<PAGE> 1
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, 1994
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)
STATE OF DELAWARE 38-2673623
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12000 Chrysler Drive, Highland Park, Michigan 48288-0001
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313) 956-5741
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of each exchange on
Title of each class which registered
------------------- ------------------------
<S> <C>
Common Stock, $1.00 par value; New York Stock Exchange
Rights to Purchase Junior Participating Chicago Stock Exchange
Cumulative Preferred Stock, Pacific Stock Exchange
$1.00 par value Philadelphia Stock Exchange
13% Debentures Due 1997 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
</TABLE>
continued
<PAGE> 2
The Common Stock of the Registrant is listed for trading on the following
additional stock exchanges:
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
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 $17.40 billion as of December 31, 1994.
The registrant had 355,059,062 shares of Common Stock outstanding as of
December 31, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information in Chrysler Corporation's definitive Proxy Statement for
its 1995 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
<PAGE> 3
CHRYSLER CORPORATION
FORM 10-K
YEAR ENDED DECEMBER 31, 1994
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C> <C>
PART I.
Item 1. Business 4-14
Item 2. Properties 14-15
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 21-25
Item 8. Financial Statements and Supplementary
Data 26-54
Item 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure 55
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) 55
PART IV.
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K 55-70
SIGNATURES 71-72
</TABLE>
3
<PAGE> 4
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 surviving corporation following mergers
with a number of its operating subsidiaries, including Chrysler Motors
Corporation which was originally incorporated in 1925.
Chrysler Corporation and its consolidated subsidiaries ("Chrysler")
operate 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 are engaged principally in wholesale
and retail vehicle financing, servicing nonautomotive leases and loans,
automotive dealership facility development and management, and property,
casualty and other insurance. Chrysler also participates in short-term vehicle
rental activities through certain of 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 manufactures, assembles and sells cars and trucks under the
brand names Chrysler, Dodge, Plymouth, Eagle and Jeep(R), and related automotive
parts and accessories, primarily in the United States, Canada and Mexico ("North
America"). 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 certain passenger cars 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. Chrysler sells to
independent distributors in Europe and other world markets vehicles which are
produced in North America and by Eurostar Automobilwerk Ges.mb.H & Co. KG
("Eurostar"), a joint venture between Chrysler and Steyr-Daimler-Puch
Fahrzeugtechnik of Graz, Austria.
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 to use retail sales incentives effectively are
significantly affected by the pricing actions and 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, governmental regulations, or adverse economic conditions in North
America.
Chrysler's long-term profitability depends upon its ability to introduce
and market its new products effectively. The success of Chrysler's new products
will depend on a number of factors, including the economy, competition, consumer
acceptance, new product development, 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 its product plans and would be adversely affected by
events requiring a major shift in product development.
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 the United States
Chrysler's automotive operations, including product design and
development activities, 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 foreign 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.
4
<PAGE> 5
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
The Automotive Industry in the United States- Continued
The tables below set forth 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 unit
sales of passenger cars and trucks (including imports to the United States) by
Chrysler.
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
(percent of total industry)
<S> <C> <C> <C> <C> <C>
U.S. Car Market Share (1):
- --------------------------
U.S. Manufacturers (Including Imports):
General Motors 34.0% 34.1% 34.6% 35.6% 35.6%
Ford 21.6 22.1 21.6 20.1 20.9
Chrysler 9.0 9.8 8.3 8.6 9.3
----- ----- ----- ----- -----
Total U.S. Manufacturers 64.6 66.0 64.5 64.3 65.8
Foreign-Based Manufacturers (2):
Japanese 29.5 29.1 30.1 30.4 27.8
All Other 5.9 4.9 5.4 5.3 6.4
----- ----- ----- ----- -----
Total Foreign-Based Manufacturers 35.4 34.0 35.5 35.7 34.2
----- ----- ----- ----- -----
Total 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
U.S. Truck Market Share (1) (3):
- --------------------------------
U.S. Manufacturers (Including Imports):
General Motors 30.9% 31.4% 32.2% 32.9% 34.3%
Ford 30.1 30.5 29.7 28.9 29.2
Chrysler 21.7 21.4 21.1 18.4 17.3
All Other 2.0 1.9 1.8 2.0 2.0
----- ----- ----- ----- -----
Total U.S. Manufacturers 84.7 85.2 84.8 82.2 82.8
Foreign-Based Manufacturers (2):
Japanese 13.5 13.2 13.9 16.5 15.7
All Other 1.8 1.6 1.3 1.3 1.5
----- ----- ----- ----- -----
Total Foreign-Based Manufacturers 15.3 14.8 15.2 17.8 17.2
----- ----- ----- ----- -----
Total 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
Unit Sales: (In thousands)
- -----------
U.S. Car Retail Sales (1):
Total Industry 8,990 8,518 8,214 8,174 9,293
Chrysler 812 834 680 703 861
U.S. Truck Retail Sales (1) (3):
Total Industry 6,421 5,681 4,904 4,367 4,854
Chrysler 1,392 1,214 1,033 805 837
</TABLE>
- -------------------------
(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.
Competition from foreign car and truck manufacturers, in the form of
both exports to the United States and sales by transplants, has been substantial
in recent years. The market share for foreign passenger cars sold in the United
States (including transplants) was 35.4 percent in 1994, compared to 34.0
percent in 1993. The market share for foreign trucks sold in the United Stated
(including transplants) was 15.3 percent in 1994, compared to 14.8 percent in
1993. Vehicles assembled in the United States by Japanese manufacturers have
significantly contributed to the market share obtained by foreign-based
manufacturers. Japanese transplant sales accounted for approximately 16.1
percent of the U.S. passenger car market and 5.6 percent of the U.S. truck
market in 1994, compared to 14.8 percent and 5.4 percent, respectively, in 1993.
5
<PAGE> 6
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
The Automotive Industry in the United States - Continued
During the first three months of 1994, Japanese exports to the United
States were subject to voluntary restraints limiting the number of new passenger
cars (excluding station wagons) that could be exported. These restraints were
put in place in 1981 and ended on March 31, 1994. For the 12 months ended March
31, 1994, the Japanese export limit was 1.65 million cars, while actual
shipments during that period were 1.39 million cars. Although the voluntary
restraint agreement has expired, it is unlikely that exports of passenger cars
to the United States from Japan would surpass the 1.65 million level in the near
future given the high assembly capacity put in place in the U. S. by Japanese
manufacturers and the relatively high cost of vehicles imported from Japan due
to the recent appreciation of the Japanese yen in relation to the U.S. dollar.
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 minivans, front-wheel-drive mid-size
and large sedans, and rear-wheel-drive vans.
In 1994 and 1993, Chrysler Canada produced 695,606 and 643,356 vehicles,
respectively, the majority of which were sold outside of Canada. Chrysler
Canada's retail sales totaled 247,752 vehicles in 1994 and 226,819 vehicles in
1993, the majority of which were manufactured outside of Canada. Chrysler
Canada's retail unit sales of cars accounted for 15.7 percent and 14.6 percent
of the Canadian car market in 1994 and 1993, respectively. In 1994, retail unit
sales of trucks accounted for 25.7 percent of the Canadian truck market compared
with 26.3 percent in 1993. In 1994, 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 13.1 percent of the
Mexican wholesale car market and 19.4 percent of the Mexican wholesale truck
market in 1994, compared with 13.3 percent and 23.6 percent, respectively, in
1993. Within the Mexican industry, Chrysler Mexico's wholesale unit sales
ranked fourth in cars and third in trucks in 1994. In 1994, overall wholesale
industry sales in Mexico are estimated to have been approximately 620,000
units, compared with 604,400 units in 1993, an increase of 2.6 percent.
In 1994, Chrysler Mexico exported 117,489 cars, compared with 104,712
cars in 1993. In 1994, Chrysler Mexico also exported 43,910 trucks, compared
with 36,660 trucks in 1993. In addition, Chrysler Mexico provides certain major
automobile components to Chrysler, including engines and air conditioner
condensers.
The economic uncertainty in Mexico following the devaluation of the Peso
may result in reduced vehicle sales in Mexico in 1995. As a result, exports to
Mexico of Chrysler vehicles manufactured in the U.S. and Canada may decrease,
and sales of vehicles in Mexico may be less profitable in 1995, as compared to
1994. If U.S. and Canada vehicle industry sales continue at present or higher
levels, imports to the U.S. and Canada of Chrysler vehicles manufactured in
Mexico may increase, and such sales may be more profitable in 1995, as compared
to 1994. The devaluation of the Peso did not significantly impact Chrysler's
1994 operating results. Chrysler cannot predict the impact that the devaluation
of the Peso, and the resulting uncertainty surrounding the Mexican economic and
political environments, will have on its operating results in 1995.
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. During 1994, trade benefits of NAFTA resulted in commercial
growth between Mexico and the United States as both economies benefitted from
reduced trading restrictions. In December of 1994, however, the value of the
Peso declined significantly in relation to the U.S. Dollar. In addition, the
Canadian Dollar experienced a decline in relation to the U.S. Dollar in January
of 1995. While it is uncertain how these economic events will affect Chrysler
in the short-term, Chrysler's management believes that the fundamentals
of NAFTA will benefit the North American automobile industry in the long-term.
6
<PAGE> 7
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
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 owns an assembly
facility in Venezuela, has equity interests in companies with manufacturing and
assembly facilities in China and Egypt, and has established joint ventures with
certain other foreign manufacturers. Chrysler will continue to focus on growth
opportunities in major markets such as Europe, Japan and China and will explore
developing markets in South America, Eastern Europe and the Asia-Pacific
region. New manufacturing and joint venture operations could be established if
market conditions, sales levels and profitability opportunities are consistent
with Chrysler's corporate objectives.
Chrysler shipped 136,462 vehicles to international markets in 1994, an
increase of 28 percent from 1993. Chrysler sold 70,294 units in European
markets and 66,168 units in other world markets, primarily Japan, Taiwan and the
Middle East. During 1994, Chrysler exported 24,272 kits to worldwide affiliates
for assembly. The majority of the kits were Jeep products shipped to China,
Indonesia and Venezuela. In addition, Chrysler began exporting the Neon and
Cirrus passenger cars in 1994.
Eurostar began production and distribution of Chrysler minivans in March
1992 for the European market. Eurostar sold 38,830 minivans in 1994, compared
to 33,738 in 1993. In 1993, Chrysler entered into an agreement with
Steyr-Daimler-Puch Fahrzeugtechnik to assemble Jeep Grand Cherokees in Austria
for the European and other world markets. Production under the agreement was
launched in the fourth quarter of 1994.
Chrysler presently does not have significant risks related to changes in
currency exchange rates as Chrysler is primarily a North American automotive
company. Chrysler does, however, have growing international sales and
continuing international component sourcing. When Chrysler sells vehicles
outside the United States or purchases components from suppliers outside the
United States, transactions are frequently denominated in currencies other than
U.S. dollars. The primary foreign currencies in which Chrysler has activities
are the German Mark, French Franc, Japanese Yen, Canadian Dollar and Mexican
Peso. To the extent possible, receipts and disbursements in a specific currency
are offset against each other. In addition, Chrysler periodically initiates
hedging activities by entering into currency exchange agreements, consisting
primarily of currency forward contracts and purchased currency options, to
minimize revenue and cost variations which could result from fluctuations in
currency exchange rates. At December 31, 1994, Chrysler had currency exchange
agreements for the German Mark, French Franc and Japanese Yen. Chrysler's
operating results may be affected by changes in currency exchange rates during
the period in which transactions are executed, to the extent that hedge coverage
does not exist. However, the impact of any changes in currency exchange rates
on unhedged transactions is not expected to be material to Chrysler's operating
results or financial position.
Chrysler does not use derivative financial instruments for trading
purposes. Chrysler's hedging activities are based upon purchases and sales
which are expected to be transacted in foreign currencies. Generally, these
purchases and sales are committed for the current and forthcoming calendar
year. The currency exchange agreements which provide hedge coverage typically
mature within two years of origination. These hedging instruments are
periodically modified as existing commitments are fulfilled and new commitments
are made. Chrysler's management believes that its hedging activities have been
effective in reducing Chrysler's limited risks related to currency exchange
fluctuations.
Mitsubishi Motors Corporation
Chrysler imports and distributes in the United States and Canada
selected models of passenger cars manufactured by MMC in Japan. In 1994,
Chrysler sold 28,849 MMC-manufactured vehicles in the United States,
representing 1.3 percent of Chrysler's U.S. retail vehicle sales. In 1993,
Chrysler sold 69,646 MMC-manufactured vehicles in the United States,
representing 3.4 percent of Chrysler's U.S. retail vehicle sales. In addition
to passenger cars, Chrysler purchases 2.5-liter and 3.0-liter V-6 engines for
use in the production of certain minivans and other vehicles, and intends to buy
approximately 415,000 of these engines from MMC during the 1995 model year.
Diamond-Star produces small sporty cars in the United States for
Chrysler and Mitsubishi Motor Sales of America ("MMSA"). Chrysler sold its 50
percent interest in Diamond-Star to MMC, its partner in the joint venture, in
October 1991. Chrysler subsequently sold its equity interest in MMC, selling
93.9 million shares of MMC stock in 1992 and 1993 for approximately $544 million
in cash, net of related expenses. Pursuant to a distribution agreement that
terminates in July 1999, Chrysler retains the right to purchase a portion of
Diamond-Star's production capacity. In addition, Chrysler will provide engines
and transmissions for use in certain Diamond-Star vehicles. Chrysler's sales of
Diamond-Star cars in 1994 and 1993 represented 1.7 and 2.1 percent,
respectively, of Chrysler's U.S. retail vehicle sales in each period.
7
<PAGE> 8
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
Mitsubishi Motors Corporation - Continued
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.
Agreements similar to the USDA are in effect covering the Canadian
market. In practice, Chrysler Canada acts as sole distributor of MMC products.
Segment Information
Industry segment and geographic area data for 1994, 1993 and 1992 are
summarized in Part II, Item 8, Notes to Consolidated Financial Statements, Note
17.
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 1989, Chrysler changed the organizational structure of its automotive
design and development activities by establishing cross-functional product
development groups called "platform teams." The platform team system is
designed to improve communications, reduce the design and development time of
new vehicles, improve product quality, and reduce the cost of developing new
vehicle lines. The utilization of platform teams has enabled Chrysler to focus
corporate resources on the continuous improvement of its car and truck
offerings.
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 in the upper-middle
segment and employ a "cab-forward" design, creating more interior passenger
space without significantly increasing vehicle size or weight. Chrysler's
share of the U.S. basic middle segment was 9.9 percent for 1994, compared to
9.7 percent for 1993. In early 1993, a new Chrysler New Yorker and a touring
derivative called the LHS, which were also based on this platform, were
introduced in the basic large segment.
In 1993, Dodge introduced the first truck designed under the 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. In the fall of 1994,
Dodge introduced a Club Cab version of the Ram pickup to pursue another segment
of the growing truck market. Dodge's share of the U.S. full-size pickup truck
market grew to 14.5 percent in 1994 from 7.1 percent in 1993.
In January of 1994, Chrysler introduced the subcompact Dodge and
Plymouth Neon, which provide both driver and passenger airbags and apply
Chrysler's "cab-forward" design used by the upper-middle segment vehicles. A
two-door coupe was added to the lineup in the third quarter of 1994.
Chrysler's share of the U.S. subcompact segment rose to 11.9 percent in 1994
from 11.4 percent in 1993.
Chrysler introduced an all-new compact car marketed as the Chrysler
Cirrus in the third quarter of 1994. The Cirrus offers newly designed engines,
includes driver and passenger airbags, and also applies the "cab-forward"
design. The Cirrus was awarded the Motor Trend Car of the Year Award for its
contemporary styling, roominess, overall quality, and value. A Dodge version
of the vehicle, the Dodge Stratus, will be introduced in the first quarter of
1995. In addition, a Plymouth version of the vehicle, the Plymouth Breeze,
will be added in the 1996 model year.
Chrysler added the Dodge Avenger in the third quarter of 1994 and will
introduce the Chrysler Sebring in the first quarter of 1995. These two-door
coupes compete in the high profile mid-specialty segment and are built
exclusively for Chrysler by Diamond-Star.
8
<PAGE> 9
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
Automotive Product Plans - Continued
Chrysler will introduce an all-new minivan in the first half of 1995.
The new Chrysler Town & Country, Dodge Caravan, and Plymouth Voyager will
provide many unique product features, including a driver's side sliding door.
Chrysler held 43.4 percent and 46.7 percent of the U.S. minivan segment in 1994
and 1993, respectively. In spite of increased competition in this segment,
Chrysler sold 513,163 minivans in the United States in 1994, compared to 502,053
in 1993. Worldwide shipments of minivans in 1994 and 1993 were 617,318 and
567,801 units, respectively.
Automotive Marketing
New passenger cars and trucks are sold at retail 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 4,687 dealers at December 31,
1994 compared with 4,726 at December 31, 1993. Chrysler Canada had 607 dealers
at December 31, 1994 compared with 601 dealers at December 31, 1993.
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 through 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 $28 million
in 64 dealerships as of December 31, 1994, compared with $37 million in 91
dealerships as of December 31, 1993.
Chrysler continues to focus on quality customer service. The new
Chrysler Customer Center is designed to promote customer satisfaction and
communicate customer concerns to dealers and internally to vehicle platform
teams.
Manufactured and Purchased Components and Materials
Chrysler continues to focus on its core automotive business. Chrysler
manufactures most of its requirements for engines, transmissions and transaxles,
certain body stampings and electronic components, and processes approximately 80
percent of its requirements for fabricated glass parts.
Chrysler used approximately 1,250 suppliers of productive materials in
1994, compared to approximately 1,380 used in 1993. 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, Massachusetts, and
Connecticut have adopted such standards and several other states are considering
similar action. Federal courts have generally upheld New York and
Massachusetts' adoption of the California standards.
Vehicle Emissions Standards
Under the Clean Air Act, auto manufacturers are required, among other
things, to significantly reduce 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 the development of vehicles capable of operating on compressed natural
gas.
9
<PAGE> 10
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
Government Regulation - Continued
Vehicle Regulation - Continued
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. Chrysler has entered into a consortium of vehicle manufacturers,
electric utilities and the U.S. 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.
On December 19, 1994, the Administrator of the United States
Environmental Protection Agency ("EPA") responded to a petition filed by the
Ozone Transport Commission ("OTC"), a group of 12 Northeast states and the
District of Columbia. The response held that the states comprising the OTC must
either adopt the California vehicle emissions standards or a 49 state program
advocated by the American Automobile Manufacturers Association (of which
Chrysler is a member) and the Association of International Automobile
Manufacturers. The Administrator's decision does not require the states that
adopt California's general vehicle emission standards to adopt California's ZEV
requirement, but permits the states to adopt the ZEV requirement if they elect
to do so. Both New York and Massachusetts have adopted the California general
standards as well as the California ZEV requirement. Connecticut has adopted
the general standards but not the ZEV requirement.
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 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.
From time to time there have been federal legislative and administrative
initiatives that would increase corporate average fuel economy standards from
their current levels. In addition, the National Highway Traffic Safety
Administration ("NHTSA") has initiated rulemaking to set light truck CAFE
standards for the 1998 - 2006 model years. 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, NHTSA is required to establish 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
upgrade certain existing standards and to establish additional standards in the
future. Chrysler expects to be able to comply with those standards.
Vehicle Recalls
Under the Clean Air Act the EPA may require manufacturers to recall and
repair customer-owned vehicles that fail to meet emission standards established
under that Act. Similarly, the Act authorizes the State of California to
require recalls for vehicles that fail to meet its emissions standards.
The Safety Act authorizes NHTSA to investigate reported vehicle problems
and to order a recall if it determines that a safety-related defect exists.
NHTSA is conducting an engineering analysis of the rear liftgate latches in
Chrysler's 1984-1994 model year minivans (approximately 4 million latches) as a
result of allegations that some latches opened during collisions. Chrysler has
provided NHTSA with extensive information in support of Chrysler's position that
no safety-related defect exists with respect to the latches. If, however, NHTSA
concludes that the information gathered may warrant a formal investigation, it
may issue a Recall Request Letter asking that Chrysler voluntarily repair or
replace the latches. If NHTSA issues such a letter and Chrysler declines to
conduct a recall, NHTSA may proceed with a formal investigation or close the
matter. If NHTSA proceeds with a formal investigation and determines that a
defect exists, it may seek to compel a recall. Chrysler continues to discuss
this matter with NHTSA.
10
<PAGE> 11
Item 1. BUSINESS - CONTINUED Part I - Continued
Automotive Operations - Continued
Government Regulation - Continued
Vehicle Regulation - Continued
Chrysler's emissions and safety-related recall costs vary widely from
year to year, and could be significant in future years depending on the
corrective action required to remedy a particular condition and the number of
vehicles involved.
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.
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, Chrysler
expects its capital requirements for the period 1995 through 1999 will be
approximately $700 million. Of this total, Chrysler estimates that $136 million
will be spent in 1995 and $138 million will be spent in 1996. Substantially all
of these expenditures are included in Chrysler's planned disbursements for new
product development and the acquisition of productive assets over the 1995 to
1999 period. 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.
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.
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. A number of lawsuits allege that Chrysler violated CERCLA
or other environmental laws and seek to recover costs associated with remedial
action. In most 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 97 sites
involved in the foregoing matters at December 31, 1994. Chrysler may also incur
remediation costs at an additional 40 of its active or deactivated facilities.
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 $310 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 those
changes could be material to Chrysler's consolidated results of operations for
the period in which the developments occur. Chrysler is unable to estimate such
changes in costs, if any, that may be incurred in connection with these matters.
11
<PAGE> 12
Item 1. BUSINESS - CONTINUED Part I - Continued
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 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 1994, CFC had nearly 3,100 employees and its portfolio of
receivables managed, which includes receivables owned and serviced for others,
totaled $32.9 billion.
CFC has sold various nonautomotive assets over the last several years,
thereby making CFC more dependant on Chrysler. Thus, lower levels of sales of
Chrysler automotive 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, 1994, receivables serviced for others accounted for 61 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>
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(in millions of dollars)
<S> <C> <C> <C> <C> <C>
Automotive financing $ 30,092 $ 25,011 $ 22,481 $ 24,220 $ 25,117
Nonautomotive financing 2,775 3,251 7,657 9,486 10,709
-------- -------- -------- -------- --------
Total $ 32,867 $ 28,262 $ 30,138 $ 33,706 $ 35,826
======== ======== ======== ======== ========
</TABLE>
Automotive Financing
CFC conducts its automotive finance business principally through its
subsidiaries Chrysler Credit Corporation, Chrysler Credit Canada Ltd., and, in
Mexico, Chrysler Comercial S.A. de C.V., (together "Chrysler Credit").
Chrysler Credit is the major source of automobile and light-duty truck
wholesale (also referred to as dealer "floor plan") and retail financing for
Chrysler dealers and their customers throughout North America. 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 are conducted through 94
branches in the United States, Canada and Mexico.
CFC's Mexican subsidiary, Chrysler Comercial S.A. de C.V. ("Chrysler
Comercial"), contributed $11 million, $18 million and $15 million in 1994, 1993
and 1992, respectively, to CFC's earnings before income taxes. Chrysler
Comercial's total assets were $433 million and $477 million at December 31, 1994
and 1993, respectively. The economic uncertainty in Mexico following the
devaluation of the Peso may have an unfavorable impact on Chrysler Comercial's
retail and wholesale volume and credit losses.
During 1994 CFC financed or leased approximately 830,000 vehicles at
retail in the United States, including approximately 525,000 new Chrysler
passenger cars and light-duty trucks, representing 24 percent of Chrysler's U.S.
retail and fleet deliveries. In 1994, the average monthly payment for new
vehicle retail installment sale contracts acquired in the United States was
$375. The average percentage of dealer cost financed was 94 percent and the
average original term was 55 months. CFC also financed at wholesale
approximately 1,647,000 new Chrysler passenger cars and light-duty trucks
representing 73 percent of Chrysler's U.S. factory shipments in 1994. Wholesale
vehicle financing accounted for 74 percent of the total automotive financing
volume of CFC in 1994 and represented 31 percent of automotive finance
receivables outstanding at December 31, 1994.
12
<PAGE> 13
Item 1. BUSINESS - CONTINUED Part I - Continued
Financial Services - Continued
Nonautomotive Financing
CFC has downsized its nonautomotive operations through sales and
liquidations over the last several years. Chrysler Capital Corporation
("Chrysler Capital") manages nonautomotive leases and loans to clients in over
15 industries throughout the United States. At December 31, 1994, Chrysler
Capital managed $2.3 billion of nonautomotive finance receivables compared to
$2.7 billion at December 31, 1993. In addition, CFC managed a portfolio of
secured small business loans totaling $0.5 billion at December 31, 1994,
compared to $0.6 billion at December 31, 1993.
Insurance
Chrysler Insurance Company and its subsidiaries ("Chrysler Insurance")
provide specialized insurance coverages for automotive dealers and their
customers in the United States and Canada. Chrysler Insurance provides physical
damage, garage liability, workers' compensation and property and contents
coverage directly to automotive dealers. 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, 1994, Chrysler Realty controlled 876 sites (of which
289 were owned by Chrysler Realty).
Funding
During 1994, CFC issued $1.8 billion of term debt and increased the
level of short-term notes outstanding (primarily commercial paper) to $4.3
billion. Receivable sales continued to be a significant source of funding
during 1994, as CFC realized $6.4 billion of net proceeds from the sale of
automotive retail receivables compared to $7.8 billion of net proceeds from the
sale of automotive retail receivables in 1993. In addition, revolving
wholesale receivable sale arrangements provided funding which aggregated $3.8
billion and $4.6 billion at December 31, 1994 and 1993, respectively.
CFC uses derivative financial instruments to manage its exposure arising
from changes in interest rates and currency exchange rates as part of its asset
and liability management program. These derivative financial instruments
include interest rate swaps, interest rate caps, forward interest rate
contracts, and currency exchange agreements. CFC does not use derivative
financial instruments for trading purposes.
Due to changing interest rates, interest rate derivatives are used to
stabilize interest margins. The Company hedges against borrowings denominated
in currencies other than the borrowers' local currency. Such borrowings are
translated in the financial statements at the rates of exchange established
under the related currency exchange agreements. Forward interest rate contracts
are used to manage exposure to fluctuations in funding costs for anticipated
securitizations of retail receivables.
CFC's outstanding debt at December 31, for each of the five most recent
years was as follows:
<TABLE>
<CAPTION>
December 31
--------------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(in millions of dollars)
<S> <C> <C> <C> <C> <C>
Short-term notes (primarily commercial paper) $ 4,315 $ 2,772 $ 352 $ 339 $ 1,114
Bank borrowings under
revolving credit facilities -- -- 5,924 6,633 6,241
Senior term debt 6,069 5,139 4,436 6,742 9,233
Subordinated term debt 27 77 585 949 1,686
Mexico borrowings and other 260 447 455 518 431
-------- ------- -------- -------- --------
Total $ 10,671 $ 8,435 $ 11,752 $ 15,181 $ 18,705
======== ======= ======== ======== ========
</TABLE>
13
<PAGE> 14
Item 1. BUSINESS - CONTINUED Part I - Continued
CAR RENTAL OPERATIONS
Through its Pentastar Transportation Group, Inc. ("Pentastar")
subsidiary, Chrysler owns Thrifty Rent-A-Car System, Inc. ("Thrifty"), and
Dollar Systems, Inc. ("Dollar", formerly Dollar Rent A Car Systems, Inc.). 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. 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 ("General"), which also rents cars for business, leisure and
personal use, exclusively through corporate owned locations. Consolidation of
General's operations into those of Dollar's was completed in 1994.
Additionally, Snappy Car Rental, Inc., which engages in renting automobiles on a
short-term basis, was sold in September 1994.
RESEARCH AND DEVELOPMENT
For the years ended December 31, 1994, 1993 and 1992, Chrysler spent
$1.3 billion, $1.2 billion, and $1.1 billion, 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, 1994, Chrysler had a total of approximately 121,000,
employees worldwide, approximately 97,000 of which were employed in the United
States. In the United States and Canada, approximately 95 percent of Chrysler's
hourly employees and 22 percent of its salaried employees are represented by
unions. Of these represented employees, 98 percent of hourly and 91 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 provides for essentially the same levels of
wages and benefits as negotiated by Chrysler's major domestic competitors. The
UAW contract 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 $612 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 new hire rates, and a broadened approach to
managed health care.
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 nonpension postretirement benefits.
INTELLECTUAL PROPERTY
Chrysler has intellectual property rights, including patents,
proprietary technology, trademarks, trade dress, 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
very 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).
14
<PAGE> 15
Item 2. PROPERTIES - CONTINUED Part I - Continued
Chrysler's manufacturing plants include a foundry, machining plants,
metal stamping plants, engine plants, transmission plants, electronic parts
plants, an air conditioning equipment plant, glass fabricating plants and other
component parts plants. In addition to Michigan, manufacturing plants in the
United States are located in Alabama, 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 plant located in Fenton, Missouri, which
was previously idled in 1991, is being equipped with new machinery and tooling
and will begin producing minivans in 1995. 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. The initial project, which consisted of 3.3 million square feet of
floor space and included design, vehicle engineering, manufacturing engineering
and pilot build facilities associated with the development of new Chrysler cars
and trucks, was completed and fully occupied in the first half of 1994. In the
third quarter of 1992, the Board of Directors approved a subsequent project to
build an administrative building which is currently under construction. The
administrative building, which will add approximately 1.0 million square feet of
floor space to the facility, is scheduled for completion in the first half of
1996.
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.
FINANCIAL SERVICES
At December 31, 1994, the following facilities were utilized by
CFC in conducting its business:
(a) executive offices of CFC, Chrysler Credit Corporation, Chrysler
Insurance and certain other domestic subsidiaries of CFC in
Southfield, Michigan;
(b) a total of 82 branches of Chrysler Credit located throughout the
United States;
(c) headquarters of remaining Chrysler First Inc. 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 12 offices of such corporation located throughout the United
States;
(e) headquarters of Chrysler Realty in Troy, Michigan; and
(f) a total of 12 offices used as headquarters and branch offices in
Canada and Mexico.
All of the facilities described above were leased by CFC.
At December 31, 1994, a total of 289 automobile dealership properties
generally consisting of land and improvements were owned by Chrysler Realty
leased primarily to Chrysler franchised dealers.
15
<PAGE> 16
Item 3. LEGAL PROCEEDINGS Part I - Continued
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. 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 those matters specify
approximately $1.1 billion in compensatory and $1.9 billion in punitive damages
in the aggregate as of December 31, 1994. These amounts represent damages
sought by plaintiffs and, therefore, do not necessarily constitute an accurate
measure of Chrysler's ultimate cost to resolve those 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 $312 million of the compensatory and $785 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 that
occurred 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 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
condition. Future developments could cause Chrysler to change its estimate of
the ultimate cost of resolving these matters, and these changes could be
material to Chrysler's consolidated results of operations for the period in
which the developments occur. Chrysler is unable to estimate such changes in
costs, if any, that may be incurred in connection with these matters.
Environmental Matters
The EPA and various state agencies have notified Chrysler that it may be
a PRP for the cost of cleaning up hazardous waste storage or disposal facilities
pursuant to the CERCLA and other federal and state environmental laws. A number
of lawsuits allege that Chrysler violated CERCLA or other environmental laws and
seek to recover costs associated with remedial action. In most 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 97 sites involved in the foregoing
matters at December 31, 1994. Chrysler may also incur remediation costs at an
additional 40 of its active or deactivated facilities.
In particular, the Indiana Department of Environmental Management
initiated an administrative proceeding in August 1985 alleging improper disposal
of waste at a Chrysler facility in Indianapolis. This proceeding, which seeks
to require Chrysler to conduct a site assessment and undertake remedial action,
may result in the imposition of civil penalties in excess of $100,000.
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 $310 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 these
changes could be material to Chrysler's consolidated results of operations for
the period in which the developments occur. Chrysler is unable to estimate such
changes in costs, if any, that may be incurred in connection with these matters.
16
<PAGE> 17
Item 3. LEGAL PROCEEDINGS - Continued Part I - Continued
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, 1994.
17
<PAGE> 18
EXECUTIVE OFFICERS OF THE REGISTRANT
(AS OF FEBRUARY 2, 1995)
<TABLE>
<CAPTION>
Officer
Name Age Since (1) Present Position
- -------------------- ----- ----------------- ---------------------------------------------------------
<S> <C> <C> <C>
R. J. Eaton 54 March 14, 1992 Chairman of the Board and Chief Executive Officer (2)
R. A. Lutz 62 June 3, 1986 President and Chief Operating Officer (2)
T. G. Denomme 55 April 9, 1981 Vice Chairman and Chief Administrative Officer (2)
G. C. Valade 52 June 7, 1990 Executive Vice President and Chief Financial Officer
T. R. Cunningham 48 September 3, 1987 Executive Vice President - Sales and Marketing and General
Manager - Minivan Operations
D. K. Pawley 53 April 11, 1991 Executive Vice President - Manufacturing
R. R. Boltz 49 June 11, 1987 Vice President - Product Strategy and Regulatory Affairs
and General Manager - Small Car Operations
T. P. Capo 43 November 7, 1991 Vice President and Treasurer
J. E. Cappy 60 August 5, 1987 Vice President - Chrysler Technologies and Rental Car
Operations
F. J. Castaing 49 August 5, 1987 Vice President - Vehicle Engineering and General Manager -
Power Train Operations
J. D. Donlon, III 48 January 1, 1992 Vice President and Controller
F. J. Ewasyshyn 42 October 6, 1994 Vice President - Advance Manufacturing and Engineering
T. C. Gale 51 April 4, 1985 Vice President - Product Design and International
Operations
T. Gallagher 52 September 3, 1992 Vice President - Employee Relations
M. M. Glusac 64 July 7, 1994 Vice President - Government Affairs
G. L. Henson 52 August 1, 1994 Vice President - Large & Small Car, Jeep and Truck
Assembly and Stamping Operations
J. E. Herlitz 52 April 7, 1994 Vice President - Product Design
J. P. Holden 43 May 6, 1993 Vice President - Quality, Capacity, and Process Management
H. A. Lewis 52 July 8, 1993 Vice President - Finance Strategy and Planning
R. G. Liberatore 45 January 1, 1993 Vice President - Washington Affairs
A. C. Liebler 52 May 17, 1990 Vice President - Marketing and Communications
C. S. Lobo 46 July 9, 1992 Vice President - President and Managing Director -
Chrysler de Mexico S. A.
W. J. O'Brien 51 September 3, 1987 Vice President, General Counsel and Secretary
K. M. Oswald 45 October 6, 1994 Vice President - Corporate Personnel
E. T. Pappert 55 November 5, 1981 Vice President - Sales and Service
L. C. Richie 53 June 12, 1986 Vice President and General Counsel - Automotive Legal
Affairs
B. I. Robertson 52 February 6, 1992 Vice President - Engineering Technologies and General
Manager - Jeep/Truck Operations
S. T. Rushwin 47 October 6, 1994 Vice President - International Manufacturing and Minivan
Assembly Operations
T. W. Sidlik 45 September 3, 1992 Vice President, Chairman - Chrysler Financial Corporation
T. T. Stallkamp 48 May 1, 1990 Vice President - Procurement and Supply and General
Manager - Large Car Operations
</TABLE>
- ----------------------------
(1) 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.
(2) 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 Henson 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,
Messrs. Eaton and Henson were high level executives at General Motors
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). There were
approximately 143,000 shareholders of record of Chrysler's common stock at
December 31, 1994. 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
1994 High Low Declared
---------------- -------- --------- -----------
<S> <C> <C> <C>
First Quarter $63.500 $48.125 $0.20
Second Quarter 55.375 44.625 0.25
Third Quarter 51.250 43.125 0.25
Fourth Quarter 51.500 43.375 0.40
<CAPTION>
1993
----------------
<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
</TABLE>
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 a ratio of indebtedness to total capitalization
(each 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>
1994 (1) 1993 (2) 1992 (3) 1991 (4) 1990 (5)
---------- ---------- ---------- ---------- ----------
(Dollars and shares in millions except per common share data)
<S> <C> <C> <C> <C> <C>
Total revenues $ 52,224 $ 43,600 $ 36,897 $ 29,370 $ 30,620
Earnings (loss) from continuing operations
before cumulative effect of changes
in accounting principles 3,713 2,415 505 (538) 68
Primary earnings per common share 10.11 6.77 1.47 (2.22) 0.30
Net earnings (loss) 3,713 (2,551) 723 (795) 68
Primary earnings (loss) per common share 10.11 (7.62) 2.21 (3.28) 0.30
Fully diluted earnings per common share 9.10 -- 2.13 -- 0.30
Dividends declared per common share 1.10 0.65 0.60 0.60 1.20
Total assets 49,539 43,679 40,690 43,076 46,374
Total debt 13,106 11,451 15,551 19,438 22,900
Convertible preferred stock (in shares) 1.7 1.7 1.7 -- --
</TABLE>
- ----------------------------
(1) Earnings for the year ended December 31, 1994 include favorable
adjustments to the provision for income taxes aggregating $132 million.
These adjustments related to: (1) the recognition of tax credits related
to expenditures in prior years for qualifying research and development
activities, in accordance with an Internal Revenue Service settlement
which was based on recently issued U.S. Department of Treasury income tax
regulations, and (2) the reversal of valuation allowances related to tax
benefits associated with net operating loss carryforwards.
(2) Results for the year ended December 31, 1993 include a pretax 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 pretax gain of
$60 million ($39 million after applicable income taxes) on the sale of
Chrysler's plastics operations, 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."
(3) Earnings for the year ended December 31, 1992 include a pretax 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 pretax charge ($79 million
after applicable income taxes) relating to the restructuring of Chrysler's
short-term vehicle rental subsidiaries, and a $110 million pretax charge
($69 million after applicable income taxes) relating to investment losses
experienced by Chrysler Canada.
(4) Results for the year ended December 31, 1991 include a pretax 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 sales incentive programs.
(5) Earnings for the year ended December 31, 1990 include a pretax 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.
20
<PAGE> 21
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF Part II - Continued
FINANCIAL 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 $5.8 billion in 1994, compared with $3.8
billion in 1993. The earnings in 1993 included a gain on sales of automotive
assets and investments totaling $265 million. Excluding the effects of these
items, Chrysler's pretax earnings for 1993 were $3.6 billion.
Chrysler reported net earnings for 1994 of $3.7 billion, or $10.11 per
common share, compared to a net loss for 1993 of $2.6 billion, or $7.62 per
common share. Net earnings for 1994 included favorable tax adjustments
aggregating $132 million. 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"
and a $72 million favorable adjustment of Chrysler's deferred tax assets and
liabilities as a result of the increased U.S. federal income tax rate.
The improvement in earnings in 1994 over 1993 was primarily the result
of an increase in sales volume, a reduction in lower-margin fleet sales in
proportion to total retail sales and reduced sales incentives, partially offset
by increased profit-based employee costs. During 1994, Chrysler's worldwide
factory sales of cars increased 2 percent to 1,051,750 units, while worldwide
factory sales of trucks increased 18 percent to 1,710,353 units. Combined U.S.
and Canadian dealers' days supply of vehicles increased to 69 days at December
31, 1994 from 63 days at December 31, 1993.
During 1994, U.S. and Canada vehicle industry retail sales were 16.7
million cars and trucks, an increase of 8 percent from the 15.4 million units
sold in 1993. Despite an increase in its combined car and truck sales,
Chrysler's U.S. and Canada retail market share in 1994 decreased slightly in
comparison to 1993. Decreases in car market share were partially offset by
increases in truck market share, as shown below:
<TABLE>
<CAPTION>
Increase/
1994 1993 (Decrease)
---------- ---------- ----------
<S> <C> <C> <C>
U.S. Retail Market (1):
Car sales 811,824 834,132 (22,308)
Car market share 9.0 % 9.8 % (0.8)%
Truck sales 1,392,171 1,213,690 178,481
Truck market share 21.7 % 21.4 % 0.3 %
Combined car and truck sales 2,203,995 2,047,822 156,173
Combined car and truck market share 14.3 % 14.4 % (0.1)%
U.S. and Canada Retail Market (1):
Combined car and truck sales 2,451,747 2,274,641 177,106
Combined car and truck market share 14.7 % 14.8 % (0.1)%
</TABLE>
----------------------
(1) All retail sale and market share data include fleet sales.
The decline in Chrysler's U.S. car market share during 1994 resulted
from reduced sales to fleet customers and reduced sales in certain segments
resulting from changeovers to all-new 1995 models. The increase in U.S. truck
market share in 1994 was the result of increased sales of full-size Dodge Ram
pickup trucks introduced in late 1993. Despite increased retail unit sales in
1994, market shares in the minivan and small sport-utility segments decreased
slightly from 1993, principally as a result of market demand in excess of
Chrysler's 1994 production capacity for minivans and Jeep(R) vehicles.
CFC's earnings before income taxes and the cumulative effect of changes
in accounting principles were $315 million in 1994, compared to $267 million in
1993. The increase in 1994 was primarily due to higher volumes of automotive
financing, reduced credit loss provisions and lower costs of bank facilities.
CFC reported net earnings of $195 million and $129 million for 1994 and 1993,
respectively. CFC's net earnings for 1993 included charges totaling $30 million
for the adoptions of SFAS No. 106 and SFAS No. 112.
21
<PAGE> 22
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF Part II - Continued
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - Continued
FINANCIAL REVIEW - Continued
During 1994 and 1993, Chrysler continued to take 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 capital spending plans. During
1994 and 1993, Chrysler contributed a total of $6.1 billion to its pension fund.
At December 31, 1994, Chrysler had plan assets in excess of its projected
pension benefit obligation ("PBO") of $244 million, compared to a PBO in excess
of plan assets of $3.9 billion at December 31, 1992. During 1993, Chrysler
issued 52 million shares of common stock for net proceeds of $1.95 billion.
During 1994 and 1993, Chrysler sold assets and investments for proceeds totaling
approximately $786 million.
Chrysler's revenues and results of operations are principally derived
from the U.S. and Canada automotive marketplace. During 1994, combined U.S. and
Canada automobile industry sales increased 8 percent from the 1993 levels, as
the economic recoveries in the U.S. and Canada continued. Overall, Chrysler
experienced sales growth consistent with the U.S. and Canada automobile
industry. In response to the economic recovery, Chrysler is increasing its
worldwide production capacity by approximately 500,000 units per year by 1996.
Chrysler vehicles manufactured in Mexico represented approximately 9
percent of Chrysler's 1994 worldwide factory car and truck sales. Approximately
two-thirds of these vehicles were exported to the U.S., Canada and other
markets. Sales in Mexico of vehicles manufactured in the U.S. and Canada were
not significant in 1994. The economic uncertainty in Mexico following the
devaluation of the Peso may result in reduced vehicle sales in Mexico in 1995.
As a result, exports to Mexico of Chrysler vehicles manufactured in the U.S. and
Canada may decrease, and sales of vehicles in Mexico may be less profitable in
1995, as compared to 1994. If U.S. and Canada vehicle industry sales continue
at present or higher levels, imports to the U.S. and Canada of Chrysler vehicles
manufactured in Mexico may increase, and such sales may be more profitable in
1995, as compared to 1994. The devaluation of the Peso did not significantly
impact Chrysler's 1994 operating results. Chrysler cannot predict the impact
that the devaluation of the Peso and the resulting uncertainty surrounding the
Mexican economic and political environments will have on its operating results
in 1995.
During the first half of 1995, Chrysler will begin production of its
all-new minivans, and will cease production of its existing minivan models.
Chrysler expects this changeover will result in a decline in minivan production
in 1995 which Chrysler currently estimates at approximately 65,000 units.
Chrysler has benefitted from several factors, including: (1) continuing
economic recoveries (including low interest rates) and strong automobile sales
in the U.S. and Canada, where Chrysler's sales are concentrated, (2) a cost
advantage in comparison to vehicles manufactured in Japan (or vehicles
containing significant material components manufactured in Japan) as a result of
favorable exchange rates between the Japanese Yen and the U.S. Dollar, and (3)
a shift in U.S. and Canada consumer preferences toward trucks, as Chrysler
manufactures a higher proportion of trucks to total vehicles than its principal
competitors in the U.S. and Canada. A significant deterioration of any of these
factors could adversely affect Chrysler's operating results.
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES
Chrysler's total revenues were as follows:
<TABLE>
<CAPTION>
1994 vs. 1993 1993 vs. 1992
Increase/ Increase/
1994 1993 (Decrease) 1992 (Decrease)
--------- -------- ------------- --------- -------------
(in millions of dollars) (in millions of dollars)
<S> <C> <C> <C> <C> <C>
Sales of manufactured products $ 49,363 $ 40,831 21 % $ 33,548 22 %
Finance and insurance income 1,373 1,429 (4)% 1,953 (27)%
Other income 1,488 1,340 11 % 1,396 (4)%
--------- --------- ---------
Total revenues $ 52,224 $ 43,600 20 % $ 36,897 18 %
========= ========= =========
</TABLE>
The increase in sales of manufactured products in 1994 primarily
reflects the 12 percent increase in factory unit sales to 2,762,103 units in
1994. The 1993 increase was largely due to a 14 percent increase in factory
unit sales from the 2,175,447 units in 1992. Average revenue per unit, net of
sales incentives, was $17,663, $16,461 and $15,086 in 1994, 1993 and 1992,
respectively. The increases in average revenue per unit in 1994 and 1993 were
principally due to reduced sales incentives and sales of an increased proportion
of trucks to total vehicles.
22
<PAGE> 23
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF Part II - Continued
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - Continued
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES - Continued
The decreases in finance and insurance income in 1994 and 1993 were
primarily attributable to reduced nonautomotive financing revenue, resulting
from sales and liquidations of CFC's nonautomotive receivables, partially offset
by increased levels of automotive finance receivables. Total automotive
financing volume in 1994, 1993 and 1992 was $70.4 billion, $59.8 billion and
$46.6 billion, respectively. The increases in automotive financing volume over
the last two years was largely due to higher volumes 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>
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
United States Penetration:
Retail 24 % 25 % 24 %
Wholesale 73 % 75 % 69 %
Number of New Chrysler Vehicles Financed in
the United States (in thousands):
Retail 525 516 413
Wholesale 1,647 1,510 1,199
</TABLE>
Other income increased during 1994, as compared to 1993 and 1992, as a
result of increased interest income, reflecting Chrysler's increased cash, cash
equivalents and marketable securities balances in 1994.
Total expenses were as follows:
<TABLE>
<CAPTION>
1994 vs. 1993 1993 vs. 1992
Increase/ Increase/
1994 1993 (Decrease) 1992 (Decrease)
--------- -------- ------------- --------- -------------
(in millions of dollars) (in millions of dollars)
<S> <C> <C> <C> <C> <C>
Costs, other than items below $ 38,032 $ 32,382 17 % $ 28,396 14 %
Depreciation of property and equipment 983 969 1 % 969 --
Amortization of special tools 961 671 43 % 641 5 %
Selling and administrative expenses 3,933 3,377 16 % 3,387 --
Pension expense 714 756 (6)% 837 (10)%
Nonpension postretirement benefit
expense 834 768 9 % 369 108 %
Interest expense 937 1,104 (15)% 1,405 (21)%
Gain on sales of automotive assets
and investments -- (265) -- (142) 87 %
Restructuring charge -- -- -- 101 --
--------- --------- --------
Total expenses $ 46,394 $ 39,762 17 % $ 35,963 11 %
========= ========= =========
</TABLE>
Costs, other than items below increased over the three years primarily
due to the increases in factory unit sales volume. 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. Excluding the 1992 investment
loss, costs, other than items below as a percent of net sales of manufactured
products were 77 percent, 79 percent and 84 percent in 1994, 1993 and 1992,
respectively. These improvements were primarily due to lower per unit sales
incentives and increased capacity utilization.
Depreciation of property and equipment remained comparable in 1994,
1993 and 1992. 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. Special tooling amortization increased in
1994 over the 1993 and 1992 levels, primarily as a result of the shortening of
the remaining service lives of certain special tools in 1994.
Selling and administrative expenses increased in 1994 from the 1993 and
1992 levels, as a result of increased advertising costs and increased
profit-based employee costs. During 1993, increased profit-based employee
costs were offset by reduced costs at CFC due to the downsizing of its
nonautomotive financing operations.
23
<PAGE> 24
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF Part II - Continued
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - Continued
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES - Continued
Pension expense decreased in 1994 due to improved funding of the plans,
partially offset by increases resulting from the reduction in the discount rate
used to measure pension expense in 1994 and benefit increases from Chrysler's
1993 national contracts with its principal bargaining units. Pension expense
decreased in 1993 due to improved funding of the plans. Contributions during
1994, 1993 and 1992 were $2.6 billion, $3.5 billion and $816 million,
respectively.
Nonpension postretirement benefit expense increased slightly in 1994, as
increases resulting from the reduction in the discount rate used to measure
nonpension postretirement benefit expense in 1994 were partially offset by cost
savings associated with the implementation of new managed care initiatives.
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 in 1994 was primarily due to reductions
in CFC's effective cost of borrowings, resulting from CFC's higher levels of
commercial paper, which has lower costs than borrowings under CFC's bank
facilities. The decline in interest expense in 1993 was primarily the result of
CFC's lower average borrowings, reflecting CFC's 1993 sales of its nonautomotive
financing operations, the proceeds from which were used to reduce outstanding
indebtedness. CFC's average effective cost of borrowings was 8.0 percent, 8.6
percent and 7.8 percent in 1994, 1993 and 1992, respectively. The decrease in
CFC's 1994 average effective cost of borrowings reflects lower bank facility
costs and higher levels of commercial paper. The increase in CFC's average
effective cost of borrowings in 1993 as compared to 1992 was primarily due to
the amortization of up-front fees and costs associated with CFC's former bank
facilities, which were replaced in 1994.
The results of operations for 1992 included a restructuring charge of
$101 million relating to the realignment of Chrysler's short-term vehicle rental
subsidiaries 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 and 1992 included gains on sales of
automotive assets and investments of $265 million and $142 million,
respectively. The 1993 pretax gain was composed of a $205 million gain on the
sales of an aggregate of 50.3 million shares of MMC stock and a $60 million gain
on the sale of Chrysler's plastics operations. The 1992 pretax gain resulted
from the sale of 43.6 million shares of MMC stock.
Chrysler's effective tax rates in 1994, 1993 and 1992 were 36.3 percent,
37.1 percent and 45.9 percent, respectively. The provision for income taxes in
1994 included adjustments aggregating $132 million for: (1) the recognition of
tax credits related to expenditures in prior years for qualifying research and
development activities, in accordance with an Internal Revenue Service
settlement which was based on recently issued U.S. Department of Treasury income
tax regulations, and (2) the reversal of valuation allowances related to tax
benefits associated with net operating loss carryforwards. The 1993 provision
for income taxes included a favorable adjustment of Chrysler's deferred tax
assets and liabilities to the increased U.S. federal tax rate. The 1992
effective tax rate was higher than the effective tax rates in 1994 and 1993 as a
result of higher nondeductible expenses, primarily goodwill amortization.
LIQUIDITY AND CAPITAL RESOURCES
Chrysler's combined cash, cash equivalents and marketable securities
totaled $8.4 billion at December 31, 1994 (including $757 million held by CFC),
compared to $5.1 billion and $3.6 billion at December 31, 1993 and 1992,
respectively. The increase in 1994 was the result of cash generated by
operating activities, partially offset by capital expenditures and pension
contributions. 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.
Chrysler's long-term profitability will depend on its ability to
develop and market its products successfully. Chrysler's expenditures for new
product development and the acquisition of productive assets were $13.7 billion
for the three-year period ended December 31, 1994. Expenditures for these
items during the succeeding three-year period are expected to be at similar or
higher levels. At December 31, 1994, Chrysler had commitments for capital
expenditures, including commitments for assets currently under construction,
totaling approximately $1.0 billion.
24
<PAGE> 25
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF Part II - Continued
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - CONTINUED
LIQUIDITY AND CAPITAL RESOURCES - CONTINUED
Chrysler's pension assets exceeded its PBO by $244 million at December
31, 1994, compared to a PBO in excess of plan assets of $2.2 billion and $3.9
billion at December 31, 1993 and 1992, respectively. These reductions in the
unfunded pension obligation resulted from Chrysler's contributions of $2.6
billion and $3.5 billion to the pension fund in 1994 and 1993, respectively. In
addition to the contributions in 1994, the projected pension benefit obligation
was reduced by an increase in the discount rate used to measure the
obligation. The favorable impact of the 1993 contributions was partially offset
by increases in the PBO caused by the reduction in the discount rate used to
measure the obligation and pension benefit increases which were included in
Chrysler's new national labor agreements with its principal collective
bargaining units.
During 1994, Chrysler replaced its $1.5 billion revolving credit
agreement, which was to expire in June 1996, with a new $1.7 billion agreement,
expiring in July 1999. The new agreement provides for reduced interest rates
and commitment fees, less restrictive financial covenants and the removal of the
lenders' ability to obtain security interests in Chrysler's assets. None of the
commitment was drawn upon at December 31, 1994.
At December 31, 1994, Chrysler (excluding CFC) had debt maturities
totaling $695 million in 1995, 1996 and 1997. In December 1994, Chrysler's
Board of Directors approved a $1 billion common stock repurchase program
commencing in the first quarter of 1995, subject to market conditions. Chrysler
believes that cash from operations and its cash position will provide sufficient
liquidity to meet its capital expenditure, debt maturity and other funding
requirements.
Chrysler's ability to market its products successfully depends
significantly on the availability of vehicle financing for its dealers and, to a
lesser extent, the availability of financing for retail and fleet customers,
both of which CFC provides.
Term debt borrowings, commercial paper borrowings and receivable sales
are CFC's primary funding sources. During 1994, CFC raised $1.8 billion from
term debt placements and increased the amount of its commercial paper
outstanding by $1.5 billion.
Receivable sales continued to be a significant source of funding for
CFC, which realized $6.4 billion and $7.8 billion of net proceeds from the sale
of automotive retail receivables during 1994 and 1993, respectively. In
addition, CFC's wholesale receivable sale arrangements provided funding which
aggregated $3.8 billion and $4.6 billion at December 31, 1994 and 1993,
respectively.
During 1993 and 1992, $3.3 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 Inc. and the sale of
certain assets of Chrysler Capital. Proceeds from these sales were used to
reduce outstanding indebtedness.
At December 31, 1994, CFC had U.S. and Canadian bank facilities
aggregating $5.2 billion and receivable sale agreements totaling $1.7 billion.
At December 31, 1994, no amounts were outstanding under CFC's U.S. and Canadian
bank facilities or receivable sale agreements.
At December 31, 1994, CFC had debt maturities of $5.1 billion in 1995
(including $4.3 billion of commercial paper), $1.7 billion in 1996, and $692
million in 1997. CFC believes that cash provided by operations, receivable
sales and the issuance of term debt and commercial paper will be sufficient to
enable it to meet its funding requirements.
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. In October 1994, the FASB
issued SFAS No. 118, "Accounting by Creditors for Impairment of a Loan--Income
Recognition and Disclosures," as an amendment to SFAS No. 114. These new
accounting standards require creditors to evaluate the collectibility of both
contractual interest and principal of receivables when evaluating the need for a
loss accrual. Chrysler believes that the implementation of these new accounting
standards will not have a material impact on its consolidated operating results
or financial position. Chrysler will adopt these standards effective January 1,
1995, as required.
25
<PAGE> 26
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Part II - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------
1994 1993 1992
------- ------- -------
(in millions of dollars)
<S> <C> <C> <C>
Sales of manufactured products $ 49,363 $ 40,831 $ 33,548
Finance and insurance income 1,373 1,429 1,953
Other income 1,488 1,340 1,396
--------- --------- ---------
TOTAL REVENUES 52,224 43,600 36,897
--------- --------- ---------
Costs, other than items below (Note 14) 38,032 32,382 28,396
Depreciation of property and
equipment (Note 1) 983 969 969
Amortization of special tools (Note 1) 961 671 641
Selling and administrative expenses 3,933 3,377 3,387
Pension expense (Note 11) 714 756 837
Nonpension postretirement benefit
expense (Note 12) 834 768 369
Interest expense 937 1,104 1,405
Gains on sales of automotive assets
and investments (Note 13) -- (265) (142)
Restructuring charge (Note 14) -- -- 101
--------- --------- ---------
TOTAL EXPENSES 46,394 39,762 35,963
--------- --------- ---------
EARNINGS BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGES
IN ACCOUNTING PRINCIPLES 5,830 3,838 934
Provision for income taxes (Note 7) 2,117 1,423 429
--------- --------- ---------
EARNINGS BEFORE CUMULATIVE EFFECT OF
CHANGES IN ACCOUNTING PRINCIPLES 3,713 2,415 505
Cumulative effect of changes in accounting
principles (Notes 1, 7 and 12) -- (4,966) 218
--------- --------- ---------
NET EARNINGS (LOSS) $ 3,713 $ (2,551) $ 723
Preferred stock dividends (Note 10) 80 80 69
--------- --------- ---------
NET EARNINGS (LOSS) ON COMMON STOCK $ 3,633 $ (2,631) $ 654
========= ========= ==========
<CAPTION>
PRIMARY EARNINGS (LOSS) PER
COMMON SHARE (Note 10): (in dollars or millions of shares)
<S> <C> <C> <C>
Earnings before cumulative effect
of changes in accounting principles $ 10.11 $ 6.77 $ 1.47
Cumulative effect of changes in
accounting principles -- (14.39) 0.74
--------- --------- --------
Net earnings (loss) per common share $ 10.11 $ (7.62) $ 2.21
========= ========= ========
Average common and dilutive
equivalent shares outstanding 359.2 345.1 295.9
FULLY DILUTED EARNINGS PER COMMON
SHARE (Note 10):
Earnings before cumulative effect
of changes in accounting principles $ 9.10 $ -- $ 1.49
Cumulative effect of changes in
accounting principles -- -- 0.64
--------- --------- --------
Net earnings per common share $ 9.10 $ -- $ 2.13
========= ========= ========
Average common and dilutive
equivalent shares outstanding 407.8 -- 339.2
Dividends declared per common share $ 1.10 $ 0.65 $ 0.60
</TABLE>
- --------------------------
See notes to consolidated financial statements.
26
<PAGE> 27
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
December 31
---------------------------
1994 1993
---------- ----------
(in millions of dollars)
<S> <C> <C>
ASSETS:
Cash and cash equivalents (Note 1) $ 5,145 $ 4,040
Marketable securities (Note 1) 3,226 1,055
Accounts receivable - trade and other (less allowance for
doubtful accounts: 1994 - $58 million; 1993 - $52 million) 1,695 1,572
Inventories (Note 2) 3,356 3,629
Prepaid taxes, pension and other expenses 1,330 833
Finance receivables, retained interests in sold receivables and
other related amounts - net (Note 3) 12,563 10,284
Property and equipment (Note 4) 10,839 9,319
Special tools 3,643 3,455
Intangible assets (Note 1) 2,162 4,328
Deferred tax assets (Note 7) 395 2,210
Other assets (Note 11) 5,185 2,954
-------- --------
TOTAL ASSETS $ 49,539 $ 43,679
======== ========
LIABILITIES:
Accounts payable $ 7,826 $ 6,712
Short-term debt (Note 6) 4,645 3,297
Payments due within one year on long-term debt (Note 6) 811 1,283
Accrued liabilities and expenses (Note 5) 5,582 4,650
Long-term debt (Note 6) 7,650 6,871
Accrued noncurrent employee benefits (Notes 1, 11 and 12) 8,595 10,613
Other noncurrent liabilities 3,736 3,417
-------- --------
TOTAL LIABILITIES 38,845 36,843
-------- --------
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:
1994 and 1993 - 1.7 shares; aggregate liquidation
preference $863 million 2 2
Common stock - $1 per share par value; authorized 1,000.0
shares; issued: 1994 and 1993 - 364.1 shares 364 364
Additional paid-in capital 5,536 5,533
Retained earnings 5,006 1,170
Treasury stock - at cost: 1994 - 9.0 shares; 1993 - 10.4
shares (214) (233)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 10,694 6,836
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 49,539 $ 43,679
======== ========
</TABLE>
- --------------------------
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 STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------------
1994 1993 1992
---------- ---------- ----------
(in millions of dollars)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 3,713 $ (2,551) $ 723
Adjustments to reconcile to net cash provided by operating
activities:
Depreciation and amortization 1,944 1,640 1,610
Provision for restructuring charge -- -- 101
Provision for credit losses 203 209 345
Deferred income taxes 1,065 803 229
Gains on sales of automotive assets and investments -- (265) (142)
Cumulative effect of changes in accounting principles -- 4,966 (218)
Change in receivables (1,158) (2) --
Change in inventories 129 (557) 535
Change in prepaid expenses and other assets (1,898) (1,472) (51)
Change in accounts payable and accrued and other liabilities 2,613 (5) 562
Other 161 47 (8)
-------- --------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 6,772 2,813 3,686
-------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (5,425) (4,700) (18,084)
Sales and maturities of marketable securities 3,519 4,937 17,786
Proceeds from sales of automotive assets and investments 62 461 215
Finance receivables acquired (20,292) (16,809) (17,290)
Finance receivables collected 5,247 9,616 10,705
Proceeds from sales of finance receivables 13,482 7,846 8,043
Proceeds from sales of nonautomotive assets -- 2,375 903
Expenditures for property and equipment (2,666) (1,761) (1,417)
Expenditures for special tools (1,177) (1,234) (872)
Other 313 446 (97)
------- --------- --------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (6,937) 1,177 (108)
------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt (less than 90-day maturities) 1,348 2,518 (110)
Proceeds under revolving lines of credit and long-term
borrowings 1,305 6,995 44,597
Payments on revolving lines of credit and long-term borrowings (1,011) (13,592) (48,334)
Proceeds from issuances of common and preferred stock, net of
expenses -- 1,952 836
Dividends paid (399) (281) (225)
Other 27 101 (26)
------- --------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,270 (2,307) (3,262)
------- --------- --------
Change in cash and cash equivalents 1,105 1,683 316
Cash and cash equivalents at beginning of year 4,040 2,357 2,041
------- --------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 5,145 $ 4,040 $ 2,357
======= ========= ========
</TABLE>
- --------------------------
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
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. Amounts for 1993 and 1992
have been reclassified to conform with current period classifications.
REVENUE RECOGNITION
Vehicle and parts sales are generally recorded when such products are
shipped to dealers. Provisions for sales allowances and incentives are made at
the time of sale and treated as sales reductions.
Interest income from finance receivables of Chrysler Financial
Corporation ("CFC"), a wholly owned subsidiary, 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.
CFC sells significant amounts of automotive receivables in transactions
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. 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 receivables are recognized in the
period that such sales occur. 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.
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, 1994, the weighted average service lives of assets were 34 years
for buildings (including improvements and building equipment), 14 years for
machinery and equipment and 11 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.
Effective April 1, 1994, Chrysler revised the estimated service lives of
certain special tools and property and equipment. These revisions were based on
updated assessments of the service lives of the related assets and resulted in
the recognition of additional amortization of special tools of $246 million in
1994 and lower depreciation of property and equipment of $45 million in 1994.
PRODUCT-RELATED COSTS
Expenditures for advertising, sales promotion and other product-related
costs are expensed as incurred, and the estimated costs of product warranty are
accrued at the time of sale. Advertising expense was $1.1 billion, $858 million
and $873 million in 1994, 1993 and 1992, respectively. Research and
development costs were $1.3 billion, $1.2 billion and $1.1 billion in 1994, 1993
and 1992, respectively.
CASH AND CASH EQUIVALENTS
Highly liquid investments with a maturity of three months or less at the
date of purchase are classified as cash equivalents.
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 - CONTINUED
MARKETABLE SECURITIES
Effective January 1, 1994, Chrysler adopted Statement of Financial
Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." This new accounting standard specifies the
accounting and reporting requirements for changes in the fair values of
investments in debt and equity securities which have readily determinable fair
values. Prior to 1994, marketable equity securities were carried at cost, which
approximated market, while debt securities were carried at cost adjusted for
amortized premium or discount. Adoption of this accounting standard did not have
a material effect on Chrysler's financial statements.
Under SFAS No. 115, these debt and equity securities are segregated into
one of the following categories--trading, available-for-sale and
held-to-maturity. Trading securities and available-for-sale securities are
carried at their fair values. Changes in the fair values of trading securities
are recorded in the statement of earnings. Changes in the fair values of
available-for-sale securities are recorded as a component of shareholders'
equity until such securities are sold. Held-to-maturity securities are carried
at cost adjusted for amortized premium or discount.
At December 31, 1994, Chrysler had investments in securities (including
cash equivalents) with an aggregate carrying value of $7.9 billion accounted for
in accordance with SFAS No. 115. These securities consisted primarily of
commercial paper, federal government agency securities and corporate debt. At
December 31, 1994, securities categorized as available-for-sale and held-to-
maturity totaled $5.5 billion and $2.4 billion, respectively. Substantially all
such securities have maturities within one year.
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 such
receivables are determined to be impaired.
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. In October 1994, the FASB
issued SFAS No. 118, "Accounting by Creditors for Impairment of a Loan--Income
Recognition and Disclosures," as an amendment to SFAS No. 114. These new
accounting standards require creditors to evaluate the collectibility of both
contractual interest and principal of receivables when evaluating the need for a
loss accrual. Chrysler believes that the implementation of these new accounting
standards will not have a material impact on its consolidated operating results
or financial position. Chrysler will adopt these standards effective January 1,
1995, as required.
INVENTORIES
Inventories are valued at the lower of cost or market. The cost of
approximately 51 percent and 44 percent of inventories at December 31, 1994 and
1993, 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
identifiable assets acquired ("goodwill") is amortized on a straight-line basis
over periods of up to 40 years. The amount is reported net of accumulated
amortization of $723 million and $643 million at December 31, 1994 and 1993,
respectively. Intangible assets also included intangible pension assets of $44
million and $2.1 billion at December 31, 1994 and 1993, respectively.
30
<PAGE> 31
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 - CONTINUED
POSTEMPLOYMENT BENEFITS
Effective January 1, 1993, Chrysler adopted SFAS No. 112, "Employers'
Accounting for Postemployment Benefits," which required 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.
DERIVATIVE FINANCIAL INSTRUMENTS
Chrysler manages risk arising from fluctuations in interest rates and
currency exchange rates by utilizing derivative financial instruments. Chrysler
does not use derivative financial instruments for trading purposes. For the
year ended December 31, 1994, Chrysler adopted SFAS No. 119, "Disclosure about
Derivative Financial Instruments and Fair Value of Financial Instruments."
When Chrysler sells vehicles outside the United States or purchases
components from suppliers outside the United States, transactions are frequently
denominated in currencies other than U.S. dollars. Periodically, Chrysler
initiates hedging activities by entering into currency exchange agreements,
consisting principally of currency forward contracts and purchased currency
options, to minimize revenue and cost variations which could result from
fluctuations in currency exchange rates. These hedge instruments typically
mature within two years of origination. The currency exchange agreements are
treated as off-balance sheet financial instruments, with related gains and
losses recorded in the settlement of the underlying transactions. In the event
of an early termination of a currency exchange agreement designated as a hedge,
the gain or loss continues to be deferred and is included in the settlement of
the underlying transaction.
CFC utilizes interest rate swaps, interest rate caps, forward interest
rate contracts and currency exchange agreements as part of its asset and
liability management program. Due to changing interest rates, interest rate
exchange agreements, which are treated as off-balance sheet financial
instruments, are utilized to stabilize interest margins. Interest differentials
resulting from interest rate swap and cap agreements are recorded on an accrual
basis as an adjustment to interest expense. In the event of an early
termination of an interest rate exchange agreement designated as a hedge, gains
or losses are deferred and recorded as an adjustment to interest expense over
the remaining term of the underlying debt. Forward interest rate contracts are
periodically used to manage exposure to fluctuations in funding costs for
anticipated securitizations of retail receivables. Unrealized gains or losses on
forward interest rate contracts that qualify for hedge accounting treatment are
deferred. Unrealized gains or losses on forward interest rate contracts that do
not qualify for hedge accounting treatment are included in the statement of
earnings. Realized gains or losses for hedge instruments are included in the
determination of the gain or loss from the related sale of retail receivables.
CFC and its subsidiaries hedge borrowings denominated in currencies other than
the borrowers' local currency with currency exchange agreements, which are
reflected in the consolidated balance sheet. As a result, such borrowings are
translated in the financial statements at the rates of exchange established
under the related currency exchange agreements.
NOTE 2. INVENTORIES AND COST OF SALES
Inventories, summarized by major classification, were as follows:
<TABLE>
<CAPTION>
December 31
---------------------------
1994 1993
--------- ---------
(in millions of dollars)
<S> <C> <C>
Finished products, including service parts $ 1,145 $ 1,016
Raw materials, finished production parts and supplies 1,223 1,177
Vehicles held for short-term lease 988 1,436
-------- -------
Total $ 3,356 $ 3,629
======= =======
</TABLE>
Inventories valued on the LIFO basis would have been $328 million and
$259 million higher than reported had they been valued on the FIFO basis at
December 31, 1994 and 1993, respectively.
Total manufacturing cost of sales aggregated $39.0 billion, $33.1
billion and $28.7 billion for 1994, 1993 and 1992, respectively.
31
<PAGE> 32
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. FINANCE RECEIVABLES, RETAINED INTERESTS IN SOLD RECEIVABLES AND
OTHER RELATED AMOUNTS
Finance receivables, retained interests in sold receivables and other
related amounts were as follows:
<TABLE>
<CAPTION>
December 31
---------------------------
1994 1993
------- --------
(in millions of dollars)
<S> <C> <C>
Automotive financing $ 5,866 $ 4,107
Nonautomotive financing 2,500 2,803
Retained senior interests in wholesale
receivables held in trusts 2,173 967
-------- -------
Total finance receivables 10,539 7,877
Retained interests in sold receivables and
other related amounts 2,548 2,914
Total allowance for credit losses (524) (507)
-------- -------
Total $ 12,563 $ 10,284
======== ========
</TABLE>
Retained interests in sold receivables and other related amounts are
generally restricted and subject to limited recourse provisions. At December
31, 1994, CFC was a party to an interest rate cap agreement related to $134
million of its retained interests. This agreement, which is designated as a
hedge instrument, resulted in no impact on interest income at CFC. At December
31, 1994, CFC was also a party to a forward interest rate contract (notional
amount $500 million) to manage its exposure to fluctuations in funding costs for
an anticipated securitization of retail receivables during the first quarter of
1995.
Contractual maturities of total finance receivables as of December 31,
1994, were (in millions of dollars): 1995 - $5,219; 1996 - $1,371; 1997 -
$1,108; 1998 - $862; 1999 - $549; and 2000 and thereafter - $1,430. Actual cash
flows will vary from contractual cash flows due to future sales of finance
receivables and prepayments.
Changes in the allowance for credit losses were as follows:
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------
1994 1993 1992
--------- ------- --------
(in millions of dollars)
<S> <C> <C> <C>
Balance at beginning of year $ 507 $ 603 $ 630
Provision for credit losses 203 209 345
Net credit losses (159) (207) (389)
Transfers related to nonautomotive asset sales -- (79) --
Other adjustments (27) (19) 17
------- ------ -----
Balance at end of year $ 524 $ 507 $ 603
======= ====== ======
</TABLE>
Nonearning finance receivables, including receivables sold subject to
limited recourse, totaled $282 million and $333 million at December 31, 1994 and
1993, respectively, which represented 0.9 percent and 1.2 percent of such
receivables outstanding, respectively.
NOTE 4. PROPERTY AND EQUIPMENT
Property and equipment, summarized by major classification, were as
follows:
<TABLE>
<CAPTION>
December 31
--------------------------
1994 1993
---------- ----------
(in millions of dollars)
<S> <C> <C>
Land $ 410 $ 427
Buildings 4,694 4,501
Machinery and equipment 10,243 9,130
Furniture and fixtures 499 462
Construction in progress 2,100 1,379
------ -----
17,946 15,899
Less accumulated depreciation 7,107 6,580
------ ------
Total $ 10,839 $ 9,319
======== ========
</TABLE>
32
<PAGE> 33
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5. ACCRUED LIABILITIES AND EXPENSES
Accrued liabilities and expenses consisted of the following:
<TABLE>
<CAPTION>
December 31
---------------------------
1994 1993
--------- ---------
(in millions of dollars)
<S> <C> <C>
Dealer and customer claims and discounts $ 1,715 $ 1,609
Employee compensation and benefits 2,242 1,653
Accrued payroll and other taxes 401 393
Other 1,224 995
------- -------
Total $ 5,582 $ 4,650
======= =======
</TABLE>
NOTE 6. DEBT
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
December 31, 1994
----------------------------- December 31
Weighted Average ------------------------
Interest Rate(1) Maturity 1994 1993
------------- ----------- --------- ---------
(in millions of dollars)
<S> <C> <C> <C> <C>
Chrysler, excluding CFC:
Debentures 12.0% 1997-2017 $ 564 $ 564
Notes and other debt 11.4% 1995-2020 1,721 2,352
--------- --------
2,285 2,916
Less amounts due within one year 187 400
--------- --------
Total 2,098 2,516
--------- -------
CFC:
Senior notes and debentures 7.2% 1995-2018 6,069 5,139
Senior subordinated notes and
debentures 8.3% 1995 27 77
Mortgage notes, capital leases and other 80 22
--------- ------
6,176 5,238
Less amounts due within one year 624 883
--------- -------
Total 5,552 4,355
--------- -------
Total long-term debt $ 7,650 $ 6,871
========== ========
</TABLE>
- -------------------------
(1) The weighted average interest rates include the effects of
interest rate exchange agreements.
At December 31, 1994, aggregate annual maturities of consolidated debt,
including principal payments on capital leases, were as follows (in millions of
dollars): 1995 - $5,456; 1996 - $1,705; 1997 - $1,009; 1998 - $999; and 1999 -
$1,577.
CFC enters into currency exchange agreements to manage its exposure to
fluctuations in currency exchange rates related to specific funding
transactions. Certain borrowings in U.S. Dollars, German Marks and Swiss Francs
are hedged with currency exchange agreements in the local currency of the
borrowing entity. As a result, such borrowings are translated in the financial
statements at the rates of exchange established under the related currency
exchange agreement. The amount of such borrowings was $734 million. If CFC had
not entered into currency exchange agreements, the amount would have been $220
million higher at December 31, 1994.
To mitigate risks associated with changing interest rates on certain of
its debt, CFC has entered into interest rate exchange agreements. CFC manages
exposure to counterparty credit risk by entering into such agreements only with
major financial institutions that are expected to fully perform under the terms
of such agreements. The notional amounts are used to measure the volume of
these agreements. The impact on interest expense of interest rate exchange
agreements was immaterial in 1994, 1993 and 1992. Chrysler cannot predict the
impact that such agreements may have on interest expense in the future.
Interest rate swaps related to term debt are matched with specific
obligations, altering the interest rate characteristics of the associated debt.
Interest rate swaps are also utilized to reduce exposure to interest rate
fluctuations on the anticipated issuances of commercial paper. Interest rate
swaps associated with commercial paper are matched with groups of such
obligations on a layered basis. An aggregate of $4.3 billion of commercial
paper was outstanding at December 31, 1994.
33
<PAGE> 34
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6. DEBT - CONTINUED
The following table summarizes CFC's interest rate derivatives related
to its debt obligations as of December 31, 1994 and 1993:
<TABLE>
<CAPTION>
Notional Amounts Outstanding
and Weighted Average Rates
---------------------------------
December 31
---------------------------------
Variable Maturing
Underlying Financial Instruments Rate Indices Through 1994 1993
---------------------------------------- ------------- -------- --------- ----------
(in millions of dollars)
<S> <C> <C> <C> <C>
PAY FIXED INTEREST RATE SWAPS
Commercial paper 1998 $ 500 $ 527
Weighted average pay rate 9.09% 9.08%
Weighted average receive rate Money Market 5.98% 3.20%
Senior notes and debentures 1995 $ 90 $ 190
Weighted average pay rate 9.44% 9.63%
Weighted average receive rate LIBOR 5.81% 3.40%
RECEIVE FIXED INTEREST RATE SWAPS
Senior notes and debentures 2006 $ 126 $ 404
Weighted average pay rate LIBOR 5.84% 3.46%
Weighted average receive rate 9.41% 9.03%
PAY/RECEIVE VARIABLE INTEREST RATE SWAPS
Senior notes and debentures 1999 $ 61 --
Weighted average pay rate LIBOR 6.16% --
Weighted average receive rate Treasury 6.89% --
</TABLE>
During 1994, CFC replaced its revolving credit and receivable sale
agreements, which were to expire in 1995, with new agreements providing for
credit lines totaling $5.2 billion and receivable sale agreements totaling $1.7
billion, expiring in 1998. These agreements contain restrictive covenants,
which, among other things, require CFC to maintain a minimum net worth. None of
the commitments were drawn upon at December 31, 1994.
During 1994, Chrysler replaced its $1.5 billion revolving credit
agreement, which was to expire in June 1996, with a new $1.7 billion revolving
credit agreement expiring in July 1999. The new agreement provides for reduced
interest rates and commitment fees, less restrictive financial covenants and the
removal of the lenders' ability to obtain security interests in Chrysler's
assets. None of the commitment was drawn upon at December 31, 1994.
NOTE 7. INCOME TAXES
Effective January 1, 1992, Chrysler adopted SFAS No. 109, "Accounting
for Income Taxes," which resulted in a favorable cumulative effect of the
change in accounting principle of $218 million, or $0.74 per common share.
Earnings before income taxes and the cumulative effect of changes in
accounting principles were attributable to the following sources:
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------
1994 1993 1992
-------- -------- ---------
(in millions of dollars)
<S> <C> <C> <C>
United States $ 5,239 $ 3,191 $ 618
Foreign 591 647 316
-------- -------- -------
Total $ 5,830 $ 3,838 $ 934
======== ======== =======
</TABLE>
34
<PAGE> 35
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7. INCOME TAXES - CONTINUED
The provision for income taxes on earnings before income taxes and the
cumulative effect of changes in accounting principles included the following:
<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------
1994 1993 1992
------ ----- ------
(in millions of dollars)
<S> <C> <C> <C>
Currently Payable:
United States $ 876 $ 523 $ 66
Foreign 60 69 123
State and local 116 28 11
----- ------ ------
1,052 620 200
----- ------ ------
Deferred:
United States 820 528 220
Foreign 73 131 (27)
State and local 172 144 36
----- ------ ------
1,065 803 229
----- ------ ------
Total $2,117 $1,423 $ 429
====== ====== ======
</TABLE>
Chrysler does not provide for U.S. income tax or foreign withholding
taxes on the undistributed earnings of foreign subsidiaries, as such cumulative
earnings of $1.9 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 1994 and 1993; 34 percent for 1992) to actual income taxes
provided was as follows:
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------
1994 1993 1992
------- ------ -------
(in millions of dollars)
<S> <C> <C> <C>
Tax at U.S. statutory rate $ 2,041 $ 1,343 $ 318
State and local taxes net of federal tax benefit 191 114 33
Recognition of prior years research and development tax credits (100) -- --
Adjustments to reflect current assessment of realizability of
deferred tax assets (32) -- --
Rate adjustment of U.S. deferred tax assets and liabilities -- (72) --
Nondeductible goodwill 27 28 60
Other (10) 10 18
------- ------- --------
Provision for income taxes $ 2,117 $ 1,423 $ 429
======= ======= ========
Effective income tax rate 36.3% 37.1% 45.9%
======= ====== ========
</TABLE>
The adjustment to the provision for income taxes for the recognition of
prior years research and development tax credits in 1994 represents the tax
benefits related to expenditures in prior years for qualifying research and
development activities, in accordance with an Internal Revenue Service
settlement which was based on recently issued U.S. Department of Treasury income
tax regulations.
35
<PAGE> 36
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA-Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7. INCOME TAXES - CONTINUED
The tax-effected temporary differences and carryforwards which comprised
deferred tax assets and liabilities were as follows:
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
------------------------------- ------------------------------
Deferred Deferred Deferred Deferred
Tax Assets Tax Liabilities Tax Assets Tax Liabilities
------------- ---------------- ----------- ---------------
(in millions of dollars)
<S> <C> <C> <C> <C>
Nonpension postretirement benefits $ 2,960 $ -- $2,783 $ --
Pensions 11 1,726 3 488
Accrued expenses 2,471 -- 2,415 --
Lease transactions -- 1,713 -- 1,673
Depreciation -- 1,678 -- 1,665
Tax credit carryforwards 51 -- 342 --
Alternative minimum tax credit carryforwards 751 -- 825 --
State and local taxes 215 105 421 91
NOL carryforwards 109 -- 136 --
Other 193 670 75 641
------- ------- ------- ------
6,761 5,892 7,000 4,558
Valuation allowance (77) -- (146) --
------- ------- ------- ------
Total $ 6,684 $ 5,892 $ 6,854 $4,558
======= ======= ======= ======
</TABLE>
Chrysler's tax credit carryforwards expire at various dates through the
year 2009; alternative minimum tax credit carryforwards have no expiration
dates. NOL carryforwards totaled $313 million at December 31, 1994, and may be
used through the year 2008. The valuation allowance was principally related to
certain subsidiaries' NOL carryforwards. Changes in the valuation allowance
were as follows:
<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------
1994 1993 1992
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Balance at beginning of year $146 $130 $107
Provision for unrecognizable deferred tax assets generated -- 36 23
Utilization of NOL carryforwards (25) (20) --
Adjustments to reflect current assessment of realizability of
deferred tax assets (32) -- --
Other (12) -- --
---- ---- ----
Balance at end of year $ 77 $146 $130
==== ==== ====
</TABLE>
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, Chrysler maintains 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. Chrysler is unable
to estimate such changes in costs, if any, which may be required in connection
with these matters.
36
<PAGE> 37
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8. COMMITMENTS AND CONTINGENT LIABILITIES - 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 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 maintains 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. Chrysler is unable to estimate such changes in costs, if
any, which may be required in connection with these matters.
OTHER MATTERS
The majority of Chrysler's lease payments are for operating leases. At
December 31, 1994, Chrysler had the following minimum rental commitments under
noncancelable operating leases: 1995 - $325 million; 1996 - $263 million; 1997
- - $134 million; 1998 - $61 million; 1999 - $48 million; and 2000 and thereafter
- - $143 million. Future minimum lease commitments have not been reduced by
minimum sublease rentals of $252 million due in the future under noncancelable
subleases.
Rental expense for operating leases, with original expiration dates
beyond one year, was $407 million, $410 million and $383 million in 1994, 1993
and 1992, respectively. Sublease rentals of $60 million, $61 million, and $60
million were received in 1994, 1993, and 1992, respectively.
Chrysler had commitments for capital expenditures, including
commitments for facilities currently under construction, approximating $1.0
billion at December 31, 1994.
At December 31, 1994, Chrysler had guaranteed obligations of others in
the amount of $224 million, none of which were 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.
37
<PAGE> 38
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9. STOCK OPTIONS AND PERFORMANCE-BASED COMPENSATION - CONTINUED
Under the Plan and the 1991 Plan, outstanding options, consisting of
ten-year nonqualified stock options, have exercise prices of not less than 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,
including the conversion of AMC options outstanding at the date of the AMC
acquisition, was as follows:
<TABLE>
<CAPTION>
Shares Under Option Price
Option Per Share
------------ ------------
(in millions)
<S> <C> <C>
Outstanding at January 1, 1992 15.4 $ 7.51 - $68.85
Granted 3.2 16.07 - 32.82
Exercised (3.7) 7.51 - 25.88
Terminated (0.1)
-----
Outstanding at December 31, 1992 14.8 11.75 - 68.85
Granted 3.0 36.88 - 56.44
Exercised (6.4) 11.75 - 44.13
Terminated (0.2)
-----
Outstanding at December 31, 1993 11.2 11.75 - 56.44
Granted 3.3 44.75 - 62.19
Exercised (1.3) 11.75 - 47.32
Terminated (0.1)
-----
Outstanding at December 31, 1994 13.1 11.75 - 62.19
=====
</TABLE>
Shares available for granting options at the end of 1994, 1993 and 1992
were 15.1 million, 1.5 million, and 4.4 million, respectively. At December 31,
1994, 5.6 million options with prices ranging from $16.07 to $54.32 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.
38
<PAGE> 39
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10. SHAREHOLDERS' EQUITY
Information with respect to shareholders' equity was as follows (shares
in millions):
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------------------
1994 1993 1992
------ ------ ------
(in millions of dollars)
<S> <C> <C> <C>
PREFERRED STOCK
Balance at beginning of year $ 2 $ 2 $ --
Shares issued (1992 - 1.7) -- -- 2
------ ------ ------
Balance at end of year $ 2 $ 2 $ 2
====== ====== ======
COMMON STOCK:
Balance at beginning of year $ 364 $ 312 $ 312
Shares issued (1993 - 52.0) -- 52 --
------ ------ ------
Balance at end of year $ 364 $ 364 $ 312
====== ====== ======
ADDITIONAL PAID-IN CAPITAL:
Balance at beginning of year $5,533 $3,657 $2,905
Issuance of common stock -- 1,900 --
Issuance of preferred stock -- -- 834
Shares issued under employee benefit plans 3 (24) (82)
------ ------ ------
Balance at end of year $5,536 $5,533 $3,657
====== ====== ======
RETAINED EARNINGS:
Balance at beginning of year $1,170 $3,924 $3,385
Net earnings (loss) 3,713 (2,551) 723
Dividends declared (470) (308) (245)
Adjustment of additional minimum pension liability 626 64 27
Previously unrecognized tax benefit - pension liability -- -- 182
Adjustment of previously recognized tax benefits -- -- (145)
Translation and other adjustments (33) 41 (3)
------ ------ ------
Balance at end of year $5,006 $1,170 $3,924
====== ====== ======
TREASURY STOCK:
Balance at beginning of year $(233) $(357) $ (493)
Shares issued under employee benefit plans (1994 - 1.4;
1993 - 5.8; 1992 - 3.6) 19 124 136
------ ------ ------
Balance at end of year $ (214) $ (233) $ (357)
====== ====== ======
</TABLE>
The annual dividend on the Series A Convertible Preferred Stock (the
"Preferred Stock") is $46.25 per share. The 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 Preferred Stock. The
Preferred Stock is not redeemable prior to January 22, 1997. Thereafter,
Chrysler may redeem the Preferred Stock, in whole or in part, at $523.13 per
share of 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.
39
<PAGE> 40
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10. SHAREHOLDERS' EQUITY - CONTINUED
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 most recently 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 following the time (the "Stock Acquisition Time") of a
public announcement or communication to Chrysler that a person or group of
persons has acquired or obtained the right to acquire 15 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 15 percent or more of Chrysler's outstanding
common stock. If the acquiring person or group acquires 15 percent or more 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 Stock Acquisition Time, 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, only prior to the Stock Acquisition Time. Additionally, at any
time after a person acquires 15 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 (or a fractional share of preferred stock with
equivalent voting rights) per Right. The Rights will expire on February 22,
1998.
Of the 1.0 billion shares of authorized common stock at December 31,
1994, 97 million shares were reserved for issuance under Chrysler's various
employee benefit plans and the conversion of the Preferred Stock.
Primary 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 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.
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 pay pension benefits and administer the plans. Chrysler made pension
fund contributions totaling $2.6 billion in 1994, $3.5 billion in 1993 and $816
million in 1992.
At December 31, 1994, plan assets were invested in a diversified
portfolio that consisted primarily of debt and equity securities, including
17.9 million shares of Chrysler common stock with a market value of $879
million. During 1994, $17 million of dividends were received on Chrysler
common stock.
40
<PAGE> 41
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11. PENSION PLANS - CONTINUED
The components of pension expense were as follows:
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------------------------------------------------
1994 1993 1992
-------------------------- ----------------------- ----------------------
Non- Non- Non-
U.S. U.S. U.S. U.S. U.S. U.S.
Plans Plans Total Plans Plans Total Plans Plans Total
----- ----- ----- ----- ----- ----- ----- ----- -----
(in millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Service cost - benefits earned during the year $ 275 $ 29 $ 304 $ 218 $ 20 $ 238 $ 171 $ 18 $ 189
Interest on projected benefit obligation 833 86 919 779 79 858 742 71 813
Return on plan assets:
Actual return 183 11 194 (1,283) (35) (1,318) (945) 80 (865)
Deferred (loss) gain (1,106) (116) (1,222) 617 (40) 577 492 (156) 336
-------- ------ ------- ------- ---- ------ ------ ----- ------
Expected return (923) (105) (1,028) (666) (75) (741) (453) (76) (529)
Net amortization and other 471 48 519 366 35 401 344 20 364
-------- ------ ------- ------- ---- ------ ------ ----- ------
Total $ 656 $ 58 $ 714 $ 697 $ 59 $ 756 $ 804 $ 33 $ 837
======== ====== ======= ======= ==== ====== ====== ===== ======
</TABLE>
During 1994, 1993 and 1992, the cost of voluntary early retirement
programs, which are periodically offered to certain salaried and hourly
employees, was $68 million, $40 million and $48 million, respectively.
Pension expense is determined using assumptions at the beginning of the
year. The projected benefit obligation ("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
---------------------------------------- --------------------------------------
1994 1993 1992 1991 1994 1993 1992 1991
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Discount rate 8.63% 7.38% 8.38% 8.50% 9.75% 8.25% 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% 9.00% 9.50% 9.50%
</TABLE>
The increase in the discount rate for U.S. Plans from 7.38 percent as of
December 31, 1993 to 8.63 percent as of December 31, 1994 resulted in a $1.3
billion decrease in the PBO at December 31, 1994 and is expected to result in a
$99 million decrease in the 1995 expense.
41
<PAGE> 42
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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>
December 31, 1994
-----------------
U. S. Plans Non-U.S. Plans
------------------------------- -------------------------------
Assets Accum. Assets Accum.
Exceed Benefits Exceed Benefits
Accum. Exceed U.S. Accum. Exceed Non-U.S.
Benefits Assets Total Benefits Assets Total Total
------ ----- ----- ------- ------ ----- ------
(in millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
Actuarial present value of benefits:
Vested $ 7,909 $ 256 $ 8,165 $ 866 $ 8 $ 874 $ 9,039
Nonvested 2,284 50 2,334 18 -- 18 2,352
-------- ----- ------- ------- ------ ----- --------
Accumulated benefit obligation 10,193 306 10,499 884 8 892 11,391
Effect of projected future salary increases 252 4 256 5 1 6 262
-------- ----- ------- ------- ------ ----- --------
PBO 10,445 310 10,755 889 9 898 11,653
Plan assets at fair value 10,896 45 10,941 956 -- 956 11,897
-------- ----- ------- ------- ------ ----- --------
PBO (in excess of) less than plan assets 451 (265) 186 67 (9) 58 244
Unrecognized net loss (gain) 1,027 4 1,031 365 (2) 363 1,394
Unrecognized prior service cost 1,324 44 1,368 202 -- 202 1,570
Unamortized net obligation at date of adoption 997 1 998 5 4 9 1,007
Adjustment required to recognize
minimum liability -- (49) (49) -- (3) (3) (52)
-------- ----- ------- ------- ------ ----- --------
Net prepaid pension (liability) recognized in
the consolidated balance sheet $ 3,799 $ (265) $ 3,534 $ 639 $ (10) $ 629 $ 4,163
========= ======== ======= ======= ====== ====== ========
<CAPTION>
December 31, 1993
-----------------
U. S. Plans Non-U.S. Plans
------------------------------- -------------------------------
Assets Accum. Assets Accum.
Exceed Benefits Exceed Benefits
Accum. Exceed U.S. Accum. Exceed Non-U.S.
Benefits Assets Total Benefits Assets Total Total
------ ----- ----- ------- ------ ----- ------
(in millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
Actuarial present value of benefits:
Vested $ 3,563 $ 5,160 $ 8,723 $1,020 $ 4 $1,024 $ 9,747
Nonvested 517 2,090 2,607 12 2 14 2,621
-------- ----- ------- ------- ------ ----- --------
Accumulated benefit obligation 4,080 7,250 11,330 1,032 6 1,038 12,368
Effect of projected future salary increases 237 7 244 18 -- 18 262
-------- ----- ------- ------- ------ ----- --------
PBO 4,317 7,257 11,574 1,050 6 1,056 12,630
Plan assets at fair value 4,599 4,767 9,366 1,062 -- 1,062 10,428
-------- ----- ------- ------- ------ ----- --------
PBO (in excess of) less than plan assets 282 (2,490) (2,208) 12 (6) 6 (2,202)
Unrecognized net loss (gain) 263 1,016 1,279 434 1 435 1,714
Unrecognized prior service cost 258 1,216 1,474 233 -- 233 1,707
Unamortized net obligation at date of adoption 283 858 1,141 6 -- 6 1,147
Adjustment required to recognize
minimum liability -- (3,088) (3,088) -- (1) (1) (3,089)
-------- ----- ------- ------- ------ ----- --------
Net prepaid pension (liability) recognized in
the consolidated balance sheet $ 1,086 $(2,488) $(1,402) $ 685 $ (6) $679 $ (723)
========= ======== ======= ======= ====== ====== ========
</TABLE>
Included in other assets on the consolidated balance sheet as of
December 31, 1994 and 1993 was noncurrent prepaid pension expense of $4.1
billion and $1.6 billion, respectively.
42
<PAGE> 43
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12. NONPENSION POSTRETIREMENT BENEFITS
Chrysler provides health 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," which requires the
accrual of such benefits during the years 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 charge
represented the immediate recognition of the transition obligation of $7.44
billion, partially offset by $2.76 billion of estimated tax benefits. The
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:
<TABLE>
<CAPTION>
Year ended December 31
----------------------
1994 1993
---- ----
(in millions of dollars)
<S> <C> <C>
Benefits attributed to employees' service $ 178 $ 142
Interest on accumulated nonpension postretirement
benefit obligation 665 626
Net amortization (9) --
------- -------
Total $ 834 $ 768
======== =======
</TABLE>
The following table summarizes the components of the nonpension
postretirement benefit obligation recognized in the consolidated balance sheet
at December 31, 1994 and 1993:
<TABLE>
<CAPTION>
Year ended December 31
----------------------
1994 1993
---- ----
(in millions of dollars)
<S> <C> <C>
Accumulated nonpension postretirement benefit
obligation ("ANPBO") attributable to:
Retirees $ 4,056 $ 4,550
Active employees eligible for benefits 1,259 1,173
Other active employees 2,837 3,388
-------- --------
Total ANPBO 8,152 9,111
Unrecognized net gains (losses) 218 (1,126)
------- --------
Nonpension postretirement benefit
obligation recognized in the
consolidated balance sheet $ 8,370 $ 7,985
======= ========
</TABLE>
Nonpension postretirement benefit expense is determined using
assumptions at the beginning of the year. The ANPBO is determined using the
assumptions at the end of the year. Assumptions at December 31, 1994 and 1993
were:
<TABLE>
<CAPTION>
Year ended December 31
----------------------
1994 1993
---- ----
<S> <C> <C>
Discount rate 8.6% 7.5%
Health care inflation rate in following
(or "base") year 7.5% 9.2%
Ultimate health care inflation rate (2001) 5.5% 5.5%
Average health care inflation rate
(base year through 2001) 6.1% 6.3%
</TABLE>
The increase in the discount rate to 8.6 percent as of December 31,
1994 resulted in a $1.1 billion decrease in the ANPBO in 1994, and is expected
to result in a $68 million decrease in nonpension postretirement benefit
expense in 1995. During 1994, Chrysler implemented new managed care initiatives
which reduced the expected health care inflation rate for 1995.
A one percentage point increase in the assumed health care inflation
rate in each year would have increased the ANPBO at December 31, 1994 by $1.0
billion and would have increased the aggregate of the service and interest cost
components of nonpension postretirement benefit expense in 1994 by $116
million.
43
<PAGE> 44
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13. SALES OF AUTOMOTIVE ASSETS AND INVESTMENTS
During 1994, Chrysler sold its wire harness operations and certain of
its soft trim operations, and entered into five-year supply agreements with
each of the purchasers. Aggregate net proceeds from the sales and the supply
agreements were approximately $325 million. The related pretax gains of
approximately $250 million were deferred and are being recognized over the
periods of the respective supply agreements.
In 1993, Chrysler sold its plastics operations for net proceeds of $132
million. The sale resulted in a pretax 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, resulting in a pretax 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, resulting in a pretax gain of $142 million ($88
million after applicable income taxes).
NOTE 14. INVESTMENT ADJUSTMENT AND RESTRUCTURING CHARGE
Included in costs, other than items below for the year ended December
31, 1992 was a pretax charge of $110 million ($69 million after applicable
income taxes) to reduce investments of Chrysler Canada Ltd. and certain of its
employee benefit plans in a real estate investment concern to their estimated
net realizable value.
Earnings for the year ended December 31, 1992 also included a $101
million pretax 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. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures to the consolidated statement of cash flows
were as follows:
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------
1994 1993 1992
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Interest paid (net of amounts capitalized):
Chrysler, excluding CFC $ 195 $ 326 $ 406
CFC 733 847 1,250
Interest capitalized 177 176 176
Income taxes paid, net of refunds received 910 535 93
</TABLE>
During 1994, CFC acquired $300 million of marketable securities in a
non-cash transaction relating to the securitization of retail receivables.
NOTE 16. FINANCIAL INSTRUMENTS
The estimated fair values of financial instruments 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.
44
<PAGE> 45
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. FINANCIAL INSTRUMENTS - CONTINUED
Amounts related to Chrysler's financial instruments were as follows:
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
----------------- ------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ----- -------- -------
(in millions of dollars)
<S> <C> <C> <C> <C>
BALANCE SHEET FINANCIAL INSTRUMENTS
Marketable securities $ 3,226 $ 3,218 $ 1,055 $ 1,061
Finance receivables and retained interests(1) 10,524 10,494 8,252 8,345
Debt(2) 13,309 13,735 11,550 12,588
Currency exchange agreements(3) 220 241 121 145
</TABLE>
- ----------------------
(1) The carrying value of finance receivables excludes $2.0
billion of direct finance and leveraged leases classified as
finance receivables in the consolidated balance sheet at
December 31, 1994 and 1993. The carrying value of retained
interests excludes $41 million and $57 million of retail
lease securities at December 31, 1994 and 1993,
respectively.
(2) The carrying value of debt excludes $17 million and $22
million of obligations under capital leases classified as
debt in the consolidated balance sheet at December 31, 1994
and 1993, respectively.
(3) Currency exchange agreements are recorded on the
consolidated balance sheet as a reduction to the carrying
value of debt.
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
------------------------ -------------------------
Contract or Unrealized Contract or Unrealized
Notional Gains/ Notional Gains/
Amount (Losses) Amount (Losses)
---------- ----------- ----------- ---------
(in millions of dollars)
<S> <C> <C> <C> <C>
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS
Interest rate swaps
With unrealized gains $ 101 $ 4 $ 314 $ 15
With unrealized losses 676 (16) 1,107 (95)
Interest rate caps 134 -- 403 --
Forward interest rate contract 500 1 -- --
Currency forward contracts
With unrealized gains -- -- 1,285 61
With unrealized losses 326 (17) 437 (8)
Purchased currency options 901 (21) 116 2
</TABLE>
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.
The methods and assumptions used to estimate the fair values of other
financial instruments are summarized as follows:
Marketable securities
The fair values of marketable securities 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 rates at which loans of similar maturity would be made as of
the date of the consolidated balance sheet. The fair values of excess servicing
cash flows and other amounts due CFC arising from receivable sale transactions
were estimated by discounting expected cash flows.
45
<PAGE> 46
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. FINANCIAL INSTRUMENTS - CONTINUED
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 with similar terms and remaining
maturities.
Currency exchange agreements
The fair values of currency exchange agreements were estimated by
discounting the expected cash flows using market exchange rates and relative
market interest rates over the remaining terms of the agreements. Currency
exchange agreements are more fully described in NOTE 1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES and NOTE 6. DEBT.
Interest rate exchange agreements
The fair values of interest rate swaps, interest rate caps and forward
interest rate contracts were estimated by discounting expected cash flows using
quoted market interest rates. Interest rate exchange agreements are more fully
described in NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NOTE 3.
FINANCE RECEIVABLES, RETAINED INTERESTS IN SOLD RECEIVABLES AND OTHER RELATED
AMOUNTS and NOTE 6. DEBT.
Currency forward contracts and purchased currency options
The fair values of currency forward contracts and purchased currency
options were estimated based on quoted market prices for contracts of similar
terms. Currency forward contracts and purchased currency options are more
fully described in NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
Although not a counterparty to certain derivative financial instruments
entered into between securitization trusts and third parties, CFC receives an
indirect beneficial interest from such instruments. Such indirect beneficial
interests are subject to reduction in the event of a counterparty's
nonperformance. If a counterparty had failed to perform at December 31, 1994,
CFC would have been exposed to a $27 million loss.
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 from the amounts presented herein.
NOTE 17. 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 represent less than 10 percent of 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
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17. 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, 1994
- -----------------
Revenues:
Unaffiliated customers $ 50,381 $ 1,843 $ 52,224
Intersegment 7 141 --
--------- --------- ---------
Total revenues 50,388 1,984 52,224
Operating earnings 5,829 315 6,023
Interest expense 311 -- 190
Equity in loss of unconsolidated
subsidiaries and affiliates 3 -- 3
Earnings before income taxes 5,515 315 5,830
Depreciation/amortization 1,880 64 1,944
Capital expenditures 3,796 47 3,843
Identifiable assets 36,001 16,648 49,539
Liabilities 28,580 13,375 38,845
DECEMBER 31, 1993
- -----------------
Revenues:
Unaffiliated customers $ 41,681 $ 1,919 $ 43,600
Intersegment 34 120 --
-------- --------- ---------
Total revenues 41,715 2,039 43,600
Operating earnings 4,050 267 4,200
Interest expense 445 -- 328
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 32,492 14,251 43,679
Liabilities 28,787 11,120 36,843
DECEMBER 31, 1992
- -----------------
Revenues:
Unaffiliated customers $ 34,406 $ 2,455 $ 36,897
Intersegment 34 120 --
-------- --------- ---------
Total revenues 34,440 2,575 36,897
Operating earnings 1,159 295 1,336
Interest expense 500 -- 383
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 25,682 17,585 40,690
Liabilities 21,142 14,587 33,152
</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.
47
<PAGE> 48
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY Part II - Continued
DATA - Continued
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 17. 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, 1994
- -----------------
Revenues:
Unaffiliated customers $ 45,655 $ 3,877 $ 2,692 $ -- $ 52,224
Transfers between geographic areas 7,452 7,301 2,385 (17,138) --
------ -------- -------- ---------- --------
Total revenues 53,107 11,178 5,077 (17,138) 52,224
Earnings before income taxes 5,239 208 383 -- 5,830
Identifiable assets 42,752 3,977 2,810 -- 49,539
DECEMBER 31, 1993
- -----------------
Revenues:
Unaffiliated customers $ 37,847 $ 3,349 $ 2,404 $ -- $ 43,600
Transfers between geographic areas 6,571 6,807 1,934 (15,312) --
------ ------ -------- ---------- --------
Total revenues 44,418 10,156 4,338 (15,312) 43,600
Earnings before income taxes 3,191 329 318 -- 3,838
Identifiable assets 37,474 3,750 2,455 -- 43,679
DECEMBER 31, 1992
- -----------------
Revenues:
Unaffiliated customers $ 31,529 $ 2,906 $ 2,462 $ -- $ 36,897
Transfers between geographic areas 5,759 4,611 1,483 (11,853) --
-------- ------- -------- --------- --------
Total revenues 37,288 7,517 3,945 (11,853) 36,897
Earnings before income taxes 618 19 297 -- 934
Identifiable assets 35,174 3,210 2,306 -- 40,690
</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, 1994 and 1993,
and the related consolidated statements of earnings and cash flows for each of
the three years in the period ended December 31, 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements 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 consolidated financial statements present fairly, in all
material respects, the financial position of Chrysler Corporation and
consolidated subsidiaries at December 31, 1994 and 1993, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1994, in conformity with generally accepted accounting
principles.
As discussed in the notes to the financial statements, the Company adopted new
Statements of Financial Accounting Standards and, accordingly, changed its
method of accounting for certain investments in debt and equity securities in
1994, its method of accounting for postretirement benefits other than
pensions and postemployment benefits in 1993, and its method of accounting
for income taxes in 1992.
Deloitte & Touche LLP
Detroit, Michigan
January 16, 1995
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 LLP,
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
recommendations of the General Auditor and Deloitte & Touche LLP 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>
First Quarter Second Quarter Third Quarter Fourth Quarter
------------- -------------- ------------ --------------
1994 1993(1) 1994 1993(2) 1994 1993(3) 1994(4) 1993
---- ------- ---- ------- ----- ------- ------- ----
(in millions of dollars except per-common-share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales of manufactured products $12,551 $10,238 $12,369 $10,307 $10,938 $8,995 $13,505 $11,291
Finance, insurance and other income 672 666 713 724 721 718 755 661
------- ------- ------- ------- ------- ------- ------- -------
Total revenues 13,223 10,904 13,082 11,031 11,659 9,713 14,260 11,952
Total expenses 11,680 10,024 11,489 9,909 10,596 9,101 12,629 10,728
------- ------- ------- ------- ------- ------- ------- -------
Earnings before income taxes and
cumulative effect of changes in
accounting principles 1,543 880 1,593 1,122 1,063 612 1,631 1,224
Provision for income taxes 605 350 637 437 412 189 463 447
------- ------- ------- ------- ------- ------- ------- -------
Earnings before cumulative effect of
changes in accounting principles 938 530 956 685 651 423 1,168 777
Cumulative effect of changes in
accounting principles -- (4,966) -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Net earnings (loss) $ 938 $(4,436) $ 956 $ 685 $ 651 $ 423 $ 1,168 $ 777
Preferred stock dividends 20 20 20 20 20 20 20 20
------- ------- ------- ------- ------- ------- ------- -------
Net earnings (loss) on
common stock $ 918 $(4,456) $ 936 $ 665 $ 631 $ 403 $ 1,148 $ 757
======= ======= ======= ======= ======= ======= ======= =======
PRIMARY EARNINGS (LOSS) PER
COMMON SHARE:
Earnings before cumulative effect of
changes in accounting principles $ 2.55 $ 1.57 $ 2.61 $ 1.86 $ 1.76 $ 1.13 $ 3.20 $ 2.11
Cumulative effect of changes in
accounting principles -- (15.25) -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Net earnings (loss) per
common share $ 2.55 $(13.68) $ 2.61 $ 1.86 $ 1.76 $ 1.13 $ 3.20 $ 2.11
======= ======= ======= ======= ======= ======= ======= =======
FULLY DILUTED EARNINGS PER
COMMON SHARE $ 2.30 -- $ 2.35 $ 1.69 $ 1.60 $ 1.04 $ 2.86 $ 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."
(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
Chrysler's plastics operations 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.
(4) Earnings for the fourth quarter of 1994 included favorable adjustments to
the provision for income taxes aggregating $132 million. These adjustments
related to: (1) the recognition of tax credits related to expenditures in
prior years for qualifying research and development activities, in
accordance with an Internal Revenue Service settlement which was based on
recently issued U.S. Department of Treasury income tax regulations, and
(2) the reversal of valuation allowances related to tax benefits
associated with net operating loss carryforwards.
51
<PAGE> 52
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)
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------
1994 1993 1992
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
Sales of manufactured products $49,534 $41,247 $33,409
Equity in earnings of unconsolidated subsidiaries and affiliates 237 187 131
Interest and other income 323 220 215
------- ------- -------
TOTAL REVENUES 50,094 41,654 33,755
------- ------- -------
Costs, other than items below 37,485 32,066 27,424
Depreciation of property and equipment 912 853 802
Amortization of special tools 961 671 641
Selling and administrative expenses 3,146 2,619 2,467
Pension expense 704 749 832
Nonpension postretirement benefit expense 828 762 368
Interest expense 228 361 429
Gain on sales of automotive assets and investments -- (265) (142)
------- ------- -------
TOTAL EXPENSES 44,264 37,816 32,821
------- ------- -------
EARNINGS BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGES
IN ACCOUNTING PRINCIPLES 5,830 3,838 934
Provision for income taxes 2,117 1,423 429
------- ------- -------
EARNINGS BEFORE CUMULATIVE EFFECT OF
CHANGES IN ACCOUNTING PRINCIPLES 3,713 2,415 505
Cumulative effect of changes in accounting principles -- (4,966) 218
------- ------- -------
NET EARNINGS (LOSS) $ 3,713 $ (2,551) $ 723
======= ======= =======
</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 (the "Car Rental Operations") accounted
for on an equity basis rather than as consolidated subsidiaries. This Sup-
plemental 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 covenant
contained in Chrysler's revolving credit facility is 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.
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)
BALANCE SHEET
(unaudited)
<TABLE>
<CAPTION>
December 31
-----------------
1994 1993
---- ----
(in millions of dollars)
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 4,972 $ 3,777
Marketable securities 2,643 707
Accounts receivable - trade and other (net) 459 805
Inventories 2,645 2,483
Prepaid taxes, pension and other expenses 1,272 713
Property and equipment 10,347 8,820
Special tools 3,643 3,455
Investments in and advances to unconsolidated subsidiaries
and affiliated companies 3,642 3,685
Intangible assets 1,781 3,882
Deferred tax assets 1,951 3,642
Other assets 4,722 2,051
------- -------
TOTAL ASSETS $38,077 $34,020
======= =======
LIABILITIES:
Accounts payable $ 7,403 $ 6,074
Short-term debt 140 100
Payments due within one year on long-term debt 187 399
Accrued liabilities and expenses 5,333 4,422
Long-term debt 2,097 2,281
Accrued noncurrent employee benefits 8,547 10,562
Other noncurrent liabilities 3,676 3,346
------- -------
TOTAL LIABILITIES 27,383 27,184
------- -------
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: 1994 and 1993 - 1.7 shares; aggregate
liquidation preference $863 million 2 2
Common stock - $1 per share par value; authorized
1,000.0 shares; issued: 1994 and 1993 - 364.1 shares 364 364
Additional paid-in capital 5,536 5,533
Retained earnings 5,006 1,170
Treasury stock - at cost: 1994 - 9.0 shares; 1993 -
10.4 shares (214) (233)
------- -------
TOTAL SHAREHOLDERS' EQUITY 10,694 6,836
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $38,077 $34,020
======= =======
</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 SFAS No. 94,
"Consolidation of All Majority-Owned Subsidiaries." The financial covenant
contained in Chrysler's revolving credit facility is 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)
STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------
1994 1993 1992
---- ---- ----
(in millions of dollars)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $3,713 $(2,551) $ 723
Adjustments to reconcile to net cash provided by operating
activities:
Depreciation and amortization 1,873 1,524 1,443
Equity in earnings of unconsolidated subsidiaries and
affiliates (237) (187) (131)
Deferred income taxes 1,065 803 229
Gain on sales of automotive assets and investments -- (265) (142)
Cumulative effect of changes in accounting principles -- 4,966 (218)
Change in accounts receivable 345 131 (300)
Change in inventories (201) (171) 159
Change in prepaid expenses and other assets (2,095) (1,587) 74
Change in accounts payable and accrued and other liabilities 2,856 365 953
Other 215 224 181
------ ------ ------
NET CASH PROVIDED BY OPERATING ACTIVITIES 7,534 3,252 2,971
------ ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (3,412) (3,149) (14,188)
Sales and maturities of marketable securities 1,463 3,401 13,925
Proceeds from sales of automotive assets and investments 62 461 215
Expenditures for property and equipment (2,611) (1,738) (1,374)
Expenditures for special tools (1,177) (1,234) (872)
Other 77 (13) (209)
------ ------ ------
NET CASH USED IN INVESTING ACTIVITIES (5,598) (2,272) (2,503)
------ ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt (less than 90-day maturities) 40 14 (165)
Proceeds under revolving lines of credit and long-term
borrowings 2 23 39
Payments on revolving lines of credit and long-term borrowings (412) (1,021) (497)
Proceeds from issuances of common and preferred stock, net of
expenses -- 1,952 836
Dividends paid (399) (281) (225)
Other 28 101 48
------ ------ ------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (741) 788 36
------ ------ ------
Change in cash and cash equivalents 1,195 1,768 504
Cash and cash equivalents at beginning of year 3,777 2,009 1,505
------ ------ ------
CASH AND CASH EQUIVALENTS AT END OF YEAR $4,972 $3,777 $2,009
====== ====== ======
</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 SFAS No. 94, "Consolidation of All
Majority-Owned Subsidiaries." The financial covenant contained in Chrysler's
revolving credit facility is 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 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 1995 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.
2. Financial Statement Schedules
No schedules are included 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.
3. Exhibits:
*3-A-1 Copy of Certificate of Incorporation of Chrysler
Corporation, as amended and restated and in effect on May
21, 1987.
*3-A-2 Copy of Certificate of Amendment of Certificate of
Incorporation of Chrysler Corporation dated May 19, 1994,
as in effect on May 20, 1994.
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.
*3-D Copy of Certificate of Designation, Preferences and Rights
of Series A Convertible Preferred Stock.
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.
- -----------------------
*Filed herewith.
55
<PAGE> 56
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
4-B-2 Copy of Agreement of Merger and Plan of Reorganization, dated as of
March 6, 1986, among Chrysler Corporation, Chrysler 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-1 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-C-2 Amendment No. 1, dated as of December 1, 1994, to the 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 known as Morgan
Shareholder Services Trust Company), as Rights Agent. Filed as Exhibit
1 to Chrysler Corporation Current Report on Form 8-K, dated December
1, 1994, and incorporated herein by reference.
4-D-1 Conformed copy of Indenture, dated as of July 15, 1987, between
Chrysler Corporation and State Street Bank and Trust Company
(successor to Manufacturers Hanover Trust Company), as Trustee,
relating to Debt Securities, 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 State Street Bank and Trust Company
(successor to 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.
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 Copy of $1,675,000,000 Revolving Credit Agreement, dated as of July
29, 1994, among Chrysler Corporation, the several Banks party to
the Agreement and Chemical Bank, as Agent for the Banks. Filed as
Exhibit 4E to the Chrysler Corporation Quarterly Report on Form 10-Q
for the quarter ended September 30, 1994 and incorporated herein by
reference.
4-F-1 Copy of Indenture, dated as of June 15, 1984, between Chrysler
Financial Corporation and Manufacturers Hanover Trust Company, as
Trustee, United States Trust Company of New York, as successor
Trustee, related to Senior Debt Securities of Chrysler Financial
Corporation. Filed as Exhibit (1) to the Current Report of Chrysler
Financial Corporation on Form 8-K, dated June 26, 1984, and
incorporated herein by reference.
56
<PAGE> 57
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
4-F-2 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-3 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.
4-F-4 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-5 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 Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1987, and incorporated herein by reference.
4-F-6 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-7 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 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-2 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 February 15, 1988, between Chrysler
Financial Corporation and Irving Trust Company, Trustee, related to
Chrysler Financial Corporation Junioi Subordinated Debt Securities.
Filed as Exhibit 4-C to Registration No. 33-23479 of Chrysler
Financial Corporation, and incorporated herein by reference.
4-H-2 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.
57
<PAGE> 58
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
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. 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. Filed as Exhibit 10-A-6 to the Chrysler Corporation
Annual Report on Form 10-K for the year ended December 31, 1993 and
incorporated herein by reference.
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 and before May 19,
1994. Filed as Exhibit 10-A-9 to the Chrysler Corporation Annual
Report on Form 10-K for the year ended December 31, 1993 and
incorporated herein by reference.
*10-A-10 Copy of Chrysler Corporation 1991 Stock Compensation Plan, as amended
and in effect on and after May 19, 1994.
*10-B-1 Copy of Chrysler Corporation Incentive Compensation Plan, as
amended and in effect on and after May 19, 1994.
*10-B-2 Copy of Chrysler Corporation Long-Term Performance Plan, as
amended and in effect on and after May 19, 1994.
10-B-3 Copy of Chrysler Supplemental Executive Retirement Plan, as
amended through December 20, 1993. Filed as Exhibit 10-B-3 to
Chrysler Corporation Annual Report on Form 10- K for the year ended
December 31, 1993 and incorporated herein by reference.
*10-B-4 Copy of Chrysler Corporation Discretionary Incentive Compensation
Plan as in effect on and after December 1, 1994.
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.
- --------------------
*Filed herewith.
58
<PAGE> 59
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
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.
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 Revolving Credit Agreement, dated as of May 23, 1994, among
Chrysler Financial Corporation, Chemical Bank, as Agent, the
several commercial banks party thereto as Co-Agents, and Chemical
Securities Inc., as Arranger. Filed as Exhibit 10-A to the Current
Report on Form 8-K of Chrysler Financial Corporation dated May 23,
1994, and incorporated herein by reference.
10-G-2 Copy of Fourth Amended and Restated Commitment Transfer Agreement,
dated as of May 23, 1994, among Chrysler Financial Corporation, the
several financial institutions parties thereto and Chemical Bank, as
agent. Filed as Exhibit 10-B to the Current Report on Form 8-K of
Chrysler Financial Corporation dated May 23, 1994, and incorporated
herein by reference.
10-G-3 Copy of Guarantee Agreement, dated as of May 23, 1994, made by
Chrysler Financial Corporation to and in favor of Guaranteed Parties
as defined therein. Filed as Exhibit 10-C to the Current Report on
Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and
incorporated herein by reference.
10-G-4 Copy of Revolving Credit Agreement, dated as of May 23, 1994,
among Chrysler Credit Canada Ltd., Royal Bank of Canada, as agent,
Canadian Imperial Bank of Commerce and Bank of Nova Scotia, as
co-agents, and the Lenders partes thereto. Filed as Exhibit 10-D to
the Current Report on Form 8-K of Chrysler Financial Corporation dated
May 23, 1994, and incorporated herein by reference.
59
<PAGE> 60
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
10-G-5 Copy of Short Term Receivables Purchase Agreement, dated as of
May 23, 1994, among Chrysler Financial Corporation, Chrysler Credit
Corporation, U.S. Auto Receivables Company, American Auto Receivables
Company, Chemical Bank, as agent, the several commercial banks parties
thereto, and Chemical Bank Agency Services Corporation, as
Administrative Agent. Filed as Exhibit 10-E to the Current Report on
Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and
incorporated herein by reference.
10-G-6 Copy of Short Term Participation and Servicing Agreement, dated as of
May 23, 1994, among American Auto Receivables Company, Chrysler Credit
Corporation, the banks and other financial institutions named as
purchasers therein, Chemical Bank, as Agent, and Chemical Bank Agency
Services Corporation, as Administrative Agent. Filed as Exhibit 10-F
to the Current Report on Form 8-K of Chrysler Financial Corporation
dated May 23, 19984, and incorporated herein by reference.
10-G-7 Copy of Short Term Bank Supplement, dated as of May 23, 1994,
among U.S. Auto Receivables Company, Chrysler Credit Corporation and
Manufacturers and Traders Trust Company, as Trustee, to the Pooling
and Servicing Agreement dated as of May 31, 1991 with respect to CARCO
Auto Loan Master Trust Short Term Bank Series. Filed as Exhibit 10-G
to the Current Report on Form 8-K of Chrysler Financial Corporation
dated May 23, 1994, and incorporated herein by reference.
10-G-8 Copy of Long Term Receivables Purchase Agreement, dated as of
May 23, 1994, among Chrysler Financial Corporation, Chrysler Credit
Corporation, U.S. Auto Receivables Company, American Auto Receivables
Company, the several commercial banks parties thereto, Chemical Bank,
as Agent, and Chemical Bank Agency Services Corporation, as
Administrative Agent. Filed as Exhibit 10-H to the Current Report on
Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and
incorporated herein by reference.
10-G-9 Copy of Long Term Participation and Servicing Agreement, dated
as of May 23, 1994, among American Auto Receivables Company, Chrysler
Credit Corporation, the banks and other financial institutions named
as purchasers therein, Chemical Bank, as Agent, and Chemical Bank
Agency Services Corporation, as Administrative Agent. Filed as
Exhibit 10-I to the Current Report on Form 8-K of Chrysler Financial
Corporation dated May 23, 1994, and incorporated herein by reference.
10-G-10 Copy of Long Term Bank Supplement, dated as of May 23, 1994, among
U.S. Auto Receivables Company, Chrysler Credit Corporation and
Manufacturers and Traders Trust Company, as Trustee, to the Pooling
and Servicing Agreement dated as of May 31, 1991 with respect to CARCO
Auto Loan Master Trust Bank Series. Filed as Exhibit 10-J to the
Current Report on Form 8-K of Chrysler Financial Corporation dated
May 23, 1994, and incorporated herein by reference.
10-G-11 Copy of Short Term Receivables Purchase Agreement, dated May
23, 1994, among Chrysler Financial Corporation, Chrysler Credit Canada
Ltd., the chartered banks named therein as purchasers, and Royal Bank
of Canada, as Agent. Filed as Exhibit 10-K to the Current Report on
Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and
incorporated herein by reference.
10-G-12 Copy of Short Term Retail Purchase and Servicing Agreement, dated
May 23, 1994, among Chrysler Credit Canada Ltd., the chartered banks
named therein as parties thereto, and Royal Bank of Canada, as Agent.
Filed as Exhibit 10-L to the Current Report on Form 8-K of Chrysler
Financial Corporation dated May 23, 1994, and incorporated herein by
reference.
10-G-13 Copy of Long Term Receivables Purchase Agreement, dated May 23,
1994, among Chrysler Financial Corporation, Chrysler Credit Canada
Ltd., the chartered banks named therein as purchasers, and Royal Bank
of Canada, as Agent. Filed as Exhibit 10-M to the Current Report on
Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and
incorporated herein by reference.
10-G-14 Copy of Long Term Retail Purchase and Servicing Agreement, dated
May 23, 1994, among Chrysler Credit Canada Ltd., the chartered banks
named therein as parties thereto, and Royal Bank of Canada, as Agent.
Filed as Exhibit 10-N to the Current Report on Form 8-K of Chrysler
Financial Corporation dated May 23, 1994, and incorporated herein by
reference.
60
<PAGE> 61
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
10-G-15 Copy of Bank Series 1994-1 Supplement, dated as of May 23, 1994, among
Chrysler Credit Canada Ltd., Royal Bank of Canada, as Agent, the
several banks parties thereto, and The Royal Trust Company, as
Custodian, to the Master Custodial and Servicing Agreement, dated
as of September 1, 1992. Filed as Exhibit 10-O to the Current Report
on Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and
incorporated herein by reference.
10-G-16 Copy of Bank Series 1994-2 Supplement, dated as of May 23, 1994, among
Chrysler Credit Canada Ltd., Royal Bank of Canada, as Agent, the
several banks parties thereto, and The Royal Trust Company, as
Custodian, to the Master Custodial and Servicing Agreement, dated as
of September 1, 1992. Filed as Exhibit 10-P to the Current Report on
Form 8-K of Chrysler Financial Corporation dated May 23, 1994, and
incorporated herein by reference.
10-H-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-H-2 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-I 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.
10-J-1 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-J-2 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-K-1 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-K-2 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-L 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 and Traders 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-M 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-N 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.
61
<PAGE> 62
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
10-O-1 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-O-2 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-O-3 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-P 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-Q 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-R 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-S 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-T 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-U 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-V-1 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-V-2 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.
10-W 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.
62
<PAGE> 63
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
10-X 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 for the year ended December 31,
1993, and incorporated herein by reference.
10-Y 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 for the year ended
December 31, 1993, and incorporated herein by reference.
10-Z Copy of Series 1993-2 Supplement, dated as of November 1, 1993, 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 3 to the Registration Statement on Form 8-A of CARCO Auto Loan
Master Trust dated December 6, 1993, and incorporated herein by
reference.
10-AA-1 Copy of Amended and Restated Trust Agreement, dated as of
November 1, 1993, among Premier Auto Receivables Company, Chrysler
Financial Corporation and Chemical Bank Delaware, as Owner Trustee,
with respect to Premier Auto Trust 1993-6. Filed as Exhibit 4-A to the
Annual Report on Form 10-K of Premier Auto Trust 1993-6 for the year
ended December 31, 1993, and incorporated herein by reference.
10-AA-2 Copy of Indenture, dated as of November 1, 1993, between Premier
Auto Trust 1993-6 and The Fuji Bank and Trust Company, as Indenture
Trustee, with respect to Premier Auto Trust 1993- 6. Filed as
Exhibit 4-B to the Annual Report on Form 10-K of Premier Auto Trust
1993-6 for the year ended December 31, 1993, and incorporated herein
by reference.
10-BB Copy of Secured Loan Purchase Agreement, dated as of March 29, 1994,
among Chrysler Credit Canada Ltd., Leaf Trust and Chrysler
Financial Corporation. Filed as Exhibit 10-ZZZ to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q for the quarter
ended March 31, 1994, and incorporated herein by reference.
10-CC-1 Copy of Amended and Restated Trust Agreement, dated as of February 1,
1994, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with respect
to Premier Auto Trust 1994-1. Filed as Exhibit 4.1 to the Quarterly
Report on Form 10-Q of Premier Auto Trust 1994-1 for the quarter ended
March 31, 1994, and incorporated herein by reference.
10-CC-2 Copy of Indenture, dated as of February 1, 1994, between Premier Auto
Trust 1994-1 and The Fuji Bank and Trust Company, as Indenture
Trustee, with respect to Premier Auto Trust 1994-1. Filed as
Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier Auto Trust
1994-1 for the quarter ended March 31, 1994, and incorporated herein
by reference.
10-DD Copy of Secured Loan Purchase Agreement, dated as of July 6, 1994,
among Chrysler Credit Canada Ltd., Leaf Trust and Chrysler
Financial Corporation. Filed as Exhibit 10-BBBB to the Quarterly
Report on Form 10-Q of Chrysler Financial Corporation for the quarter
ended June 30, 1994, and incorporated herein by reference.
10-EE-1 Copy of Amended and Restated Trust Agreement, dated as of May 1, 1994,
among Premier Auto Receivables Company, Chrysler Financial Corporation
and Chemical Bank, Delaware, as Owner Trustee, with respect to
Premier Auto Trust 1994-2. Filed as Exhibit 4.1 to the Quarterly
Report on Form 10-Q of Premier Auto Trust 1994-2 for the Quarter ended
June 30, 1994, and incorporated herein by reference.
10-EE-2 Copy of Indenture, dated as of May 1, 1994, between Premier Auto Trust
1994-2 and The Fuji Bank and Trust Company, as Indenture Trustee, with
respect to Premier Auto Trust 1994-2. Filed as Exhibit 4.2 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1994-2 for the
quarter ended June 30, 1994, and incorporated herein by reference.
10-FF-1 Copy of Amended and Restated Trust Agreement, dated as of June 1,
1994, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank, Delaware, with respect to Premier Auto
Trust 1994-3. Filed as Exhibit 4.1 to the Quarterly Report on
Form 10-Q of Premier Auto Trust 1994-3 for the quarter ended June 30,
1994, and incorporated herein by reference.
10-FF-2 Copy of Indenture, dated as of June 1, 1994, between Premier Auto
Trust 1994-3 and The Fuji Bank and Trust Company, as Indenture
Trustee, with respect to Premier Auto Trust 1994-3. Filed as Exhibit
4.2 to the Quarterly Report on Form 10-Q of Premier Auto Trust 1994-3
for the quarter ended June 30, 1994, and incorporated herein by
reference.
63
<PAGE> 64
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
10-GG-1 Copy of Master Receivables Purchase Agreement among Chrysler Credit
Canada Ltd., CORE Trust and Chrysler Financial Corporation, dated as
of November 29, 1994. Filed as Exhibit 10-FFF to the Annual Report of
Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1994, and incorporated herein by reference.
10-GG-2 Copy of Terms Schedule among Chrysler Credit Canada Ltd., CORE Trust
and Chrysler Financial Corporation dated as of December 2,
1994, with respect to the sale of retail automotive receivables to
CORE Trust. Filed as Exhibit 10-GGG to the Annual Report of Chrysler
Financial Corporation on Form 10-K for the year ended December 31,
1994, and incorporated herein by reference.
10-HH Copy of Terms Schedule among Chrysler Credit Canada Ltd., CORE Trust
and Chrysler Financial Corporation dated as of December 22, 1994, with
respect to the sale of retail automotive receivables to CORE Trust.
Filed as Exhibit 10-HHH to the Annual Report of Chrysler Financial
Corporation on Form 10-K for the year ended December 31, 1994, and
incorporated herein by reference.
10-II Copy of Asset Purchase Agreement dated as of December 14, 1994,
between Chrysler Capital Income Partners, L.P. and First Union
Commercial Corporation. Filed as Exhibit 10-III to the Annual Report
of Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1994, and incorporated herein by reference.
10-JJ Copy of Receivables Purchase Agreement, dated as of December 15, 1994,
among Chrysler Financial Corporation, Premier Auto Receivables Company
and ABN AMRO Bank, N.V., as Agent with respect to the sale of retail
automotive receivables to Windmill Funding Corporation. Filed as
Exhibit 10-JJJ to the Annual Report of Chrysler Financial Corporation
on Form 10-K for the year ended December 31, 1994, and incorporated
herein by reference.
10-KK Copy of Pooling and Servicing Agreement, dated as of August 1, 1990,
among Chrysler Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and The Fuji Bank and Trust Company, as
Trustee, with respect to CARCO DEALRs Wholesale Trust 1990-A. Filed
as Exhibit 10-HHH to the Annual Report of Chrysler Financial
Corporation on Form 10-K for the year ended December 31, 1990, and
incorporated herein by reference.
10-LL Copy of Amendment, dated as of September 23, 1991, to the Pooling and
Servicing Agreement, dated August 1, 1990, among Chrysler Auto
Receivables Company, as Seller, Chrysler Credit Corporation, as
Servicer, and The Fuji Bank and Trust Company, as Trustee, with
respect to CARCO DEALRs Wholesale Trust 1990-A. Filed as Exhibit
10-NN 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-MM Copy of Receivables Purchase Agreement, dated as of August 16,
1990, between Chrysler Auto Receivables Company, as Buyer, and
Chrysler Credit Corporation, as Seller, with respect to CARCO DEALRs
Wholesale Trust 1990-A. Filed as Exhibit 10-III to the Annual Report
of Chrysler Financial Corporation on Form 10-K for the year ended
December 31, 1990, and incorporated herein by reference.
10-NN Copy of Receivables Sales Agreement, dated as of August 16,
1990, between Chrysler Financial Corporation and Chrysler Credit
Corporation, with respect to CARCO DEALRs Wholesale Trust 1990-A.
Filed as Exhibit 10-JJJ to the Annual Report of Chrysler Financial
Corporation on Form 10-K for the year ended December 31, 1990, and
incorporated herein by reference.
10-OO Copy of Pooling and Servicing Agreement, dated as of October 1,
1990, among Chrysler Auto Receivables Company, as Seller, Chrysler
Credit Corporation, as Servicer, and The Fuji Bank and Trust Company,
as Trustee, related to Money Market Auto Loan Trust 1990-1. Filed as
Exhibit 4-A to the Registration of Certain Classes of Securities
Report of Money Market Auto Loan Trust 1990-1 on Form 8-A, and
incorporated herein by reference.
10-PP Copy of Amendment No. 1 to the Pooling and Servicing Agreement,
dated as of June 29, 1992, among Chrysler Auto Receivables Company, as
Seller, Chrysler Credit Corporation, as Servicer, and The Fuji Bank
and Trust Company, as Trustee, with respect to Money Market Auto Loan
Trust 1990-1. Filed as Exhibit 4-B to the Quarterly Report of Money
Market Auto Loan Trust 1990-1 on Form 10-Q for the quarter ended June
30, 1992, and incorporated herein by reference.
64
<PAGE> 65
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
10-QQ Copy of Pooling and Servicing Agreement, dated as of May 1,
1991, among Chrysler Auto Receivables Company, as Seller, Chrysler
Credit Corporation, as Servicer, and The Fuji Bank and Trust Company,
as Trustee, with respect to Select Auto Receivables Trust 1991-1.
Filed as Exhibit 4-A to the Quarterly Report on Form 10-Q of Select
Auto Receivables Trust 1991-1 for the quarter ended September 30,
1991, and incorporated herein by reference.
10-RR Copy of Standard Terms and Conditions of Agreement, dated as of May
1, 1991, between Chrysler Auto Receivables Company, as Seller, and
Chrysler Credit Corporation, as Servicer, with respect to Select Auto
Receivables Trust 1991-1. Filed as Exhibit 4-B to the Quarterly
Report on Form 10-Q of Select Auto Receivables Trust 1991-1 for the
quarter ended September 30, 1991, and incorporated herein by
reference.
10-SS Copy of Purchase Agreement, dated as of May 1, 1991, between
Chrysler Financial Corporation and Chrysler Auto Receivables Company
with respect to Select Auto Receivables Trust 1991-1. Filed as
Exhibit 4-C to the Quarterly Report on Form 10-Q of Select Auto
Receivables Trust 1991-1 for the quarter ended September 30, 1991, and
incorporated herein by reference.
10-TT Copy of Pooling and Servicing Agreement, dated as of May 31,
1991, among Chrysler 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 2 to the CARCO Auto Loan Master Trust Registration
Statement on Form 8-A, and incorporated herein by reference.
10-UU Copy of Pooling and Servicing Agreement, dated as of July 1,
1991, among Chrysler Auto Receivables Company, as Seller, Chrysler
Credit Corporation, as Servicer, and The Fuji Bank and Trust Company,
as Trustee, with respect to Select Auto Receivables Trust 1991-2.
Filed as Exhibit 4-A to the Quarterly Report on Form 10-Q of Select
Auto Receivables Trust 1991-2 for the quarter ended September 30,
1991, and incorporated herein by reference.
10-VV Copy of Standard Terms and Conditions of Agreement, dated as of July
1, 1991, between Chrysler Auto Receivables Company, as Seller, and
Chrysler Credit Corporation, as Servicer, with respect to Select Auto
Receivables Trust 1991-2. Filed as Exhibit 4-B to the Quarterly
Report on Form 10-Q of Select Auto Receivables Trust 1991-2 for the
quarter ended September 30, 1991 and incorporated herein by reference.
10-WW Copy of Purchase Agreement, dated as of July 1, 1991, between
Chrysler Financial Corporation and Chrysler Auto Receivables
Company with respect to Select Auto Receivables Trust 1991-2. Filed
as Exhibit 4-C to the Quarterly Report on Form 10-Q of Select Auto
Receivables Trust 1991-2 for the quarter ended September 30, 1991, and
incorporated herein by reference.
10-XX Copy of Pooling and Servicing Agreement, dated as of September 1,
1991, among Chrysler Auto Receivables Company, as Seller, Chrysler
Credit Corporation, as Servicer, and The Fuji Bank and Trust Company,
as Trustee, with respect to Select Auto Receivables Trust 1991-3.
Filed as Exhibit 4-A to the Quarterly Report on Form 10-Q of Select
Auto Receivables Trust 1991-2 for the quarter ended September 30,
1991, and incorporated herein by reference.
10-YY Copy of Standard Terms and Conditions of Agreement, dated as of
September 1, 1991, between Chrysler Auto Receivables Company, as
Seller, and Chrysler Credit Corporation, as Servicer, with respect to
Select Auto Receivables Trust 1991-3. Filed as Exhibit 4-B to the
Quarterly Report on Form 10-Q of Select Auto Receivables Trust 1991-3
for the quarter ended September 30, 1991, and incorporated herein by
reference.
10-ZZ Copy of Purchase Agreement, dated as of September 1, 1991, between
Chrysler Financial Corporation and Chrysler Auto Receivables Company
with respect to Select Auto Receivables Trust 1991-3. Filed as
Exhibit 4-C to the Quarterly Report on Form 10-Q of Select Auto
Receivables Trust 1991-3 for the quarter ended September 30, 1991, and
incorporated herein by reference.
10-AAA Copy of Pooling and Servicing Agreement, dated as of November 1,
1991, among Chrysler Auto Receivables Company, as Seller, Chrysler
Credit Corporation, as Servicer, and The Fuji Bank and Trust Company,
as Trustee, with respect to Select Auto Receivables Trust 1991-5.
Filed as Exhibit 4-A to the Annual Report on Form 10-K of Select Auto
Receivables Trust 1991-5 for the year ended December 31, 1991, and
incorporated herein by reference.
65
<PAGE> 66
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
10-BBB Copy of Standard Terms and Conditions of Agreement, dated as of
November 1, 1991, between Chrysler Auto Receivables Company, as
Seller, and Chrysler Credit Corporation, as Servicer, with respect to
Select Auto Receivables Trust 1991-5. Filed as Exhibit 4-B to the
Annual Report on Form 10-K of Select Auto Receivables Trust 1991-5 for
the year ended December 31, 1991, and incorporated herein by
reference.
10-CCC Copy of Purchase Agreement, dated as of November 1, 1991, between
Chrysler Financial Corporation and Chrysler Auto Receivables
Company with respect to Select Auto Receivables Trust 1991-5. Filed
as Exhibit 4-C to the Annual Report on Form 10-K of Select Auto
Receivables Trust 1991-5 for the year ended December 31, 1991, and
incorporated herein by reference.
10-DDD Copy of Pooling and Servicing Agreement, dated as of December 1, 1991,
among U.S. Auto Receivables Company, as Seller, Chrysler Credit
Corporation, as Servicer, and LaSalle National Bank, as Trustee, with
respect to CFC-15 Grantor Trust. Filed as Exhibit 10-PPPP 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-EEE 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-FFF 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-GGG 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.
10-HHH 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-III 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-JJJ 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-KKK 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-LLL Copy of First Amendment, dated as of November 8, 1991, to the Series
1991-3 Supplement, dated as of June 30, 1991, among Chrysler
Credit Corporation, as Servicer, U.S. Auto Receivables Company, as
Seller, 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.
66
<PAGE> 67
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
10-MMM 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-NNN 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-OOO 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-PPP 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-A 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-QQQ 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-RRR 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-SSS 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-TTT Copy of Indenture, dated as of July 1, 1992, between Premier Auto
Trust 1992-4 and Bankers Trust Company with respect to Premier Auto
Trust 1992-4. Filed as Exhibit 4-A to the Quarterly Report on Form
10-Q of Premier Auto Trust 1992-4 for the quarter ended September 30,
1992, and incorporated herein by reference.
10-UUU Copy of 5.05% Asset Backed Note with respect to Premier Auto Trust
1992-4. Filed as Exhibit 4-B to the Quarterly Report on Form 10-Q of
Premier Auto Trust 1992-4 for the quarter ended September 30, 1992,
and incorporated herein by reference.
10-VVV Copy of Trust Agreement, dated as of July 1, 1992, between Premier
Auto Receivables Company and Chemical Bank Delaware, with respect to
Premier Auto Trust 1992-4. Filed as Exhibit 4- C to the Quarterly
Report on Form 10-Q of Premier Auto Trust 1992-4 for the quarter ended
September 30, 1992, and incorporated herein by reference.
10-WWW Copy of Receivables Purchase Agreement, dated as of August 18, 1992,
between Chrysler Credit 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-XXX 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-YYY 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.
67
<PAGE> 68
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
10-ZZZ 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-AAAA 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-A of CARCO Auto Loan Master Trust on October 30, 1992, and
incorporated herein by reference.
10-BBBB 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-CCCC 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.
10-DDDD 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-EEEE 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-FFFF 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-GGGG 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-HHHH 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.
10-IIII 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.
68
<PAGE> 69
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
10-JJJJ 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 1993-1.
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-KKKK 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-LLLL Copy of Purchase Agreement, dated as of January 25, 1993, among
Chrysler Credit 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-MMMM 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-NNNN Copy of Amended and Restated Trust Agreement, dated as
of August 1, 1993, among Premier Auto Receivables Company, Chrysler
Financial Corporation and Chemical Bank Delaware, as Owner Trustee,
with respect to Premier Auto Trust 1993-4. Filed as Exhibit 4.1 to
the Quarterly Report on Form 10-Q of Premier Auto Trust 1993-4 for the
quarter ended September 30, 1993, and incorporated herein by
reference.
10-OOOO Copy of Indenture, dated as of August 1, 1993, between Premier Auto
Trust 1993-4 and Bankers Trust Company, as Indenture Trustee, with
respect to Premier Auto Trust 1993-4. Filed as Exhibit 4.2 to the
Quarterly Report on Form 10-Q of Premier Auto Trust 1993-4 for the
quarter ended September 30, 1993, and incorporated herein by
reference.
10-PPPP 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-QQQQ Copy of Amended and Restated Trust Agreement, dated as of August 1,
1994, among Premier Auto Receivables Company, Chrysler Financial
Corporation and Chemical Bank Delaware, as Owner Trustee, with respect
to Premier Auto Trust 1994-4. Filed as Exhibit 4.1 to the Quarterly
Report on Form 10-Q of Premier Auto Trust 1994-4 for the quarter ended
September 30, 1994, and incorporated herein by reference.
10-RRRR Copy of Indenture, dated as of August 1, 1994, between Premier
Auto Trust 1994-4 and Bankers Trust Company, as Indenture Trustee.
Filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q of Premier
Auto Trust 1994-4 for the quarter ended September 30, 1994, 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 LLP, 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.
*27 Financial Data Schedule for year ended December 31, 1994.
- --------------------
*Filed herewith
69
<PAGE> 70
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Part IV - Continued
AND REPORTS ON FORM 8-K - CONTINUED
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:
A report on Form 8-K, dated December 1, 1994, was filed
during the quarter ended December 31, 1994, reporting the
amendment of the Amended and Restated Rights Agreement,
dated as of December 14, 1990 under Item 5 of such Form
8-K.
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.
CHRYSLER CORPORATION
By R. J. Eaton
----------------------------
R. J. EATON
Chairman of the Board
and Chief Executive Officer
February 2, 1995
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.
Principal executive officers:
<TABLE>
<S> <C> <C>
R. J. Eaton Chairman of the Board February 2, 1995
- ----------- and Chief Executive Officer
R. J. EATON
R. A. Lutz President and Chief February 2, 1995
- ---------- Operating Officer
R. A. LUTZ
Principal financial officer:
G. C. Valade Executive Vice President and February 2, 1995
- ------------ Chief Financial Officer
G. C. VALADE
Principal accounting officer:
J. D. Donlon, III Vice President and February 2, 1995
----------------- Controller
J. D. DONLON, III
</TABLE>
71
<PAGE> 72
CONFORMED
SIGNATURES
<TABLE>
<S> <C> <C> <C>
Board of Directors:
Lilyan H. Affinito * Director February 2, 1995
- ------------------
LILYAN H. AFFINITO
Robert E. Allen * Director February 2, 1995
- ---------------
ROBERT E. ALLEN
Joseph E. Antonini * Director February 2, 1995
- ------------------
JOSEPH E. ANTONINI
Joseph A. Califano, Jr. * Director February 2, 1995
- -----------------------
JOSEPH A. CALIFANO, JR.
Thomas G. Denomme * Director February 2, 1995
- -----------------
THOMAS G. DENOMME
Robert J. Eaton * Director February 2, 1995
- ---------------
ROBERT J. EATON
Earl G. Graves * Director February 2, 1995
- --------------
EARL G. GRAVES
Kent Kresa * Director February 2, 1995
- ----------
KENT KRESA
Robert J. Lanigan * Director February 2, 1995
- -----------------
ROBERT J. LANIGAN
Robert A. Lutz * Director February 2, 1995
- --------------
ROBERT A. LUTZ
Peter A. Magowan * Director February 2, 1995
- ----------------
PETER A. MAGOWAN
Malcolm T. Stamper * Director February 2, 1995
- ------------------
MALCOLM T. STAMPER
Lynton R. Wilson * Director February 2, 1995
- ----------------
LYNTON R. WILSON
</TABLE>
* By R. D. Houtman
-------------------------------
R. D. HOUTMAN
Attorney-in-Fact
February 2, 1995
72
<PAGE> 1
EXHIBIT 3-A-1
=============================================================================
CHRYSLER CORPORATION
CERTIFICATE OF INCORPORATION
(AS AMENDED AND RESTATED MAY 21, 1987)
=============================================================================
<PAGE> 2
CERTIFICATE OF INCORPORATION
OF
CHRYSLER CORPORATION
----------
ARTICLE I
NAME
The name of the corporation is Chrysler Corporation.
ARTICLE II
ADDRESS AND REGISTERED AGENT
The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE III
DESCRIPTION OF BUSINESS
The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
ARTICLE IV
CAPITAL STOCK
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 520,000,000 shares, consisting of
20,000,000 shares of Preferred Stock, par value of $1.00 per share, and
500,000,000 shares of Common Stock, par value of $1.00 per share.
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions of the Preferred Stock and the
Common Stock are as follows:
A. The Preferred Stock may be issued from time to time in one
or more series. Subject to the limitations set forth herein and any
limitations prescribed by law, the Board of Directors is expressly
authorized, prior to issuance of any series of Preferred Stock, to fix
by resolution or resolutions providing for the issue of any series the
number of shares included in such series and the designations, relative
powers, preferences and rights, and the qualifications, limitations or
restrictions of such series. Pursuant to the foregoing general
authority vested in the Board of Directors, but not in limitation of
the powers conferred on the Board of Directors thereby and by the
General Corporation Law of the State of Delaware, the Board of
Directors is expressly authorized to determine with respect to each
series of Preferred Stock:
(1) the designation or designations of such series and
the number of shares (which number from time to time may be
decreased by the Board of Directors, but not below the number of
such shares then outstanding, or may be increased by the Board
of Directors unless otherwise provided in creating such series)
constituting such series;
<PAGE> 3
(2) the rate or amount and times at which, and the
preferences and conditions under which, dividends shall be
payable on shares of such series, the status of such dividends
as cumulative or noncumulative, the date or dates from which
dividends, if cumulative, shall accumulate, and the status of
such shares as participating or nonparticipating after the
payment of dividends as to which such shares are entitled to
any preference;
(3) the rights and preferences, if any, of the holders
of shares of such series upon the liquidation, dissolution or
winding up of the affairs of, or upon any distribution of the
assets of, the Corporation, which amount may vary depending
upon whether such liquidation, dissolution or winding up is
voluntary or involuntary and, if voluntary, may vary at
different dates, and the status of the shares of such series
as participating or nonparticipating after the satisfaction of
any such rights and preferences;
(4) the full or limited voting rights, if any, to be
provided for shares of such series, in addition to the voting
rights provided by law;
(5) the times, terms and conditions, if any, upon which
shares of such series shall be subject to redemption, including
the amount the holders of shares of such series shall be
entitled to receive upon redemption (which amount may vary
under different conditions or at different redemption dates)
and the amount, terms, conditions and manner of operation of
any purchase, retirement or sinking fund to be provided for
the shares of such series;
(6) the rights, if any, of holders of shares of such
series to convert such shares into, or to exchange such shares
for, shares of any other class or classes or of any other
series of the same class, the prices or rates of conversion or
exchange, and adjustments thereto, and any other terms and
conditions applicable to such conversion or exchange;
(7) the limitations, if any, applicable while such
series is outstanding on the payment of dividends or making of
distributions on, or the acquisition or redemption of, Common
Stock or any other class of shares ranking junior, either as to
dividends or upon liquidation, to the shares of such series;
(8) the conditions or restrictions, if any, upon the
issue of any additional shares (including additional shares of
such series or any other series or of any other class) ranking
on a parity with or prior to the shares of such series either
as to dividends or upon liquidation; and
(9) any other relative powers, preferences and
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of shares
of such series;
in each case, so far as not inconsistent with the provisions of this
Certificate of Incorporation or the General Corporation Law of the
State of Delaware as then in effect. All shares of Preferred Stock
shall be identical and of equal rank except in respect to the
particulars that may be fixed by the Board of Directors as provided
above, and all shares of each series of Preferred Stock shall be
identical and of equal rank except as to the times from which
cumulative dividends, if any, thereon shall be cumulative.
B. Except as otherwise provided by the General Corporation Law
of the State of Delaware or by any resolution adopted by the Board of
Directors fixing the relative powers, preferences and rights and the
qualifications, limitations or restrictions of any series of Preferred
Stock, the entire voting power of the shares of the Corporation for the
election of Directors and for all other purposes, as well as all other
rights appertaining to shares of the Corporation, shall be vested
exclusively in the Common Stock. Each share of Common Stock shall have
one vote upon all matters to be voted on by the holders of the Common
Stock, and shall be entitled to participate equally in all dividends
payable with respect to the Common Stock and to share ratably, subject
to the rights and preferences of any Preferred Stock, in all assets of
the Corporation in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, or upon any distribution of the assets of the Corporation.
C. No present or future holder of any shares of the
Corporation, whether heretofore or hereafter issued, shall have any
preemptive rights with respect to (1) any shares of the Corporation or
(2) any other securities of the Corporation (including bonds and
debentures) convertible into or carrying rights or options to purchase
any shares of the Corporation.
2
<PAGE> 4
ARTICLE V
TERM OF EXISTENCE
The Corporation shall have perpetual existence.
ARTICLE VI
STOCKHOLDER LIABILITY
The stockholders of the Corporation shall not be personally liable for
the payment of the Corporation's debts.
ARTICLE VII
BOARD OF DIRECTORS
All corporate powers of the Corporation shall be exercised by the Board
of Directors except as otherwise provided by law.
The number of the directors of the Corporation shall be fixed from time
to time as provided in the By-Laws and may be altered from time to time as
provided in the By-Laws. In case of any increase in the number of directors,
the additional directors shall be elected as provided in the By-Laws. Election
of directors need not be by written ballot.
The directors of the Corporation may, by a By-Law adopted by a vote of
the stockholders, be divided into one, two or three classes as provided by the
laws of the State of Delaware.
The directors may hold their meetings and have an office or offices
outside the State of Delaware if the By-Laws so provide.
Subject always to the By-Laws made by the stockholders, the Board of
Directors may make By-Laws and from time to time may alter, amend or repeal any
By-Laws, but any By-Laws made by the Board of Directors may be altered, amended
or repealed by the stockholders at any annual meeting or at any special
meeting, provided that notice of such proposed alteration, amendment or repeal
is included in the notice of such meeting.
The Board of Directors shall have power from time to time to fix the
amount to be reserved by the Corporation over and above its capital stock paid
in and to fix and determine and to vary the amount of the working capital of
the Corporation, and to direct and determine the use and disposition of the
working capital and of any surplus or net profits.
The Board of Directors from time to time shall determine whether and to
what extent and at what times and places and under what conditions and
regulations the accounts and books of the Corporation or any of them shall be
open to the inspection of the stockholders, and no stockholder shall have any
right to inspect any account, book or document of the Corporation except as
conferred by statute or as authorized by resolution of the Board of Directors.
ARTICLE VIII
ELIMINATION OR LIMITATION OF CERTAIN LIABILITIES OF DIRECTORS
INDEMNIFICATION AND INSURANCE
A. A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (1) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (2) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (3) under Section 174 of the Delaware General
Corporation Law, or (4) for any transaction from which the director derived any
improper personal benefit. If, after approval by the stockholders of this
Section, the Delaware General Corporation Law is amended to permit the further
elimination or limitation of the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law, as so
amended.
3
<PAGE> 5
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation in respect of any act or omission
occurring prior to the time of such repeal or modification.
B. (1) Each person who is or was made a party or is threatened to be
made a party to or is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she, or a person of whom he or she is the
legal representative, is or was a director, officer, employee or agent of the
Corporation or any of its subsidiaries or is or was serving at the request of
the Corporation or any of its subsidiaries, as a director, officer, employee,
fiduciary or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to
the extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such
person in connection therewith and such indemnification shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of his or her heirs, executors and administrators;
provided, however, that, except as provided in paragraph (2) hereof with
respect to proceedings seeking to enforce rights to indemnification, the
Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation. The right to indemnification conferred in this Section shall
be a contract right and shall include the right to be paid by the Corporation
the expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the Delaware General Corporation Law
requires, the payment of such expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the Corporation of an undertaking, by or on behalf of such director or
officer, to repay all amounts so advanced if it shall ultimately be determined
that such director or officer is not entitled to be indemnified under this
Section or otherwise.
(2) If a claim under paragraph (1) of this Section is not paid in full
by the Corporation within sixty days after a written claim has been received by
the Corporation, except in the case of a claim for expenses incurred in
defending a proceeding in advance of its final disposition, in which case the
applicable period shall be twenty days, the claimant may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim
and, if successful in whole or in part, the claimant shall be entitled to be
paid also the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the Delaware General Corporation Law for the Corporation
to indemnify the claimant for the amount claimed, but the burden of proving
such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or
its stockholders) to have made a determination prior to the commencement of
such action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or
its stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
(3) The right to indemnification and the payment of expenses incurred
in defending a proceeding in advance of its final disposition conferred in this
Section shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of this Certificate of
Incorporation or by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
4
<PAGE> 6
(4) The Corporation may maintain insurance, at its expense, to protect
itself and any of its subsidiaries and any director, officer, employee or agent
of the Corporation and any of its subsidiaries or another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
(5) The Corporation may enter into contracts with any director,
officer, employee or agent of the Corporation or any of its subsidiaries
providing indemnification to the full extent authorized or permitted by the
Delaware General Corporation Law and may create a trust fund, grant a security
interest and/or use other means (including, without limitation, letters of
credit, surety bonds and other similar arrangements) to ensure the payment of
such amounts as may become necessary to effect indemnification pursuant to such
contracts or otherwise.
(6) The Corporation's indemnity of any person who was or is serving at
its request as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise shall be reduced by any
amounts such person may collect as indemnification from such other corporation,
partnership, joint venture, trust or other enterprise.
(7) Any repeal or modification of the foregoing paragraphs by the
stockholders of the Corporation shall not adversely affect any right or
protection of a person with respect to any act or omission occurring prior to
the time of such repeal or modification.
5
<PAGE> 1
EXHIBIT 3-A-2
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CHRYSLER CORPORATION
CHRYSLER CORPORATION, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
FIRST: That at a meeting of the Board of Directors of Chrysler
Corporation duly called and held on March 3, 1994, the Board of Directors duly
adopted a resolution which set forth a proposed amendment of the Restated
Certificate of Incorporation ("Certificate of Incorporation") of Chrysler
Corporation, declared said amendment to be advisable and recommended that such
amendment be approved by the stockholders of Chrysler Corporation at the annual
meeting of stockholders on May 19, 1994.
The proposed amendment was to amend the first sentence of Article IV of
the Certificate of Incorporation. Such sentence, as proposed to be amended, is
as follows:
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 1,020,000,000 shares,
consisting of 20,000,000 shares of Preferred Stock, par value of $1.00
per share, and 1,000,000,000 shares of Common Stock, par value of
$1.00 per share.
SECOND: That at the annual meeting of stockholders of Chrysler
Corporation duly called and held on May 19, 1994 upon notice in accordance
with Section 222 of the General Corporation Law of the State of Delaware, a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote thereon was voted in favor of the foregoing amendment of the
Certificate of Incorporation of Chrysler Corporation.
<PAGE> 2
-2-
THIRD: That the foregoing amendment has been duly adopted in
accordance with the provisions of Section 242 of the General Corporation Law of
the State of Delaware.
IN WITNESS WHEREOF, said CHRYSLER CORPORATION has caused this
certificate to be signed by Gary C. Valade, its Executive Vice President, and
attested by William J. O'Brien, its Vice President and Secretary, this 19th day
of May, 1994.
CHRYSLER CORPORATION
BY /s/ GARY C. VALADE
----------------------
Gary C. Valade
Executive Vice President
ATTEST:
/s/ WILLIAM J. O'BRIEN
- -----------------------
William J. O'Brien
Vice President
and Secretary
<PAGE> 1
EXHIBIT 3-C
CHRYSLER CORPORATION
Certificate of Designation
Pursuant to Section 151
of the General Corporation Law
of the State of Delaware
Certificate of Designation
Junior Participating Cumulative Preferred Stock
We, F. W. Zuckerman and A. E. Micale, being, respectively, a Vice
President and the Assistant Secretary of Chrysler Corporation, a corporation
organized and existing under the General Corporation Law of Delaware
(the "Corporation"), do hereby certify:
FIRST: That, pursuant to authority expressly vested in the Board of
Directors of the Corporation by the provisions of its Restated Certificate of
Incorporation, the Board of Directors on February 4, 1988 duly adopted the
following resolution:
RESOLVED that this Board of Directors, pursuant to authority expressly
vested in it by the provisions of the Restated Certificate of Incorporation of
the Corporation, hereby authorizes the issue of a series of Preferred Stock of
the Corporation and hereby fixes the designation, relative powers, preferences
and rights, and the qualifications, limitations or restrictions thereof, as
follows:
<PAGE> 2
Section 1. Designation and Number of Shares. 2,500,000 shares of the
Preferred Stock of the Corporation shall constitute a series of Preferred Stock
designated as Junior Participating Cumulative Preferred Stock, (hereinafter
referred to as the "Junior Preferred Stock"). Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Junior Preferred Stock to a
number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights,
or warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Junior Preferred Stock.
Section 2. Dividends and Distributions. (A) Subject to the rights of the
holders of any shares of any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Junior Preferred Stock with respect to
dividends, the holders of shares of Junior Preferred Stock, in preference to
the holders of Common Stock, par value $1.00 of the Corporation (the "Common
Stock") and of any other junior stock which may be outstanding, shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the fifteenth day of January, April, July and October in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Junior Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$2.50 per share ($10.00 per annum), or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issu-
2
<PAGE> 3
ance of any share or fraction of a share of Junior Preferred Stock. In the
event the Corporation shall at any time declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Junior Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $2.50 per share ($10.00 per
annum) on the Junior Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares
of Junior Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Junior Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Junior Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which
3
<PAGE> 4
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall accumulate
but shall not bear interest. Dividends paid on the shares of Junior Preferred
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Junior Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Junior Preferred
Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment as hereinafter set forth,
each share of Junior Preferred Stock shall entitle the holder thereof to 100
votes (and each one one-hundredth of a share of Junior Preferred Stock shall
entitle the holder thereof to one vote) on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on Common Stock payable in shares of
Common Stock or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the number of votes
per share to which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in the Restated Certificate of
Incorporation, in any other certificate of designation creating a series of
preferred stock or any similar stock, or by law,
4
<PAGE> 5
the holders of shares of Junior Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(C) Except as provided herein, in Section 10 or by applicable law,
holders of Junior Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for authorizing or taking any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Junior Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Junior Preferred Stock outstanding shall
have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on
any shares or stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding-up) to the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Junior Preferred
Stock except dividends paid ratably on the Junior Preferred Stock, and
all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding-up) with the Junior Preferred
Stock, provided that
5
<PAGE> 6
the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any
stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Junior Preferred Stock;
or
(iv) purchase or otherwise acquire for consideration any
shares of Junior Preferred Stock, or any shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding-up) with the Junior Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Junior Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever,
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued shares
of preferred stock, without designation as to series, and may be reissued as
part of a new series of preferred stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein, in the Restated Certificate of
Incorporation, in any other certificate of designation creating a series of
preferred stock or any similar stock or as otherwise required by law.
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<PAGE> 7
Section 6. Liquidation, Dissolution or Winding-Up. Upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, no
distribution shall be made (A) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding-up) to the
Junior Preferred Stock unless prior thereto, the holders of shares of Junior
Preferred Stock shall have received the higher of (i) $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, or (ii) an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of
Common Stock; nor shall any distribution be made (B) to the holders of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding-up) with the Junior Preferred Stock, except distributions made ratably
on the Junior Preferred Stock and all other such parity stock in proportion to
the total amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding-up. In the event the Corporation
shall at any time declare or pay any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Junior Preferred Stock were entitled immediately
prior to such event under the provision in clause (A) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash
7
<PAGE> 8
and/or any other property, or otherwise changed, then in any such case each
share of Junior Preferred Stock shall at the same time be similarly exchanged
or changed into an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Junior Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Junior Preferred Stock shall not
be redeemable.
Section 9. Rank. Unless otherwise provided in the Restated Certificate
of Incorporation of the Corporation or a Certificate of Designation relating to
a subsequent series of preferred stock of the Corporation, the Junior Preferred
Stock shall rank junior to all other series of the Corporation's preferred
stock as to the payment of dividends and the distribution of assets on
liquidation, dissolution or winding-up, and senior to the Common Stock of this
Corporation.
Section 10. Amendment. The Restated Certificate of Incorporation of the
Corporation, as amended, shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Junior Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-
8
<PAGE> 9
thirds of the outstanding shares of Junior Preferred Stock, voting together as
a single series.
Section 11. Fractional Shares. Junior Preferred Stock may be issued in
fractions of a share (in one one-hundredths (1/100) of a share and integral
multiples thereof) which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Junior Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its Vice President and attested by its Assistant
Secretary this 17th day of February, 1988.
/s/ F.W. ZUCKERMAN
------------------
F.W. Zuckerman
Vice President
ATTEST:
/s/ A.E. MICALE
--------------
A.E. Micale
Assistant Secretary
9
<PAGE> 1
EXHIBIT 3-D
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
of
SERIES A CONVERTIBLE PREFERRED STOCK
of
CHRYSLER CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CHRYSLER CORPORATION, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), does hereby certify as
follows:
Pursuant to the authority conferred on the Board of Directors of the
Corporation by the Certificate of Incorporation, as amended, of the Corporation
and in accordance with Sections 151 and 141(c) of the General Corporation Law
of the State of Delaware, the Board of Directors of the Corporation, on
February 6, 1992, duly adopted resolutions authorizing the issuance of a series
of Preferred Stock, par value $1.00 per share, of the Corporation, establishing
the voting rights of the shares of such series of Preferred Stock (in the form
set forth in Section 8 of the resolution set forth hereinbelow in this
Certificate of Designation), appointing a committee (the "Committee") of the
Board of Directors of the Corporation comprised of Messrs. L.A. Iacocca, R.A.
Lutz and R.S. Miller, Jr. and authorizing said Committee to fix the
designations and any of the preferences or rights of the shares of such series
of Preferred Stock relating to dividends, redemption, dissolution, any
distribution of assets of the Corporation or the conversion of such shares and
to fix the number of shares constituting such series of Preferred Stock.
Pursuant to the authority conferred on the Committee by the aforesaid
resolutions of the Board of Directors of the Corporation, the Committee, on
February 14, 1992, duly adopted the following resolution establishing a series
of 1,725,000 shares of Preferred Stock of the Corporation designated as "Series
A Preferred Stock":
RESOLVED, that pursuant to the authority conferred on the Board of
Directors of this Corporation by the Certificate of Incorporation, as
amended, and pursuant to the authority conferred on this Committee by
resolutions
<PAGE> 2
duly adopted by the Board of Directors of the Corporation, a series of
Preferred Stock, par value $1.00 per share, of the Corporation be and
hereby is established and created, and that the designation and number of
shares thereof and the voting powers (in the form previously established by
resolution of the Board of Directors of the Corporation, as set forth in
Section 8 below) and the other powers, preferences and relative,
participating, optional or other rights of the shares of such series and
the qualifications, limitations and restrictions thereof are as follows:
Series A Convertible Preferred Stock
1. Designation and Amount. There shall be a series of Preferred
Stock designated as "Series A Convertible Preferred Stock" and the number of
shares constituting such series shall be 1,725,000. Such series is referred
to herein as the "Convertible Preferred Stock".
2. Par Value. The par value of each share of Convertible Preferred
Stock shall be $1.00.
3. Rank. All shares of Convertible Preferred Stock shall rank
prior, both as to payment of dividends and as to distributions of assets upon
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, to all of the Corporation's now or hereafter issued Common Stock,
par value $1.00 per share (the "Common Stock"), to all of the Corporation's
Junior Participating Cumulative Preferred Stock, par value $1.00 per share,
when and if issued (the "Junior Participating Preferred") and to all of the
Corporation's hereafter issued capital stock ranking junior to the Convertible
Preferred Stock, when and if issued.
4. Dividends. The holders of Convertible Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds at the time legally available therefor, dividends at the rate of $46.25
per annum per share, and no more, which shall be fully cumulative, shall accrue
without interest from the date of initial issuance of such shares of
Convertible Preferred Stock and shall be payable in cash quarterly in arrears
on January 15, April 15, July 15 and October 15 of each year commencing April
15, 1992 (with respect to the period from such date of initial issuance to
March 31, 1992) (except that if any such date is a Saturday, Sunday or legal
holiday, then such dividend shall be payable on the next day that is not a
Saturday, Sunday or legal holiday) to holders of record as they appear upon the
stock transfer books of the Corporation on such record dates, not more than
sixty days nor less than ten days preceding the payment dates for such
dividends, as are fixed by the Board of Directors (or, to the extent permitted
by applicable law, a duly authorized committee thereof). For
2
<PAGE> 3
purposes hereof, the term "legal holiday" shall mean any day on which banking
institutions are authorized to close in New York, New York or in Detroit,
Michigan. Subject to the next paragraph of this Section 4, dividends on
account of arrears for any past dividend period may be declared and paid at any
time, without reference to any regular dividend payment date. The amount of
dividends payable per share of Convertible Preferred Stock for each quarterly
dividend period shall be computed by dividing the annual dividend amount by
four. The amount of dividends payable for the initial dividend period and any
period shorter than a full quarterly period shall be computed on the basis of a
360-day year of twelve 30-day months. No interest shall be payable in respect
of any dividend payment on the Convertible Preferred Stock which may be in
arrears.
No dividends or other distributions, other than dividends payable
solely in shares of Common Stock or other capital stock of the Corporation
ranking junior as to dividends and as to liquidation rights to the Convertible
Preferred Stock, shall be declared, paid or set apart for payment on any shares
of Common Stock or other capital stock of the Corporation ranking junior as to
dividends to the Convertible Preferred Stock, including the Junior
Participating Preferred, when and if issued (the "Junior Dividend Stock"),
unless and until all accrued and unpaid dividends on the Convertible Preferred
Stock for all dividend payment periods terminating on or prior to the date of
payment of such dividends or other distributions on Junior Dividend Stock shall
have been paid or declared and set apart for payment.
If at any time any dividends on the Convertible Preferred Stock shall
be in arrears, the Corporation shall not repurchase, redeem or otherwise
acquire any shares of Common Stock, Junior Dividend Stock or any other class or
series of the Corporation's capital stock hereafter issued ranking junior as to
liquidation rights to the Convertible Preferred Stock (the "Junior Liquidation
Stock") for consideration aggregating in excess of $100,000 in any calendar
year.
If at any time any dividend on any capital stock of the Corporation
hereafter issued ranking senior as to dividends to the Convertible Preferred
Stock (the "Senior Dividend Stock") shall be in default, in whole or in part,
then (except to the extent allowed by the terms of such Senior Dividend Stock)
no dividend shall be paid or declared and set apart for payment on the
Convertible Preferred Stock unless and until all accrued and unpaid dividends
with respect to the Senior Dividend Stock for all payment periods terminating
on or prior to the date of payment of the current dividend on the Convertible
Preferred Stock shall have been paid or declared and set apart for payment,
without interest. No full dividends shall be paid or declared and set apart
for payment on any class or series of the
3
<PAGE> 4
Corporation's capital stock hereafter issued ranking, as to dividends, on a
parity with the Convertible Preferred Stock (the "Parity Dividend Stock") for
any period unless full cumulative dividends have been, or contemporaneously
are, paid or declared and set apart for such payment on the Convertible
Preferred Stock for all dividend payment periods terminating on or prior to the
date of payment of such full cumulative dividends. No full dividends shall be
paid or declared and set apart for payment on the Convertible Preferred Stock
for any period unless full cumulative dividends have been, or contemporaneously
are, paid or declared and set apart for payment on the Parity Dividend Stock
for all dividend periods terminating on or prior to the date of payment of such
full cumulative dividends. When accrued dividends are not paid in full on the
Convertible Preferred Stock and the Parity Dividend Stock, all dividends paid
or declared and set apart for payment on the Convertible Preferred Stock and
the Parity Dividend Stock shall be paid or declared and set apart for payment
pro rata so that the amount of dividends paid or declared and set apart for
payment per share on the Convertible Preferred Stock and the Parity Dividend
Stock shall in all cases bear to each other the same ratio that accrued and
unpaid dividends per share on the Convertible Preferred Stock and the Parity
Dividend Stock bear to each other.
Any reference to "distribution" contained in this Section 4 shall not
be deemed to include any distribution made in connection with any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary.
5. Liquidation Preference. In the event of a liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of shares of Convertible Preferred Stock shall be entitled to
receive out of the assets of the Corporation, whether such assets are stated
capital or surplus of any nature, an amount equal to the dividends accrued and
unpaid on such shares on the date of final distribution to such holders,
whether or not declared, without interest, plus a sum equal to $500.00 per
share, and no more, before any payment shall be made or any assets distributed
to the holders of Common Stock or any Junior Liquidation Stock; provided,
however, that such rights shall accrue to the holders of Convertible Preferred
Stock only in the event that the Corporation's payments with respect to the
liquidation preferences of the shares of capital stock of the Corporation
hereafter issued ranking senior as to liquidation rights to the Convertible
Preferred Stock (the "Senior Liquidation Stock") are fully met. The entire
assets of the Corporation available for distribution after the liquidation
preferences of the Senior Liquidation Stock are fully met shall be distributed
ratably among the holders of the Convertible Preferred Stock and any other
class or series of the Corporation's capital stock hereafter issued having
parity as to liquidation rights with the
4
<PAGE> 5
Convertible Preferred Stock in proportion to the respective preferential
amounts to which each is entitled (but only to the extent of such preferential
amounts). After payment in full of the liquidation preferences of the shares
of the Convertible Preferred Stock, the holders of such shares shall not be
entitled to any further participation in any distribution of assets by the
Corporation. Neither a consolidation or merger of the Corporation with or
into another corporation nor a merger of any other corporation with or into the
Corporation, nor a sale or transfer of all or any part of the Corporation's
assets for cash, securities or other property will be considered a liquidation,
dissolution or winding up of the Corporation.
6. Redemption at Option of the Corporation. The Convertible Preferred
Stock may not be redeemed by the Corporation prior to January 22, 1997.
Thereafter, the Convertible Preferred Stock may be redeemed by the Corporation,
at its option on any date set by the Board of Directors, in whole or in part at
any time, at a redemption price of $523.13 per share, plus an amount in cash
equal to accrued and unpaid dividends thereon, whether or not declared, pro
rata, to but excluding the redemption date, if redeemed on or prior to December
31, 1997, and at the following redemption prices per share, if redeemed during
the 12-month period ending December 31:
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
1998 $ 518.50
1999 513.88
2000 509.25
2001 504.63
</TABLE>
and thereafter at $500.00 per share, plus, in each case, an amount in cash
equal to all dividends on the Convertible Preferred Stock accrued and unpaid
thereon, whether or not declared, pro rata, to but excluding the date fixed for
redemption, such sum being hereinafter referred to as the "Redemption Price".
In case of the redemption of less than all of the then outstanding
Convertible Preferred Stock, the Corporation shall designate by lot, or in such
other manner as the Board of Directors may determine, the shares to be
redeemed, or shall effect such redemption pro rata. Notwithstanding the
foregoing, the Corporation shall not redeem less than all of the Convertible
Preferred Stock at any time outstanding until all dividends accrued and in
arrears upon all Convertible Preferred Stock then outstanding shall have been
paid for all past dividend periods.
Not more than sixty nor less than twenty days prior to the
redemption date fixed by the Board of Directors, notice by first class mail,
postage prepaid, shall be given to the holders
5
<PAGE> 6
of record of shares of the Convertible Preferred Stock to be redeemed,
addressed to such holders at their last addresses as shown upon the stock
transfer books of the Corporation. Each such notice of redemption shall
specify the date fixed for redemption, the Redemption Price, the place or
places of payment, that payment will be made upon presentation and surrender of
the shares of Convertible Preferred Stock, that on and after the redemption
date dividends will cease to accrue on such shares, the then-effective
conversion price pursuant to Section 7 and that the right of holders to convert
shares of Convertible Preferred Stock shall terminate at the close of business
on the fifth business day prior to the redemption date (unless the Company
defaults in the payment of the Redemption Price).
Any notice that is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of shares of
Convertible Preferred Stock receives such notice; and failure to give such
notice by mail, or any defect in such notice, to the holders of any shares
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Convertible Preferred Stock. On or
after the date fixed for redemption as stated in such notice, each holder of
the shares called for redemption shall surrender the certificate evidencing
such shares to the Corporation at the place designated in such notice and shall
thereupon be entitled to receive payment of the Redemption Price. If less than
all the shares evidenced by any such surrendered certificate are redeemed, a
new certificate shall be issued evidencing the unredeemed shares. Notice
having been given as aforesaid, if, on the date fixed for redemption, funds
necessary for the redemption shall be available therefor and shall have been
irrevocably deposited or set aside, then, notwithstanding that the certificates
evidencing any shares so called for redemption shall not have been surrendered,
dividends with respect to the shares so called shall cease to accrue after the
date fixed for redemption, such shares shall no longer be deemed outstanding,
the holders thereof shall cease to be stockholders of the Corporation and all
rights whatsoever with respect to the shares so called for redemption (except
the right of the holders to receive the Redemption Price without interest upon
surrender of their certificates therefor) shall terminate. If funds legally
available for such purpose are not sufficient for redemption of the shares of
Convertible Preferred Stock which were to be redeemed, then the certificates
evidencing such shares shall be deemed not to be surrendered, such shares shall
remain outstanding and the right of holders of shares of Convertible Preferred
Stock thereafter shall continue to be only those of a holder of shares of the
Convertible Preferred Stock.
The shares of Convertible Preferred Stock shall not be subject to
the operation of any mandatory purchase, retirement or sinking fund.
6
<PAGE> 7
7. Conversion Privilege.
(a) Right of Conversion. After the expiration of ninety days from
the date of initial issuance of any shares of the Convertible Preferred Stock,
each share of Convertible Preferred Stock shall be convertible at the option of
the holder thereof, at any time prior to the close of business on the fifth
business day prior to the date fixed for redemption of such share as herein
provided, into fully paid and nonassessable shares of Common Stock and such
other securities and property as hereinafter provided, at the rate of that
number of shares of Common Stock for each full share of Convertible Preferred
Stock that is equal to $500.00 divided by the conversion price applicable per
share of Common Stock. For purposes of this resolution, the "conversion
price" applicable per share of Common Stock shall initially be equal to $18.00,
and shall be adjusted from time to time in accordance with the provisions of
this Section 7.
For the purpose of this Section 7, the term "Common Stock" shall
initially mean the class designated as Common Stock, par value $1.00 per share,
of the Corporation as of February 12, 1992.
(b) Conversion Procedures. Any holder of shares of Convertible
Preferred Stock desiring to convert such shares into Common Stock shall
surrender the certificate or certificates evidencing such shares of Convertible
Preferred Stock at the office of the transfer agent for the Convertible
Preferred Stock, which certificate or certificates, if the Corporation shall so
require, shall be duly endorsed to the Corporation or in blank, or accompanied
by proper instruments of transfer to the Corporation or in blank, accompanied
by irrevocable written notice to the Corporation that the holder elects so to
convert such shares of Convertible Preferred Stock and specifying the name or
names (with address or addresses) in which a certificate or certificates
evidencing shares of Common Stock are to be issued.
Subject to Section 7(1) hereof, no payments or adjustments in
respect of dividends on shares of Convertible Preferred Stock surrendered for
conversion or on account of any dividend on the Common Stock issued upon
conversion shall be made upon the conversion of any shares of Convertible
Preferred Stock.
The Corporation shall, as soon as practicable after such deposit of
certificates evidencing shares of Convertible Preferred Stock accompanied by
the written notice and compliance with any other conditions herein contained,
deliver at such office of such transfer agent to the person for whose account
such shares of Convertible Preferred Stock were so surrendered, or to the
nominee or nominees of such person, certificates
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<PAGE> 8
evidencing the number of full shares of Common Stock to which such person shall
be entitled as aforesaid, together with a cash adjustment in respect of any
fraction of a share of Common Stock as hereinafter provided. Subject to the
following provisions of this paragraph, such conversion shall be deemed to have
been made as of the date of such surrender of the shares of Convertible
Preferred Stock to be converted, and the person or persons entitled to receive
the Common Stock deliverable upon conversion of such Convertible Preferred
Stock shall be treated for all purposes as the record holder or holders of such
Common Stock on such date.
(c) Adjustment of Conversion Price. The conversion price
at which a share of Convertible Preferred Stock is convertible into Common
Stock shall be subject to adjustment from time to time as follows:
(i) In case the Corporation shall pay or make a dividend or
other distribution on its Common Stock exclusively in Common Stock or shall pay
or make a dividend or other distribution on any other class of capital stock of
the Corporation which dividend or distribution includes Common Stock or shall
exchange outstanding Rights (as defined in Section 7(k) hereof) for shares of
Common Stock pursuant to Section 23A of the Corporation's Rights Agreement,
dated as of February 4, 1988, as amended (the "Rights Agreement"), the
conversion price in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution or to exchange such Rights shall be reduced by
multiplying such conversion price by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination and the denominator shall be the sum of
such number of shares and the total number of shares constituting such dividend
or other distribution or exchange, such reduction to become effective
immediately after the opening of business on the day following the date fixed
for such determination. For the purposes of this subparagraph (i), the number
of shares of Common Stock at any time outstanding shall not include shares held
in the treasury of the Corporation. The Corporation shall not pay any
dividend or make any distribution on shares of Common Stock held in the
treasury of the Corporation.
(ii) In case the Corporation shall pay or make a dividend or
other distribution on its Common Stock consisting exclusively of, or shall
otherwise issue to all holders of its Common Stock, rights or warrants
entitling the holders thereof to subscribe for or purchase shares of Common
Stock at a price per share less than the current market price per share
(determined as provided in subparagraph (vii) of this Section 7(c)) of the
Common Stock on the date fixed for the determination of stockholders entitled
to receive such rights or warrants, the
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conversion price in effect at the opening of business on the day following the
date fixed for such determination shall be reduced by multiplying such
conversion price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common Stock
so offered for subscription or purchase would purchase at such current market
price and the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock so offered for subscription or
purchase, such reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purposes of this subparagraph (ii), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the
Corporation. The Corporation shall not issue any rights or warrants in respect
of shares of Common Stock held in the treasury of the Corporation. In case
any rights or warrants referred to in this subparagraph (ii) in respect of
which an adjustment shall have been made shall expire unexercised within 45
days after the same shall have been distributed or issued by the Corporation,
the conversion price shall be readjusted at the time of such expiration to the
conversion price that would have been in effect if no adjustment had been made
on account of the distribution or issuance of such expired rights or warrants.
For the purposes of this Section 7(c)(ii), if both a Distribution Date and a
Section 11(a)(ii) Event (as such terms are defined in the Rights Agreement)
shall have occurred, then the later to occur of such events shall be deemed to
constitute an issuance of rights to purchase shares of Common Stock.
(iii) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the conversion
price in effect at the opening of business on the day following the day upon
which such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the conversion price in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(iv) Subject to the last sentence of this subparagraph (iv), in
case the Corporation shall, by dividend or otherwise, distribute to all holders
of its Common Stock evidences of its indebtedness, shares of any class of
capital stock, cash or assets (including securities, but excluding any rights
or
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<PAGE> 10
warrants referred to in subparagraph (ii) of this Section 7(c), excluding any
dividend or distribution paid exclusively in cash and excluding any dividend or
distribution referred to in subparagraph (i) of this Section 7(c)), the
conversion price shall be reduced so that the same shall equal the price
determined by multiplying the conversion price in effect immediately prior to
the effectiveness of the conversion price reduction contemplated by this
subparagraph (iv) by a fraction of which the numerator shall be the current
market price per share (determined as provided in subparagraph (vii) of this
Section 7(c)) of the Common Stock on the date of such effectiveness less the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors),
on the date of such effectiveness, of the portion of the evidences of
indebtedness, shares of capital stock, cash and assets so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such reduction to become
effective immediately prior to the opening of business on the day following the
date fixed for the payment of such distribution (the "Reference Date"). If
the Board of Directors determines the fair market value of any distribution for
purposes of this subparagraph (iv) by reference to the actual or when issued
trading market for any securities comprising such distribution, it must in
doing so consider the prices in such market over the same period used in
computing the current market price per share of Common Stock pursuant to
subparagraph (vii) of this Section 7(c). For purposes of this subparagraph
(iv), any dividend or distribution that includes shares of Common Stock, rights
or warrants to subscribe for or purchase shares of Common Stock or other
securities convertible into or exchangeable for shares of Common Stock shall be
deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, cash, assets or shares of capital stock other than such shares of
Common Stock, such rights or warrants or such other convertible or exchangeable
securities (making any conversion price reduction required by this subparagraph
(iv)) immediately followed by (2) in the case of such shares of Common Stock or
such rights or warrants, a dividend or distribution thereof (making any further
conversion price reduction required by subparagraph (i) or (ii) of this Section
7(c), except (A) the Reference Date of such dividend or distribution as defined
in this subparagraph (iv) shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution or to exchange such Rights" and "the date fixed for such
determination" within the meaning of subparagraphs (i) and (ii) of this Section
7(c) and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of subparagraph (i) of
this Section 7(c)) or (3) in the case of such other convertible or exchangeable
securities, a dividend or distribution of such
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<PAGE> 11
number of shares of Common Stock as would then be issuable upon the conversion
or exchange thereof, whether or not the conversion or exchange of such
securities is subject to any conditions (making any further conversion price
reduction required by subparagraph (i) of this Section 7(c), except (A) the
Reference Date of such dividend or distribution as defined in this subparagraph
(iv) shall be substituted as "the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution or to
exchange such Rights" and "the date fixed for such determination" and (B) the
shares deemed to constitute such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such
determination," each within the meaning of subparagraph (i) of this Section
7(c)).
(v) In case the Corporation shall, by dividend or otherwise, at
any time distribute to all holders of its Common Stock cash (excluding (1) any
cash that is distributed as part of a distribution referred to in subparagraph
(iv) of this Section 7(c) and (2) any cash representing an amount per share of
Common Stock of any quarterly cash dividend on the Common Stock to the extent
such cash does not exceed the amount per share of Common Stock of the next
preceding quarterly cash dividend on the Common Stock (as adjusted to reflect
subdivisions or combinations of the Common Stock), or all of any such quarterly
cash dividend if the amount thereof per share of Common Stock multiplied by
four does not exceed 15% of the current market price per share (determined as
provided in subparagraph (vii) of this Section 7(c)) of the Common Stock on the
Trading Day (as defined in Section 7(i)) next preceding the date of declaration
of such dividend), the conversion price shall be reduced so that the same shall
equal the price determined by multiplying the conversion price in effect
immediately prior to the effectiveness of the conversion price reduction
contemplated by this subparagraph (v) by a fraction of which the numerator
shall be the current market price per share (determined as provided in
subparagraph (vii) of this Section 7(c)) of the Common Stock on the date of
such effectiveness less the amount of cash so distributed and not excluded as
above provided applicable to one share of Common Stock and the denominator
shall be such current market price per share of the Common Stock, such
reduction to become effective immediately prior to the opening of business on
the day following the date fixed for the payment of such distribution.
(vi) In case a tender or exchange offer made by the Corporation
or any subsidiary of the Corporation for all or any portion of the
Corporation's Common Stock shall expire and such tender or exchange offer shall
involve the payment by the Corporation or such subsidiary of consideration per
share of Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors) at the last
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<PAGE> 12
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as it shall have been amended) that exceeds the
current market price per share (determined as provided in subparagraph (vii) of
this Section 7(c)) of the Common Stock on the Trading Day next succeeding the
Expiration Time, the conversion price shall be reduced so that the same shall
equal the price determined by multiplying the conversion price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Expiration Time multiplied by the current
market price per share (determined as provided in subparagraph (vii) of this
Section 7(c)) of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged
and not withdrawn as of the Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the current market price per share
(determined as provided in subparagraph (vii) of this Section 7(c)) of the
Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction to become effective immediately prior to the opening of business on
the day following the Expiration Time.
(vii) For the purpose of any computation under this
subparagraph and subparagraphs (ii), (iv) and (v) of this Section 7(c), the
current market price per share of Common Stock on any date shall be deemed to
be the average of the daily Closing Prices (as defined in Section 7(i)) for the
five consecutive Trading Days prior to and including the date in question;
provided, however, that (1) if the "ex" date (as hereinafter defined) for any
event (other than the issuance or distribution requiring such computation) that
requires an adjustment to the conversion price pursuant to subparagraph (i),
(ii), (iii), (iv), (v) or (vi) above occurs on or after the twentieth Trading
Day prior to the day in question and prior to the "ex" date for the issuance or
distribution requiring such computation, the Closing Price for each Trading Day
prior to the "ex" date for such other event shall be adjusted by multiplying
such Closing Price by the same fraction by which the conversion price is so
required to be adjusted as a result of such other event, (2) if the "ex" date
for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion price pursuant to
subparagraph (i), (ii), (iii), (iv), (v) or (vi) above occurs on or after
the "ex" date for the issuance or distribution requiring such computation and
on or prior to the day in question, the Closing Price for each Trading Day on
and
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<PAGE> 13
after the "ex" date for such other event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by which the conversion price
is so required to be adjusted as a result of such other event, and (3) if the
"ex" date for the issuance or distribution requiring such computation is on or
prior to the day in question, after taking into account any adjustment required
pursuant to clause (2) of this proviso, the Closing Price for each Trading Day
on or after such "ex" date shall be adjusted by adding thereto the amount of
any cash and the fair market value on the day in question (as determined by the
Board of Directors in a manner consistent with any determination of such value
for purposes of paragraph (iv) or (v) of this Section 7(c), whose determination
shall be conclusive and described in a resolution of the Board of Directors) of
the evidences of indebtedness, shares of capital or assets being distributed
applicable to one share of Common Stock as of the close of business on the day
before such "ex" date. For the purpose of any computation under subparagraph
(vi) of this Section 7(c), the current market price per share of Common Stock
on any date shall be deemed to be the average of the daily Closing Prices for
such day and the next two succeeding Trading Days; provided, however, that if
the "ex" date for any event (other than the tender or exchange offer requiring
such computation) that requires an adjustment to the conversion price pursuant
to subparagraph (i), (ii), (iii), (iv), (v) or (vi) above occurs on or
after the Expiration Time for the tender or exchange offer requiring such
computation and on or prior to the day in question, the Closing Price for each
Trading Day on and after the "ex" date for such other event shall be adjusted
by multiplying such Closing Price by the reciprocal of the fraction by which
the conversion price is so required to be adjusted as a result of such other
event. For purposes of this paragraph, the term "ex" date, (1) when used
with respect to any issuance or distribution, means the first date on which the
Common Stock trades regular way on the relevant exchange or in the relevant
market from which the Closing Price was obtained without the right to receive
such issuance or distribution, (2) when used with respect to any subdivision
or combination of shares of Common Stock, means the first date on which the
Common Stock trades regular way on such exchange or in such market after the
time at which such subdivision or combination becomes effective, and (3) when
used with respect to any tender or exchange offer means the first date on which
the Common Stock trades regular way on such exchange or in such market after
the Expiration Time of such offer.
(viii) The Corporation may make such reductions in the
conversion price, in addition to those required by subparagraphs (i), (ii),
(iii), (iv), (v) and (vi) of this Section 7(c), as it considers to be
advisable to avoid or diminish any income tax to holders of Common Stock or
rights to purchase Common Stock resulting from any dividend or distribution of
stock (or rights
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<PAGE> 14
to acquire stock) or from any event treated as such for income tax purposes.
The Corporation from time to time may reduce the conversion price by any amount
for any period of time if the period is at least twenty days, the reduction is
irrevocable during the period and the Board of Directors of the Corporation
shall have made a determination that such reduction would be in the best
interests of the Corporation, which determination shall be conclusive.
Whenever the conversion price is reduced pursuant to the preceding sentence,
the Corporation shall mail to holders of record of the Convertible Preferred
Stock a notice of the reduction at least fifteen days prior to the date the
reduced conversion price takes effect, and such notice shall state the reduced
conversion price and the period it will be in effect.
(ix) No adjustment in the conversion price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the conversion price; provided, however, that any adjustments which by reason
of this subparagraph (ix) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment.
(x) Notwithstanding any other provision of this Section 7, no
adjustment to the conversion price shall reduce the conversion price below the
then par value per share of the Common Stock, and any such purported adjustment
shall instead reduce the conversion price to such par value. The Corporation
hereby covenants not to take any action (1) to increase the par value per share
of the Common Stock or (2) that would or does result in any adjustment in the
conversion price that, if made without giving effect to the previous sentence,
would cause the conversion price to be less than the then par value per share
of the Common Stock; provided, however, that the covenant in this sentence
shall be suspended if within ten days of determining in good faith that such
action would result in such adjustment (but not later than the business day
following the effectiveness of such adjustment), the Corporation gives notice
of redemption of all outstanding shares of the Convertible Preferred Stock, and
effects the redemption referred to in such notice on the redemption date
referred to therein in compliance with Section 6, but shall be retroactively
reinstated if such notice or redemption does not occur.
(xi) Whenever the conversion price is adjusted as herein
provided:
(1) the Corporation shall compute the adjusted conversion price
and shall prepare a certificate signed by the Treasurer of the Corporation
setting forth the adjusted conversion price and showing in reasonable detail
the facts upon which such adjustment is based, and such certificate shall
forthwith be filed with the transfer agent for the Convertible Preferred Stock;
and
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<PAGE> 15
(2) a notice stating the conversion price has been adjusted and
setting forth the adjusted conversion price shall forthwith be required, and as
soon as practicable after it is required, such notice shall be mailed by the
Corporation to all record holders of shares of Convertible Preferred Stock at
their last addresses as they shall appear upon the stock transfer books of the
Corporation.
(d) No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon conversion
of Convertible Preferred Stock. If more than one certificate evidencing shares
of Convertible Preferred Stock shall be surrendered for conversion at one time
by the same holder, the number of full shares issuable upon conversion thereof
shall be computed on the basis of the aggregate number of shares of Convertible
Preferred Stock so surrendered. Instead of any fractional share of Common
Stock that would otherwise be issuable upon conversion of any shares of
Convertible Preferred Stock, the Corporation shall pay a cash adjustment in
respect of such fractional interest in an amount equal to the same fraction of
the market price per share of Common Stock (as determined by the Board of
Directors or in any manner prescribed by the Board of Directors, which, so long
as the Common Stock is listed on the New York Stock Exchange, shall be the
reported last sale price regular way on the New York Stock Exchange) at the
close of business on the day of conversion.
(e) Reclassification, Consolidation, Merger or Sale of Assets.
In the event that the Corporation shall be a party to any transaction
(including without limitation any recapitalization or reclassification of the
Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), any consolidation of the Corporation with, or
merger of the Corporation into, any other person, any merger of another person
into the Corporation (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Corporation), any sale or transfer of all or substantially
all of the assets of the Corporation or any compulsory share exchange) pursuant
to which the Common Stock is converted into the right to receive other
securities, cash or other property, then lawful provision shall be made as part
of the terms of such transaction whereby the holder of each share of
Convertible Preferred Stock then outstanding shall have the right thereafter,
to convert such share only into (i) in the case of any such transaction other
than a Common Stock Fundamental Change and subject to funds being legally
available for such purpose under applicable law at the time of such conversion,
the kind and amount of securities, cash and other property receivable upon such
recapitalization, reclassification, consolidation, merger, sale, transfer or
share exchange by a holder of the number of
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shares of Common Stock of the Corporation into which such share of Convertible
Preferred Stock might have been converted immediately prior to such
recapitalization, reclassification, consolidation, merger, sale, transfer or
share exchange, after giving effect, in the case of any Non-Stock Fundamental
Change, to any adjustment in the conversion price required by the provisions of
Section 7(h), and (ii) in the case of a Common Stock Fundamental Change, into
common stock of the kind received by holders of Common Stock as a result of
such Common Stock Fundamental Change in an amount determined pursuant to the
provisions of Section 7(h). The Corporation or the person formed by such
consolidation or resulting from such merger or which acquires such assets or
which acquires the Corporation's shares, as the case may be, shall make
provisions in its certificate or articles of incorporation or other constituent
document to establish such right. Such certificate or articles of
incorporation or other constituent document shall provide for adjustments
which, for events subsequent to the effective date of such certificate or
articles of incorporation or other constituent document, shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Section 7. The above provisions shall similarly apply to successive
recapitalizations, reclassifications, consolidations, mergers, sales, transfers
or share exchanges.
(f) Reservation of Shares; Transfer Taxes; Etc. The
Corporation shall at all times reserve and keep available, out of its
authorized and unissued stock, solely for the purpose of effecting the
conversion of the Convertible Preferred Stock, such number of shares of its
Common Stock free of preemptive rights as shall from time to time be sufficient
to effect the conversion of all shares of Convertible Preferred Stock from time
to time outstanding. The Corporation shall from time to time, in accordance
with the laws of the State of Delaware, increase the authorized number of
shares of Common Stock if at any time the number of shares of authorized and
unissued Common Stock shall not be sufficient to permit the conversion of all
the then-outstanding shares of Convertible Preferred Stock.
If any shares of Common Stock required to be reserved for
purposes of conversion of the Convertible Preferred Stock hereunder require
registration with or approval of any governmental authority under any Federal
or State law before such shares may be issued upon conversion, the Corporation
will in good faith and as expeditiously as possible endeavor to cause such
shares to be duly registered or approved, as the case may be. If the Common
Stock is listed on the New York Stock Exchange or any other national securities
exchange, the Corporation will, if permitted by the rules of such exchange,
list and keep listed on such exchange, upon official notice of issuance, all
shares of Common Stock issuable upon conversion of the Convertible Preferred
Stock.
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The Corporation shall pay any and all issue or other taxes that
may be payable in respect of any issue or delivery of shares of Common Stock on
conversion of the Convertible Preferred Stock. The Corporation shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue or delivery of Common Stock (or other securities
or assets) in a name other than that in which the shares of Convertible
Preferred Stock so converted were registered, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to the
Corporation the amount of such tax or has established, to the satisfaction of
the Corporation, that such tax has been paid.
(g) Prior Notice of Certain Events. In case:
(i) the Corporation shall (1) declare any dividend (or any
other distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash out of its retained
earnings other than any special or nonrecurring or other extraordinary dividend
or (2) declare or authorize a redemption or repurchase of in excess of 10% of
the then-outstanding shares of Common Stock; or
(ii) the Corporation shall authorize the granting to all
holders of Common Stock of rights or warrants to subscribe for or purchase any
shares of stock of any class or of any other rights or warrants; or
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in par
value, or from par value to no par value, or from no par value to par value),
or of any consolidation or merger to which the Corporation is a party and for
which approval of any stockholders of the Corporation shall be required, or of
the sale or transfer of all or substantially all of the assets of the
Corporation or of any compulsory share exchange whereby the Common Stock is
converted into other securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation;
then the Corporation shall cause to be filed with the transfer agent for the
Convertible Preferred Stock, and shall cause to be mailed to the holders of
record of the Convertible Preferred Stock, at their last addresses as they
shall appear upon the stock transfer books of the Corporation, at least fifteen
days prior to the applicable record date hereinafter specified, a notice
stating (x) the date on which a record (if any) is to be taken for the purpose
of such dividend, distribution, redemption, repurchase or granting of rights or
warrants or, if a record is not to be taken, the date as of which the holders
of Common Stock
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<PAGE> 18
of record to be entitled to such dividend, distribution, redemption, rights or
warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).
(h) Adjustments in Case of Fundamental Changes. Notwithstanding
any other provision in this Section 7 to the contrary, if any Fundamental
Change (as defined in Section 7(i)) occurs, then the conversion price in effect
will be adjusted immediately after such Fundamental Change as described below.
In addition, in the event of a Common Stock Fundamental Change (as defined in
Section 7(i)), each share of Convertible Preferred Stock shall be convertible
solely into common stock of the kind received by holders of Common Stock as the
result of such Common Stock Fundamental Change.
For purposes of calculating any adjustment to be made pursuant to
this Section 7(h) in the event of a Fundamental Change, immediately after such
Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change (as defined
in Section 7(i)), the conversion price of the Convertible Preferred Stock shall
become the lower of (A) the conversion price immediately prior to such
Non-Stock Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to this Section 7, and (B) the result obtained by
multiplying the greater of the Applicable Price (as defined in Section 7(i)) or
the then applicable Reference Market Price (as defined in Section 7(i)) by a
fraction the numerator of which shall be $500.00 and the denominator of which
shall be the then current Redemption Price per share of Convertible Preferred
Stock (or for periods prior to January 22, 1997, the denominator of which shall
be the following amounts per share plus an amount equal to all dividends
accrued and unpaid thereon, whether or not declared, pro rata, to but excluding
the date of such Non-Stock Fundamental Change: if the Non-Stock Fundamental
Change occurs during the period commencing on the date of initial issuance of
the Convertible Preferred Stock and ending December 31, 1992, $546.25; during
the period commencing January 1, 1993 and ending December 31, 1993, $541.63;
during the period commencing January 1, 1994 and ending December 31, 1994,
$537.00; during the period commencing January 1, 1995 and ending December 31,
1995, $532.38; during the period commencing January 1, 1996 and ending December
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31, 1996, $527.75; and during the period commencing January 1, 1997 and ending
January 21, 1997, $523.13); and
(ii) in the case of a Common Stock Fundamental Change, the
conversion price shall be the conversion price in effect immediately prior to
such Common Stock Fundamental Change, but after giving effect to any other
prior adjustments effected pursuant to this Section 7, multiplied by a
fraction, the numerator of which is the Purchaser Stock Price (as defined in
Section 7(i)) and the denominator of which is the Applicable Price; provided,
however, that in the event of a Common Stock Fundamental Change in which (A)
100% by value of the consideration received by a holder of Common Stock is
common stock of the successor, acquiror or other third party (and cash, if any,
is paid with respect to any fractional interests in such common stock resulting
from such Common Stock Fundamental Change) and (B) all of the Common Stock
shall have been exchanged for, converted into or acquired for common stock (and
cash with respect to fractional interests) of the successor, acquiror or other
third party, the conversion price of the shares of Convertible Preferred Stock
immediately following such Common Stock Fundamental Change shall be the
conversion price in effect immediately prior to such Common Stock Fundamental
Change multiplied by a fraction, the numerator of which is one (1) and the
denominator of which is the number of shares of common stock of the successor,
acquiror, or other third party received by a holder of one share of Common
Stock as a result of such Common Stock Fundamental Change.
(i) Definitions. The following definitions shall apply to
terms used in this Section 7:
(1) "Applicable Price" shall mean (i) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only cash,
the amount of cash received by the holder of one share of Common Stock and (ii)
in the event of any other Non-Stock Fundamental Change or any Common Stock
Fundamental Change, the average of the last reported sales price for the Common
Stock during the ten Trading Days immediately prior to the record date for the
determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Non-Stock
Fundamental Change or Common Stock Fundamental Change, or, if there is no such
record date, the date upon which the holders of the Common Stock shall have the
right to receive such cash, securities, property or other assets.
(2) "Closing Price" on any day shall mean the closing sale
price regular way on such day or, in case no such sale takes place on such day,
the average of the reported closing bid and asked prices regular way, in each
case on the New York Stock Exchange, or, if the Common Stock is not listed or
admitted to
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trading on such Exchange, on the principal national securities exchange or
quotation system on which the Common Stock is quoted or listed or admitted to
trading, or, if not quoted or listed or admitted to trading on any national
securities exchange or quotation system, the average of the closing bid and
asked prices of the Common Stock on the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a
similarly generally accepted reporting service, or if not so available in such
manner as furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors of the Corporation for that purpose.
(3) "Common Stock Fundamental Change" shall mean any Fundamental
Change in which more than 50% by value (as determined in good faith by the
Board of Directors of the Corporation) of the consideration received by holders
of Common Stock consists of common stock that for the consecutive ten Trading
Days immediately prior to such Fundamental Change has been admitted for listing
or admitted for listing subject to notice of issuance on a national securities
exchange or quoted on the National Association of Securities Dealers, Inc.
("NASDAQ") National Market System; provided, however, that a Fundamental Change
shall not be a Common Stock Fundamental Change unless either (i) the
Corporation continues to exist after the occurrence of such Fundamental Change
and the outstanding shares of Convertible Preferred Stock continue to exist as
outstanding shares of Convertible Preferred Stock, or (ii) not later than the
occurrence of such Fundamental Change, the outstanding shares of Convertible
Preferred Stock are converted into or exchanged for shares of convertible
preferred stock of a corporation succeeding to the business of the Corporation,
which convertible preferred stock has powers, preferences and relative,
participating, optional or other rights, and qualifications, limitations and
restrictions substantially similar to those of the Convertible Preferred Stock.
(4) "Fundamental Change" shall mean the occurrence of any
transaction or event in connection with a plan pursuant to which all or
substantially all of the Common Stock shall be exchanged for, converted into,
acquired for or constitute solely the right to receive cash, securities,
property or other assets (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise); provided, however, in the case of a plan
involving more than one such transaction or event, for purposes of adjustment
of the conversion price, such Fundamental Change shall be deemed to have
occurred when substantially all of the Common Stock of the Corporation shall be
exchanged for, converted into, or acquired for or constitute solely the right
to receive cash, securities, property or other assets, but the adjustment shall
be based upon the consideration which the
20
<PAGE> 21
holders of Common Stock received in such transaction or event as a result of
which more than 50% of the Common Stock of the Corporation shall have been
exchanged for, converted into, or acquired for or constitute solely the right
to receive cash, securities, property or other assets; provided, further, that
such term does not include (i) any such transaction or event in which the
Corporation and/or any of its subsidiaries are the issuers of all the cash,
securities, property or other assets exchanged, acquired or otherwise issued in
such transaction or event, or (ii) any such transaction or event in which the
holders of Common Stock receive securities of an issuer other than the
Corporation if, immediately following such transaction or event, such holders
hold a majority of the securities having the power to vote normally in the
election of directors of such other issuer outstanding immediately following
such transaction or other event.
(5) "Non-Stock Fundamental Change" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
(6) "Purchaser Stock Price" shall mean, with respect to any
Common Stock Fundamental Change, the average of the last reported sales price
for the common stock, on the principal national securities exchange or the
NASDAQ National Market System on which such common stock is listed, received in
such Common Stock Fundamental Change during the ten Trading Days immediately
prior to the record date for the determination of the holders of Common Stock
entitled to receive such common stock, or if there is no such record date, the
date upon which the holders of the Common Stock shall have the right to receive
such common stock; provided, however, if no such last reported sales price for
the common stock during the last ten Trading Days prior to the record date
exists, then the Purchaser Stock Price shall be set at a price determined in
good faith by the Board of Directors of the Corporation.
(7) "Reference Market Price" shall initially mean $10.00 (which
is an amount equal to 66-2/3% of the reported last sales price for the Common
Stock on the New York Stock Exchange on February 12, 1992), and in the event of
any adjustment to the conversion price other than as a result of a Fundamental
Change, the Reference Market Price shall also be adjusted so that the ratio of
the Reference Market Price to the conversion price after giving effect to any
such adjustment shall always be the same as the ratio of $10.00 to the initial
conversion price set forth above.
(8) "Trading Day" shall mean a day on which the national
securities exchange or the NASDAQ National Market System used to determine the
Closing Price is open for the transaction of business or the reporting of
trades.
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<PAGE> 22
(j) Dividend or Interest Reinvestment Plans. Notwithstanding the
foregoing provisions, the issuance of any shares of Common Stock pursuant to
any plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional amounts
in shares of Common Stock under any such plan, and the issuance of any shares
of Common Stock or options or rights to purchase such shares pursuant to any
employee benefit plan or program of the Corporation or pursuant to any option,
warrant, right or exercisable, exchangeable or convertible security outstanding
as of the date the Convertible Preferred Stock was first designated (except as
expressly provided in Section 7(c)(i) or 7(c)(ii) with respect to certain
events under the Rights Agreement), and any issuance of Rights (as hereinafter
defined), shall not be deemed to constitute an issuance of Common Stock or
exercisable, exchangeable or convertible securities by the Corporation to which
any of the adjustment provisions described above applies. There shall also be
no adjustment of the conversion price in case of the issuance of any stock (or
securities convertible into or exchangeable for stock) of the Corporation
except as specifically described in this Section 7. If any action would
require adjustment of the conversion price pursuant to more than one of the
provisions described above, only one adjustment shall be made and such
adjustment shall be the amount of adjustment which has the highest absolute
value.
(k) Preferred Share Purchase Rights. So long as Preferred
Share Purchase Rights of the kind declared and distributed by the Corporation's
Board of Directors in February 1988 as the same have been and may hereafter be
amended ("Rights"), are attached to the outstanding shares of Common Stock of
the Corporation, each share of Common Stock issued upon conversion of the
shares of Convertible Preferred Stock prior to the earliest of any Distribution
Date (as defined in the Rights Agreement), the date of redemption of the Rights
or the date of expiration of the Rights shall be issued with Rights in an
amount equal to the amount of Rights then attached to each such outstanding
share of Common Stock.
(1) Certain Additional Rights. In case the Corporation shall,
by dividend or otherwise, declare or make a distribution on its Common Stock
referred to in paragraph 7(c)(iv) or 7(c)(v), the holder of each share of
Convertible Preferred Stock, upon the conversion thereof subsequent to the
close of business on the date fixed for the determination of stockholders
entitled to receive such distribution and prior to the effectiveness of the
conversion price adjustment in respect of such distribution pursuant to Section
7(c)(iv) or Section 7(c)(v), shall also be entitled to receive for each share
of Common Stock into which such share of Convertible Preferred Stock is
converted, the portion of the evidences of indebtedness, shares of capital
stock, cash and assets so distributed
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<PAGE> 23
applicable to one share of Common Stock; provided, however that, at the
election of the Corporation (whose election shall be evidenced by a resolution
of the Board of Directors) with respect to all holders so converting, the
Corporation may, in lieu of distributing to such holder any portion of such
distribution not consisting of cash or securities of the Corporation, pay such
holder an amount in cash equal to the fair market value thereof (as determined
by the Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors). If any conversion of a
share of Convertible Preferred Stock described in the immediately preceding
sentence occurs prior to the payment date for a distribution to holders of
Common Stock which the holder of the share of Convertible Preferred Stock so
converted is entitled to receive in accordance with the immediately preceding
sentence, the Corporation may elect (such election to be evidenced by a
resolution of the Board of Directors) to distribute to such holder a due bill
for the evidences of indebtedness, shares of capital stock, cash or assets to
which such holder is so entitled, provided that such due bill (i) meets any
applicable requirements of the principal national securities exchange or other
market on which the Common Stock is then traded and (ii) requires payment or
delivery of such evidences of indebtedness, shares of capital stock, cash or
assets no later than the date of payment or delivery thereof to holders of
Common Stock receiving such distribution.
8. Voting Rights.
(a) General. The holders of Convertible Preferred Stock will
not have any voting rights except as set forth below or as otherwise from time
to time required by law. In connection with any right to vote, each holder of
Convertible Preferred Stock will have one vote for each share held. Any shares
of Convertible Preferred Stock held by the Corporation or any entity controlled
by the Corporation shall not have voting rights hereunder and shall not be
counted in determining the presence of a quorum.
(b) Default Voting Rights. Whenever dividends on the
Convertible Preferred Stock or any other class or series of Parity Dividend
Stock shall be in arrears in an aggregate amount equal to at least six
quarterly dividends (whether or not consecutive), (i) the number of members of
the Board of Directors of the Corporation shall be increased by two, effective
as of the time of election of such directors as hereinafter provided and (ii)
the holders of the Convertible Preferred Stock (voting separately as a class
with all other affected classes or series of the Parity Dividend Stock upon
which like voting rights have been conferred and are exercisable) will have the
exclusive right to vote for and elect such two additional directors of the
Corporation at any meeting of stockholders of the Corporation at which
directors are to be elected held during the period such
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<PAGE> 24
dividends remain in arrears. The right of the holders of the Convertible
Preferred Stock to vote for such two additional directors shall terminate when
all accrued and unpaid dividends on the Convertible Preferred Stock have been
declared and paid or set apart for payment. The term of office of all
directors so elected shall terminate immediately upon the termination of the
right of the holders of the Convertible Preferred Stock and such Parity
Dividend Stock to vote for such two additional directors, and the number of
directors of the Board of Directors of the Corporation shall immediately
thereafter be reduced by two.
The foregoing right of the holders of the Convertible Preferred
Stock with respect to the election of two directors may be exercised at any
annual meeting of stockholders or at any special meeting of stockholders held
for such purpose. If the right to elect directors shall have accrued to the
holders of the Convertible Preferred Stock more than ninety days preceding the
date established for the next annual meeting of stockholders, the President of
the Corporation shall, within twenty days after the delivery to the Corporation
at its principal office of a written request for a special meeting signed by
the holders of at least 10% of all outstanding shares of the Convertible
Preferred Stock, call a special meeting of the holders of the Convertible
Preferred Stock to be held within sixty days after the delivery of such request
for the purpose of electing such additional directors.
The holders of the Convertible Preferred Stock and any Parity
Dividend Stock referred to above voting as a class shall have the right to
remove without cause at any time and replace any directors such holders shall
have elected pursuant to this Section 8.
(c) Class Voting Rights. So long as the Convertible Preferred
Stock is outstanding, the Corporation shall not, without the affirmative vote
or consent of the holders of at least 66-2/3% (unless a higher percentage shall
then be required by applicable law) of all outstanding shares of the
Convertible Preferred Stock voting separately as a class, (i) amend, alter or
repeal any provision of the Certificate of Incorporation or the By-Laws of the
Corporation, as amended, so as to affect adversely the relative rights,
preferences, qualifications, limitations or restrictions of the Convertible
Preferred Stock or (ii) create, authorize or issue, or reclassify any
authorized stock of the Corporation into, or increase the authorized amount of,
any Senior Dividend Stock or Senior Liquidation Stock, or any security
convertible into such Senior Dividend Stock or Senior Liquidation Stock. A
class vote on the part of the Convertible Preferred Stock shall, without
limitation, specifically not be deemed to be required (except as otherwise
required by law or resolution of the Corporation's Board of Directors) in
connection with: (a) the authorization, issuance or increase in the
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<PAGE> 25
authorized amount of any shares of any other class or series of stock which
ranks junior to, or on a parity with, the Convertible Preferred Stock in
respect of the payment of dividends and distributions upon liquidation,
dissolution or winding up of the Corporation; or (b) the authorization,
issuance or increase in the amount of any bonds, mortgages, debentures or other
obligations of the Corporation.
9. Outstanding Shares. For purposes of this Certificate of
Designation, Preferences and Rights, all shares of Convertible Preferred Stock
issued by the Corporation shall be deemed outstanding except (i) from the date
fixed for redemption pursuant to Section 6 hereof, all shares of Convertible
Preferred Stock that have been so called for redemption under Section 6, to the
extent provided thereunder; (ii) from the date of surrender of certificates
evidencing shares of Convertible Preferred Stock, all shares of Convertible
Preferred Stock converted into Common Stock; and (iii) from the date of
registration of transfer, all shares of Convertible Preferred Stock held of
record by the Corporation or any majority-owned subsidiary of the Corporation.
10. Partial Payments. Upon an optional redemption by the
Corporation, if at any time the Corporation does not pay amounts sufficient to
redeem all Convertible Preferred Stock, then such funds which are paid shall be
applied to redeem such shares of Convertible Preferred Stock as the Corporation
may designate by lot or in such other manner as the Board of Directors may
determine, or such redemption shall be effected pro rata.
11. Transfer Restrictions.
(a) Legends on Convertible Preferred Stock and Common Stock.
(i) The certificates evidencing shares of Convertible Preferred
Stock shall, until the third anniversary of their date of original issuance,
unless otherwise agreed by the Corporation and the holders of any such
certificates, bear a legend substantially to the following effect:
"This Security (or its predecessor) was originally issued in a
transaction exempt from registration under Section 5 of the
United States Securities Act of 1933 (the "Securities Act"), and
this Security and any shares of Common Stock issued upon
conversion hereof may not be offered, sold or otherwise
transferred in the absence of such registration or an applicable
exemption therefrom. Each purchaser of this Security is hereby
notified that the seller of this Security may be relying on the
exemption from the provisions of
25
<PAGE> 26
Section 5 of the Securities Act provided by Rule 144A thereunder.
The holder of this Security agrees for the benefit of the
Corporation that (A) such Security and any shares of Common Stock
issued upon conversion hereof may be resold, pledged or otherwise
transferred, only (1) inside the United States to a person who
the seller reasonably believes is a Qualified Institutional Buyer
(as defined in Rule 144A under the Securities Act) in a
transaction meeting the requirements of Rule 144A or (2) outside
the United States to a foreign person in a transaction meeting
the requirements of Rule 904 under the Securities Act and (3) in
each case, in accordance with any applicable securities laws of
any State of the United States or any other applicable
jurisdiction and (B) the holder will, and each subsequent holder
is required to, notify any purchaser from it of this Security or
any Common Stock issued upon conversion hereof of the resale
restrictions set forth in (A) above."
Until the third anniversary of the date of original issuance of any Convertible
Preferred Stock, certificates representing the shares of Common Stock issued
upon conversion of such Convertible Preferred Stock shall bear a comparable
legend. The shares of Convertible Preferred Stock, and the shares of Common
Stock issued upon conversion of such shares, shall be subject to the
restrictions on transfer set forth in the legend above until the third
anniversary of the date of original issuance of the Convertible Preferred
Stock.
(ii) The certificates evidencing shares of Convertible
Preferred Stock (and shares of Common Stock issued upon conversion of such
shares) initially issued to any "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is not a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act shall, until such time as the Corporation and the transfer agent
for the Convertible Preferred Stock shall have received evidence satisfactory
to each of them that the transfer of such shares of Convertible Preferred Stock
or Common Stock has been effected in accordance with the limitations on
transfer set forth in paragraph (a)(i) above, bear the following additional
legend:
"In connection with any transfer, the holder will deliver to the
registrar and transfer agent such certificates and other
information as it may reasonably require to confirm that the
transfer complies with the foregoing restrictions."
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<PAGE> 27
(b) Transfer Agent Requirements. The transfer agent for the
Convertible Preferred Stock and the transfer agent and registrar for the Common
Stock shall not be required to accept for registration of transfer any
Convertible Preferred Stock or Common Stock bearing the legend contained in
paragraph (a)(ii) above, except upon presentation of satisfactory evidence that
the restrictions on transfer of the Convertible Preferred Stock and Common
Stock referred to in the legend in paragraph (a)(i) have been complied with,
all in accordance with such reasonable regulations as the Corporation may from
time to time agree with the transfer agent for the Convertible Preferred Stock
and the transfer agent and registrar for the Common Stock.
12. Status of Acquired Shares. Shares of Convertible
Preferred Stock redeemed by the Corporation, received upon conversion pursuant
to Section 7 or otherwise acquired by the Corporation will be restored to the
status of authorized but unissued shares of Preferred Stock, without
designation as to class, and may thereafter be issued, but not as shares of
Convertible Preferred Stock.
13. Preemptive Rights. The Convertible Preferred Stock is not
entitled to any preemptive or subscription rights in respect of any securities
of the Corporation.
14. Severability of Provisions. Whenever possible, each
provision hereof shall be interpreted in a manner as to be effective and valid
under applicable law, but if any provision hereof is held to be prohibited by
or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid
under applicable law.
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<PAGE> 28
IN WITNESS WHEREOF, Chrysler Corporation has caused this
certificate to be signed on its behalf by William J. O'Brien, its Vice
President, and its corporate seal to be hereunto affixed and attested by
Anthony E. Micale, its Assistant Secretary, this 14th day of February, 1992.
CHRYSLER CORPORATION
[SEAL]
By: /s/ William J. O'Brien
---------------------------
Name: William J. O'Brien
Title: Vice President
Attest:
/s/ Anthony E. Micale
- --------------------------------
Name: Anthony E. Micale
Title: Assistant Secretary
28
<PAGE> 1
EXHIBIT 10-A-10
(AS AMENDED BY THE BOARD OF DIRECTORS ON MARCH 3, 1994
SUBJECT TO STOCKHOLDER APPROVAL ON MAY 19, 1994)
CHRYSLER CORPORATION
1991 STOCK COMPENSATION PLAN
EFFECTIVE MAY 16, 1991
(AS AMENDED THROUGH MAY 19, 1994)
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 salaried 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.
<PAGE> 2
(l) "Limited Stock Appreciation Right" means a Stock Appreciation
Right that can be exercised only in the event of a Change in Control.
(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.
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<PAGE> 3
In particular, the Committee shall have full authority, not inconsistent
with the Plan:
(a) to select Participants from among the Eligible Employees;
(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 the aggregate of all
shares of stock issued under the Plan be greater than that allowed under
the Plan, and in no case shall the number of shares of Stock to be covered
by all such Awards (excluding grants of Restricted Stock Units) made to
the same Eligible Employee during the five year period beginning January
1, 1994 and ending December 31, 1998 exceed ten percent of the total
number of shares of Stock approved by the stockholders of the Company for
issuance under the Plan (as such number be increased from time to time in
accordance with Section 10 hereof, and as such number may be
adjusted from time to time in accordance with Section 3 hereof for changes
in corporate structure or capitalization affecting the Stock);
(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.
Notwithstanding anything else contained in this Plan to the contrary, if
any award of Performance Stock Units is intended at the time of grant to be
other performance based compensation within the meaning of Section 162(m)(4)(C)
of the Code, to the extent required to so qualify any award hereunder, the
Committee shall not be entitled to exercise any discretion otherwise authorized
under this Plan with respect to such award if the ability to exercise such
discretion (as oppposed) to the exercise of such discretion) would cause such
award to fail to qualify as other performance based compensation.
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 twenty-eight (28) million, consisting of (a) eleven
(11) million shares as constituted at the time of the annual meeting of
stockholders on May 16, 1991, plus (b) seventeen (17) million shares as
constituted at the time of the annual meeting of stockholders on May 19, 1994.
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
3
<PAGE> 4
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 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 salaried 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 officers and key salaried 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 them while they were 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
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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 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.
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(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.
(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
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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 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
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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 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.
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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 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
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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 all or any part of a
Restricted Stock Unit Award lapse or determine the performance objectives with
respect to all or any part of a Performance Stock Unit Award to have been
attained; provided, however, that the Committee shall not be entitled to
exercise such discretion to the extent that the ability to exercise such
discretion would cause the Performance Stock Unit Award to fail to qualify as
other performance based compensation under Section 162(m) of the Code.
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").
(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
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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 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
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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 or
othwerwise, 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.
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
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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
(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
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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 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
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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;
(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
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<PAGE> 16
conditions set forth in any deferral or similar plan or arrangement enacted
by the Board or the Committee in its sole discretion.
(h) Nothing in this Plan shall be interpreted to preclude the Corporation
from granting Awards under, or paying compensation outside the parameters of,
the Plan including, without limitation, base salaries, awards under any other
plan of the Corporation or its Subsidiaries (whether or not approved by
stockholders), incentive compensation (whether or not based on the attainment
of pre-established performance objectives) or retention or other special
payments, that is not deductible for Federal, State or local income tax
purposes by reason of Section 162(m) of the Code or otherwise, should the Board
or any committee thereof (including the Committee), whichever is applicable,
determine that such action is in the best interests of the Corporation and its
stockholders.
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.
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<PAGE> 1
EXHIBIT 10-B-1
(AS AMENDED BY THE BOARD OF DIRECTORS ON MARCH 3, 1994
SUBJECT TO STOCKHOLDER APPROVAL ON MAY 19, 1994)
CHRYSLER CORPORATION
INCENTIVE COMPENSATION PLAN
EFFECTIVE JANUARY 1, 1970
(AS AMENDED THROUGH MAY 19, 1994)
1. PURPOSE
The purpose of the Chrysler Corporation Incentive Compensation Plan (below
called the Plan or this Plan) is to encourage the continued and energetic
efforts of officers and key salaried employees (below called collectively
Employees) of Chrysler Corporation (below called Chrysler) and its subsidiaries
(Chrysler and its subsidiaries collectively below called the Corporation) on
behalf of the Corporation by enabling them to share in the profits of the
Corporation, in accordance with the resolution adopted by the Stockholders of
Chrysler at their Annual Meeting on April 16, 1929, as they amended it at their
Annual Meeting on April 17, 1956, and at their Special Meeting on April 16,
1963, and at their Annual Meetings on April 15, 1969, April 18, 1972, June 7,
1984, May 20, 1993 and May 19, 1994, and as it may be further amended from time
to time (below called the Stockholders' Resolution).
2. INCENTIVE COMPENSATION COMMITTEE
The Board of Directors of Chrysler (below called the Board) shall appoint
not less than three Directors of Chrysler, none of whom shall be entitled to
receive funds or securities pursuant to any Incentive Plan (as defined in the
Stockholders' Resolution) of Chrysler, to be an Incentive Compensation Committee
(below called the Committee) to administer this Plan. All of the members of the
Committee shall be "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
may designate a Secretary, one or more Assistant Secretaries and an
Administrator, none of whom need be Directors of Chrysler. Subject to the
provisions of this Plan, the Committee shall have authority, in its discretion,
to prescribe, amend, and rescind rules and regulations relating to this Plan.
3. INCENTIVE COMPENSATION FUND
For each fiscal year the Board shall authorize and approve the amount to be
provided out of the earnings of the Corporation for such fiscal year for
purposes of this Plan and the Chrysler Corporation Long-Term Incentive Plan
(below called the Long-Term Plan, this Plan and the Long-Term Plan collectively
below called the Plans), not to exceed the amount permitted by the Stockholders'
Resolution, and shall authorize and direct the proper officers of the
Corporation (a) to set aside such amount and to add to it (b) any amount
authorized and approved by the Board for any prior fiscal year but not
previously awarded and (c) any amount awarded for any prior fiscal year that has
been forfeited. The sum of all such amounts (or such part thereof as the Board
may determine should be made available for awards for any fiscal year) shall be
the Incentive Compensation Fund for that fiscal year (below called the Fund).
Any part of such sum that the Board determines shall not be made available for
awards for any fiscal year shall be carried forward and may be awarded in a
subsequent fiscal year.
4. ELIGIBILITY
The Committee, in its sole and absolute discretion, shall have full power
to determine by salary, salary grade, salary band, classification, or otherwise,
the Employees (including those who have retired or died or have been granted a
leave of absence or were laid off during the year) who shall be eligible for
consideration to participate in the Plans in any year, except that the Committee
may not determine as eligible for consideration to participate in the Plans any
Employee who was eligible at any time in that year to participate in any other
<PAGE> 2
Incentive Plan of the Corporation as defined in the Stockholders' Resolution.
Employees shall not be ineligible for consideration to participate in the Plans
by reason of their eligibility to participate in any Performance Award Plan or
in any Savings and Investment Plan, both as defined in the Stockholders'
Resolution, or in any Stock Option Plan, or any Performance Award Plan adopted
under any Stock Option Plan, of Chrysler or any of its subsidiaries or in any
successor plan or programs adopted to replace any such plan or programs.
5. SELECTING PARTICIPANTS AND DETERMINING AWARDS
Each year the Committee, in accordance with such rules as it may prescribe,
shall:
(a) select from the Employees eligible for consideration to
participate in the Plans those Employees who are to participate for that
year;
(b) award under this Plan to certain of the Employees so selected
(below called Participant) such share of the Fund as the Committee shall
determine (below called an Award); provided, however, that the maximum
amount of such share that may be awarded to a Participant for any year
shall not exceed an amount equal to two hundred percent (200%) of the
Participant's base salary; and
(c) award under the Long-Term Plan to certain of the Employees so
selected, in accordance with the terms of the Long-Term Plan, such share of
the Fund as the Committee shall determine.
An Employee may receive an Award under this Plan and an award under the
Long-Term Plan in the same year.
The Committee shall have full and final authority in performing these
duties, but shall report to the Board the share of the Fund awarded to each
Employee under this Plan and under the Long-Term Plan, expressed in dollar
amounts and/or percentage of base salary or performance share awards or award
units or otherwise, as the Committee shall determine.
Notwithstanding anything else contained in this Plan to the contrary, if
any Award is intended at the time of grant to be other performance based
compensation within the meaning of Section 162(m)(4)(C) of the Internal Revenue
Code of 1986, as the same may be amended from time to time (the "Code"), to the
extent required to so qualify any Award hereunder, the Committee shall not be
entitled to exercise any discretion otherwise authorized under this Plan with
respect to such Award if the ability to exercise such discretion (as opposed to
the exercise of such discretion) would cause such Award to fail to qualify as
other performance based compensation.
6. TARGET AWARDS
A Target Award for each Participant will be established each fiscal year by
the Committee. Each Target Award will be expressed as a percent (not in excess
of 160%) of the Participant's base salary, or the average base salary or
midpoint of the salary range of a class of Employees. An Employee who first
becomes eligible for an Award, and is selected as a Participant, after the
beginning of a given year will have his or her Target Award established on a pro
rata basis for the number of months he or she is eligible during such year.
7. CORPORATE PERFORMANCE GOALS
The Committee will establish one or more performance goals ("Performance
Goals") consisting of such criteria and for the accomplishment of such corporate
objectives as the Committee may designate prior to the beginning of each award
year relating to the following: quality, customer satisfaction, profitability,
net margin as a percentage of revenue, return on sales, return on capital,
breakeven, productivity, and/or debt to capitalization. However, the Committee
shall have the discretion to change and/or add goals and to modify the
objectives designated in relation to previously established goals.
8. CORPORATE PERFORMANCE EVALUATION
After the end of each year, the Committee will determine the percentage of
attainment of each Performance Goal established for that year. Target Award
amounts will then be adjusted by multiplying the
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Target Award amounts by the corporate performance percentage. For purposes of
the above calculation, (a) a corporate performance percentage of less than 25%
will result in no Awards being paid, and (b) a corporate performance percentage
in excess of 125% will result in Target Award amounts being adjusted by 125%.
9. PAYING AND EARNING OUT OF AWARDS UNDER THIS PLAN
Awards under this Plan shall be paid to Participants in one lump sum,
unless the Committee, in its discretion, determines that an Award shall be paid
in installments.
A Participant will have earned out under this Plan an Award payable in one
lump sum, or the first installment of an Award payable in installments, if his
or her employment with the Corporation has been continuous (a) up to the date of
payment of the Award payable in one lump sum, or of the first installment of the
Award payable in installments, as the case may be, or (b) up to the date of the
Participant's retirement or death if he or she should retire or die before the
date of such payment, or (c) up to the date the Participant was granted a leave
of absence if such leave of absence was granted before the date of such payment,
or (d) up to the date the Participant was laid off if he was laid off before the
date of such payment. A Participant will have earned out a subsequent
installment if his or her employment with the Corporation has been continuous up
to and including (a) the December 31 immediately preceding the date the
installment is payable, or (b) the date of the Participant's death if he or she
should die before such December 31, or (c) such date as the Corporation may
determine under all other circumstances.
A Participant whose employment with the Corporation is terminated other
than by death will not thereafter earn out under this Plan any installment of an
Award payable in installments unless the Corporation expressly consents in
writing to waive the condition of continuous employment with the Corporation,
and the Participant thereafter will earn out each installment only if up to and
including the December 31 immediately preceding the date the installment is
payable the Participant neither (a) takes other employment or renders services
to others without the written consent of the Corporation, nor (b) conducts
himself or herself in a manner adversely affecting the Corporation, the
determination by the Committee that a Participant has so conducted himself or
herself to be final and conclusive.
Any installment which a Participant fails to earn out under this Plan shall
be forfeited and included in the Fund for a subsequent year as provided in
paragraph 3.
Nothing in this Plan shall prevent the Corporation from discharging or
requesting the resignation of any Participant.
An Award payable in one lump sum, or the first installment of an Award
payable in installments, shall be paid to the Participant on such date as the
Committee shall determine, and if the Participant complies with the conditions
for earning out a subsequent installment, it shall be paid to him or her on such
date in the year in which it is payable as the Committee shall determine.
Any lump sum payment or installment earned out under this Plan and payable
to a Participant who is deceased shall be paid to his or her legal
representative in such manner and at such time as it would have been paid to the
Participant were he or she then alive and in the employ of the Corporation.
10. FORM OF PAYMENTS UNDER THIS PLAN
The Committee in its sole and absolute discretion shall determine for any
year whether under this Plan the lump sum payment or the installment of any
Awards payable in that year shall be paid in cash or in shares of Chrysler
stock, or partly in cash and partly in shares of Chrysler stock, the shares to
be shares held by the Corporation in its treasury or purchased by the
Corporation in the market for distributing in place of cash, the shares to be
valued for this purpose in accordance with the Stockholders' Resolution, with
cash in place of fractional shares.
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11. DEFERRAL OF PAYMENT
A Participant may voluntarily elect to defer receipt of payment under this
Plan of all or any part of an Award payable in one lump sum or of any
installment of an Award payable in installments upon such terms and conditions
as the Committee may prescribe.
12. COSTS
All costs of administering the Plans shall be borne by the Corporation and
shall not be charged against the Fund.
13. PAYMENTS UPON A CHANGE IN CONTROL
Notwithstanding any other provisions hereof, if a "Change in Control" (as
defined in paragraph 13(D) hereof) of Chrysler shall occur, the following shall
be paid, in cash, no later than the tenth day following such Change in Control:
(a) all unpaid installments of an Award payable in installments pursuant to
paragraph 9 of this Plan, (b) all voluntary deferrals made by a Participant
pursuant to paragraph 11 of this Plan, (c) all unpaid Awards made (including any
made pursuant to paragraph 13(C) hereof) for any completed fiscal year which
preceded the Change in Control, and (d) "Change in Control Awards" (as
determined pursuant to paragraph 13(A) hereof).
A. CHANGE IN CONTROL AWARDS. Upon a Change in Control of Chrysler, each
Employee (below called a "Change in Control Participant") eligible pursuant to
paragraph 4 hereof for consideration to participate in the Plans for the fiscal
year in which the Change in Control occurs (the "Change in Control Year") shall
be paid a cash award, in a lump sum (the "Change in Control Award").
The tentative Change in Control Award of each Change in Control Participant
to whom an Award was made for the last fiscal year immediately preceding the
Change in Control for which Awards (including Awards, if any, made pursuant to
paragraph 13(C) hereof) were made generally (the "Base Year") shall be
determined by multiplying the "Change in Control Fund" (calculated in accordance
with paragraph 13(B) hereof) by a fraction, the numerator of which shall be the
amount of the Award of such Change in Control Participant for the Base Year, and
the denominator of which shall be the aggregate amount of Awards made for the
Base Year. A tentative Change in Control Award for each Change in Control
Participant to whom an Award was not made for the Base Year shall also be
determined and shall be comparable to the tentative Change in Control Awards of
similarly situated (in terms of the criteria employed by the Committee to
determine participation under paragraph 4 hereof, such as salary, salary grade
or classification) Change in Control Participants to whom Awards were made for
the Base Year.
The actual Change in Control Award of each Change in Control Participant
shall then be determined by multiplying the Change in Control Fund by a
fraction, the numerator of which shall be his tentative Change in Control Award
and the denominator of which shall be the aggregate tentative Change in Control
Awards.
B. CHANGE IN CONTROL FUND. The Change in Control Fund shall be the lesser
of the amount described in (i) or in (ii) below, adjusted by the amount
described in (iii):
(i) the sum (measured immediately prior to a Change in Control) of (x)
any amount authorized and approved by the Board for any fiscal year
completed prior to the Change in Control but not previously awarded under
this Plan or previously charged against the Fund pursuant to any other plan
of the Corporation and (y) any amount awarded from the Fund or charged
against the Fund for any fiscal year completed prior to the Change in
Control that has been forfeited;
(ii) the aggregate amount accrued during the Change in Control Year up
to and including the date of the Change in Control, in the ordinary course
of business and consistent with past practice, on the books of the
Corporation to be set aside by the Board for purposes of the Plans and
incentive compensation retirement benefits under the Supplemental Plan
pursuant to paragraph 3 of this Plan. The determinations (made prior to the
Change in Control) of the Corporation's internal accountants in making any
such accruals shall be conclusive;
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(iii) the "applicable amount" (the lesser amount from (i) or (ii)
above) shall be adjusted as follows: if an additional charge is made
against the Fund with respect to Performance Shares under the Long-Term
Plan upon the occurrence of a Change in Control, the "applicable amount"
shall be reduced by such charge; if any amount previously charged against
the Fund for Performance Shares which are not earned and delivered upon the
occurrence of a Change in Control is returned to the Fund, the "applicable
amount" shall be increased by such returned amount.
C. MAKING AWARDS FOR COMPLETED YEARS. Upon the occurrence of a "Potential
Change in Control" (as defined in paragraph 13(E) hereof), if there is any
completed fiscal year of the Corporation for which the audited financial
statements of the Corporation are available and for which the Board has not yet
determined the Incentive Compensation Fund and/or for which the Committee has
not yet determined the Awards, such determinations and the payments of any
Awards so determined shall be made as soon as reasonably possible.
D. CHANGE IN CONTROL DEFINITION. "Change in Control" shall mean a change
in control of Chrysler, which shall be deemed to have occurred if the conditions
set forth in any one of the following paragraphs shall have been satisfied:
(i) any Person (as defined below) is or becomes the Beneficial Owner
(as defined below) of securities of Chrysler representing 20% or more of
the combined voting power of Chrysler's then outstanding securities (unless
the event causing the 20% threshold to be crossed is an acquisition of
securities directly from Chrysler); or
(ii) during any period of two consecutive years beginning after June
7, 1990, 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 Chrysler to effect a transaction
described in paragraph (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 (2/3) 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; or
(iii) the stockholders of Chrysler approve a merger or consolidation
of Chrysler with any other corporation (other than a merger or
consolidation which would result in the voting securities of Chrysler
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 Chrysler or such surviving entity held by a trustee or other
fiduciary pursuant to any employee benefit plan of Chrysler or such
surviving entity or any subsidiary of Chrysler or such surviving entity, at
least 80% of the combined voting power of the voting securities of Chrysler
or such surviving entity outstanding immediately after such merger or
consolidation); or
(iv) the stockholders of Chrysler approve a plan of complete
liquidation or dissolution of Chrysler or an agreement for the sale or
disposition by Chrysler of all or substantially all Chrysler's assets.
For purposes of the definition of Change in Control in this paragraph
13(D): (a) "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as supplemented by Section 13(d)(3) of the Exchange Act, provided, however, that
Person shall not include (i) Chrysler, any subsidiary of Chrysler or any other
Person controlled by Chrysler, (ii) any trustee or other fiduciary holding
securities under any employee benefit plan of Chrysler or any subsidiary of
Chrysler, or (iii) a corporation owned, directly or indirectly, by the
stockholders of Chrysler in substantially the same proportions as their
ownership of securities of Chrysler; and (b) 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 otherwise 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 (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 securities (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
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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. POTENTIAL CHANGE IN CONTROL DEFINITION. A "Potential Change in Control"
shall be deemed to have occurred if the conditions set forth in any one of the
following paragraphs shall have been satisfied:
(i) Chrysler enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control;
(ii) Chrysler or any Person (as defined in paragraph 13(D) hereof)
publicly announces an intention to take or to consider taking actions
which, if consummated, would constitute a Change in Control;
(iii) any Person who is or becomes the Beneficial Owner (as defined in
paragraph 13(D) hereof), directly or indirectly, of securities of Chrysler
representing 10% or more of the combined voting power of Chrysler's then
outstanding securities, increases such Person's beneficial ownership of
such securities by 5% or more over the percentage so owned by such Person
on the date hereof; or
(iv) the Board adopts a resolution to the effect that, for purposes of
this Plan, a Potential Change in Control has occurred.
14. INTERPRETATION
The Board 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 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 may rely
and act upon the opinion of counsel (who may be counsel to Chrysler) on the
question of law.
15. EFFECTIVE PERIOD
The Plan shall become effective, upon approval by the Board, beginning
January 1, 1970, and shall remain in effect until terminated as provided in
Paragraph 16.
16. AMENDMENT AND TERMINATION
At any time the Board may amend, alter or terminate this Plan (consistent
with the Stockholders' Resolution) as the Board shall deem advisable; provided,
however, that the Board may not: (a) without the approval of the holders of a
majority of the shares of Common Stock of Chrysler voting on the matter,
increase the total amount that under the Stockholders' Resolution may be
provided out of the earnings of the Corporation for incentive compensation and
(b) without the approval of the holders of a majority of the shares of Common
Stock of Chrysler issued and outstanding, issue shares of Chrysler stock for
distributing in place of cash; and provided further, however, that terminating
or amending this Plan shall not terminate the right of any Participant to earn
out and thereby become entitled to receive, in the same manner as if this Plan
had not been terminated or amended, any unpaid installment of an Award made to
him under this Plan prior to the terminating or amending of this Plan or any
Retirement Benefit he would become eligible to receive under the Supplemental
Plan by complying with the terms thereof.
Nothing in this Plan shall be interpreted to preclude Chrysler from
granting awards under, or paying compensation outside the parameters of, the
Plan including, without limitation, base salaries, awards under any other plan
of Chrysler (whether or not approved by stockholders), incentive compensation
(whether or
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not based on the attainment of pre-established performance objectives) or
retention or other special payments, that is not deductible for Federal, State
or local income tax purposes by reason of Section 162(m) of the Code or
otherwise, should the Board or any committee thereof (including the Committee),
whichever is applicable, determine that such action is in the best interests of
Chrysler and its stockholders.
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EXHIBIT 10-B-2
(AS AMENDED BY THE BOARD OF DIRECTORS ON MARCH 3, 1994
SUBJECT TO STOCKHOLDER APPROVAL ON MAY 19, 1994)
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
(AS AMENDED THROUGH MAY 19, 1994)
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 other key
salaried employees (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.
"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 one or more corporate objectives 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. Such objectives shall relate to: quality, customer
satisfaction, profitability, net margin as a percentage of revenue, return on
sales, return on capital, breakeven, productivity, and/or debt to
capitalization.
"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.
<PAGE> 2
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 this 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 shall 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.
6. PERFORMANCE GOALS
The Committee shall establish one or more Performance Goals for each
Performance Cycle consisting of such criteria and for the accomplishment of such
corporate objectives as the Committee may designate prior to the beginning of
each Performance Cycle. 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 if the Performance Goals for that Cycle are fully achieved at
a 100% level of performance, which number shall be determined by dividing an
amount (expressed as a percentage -- not to exceed 80% -- of the Participant's
base salary, or the average base salary or midpoint of the salary range of a
class of Participants, at the time of the award), by the then fair market price
of Chrysler Common Stock 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 based on the actual
performance level attained. 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.
Except as otherwise provided in Section 13 below, the Committee may, in its
sole discretion, supplement any award previously made to any Participant,
provided that such award has not yet been earned out and paid.
8. PAYMENT OF PERFORMANCE SHARES
The Committee shall determine the percentage of the Performance Shares
which were earned by each Participant with respect to each Performance Cycle.
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
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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.
A Participant may elect, on or after the date of grant of any award and
before 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 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.
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.
Notwithstanding anything else contained in this Plan to the contrary, if
any award of Performance Shares is intended at the time of grant to be other
performance based compensation within the meaning of Section 162(m)(4)(C) of the
Code, to the extent required to so qualify any award hereunder, the Committee
shall not be entitled to exercise any discretion otherwise authorized under this
Plan with respect to such award if the ability to exercise such discretion (as
opposed to the exercise of such discretion) would cause such award to fail to
qualify as other performance based compensation.
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Nothing in this Plan shall be interpreted to preclude Chrysler from
granting awards under, or paying compensation outside the parameters of, the
Plan including, without limitation, base salaries, awards under any other plan
of Chrysler (whether or not approved by stockholders), incentive compensation
(whether or not based on the attainment of pre-established performance
objectives) or retention or other special payments, that is not deductible for
Federal, State or local income tax purposes by reason of Section 162(m) of the
Code or otherwise, should the Board or any committee thereof (including the
Committee), whichever is applicable, determine that such action is in the best
interests of Chrysler and its stockholders.
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<PAGE> 1
EXHIBIT 10-B-4
December 1, 1994
CHRYSLER CORPORATION
DISCRETIONARY INCENTIVE COMPENSATION PLAN
1. PURPOSE
The purpose of the Chrysler Corporation Discretionary Incentive
Compensation Plan (the "Plan") is to encourage the continued and energetic
efforts of officers and key salaried employees ("Employees") of Chrysler
Corporation ("Chrysler") and its subsidiaries (Chrysler and its subsidiaries
are referred to collectively as the "Corporation") on behalf of the
Corporation by enabling them to share in the profits of the Corporation, in
accordance with the resolution adopted by the Stockholders of Chrysler at their
Annual Meeting on April 16, 1929, as amended and as it may be further amended
from time to time (the "Stockholders' Resolution").
2. INCENTIVE COMPENSATION COMMITTEE
The Board of Directors of Chrysler (the "Board") will appoint not less
than three Directors, none of whom will be entitled to receive funds or
securities pursuant to any Incentive Plan (as defined in the Stockholders'
Resolution) of Chrysler, to be an Incentive Compensation Committee (the
"Committee") to administer this Plan. All of the members of the Committee will
be "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 may
designate a Secretary, one or more Assistant Secretaries and an Administrator,
none of whom need be Directors of Chrysler. The Committee will have authority,
in its discretion, to prescribe, amend, and rescind rules and regulations
relating to this Plan.
3. INCENTIVE COMPENSATION FUND
For each fiscal year the Board will authorize and approve the amount
to be provided out of the earnings of the Corporation for such fiscal year for
purposes of this Plan, the Chrysler Corporation Incentive Compensation Plan,
and the Chrysler Corporation Long-Term Incentive Plan (collectively, the
"Plans"), not to exceed the amount permitted by the Stockholders' Resolution,
and will authorize and direct the proper officers of the Corporation to set
aside the amount and to add to it (a) any amount authorized and approved by the
Board for any prior fiscal year but not previously awarded and (b) any amount
awarded for any prior fiscal year that has been forfeited. The sum of those
amounts (or such part thereof as the Board may determine should be made
available for awards for any fiscal year) will be the Incentive Compensation
Fund for that fiscal year (the "Fund").
<PAGE> 2
Any part of the Fund that the Board determines shall not be made available for
awards for any fiscal year will be carried forward and may be awarded in a
subsequent fiscal year.
4. PARTICIPANTS
The Committee, in its sole and absolute discretion, has full power to
determine by salary, salary grade, salary band, classification, or otherwise,
the Employees (including those who have joined the Corporation or retired or
died or have been granted a leave of absence or were laid off during the year)
who may participate in the Plan in any year ("Participants").
5. AWARDS
Each year the Committee, may award under this Plan to each Participant
such share of the Fund as the Committee shall determine (below called an
Award). The Award to a Participant may be based on an assessment of the
Participant's individual performance during the year, or on corporate
performance, or both, as the Committee may determine.
The Committee shall have full and final authority in performing these
duties, but shall report to the Board the share of the Fund awarded under this
Plan.
6. PAYING AND EARNING OUT OF AWARDS UNDER THIS PLAN
Awards under this plan shall be paid to Participants in one lump sum,
unless the Committee, in its discretion, determines that an Award shall be paid
in installments.
A Participant will have earned out under this Plan an Award payable in
one lump sum, or the first installment of an Award payable in installments, if
his or her employment with the Corporation has been continuous (a) up to the
date of payment of the Award payable in one lump sum, or of the first
installment of the Award payable in installments, as the case may be, or (b) up
to the date of the Participant's retirement or death if he or she should retire
or die before the date of such payment, or (c) up to the date the Participant
was granted a leave of absence if such leave of absence was granted before the
date of such payment, or (d) up to the date the Participant was laid off if he
or she was laid off before the date of such payment. A Participant will have
earned out a subsequent installment if his or her employment with the
Corporation has been continuous up to and including (a) the December 31
immediately preceding the date the installment is payable, or (b)the date of
the Participant's death if he or she should die before such December 31, or (c)
such date as the Corporation may determine under all other circumstances.
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A Participant whose employment with the Corporation is terminated
other than by death will not thereafter earn out under this Plan any
installment of an Award payable in installments unless the Corporation
expressly consents in writing to waive the condition of continuous employment
with the Corporation, and the Participant thereafter will earn out each
installment only if up to and including the December 31 immediately preceding
the date the installment is payable the Participant neither (a) takes other
employment or renders services to others without the written consent of the
Corporation, nor (b) conducts himself or herself in a manner adversely
affecting the Corporation, the determination by the Committee that a
participant has so conducted himself or herself to be final and conclusive.
Any installment which a Participant fails to earn out under this Plan
shall be forfeited and included in the Fund for a subsequent year.
Nothing in this Plan shall prevent the Corporation form discharging or
requesting the resignation of any Participant.
An Award payable in one lump sum, or the first installment of an Award
payable in installments, shall be paid to the Participant on such date as the
Committee shall determine, and if the Participant complies with the conditions
for earning out a subsequent installment, it shall be paid to him or her on
such date in the year in which it is payable as the Committee shall determine.
Any lump sum payment or installment earned out under this Plan and
payable to the Participant who is deceased shall be paid to his or her legal
representative in such manner and at such time as it would have been paid to
the Participant were he or she then alive and in the employ of the Corporation.
7. FORM OF PAYMENTS UNDER THIS PLAN
The Committee is in its sole and absolute discretion shall determine
for any year whether under this Plan the lump sum payment or the installment of
any Awards payable in that year shall be paid in cash or in shares of Chrysler
stock, or partly in cash and partly in shares of Chrysler stock, the shares to
be shares held by the Corporation in its treasury or purchased by the
Corporation in the market for distributing in place of cash, the shares to be
valued for this purpose in accordance with the Stockholder's Resolution, with
cash in place of fractional shares.
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8. DEFERRAL OF PAYMENT
A Participant may voluntarily elect to defer receipt of payment under
this Plan of all or any part of an Award payable in one lump sum or of any
installment of an Award payable in installments upon such terms and conditions
as the Committee may prescribe.
9. COSTS
All costs of administering the Plan shall be borne by the Corporation
and shall not be charged against the Fund.
10. PAYMENTS UPON A CHANGE IN CONTROL
Notwithstanding any other provisions hereof, if a "Change in Control"
(as defined in paragraph 10(D) hereof) of Chrysler shall occur, the following
shall be paid, in cash, no later than the tenth day following such Change in
Control: (a) all unpaid installments of an Award payable in installments under
this Plan, (b) all voluntary deferrals made by a Participant under this Plan,
(c) all unpaid Awards made (including any made pursuant to paragraph 10(C)
hereof) for any completed fiscal year which preceded the Change in Control, and
(d) "Change in Control Awards" (as determined pursuant to paragraph 10(A)
hereof).
A. CHANGE IN CONTROL AWARDS. Upon a Change in Control of Chrysler,
each Participant (a "Change in Control Participant") for the fiscal year in
which the Change in Control occurs (the "Change in Control Year") shall be paid
a cash award, in a lump sum (the "Change in Control Award").
The tentative Change in Control Award of each Change in Control
Participant to whom an Award was made for the last fiscal year immediately
preceding the Change in Control for which Awards (including Awards, if any,
made pursuant to paragraph 10(C) hereof) were made generally (the "Base Year")
shall be determined by multiplying the "Change in Control Fund" (calculated in
accordance with paragraph 10(B) hereof) by a fraction, the numerator of which
shall be the amount of the Award of such Change in Control Participant for the
Base Year, and the denominator of which shall be the aggregate amount of Awards
made for the Base Year. A tentative Change in Control award for each Change in
Control Participant to whom an Award was not made for the Base Year shall also
be determined and shall be comparable to the tentative Change in Control Awards
of similarly situated Change in Control Participants to whom awards were made
for the Base Year.
The actual Change in Control Award for each Change in Control
Participant shall then be determined by multiplying the Change in Control Fund
by a fraction, the numerator of which shall be his tentative Change in Control
Award and the denominator of which shall be the aggregate tentative Change in
Control Awards.
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B. CHANGE IN CONTROL FUND. The Change in Control Fund shall be the
lesser of the amount described in (i) or in (ii) below, adjusted by the amount
described in (iii):
(i) the sum (measured immediately prior to the Change in
Control) of (x) any amount authorized and approved by the Board for
any fiscal year completed prior to the Change in Control but not
previously awarded under this Plan or previously charged against the
Fund pursuant to any other plan of the Corporation and (y) any amount
awarded from the Fund or charged against the Fund for any fiscal year
completed prior to the Change in Control that has been forfeited;
(ii) the aggregate amount accrued during the Change in Control
Year up to and including the date of the Change in Control, in the
ordinary course of business and consistent with past practice, on the
books of the Corporation to be set aside by the Board for purposes of
the Plans and retirement benefits under the Chrysler Corporation
Supplemental Executive Retirement Plan. The determinations (made
prior to the Change in Control) of the Corporation's internal
accountants in making any such accruals shall be conclusive;
(iii) the "applicable amount" (the lesser amount from (i) or
(ii) above) shall be adjusted as follows: if one or more additional
charges are made against the Fund with respect to Performance Shares
under the Long-Term Incentive Plan or awards under the Incentive
Compensation Plan upon the occurrence of a Change in Control, the
"applicable amount" shall be reduced by such charge or charges; if any
amount previously charged against the Fund for Performance Shares or
Incentive Compensation Plan awards which are not earned and delivered
upon the occurrence of a Change in Control are returned to the Fund,
the "applicable amount" shall be increased by such returned amounts.
C. MAKING AWARDS FOR COMPLETED YEARS. Upon the occurrence of a
"Potential Change in Control" (as defined in paragraph 10(E) hereof), if there
is any completed fiscal year of the Corporation for which the audited financial
statements of the Corporation are available and for which the Board has not yet
determined the Incentive Compensation Fund and/or for which the Committee has
not yet determined the Awards, such determinations and the payments of any
Awards so determined shall be made as soon as reasonably possible.
D. CHANGE IN CONTROL DEFINITION. "Change in Control" shall mean a
change in control of Chrysler, which shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
5
<PAGE> 6
(i) any Person (as defined below) is or becomes the Beneficial
Owner (as defined below) of securities of Chrysler representing 20% or
more of the combined voting power of Chrysler's then outstanding
securities (unless the event causing the 20% threshold to be crossed
in an acquisition of securities directly from Chrysler); or
(ii) during any period of two consecutive years beginning
after June 7, 1990, 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 Chrysler
to effect a transaction described in paragraph (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 (2/3) 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; or
(iii) the stockholders of Chrysler approve a merger or
consolidation of Chrysler with any other corporation (other than a
merger or consolidation which would result in the voting securities of
Chrysler 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 Chrysler or such surviving
entity held by a trustee or other fiduciary pursuant to any employee
benefit plan of Chrysler or such surviving entity or any subsidiary of
Chrysler or such surviving entity, at least 80% of the combined voting
power of the voting securities of Chrysler or such surviving entity
outstanding immediately after such merger or consolidation); or
(iv) the stockholders of Chrysler approve a plan of complete
liquidation or dissolution of Chrysler or an agreement for the sale or
disposition by Chrysler of all or substantially all Chrysler's assets.
For purposes of the definition of Change in Control in this paragraph
10(D): (a) "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as supplemented by Section 13(d)(3) of the Exchange Act, provided,
however, that Person shall not include (i) Chrysler, any subsidiary of Chrysler
or any other Person controlled by Chrysler, (ii) any trustee or other fiduciary
holding securities under any employee benefit plan of Chrysler or any
subsidiary of Chrysler , or (iii) a corporation owned, directly or indirectly,
by the stockholders of Chrysler in substantially the same proportions as their
ownership of securities of Chrysler; and (b) a Person shall be deemed the
"Beneficial Owner" of any securities which such Person, directly
6
<PAGE> 7
or indirectly, has the right to vote or dispose of or otherwise 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 (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 securities (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. POTENTIAL CHANGE IN CONTROL DEFINITION. A "Potential Change in
Control" shall be deemed to have occurred if the conditions set forth in any
one of the following paragraphs shall be satisfied:
(i) Chrysler enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
(ii) Chrysler or any Person (as defined in paragraph 10(D)
hereof) publicly announces an intention to take or to consider taking
actions which if consummated, would constitute a Change in Control;
(iii) any Person who is or becomes the Beneficial Owner (as
defined in paragraph 10(D) hereof), directly or indirectly, of
securities of Chrysler representing 10% or more of the combined voting
power of Chrysler's then outstanding securities, increases such
Person's beneficial ownership of such securities by 5% or more over
the percentage so owned by such Person on the date hereof; or
(iv) the Board adopts a resolution to the effect that, for
purposes of this Plan, a Potential Change in Control has occurred.
7
<PAGE> 8
11. INTERPRETATION
The Board 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
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 may rely and act upon the opinion of counsel (who may be counsel to
Chrysler) on the question of law.
12. EFFECTIVE PERIOD
The Plan shall become effective, upon approval by the Board, beginning
December 1, 1994, and shall remain in effect until terminated as provided in
Paragraph 16.
13. AMENDMENT AND TERMINATION
At any time the Board may amend, alter or terminate this Plan
(consistent with the Stockholders' Resolution) as the Board shall deem
advisable; provided, however, that the Board may not: (a) without the approval
of the holders of a majority of the shares of Common Stock of Chrysler voting
on the matter, increase the total amount that under the Stockholders'
Resolution may be provided out of the earnings of the Corporation for incentive
compensation and (b) without the approval of the holders of a majority of the
shares of Common Stock of Chrysler issued and outstanding, issue shares of
Chrysler stock for distributing in place of cash; and provided further,
however, that terminating or amending this Plan shall not terminate the right
of any Participant to earn out and thereby become entitled to receive, in the
same manner as if this Plan had not been terminated or amended, any unpaid
installment of an Award made to him under this Plan prior to the terminating or
amending of this Plan.
8
<PAGE> 1
EXHIBIT 11
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
EARNINGS PER COMMON SHARE DATA
APB 15 CALCULATION
<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------
1994 1993 1992
---- ---- ----
(in millions of dollars and shares,
except per-common-share amounts)
<S> <C> <C> <C>
PRIMARY:
Net earnings (loss) $3,713 $(2,551) $ 723
Preferred stock dividends (80) (80) (69)
------- ------- ------
Earnings (loss) attributable to common stock $3,633 $(2,631) $ 654
======= ======= ======
Weighted average shares outstanding 354.3 345.1 292.8
Shares issued on exercise of dilutive options 10.3 -- 9.8
Shares purchased with proceeds of options (5.8) -- (7.3)
Shares contingently issuable 0.4 -- 0.6
------- ------- ------
Shares applicable to primary earnings (loss) 359.2 345.1 295.9
======= ======= ======
FULLY DILUTED:
Net earnings $3,713 $ -- $ 723
Preferred stock dividends -- -- --
------- ------- ------
Earnings attributable to common stock $3,713 $ -- $ 723
======= ======= ======
Weighted average shares outstanding 354.3 -- 292.8
Shares issued on exercise of dilutive options 11.1 -- 11.2
Shares purchased with proceeds of options (6.5) -- (7.9)
Shares applicable to convertible
preferred stock 47.9 -- 41.4
Shares contingently issuable 1.0 -- 1.7
------- ------- ------
Shares applicable to fully diluted
earnings 407.8 -- 339.2
======= ======= ======
PER COMMON SHARE DATA:
Primary:
Earnings before cumulative effect of
changes in accounting principles $ 10.11 $ 6.77 $ 1.47
Cumulative effect of changes in
accounting principles -- (14.39) 0.74
------- ------- ------
Net earnings (loss) per common share $ 10.11 $ (7.62) $ 2.21
======= ======= ======
Fully Diluted:
Earnings before cumulative effect of
changes in accounting principles $ 9.10 $ -- $ 1.49
Cumulative effect of changes in
accounting principles -- -- 0.64
------- ------- ------
Net earnings per common share $ 9.10 $ -- $ 2.13
======= ======= ======
</TABLE>
NOTE: Primary 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 1994 and 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
------------------------------------------
1994 1993 1992 1991(1) 1990
---- ---- ---- ------- ----
(in millions of dollars)
<S> <C> <C> <C> <C> <C>
Net earnings (loss) from continuing operations before
cumulative effect of changes in accounting
principles $3,713 $2,415 $ 505 $ (538) $ 68
Add back:
Taxes on income 2,117 1,423 429 (272) 79
Fixed charges 1,267 1,433 1,732 2,179 2,783
Amortization of previously capitalized interest 87 94 87 86 81
Deduct:
Capitalized interest 177 176 176 162 140
Undistributed earnings from less than
fifty-percent owned affiliates 15 2 7 11 6
------ ------ ------ ------ ------
Earnings available for fixed charges $6,992 $5,187 $2,570 $1,282 $2,865
------ ------ ------ ------ ------
Fixed charges:
Interest expense $ 937 $1,104 $1,405 $1,869 $2,458
Interest expense of unconsolidated subsidiaries -- -- -- -- 15
Capitalized interest 177 176 176 162 140
Credit line commitment fees 10 10 10 15 6
Interest portion of rent expense 143 143 139 126 119
Gross-up of preferred stock dividends of majority-
owned subsidiaries (CFC) to a pretax basis -- -- 2 7 45
------ ------ ------ ------ ------
Total fixed charges $1,267 $1,433 $1,732 $2,179 $2,783
------ ------ ------ ------ ------
Ratio of earnings to fixed charges 5.52 3.62 1.48 0.59 1.03
====== ====== ====== ====== ======
Preferred stock dividend requirements $ 125 $ 127 $ 128 $ -- $ --
====== ====== ====== ====== ======
Ratio of earnings to fixed charges and preferred
stock dividend requirements 5.02 3.33 1.38 -- --
====== ====== ====== ====== ======
Equity taken up in earnings of less than fifty-percent
owned affiliates $ 15 $ 2 $ 11 $ 13 $ 8
Deduct:
Dividends paid by affiliates -- -- 4 2 2
------ ------ ------ ------ ------
Undistributed earnings from less than fifty-percent
owned affiliates $ 15 $ 2 $ 7 $ 11 $ 6
====== ====== ====== ====== ======
</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
pretax earnings that would be required to cover such dividend
requirements.
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT AS OF DECEMBER 31, 1994
Registrant:
CHRYSLER CORPORATION (DELAWARE) (AUTOMOTIVE)
Subsidiaries of Chrysler Corporation
(In connection with the companies named, all voting securities are
owned, directly or indirectly by the Registrant, except where 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)(Automotive)
Chrysler Institute of Engineering (Michigan)(Non-profit)
Chrysler International Corporation (Delaware)(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)
International Motors & Management S.A.M. (Morocco)(Financial Services)
Chrysler International Services, S.A. (Delaware)(Automotive)
CISSA do Brasil Limitada (owned 99% by Chrysler International
Services S.A. and owned 1% 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)
Electrospace Systems, Inc. (Texas)(Defense Electronics)
Pentastar Support Services, Inc. (Delaware)(Defense Electronics)
Pentastar Electronics, Inc. (Delaware)(Defense Electronics)
Chrysler Technologies Middle East Ltd. (owned 33-1/3% by
each of Chrysler Technologies
Airborne Systems, Inc., Electrospace Systems, Inc. and
Pentastar Electronics, Inc. (Delaware)(Defense Electronics)
Chrysler Technologies International, Inc. (U.S. Virgin Islands)
(Foreign Sales Corporation)
CTC Financial Services, Inc. (Texas)(Financial Services)
Chrysler Transport, Inc. (Delaware)(Automotive)
Dealer Capital, Inc. (Delaware)(Financial Services)
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)
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 Chile LTDA (Chile)(Automotive)
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)
<PAGE> 2
EXHIBIT 21 - CONTINUED
SUBSIDIARIES OF THE REGISTRANT AS OF DECEMBER 31, 1994
Chrysler Motors de Venezuela, S.A. (Venezuela)(Automotive)
Cayman Island Investment Co. (Cayman Islands)(Financial Services)
Jeep Caracas, S.A. (Venezuela)(Automotive)
Ensambladora Carabobo, C.A. (Venezuela)(Automotive)
Chrysler Overseas Trading Co. Ltd. (United Kingdom)(Automotive)
Chrysler de Venezuela S.A. (Venezuala)(Automotive)
Jeep Australia, Pty., Ltd. (Australia)(Automotive)
Jeep of Canada Limited (Canada)(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)
Foundacion Chrysler de Mexico, IAP (Mexico)(Financial Services)
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)
CC Funding Corporation (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 Funding Corporation (Delaware)(Financial Services)
Chrysler Capital Investment Services, Inc. (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
EXHIBIT 21 - CONTINUED
SUBSIDIARIES OF THE REGISTRANT AS OF DECEMBER 31, 1994
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)
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)
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 lE Geothermal Corporation (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 2, 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)
<PAGE> 4
EXHIBIT 21 - CONTINUED
SUBSIDIARIES OF THE REGISTRANT AS OF DECEMBER 31, 1994
Chrysler Credit Canada Ltd. (Canada)(Financial Services)
Chrysler Credit Holdings Ltd. (Ontario)(Financial Services)
Chrysler Finance Limited (Ontario)(Financial Services)
Chrysler First Commercial Corporation Inc. (Ontario)
(Financial Services)
CCF Canada Ltd. (Ontario)(Financial Services)
Snapper Financial 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)
Chrysler First Acceptance Corporation (Delaware)(Financial Services)
Chrysler First Business Credit Corporation (Delaware)
(Financial Services)
Chrysler First Commercial Corporation (Pennsylvania)
(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 Industrial Loan Company
(Washington)(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)
Chrysler Timberlake Corporation (Delaware)(Financial Services)
EFH Leasing Corporation (Delaware)(Financial Services)
1981 Helicopters, Ltd. (New York)(Financial Services)
104462 Canada Ltd. (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)
Pentastar Transportation Group, Inc. (Oklahoma)(Automotive Leasing)
Dollar Systems, Inc. (Delaware)(Automotive Leasing)
Dollar Operations, Inc. (Oklahoma)(Automotive Leasing)
Combined Shuttle Services, Inc. (Virginia)(Automotive Rental
Shuttle Services)
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)
Manatee Leasing, Inc. (Oklahoma)(Automotive Leasing)
PTG, Inc. (Oklahoma)(Automotive Leasing)
Pentastar Transportation Group Canada, Inc. (Ontario)(Automotive Leasing)
Tartan, Inc. (Oklahoma)(Automotive Leasing)
<PAGE> 5
EXHIBIT 21 - CONTINUED
SUBSIDIARIES OF THE REGISTRANT AS OF DECEMBER 31, 1994
Thrifty Rent-A-Car System, Inc. (Oklahoma)(Automotive Leasing)
KAM Cars of America, 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. (99.8% Owned)(France)(Automotive Leasing)
Thrifty Rent-A-Car Limited (United Kingdom)(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:
46 majority-owned retail sales outlets in the United States
14 majority-owned retail sales outlets outside the United States
<PAGE> 1
Exhibit 23
CONFORMED
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference of our report dated January 16,
1995, appearing in this Annual Report on Form 10-K of Chrysler Corporation for
the year ended December 31, 1994, in the following Registration Statements:
REGISTRATION
FORM STATEMENT NO. DESCRIPTION
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 deliverable
(Post-Effective) pursuant to the 1972 and 1980 American Motors
Amendment No. 1) 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
S-8 33-55817 Chrysler Corporation 1991 Stock Compensation Plan
Deloitte & Touche LLP
Detroit, Michigan
February 2, 1995
<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 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, 1994, 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 2nd day
of February, 1995.
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 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, 1994, 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 2nd day
of February, 1995.
Robert E. Allen
ROBERT E. ALLEN
<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 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, 1994, 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 2nd
day of February, 1995.
Joseph E. Antonini
JOSEPH E. ANTONINI
<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 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, 1994, 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 2nd
day of February, 1995.
Joseph A. Califano
JOSEPH A. CALIFANO
<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 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, 1994, 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
2nd day of February, 1995.
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 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, 1994, 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
2nd day of February, 1995.
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 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, 1994, 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 2nd
day of February, 1995.
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 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, 1994, 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 2nd
day of February, 1995.
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 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,
1994, 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
2nd day of February, 1995.
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 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,
1994, 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
2nd 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 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, 1994, 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
2nd day of February, 1995.
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 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, 1994, 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
2nd day of February, 1994.
Malcolm T. Stamper
MALCOLM T. STAMPER
<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 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, 1994, 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
2nd day of February, 1995.
Lynton R. Wilson
LYNTON R. WILSON
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<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 5,145
<SECURITIES> 3,226
<RECEIVABLES> 1,695
<ALLOWANCES> 58
<INVENTORY> 3,356
<CURRENT-ASSETS> 0
<PP&E> 17,946
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0
2
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<SALES> 49,363
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<OTHER-EXPENSES> 3,933
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<FN>
<F1>
(1) Excludes depreciation of property and equipment, amortization of special
tools, pension expense and nonpension postretirement benefit expense.
</FN>
</TABLE>
