonuses, or other forms of
extra compensation. The term "Salary" shall include base salary amounts
deferred pursuant to the Chrysler Stock Unit Investment Program. The term
"Salary" shall further include amounts deducted from base salary under
provisions of the Chrysler Best By Choice Program but shall not include amounts
added to base compensation payments pursuant to the Best By Choice Program.
15
<PAGE> 17
ARTICLE III. PARTICIPATION
3.01 An Employee who has received or receives an award of incentive
compensation under the Incentive Compensation Plan for the year 1983 or any
subsequent year shall participate in the Plan with respect to the Incentive
Compensation Retirement Benefit and the Incentive Compensation Death Benefit.
3.02 An Employee who retires under the SERP and whose retirement or
termination benefits as calculated under SERP are in excess of the benefit and
compensation limitations set forth in that plan or imposed under Section 415 or
Sub-paragraph 401(a)(17) of the Internal Revenue Code shall participate in the
Plan with respect to the ERISA Excess Retirement Benefit and ERISA Excess Death
Benefit.
3.03 An Employee who retired as an elected officer of Chrysler
Corporation prior to January 1, 1986 shall participate in the Plan with respect
to the Post Retirement Supplemental Benefit.
16
<PAGE> 18
ARTICLE IV. RETIREMENT AND DEFERRED RETIREMENT BENEFITS
4.01 An Employee who retires under the SERP, or for purposes of the
Incentive Compensation Retirement Benefits also under the Chrysler Canada Ltd.
Salaried Employees' Retirement Plan on or after his Normal Retirement Date
shall be entitled to receive under this Plan, commencing on the first day of
the month next following his retirement date, retirement benefits equal to the
sum of (i) any Incentive Compensation Retirement Benefit for which he may be
eligible as provided in Subsection A, and (ii) any ERISA Excess Retirement
Benefit for which he may be eligible as provided in Subsection B.
A. The Incentive Compensation Retirement Benefit of an Employee
retiring as provided above in this Section 4.01 shall be a monthly
amount equal to the sum of the following:
1. An amount equal to .5 of 1 percent (.5%) of his
Incentive Compensation Plan awards for 1983 and 1984,
plus
2. An amount equal to such percentage of his combined (a)
Incentive Compensation Plan award for each of the
years 1985 through 1992 and (b) Long-Term Incentive
Plan award (whether such award is payable in cash or
Chrysler Stock) earned out and paid for performance
cycles ending in each of the years 1987 through 1992,
as the Incentive Compensation Committee of the Board
of Directors shall determine, but not more than .5 of
1 percent (.5%) of his combined award for any such
year, plus
17
<PAGE> 19
3. An amount equal to such percentage of his combined
(a) Incentive Compensation Plan award for 1993 and
each year thereafter and (b) Long-Term Performance
Plan award for performance cycles ending in 1993 and
each year thereafter as the Incentive Compensation
Committee of the Board of Directors shall determine,
but not more than .5 of 1 percent (.5%) of his
combined award for any such year.
B. The ERISA Excess Retirement Benefit of an Employee retiring as
provided above in this Section 4.01 shall be a monthly amount equal to
the excess of:
1. The retirement benefit calculated under the
provisions of Section 4.01 of the SERP (irrespective
of whether payments under the SERP are actually made
in the form described in Section 4.01 of the SERP)
without regard to the benefit and compensation
limitations set forth in that plan or imposed under
Section 415 or Sub-paragraph 401(a)(17) of the
Internal Revenue Code over
2. The retirement benefit calculated under Section 4.01
of the SERP because of such ERISA limitations.
Notwithstanding anything to the contrary in this Plan, the
retirement benefits of an Employee of the Corporation or a Non-Participating
Subsidiary, who continues active service until his 65th birthday, shall be
nonforfeitable.
4.02 An Employee who retires under the Special Early Retirement
provisions of the SERP or, for purposes of the Incentive Compensation
Retirement Benefit, retires at the option of the
18
<PAGE> 20
Corporation under the Chrysler Canada Ltd. Salaried Employees' Retirement Plan
on or after his 55th birthday but before his 62nd birthday and who at the date
of his early retirement has 10 years or more of Credited Service (or who shall
have attained such lesser age or years of Credited Service as may be required
under terms of a specific Early Retirement Program if he retires pursuant to
such program) shall be entitled to receive under this Plan, commencing on the
first day of the month next following the date of his retirement, retirement
benefits equal to the sum of (i) any Incentive Compensation Retirement Benefit
for which he may be eligible as provided in Subsection A., and (ii) any ERISA
Excess Retirement Benefit for which he may be eligible as provided in
Subsection B.
A. The Incentive Compensation Retirement Benefit of an Employee
retiring early as provided in this Section 4.02 shall be a
monthly amount calculated as described in Section 4.01A.
B. The ERISA Excess Retirement Benefit of an Employee retiring
early as provided in this Section 4.02 shall be a monthly
amount calculated as described in Section 4.01B.
C. The reduced age, Credited Service, and date specifications
applicable to specific Special Early Retirement Programs are
as follows:
1. 1991 Program
a. Minimum age: 53
b. Minimum Credited Service: 10 years
c. Eligibility date: August 31, 1991
19
<PAGE> 21
d. Retirement date: April 30, 1991 or, if
later, the end of the month prior to
September, 1991 when age and Credited Service
requirements are first met (Retirements may
occur at a later date as approved by the
Corporation and agreed to by the Employee but
not beyond December 31, 1991)
2. 1992 Program
a. Minimum age: 55
b. Minimum Credited Service: 7 years
c. Eligibility date: December 31, 1992 (Must be
actively at work during the March 1, 1992 to
May 31, 1992 period)
d. Retirement date: August 31, 1992 or as early
as May 31, 1992 if age and Credited Service
requirements are met or, in the case of an
Employee who first meets the age and Credited
Service requirements of the Program between
September 1, 1992 and December 31, 1992, the
end of the month the Employee first meets
such requirements (Retirement may occur at a
later date as approved by the Corporation and
agreed to by the Employee but not beyond
December 31, 1992)
3. 1993 Program
a. Minimum age: 54
b. Minimum Credited Service: 10 years
c. Eligibility date: December 31, 1993
20
<PAGE> 22
d. Retirement date: April 30, 1993 or, if
later, the end of the month prior to January
1, 1994 when age and Credited Service
requirements are first met (Retirements may
occur at a later date as approved by the
Corporation and agreed to by the Employee but
not beyond December 31, 1993)
Provided, however, that in the case of an Employee retiring under this
Section 4.02 who is employed or becomes employed by any competing
firm, as determined by the Committee, payment of his monthly
retirement benefits provided under Section 4.02A shall not be made for
any month during which he is so employed by any such competing firm
prior to the first day of the month next following his 65th birthday.
4.03 An Employee who retires under the SERP, or for purposes of the
Incentive Compensation Retirement Benefit also under the Chrysler Canada
Ltd. Salaried Employees' Retirement Plan at his option on or after his 55th
birthday but before his 65th birthday and (a) who has not attained age 60 and
whose combined years of age and years of Credited Service (to the nearest 1/12
in each case) shall total 85 or more, or (b) who has attained age 60 but not 65
and has 10 or more years of Credited Service, shall in any such case be entitled
to receive under this Plan, commencing on the first day of the month next
following the date of his retirement, retirement benefits equal to the sum of
(i) any Incentive Compensation Retirement Benefit for which he may be eligible
as provided in Subsection A, and (ii) any ERISA Excess Retirement
21
<PAGE> 23
Benefit for which he may be eligible as provided in Subsection B, subject to
the provisions of Subsection C, below.
A. The Incentive Compensation Retirement Benefit of an Employee
retiring early as provided in this Section 4.03 shall be a monthly
amount calculated as described in Section 4.01A.
B. The ERISA Excess Retirement Benefit of an Employee retiring
early as provided in this Section 4.03 shall be a monthly
amount calculated as described in Section 4.01B.
C. The retirement benefits described above in Sections 4.03A and
4.03B shall be reduced by multiplying such benefits by a
percentage as set forth in the following table:
<TABLE>
<CAPTION>
Age When
Benefit Commences Percentage*
<S> <C>
55 57.9%
56 63.5
57 69.4
58 75.2
59 80.8
60 86.7
61 93.3
62 100.0
63 100.0
64 100.0
</TABLE>
* Prorated for intermediate ages computed to the nearest whole month
Provided, however, that in the case of an Employee retiring under this
Section 4.03 who is employed or becomes employed by any
22
<PAGE> 24
company other than the Corporation, payment of his monthly retirement benefit
provided under Section 4.03A shall not be made for any month during which he is
so employed by any company other than the Corporation prior to the first day of
the month next following his 65th birthday, unless the Committee approves such
payment annually.
4.04 An Employee who retires under the SERP, or for purposes of the
Incentive Compensation Retirement Benefit also under the Chrysler Canada Ltd.
Salaried Retirement Plan because of Permanent Total Disability with 10 years or
more of Credited Service (i) on or after his 55th birthday but before his
Normal Retirement Date or (ii) before his 55th birthday and who has been a
participant for at least 10 years since he attained age 35, or (iii) before his
55th birthday and who has been a participant for five years but less than 10
years since he attained age 35, shall be entitled to receive under this Plan,
retirement benefits equal to the sum of (i) any Incentive Compensation
Retirement Benefit for which he may be eligible as provided in Subsection A and
(ii) any ERISA Excess Retirement Benefit for which he may be eligible as
provided in Subsection B below.
A. The Incentive Compensation Retirement Benefits of an Employee
retiring as provided in this Section 4.04 shall be a monthly amount
calculated as described in Section 4.01A and
B. The ERISA Excess Retirement Benefits of an Employee retiring as
provided in this Section 4.04 shall be a monthly amount as calculated
in Section 4.01B and such monthly retirement benefits shall commence
on the first day of the month next following the date of his
retirement, except that
23
<PAGE> 25
with respect to an Employee retiring as described in (iii) above in
this Section 4.04, such monthly retirement benefits shall commence on
the first day of the month immediately following the month in which he
attains age 55. Provided, however, that in the case of an Employee
retiring under this Section 4.04 who is employed or becomes employed
by any competing firm, as determined by the Committee, payment of his
monthly retirement benefits provided under Section 4.04A shall not be
made for any month during which he is so employed by such competing
firm prior to the first day of the month next following his 65th
birthday.
4.05
A. An Employee who retires under an employment contract at the
option of the Corporation or because of Permanent Total Disability on
or after his 55th birthday but before his 65th birthday shall be
entitled to receive under this Plan, commencing on the first day of
the month next following his retirement date, an Incentive
Compensation Retirement Benefit in a monthly amount calculated as
described in Section 4.01A.
Provided, however, that in the case of an Employee retiring
under this Section 4.05A who is employed or becomes employed by any
competing firm, as determined by the Committee, payment of his monthly
retirement benefits provided under Section 4.05A shall not be made for
any month during which he is so employed by any such competing firm
prior to the first day of the month next following his 65th birthday.
24
<PAGE> 26
B. An Employee who retires under an employment contract at his
option on or after his 55th birthday but before his 65th birthday
shall be entitled to receive under this Plan, commencing on the first
day of the month next following his retirement date, an Incentive
Compensation Retirement Benefit in a monthly amount calculated as
described in Section 4.01A, reduced by multiplying such benefits by a
percentage as set forth in the following table:
<TABLE>
<CAPTION>
Age When
Benefit Commences Percentage*
<S> <C>
55 57.9
56 63.5
57 69.4
58 75.2
59 80.8
60 86.7
61 93.3
62 100.0
63 100.0
64 100.0
</TABLE>
*Prorated for intermediate ages computed to the nearest whole month
25
<PAGE> 27
Provided, however, that in the case of an Employee retiring under this
Section 4.05B who is employed or becomes employed by any company other than the
Corporation, payment of his monthly retirement benefit provided under Section
4.05B shall not be made for any month during which he is so employed by any
company other than the Corporation prior to the first day of the month next
following his 65th birthday, unless the Committee approves such payment
annually.
C. An Employee who retires under an employment contract, and who
on his retirement date has not attained age 55, shall be entitled to
receive under this Plan, commencing on the first day of the month next
following his Normal Retirement Date, an Incentive Compensation
Retirement Benefit in a monthly amount calculated as described in
Section 4.01 A.
4.06 An Employee whose employment terminates under the SERP, or
for purposes of the Incentive Compensation Retirement Benefits also under the
Chrysler Canada Ltd. Salaried Employees' Retirement Plan otherwise than by
death or retirement shall be entitled to receive under this Plan a deferred
retirement benefit equal to the sum of (i) any Incentive Compensation
Retirement Benefit for which he is eligible as provided in Subsection A below,
and (ii) any ERISA Excess Retirement Benefit for which he is eligible as
provided in Subsection B below, subject to the provisions of Subsections C and
D below.
A. If he has 5 years or more of Credited Service at the date his
employment terminates and (i) his employment terminated other
than because of resignation (an Employee
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who retires under the Pension Plan and is considered as
being terminated under SERP shall be counted as having
terminated but not as having resigned under this Plan) or
discharge or (ii) his employment terminated because of
resignation or discharge and the Employee Benefits Committee
approves vesting of the terminated Employee's accrued Incentive
Compensation Retirement Benefit, he shall be entitled to
receive Incentive Compensation Retirement Benefits in a monthly
amount calculated as described in Section 4.01A. Any non-
vested Incentive Compensation Retirement Benefits are
forfeited. Notwithstanding the preceding provisions of this
Subsection A.(a) all Incentive Compensation Retirement Benefits
accrued as of December 31, 1993 shall be fully vested as of
such date in respect to Band 96 and above employees who have
five or more years of Credited Service as of such date and (b)
all Incentive Compensation Retirement Benefits accrued as of
January 1, 1994 shall be fully vested as of such date in
respect to employees below Band 96 who have five or more years
of Credited Service as of such date.
B. The deferred age 65 ERISA Excess Retirement Benefit he shall
be entitled to receive shall be a monthly amount equal to the
excess of (i) the deferred retirement benefit calculated under
the provisions of Section 4.06 of the SERP without regard to
the benefit limitations contained in section 415(b)(1) and/or
Section 415(e) of the Internal Revenue Code, as amended, over
(ii) the
27
<PAGE> 29
deferred retirement benefit payable under SERP because of such
limitation.
C. Any deferred retirement benefits under this Section 4.06
except as otherwise provided below in Subsection D, shall be a
monthly pension commencing as of the first day of the first
month after the Employee attains age 65 in the full unreduced
amount for which he is eligible under this Section 4.06.
D. Deferred retirement benefits paid to a terminated Employee
may, if such Employee makes written application, begin prior
to age 65 (but in no event earlier than the month the
terminated Employee attains age 60) on a reduced Actuarial
Equivalent basis but shall not be paid for any month prior to
age 65 in which the terminated Employee is employed by any
company other than the Corporation, unless the Committee
approves such payment annually, or is employed by any
competing firm, as determined by the Committee.
4.07
A. If a retired Employee who has commenced receiving retirement benefits
under this Plan is reemployed on or after the effective date of the Plan he
shall continue to receive during such reemployment the retirement benefits to
which he is otherwise entitled, provided, however, that such reemployment shall
not result in the accrual of any additional benefits under the Plan.
B. If a former Employee eligible for a deferred retirement
benefit under this Plan, who has not yet commenced receiving such
benefit, is reemployed, then his eligibility therefore
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<PAGE> 30
shall cease and the accrued retirement benefit, if any, he had at the
date his employment terminated shall be reinstated.
C. If a former employee whose employment had terminated as a
result of resignation or discharge is subsequently reemployed, the
Committee may, at its discretion, reinstate all or apart of any
Incentive Compensation Retirement Benefit that had been previously
forfeited pursuant to provisions of Section 4.06 of this Plan.
4.08 A retired Employee who on the date of his retirement was an
elected officer of Chrysler Corporation and who retired under Section 4.01,
4.02, 4.03, 4.04, or 4.05 of the SERP shall be entitled to receive under this
Plan, commencing on January 1, 1986, a Post Retirement Supplemental Benefit
which shall be a monthly amount equal to the excess of (i) the highest Basic
Pension Rate in effect on January 1, 1986 under the Chrysler Pension Plan for
employees who retired when the Employee retired over (ii) the highest Basic
Pension Rate in effect under the Chrysler Pension Plan on the date the Employee
retired, multiplied by the Employee's years of Credited Service.
4.09 No Employee shall be entitled to retirement benefits under
this Plan except as set forth in Sections 4.01, 4.02, 4.03, 4.04, 4.05, 4.08
and 4.12, of this Plan, and no Employee shall have any vested right under the
Plan except such rights, if any, as may accrue to him under Section 4.06 or
Section 4.12. At his Normal Retirement Date, he shall not be entitled to
receive any retirement benefits until his subsequent retirement. At that time
he shall be entitled to receive a monthly retirement benefit commencing on the
29
<PAGE> 31
first day of the month next following the date of his retirement in the amount
computed as provided in Section 4.01.
4.10 An Employee who performs any service after December 31, 1987
shall be entitled to have both his Salary and service taken into account for
purposes of calculating his retirement benefit under this Plan, irrespective of
whether such service occurs before or after the Employee's Normal Retirement
Date.
4.11 A Special Incentive Compensation Benefit is payable, prior to
retirement under the Salaried Employees' Retirement plan, to those entitled to
a Special Leave of Absence benefit pursuant to the first paragraph of Section
1.01E who would, if they were retired, be entitled to an Incentive Compensation
Retirement Benefit under this Article IV. The Special Incentive Compensation
Benefit shall be calculated and paid in the same manner as the Incentive
Compensation Retirement Benefit under this Article IV.
4.12 Notwithstanding any other provisions hereof, upon the occurrence
of a (Change in Control) (as defined in Section 4.13), each Employee who has
participated in the Plan with respect to the Incentive Compensation Retirement
Benefit shall be vested in his accrued Incentive Compensation Retirement
Benefit. If the employment of any such Employee by the Corporation is
terminated by the Corporation without (cause) (as defined below) within the
two-year period immediately following a Change in Control, the Corporation
shall pay such Employee, within ten (10) days of such termination, the Commuted
Value of his Incentive Compensation Retirement Benefit, calculated as described
in Section 4.01A and as if payment of such monthly retirement benefit were to
commence on the first day of the month next following his Normal Retirement
30
<PAGE> 32
Date. The Commuted Value shall be determined for this purpose by using the
lower of (i) the interest rate set forth in Appendix A to this Plan immediately
prior to such Change in Control, and (ii) the interest rate set forth in such
Appendix A immediately prior to such termination of employment. (Cause), for
purposes of this Section 4.12, shall mean the willful engaging by the Employee
in conduct which is demonstrably injurious to the Corporation, monetarily or
otherwise.
4.13 (Change in Control) shall mean a change in control of Chrysler
Corporation, which shall be deemed to have occurred if the conditions set forth
in any one of the following paragraphs shall have been satisfied:
A. Any Person (defined below) shall become the Beneficial Owner
(defined below) of securities of Chrysler Corporation representing 20%
or more of the combined voting power of Chrysler Corporation's then
outstanding securities (unless the event causing the 20% threshold to
be crossed is an acquisition of securities directly from Chrysler
Corporation);
B. During any period of two consecutive years beginning after
June 7, 1990, individuals who at the beginning of such period
constitute the Board of Directors of Chrysler Corporation and any new
director (other than a director designated by a Person who has entered
into an agreement with Chrysler Corporation to effect a transaction
described in paragraph A, C or D of this Change in Control definition)
whose election or nomination for election was approved by a vote of
at least two-thirds of the directors then in office who either were
directors at the beginning of such two year
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<PAGE> 33
period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the Board
of Directors;
C. The stockholders of Chrysler Corporation approve a merger or
consolidation of Chrysler Corporation (other than a merger
or consolidation which would result in the voting securities of
Chrysler Corporation outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding
or by being converted into voting securities of the entity surviving
such merger or consolidation), in combination with voting securities
of Chrysler Corporation or such surviving entity held by a trustee or
other fiduciary pursuant to any employee benefit plan of Chrysler
Corporation or such surviving entity of any subsidiary of Chrysler
Corporation or such surviving entity, at least 80% of the combined
voting power of the securities of Chrysler Corporation or such
surviving entity outstanding immediately after such merger or
consolidation); or
D. The stockholders of Chrysler Corporation approve a plan of
complete liquidation or dissolution of Chrysler Corporation or an
agreement for the sale or disposition by Chrysler Corporation of all
or substantially all of Chrysler Corporation's assets.
"The following terms, as used in this Change in Control
definition, shall have the meanings stated below:
"Beneficial Owner", with respect to any securities, means any
Person who, directly or indirectly, has the right to vote or dispose
of such securities or otherwise has "Beneficial
32
<PAGE> 34
Ownership" of such securities (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the (Exchange Act)),
pursuant to any agreement, arrangement or understanding (whether or
not in writing); provided however, that (i) a Person shall not be
deemed the Beneficial Owner of any security as a result of an
agreement, arrangement or understanding to vote such security (x)
arising solely from a revocable proxy or consent given in response to
a public proxy or consent solicitation made pursuant to, and in
accordance with, the Exchange Act and the applicable rules and
regulations thereunder or (y) made in connection with, or to otherwise
participate in, a proxy or consent solicitation made, or to be made,
pursuant to, and in accordance with, the applicable provisions of the
Exchange Act and the applicable rules and regulations thereunder, in
either case described in clause (x) or clause (y) above, whether or
not such agreement, arrangement or understanding is also then
reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report), and (ii) a Person engaged in
business as an underwriter of securities shall not be deemed to be the
Beneficial Owner of any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition.
"Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act, as supplemented by Section
13(d)(3) of the Exchange Act, provided, however, that Person shall not
include (i) Chrysler Corporation, any
33
<PAGE> 35
subsidiary of Chrysler Corporation or any other Person controlled by
Chrysler Corporation, (ii) any trustee or other fiduciary holding
securities under any employee benefit plan of Chrysler Corporation or
any subsidiary of Chrysler Corporation, or (iii) a corporation owned,
directly or indirectly, by the stockholders of Chrysler Corporation in
substantially the same proportions as their ownership of securities of
Chrysler Corporation.
4.14 Notwithstanding any other provision of this Article IV or of
this Plan, a Salaried Employee who retires prior to age 55 pursuant
to provisions of the Chrysler Canada, Ltd. Salaried Employees'
Retirement Plan, shall be considered an employment termination rather
than a retirement for purposes of determining the nature, amount, and
timing of any benefits to which he may be entitled under this Plan.
34
<PAGE> 36
ARTICLE V. DEATH BENEFITS
5.01 If a former Employee dies (a) on or after the date of his
retirement under the SERP, or for purposes of the Incentive Compensation
Retirement Benefits also under the Chrysler Canada Ltd. Salaried Employees'
Retirement Plan in the case of a former Employee who retired under any of such
plans, or (b) on or after the date his employment terminated, in the case of a
former Employee whose employment terminated otherwise than by retirement under
the SERP, or for purposes of the Incentive Compensation Retirement Benefit also
under the Chrysler Canada Ltd. Salaried Employees' Retirement Plan, and who was
eligible for a deferred retirement benefit under Section 4.06 at the time of
such termination, and if in either such case no election under Section 6.04 was
in effect for such former Employee at the time of his death, then in any such
case the Beneficiary of any such former Employee shall be entitled to receive
under this Plan (i) any Incentive Compensation Death Benefit for which he was
eligible as a former Employee as provided in Subsection A below, (ii) any ERISA
Excess Death Benefits for which he was eligible as provided in Subsection B
below, and (iii) any Modified Special Early Retirement Program Death Benefit,
for which he was eligible as provided in Subsection C below.
A. The Incentive Compensation Death Benefit of such a former
Employee shall be:
1. If at the time of his death the former Employee was
receiving an Incentive Compensation Retirement
Benefit (whether due to retirement or termination of
employment) or if commencement of receipt of an
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<PAGE> 37
Incentive Compensation Retirement Benefit was
deferred as provided in Section 6.03, an amount equal
to the Commuted Value of any unpaid guaranteed
payments of the Incentive Compensation Retirement
Benefit.
B. The ERISA Excess Death Benefit of such a former Employee shall
be:
1. If at the time of his death he was receiving an ERISA
Excess Retirement Benefit (whether due to retirement
or termination of employment) or if commencement of
receipt of an ERISA Excess Retirement Benefit was
deferred as provided in Section 6.03, an amount equal
to the Commuted Value of any unpaid guaranteed
payments of the ERISA Excess Retirement Benefit.
2. If he was entitled to an ERISA Excess Retirement
Benefit under Section 4.06B and if he dies prior to
the date payment of such ERISA Excess Retirement
Benefit commences, and
a. If such ERISA Excess Retirement Benefit
includes a monthly amount of contributory
retirement benefit as provided for under the
provisions of either or both of Section(s) 4.06A
of the SERP, or 101.B of this Plan, his ERISA
Excess Death Benefit based on such contributory
retirement benefit shall be in an
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<PAGE> 38
amount equal to 100 times the amount of
such monthly benefit, and
b. If such ERISA Excess Retirement Benefit
includes a monthly amount of the SERP
non-contributory retirement benefit
calculated under the provisions of Section
4.06B of the SERP, his ERISA Excess Death
Benefit based on such non-contributory
retirement benefit shall be in an amount
equal to the Commuted Value of the 120
monthly payments of such benefit that he
would have received under the Plan had he
elected to receive immediate payment of
benefits commencing on the date immediately
preceding the date of his death.
C. The Modified Special Early Retirement Program Death Benefit of
such a former Employee shall be:
1. An amount equal to the Commuted Value of the
remainder of 120 guaranteed monthly payments for the
contributory and non-contributory Supplementary
Minimum Benefit to which the Employee is
entitled pursuant to Section 1.01E of this Plan and/or
2. An amount equal to the Commuted Value of the
remainder of 120 guaranteed monthly payments for the
contributory and non-contributory Special Leave of
Absence Benefit (excluding, however, monthly payments
under the Pension Plan which shall not be guaranteed)
to which the Employee is entitled pursuant to Section
1.01E of this Plan.
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5.02 If an Employee dies while participating in the SERP, or for
purposes of the Incentive Compensation Retirement Benefits also under the
Chrysler Canada Ltd. Salaried Employees' Retirement Plan and after his Normal
Retirement Date and if he is not deemed to have made the election provided in
Section 6.05, his Beneficiary shall be entitled to receive the sum of (i) any
Incentive Compensation Death Benefit for which the Employee was eligible as
provided in Subsection A and (ii) any ERISA Excess Death Benefit for which the
Employee was eligible as provided in Subsection B below.
A. The Incentive Compensation Death Benefit of such an Employee
shall be an amount equal to the Commuted Value of 120 monthly payments
of the monthly Incentive Compensation Retirement Benefit which would
have been payable to the Employee if he had retired under the Plan on
the date of his death.
B. The ERISA Excess Death Benefit of such an Employee shall
be an amount equal to the Commuted Value of 120 monthly payments
of the monthly ERISA Excess Retirement Benefit that he would
have received under the Plan had he retired on the date of
his death.
5.03 If an Employee dies while participating in the SERP, or
for purposes of the Incentive Compensation Retirement Benefit
also under the Chrysler Canada Ltd. Salaried Employees' Retirement
Plan and on or prior to his Normal Retirement Date, his Beneficiary
shall be entitled to receive the sum of (i) any Incentive Compensation
Death Benefit for which the Employee was eligible at the time of
his death as provided in Subsection A and (ii) any
38
<PAGE> 40
ERISA Excess Death Benefit for which the Employee was eligible as provided in
Subsection B below.
A. The Incentive Compensation Death Benefit of such an Employee
shall be an amount equal to the Actuarial Equivalent of his accrued
age 65 monthly Incentive Compensation Retirement Benefit.
B. The ERISA Excess Death Benefit of such an Employee shall be an
amount equal to the excess of (i) the death benefit calculated under
the SERP without regard to the benefit and compensation limitations
set forth in that plan or imposed under Section 415 or Sub-paragraph
401(a)(17) of the Internal Revenue Code over (ii) the death benefit
payable under the SERP because of such ERISA limitations. Any death
benefit payable under this Plan shall be computed based on any
contributions under Section VII of this Plan.
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<PAGE> 41
ARTICLE VI. PAYMENT OF BENEFITS
6.01 An Employee desiring to retire and receive a retirement
benefit under the Plan or a terminated Employee desiring to apply for a
deferred retirement benefit under the Plan shall, in either such case, obtain a
form of application for that purpose and shall file his written application
with the Committee, furnishing the information the Committee shall request
together with documentary evidence in support of the same, satisfactory to the
Committee, and any authority in writing that the Committee may request
authorizing it to obtain pertinent information or records, certificates or
transcripts from any public office.
6.02 A Retirement benefit, except as provided under Section 6.10 of
the Plan, shall be paid in monthly installments. The first installment shall
be payable on the first day of the month following the actual retirement of an
Employee retiring from the employ of the Corporation or of a Non-Participating
Subsidiary or, in the case of an Employee whose employment terminates otherwise
than by retirement, on the first day of the first month after the Employee
attains age 65. Subsequent installments of the retirement benefit shall be
payable on the first day of each month thereafter during the lifetime of the
retired or former Employee, and the standard form of payment of the retirement
benefit shall be for the lifetime of the retired or former Employee with a
guarantee of 120 monthly payments, except for the Post Retirement Supplemental
Benefit described in Section 4.05., for which the standard form of payment
shall be monthly payments during the lifetime of the former Employee without
any guaranteed number of payments.
40
<PAGE> 42
6.03 Anything to the contrary in this Plan notwithstanding, monthly
retirement benefit payments under the Plan shall not commence until the first
day of the month following the ceasing of any sickness or accident benefits
(including payments under the Disability Absence Plan of the Corporation,
disability benefits under the Salary Continuation Plan of the Corporation, and
payments or benefits of like purpose or kind under any similar plan of the
Corporation or of a Non-Participating Subsidiary in effect at the time) toward
which the Corporation or a Non-Participating Subsidiary contributes by payment
of premiums, taxes or otherwise; provided, however, that commencement of a
monthly retirement benefit shall not be deferred by reason of receipt of (a) a
Permanent Total Disability Benefit under any pension plan or group life
insurance policy of the Corporation or of a Non-Participating Subsidiary, or
(b) a disability benefit under the Federal Social Security Act, or (c) a
benefit under the Long Term Disability Plan or the Extended Disability Plan of
the Corporation or a benefit or payment of like purpose or kind under any
similar plan of the Corporation or of a Non-Participating Subsidiary at the
time in effect.
6.04 In lieu of payment of a retirement benefit in the standard
form as described in Section 6.02 and lieu of payment of a death benefit as
described in Article V, payment of all such benefits shall be made in the form
of a surviving spouse option, as provided in Subsection A below, to an Employee
who retires and who is entitled to a retirement benefit. The Employee or
former Employee shall automatically be deemed to have elected the form of
surviving spouse option provided in Subsection A below (sometimes
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<PAGE> 43
called "Qualifying Option" in this Article VI) except where otherwise provided
in such Subsection A. The surviving spouse option in the form provided below
shall be applicable only with respect to an Employee or former Employee who is
married on the date such election is deemed to have been made.
A. The retirement benefit under the Qualifying Option for an
Employee or former Employee who automatically elects it, as
hereinabove provided, shall consist of reduced monthly payments after
the effective date of his election during his lifetime with a
guarantee of 120 monthly payments, with provision that if his death
occurs on or after the effective date of his election and if the
person who was his spouse at the date of his retirement (or in the
case of a former Employee entitled to a deferred retirement benefit
under Section 4.06, on the date he files his application) is living at
the last to occur of his death or the expiration of such 120-month
period, benefits in the amount specified below shall be payable
monthly to such surviving spouse during her remaining lifetime.
Notwithstanding anything to the contrary in this Subsection A, the
above provisions relating to a guarantee of 120 monthly payments do
not apply to the Post Retirement Supplemental Benefit. The Qualifying
Option shall automatically apply, in respect to the Post Retirement
Supplemental Benefit, in respect to employees or former employees who
have the Qualifying Option under the Chrysler Salaried Employees'
Retirement Plan pursuant to Section 6.05 of that plan. Those
participants in this Plan who do not have the Qualifying Option under
the Chrysler Salaried Employees'
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<PAGE> 44
Retirement Plan may elect to receive Post Retirement Supplemental
Benefit payments payable until the death of both the Employee or
former Employee and his spouse but such election shall not be
automatic.
1. The reduced monthly payment of a retirement benefit
payable to the Employee or former Employee whose age
does not differ from that of his spouse by more than
5 years shall be an amount equal to the monthly
payment that would have been payable to him in the
standard form, reduced by an amount equal to 5% of
the amount of the retirement benefits that would be
payable to him in the standard form at his Normal
Retirement Date if he had elected the standard form
of payment. If the age of the spouse is less than
the age of such Employee or former Employee, the
percentage shall be 5% increased by 1/2 of 1% for
each year in excess of 5 years that the age of the
spouse is less than the age of the Employee or former
Employee. If the age of the spouse is greater than
the age of the Employee or former Employee, the
percentage shall be 5% decreased by 1/2 of 1% for
each year in excess of 5 years that the age of the
spouse exceeds the age of the Employee or former
Employee (but not less than 0%). For this purpose,
the ages of the Employee or former Employee and his
spouse shall each be the age at his or her last
birthday prior to the effective date of election as
provided in
43
<PAGE> 45
Subsection B below. The reductions provided in this paragraph shall
be made in all monthly payments paid to the Employee or former
Employee on or after the date on which his election becomes effective,
except as otherwise provided below in Subsections E and F of this
Section 6.04.
2. The benefits payable to the surviving spouse, if the death of the
Employee or former Employee occurs on or after the effective date
of his election (or in the case of a former Employee entitled to a
deferred retirement benefit under Section 4.06, on or after the date
he files his application) and the person who was his spouse is
living at the last to occur of his death or the expiration of the
120 guaranteed monthly payments, shall be monthly payments equal to
60% of the reduced monthly payments determined as provided in
paragraph 1 above.
Notwithstanding anything to the contrary in this Subsection 2, any
monthly amount payable to a surviving spouse which is calculated on
the basis of the Post Retirement Supplemental Benefit under the
provisions of Section 4.05 shall commence on the first day of the
month following the month in which the Employee died and terminate
with the last monthly payment before her death.
B. An election of the surviving spouse option that is deemed to
have been made as provided in Subsection A above, shall be
44
<PAGE> 46
deemed to have been made at the time the Employee or former Employee
files his application for a retirement benefit or a deferred
retirement benefit, and the effective date of the election shall be
the date payment of the retirement benefit commences, except that, in
the case of an Employee or former Employee who is married when his
election would otherwise become effective, but whose marriage at that
date has been continuously in effect for less than one year, the
effective date of his election shall be the first day of the month
following the month in which such marriage has been continuously in
effect for one year. However, in the case of an Employee or former
Employee who marries during the twelve month period immediately
preceding the date payment of a retirement benefit commences and has
been married to that spouse for at least one year ending on the date
of the Employee's or former Employee's death, he shall be deemed to
have been married for one year ending on the date payment of his
retirement benefit commenced.
C. If an Employee or former Employee is deemed to have made
the election provided above in Subsection A of this Section 6.04
and if his spouse dies or should otherwise cease to be his spouse
after he has made such election but before the effective date of
such election, the election shall be revoked automatically. The
election shall be irrevocable on or after the effective date of the
election if the Employee or former Employee and his designated
spouse are both living on such date except as otherwise provided
below in Subsections E and F of this Section 6.04. If such
designated spouse dies or
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<PAGE> 47
should otherwise cease to be the spouse of the Employee or former
Employee after the effective date of the election and during his
lifetime, the reduced monthly payments payable to him shall not be
affected, except as otherwise provided below in Subsections E and F of
this Section 6.04.
D. Upon the request of the Committee an Employee or former
Employee deemed to have made the election provided in Subsection
A of this Section 6.04 must produce an official marriage
certificate or other evidence of his marriage to his spouse
satisfactory to the Committee.
E. An Employee or former Employee who is deemed to have made
the election provided above in Subsection A of this Section 6.04
and whose designated spouse predeceases him may have his monthly
payments restored to the amount payable without reduction for such
election, and shall become eligible for all death benefits as
provided in Article V, effective the first day of the third month
following the month in which the Committee receives evidence
satisfactory to it of the spouse's death.
F. If an Employee or former Employee is deemed to have
made the election provided above in Subsection A of this Section
6.04 and if the Employee or former Employee and his spouse
are divorced by court decree or judgment, such Employee or former
Employee is deemed to have canceled such election and will have his
monthly payments restored to the amount payable without reduction
for such election and shall become eligible for death benefits as
provided in Article V, effective the first day of the third month
following the month in which the
46
<PAGE> 48
Committee receives such Employee's or former Employee's written
revocation of the election because of divorce, on a form approved by
the Committee, and accompanied by evidence satisfactory to the
Committee of a final decree or judgment of divorce.
G. A retired Employee who (i) was deemed to have made the
election provided above in Subsection A of this Section 6.04 and
whose designated spouse dies or otherwise ceases to be his designated
spouse or (ii) was not married on the date provided for such election
in Subsection B of this Section 6.04, and who marries or remarries
shall automatically be deemed to have reelected the form of surviving
spouse option provided above in Subsection A of this Section 6.04.
Such election shall become effective on the first day of the month
following the month in which the retired Employee has been married one
year.
6.05 Every Employee may designate a Beneficiary to receive payments
in the event of his death by filing with the Committee a designation in
writing signed by him in such form as the Committee shall prescribe, and
may change or revoke the designation from time to time and at any time by
filing with the Committee a new designation; provided, however, that an
Employee shall be deemed to have designated as his Beneficiary the beneficiary
designated in the SERP, or for purposes of the Incentive Compensation
Retirement Benefit also under the Chrysler Canada Ltd. Salaried Employees'
Retirement Plan, unless the Participant specifically designates another
Beneficiary.
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6.06 Any death benefit provided in Article V with respect to an
Employee for whom there is in effect no election as provided in Section 6.04
shall be paid in a lump sum.
6.07 No benefit or right to payment under this Plan shall be
subject to any claim of any creditor of any Employee, Beneficiary or surviving
spouse of a deceased Employee or former Employee and shall not be subject to
attachment or garnishment or other legal process by any creditor, nor shall any
Employee, former Employee, Beneficiary or surviving spouse have any right to
alienate, anticipate, commute, pledge, encumber or assign any of the benefits
under this Plan.
6.08 In the event of the death of a person entitled to any benefit
under the Plan, or in the event that the Committee shall find that any such
person is unable to care for his affairs because of illness or accident, the
Committee may cause any benefit payments due, unless claim shall have been made
therefor by a duly appointed legal representative, to be paid to the spouse, a
child, a parent or other blood relative, or to any person deemed by the
Committee to have incurred expense for such person, and any such payments so
made shall be a complete discharge of the liabilities of the Plan therefor. In
the event that, at the time a benefit becomes payable to any persons under the
Plan, the Committee after reasonably diligent search is unable, within six
years from the time the benefit is payable, to find the person to whom the
benefit is payable, then the benefit shall be treated as a forfeiture and all
right, title, and interest of the person therein and thereto shall terminate.
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<PAGE> 50
6.09 Notwithstanding anything to the contrary herein, the Committee
shall pay the Actuarial Equivalent of any amount(s) payable under this Plan to
a participant or Beneficiary before such amount(s) would otherwise be paid (and
in discharge of all obligations with respect thereto) if, based on any of the
following events, the Committee determines, in good faith based on consultation
with counsel, that such participant or Beneficiary has or will recognize income
for federal income tax purposes with respect to such amount(s) before such
amount(s) are otherwise to be paid:
A. a change in the Internal Revenue Code or Title 1 of ERISA, or
the Treasury or Department of Labor Regulations thereunder,
respectively, or a binding or predominant judicial construction
thereof,
B. a published ruling or similar announcement issued by
the Internal Revenue Service or the Department of Labor,
C. a decision by a court of competent jurisdiction involving a
participant in the Plan, a Beneficiary of the Plan, the
Corporation, or any entity involved in making payments under the Plan,
or
D. a final determination of tax liability following a contested
tax or ERISA dispute or audit (or a closing agreement made
under section 7121 of the Internal Revenue Code) that involves a
participant in the Plan, a Beneficiary of the Plan, the Corporation,
or any entity involved in making payments under the Plan. 6.10
49
<PAGE> 51
A. An employee eligible to receive an Incentive Compensation
Retirement Benefit under Article IV of the Plan may elect to receive
such benefit in a lump sum payment. Such lump sum payment shall be
equal to the lesser of (a) an amount equal to 80% of the cost of a
typical commercial insurance policy equivalent in value to the Plan's
10 years certain and life standard form of payment or (b) an amount
calculated based on the Plan's cost/funding assumptions, except that a
10% interest rate shall be used. An election to receive an immediate
lump sum payment may be made at retirement. If such election is not
made at retirement, a subsequent election may be made subject to a
waiting period of one year. Eligible recipients of Incentive
Compensation Retirement benefits who retired prior to January 1, 1994
shall be provided a one time 90 day window election period, as
determined by the Corporation, to make a lump sum payment election
without a one year waiting period. The value of the lump sum payment
will be determined based on the remaining value of the Plan's 10 years
certain and life normal provision.
B. A terminated employee eligible to receive a deferred Incentive
Compensation Retirement Benefit under Section 4.06 of the Plan may
elect to receive such benefit in a lump sum payment subject to
Committee approval. Such lump sum payments, however, may not be
elected prior to age 65. In addition, if such lump sum payment
election is made later than age 65, it is subject to a waiting period
of one year. If benefits have commenced prior to the lump sum
payment, the value of the lump sum payment will be determined based on
the
50
<PAGE> 52
remaining value of the Plan's 10 years certain and life normal
provision, assuming the terminated employee had elected such normal
provision when his benefits commenced.
51
<PAGE> 53
ARTICLE VII. CONTRIBUTIONS
7.01 Employee contributions shall be permitted under this Plan
solely for the purpose of providing an ERISA Excess Retirement Contributory
Benefit pursuant to Section 1.01B of this Plan and an ERISA Excess Death
Benefit pursuant to Paragraph 5.01B.2.a of this Plan.
7.02 Employee contributions under this Plan shall be voluntary and
shall be permitted in the amount and to the extent they would have been
permitted under the Salaried Employees' Retirement Plan ("SERP") had they not
been curtailed by limitations imposed by Sub-paragraph 401(a)(17) of the
Internal Revenue Code, as amended, as embodied in Subsection 4.01C of SERP.
52
<PAGE> 54
ARTICLE VIII. PLAN ADMINISTRATION
8.01 The Committee shall have exclusive authority to control and
manage the operation and administration of this Plan except as specifically set
forth in Section 8.04 below.
8.02 The Committee may make rules and regulations for the
administration of the Plan which are not inconsistent with the terms and
provisions of the Plan. The Committee shall have discretionary authority to
construe and interpret the Plan and decide all questions of eligibility,
benefit settlement and payment. It may correct any defect or supply any
omission or reconcile any inconsistency in such manner and to such extent as it
shall deem expedient to carry the Plan into effect and it shall be the sole and
final judge of such expediency. In addition the Committee, or such person or
persons it shall designate for that purpose as provided in Section 8.03, shall
maintain the following claim review procedure:
A. Claim Review Procedure. (a) If any former Employee or any
Beneficiary has not received a benefit under the Plan to which he
thinks he is entitled, he or his authorized representative, within 180
days after the event that he thinks entitled him to the benefit, may
file with the Committee a written claim for the benefit, in any form
reasonably calculated to bring the nature of his claim to the
attention of the Committee. If the claim is wholly or partially
denied, the Committee within 180 days of its receipt of the claim,
shall give to the claimant written notice of the denial, setting forth
in a manner calculated to be understood by the claimant the specific
reason or reasons for the denial. A
53
<PAGE> 55
claimant whose claim to benefits under the Plan has been wholly or
partially denied, or his authorized representative, may request a
review of his claim by the Committee by making written application for
review to the Committee within 90 days after the claimant's receipt of
written notification of denial of his Claim. In connection with the
review, the claimant or his authorized representative may submit
issues and comments in writing. Not later than 90 days after the
receipt by the Committee of the claimant's request for review, the
Committee shall give its decision in writing, setting forth the
specific reasons for the decision, written in a manner calculated to
be understood by the claimant. Subject to any rights to remedies
accorded by applicable law, the final decision of the Committee shall
be conclusive and binding upon the Corporation, the claimant and all
other persons interested in the claim.
B. The Committee shall also make arrangements for authorizing the payment
of benefits to retired Employees, former Employees, surviving spouses
and Beneficiaries entitled thereto. The payment of such benefits
shall commence as of the first day of the first calendar month
beginning after the date which is 90 days following the Committee's
decision in 8.02 A.
8.03 The Committee may appoint a secretary and one or more assistant
secretaries and such other agents and representatives as it may deem advisable,
who may but need not be Employees otherwise covered by this Plan, to keep its
records or assist it in doing any other acts or things, and any such appointment
shall be deemed a designation.
54
<PAGE> 56
8.04
A. In the performance of its duties under this Plan the Committee
may act by a majority of its members then in office and any action
expressed from time to time by a vote at a meeting or in writing
without a meeting shall constitute action of such Committee and shall
have the same effect for all purposes as if assented to by all of the
members of such Committee then in office.
B. Any action which this Plan authorizes or requires the
Committee to do shall, if done in good faith by such committee, be
final and binding upon Employees, retired Employees, former Employees,
surviving spouses, Beneficiaries, and the Corporation. The fact that
any member of either such Committee is an Employee, officer, director
or stockholder of Chrysler Corporation or is covered by this Plan
shall not disqualify him from doing any act or thing which this Plan
authorizes or requires him to do as a member of such Committee or
render him accountable for any benefit received by him as an Employee
covered by this Plan. No Committee member shall participate in any
decision of the Committee that would directly and specifically affect
the timing or amount of his benefits under the Plan.
C. The members of the Committee shall discharge their duties
under the Plan solely in the interest of the Employees and their
Beneficiaries and (i) for the exclusive purpose of providing benefits
to such Employees and their Beneficiaries and defraying reasonable
expenses of administering the Plan (ii) with the care, skill,
prudence, and diligence under the
55
<PAGE> 57
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; and (iii) in
accordance with the provisions of the Plan, as the same may be from
time to time amended.
D. The Committee and the members of the Committee shall be
entitled to rely upon all information certified to it by the
Corporation, all certificates and reports furnished by the Actuary or
by any qualified public accountant and all opinions given by any duly
appointed legal counsel (who may be also counsel for Chrysler
Corporation); and neither the Committee nor any member of the
Committee shall be deemed imprudent in respect of any action taken or
permitted by them in good faith in reliance upon any such
certificates, reports or opinions. Except to the extent otherwise
provided by law neither the Committee nor any of the members of the
Committee shall be liable to the Corporation or to any Employee or to
any Beneficiary on account of any act done or omitted or determination
made by the Committee acting in good faith in the performance of its
duties under the Plan, nor for any act done or omitted by any agent or
representative of the Committee selected by such Committee with
reasonable care, nor shall any member of the Committee be liable to
any person for any act done or omitted by any other member of the
Committee in which he did not concur. The Corporation agrees, to the
extent permitted by law, to indemnify and hold the Committee and each
of the members of the Committee harmless from and against any
liability it or they may incur in connection with
56
<PAGE> 58
the Plan, unless arising from their own negligent or willful breach of
their fiduciary responsibility as set forth in subsection C of this
section.
E. Any act that the Plan authorizes or requires the Committee to
do, or any determination in good faith by the Committee of any matter
or question under the Plan shall, in any such case, be final and
binding upon any Employee, retired Employee, former Employee,
surviving spouse or Beneficiary.
F. All expenses of the Committee in the performance of its duties
under this Plan shall be payable by the Corporation.
8.05 The Corporation, as long as the Plan remains in effect, shall
pay or cause to be paid the benefits provided by the Plan and the incurred
costs and expenses of the Plan.
57
<PAGE> 59
ARTICLE IX. AMENDMENT, TERMINATION
9.01 The Board of Directors of Chrysler Corporation shall have the
right to amend the Plan at any time and from time to time, to any extent that
it may deem advisable, except that no such amendment shall adversely affect the
rights of any Employee with respect to retirement benefits theretofore accrued
under the Plan.
9.02 The Committee shall have the right to amend this Plan at any
time and from time to time, to any extent that it may deem advisable, except
that no such amendment shall
A. adversely affect the rights of any Employee with respect to
retirement benefits theretofore accrued under the Plan; or
B. increase the amount of retirement or death benefits provided
for generally under the Plan except the Post Retirement Supplemental
Benefit; or
C. decrease the age or length of service that Employees are
required to have under the Plan in order to be eligible
for benefits upon early retirement or termination of employment; or
D. permit the termination of this Plan other than by the authority
of the Board of Directors of Chrysler Corporation; or
E. alter the provisions of Article VIII or of this Article IX.
9.03 Any amendment to this Plan shall be set out in an instrument in
writing executed on behalf of Chrysler Corporation under its corporate seal by
the President or a Vice President or the Treasurer and by the Secretary or an
Assistant Secretary, and
58
<PAGE> 60
authorized by a resolution of the Committee or of the Board of Directors.
9.04 Chrysler Corporation by action of its Board may direct the
Committee to terminate the Plan in whole or in part at any time. In the case
of complete or partial termination of the Plan, no further benefits shall be
accrued under the affected portions of the Plan with respect to affected
Employees, and benefits theretofore accrued shall be paid in accordance with
the provisions of Articles IV through VI of the Plan. Except with the consent
of the Employee, no such termination of the Plan shall adversely affect the
rights of any Employee with respect to retirement benefits theretofore accrued
under the Plan.
9.05 Notwithstanding any other provisions hereof, during the
two-year period beginning on the date of a Change in Control, the Plan shall
not be terminated (whether in whole or in part) and the Plan shall not be
amended in any way which detrimentally affects the right of any Employee (i) to
participate in the Plan, (ii) to accrue, or to continue to accrue, supplemental
retirement benefits under the Plan, or (iii) to vest in any such supplemental
retirement benefits.
59
<PAGE> 61
ARTICLE X. GENERAL
10.01 This Plan is purely voluntary on the part of the Corporation.
Neither the establishment of this Plan nor the payment of any benefit shall be
construed as giving any Employee or any other person any legal or equitable
right against the Corporation or the Committee, unless the same shall be
expressly provided for in this Plan or conferred by affirmative action of the
Committee or the Corporation in accordance with the terms and provisions of the
Plan, or as giving any Employee the right to be retained in the service of the
Corporation, and all Employees shall remain subject to discharge to the same
extent as if this Plan had never been established.
10.02 The validity and construction of this Plan shall be determined
according to the laws of the United States and of the State of Michigan.
10.03 Titles of articles are for general information only and this
Plan is not to be construed by reference thereto.
10.04 In all cases where they would so apply, words used in
the masculine or feminine shall be construed to include the opposite gender,
and words used in the singular shall be construed to include the plural.
10.05 In case any provisions of this Plan shall be held illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining parts of this Plan, but this Plan shall be construed and enforced as
if such illegal or invalid provisions had never been inserted herein.
60
<PAGE> 62
10.06 Any payment or distribution to any Employee, retired
Employee, former Employee, Beneficiary, or surviving spouse in accordance with
the provisions of this Plan shall be in full satisfaction of all claims against
the Committee and the Corporation.
10.07 No liability shall attach to or be incurred by members of the
Committee, stockholders, officers or directors, as such, of the Corporation,
under or by reason of any of the provisions of this Plan or implied therefrom,
and all liability of every kind and nature and all rights and claims against
the Corporation and every member of the Committee, any stockholder, officer or
director, past, present or future, as such, whether arising in common law or in
equity or created by statute or constitution or otherwise are hereby expressly
waived and released as a condition of and part of the consideration for the
contributions of the Corporation under this Plan. Each Employee, retired
Employee, former Employee, surviving spouse, or Beneficiary, as a condition of
receiving any benefits under the Plan, shall be conclusively deemed for all
purposes to have assented to the Plan and shall be bound hereby with the same
force and effect as if he had executed a consent to all the terms and
provisions of the Plan.
10.08 The Corporation shall not be required to segregate any assets
which may at any time be represented as compensation reduction amounts, accrued
benefits or earnings credited to a participant. The Corporation shall not, by
any provisions of this Plan, be deemed to be a trustee of any property, and the
liabilities of the Corporation to any participant shall be those of a debtor
pursuant to such contract obligations as are created by
61
<PAGE> 63
the Plan, and no such obligation of the Corporation shall be deemed to be
secured by any pledge or other encumbrance on any property of the
Corporation.
10.09 The Committee is authorized to satisfy all requirements for
tax withholding on distributions under the Plan, through a deduction from the
participant's benefit payment, excluding any tax imposed on the employer.
62
<PAGE> 64
ARTICLE XI. SPECIAL PROVISIONS APPLICABLE TO DESIGNATED PARTICIPANTS
11.01 Additional years of Credited Service shall be granted, in
respect to any individual listed below, for purposes of determining his total
retirement benefits under Chrysler pension plans. The total amount of
additional Chrysler pension benefits attributable to such additional years of
Credited Service shall be paid under the ERISA Excess Retirement Benefit part
of this plan described in Section 1.01B. Individuals eligible for such
additional years of Credited Service and the amount of such additional Credited
Service to be recognized shall be as follows:
A. L. A. Iacocca (Social Security ####-##-####) 4 years,
10 months (After recognition of 3 additional years of
credited service under the 1992 Salaried Employees'
Special Early Retirement Program.)
B. R. J. Eaton (Social Security ####-##-####)-5 years
C. R. A. Lutz (Social Security ####-##-####)-5 years
(subject to forfeiture if Mr. Lutz's separation is
not under a Mutually Satisfactory Agreement)
11.02 Special conditions shall apply, in respect to any individual
listed below, for purposes of determining certain Chrysler retirement benefits
payable to him from this Plan. Individuals to whom such special conditions
apply and a description of such special conditions are as follows:
A. J.A. Pilulas. (Social Security ####-##-####)
Additional benefits that would have been paid Mr.
Pilulas under the Chrysler Pension Plan and the
Chrysler Salaried Employees Retirement Plan had he
retired on June 1, 1989 under the Special Early
Retirement provisions of such
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<PAGE> 65
plans will be paid under the ERISA Excess Retirement Benefit part
of this Plan described in Section 1.01B. In addition, benefits
he had forfeited under the Incentive Compensation Retirement
Benefit part of this Plan described in Section 1.01A shall be
paid on an unreduced basis. Benefits provided under this
Section 11.02A shall be provided prospectively only commencing
November 1, 1992.
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<PAGE> 66
<TABLE>
<CAPTION>
APPENDIX A
ACTUARIAL ASSUMPTIONS UNDER THE PLAN
Section Purpose Actuarial Assumptions or
Basis for Determination
<S> <C> <C> <C>
1. 2.06 To determine the single sum value or The basis for determining these
lump sum value of periodic payments commuted values will be amounts
payable in the future. determined using an interest rate as
set forth hereafter in this Appendix.
2. 5.01A1 To determine the Commuted Value of The number of payments remaining in
any unpaid guaranteed payments of the certain period at the time of
Incentive Compensation Retirement death will be discounted to the last
Benefits at the time of a former day of the month in which death
Employee's death. occurs at a rate of interest of 10%
compounded annually.
3. 5.01B1 To determine the Commuted Value of The number of payments remaining in
any unpaid guaranteed payments of the certain period at the time of
ERISA Excess Retirement Benefits at death will be discounted to the last
the time of a former Employee's day of the month in which death
death. occurs at a rate of 9% compounded
annually.
4. 5.01B2 To determine the Commuted Value of The Commuted Value will be based on
120 monthly payments of ERISA Excess the rate of interest of 9% compounded
Retirement Benefit of a former annually and the monthly payment the
Employee whose death occurs prior to former Employee would have received
the date monthly payments commence. had he elected to have benefits
commence on the date immediately
preceding the date of his death.
</TABLE>
65
<PAGE> 67
<TABLE>
<CAPTION>
SECTION PURPOSE ACTUARIAL ASSUMPTIONS
OR
BASIS FOR
DETERMINATION
<S> <C> <C> <C>
5. 5.02A To determine the Commuted Value of The Commuted Value will be determined
120 monthly payments of the monthly based on a rate of 10% compounded
Incentive Compensation Retirement annually and the monthly Incentive
Benefits with respect to an Employee Compensation Retirement Benefit the
who dies while still employed after Employee would have received had he
his Normal Retirement Date. retired on the date of his death.
6. 5.02B To determine the Commuted Value of The Commuted Value will be determined
120 monthly payments of the monthly * based on a rate of interest of 9%
ERISA Excess Retirement Benefits with compounded annually and the monthly
respect to an Employee who dies while ERISA Excess Retirement Benefit the
still employed but after his Normal Employee would have received had he
Retirement Date. retired on the date of his death.
7. 5.03A To determine an Actuarial Equivalent. The actuarial assumptions that will
be used in determining an Actuarial
Equivalent will be the 1971 Group
Annuity Mortality Table (weighted 70%
for males and 30% for females), an
interest rate of 10% compounded
annually, and an expected retirement
date of the latter of a) the date
immediately preceding the date of the
Employee's death or b) the date the
Employee would have first become
eligible to retire at his option.
</TABLE>
66
<PAGE> 68
<TABLE>
<CAPTION>
SECTION PURPOSE ACTUARIAL ASSUMPTIONS
OR
BASIS FOR
DETERMINATION
<S> <C> <C> <C>
8. 5.03B To determine the ERISA Excess Death The death benefit of such an Employee
Benefit of an Employee whose death shall be the Commuted Value, at 9%
occurs on or after his 60th birthday interest compounded annually, of 120
with ten years or more of Credited monthly payments equal to the monthly
Service. Non-Contributory Retirement Benefit
that he would have received had he
retired on the date of his death
reduced by 5/8 of 1% for each full
month by which the date of his death
precedes his Normal Retirement Date.
9. 6.02 To determine the equivalent lump sum, The actuarial assumptions used in
quarterly, half yearly, or yearly determining the equivalent benefits
benefits with respect to monthly will be the 1971 Group Annuity
benefits that are less than $10. Mortality Table (weighted 70% for
males and 30% for females), and 9%
(10% for an Incentive Compensation
Retirement Benefit) interest
compounded annually.
10. 6.10 To determine the value of a lump sum The lump sum value will be determined
Incentive Compensation Retirement based on a rate of interest of 10%
Benefit compounded annually and the
provisions specified in Section 6.10
of the Plan.
</TABLE>
67
<PAGE> 69
<TABLE>
<CAPTION>
Section Purpose Actuarial Assumptions or
Basis for Determination
<S> <C> <C> <C>
11. Sections not To determine an Actuarial Equivalent. The actuarial assumptions that will
listed above be used in determining an Actuarial
Equivalent will be the 1971 Group
Annuity Mortality table (weighted 70%
for males and 30% for females), an
interest rate of 9% (10% for an
Incentive Compensation Retirement
Benefit) compounded annually, and an
expected Normal Retirement Date of
the 1st day of the month following
Age 65.
</TABLE>
68
<PAGE> 70
IN WITNESS WHEREOF, the Corporation has caused this Instrument to be
executed by its duly authorized officers and its corporate seal to be hereunto
affixed as of the 1st day of January, 1994.
CHRYSLER CORPORATION
By __________________________
J. P. Holden
Vice President -
Corporate Personnel
Attest:
___________________________________
A. E. Micale
Assistant Secretary
(CORPORATE SEAL)
69
<PAGE> 71
STATE OF MICHIGAN )
) SS:
COUNTY OF WAYNE )
On the _______________ day of _______________, 1994 before me
personally came J. P. Holden, to me known, who, being by me duly sworn, did
depose and say that he resides at 1462 Inwoods Circle, Bloomfield Hills,
Michigan 48013, in the County of Oakland, State of Michigan; that he is Vice
President - Corporate Personnel of CHRYSLER CORPORATION, the corporation
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of
said corporation, and that he signed his name thereto by like order.
______________________________
70
<PAGE> 1
EXHIBIT 11
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
Earnings Per Common Share Data
APB 15 Calculation
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------------
1993 1992 1991
------------ ------------ ------------
(in millions of dollars and thousands of shares)
<S> <C> <C> <C>
Primary:
- --------
Net earnings (loss) $ (2,551) $ 723 $ (795)
Preferred stock dividends (80) (69) --
------------ ------------ ------------
Earnings (loss) attributable to common stock $ (2,631) $ 654 $ (795)
============ ============ ============
Weighted average shares outstanding 345,097 292,785 242,561
Shares issued on exercise of dilutive options -- 9,770 --
Shares purchased with proceeds of options -- (7,315) --
Shares contingently issuable -- 660 --
------------ ------------ ------------
Shares applicable to primary earnings (loss) 345,097 295,900 242,561
============ ============ ============
Fully Diluted:
- --------------
Net earnings $ -- $ 723 $ --
Preferred stock dividends -- -- --
------------ ------------ ------------
Earnings attributable to common stock $ -- $ 723 $ --
============ ============ ============
Weighted average shares outstanding -- 292,785 --
Shares issued on exercise of dilutive options -- 11,236 --
Shares purchased with proceeds of options -- (7,871) --
Shares applicable to convertible
preferred stock -- 41,374 --
Shares contingently issuable -- 1,710 --
------------ ------------ ------------
Shares applicable to fully diluted
earnings -- 339,234 --
============ ============ ============
Per Common Share Data:
- ----------------------
Primary:
Earnings before cumulative effect of
changes in accounting principles $ 6.77 $ 1.47 $ (2.22)
Cumulative effect of changes in
accounting principles (14.39) 0.74 (1.06)
------------ ------------ ------------
Net earnings (loss) per common share $ (7.62) $ 2.21 $ (3.28)
============ ============ ============
Fully Diluted:
Earnings before cumulative effect of
changes in accounting principles $ -- $ 1.49 $ --
Cumulative effect of changes in
accounting principles -- 0.64 --
------------ ------------ ------------
Net earnings per common share $ -- $ 2.13 $ --
============ ============ ============
</TABLE>
Note: Earnings (loss) per common share amounts were computed by
dividing earnings (loss) after deduction of preferred stock
dividends by the average number of common and dilutive equivalent
shares outstanding. In 1992, fully diluted per common share
amounts assume conversion of the convertible preferred stock, the
elimination of the related preferred stock dividend requirement,
and the issuance of common stock for all other potentially
dilutive equivalent shares outstanding. Computations of primary
earnings (loss) per common share exclude the effect of common
stock equivalents and shares contingently issuable for any year
in which their inclusion would have the effect of increasing the
earnings per common share amount or decreasing the loss per
common share amount otherwise computed. Fully diluted per common
share amounts are not applicable for loss periods.
<PAGE> 1
EXHIBIT 12
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
Computations of Ratios of Earnings to Fixed Charges and
Preferred Stock Dividend Requirements
<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------------------------------------
1993 1992 1991(1) 1990 1989
-------- -------- -------- -------- --------
(in millions of dollars)
<S> <C> <C> <C> <C> <C>
Net earnings (loss) from continuing operations before
cumulative effect of changes in accounting
principles $ 2,415 $ 505 $ (538) $ 68 $ 323
Add back:
Taxes on income 1,423 429 (272) 79 242
Fixed charges 1,433 1,732 2,179 2,783 3,126
Amortization of previously capitalized interest 94 87 86 81 78
Deduct:
Capitalized interest 176 176 162 140 123
Undistributed earnings from less than fifty-
percent owned affiliates 2 7 11 6 35
-------- -------- -------- -------- --------
Earnings available for fixed charges $ 5,187 $ 2,570 $ 1,282 $ 2,865 $ 3,611
-------- -------- -------- -------- --------
Fixed charges:
Interest expense $ 1,104 $ 1,405 $ 1,869 $ 2,458 $ 2,844
Interest expense of unconsolidated subsidiaries -- -- -- 15 10
Capitalized interest 176 176 162 140 123
Credit line commitment fees 10 10 15 6 9
Interest portion of rent expense 143 139 126 119 121
Gross-up of preferred stock dividends of majority-
owned subsidiaries (CFC) to a pre-tax basis -- 2 7 45 19
-------- -------- -------- -------- --------
Total fixed charges $ 1,433 $ 1,732 $ 2,179 $ 2,783 $ 3,126
-------- -------- -------- -------- --------
Ratio of earnings to fixed charges 3.62 1.48 0.59 1.03 1.16
======== ======== ======== ======== ========
Preferred stock dividend requirements $ 127 $ 128 $ -- $ -- $ --
======== ======== ======== ======== ========
Ratio of earnings to fixed charges and preferred
stock dividend requirements 3.33 1.38 -- -- --
======== ======== ======== ======== ========
Equity taken up in earnings of less than fifty-percent
owned affiliates $ 2 $ 11 $ 13 $ 8 $ 39
Deduct:
Dividends paid by affiliates -- 4 2 2 4
-------- -------- -------- -------- --------
Undistributed earnings from less than fifty-percent
owned affiliates $ 2 $ 7 $ 11 $ 6 $ 35
======== ======== ======== ======== ========
</TABLE>
(1) In 1991, earnings were not sufficient to cover fixed charges. The
coverage deficiency was $897 million.
NOTE: For purposes of computing the ratios of earnings to fixed charges
and preferred stock dividend requirements, earnings are
determined by adding back fixed charges to earnings (loss) from
continuing operations (including equity in net earnings of
unconsolidated subsidiaries) before taxes on income and excluding
undistributed earnings from less than fifty-percent owned
affiliates. Fixed charges consist of interest expense, credit
line commitment fees, the interest portion of rent expense and
the preferred stock dividend requirements of its majority-owned
subsidiaries increased to an amount representing the pre-tax
earnings that would be required to cover such dividend
requirements. The year ended December 31, 1989 has been restated
to exclude the effects of discontinued operations.
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
1993
Registrant:
Chrysler Corporation (Delaware) (Automotive)
Subsidiaries of Chrysler Corporation
(wholly - owned unless otherwise indicated):
Acuflight, Inc. (67% owned)(Delaware)(Automotive)
American Motors Pan American Corporation (Delaware)(Automotive)
Automotive Financial Services, Inc.(Michigan)(Financial Services)
Beaver Dam Products Corporation (Delaware)(Marine/Automotive)
Chrysler Corporation Fund (Michigan)(Non-profit, Charitable)
Chrysler International Corporation (Delaware)(Automotive)
Acustar Holding, Inc. (Delaware)(Automotive)
Chrysler Italian Imports, Inc. (Delaware)(Automotive)
Lamborghini USA, Inc. (Delaware)(Automotive)
Chrysler International wholly-owned subsidiaries outside the United States:
Automobili Lamborghini S.p.A.(Italy)(Automotive)
Lamborghini Engineering S.p.A.(Italy)(Automotive)
Chrysler Automotive Services Gmbh (Germany)(Automotive)
Chrysler Austria Gesellschaft m.b.H. (Austria)(Automotive)
Eurostar Gesellschaft m.b.H.(50.01% owned)(Austria)(Automotive)
Eurostar Gesellschaft m.b.H. & Co. KG(50.01%
owned)(Austria)(Automotive)
Chrysler International Services, S.A. (Delaware)(Automotive)
CISSA do Brasil Limitada 99% owned by Chrysler International Services,
S.A. and 1% owned by Chrysler International Corporation
(Delaware)(Automotive)
Chrysler Pentastar Aviation, Inc. (Delaware)(Commercial Aviation)
Chrysler Technologies Corporation (Michigan)(Defense Electronics)
(Aircraft Modification)
ESI Holding, Inc. (Delaware)(Holding Company)
Chrysler Technologies Airborne Systems, Inc. (Delaware)
(Aircraft Modification)
Chrysler Technologies International, Inc. (U.S. Virgin Islands)
(Foreign Sales Corporation)
CTC Financial Services, Inc. (Texas)(Financial Services)
CTC Middle East Ltd. (Delaware)(Defense Electronics)
Electrospace Systems, Inc. (Texas)(Defense Electronics)
Pentastar Support Services, Inc. (Delaware)(Inactive)
Pentastar Electronics, Inc. (Delaware)(Defense Electronics)
Chrysler Transport, Inc. (Delaware)(Automotive)
Dealer Capital, Inc. (Delaware)(Financial Services)
Jeep International Corporation (Delaware)(Automotive)
New Venture Gear, Inc.(64% owned)(Delaware)(Automotive)
VPSI, Inc. (Delaware)(Transportation Services)
Chrysler Corporation wholly-owned subsidiaries outside the United States:
AMC de Venezuela, C.A. (Venezuela)(Automotive)
American Motors Overseas Corporation (Netherlands Antilles)
(Financial Services)
Autocircuitos de Obregon, S.A. de C.V. (Mexico)(Automotive)
Auto Electronica de Juarez, S.A. de C.V. (Mexico)(Automotive)
Chrysler Canada Ltd. (Canada)(Automotive)
American Motors (Canada) Inc. (Canada)(Automotive)
Bramco Satellite, Inc. (Canada)(Automotive)
Chrysler (Taiwan) Co., Ltd. (Taiwan)(Automotive)
Commuter Van Pooling Services Ltd. (Canada)(Transportation Services)
Chrysler Foreign Sales Corporation (U.S. Virgin Islands)(Automotive)
Chrysler International S.A. (Switzerland)(Automotive)
Chrysler Engineering S.A.(Switzerland)(Automotive)
CISA Financial Services S.A.(Financial Services)
Chrysler Motors de Venezuela, S.A. (Venezuela)(Automotive)
Cayman Island Investment Co. (Cayman Islands)(Financial Services)
Jeep Caracas, S.A. (Venezuela)(Automotive)
<PAGE> 2
Subsidiaries of Chrysler Corporation
(wholly - owned unless otherwise indicated)(continued)
Chrysler Overseas Trading Co. Ltd. (United Kingdom)(Automotive)
Chrysler de Venezuela S.A. (Venezuela)(Automotive)
Rootes Motors de Venezuela S.A. (Venezuela)(Automotive)
Circuitos Mexicanos de Nogales S.A. de C.V.(outside the
U.S.)(Mexico)(Automotive)
Ensambles de Interiores Automotrices, S.A. de C.V.(Mexico)(Automotive)
Jeep Africa, Ltd. (51.0% owned)(Kenya)(Automotive)
Jeep Australia, Pty., Ltd. (Australia)(Automotive)
Jeep of Canada Limited (Canada)(Automotive)
Jeep Japan, Ltd. (Japan)(Automotive)
Productos Electros Diversificados, S.A. de C.V. (Mexico)(Automotive)
Sistemas Electricos Conductores S.A. de C.V. (Mexico)(Automotive)
Chrysler Corporation partially-owned subsidiaries outside the United States:
Chrysler de Mexico S.A. (99.9% owned by Chrysler Motors)(Mexico)(Automotive)
Aire y Temperatura S.A.(Mexico)(Automotive)
Chrysler Financial Corporation (Michigan)(Financial Services)
Advanced Leasing Services Number 3, Inc. (Delaware)(Financial Services)
American Auto Receivables Company (Delaware)(Financial Services)
Auto Receivables Corporation (Canada)(Financial Services)
Chrysler Auto Receivables Company (Delaware)(Financial Services)
Chrysler Capital Corporation (Delaware)(Financial Services)
Adelaide FSC, Ltd. (U.S. Virgin Islands)(Financial Services)
Alice Springs, Ltd. (U.S. Virgin Islands)(Financial Services)
Artesia Turbine Cogeneration Corporation (Delaware)(Financial Services)
Baltimore Compost I Corporation (Delaware)(Financial Services)
Baltimore Compost II Corporation (Delaware)(Financial Services)
Cara FSC, Ltd. (U.S. Virgin Islands)(Financial Services)
Carmel Holdings, Inc. (Delaware)(Financial Services)
CC Funding Corporation (Delaware)(Financial Services)
CCRI Holdings No 2, Inc. (Delaware)(Financial Service)
Chestnut Properties, Inc. (Delaware)(Financial Services)
Chrysler Arboleda Corporation (Delaware)(Financial Services)
Chrysler Asset Management Corporation (Delaware)(Financial Services)
Chrysler Systems, Inc. (Delaware)(Financial Services)
Chrysler Systems Canada, Ltd. (Canada)(Financial Services)
Chrysler Systems GmbH (Germany)(Financial Services)
Chrysler Systems Limited (United Kingdom)(Financial Services)
CS Technical Services, Inc. (Illinois)(Financial Services)
Lauren 90 Corporation (Delaware)(Financial Services)
Lauren Shipping Corporation Pte., Ltd. (Singapore)
(Financial Services)
Laurissa 85 Corporation (Delaware)(Financial Services)
Laurissa Shipping Corporation Pte. Ltd. (Singapore)
(Financial Services)
Marine Asset Management Corporation (Delaware)(Financial Services)
Chrysler Capital Fund Management Corporation (Delaware)
(Financial Services)
Chrysler Capital Income Partnership L.P. (Delaware)(Financial Services)
Chrysler Capital Funding Corporation (Delaware)(Financial Services)
Chrysler Capital Investment Services, Inc. (Delaware)
(Financial Services)
Chrysler Capital Offshore Corporation (Delaware)(Financial Services)
Chrysler Capital Public Finance Corporation (Delaware)
(Financial Services)
Chrysler Capital Realty, Inc.(Delaware)(Real Estate Holding Company)
Chrysler Glenview Corporation (Delaware)(Financial Services)
Chrysler Capital Transportation Services, Inc. (Delaware)
(Financial Services)
Chrysler Concord Corporation (Delaware)(Financial Services)
Chrysler M.S. Corporation (Delaware)(Financial Services)
Chrysler Natural Resources Development Corporation (Delaware)
(Financial Services)
Chrysler Pryor Corporation (Delaware)(Financial Services)
Chrysler Rail Transportation Corporation (Delaware)(Financial Services)
Chrysler RRPF Limited (United Kingdom)(Financial Services)
CLG Apache Limited, Inc. (Delaware)(Financial Services)
CLG Apache Preferred, Inc. (Delaware)(Financial Services)
<PAGE> 3
Subsidiaries of Chrysler Corporation
(wholly - owned unless otherwise indicated)(continued)
CLG Media, Inc. (Delaware)(Financial Services)
CLG Media of Denver, Inc. (Delaware)(Financial Services)
CLG Media of Seattle, Inc. (Delaware)(Financial Services)
CLG Media of Wilmington, Inc. (Delaware)(Financial Services)
Conemaugh Hydroelectric Projects, Inc. (Delaware)(Financial Services)
Cross Lane Properties, Inc. (Delaware)(Financial Services)
Emily FSC, Ltd. (U.S. Virgin Islands)(Financial Services)
EPC Corporation (Delaware)(Financial Services)
Fourfold Cogeneration Corporation (Delaware)(Financial Services)
FPB California Cogeneration Corporation (Delaware)(Financial Services)
Fresno Biomass Power Corporation (Delaware)(Financial Services)
Gasaara Corporation (Delaware)(Financial Services)
Hacogen Corporation (Delaware)(Financial Services)
Harper Lake Solar IX Corporation (Delaware)(Financial Services)
Hartford Turbine Cogeneration Corporation (Delaware)
(Financial Services)
High Ridge Holdings No 2, Inc. (Delaware)(Financial Services)
HLLSLC Corporation (Delaware)(Financial Services)
HLSP IX, Inc. (Delaware)(Financial Services)
Jasmin EOR Cogeneration Corporation (Delaware)(Financial Services)
Klair, Ltd. (Delaware)(Financial Services)
Pasir Puteh Ltd. (U.S. Virgin Islands)(Financial Services)
LC Leasing, Inc. (Delaware)(Financial Services)
Larvik Holdings, Inc. (Delaware)(Financial Services)
Mathilda FSC, Ltd. (U.S. Virgin Islands)(Financial Services)
New Canaan Road Holdings, Inc. (Delaware)(Financial Services)
Niagara Turbine Cogeneration Corporation (Delaware)(Financial Services)
Ormesageo IE Geothermal Corporation (Delaware)(Financial Services)
Park Slope Properties, Inc. (Delaware)(Financial Services)
Perth Ltd. (U.S. Virgin Islands)(Financial Services)
Piney Point Properties (Delaware)(Financial Services)
Poso EOR Cogeneration Corporation (Delaware)(Financial Services)
Rocklin Biomass Power Corporation (Delaware)(Financial Services)
Roxbury Road Properties, Inc. (Delaware)(Financial Services)
Salinas Turbine Cogeneration Corporation (Delaware)(Financial Services)
Stamford Holdings No 1, Inc. (Delaware)(Financial Services)
Stamford Holdings No 2, Inc. (Delaware)(Financial Services)
Stamford Properties No 1, Inc. (Delaware)(Financial Services)
Stamford Properties No 2, Inc. (Delaware)(Financial Services)
Stillwater Geothermal Corporation (Delaware)(Financial Services)
Strawberry Hill Properties, Inc. (Delaware)(Financial Services)
Suffolk Leasing, Inc. (Delaware)(Financial Services)
Summit Avenue Properties, Inc. (Delaware)(Financial Services)
Toquam Properties, Inc. (Delaware)(Financial Services)
Trona Cogeneration Corporation (Delaware)(Financial Services)
TTC Corporation (Delaware)(Financial Services)
UMB Properties, Inc. (Delaware)(Financial Services)
Westover Holdings, Inc. (Delaware)(Financial Services)
Whitefield Biomass Power Corporation (Delaware)(Financial Services)
Whitewater Holdings, Inc. (Delaware)(Financial Services)
Wilson Street Holdings, Inc. (Delaware)(Financial Services)
Wilton Properties, Inc. (Delaware)(Financial Services)
Chrysler Comercial S.A. de C.V. (99.99% owned by Chrysler Financial
Corporation and .01% owned by Chrysler de Mexico, S.A. and three
directors)(Mexico)(Financial Services)
Chrysler Commercial Leasing Corporation (Michigan)(Financial Services)
Chrysler Cadre, Inc. (Delaware)(Financial Services)
Chrysler Consortium Corporation (Delaware)(Financial Services)
Chrysler Credit Canada Ltd. (Canada)(Financial Services)
Chrysler Credit Holdings Ltd. (Ontario)(Financial Services)
Chrysler Finance Limited (Ontario)(Financial Services)
<PAGE> 4
Subsidiaries of Chrysler Corporation
(wholly - owned unless otherwise indicated)(continued)
Chrysler First Commercial Corporation Inc. (Ontario)
(Financial Services)
CCF Canada Ltd. (Ontario)(Financial Services)
Snapper Financial Services Corporation Inc. (Ontario)
(Financial Services)
Chrysler Life Insurance Company of Canada (Canada)(Insurance)
Chrysler Systems Canada Ltd. (Canada)(Financial Services)
Chrysler Credit Corporation (Delaware)(Financial Services)
Chrysler Credit de Puerto Rico N.V. (Netherlands Antilles)
(Financial Services)
Chrysler Credit Realvest, Inc. (Delaware)(Financial Services)
Chrysler Financial Overseas Capital N.V. (Netherlands Antilles)
(Financial Services)
Chrysler First Inc.(Pennsylvania)(Financial Services)
AIA, Inc of Pennsylvania (Pennsylvania)(Insurance)
Allentown General Corporation (Delaware)(Financial Services)
Chrysler First Acceptance Corporation (Delaware)(Financial Services)
Chrysler First Business Credit Corporation (Delaware)
(Financial Services)
Chrysler First Commercial Corporation (Pennsylvania)
(Financial Services)
Carver Creditcorp Inc. (Delaware)(Financial Services)
Chrysler First GCC, Inc. (Delaware)(Financial Services)
Chrysler First KFCC, Inc. (Delaware)(Financial Services)
Chrysler First MMAC, Inc. (Pennsylvania)(Financial Services)
Chrysler First SRCC, Inc. (Delaware)(Financial Services)
Chrysler First TFSI, Inc. (Delaware)(Financial Services)
Chrysler First WAC, Inc. (Delaware)(Financial Services)
Godfrey Acceptance Corporation (Delaware)(Financial Services)
Chrysler First Consumer Discount Company (Pennsylvania)
(Financial Services)
Chrysler First Financial Services Corporation (Delaware)
(Financial Services)
Chrysler First Financial Services Corporation of America
(Delaware)(Financial Services)
Chrysler First Financial Services Corporation of Florida
(Florida)(Financial Services)
Chrysler First Mortgage Corporation of Florida (Florida)
(Financial Services)
Chrysler First Financial Services Corporation of Minnesota
(Minnesota)(Financial Services)
Chrysler First Industrial Loan Company (Washington)(Financial Services)
Financial Acceptance Corporation (Delaware)(Financial Services)
PrivateBrands Acceptance Corporation (Delaware)(Financial Services)
Chrysler Insurance Company (Michigan)(Insurance)
Chrysler Life Insurance Company (Michigan)(Insurance)
Pentastar Insurance Agency, Inc. (Michigan)(Insurance)
Chrysler Leasing Corporation (Delaware)(Financial Services)
Chrysler Macnally Corporation (Delaware)(Financial Services)
Chrysler Meadowcroft Corporation (Delaware)(Financial Services)
Chrysler Dunwoody, Inc. (Delaware)(Financial Services)
Chrysler Meridian Corporation (Delaware)(Financial Services)
Clinton Holding Corporation (Delaware)(Financial Services)
Chrysler Realty Corporation (Delaware)(Real Estate Holding Company)
ABKO Properties Management Corporation (Delaware)
(Real Estate Holding Company)
Chrysler Timberlake Corporation (Delaware)(Financial Services)
EFH Leasing Corporation (Delaware)(Financial Services)
1981 Helicopters, Ltd. (New York)(Financial Services)
104462 Canada (Canada)(Financial Services)
Gilkeson Road Corporation (Delaware)(Financial Services)
Premier Auto Receivables Company (Delaware)(Financial Services)
RAE Hotel Corporation (Delaware)(Financial Services)
Redisco Canada Ltd. (Canada)(Financial Services)
Sovereign Crest Properties, Inc. (Delaware)(Financial Services)
U.S. Auto Receivables Company (Delaware)(Financial Services)
<PAGE> 5
Subsidiaries of Chrysler Corporation
(wholly - owned unless otherwise indicated)(continued)
Pentastar Transportation Group, Inc. (Oklahoma)(Automotive Leasing)
Dollar Rent A Car Systems, Inc. (California)(Automotive Leasing)
Dollar Operations, Inc. (Oklahoma)(Automotive Leasing)
Dollar Philadelphia, Inc. (Pennsylvania)(Automotive Leasing)
Dollar Systems, Inc. (Delaware)(Automotive Leasing)
Dollar Rent A Car Systems, Ltd. (75% Owned) (New Zealand)
(Automotive Leasing)
Scamp Auto Rental I, Inc. (Florida)(Automotive Leasing)
Pentastar Services, Inc. (Oklahoma)(Automotive Leasing)
PTG, Inc. (Oklahoma)(Automotive Leasing)
Pentastar Transportation Group Canada, Inc. (Ontario)(Automotive Leasing)
Snappy Car Rental, Inc. (Ohio)(Automotive Leasing)
Tartan, Inc. (Oklahoma)(Automotive Leasing)
Thrifty Rent-A-Car System, Inc. (Oklahoma)(Automotive Leasing)
KAM Cars of America, Inc. (Oklahoma)(Automotive Leasing)
Manatee Leasing, Inc. (Oklahoma)(Automotive Leasing)
Thrifty Canada, Ltd. (Canada)(Automotive Leasing)
2426-3303 Quebec, Inc. (Canada)(Automotive Leasing)
Location Demers Ltd. (Canada)(Automotive Leasing)
Auto A Louer (Rimouski) Inc. (Canada)(Automotive Leasing)
Location Via-Can, Inc. (Canada)(Automotive Leasing)
Boutique L'Amoire A Linge Inc. (Canada)(Automotive Leasing)
Viabec Inc. (Canada)(Automotive Leasing)
Thrifty Europe, S.A. (99.7% Owned)(France)(Automotive Leasing)
Thrifty Rent-A-Car Limited (England)(Automotive Leasing)
Thrifty Rent-A-Car Limited (Ireland)(Automotive Leasing)
Thrifty Rent-A-Car Limited (New Zealand)(Automotive Leasing)
Thrifty Rent-A-Car Limited (Scotland)(Automotive Leasing)
TRAC Asia Pacific, Inc. (75% owned)(Oklahoma)(Automotive Leasing)
Unconsolidated subsidiaries owned directly or indirectly by Chrysler:
64 majority-owned retail sales outlets in the United States
21 majority-owned retail sales outlets outside the United States
<PAGE> 1
CONFORMED
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference of our report
dated January 18, 1994, appearing in this Annual Report on Form 10-K of
Chrysler Corporation for the year ended December 31, 1993, in the following
Registration Statements:
<TABLE>
<CAPTION>
Registration
Form Statement No. Description
-------------- ------------------ -------------------
<S> <C> <C>
S-8 33-5588 Chrysler Salaried Employees' Savings Plan
S-8 33-6117 Chrysler Corporation Stock Option Plan
S-3 33-13739 Chrysler Corporation Common Stock deliverable to Selling stockholder named
therein
S-3 33-15716 Chrysler Corporation Common Stock deliverable to Selling stockholder named
therein
S-8 33-15544 Chrysler Corporation Common Stock
(Post-Effective deliverable pursuant to the 1972 and
Amendment No. 1) 1980 American Motors Corporation Stock Option Plans
S-3 33-15849 Chrysler Corporation Debt Securities
S-3 33-22233 Chrysler Corporation Common Stock deliverable to Selling stockholders named
therein
S-3 33-39688 Chrysler Corporation Common Stock deliverable to Selling stockholders named
therein
S-8 33-47986 Chrysler Corporation 1991 Stock Compensation Plan
S-3 33-59294 Chrysler Corporation Common Stock deliverable to Selling stockholders named
therein
</TABLE>
DELOITTE & TOUCHE
Detroit, Michigan
February 4, 1994
<PAGE> 1
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
Lilyan H. Affinito
LILYAN H. AFFINITO
<PAGE> 2
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
Joseph E. Antonini
JOSEPH E. ANTONINI
<PAGE> 3
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
Joseph A. Califano, Jr.
JOSEPH A. CALIFANO, JR.
<PAGE> 4
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
A. Jean de Grandpre
A. JEAN de GRANDPRE
<PAGE> 5
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
Thomas G. Denomme
THOMAS G. DENOMME
<PAGE> 6
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
Robert J. Eaton
ROBERT J. EATON
<PAGE> 7
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
Earl G. Graves
EARL G. GRAVES
<PAGE> 8
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
Kent Kresa
KENT KRESA
<PAGE> 9
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
Robert J. Lanigan
ROBERT J. LANIGAN
<PAGE> 10
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
Robert A. Lutz
ROBERT A. LUTZ
<PAGE> 11
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
Peter A. Magowan
PETER A. MAGOWAN
<PAGE> 12
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
William G. Milliken
WILLIAM G. MILLIKEN
<PAGE> 13
CONFORMED
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of
Chrysler Corporation hereby constitutes and appoints WILLIAM J. O'BRIEN, R. D.
HOUTMAN, ANTHONY E. MICALE AND HOLLY E. LEESE or any one or more of them, to be
his agent, proxy and attorney-in-fact, to sign and execute in his name, place
and stead and on his behalf, and to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1934, as amended, the Form 10-K
Annual Report of Chrysler Corporation for the fiscal year ended December 31,
1993, and any and all amendments to such Annual Report that may be necessary or
desirable; hereby approving, ratifying and confirming all that the aforesaid
agents, proxies and attorneys-in-fact or any one of them do on his behalf
pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the 3rd
day of February, 1994.
Malcolm T. Stamper
MALCOLM T. STAMPER
