<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 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)
<TABLE>
<C> <C>
STATE OF DELAWARE 38-2673623
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 CHRYSLER DRIVE, AUBURN HILLS, MICHIGAN 48326-2766
(Address of principal executive offices) (Zip Code)
</TABLE>
(810) 576-5741
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 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 ___
The registrant had 687,927,015 shares of common stock outstanding as of
March 31, 1997.
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<PAGE> 2
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.............................. 1-5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............... 6-10
Part II. OTHER INFORMATION
Item 5. Other Information................................. 11-13
Item 6. Exhibits and Reports on Form 8-K.................. 14
Signature Page.............................................. 15
Exhibit Index............................................... 16
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
(IN MILLIONS OF DOLLARS)
<S> <C> <C>
Sales of manufactured products.............................. $15,156 $14,044
Finance and insurance revenues.............................. 410 449
Other revenues.............................................. 550 463
------- -------
TOTAL REVENUES......................................... 16,116 14,956
------- -------
Costs, other than items below............................... 11,968 11,005
Depreciation and special tools amortization................. 678 611
Selling and administrative expenses......................... 1,207 1,087
Employee retirement benefits................................ 325 311
Interest expense............................................ 234 272
------- -------
TOTAL EXPENSES......................................... 14,412 13,286
------- -------
EARNINGS BEFORE INCOME TAXES........................... 1,704 1,670
Provision for income taxes.................................. 675 665
------- -------
NET EARNINGS........................................... $ 1,029 $ 1,005
Preferred stock dividends................................... -- 1
------- -------
NET EARNINGS ON COMMON STOCK........................... $ 1,029 $ 1,004
======= =======
<CAPTION>
(IN DOLLARS OR MILLIONS
OF SHARES)
<S> <C> <C>
PRIMARY EARNINGS PER COMMON SHARE........................... $ 1.46 $ 1.32
======= =======
Average common and dilutive equivalent shares
outstanding............................................ 705.9 760.9
FULLY DILUTED EARNINGS PER COMMON SHARE..................... $ 1.45 $ 1.30
======= =======
Average common and dilutive equivalent shares
outstanding............................................ 708.4 770.2
DIVIDENDS DECLARED PER COMMON SHARE......................... $ 0.40 $ 0.30
</TABLE>
See notes to consolidated financial statements.
1
<PAGE> 4
ITEM 1. FINANCIAL STATEMENTS -- CONTINUED
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
1997 1996
----------- --------------------------
MARCH 31 DECEMBER 31 MARCH 31
-------- ----------- --------
(UNAUDITED) (UNAUDITED)
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents.................................. $ 6,202 $ 5,158 $ 6,174
Marketable securities...................................... 2,461 2,594 2,175
------- ------- -------
Total cash, cash equivalents and marketable
securities.......................................... 8,663 7,752 8,349
Accounts receivable -- trade and other..................... 1,763 2,126 2,290
Inventories................................................ 5,562 5,195 5,137
Prepaid employee benefits, taxes and other expenses........ 1,723 1,929 915
Finance receivables and retained interests in sold
receivables.............................................. 13,983 12,339 14,585
Property and equipment..................................... 15,291 14,905 12,918
Special tools.............................................. 3,924 3,924 3,481
Intangible assets.......................................... 1,973 1,995 2,134
Other assets............................................... 6,714 6,019 6,612
------- ------- -------
TOTAL ASSETS.......................................... $59,596 $56,184 $56,421
======= ======= =======
LIABILITIES:
Accounts payable........................................... $ 9,402 $ 8,981 $ 9,034
Accrued liabilities and expenses........................... 8,981 8,864 7,888
Short-term debt............................................ 3,804 3,214 2,393
Payments due within one year on long-term debt............. 2,847 2,998 2,510
Long-term debt............................................. 9,296 7,184 9,763
Accrued noncurrent employee benefits....................... 9,599 9,431 9,361
Other noncurrent liabilities............................... 3,900 3,941 4,065
------- ------- -------
TOTAL LIABILITIES..................................... 47,829 44,613 45,014
------- ------- -------
SHAREHOLDERS' EQUITY: (shares in millions)
Preferred stock -- $1 per share par value; authorized 20.0
shares; Series A Convertible Preferred Stock; issued and
outstanding: 1997 -- 0.03; 1996 -- 0.04 and 0.12 shares,
respectively (aggregate liquidation preference 1997 --
$15 million; 1996 -- $21 million and $58 million,
respectively)............................................ * * *
Common stock -- $1 per share par value; authorized 1,000.0
shares; issued: 1997 -- 822.3; 1996 -- 821.6 and 408.8
shares, respectively..................................... 822 822 409
Additional paid-in capital................................. 5,163 5,129 5,514
Retained earnings.......................................... 9,560 8,829 7,034
Treasury stock -- at cost: 1997 -- 134.4 shares; 1996 --
119.1 and 34.8 shares, respectively...................... (3,778) (3,209) (1,550)
------- ------- -------
TOTAL SHAREHOLDERS' EQUITY............................ 11,767 11,571 11,407
------- ------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............ $59,596 $56,184 $56,421
======= ======= =======
</TABLE>
- -------------------------
* Less than $1 million
See notes to consolidated financial statements.
2
<PAGE> 5
ITEM 1. FINANCIAL STATEMENTS -- CONTINUED
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
(IN MILLIONS OF DOLLARS)
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES................... $ 967 $ 1,883
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities........................ (968) (678)
Sales and maturities of marketable securities............. 1,075 1,298
Finance receivables acquired.............................. (5,803) (5,890)
Finance receivables collected............................. 1,711 1,860
Proceeds from sales of finance receivables................ 3,463 3,241
Expenditures for property and equipment................... (559) (624)
Expenditures for special tools............................ (273) (207)
Purchases of vehicle operating leases..................... (299) (130)
Other..................................................... (8) 72
------- -------
NET CASH USED IN INVESTING ACTIVITIES................ (1,661) (1,058)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt................................. 590 (411)
Proceeds from long-term borrowings........................ 3,134 965
Payments on long-term borrowings.......................... (1,168) (213)
Repurchases of common stock............................... (561) (329)
Dividends paid............................................ (283) (229)
Other..................................................... 26 23
------- -------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES.......................................... 1,738 (194)
------- -------
Change in cash and cash equivalents......................... 1,044 631
Cash and cash equivalents at beginning of period............ 5,158 5,543
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................. $ 6,202 $ 6,174
======= =======
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 6
ITEM 1. FINANCIAL STATEMENTS -- CONTINUED
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. CONSOLIDATION AND FINANCIAL STATEMENT PRESENTATION
The unaudited consolidated financial statements of Chrysler Corporation and
its consolidated subsidiaries ("Chrysler") include the accounts of all
significant majority-owned subsidiaries and entities. Affiliates that are 20
percent to 50 percent owned and subsidiaries where control is expected to be
temporary, primarily investments in certain dealerships, are generally accounted
for on an equity basis. Intercompany accounts and transactions have been
eliminated in consolidation. The consolidated financial statements of Chrysler
for the three months ended March 31, 1997 and 1996 reflect all adjustments,
consisting of only normal and recurring items, which are, in the opinion of
management, necessary to present a fair statement of the results for the interim
periods. The operating results for the three months ended March 31, 1997 are not
necessarily indicative of the results of operations for the entire year.
Reference should be made to the consolidated financial statements included in
the Annual Report on Form 10-K for the year ended December 31, 1996. Certain
amounts for 1996 have been reclassified to conform with current period
classifications.
NOTE 2. INVENTORIES
Inventories, summarized by major classification, were as follows:
<TABLE>
<CAPTION>
1997 1996
-------- ----------------------
MARCH 31 DECEMBER 31 MARCH 31
-------- ----------- --------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Finished products, including service parts.................. $1,674 $1,569 $1,524
Raw materials, finished production parts and supplies....... 1,462 1,540 1,457
Vehicles held for short-term lease.......................... 2,426 2,086 2,156
------ ------ ------
TOTAL.................................................. $5,562 $5,195 $5,137
====== ====== ======
</TABLE>
NOTE 3. CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1997, Chrysler adopted Statement of Financial
Accounting Standards ("SFAS") No. 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities." The adoption of this
accounting standard did not have a material impact on Chrysler's consolidated
financial statements.
Effective January 1, 1996, Chrysler adopted SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of." The initial adoption of this accounting standard did not have a material
impact on Chrysler's consolidated financial statements.
NOTE 4. COMMON STOCK REPURCHASES
During 1996, Chrysler's Board of Directors approved an increase in
Chrysler's planned 1997 common stock repurchases from $1 billion to $2 billion.
These common stock repurchases are subject to market and general economic
conditions. During the first quarter of 1997, Chrysler repurchased 17.9 million
shares of its common stock at a cost of $587 million (including $41 million in
unsettled repurchases).
NOTE 5. LONG-TERM DEBT
On February 5, 1997, Chrysler sold, in a private offering, $500 million of
7.45% Debentures due 2097 for net proceeds of $485 million. Concurrent with the
sale of these debentures, Chrysler terminated, and settled for cash, forward
contracts (notional amount $520 million) which were entered into to mitigate
interest rate risk associated with the anticipated sale of this debt. These
debentures were exchanged for $500 million of publicly traded 7.45% Debentures,
Series B, on April 2, 1997.
4
<PAGE> 7
ITEM 1. FINANCIAL STATEMENTS -- CONTINUED
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
NOTE 5. LONG-TERM DEBT -- CONTINUED
On February 26, 1997, Chrysler sold $600 million of 7.45% Debentures due
2027 for net proceeds of $592 million. Concurrent with the sale of these
debentures, Chrysler terminated, and settled for cash, forward contracts
(notional amount $575 million) which were entered into to mitigate interest rate
risk associated with the anticipated sale of this debt.
The gains on termination of the forward contracts were immaterial and will
be amortized over the terms of the respective debt.
5
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 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 of $1,704 million for the
first quarter of 1997, compared with $1,670 million for the first quarter of
1996. Net earnings for the first quarter of 1997 were $1,029 million, or $1.46
per common share, compared with $1,005 million, or $1.32 per common share, in
the first quarter of 1996.
The improvement in operating results in the first quarter of 1997 compared
with the first quarter of 1996 resulted primarily from an increase in vehicle
shipments and net pricing actions (including the effect of increased average
sales incentives per vehicle), substantially offset by increases in selling and
administrative expenses, and depreciation and special tools amortization.
Chrysler's worldwide vehicle shipments in the first quarter of 1997 were
781,239, an increase of 28,063 units or 4 percent, compared with the first
quarter of 1996. Chrysler's vehicle shipments outside of the U.S., Canada and
Mexico in the first quarter of 1997 were 52,852, an increase of 5,507 units or
12 percent, compared with the first quarter of 1996.
Chrysler's revenues and results of operations are principally derived from
the U.S. and Canada automotive marketplaces. In the first quarter of 1997,
retail industry sales (including fleet) of new cars and trucks in the U.S. and
Canada, on a Seasonally Adjusted Annual Rate basis, were 17.0 million units,
compared with 16.8 million units for the first quarter of 1996.
Chrysler's U.S. and combined U.S. and Canada retail sales and market share
data for the first quarter of 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
FIRST QUARTER
------------------------------------
INCREASE/
1997 1996 (DECREASE)
---- ---- ----------
<S> <C> <C> <C>
U.S. Retail Market(1):
Car sales................................................. 202,977 215,147 (12,170)
Car market share.......................................... 10.0% 10.5% (0.5)%
Truck sales (including minivans).......................... 369,678 376,159 (6,481)
Truck market share........................................ 21.8% 22.9% (1.1)%
Combined car and truck sales.............................. 572,655 591,306 (18,651)
Combined car and truck market share....................... 15.4% 16.0% (0.6)%
U.S. and Canada Retail Market(1):
Combined car and truck sales.............................. 626,844 644,678 (17,834)
Combined car and truck market share....................... 15.6% 16.3% (0.7)%
</TABLE>
- -------------------------
(1) All retail sale and market share data include fleet sales.
Chrysler's U.S. car market share for the first quarter of 1997 decreased
compared with the first quarter of 1996 primarily as a result of decreased sales
of its Neon subcompact vehicles. Chrysler's U.S. truck market share for the
first quarter of 1997 decreased compared with the first quarter of 1996
primarily as a result of decreased sales of its Dodge Ram pickup trucks and
Jeep(R) Cherokee vehicles, partially offset by increased sales of Jeep Wrangler
vehicles. These decreases reflect an increasingly competitive environment
resulting from new product offerings from competitors and increased sales by
Japanese manufacturers.
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
FINANCIAL REVIEW -- CONTINUED
Chrysler Financial Corporation ("CFC") reported earnings before income
taxes of $141 million for the first quarter of 1997 compared with $154 million
for the first quarter of 1996. CFC's net earnings were $93 million for the first
quarter of 1997 compared with $98 million for the first quarter of 1996. The
decrease in net earnings for the first quarter of 1997 compared with the first
quarter of 1996 primarily reflects higher provisions for credit losses partially
offset by higher gains from sales of receivables.
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES
Chrysler's total revenues for the three months ended March 31, 1997 and
1996 were as follows:
<TABLE>
<CAPTION>
FIRST QUARTER
-----------------------------------------
INCREASE/
1997 1996 (DECREASE)
---- ---- ----------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Sales of manufactured products.............................. $15,156 $14,044 8 %
Finance and insurance revenues.............................. 410 449 (9)%
Other revenues.............................................. 550 463 19 %
------- -------
Total revenues......................................... $16,116 $14,956 8 %
======= =======
</TABLE>
The increase in sales of manufactured products in the first quarter of 1997
compared with the first quarter of 1996 primarily reflects a 4 percent increase
in vehicle shipments and an increase in average revenue per unit, net of sales
incentives, from $18,559 in the first quarter of 1996 to $19,427 in the first
quarter of 1997. The increase in average revenue per unit was principally due to
pricing actions partially offset by higher average sales incentives per vehicle.
The decrease in finance and insurance revenues in the first quarter of 1997
compared with the first quarter of 1996 was primarily attributable to lower
average automotive and nonautomotive receivables outstanding, partially offset
by an increase in vehicles under purchased operating leases.
The increase in other revenues in the first quarter of 1997 compared with
the first quarter of 1996 was primarily attributable to higher gains from sales
of receivables at CFC and higher interest income.
Chrysler's total expenses for the three months ended March 31, 1997 and
1996 were as follows:
<TABLE>
<CAPTION>
FIRST QUARTER
-----------------------------------------
INCREASE/
1997 1996 (DECREASE)
---- ---- ----------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Costs, other than items below............................... $11,968 $11,005 9 %
Depreciation and special tools amortization................. 678 611 11 %
Selling and administrative expenses......................... 1,207 1,087 11 %
Employee retirement benefits................................ 325 311 5 %
Interest expense............................................ 234 272 (14)%
------- -------
Total expenses......................................... $14,412 $13,286 8 %
======= =======
</TABLE>
Costs, other than items below increased in the first quarter of 1997
compared with the first quarter of 1996 primarily as a result of a 4 percent
increase in vehicle shipments and increased vehicle content. Costs, other than
items below as a percent of sales of manufactured products were 79 percent and
78 percent for the three months ended March 31, 1997 and 1996, respectively.
7
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
COMPARISON OF SELECTED ELEMENTS OF REVENUES AND EXPENSES -- CONTINUED
Depreciation and special tools amortization for the first quarter of 1997
increased compared with the first quarter of 1996 primarily as a result of
higher levels of property and equipment in use, including increased depreciation
related to vehicles under purchased operating leases.
Selling and administrative expenses for the first quarter of 1997 increased
compared with the first quarter of 1996 primarily as a result of increased
advertising expenses and increased expenses associated with Chrysler's expanding
international operations.
Interest expense for the first quarter of 1997 decreased compared with the
first quarter of 1996 primarily as a result of lower average effective cost of
borrowings at CFC. The decline in CFC's average effective cost of borrowings
primarily reflects lower market interest rates in the U.S. and Canada.
LIQUIDITY AND CAPITAL RESOURCES
Chrysler's consolidated combined cash, cash equivalents and marketable
securities totaled $8,663 million at March 31, 1997 (including $1,037 million
held by CFC and Car Rental Operations), compared with $7,752 million at December
31, 1996 (including $797 million held by CFC and Car Rental Operations). The
increase in Chrysler's combined cash, cash equivalents and marketable securities
in the first quarter of 1997 was primarily the result of cash provided by a net
increase in total debt and cash generated by operating activities, partially
offset by capital expenditures, net finance receivables acquired, common stock
repurchases and dividend payments.
During 1996, Chrysler's Board of Directors approved an increase in
Chrysler's planned 1997 common stock repurchases from $1 billion to $2 billion.
These common stock repurchases are subject to market and general economic
conditions. During the first quarter of 1997, Chrysler repurchased 17.9 million
shares of its common stock at a cost of $587 million (including $41 million in
unsettled repurchases).
In February 1997, Chrysler sold $500 million of 7.45% Debentures due 2097
and $600 million of 7.45% Debentures due 2027 for net proceeds of $485 million
and $592 million, respectively.
At March 31, 1997, Chrysler (excluding CFC) had debt maturities totaling
$746 million through 1999. At March 31, 1997, Chrysler had a $2.4 billion
revolving credit agreement which expires in April 2001. There were no amounts
outstanding under this revolving credit agreement at March 31, 1997. Chrysler
believes that cash from operations and its cash position will be sufficient to
meet its capital expenditure, debt maturity, common stock repurchase, dividend
payment and other funding requirements.
Receivable sales continued to be a significant source of funding for CFC,
which realized $1.4 billion of net proceeds from the sale of automotive retail
receivables in the first quarter of 1997 compared with $1.1 billion of net
proceeds in the first quarter of 1996. In addition, securitization of revolving
wholesale account balances provided funding for CFC which aggregated $6.8
billion and $6.6 billion at March 31, 1997 and 1996, respectively.
At March 31, 1997, CFC had contractual debt maturities of $5.4 billion for
the remainder of 1997 (including $3.2 billion of short-term notes), $2.6 billion
in 1998 and $2.4 billion in 1999. CFC's U.S. and Canadian revolving credit
facilities, which total $8 billion, consist of a $2 billion facility expiring in
April 1997 and a $6 billion facility expiring in April 2001. At March 31, 1997,
no amounts were outstanding under CFC's revolving credit facilities. During the
first quarter of 1997, CFC began the process of negotiating new revolving credit
facilities to replace and extend its existing revolving credit facilities. CFC
believes that cash provided by operations, receivable sales, securitizations,
and the issuance of term debt and commercial paper will provide sufficient
liquidity to meet its debt maturity and other funding requirements.
8
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
LIQUIDITY AND CAPITAL RESOURCES -- CONTINUED
Chrysler's strategy is to focus on its core automotive business. As part of
this strategy, Chrysler has sold certain assets and businesses which are not
related to its core automotive business, and is exploring the sale of other such
assets and businesses in the near term.
OUTLOOK
The statements contained in this Outlook section are based on management's
current expectations. With the exception of the historical information contained
herein, the statements presented in this Outlook section are forward-looking
statements that involve numerous risks and uncertainties. Actual results may
differ materially.
Chrysler's worldwide vehicle production in the first quarter of 1997 was
762,160 units, an increase of 19,026 units or 3 percent, compared with the first
quarter of 1996. Worldwide vehicle production for the second quarter of 1997 is
expected to be approximately 818,000 units, an increase of 42,200 units,
compared with the second quarter of 1996. This expected production level is
heavily dependent on Chrysler's ability to maintain its competitive position and
continued favorable economic conditions in the U.S. and Canada, where Chrysler's
sales are concentrated.
Chrysler projects that full-year 1997 retail (including fleet) industry
sales for the U.S. will range from 15.0 million to 15.5 million units and that
full-year 1997 retail (including fleet) industry sales for Canada will range
from 1.2 million to 1.3 million units. Full-year 1996 retail (including fleet)
industry sales were 15.4 million units and 1.2 million units in the U.S. and
Canada, respectively. Actual levels of industry retail (including fleet) sales
will depend on, among other things, economic conditions in the U.S. and Canada.
Accordingly, there can be no assurance that Chrysler's estimates will be
accurate.
In addition, Chrysler wishes to caution readers that several factors, as
well as those factors described elsewhere in this discussion or in other
Securities and Exchange Commission filings, in some cases have affected, and in
the future could affect, Chrysler's actual results, and could cause Chrysler's
actual results to differ materially from those expressed in any forward-looking
statement made by, or on behalf of, Chrysler. Those factors include: business
conditions and growth in the automotive industry and general economy; changes in
gasoline and oil prices; changes in consumer debt levels and interest rates;
changes in consumer preferences away from pickup trucks, sport-utility vehicles
and minivans; competitive factors, such as domestic and foreign rival car and
truck offerings, sales incentives, acceptance of new products and price
pressures; excess or shortage of manufacturing capacity; risks and uncertainties
associated with Chrysler's expansion into international markets; and changes in
foreign exchange rates and the resulting impact on pricing strategies of major
foreign competitors. Additionally, several of Chrysler's competitors have larger
worldwide sales volumes and greater financial resources, which may, over time,
place Chrysler at a competitive disadvantage in responding to its competitors'
offerings, substantial changes in consumer preferences, government regulations,
or adverse economic conditions in the U.S. and Canada. Finally, the automotive
industry historically has been highly cyclical and the duration of these cycles
has been difficult to predict.
NEW ACCOUNTING STANDARD
In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share." This Statement
establishes standards for computing and presenting earnings per share ("EPS")
and applies to all entities with publicly held common stock or potential common
stock. This Statement replaces the presentation of primary EPS and fully diluted
EPS with a presentation of basic EPS and diluted EPS, respectively. Basic EPS
excludes dilution and is computed by dividing earnings
9
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- CONTINUED
NEW ACCOUNTING STANDARD -- CONTINUED
available to common stockholders by the weighted-average number of common shares
outstanding for the period. Similar to fully diluted EPS, diluted EPS reflects
the potential dilution of securities that could share in the earnings. This
Statement is not expected to have a material effect on Chrysler's reported EPS
amounts. This Statement is effective for Chrysler's financial statements for the
year ended December 31, 1997.
REVIEW BY INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP, Chrysler's independent public accountants, performed
a review of the financial statements for the three months ended March 31, 1997
and 1996 in accordance with the standards for such reviews established by the
American Institute of Certified Public Accountants. The review did not
constitute an audit, and accordingly, Deloitte & Touche LLP did not express an
opinion on the aforementioned data. Refer to the Independent Accountants' Report
included at Exhibit 15A.
10
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
STATEMENT OF EARNINGS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
(IN MILLIONS OF DOLLARS)
<S> <C> <C>
Sales of manufactured products.............................. $15,261 $14,174
Equity in earnings of unconsolidated subsidiaries and
affiliates................................................ 133 160
Interest income and other revenues.......................... 201 172
------- -------
TOTAL REVENUES......................................... 15,595 14,506
------- -------
Costs, other than items below............................... 11,866 10,971
Depreciation and special tools amortization................. 641 583
Selling and administrative expenses......................... 999 912
Employee retirement benefits................................ 322 306
Interest expense............................................ 63 64
------- -------
TOTAL EXPENSES......................................... 13,891 12,836
------- -------
EARNINGS BEFORE INCOME TAXES........................... 1,704 1,670
Provision for income taxes.................................. 675 665
------- -------
NET EARNINGS........................................... $ 1,029 $ 1,005
======= =======
</TABLE>
This Supplemental Information does not present the results of operations of
Chrysler in accordance with generally accepted accounting principles. This
Supplemental Information reflects the results of operations of Chrysler with its
investments in Chrysler Financial Corporation ("CFC") and short-term vehicle
rental subsidiaries (the "Car Rental Operations") accounted for on an equity
basis rather than as consolidated subsidiaries and, therefore, does not comply
with Statement of Financial Accounting Standards ("SFAS") No. 94, "Consolidation
of All Majority-Owned Subsidiaries." 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.
11
<PAGE> 14
ITEM 5. OTHER INFORMATION -- CONTINUED
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
-------- ----------------------
MARCH 31 DECEMBER 31 MARCH 31
-------- ----------- --------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents................................... $ 5,560 $ 4,825 $ 5,626
Marketable securities....................................... 2,064 2,122 1,521
------- ------- -------
Total cash, cash equivalents and marketable securities...... 7,624 6,947 7,147
Accounts receivable -- trade and other...................... 928 630 1,893
Inventories................................................. 4,644 4,364 4,386
Prepaid employee benefits, taxes and other expenses......... 1,686 1,893 880
Property and equipment...................................... 14,110 13,877 11,953
Special tools............................................... 3,924 3,924 3,481
Investments in and advances from/to unconsolidated
subsidiaries and affiliated companies..................... 3,101 2,874 3,751
Intangible assets........................................... 1,612 1,627 1,761
Deferred tax assets......................................... 1,668 1,624 1,807
Other assets................................................ 5,976 5,448 5,681
------- ------- -------
TOTAL ASSETS......................................... $45,273 $43,208 $42,740
======= ======= =======
LIABILITIES:
Accounts payable............................................ $ 8,632 $ 8,238 $ 8,189
Accrued liabilities and expenses............................ 8,719 8,525 7,629
Short-term debt............................................. 314 346 346
Payments due within one year on long-term debt.............. 21 22 44
Long-term debt.............................................. 2,288 1,206 1,769
Accrued noncurrent employee benefits........................ 9,537 9,365 9,299
Other noncurrent liabilities................................ 3,995 3,935 4,057
------- ------- -------
TOTAL LIABILITIES.................................... 33,506 31,637 31,333
------- ------- -------
SHAREHOLDERS' EQUITY: (shares in millions)
Preferred stock - $1 per share par value; authorized 20.0
shares; Series A Convertible Preferred Stock; issued and
outstanding: 1997 -- 0.03; 1996 -- 0.04 and 0.12 shares,
respectively (aggregate liquidation preference 1997 -- $15
million; 1996 -- $21 million and $58 million,
respectively)............................................. * * *
Common stock -- $1 per share par value; authorized 1,000.0
shares; issued: 1997 -- 822.3; 1996 -- 821.6 and 408.8
shares, respectively...................................... 822 822 409
Additional paid-in capital.................................. 5,163 5,129 5,514
Retained earnings........................................... 9,560 8,829 7,034
Treasury stock -- at cost: 1997 -- 134.4 shares; 1996 --
119.1 and 34.8 shares, respectively....................... (3,778) (3,209) (1,550)
------- ------- -------
TOTAL SHAREHOLDERS' EQUITY........................... 11,767 11,571 11,407
------- ------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........... $45,273 $43,208 $42,740
======= ======= =======
</TABLE>
- -------------------------
* Less than $1 million
This Supplemental Information does not present the financial position of
Chrysler in accordance with generally accepted accounting principles. This
Supplemental Information 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 and, therefore, 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.
12
<PAGE> 15
ITEM 5. OTHER INFORMATION -- CONTINUED
SUPPLEMENTAL INFORMATION
CHRYSLER (WITH CFC AND CAR RENTAL OPERATIONS ON AN EQUITY BASIS)
CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
(IN MILLIONS OF DOLLARS)
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES................... $1,514 $1,440
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities........................ (181) (433)
Sales and maturities of marketable securities............. 219 796
Expenditures for property and equipment................... (540) (613)
Expenditures for special tools............................ (273) (207)
Purchases of vehicle operating leases..................... (89) (5)
Other..................................................... 1 127
------ ------
NET CASH USED IN INVESTING ACTIVITIES................ (863) (335)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt................................. (32) 76
Proceeds from long-term borrowings........................ 1,088 14
Payments on long-term borrowings.......................... (2) (12)
Change in advances from CFC............................... (152) --
Repurchases of common stock............................... (561) (329)
Dividends paid............................................ (283) (229)
Other..................................................... 26 21
------ ------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES.......................................... 84 (459)
------ ------
Change in cash and cash equivalents....................... 735 646
Cash and cash equivalents at beginning of period.......... 4,825 4,980
------ ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD................ $5,560 $5,626
====== ======
</TABLE>
This Supplemental Information does not present the cash flows of Chrysler
in accordance with generally accepted accounting principles. This Supplemental
Information 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 and, therefore, does not comply with SFAS No. 94,
"Consolidation of All Majority-Owned Subsidiaries." 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.
13
<PAGE> 16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
The exhibits filed with this Report are listed in the Exhibit Index which
immediately precedes such exhibits.
(B) REPORTS ON FORM 8-K
A report on Form 8-K, dated February 7, 1997, was filed during the three
months ended March 31, 1997, reporting the completion of a Rule 144A sale to
institutional investors of $500 million in aggregate principal amount of 7.45%
Debentures due 2097. This item was reported under Item 5 of such Form 8-K.
14
<PAGE> 17
CONFORMED
SIGNATURE
Pursuant to the requirements 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
--------------------------------------
(Registrant)
Date: April 10, 1997 By J. D. Donlon, III
------------------------------------
J. D. Donlon, III
Vice President and Controller
(Principal Accounting Officer)
15
<PAGE> 18
EXHIBIT INDEX
FOR QUARTERLY REPORT ON FORM 10-Q FOR THE
QUARTERLY PERIOD ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
EXHIBIT
- -------
<C> <S>
4-D-7 Appendix E to Indenture, dated as of March 1, 1985, as
amended and supplemented, between Chrysler Corporation and
State Street Bank and Trust Company, as successor Trustee to
Manufacturers Hanover Trust Company. Filed as Exhibit 4-D-7
to Registration No. 333-21849 on Form S-4 of Chrysler
Corporation and incorporated herein by reference (not
included herewith).
4-D-8 Appendix F to Indenture, dated as of March 1, 1985, as
amended and supplemented, between Chrysler Corporation and
State Street Bank and Trust Company, as successor Trustee to
Manufacturers Hanover Trust Company. Filed as Exhibit 4-D-8
to Registration No. 333-21849 on Form S-4 of Chrysler
Corporation and incorporated herein by reference (not
included herewith).
4-D-9 Appendix G to Indenture, dated as of March 1, 1985, as
amended and supplemented, between Chrysler Corporation and
State Street Bank and Trust Company, as successor Trustee to
Manufacturers Hanover Trust Company. (Filed with this
report.)
10-A-10 Copy of Chrysler Corporation 1991 Stock Compensation Plan,
as amended and in effect on and after February 6, 1997.
(Filed with this report.)
10-A-11 Copy of Chrysler Corporation Stock Option Plan, as amended
through February 6, 1997. (Filed with this report.)
11 Statement regarding computation of earnings per common
share. (Filed with this report.)
15A Letter, dated April 10, 1997, re unaudited interim
information. (Filed with this report.)
15B Letter, dated April 10, 1997, re unaudited interim
information. (Filed with this report.)
27 Financial Data Schedule for three months ended March 31,
1997. (Filed with this report.)
</TABLE>
16
<PAGE> 1
EXHIBIT 4-D-9
APPENDIX G
TO
INDENTURE
DATED AS OF MARCH 1, 1985, BETWEEN
CHRYSLER CORPORATION
AND
STATE STREET BANK AND TRUST COMPANY
(as successor Trustee to Manufacturers Hanover Trust Company)
7.45% DEBENTURES DUE 2027
There is hereby created under this Indenture a series of Debt Securities
known and designated as the "7.45% Debentures due 2027" of the Company (in this
Appendix sometimes referred to as the "Debentures"). The aggregate principal
amount of Debentures which may be authenticated and delivered under this
Indenture is limited to $600,000,000, except for Debentures authenticated and
delivered upon transfer of, or in exchange for, or in lieu of, other Debentures
pursuant to Section 304, 305, 306 or 906.
The Stated Maturity of the Debentures shall be March 1, 2027, and the
Debentures shall bear interest at the rate of 7.45% per annum, from March 3,
1997, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, payable semiannually on March 1 and September 1 of
each year, commencing September 1, 1997, to the Persons in whose names the
Debentures (or any Predecessor Securities) are registered at the close of
business on the February 15 or August 15 next preceding such Interest Payment
Date, until the principal thereof is paid or made available for payment.
The Debentures shall be redeemable as set forth in the form thereof.
The Depositary for the Debentures shall be The Depository Trust Company
until a successor Depositary shall have become such pursuant to the applicable
provisions of this Debenture, and thereafter the Depositary shall be such
successor Depositary.
The certificates evidencing the Debentures shall be in substantially the
following form:
FORM OF FACE OF DEBENTURE
CHRYSLER CORPORATION
7.45% DEBENTURES DUE 2027
[If this Debenture is to be issued in the form of a Global Security insert
the following:
Unless and until this Debenture is exchanged in whole or in part for one or
more Debentures in definitive registered form, this Debenture may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.]
No. . . . . . . $ . . . . . . .
CHRYSLER CORPORATION, a Delaware corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to, or
registered assigns, the principal sum of Dollars on March 1, 2027, and to pay
interest thereon from March 3, 1997, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semiannually on March
1 and September 1 in each year, commencing September 1, 1997, at the rate of
7.45% per annum, until the principal hereof is paid or made available for
<PAGE> 2
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the February 15 or August 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the registered Holder on such Regular Record Date, and may be paid to
the Person in whose name this Debenture (or one or more Predecessor Securities)
is registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Debentures not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Debentures may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture. Payment of the principal
of and interest on this Debenture will be made at the office or agency of the
Company maintained for that purpose in Chicago, Illinois, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
address of, or by wire transfer to an account designated by, the person entitled
thereto as such address shall appear on the Security Register.
Reference is hereby made to the further provisions of this Debenture set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by manual
signature by the Trustee referred to on the reverse hereof, this Debenture shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal by the manual or facsimile signatures of its
officers thereunto duly authorized.
<TABLE>
<S> <C>
Dated: CHRYSLER CORPORATION
[SEAL] By
Attest: --------------------------------------------
- --------------------------------------------
Assistant Secretary
</TABLE>
G-2
<PAGE> 3
FORM OF REVERSE OF DEBENTURE
CHRYSLER CORPORATION
7.45% DEBENTURES DUE 2027
This Debenture is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness of the Company (herein called the "Debt
Securities") of the series hereinafter specified, all issued and to be issued
under an Indenture (herein called the "Indenture") dated as of March 1, 1985,
between the Company and MANUFACTURERS HANOVER TRUST COMPANY as Trustee (herein
called the "Trustee" which term includes State Street Bank and Trust Company and
any other successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Debt Securities,
and of the terms upon which the Debt Securities are, and are to be,
authenticated and delivered. The Debt Securities may be issued in one or more
series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if any) at different
rates, may be subject to different redemption provisions (if any), and may
otherwise vary as in the Indenture provided. This Debenture is one of a series
designated as the 7.45% Debentures due 2027 of the Company, limited in aggregate
principal amount to $600,000,000 (herein called the "Debentures").
The Debentures may be redeemed as a whole or in part, at the option of the
Company at any time and from time to time, upon mailing a notice of such
redemption not less than 30 nor more than 60 days prior to the date fixed for
redemption to the Holders of the Debentures at their address appearing in the
Security Register, all as provided in the Indenture, at a redemption price equal
to the greater of (i) 100% of the principal amount of the Debentures to be
redeemed and (ii) the sum of the present values of the Remaining Scheduled
Payments thereon discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 18 basis points, together in either case with accrued interest on the
principal amount being redeemed to the date of redemption (but interest
installments whose Stated Maturity is on the Redemption Date will be payable to
the Holders of such Debentures, or one or more Predecessor Securities, of record
at the close of business on the relevant Record Date referred to on the face
hereof) all as provided in the Indenture.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Debentures to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Debentures.
"Comparable Treasury Price" means with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer as of 3:30 p.m., New York time, on the third business day
preceding such redemption date.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Company.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, Chase
Securities Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc. and their
G-3
<PAGE> 4
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
nationally recognized investment banking firm that is a Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to each Debenture to be
redeemed, the remaining scheduled payments of the principal thereof and interest
thereon that would be due after the related redemption date but for such
redemption; provided, however, that, if such redemption date is not an interest
payment date with respect to such Debenture, the amount of the next succeeding
scheduled interest payment thereon will be reduced by the amount of interest
accrued thereon to such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity (computed as of the
second business day immediately preceding such redemption date) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures for the unredeemed portion hereof shall be issued in the name of
the Holder hereof upon the cancellation hereof.
If an Event of Default, as defined in the Indenture, with respect to the
Debentures, shall occur and be continuing, the principal of all the Debentures
may be declared due and payable in the manner and with the effect provided in
the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities under the Indenture
at any time by the Company with the consent of the Holders of 66 2/3% in
aggregate principal amount of the Debt Securities of each series at the time
Outstanding and also permits the Company and the Trustee, in certain
circumstances, to amend the Indenture without notice to, or the consent of, the
Holders of any of the Debt Securities. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Debt Securities of any series at the time Outstanding, on behalf of the
Holders of all the Debt Securities of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Debenture shall be conclusive and binding upon such holder and upon all
future Holders of this Debenture and of any Debenture issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Debenture.
Holders of Debt Securities may not enforce their rights pursuant to the
Indenture or the Debt Securities except as provided in the Indenture. No
reference herein to the Indenture and no provision of this Debenture or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and interest on this Debenture at the
times, place, and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, this Debenture is transferable on the Security Register of the Company,
upon surrender of this Debenture for registration of transfer at the office or
agency of the Company in Boston, Massachusetts duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company, the
Security Registrar and the Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Debentures of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Debentures are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Debentures are
exchangeable for a like aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holder surrendering the same.
No service charge shall be made for any such transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
G-4
<PAGE> 5
The Company, the Trustee and any agent of the Company or the Trustee may
treat the person in whose name this Debenture is registered as the owner hereof
for all purposes, whether or not this Debenture be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture and the Debentures shall be governed by, and construed in
accordance with, the laws of the State of New York.
All terms used in the Debentures which are defined in the Indenture,
including Appendix G thereto, shall have the meanings assigned to them therein.
G-5
<PAGE> 1
EXHIBIT 10-A-10
CHRYSLER CORPORATION
1991 STOCK COMPENSATION PLAN
EFFECTIVE MAY 16, 1991
AS AMENDED THROUGH FEBRUARY 6, 1997
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 14 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) "Director" means any member of the Board, whether or not such
member is a Nonemployee Director, and "Nonemployee Director" means a
Director who is not an employee of the Company, any Subsidiary or any
Related Entity.
(h) "Disability" means being permanently and totally disabled under
any insurance program of the Company, any Subsidiary or any Related Entity,
except that, in the case of a Nonemployee Director, Disability shall mean a
permanent and total disability within the meaning of Section 22(e) of the
Code.
(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 Sections 9, 10, and
11 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; except that, in the case of a Nonemployee Director,
Restricted Stock Unit shall mean the right to receive one share of Stock as
set forth in Section 10 of the Plan.
(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; except that, in the case of a
Nonemployee Director, Retirement shall mean termination of service as a
Director after attaining age 72 (or such other age as the Board may
establish from time to time by resolution) for purposes of Section 10 of
the Plan.
(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
two Nonemployee Directors, each of whom shall be a "Non-Employee Director"
within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended from time to time (the "Exchange Act"), or meet any other
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applicable standard for administrators under that or any similar rule which may
be in effect from time to time. Each member of the Committee shall be appointed
by the Board and serve at the pleasure of the Board.
The Committee shall have the power and authority in its sole discretion to
grant Awards to Eligible Employees pursuant to the terms and provisions of the
Plan.
In particular, the Committee shall have full authority, not inconsistent
with the Plan:
(a) to select Participants from among the Eligible Employees;
(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 may be increased from time to time in
accordance with Section 12 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 opposed 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.
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To the extent that (a) a Stock Option expires or is otherwise terminated,
cancelled or surrendered without being exercised (including, without limitation,
in connection with the grant of a replacement option) or (b) any Restricted
Stock Unit Award or Performance Stock Unit Award granted hereunder expires or is
otherwise terminated or is cancelled, the shares of Stock underlying such Stock
Option or subject to such Restricted Stock Unit Award or Performance Stock Unit
Award shall again be available for issuance in connection with future Awards
under the Plan.
Upon the exercise of a Related Stock Appreciation Right or Related Limited
Stock Appreciation Right (as defined in Section 7 of the Plan), the Stock
Option, or the part thereof to which such Related Stock Appreciation Right or
Related Limited Stock Appreciation Right is related, shall be deemed to have
been exercised for the purpose of the limitation on the number of shares of
Stock to be issued under the Plan, but only to the extent of the number of
shares of Stock in respect of which the Related Stock Appreciation Right or
Related Limited Stock Appreciation Right was exercised.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure or
capitalization affecting the Stock, the Committee in its sole discretion may
make an adjustment or substitution in the number and class of shares reserved
for issuance under the Plan, the number and class of shares covered by
outstanding Awards and the option price per share of Stock Options or the
applicable price per share specified in Stock Appreciation Rights or Limited
Stock Appreciation Rights to reflect the effect of such change in corporate
structure or capitalization on the Stock; provided, however, that any fractional
shares resulting from such adjustment shall be eliminated; provided, further,
however, that if by reason of any such change in corporate structure or
capitalization a Participant holding a Restricted Stock Unit Award or
Performance Stock Unit Award shall be entitled, subject to the terms and
conditions of such Award, to additional or different shares of any security, the
issuance of such additional or different shares shall thereupon be subject to
all of the terms and conditions (including restrictions and performance
criteria) which 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
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forth, among other things, the option price of the option, the term of the
option and conditions regarding exercisability of the option granted thereunder.
(i) Nature of Options. The Committee shall have the authority to grant
any Participant either Incentive Stock Options, Nonqualified Stock Options
or both types of Stock Options (in each case with or without Stock
Appreciation Rights or Limited Stock Appreciation Rights), except that the
Committee shall not grant any Incentive Stock Options to an employee of a
Related Entity. Any Stock Option which does not qualify as an Incentive
Stock Option, or the terms of which at the time of its grant provide that
it shall not be treated as an Incentive Stock Option, shall constitute a
Nonqualified Stock Option.
(ii) Exercisability. Subject to such terms and conditions as shall be
determined by the Committee in its sole discretion at or after the time of
grant, Stock Options shall be exercisable from time to time to the extent
of 40% of the number of shares of Stock covered by the Stock Option on and
after the first anniversary and before the second anniversary of the date
of grant of the Stock Option, to the extent of 70% of the number of shares
of Stock covered by the Stock Option on and after the second anniversary
and before the third anniversary of the date of grant of the Stock Option
and to the extent of 100% of the number of shares of Stock covered by the
Stock Option on and after the third anniversary of the date of grant of the
Stock Option and before the expiration of the stated term of the Stock
Option (or to such lesser extent as the Committee in its sole discretion
shall determine at the time of grant or to such greater extent as the
Committee in its sole discretion shall determine at or after the time of
grant).
(iii) Method of Exercise. Stock Options may be exercised by giving
written notice of exercise delivered in person or by mail as required by
the terms of any Stock Option Agreement at the Company's principal
executive office, specifying the number of shares of Stock with respect to
which the Stock Option is being exercised, accompanied by payment in full
of the option price in cash or its equivalent as determined by the
Committee in its sole discretion. If requested by the Committee, the
Optionee shall deliver to the Company the Stock Option Agreement evidencing
the Stock Option being exercised for notation thereon of such exercise and
return thereafter of such agreement to the Optionee. As determined 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. 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). 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
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Option representing at least the after-tax profit received upon exercise of
the Original Option, as the Committee in its sole discretion shall deem
desirable and which may be set forth in rules or guidelines adopted by the
Committee or in the Stock Option Agreements evidencing the Reload Options.
(b) Terms and Conditions. Stock Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable.
(i) Option Price. The option price per share of Stock purchasable
under a Stock Option (other than a Reload Option) shall be determined by
the Committee at the time of grant, but shall be not less than 100% of the
Fair Market Value of the Stock on the date of the grant; provided, however,
that if any Participant owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the Company or any
Subsidiary when an Incentive Stock Option is granted to such Participant,
the option price of such Incentive Stock Option (to the extent required by
the Code at the time of grant) shall be not less than 110% of the Fair
Market Value of the Stock on the date such Incentive Stock Option is
granted.
(ii) Option Term. The term of each Stock Option shall be fixed by the
Committee at the time of grant, but no Stock Option shall be exercisable
more than ten years after the date such Stock Option is granted; provided,
however, that if any Participant owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the Company or any
Subsidiary when an Incentive Stock Option is granted to such Participant,
such Stock Option (to the extent required by the Code at time of grant)
shall not be exercisable more than five years from the date such Incentive
Stock Option is granted.
(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
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request of the Company or a Subsidiary, with another Related Entity), the
Committee in its sole discretion may permit the Optionee to exercise any
Stock Option held by such Optionee after the date of such termination at
any time until the expiration of the stated term of such Stock Option (or
such shorter period as the Committee in its sole discretion shall specify
at or after the time of grant), to the extent that the Optionee would on
the date of exercise have been entitled to exercise such Stock Option if
such Optionee had continued to be employed by the Company or such
Subsidiary (or such initial Related Entity), provided that the Optionee has
been in continuous employ with the Related Entity to which such Optionee
has moved from the date of acceptance of employment therewith until the
date of exercise. In the event of a termination of employment by the
Company, any Subsidiary or any Related Entity under mutually satisfactory
conditions, if an Incentive Stock Option is exercised after the expiration
of the exercise period that applies for purposes of Section 422 of the
Code, such Stock Option will thereafter be treated as a Nonqualified Stock
Option.
(vi) Option Exercise After Termination by Death. If (x) an Optionee's
employment with the Company, any Subsidiary or any Related Entity
terminates by reason of death, (y) an Optionee dies within the five year
period (or such shorter period as the Committee shall have specified for
exercise in accordance with Section 5(a)(iv) of the Plan) following
termination by reason of Disability or Retirement as set forth in Section
5(a)(iv) of the Plan or (z) an Optionee dies within the one year period (or
such shorter period as the Committee shall have specified for exercise in
accordance with Section 5(a)(v) of the Plan) following termination under
mutually satisfactory conditions as set forth in the first sentence of
Section 5(a)(v) of the Plan, any Stock Option held by such Optionee may
thereafter be exercised by the legal representative of the estate or by the
legatee of the Optionee under the will of the Optionee for a period of one
year (or such shorter period as the Committee in its sole discretion shall
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 14
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 14 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.
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Participants shall enter into a Stock Appreciation Rights agreement with the
Company if requested by the Committee, in such form as the Committee shall
determine.
(i) Time of Grant. Related Stock Appreciation Rights related to a
Nonqualified Stock Option may be granted either at or after the time of the
grant of such Nonqualified Stock Option. Related Stock Appreciation Rights
related to an Incentive Stock Option may be granted only at the time of the
grant of such Incentive Stock Option. Freestanding Stock Appreciation
Rights may be granted at any time.
(ii) Exercisability. Related Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the Stock
Options to which they relate shall be exercisable in accordance with the
provisions of Section 5(a)(ii) of the Plan and Freestanding Stock
Appreciation Rights shall be exercisable, subject to such terms and
conditions as shall be determined by the Committee in its sole discretion
at or after the time of grant, from time to time, to the extent that Stock
Options are exercisable in accordance with the provisions of Section
5(a)(ii) of the Plan. 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.
(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 14 of the Plan) of one share of Stock on the date of exercise,
multiplied by the number of shares of Stock in respect of which the Limited
Stock Appreciation Right shall have been exercised.
(b) Other Provisions. The other provisions of Section 6 of the Plan shall
apply to Limited Stock Appreciation Rights to the extent not inconsistent with
the provisions of this Section 7.
SECTION 8. RESTRICTED STOCK UNITS AND PERFORMANCE STOCK UNITS.
(a) Grant. Awards of Restricted Stock Units or Performance Stock Units may
be granted either alone or in addition to other Awards granted under the Plan.
Each Restricted Stock Unit or Performance Stock Unit represents the right to
receive, subject to the terms and provisions of the Plan and any agreements
evidencing such Awards, one share of Stock. If the Committee in its sole
discretion so determines at the time of grant, a Participant to whom a
Restricted Stock Unit Award or Performance Stock Unit Award has been granted may
be credited with an amount equivalent to all cash dividends ("Dividend
Equivalents") that would have been paid to the holder of such Restricted Stock
Unit Award or Performance Stock Unit Award if one share of Stock for every
Restricted Stock Unit or Performance Stock Unit awarded had been issued to the
holder on the date of grant of such Restricted Stock Unit Award or Performance
Stock Unit Award. The Committee shall determine the terms and conditions of each
Restricted Stock Unit Award and Performance Stock Unit Award including, without
limitation, the number of Restricted Stock Units or Performance Stock Units to
be covered by such Award, the restricted period applicable to Restricted Stock
Unit Awards and the performance objectives applicable to Performance Stock Unit
Awards. The Committee in its sole discretion may prescribe
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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 may 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 14 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 15(a) of the Plan; and
(ii) any Dividend Equivalents credited in respect of such Restricted
Stock Units or Performance Stock Units shall become vested to the extent
that such Restricted Stock Units or Performance Stock Units shall have
become vested and the Committee shall cause such Dividend Equivalents to be
delivered to the Participant.
Any such Restricted Stock Unit Award or Performance Stock Unit Award
(including any Dividend Equivalents credited in respect thereof) that shall not
have become vested at the end of the applicable restricted period or the period
given for the attainment of performance objectives shall expire, terminate and
be cancelled and the Participant shall not thereafter have any rights with
respect to the Restricted Stock Units or Performance Stock Units (or any
Dividend Equivalents credited in respect thereof) covered thereby.
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SECTION 9. GRANT OF STOCK OPTIONS, STOCK APPRECIATION RIGHTS AND LIMITED STOCK
APPRECIATION RIGHTS TO NONEMPLOYEE DIRECTORS.
Each Nonemployee Director who is elected or reelected as a Director on or
after May 16, 1991 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. Unless the Board shall otherwise
determine and subject to Section 14 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, unless the Board shall
establish a different schedule as to all, any or any class of Nonemployee
Directors, 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.
SECTION 10. GRANT OF RESTRICTED STOCK UNITS TO NONEMPLOYEE DIRECTORS.
(a) Unit Awards. Each Nonemployee Director who is first elected to the
Board after December 31, 1995 shall be awarded 3,000 Restricted Stock Units on
the date of his or her initial election.
(b) Delivery of Stock. Subject to satisfaction of the applicable vesting
requirements set forth in (c) below and except as otherwise provided in Section
14, a number of shares of Stock corresponding to the number of Restricted Stock
Units awarded to a Nonemployee Director (including those credited under Section
10(e) below) shall be delivered to such Nonemployee Director and transferred on
the books of the Company on the first business day of the month immediately
following the termination of such Nonemployee Director's service as a Director;
provided that any fractional shares of Stock shall be paid in cash based upon
the Fair Market Value on the date such shares would otherwise have been
delivered to the Nonemployee Director or the Nonemployee Director's beneficiary.
Alternatively, in lieu of such Stock the Nonemployee
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<PAGE> 12
Director may elect, on or before the date of his or her termination of service,
to receive an amount in cash equal to (i) the Fair Market Value of a share of
Stock on such date, multiplied by (ii) the number of Restricted Stock Units
awarded and credited to him or her. Upon the delivery of a share of Stock (or
cash with respect to a fractional share) or the equivalent amount in cash, as
such Nonemployee Director may elect, the corresponding Restricted Stock Unit (or
fraction thereof) shall be canceled and be of no further force or effect.
(c) Vesting. Except as otherwise provided by action of the Board in this
Section or Section 14, if the service of a Nonemployee Director terminates prior
to the completion of five consecutive Years of Service as a Director following
his or her initial election, all Restricted Stock Units awarded and credited to
such Nonemployee Director pursuant to this Section 10 shall be immediately
forfeited. As used in this Section 10, 'Year of Service as a Director' means the
period of service as a Director measured from the date of one annual meeting of
the Company's stockholders to the next annual meeting of stockholders.
Notwithstanding the foregoing, if the Nonemployee Director's service terminates
by reason of his/her death, Disability or Retirement prior to the completion of
five Years of Service as a Director following his or her initial election, the
rights of the Nonemployee Director in respect of his or her Restricted Stock
Units shall become fully and immediately vested in connection with such
Director's termination of service. In the event of the death of a Nonemployee
Director, the shares of Stock corresponding to such Director's outstanding
Restricted Stock Units, if any, shall be delivered to the beneficiary designated
by the Nonemployee Director on a form provided by the Company, or, in the
absence of such designation, to the Nonemployee Director's estate.
(d) Nontransferability. Restricted Stock Units may not be assigned or
transferred, in whole or in part, either directly or by operation of law (except
in the event of a Nonemployee Director's death by will or applicable laws of
descent and distribution), including, but not by way of limitation, by
execution, levy, garnishment, attachment, pledge, bankruptcy or in any other
manner, and no such right or interest of any Nonemployee Director in the Plan
shall be subject to any obligation or liability of such Nonemployee Director.
(e) Dividend Equivalents. A Nonemployee Director shall have no rights as a
stockholder of the Company with respect to any Restricted Stock Units until
shares of Stock are delivered to the Director pursuant to this Section 10. On or
as soon as practicable after each date on which dividends are paid to
stockholders with respect to Stock, the account of each Nonemployee Director
shall be credited with an additional number of Restricted Stock Units computed
pursuant to the following formula. With respect to dividends paid in cash or
property other than Stock, the number of Restricted Stock Units to be credited
to each Nonemployee Director's account shall be determined by dividing (i) the
product of (x) the amount of any cash dividend (or the value of any other
property) payable per share of Stock for the applicable dividend payment date
and (y) the number of Restricted Stock Units in such Nonemployee Director's
account on the record date for the payment of such dividend by (ii) the Fair
Market Value of a share of Stock on such record date. With respect to any stock
dividend declared, each Nonemployee Director's account shall be credited with a
number of Restricted Stock Units equal to the product of (i) the number of
Restricted Stock Units in such Nonemployee Director's account on the record date
for the payment of such dividend and (ii) any stock dividend declared on a share
of Stock.
SECTION 11. PAYMENT OF ANNUAL RETAINER FEE TO NONEMPLOYEE DIRECTORS.
(a) Fees Payable in Stock. Effective with respect to services rendered
after the Company's 1996 Annual Meeting of Stockholders, the annual retainer fee
payable to a Nonemployee Director for service as a Director, for service as a
member of a committee of the Board, and for service as chairperson of such a
committee during a given year (collectively, the "Annual Retainer Fee"), will be
paid in shares of the Company's Common Stock pursuant to the formula set forth
below. In the case of a Nonemployee Director first elected to the Board
following any annual meeting of shareholders, the portion of the Annual Retainer
Fee otherwise payable from the date of such election to the next annual meeting
will be paid in Stock. Fees payable to a Nonemployee Director for attendance at
meetings of the Board or any of its committees will not be paid in Common Stock.
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(b) Calculation of Shares Issuable. The number of whole shares of Stock
issuable in respect of a Nonemployee Director's Annual Retainer Fee for a given
year will be equal to the remainder of (i) the number of shares of Stock
determined by dividing the aggregate dollar amount of the Annual Retainer Fee by
the Fair Market Value of a share of Stock on the date of the annual meeting of
shareholders in such year (or, in the case of a Director first elected to the
Board following the annual meeting of shareholders for a given year, at the date
of such election) minus (ii) the greatest number of whole shares of Stock equal
to, but not in excess of, each Nonemployee Director's hypothetical income and
employment tax liability with respect to the Annual Retainer Fee payable
assuming that each Nonemployee Director pays Federal income tax at the highest
marginal rate in effect at such time, State and local income taxes at the
highest marginal rate in effect at such time for the locale in which the
Nonemployee Director resides and Medicare taxes at the rate in effect at such
time under Section 3101(b) of the Code. Any fractional shares resulting from the
above calculation will be settled in cash.
SECTION 12. AMENDMENT AND TERMINATION.
The Board or the Committee may amend, alter, or discontinue the Plan, in
its sole discretion, but no amendment, alteration, or discontinuation shall be
made which would impair the rights of a Participant under any Award theretofore
granted without such Participant's consent, or which, without the approval of
the stockholders of the Company (where such approval is necessary to satisfy
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, 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 13. 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 14. 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;
(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;
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(iii) (A) any Restricted Stock Unit Award and any Performance Stock
Unit Award granted under the Plan that has become fully vested and
freely transferable or has not been paid in full prior to the Change in
Control shall be cancelled in exchange for an immediate cash payment
equal to the product of (x) the number of shares of Stock covered by
such Restricted Stock Unit Award or Performance Stock Unit Award,
whichever is applicable, multiplied by (y) the amount determined in
accordance with clause (y) of subsection (e) of this Section 14, and (B)
Dividends Equivalents credited in respect of any such Restricted Stock
Unit Award or Performance Stock Unit Award shall be deemed fully vested
and payable immediately upon such Change in Control; and
(iv) 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 expiration of 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 14) is or becomes the
Beneficial Owner (as defined in this Section 14) of securities of the
Company representing 20% or more of the combined voting power of the
Company's then outstanding securities (unless the event causing the 20%
threshold to be crossed is an acquisition of securities directly from
the Company);
(ii) during any period of two consecutive years beginning after May
16, 1991, individuals who at the beginning of such period constitute the
Board and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a
transaction described in clause (i), (iii) or (iv) of this Change in
Control definition) whose election or nomination for election was
approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved cease for
any reason to constitute a majority of the Board;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (other than a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the entity surviving such merger or consolidation),
in combination with voting securities of the Company or such surviving
entity held by a trustee or other fiduciary pursuant to any employee
benefit plan of the Company or such surviving entity or of any
Subsidiary of the Company or such surviving entity, at least 80% of the
combined voting power of the securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation); or
(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 as 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.
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(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 14, "Change in Control Stock
Appreciation" with respect to any share of Stock shall mean an amount equal
to the excess, if any, of
(i) the higher of (x) the Fair Market Value of such share on the
date the Limited Stock Appreciation Right is exercised or (y) (A) in the
case of transactions described in clauses (i) or (iii) of the Change in
Control definition, the highest per share price paid (below called the
"Highest Price") for shares of Stock in the transaction constituting the
Change in Control, (B) in the case of a transaction described in clause
(ii) of the Change in Control definition which occurs in connection with
a transaction described in clauses (i), (iii), or (iv) of the Change in
Control definition, the Highest Price, (C) in the case of a transaction
described in clause (ii) of the Change in Control definition which does
not occur in connection with a transaction described in clauses (i),
(iii) or (iv) of the Change in Control definition, the average of the
daily closing prices per share of Stock of the Company on the New York
Stock Exchange, if such shares are traded thereon, or, if not, such
other national securities exchange on which such shares are admitted to
trade or, if none, the National Association of Securities Dealers
Automated Quotation System if such shares are admitted for quotation
thereon, on the thirty consecutive trading days immediately preceding
the Change in Control or (D) in the case of a transaction described in
clause (iv) of the Change in Control definition, the equivalent of the
Highest Price as determined by the Committee, over
(ii) in the case of a Related Limited Stock Appreciation Right, the
option price specified in the related Stock Option and, in the case of a
Freestanding Limited Stock Appreciation Right, the price per share
specified therein, which shall not be less than 100% of the Fair Market
Value of the Stock on the date of grant; provided, however, that with
respect to a Related Limited Stock Appreciation Right associated with a
Stock Option which is an Incentive Stock Option immediately prior to the
exercise of such Limited Related Stock Appreciation Right, the Change in
Control Stock Appreciation thereon shall not exceed the maximum amount
which will permit such Stock Option to continue to qualify as an
Incentive Stock Option.
SECTION 15. 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
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<PAGE> 16
then listed or quotation system on which the Stock is admitted for trading and
any applicable federal or state securities law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(b) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required, and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan shall
not confer upon any employee of the Company, any Subsidiary or any Related
Entity any right to continued employment with the Company, any Subsidiary or any
Related Entity, as the case may be, nor shall it interfere in any way with the
right of the Company, any Subsidiary or any Related Entity to terminate the
employment of any of its employees at any time.
(c) Each Participant shall be deemed to have been granted any Award on the
date the Committee took action to grant such Award under the Plan or such later
date as the Committee in its sole discretion shall determine at the time such
grant is authorized; provided, however, that a Reload Option shall be deemed to
have been granted on the date on which is exercised the Original Option in
respect of the exercise of which such Reload Option is granted or such later
date as the Committee in its sole discretion shall determine prior to the date
on which such exercise occurs.
(d) Unless the Committee otherwise determines, each Participant shall, no
later than the date as of which the value of an Award first becomes includible
in the gross income of the Participant for federal income tax purposes, pay to
the Company, or make arrangements satisfactory to the Committee regarding
payment of, any federal, state or local taxes of any kind required by law to be
withheld with respect to the Award. The obligations of the Company under the
Plan shall be conditional on such payment or arrangements and the Company (and,
where applicable, its Subsidiaries and its Related Entities) shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Participant.
A Participant (other than a Nonemployee Director) may elect to have such
tax withholding obligation satisfied, in whole or in part, by (i) authorizing
the Company to withhold from shares of Stock to be issued upon the exercise of a
Stock Option or Stock Appreciation Right or upon the vesting of any Restricted
Stock Unit Award or Performance Stock Unit Award a number of shares of Stock
with an aggregate Fair Market Value that would satisfy the withholding amount
due, or (ii) transferring to the Company shares of Stock owned by the
Participant with an aggregate Fair Market Value that would satisfy the
withholding amount due.
(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. 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
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<PAGE> 17
stock option" within the meaning of Section 422 of the Code, the Stock Option
granted shall nevertheless continue to be outstanding as and shall be deemed to
be a Nonqualified Stock Option under the Plan.
(g) A Participant may elect, on or after the date of grant of any Award, to
defer receipt of all or any portion of the proceeds of such Award or any
Dividend Equivalents in connection therewith, whether in the form of cash or
shares of Stock, deliverable to such Participant upon the exercise, vesting or
payment of any such Award or Dividend Equivalents, in each case to the extent
permitted by and subject to the terms and conditions set forth in any deferral
or similar plan or arrangement enacted by the Board or the Committee in its sole
discretion.
(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.
(i) This Plan shall not impose any obligations on the Company to retain any
Nonemployee Director as a Director nor shall it impose any obligation on the
part of any Nonemployee Director to remain as a Director of the Company,
provided that each Nonemployee Director, by accepting each award under the Plan,
shall represent to the Company that it is his or her good faith intention to
continue to serve as a Director of the Company until its next annual meeting of
stockholders and that he or she agrees to do so unless a change in circumstances
arises.
SECTION 16. 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 17. 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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EXHIBIT 10-A-11
CHRYSLER CORPORATION
STOCK OPTION PLAN
(as amended through February 6, 1997)
1. PURPOSE
The purpose of the Stock Option Plan is to enable Chrysler Corporation
(below called the Corporation) to be thoroughly competitive in encouraging
salaried officers and key employees and nonemployee Directors who are
responsible for the Corporation's future growth and success to remain in its
service and to attract others to it.
2. AMOUNT OF STOCK SUBJECT TO THIS PLAN
The total number of shares of Common Stock of the Corporation that may be
sold pursuant to options granted under this Plan shall not exceed (a) 1,500,000
shares as constituted at the time of the annual meeting of stockholders on April
19, 1966 reduced by the number of shares as to which options have been granted
and exercised since that time under any other stock option plan of the
Corporation, plus (b) 1,500,000 shares as constituted at the time of the annual
meeting of stockholders on May 3, 1977, plus (c) 3,500,000 shares as constituted
at the time of the annual meeting of stockholders on June 3, 1982 (all before
the three-for-two split of the Common Stock that became effective on February
20, 1986), plus (d) 7,500,000 shares as constituted at the time of the annual
meeting of stockholders on May 14, 1986. The shares sold under this Plan may be
either authorized and unissued shares or issued shares reacquired by the
Corporation at any time, as the Board of Directors from time to time may
determine. Unless and until the Board of Directors shall determine to purchase
shares in the market for the purpose of this Plan or to use treasury shares, the
shares sold under this Plan shall be authorized and unissued shares reserved for
that purpose. If any options granted under this Plan shall terminate, lapse or
expire for any reason without having been exercised in full, the shares not
purchased under the options shall be available again for the purposes of this
Plan; provided, however, that this sentence shall not apply to any shares as to
which an option is forfeited upon the exercise of a Stock Appreciation Right or
a Limited Stock Appreciation Right, as defined below.
3. ELIGIBILITY AND PARTICIPATION
Nonemployee Directors of the Corporation and salaried officers and key
employees of the Corporation, its subsidiaries and its Related Entities (as
defined below) who are responsible for or contribute to the management, growth
or profitability of the business of the Corporation, its subsidiaries or its
Related Entities shall be eligible to be granted options, and any former
employees of the Corporation, its subsidiaries and its Related Entities shall be
eligible to be granted Reload Options (as defined in paragraph 4 below) with
respect to stock options granted to such former employees; provided, however,
with respect to an employee of a Related Entity, that such person was an
employee of the Corporation, a subsidiary or, if originally an employee of the
Corporation or a subsidiary, or another Related Entity immediately prior to
becoming employed by such Related Entity and accepted employment with such
Related Entity at the request of the Corporation or a subsidiary. The term
"Related Entity" when used herein shall mean any corporation, joint venture or
other entity, domestic or foreign, other than a subsidiary, in which the
Corporation owns, directly or indirectly, a substantial equity interest. The
term "Nonemployee Director" means a Director who is not an employee of the
Corporation, any of its subsidiaries or any Related Entity.
4. GRANTING OF OPTIONS
The Board of Directors of the Corporation shall appoint a Stock Option
Committee (below called the Committee), consisting of not less than two
Nonemployee Directors, each of whom shall be a "Non-Employee Director" within
the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
from time to time (the "Exchange Act"), or meet any other applicable standard
for administrators
<PAGE> 2
under that or any similar rule in effect from time to time. Each member of the
Committee shall be appointed by the Board and serve at the pleasure of the
Board. The Committee shall have the power and authority granted to it in this
and other paragraphs of this Plan; provided, however, that the Board of
Directors shall have the right to exercise any and all such power and authority
and to perform each and every function of the Committee whenever, in the sole
discretion of the Board, this seems expedient.
Subject to the express provisions of this Plan, the Committee shall have
authority in its discretion from time to time, (a) to determine the salaried
officers and key employees of the Corporation, its subsidiaries and its Related
Entities to receive options, the times when they shall receive them, the number
of shares to be subject to each option, and the option price, (b) to determine
the terms and provisions of the option agreements applicable to options granted
under this Plan, to construe such terms and provisions, and to correct any
defect or supply any omission or reconcile any inconsistency in any option
agreement, and (c) to prescribe, amend, and rescind rules and regulations
relating to this Plan. The determination of the Committee with respect to such
matters shall be conclusive. The Committee may permit a person to whom an option
has been granted and whose employment with the Corporation or any subsidiary is
terminated in connection with the acceptance of employment, at the Corporation's
or any subsidiary's request, with a Related Entity, to exercise his or her
options through their stated terms, provided the option holder maintains his or
her employment with such Related Entity through the date of exercise of the
option.
Unless otherwise expressly provided by the Committee in any specific
instance, the action of the Committee naming a salaried officer or key employee
of the Corporation, any subsidiary or any Related Entity to receive an option
pursuant to this Plan (or any of the appreciation rights permitted under
paragraph 6 of this Plan), determining the number of shares to be subject to the
option (or such appreciation rights), and setting the option price of the shares
subject to the option (or such appreciation rights) shall constitute the
granting of the option (or such appreciation rights), and the date when the
Committee shall take the action shall be the date of granting the option (or
such appreciation rights).
The Committee shall designate each option granted to a salaried officer or
key employee of the Corporation, any subsidiary or any Related Entity under this
Plan as either an Incentive Stock Option or a Nonqualified Stock Option. An
Incentive Stock Option shall be subject to all of the requirements of this Plan,
including those specified in paragraph 5 of this Plan. A Nonqualified Stock
Option shall be subject to all of the requirements of this Plan, except those
specified in paragraph 5 of this Plan.
The Committee shall have the authority to specify, at the time of grant or,
with respect to Nonqualified Stock Options, at or after the time of grant, that
the person to whom an option is or was granted under this Plan (which may
include a former salaried officer or key employee of the Corporation, any
subsidiary or any Related Entity) shall be granted a Nonqualified Stock Option
(a "Reload Option") in the event such person exercises all or a part of a stock
option (an "Original Option") by surrendering in accordance with paragraph 6 of
this Plan already owned shares of unrestricted Common Stock in full or partial
payment of the option price under such Original Option, subject to the
availability of shares of stock under this Plan at the time of such exercise.
Each Reload Option shall cover a number of shares of stock equal to the number
of shares of stock surrendered in payment of the option price under such
Original Option, shall have an option price per share of stock equal to the Fair
Market Value (as defined below) of the stock on the date of grant of such Reload
Option and shall expire on the stated expiration date of the Original Option. A
Reload Option shall be exercisable at any time and from 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). Any Reload Option may provide for
the grant, when exercised, of subsequent Reload Options to the extent and upon
such terms and conditions, consistent with this paragraph 5, as the Committee in
its sole discretion shall specify at or after the time of grant of such Reload
Option. A Reload Option shall contain such other terms and conditions, which may
include a restriction on the transferability of the shares of stock received
upon exercise of the Original Option representing at least the after-tax profit
received upon exercise of the Original Option, as the Committee in its sole
discretion shall deem desirable and which may be set forth in rules or
guidelines adopted by the Committee or in the Stock Option Agreements evidencing
the Reload Options. The term "Fair Market Value" when used herein shall mean, as
of any given date, the mean of the high and low trading price of the Common
Stock of the
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<PAGE> 3
Corporation on such date as reported on the New York Stock Exchange or, if the
stock is not then traded on the New York Stock Exchange, on such other national
securities exchange on which the stock is admitted to trade or, if none, on the
National Association of Securities Dealers Automated Quotation System if the
stock is admitted for quotation thereon; provided, however, that if any such
exchange or quotation system is closed on any day on which Fair Market Value is
to be determined, Fair Market Value shall be determined as of the first day
immediately preceding such day on which such exchange or quotation system was
open for trading.
5. INCENTIVE STOCK OPTIONS
An option designated by the Committee as an Incentive Stock Option is
intended to qualify as an "incentive stock option" within the meaning of
Subsection (b) of Section 422(A) of the Internal Revenue Code, and shall, in
addition to all other requirements of this Plan, be subject to the requirements
of this paragraph 5. An Incentive Stock Option may not be exercised by a person
while there is "outstanding", within the meaning of Section 422(A)(c)(7) of the
Internal Revenue Code or any amendment thereof in effect at the relevant time,
any Incentive Stock Option which was granted before the granting of such option,
to such person to purchase stock of the Corporation. An Incentive Stock Option
may not be granted to a person who at the time the option is granted owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Corporation, unless the option price of the shares of Common Stock
for which the option is granted to such person is not less than 110% of the Fair
Market Value of such stock at the time the option is granted and such option by
its terms is not exercisable after the expiration of five years from the date
such option is granted. The aggregate Fair Market Value, determined as of the
time the option is granted, of shares of Common Stock as to which any person may
be granted Incentive Stock Options in any calendar year shall not exceed
$100,000 plus any unused limit carryover to such year. In applying such calendar
year limitation, (a) the term "unused limit carryover" shall mean one-half of
the amount by which $100,000 exceeds the aggregate Fair Market Value, determined
as of the time the option is granted, of shares of Common Stock as to which the
person was granted options in any calendar year after 1980, (b) the amount of
options granted during a calendar year to a person shall be treated as first
using up the $100,000 limitation for that year, (c) to the extent that the
aggregate Fair Market Value, determined as of the time the option is granted, of
shares of Common Stock as to which options are granted to a person in any
calendar year, exceeds $100,000, the excess shall be treated as using up unused
limit carryovers to such year in the order of the calendar years in which the
carryovers arose, and (d) the amount of the unused limit carryover from any
calendar year which may be taken into account in any succeeding calendar year
shall be the amount of such carryover reduced by the amount of such carryover
which was used in prior calendar years; provided, however, that no unused limit
carryover may be carried over except to the three calendar years succeeding the
year in which it arose.
6. OPTION PRICE, PAYMENT AND APPRECIATION DISTRIBUTION
The option price of the shares of Common Stock subject to each option
granted to a salaried officer or key employee of the Corporation, any subsidiary
or any Related Entity pursuant to this Plan shall be set by the Committee and,
except as otherwise provided in paragraph 5 of this Plan, shall not be less than
100% of the Fair Market Value on the date of the granting of the option, as
determined by the Committee. Except as otherwise provided in this paragraph 6,
the option price shall be paid in full upon exercise of the option, in cash or
shares of Common Stock. The proceeds of sale of stock subject to the options are
to be added to the general funds of the Corporation and used for its corporate
purposes.
In connection with the payment of any federal, state or local taxes of any
kind required by law to be withheld with respect to any option, award or other
right under this Plan, the person to whom such option, award or other right is
granted may elect to have such tax withholding obligation satisfied, in whole or
in part, by (i) authorizing the Corporation to withhold from the shares of
Common Stock to be issued upon the exercise or vesting of such option, award or
right a number of shares of Common Stock with an aggregate Fair Market Value
that would satisfy the withholding amount due, or (ii) transferring to the
Corporation shares of Common Stock owned by that person with an aggregate Fair
Market Value that would satisfy the withholding amount due.
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<PAGE> 4
The person to whom an option is granted under this Plan may, at the
discretion of the Committee, be granted at the time the option is granted, the
right (below called a Stock Appreciation Right) to elect as an alternative means
of exercising the option, to forfeit his option with respect to a number of
shares up to the Maximum Number of Shares, as defined below, in which case he
shall receive in cash or shares of Common Stock or any combination thereof, at
the sole discretion of the Committee, with respect to those shares as to which
he elects to forfeit his option, the Stock Appreciation, as defined below.
The person to whom an option is granted under this Plan may, at the
discretion of the Committee, be granted, at the time the option is granted, the
right (below called an Additional Appreciation Right) to receive at the time the
option is exercised, in cash or shares of Common Stock or any combination
thereof, at the sole discretion of the Committee, an amount equal to (a) the
number of shares he then purchased, multiplied by (b) the Stock Appreciation on
an equal number of shares; provided, however, that nonemployee Directors may not
be granted Additional Appreciation Rights.
The person to whom an option is granted under this Plan may, at the
discretion of the Committee, be granted at the time the option is granted (or,
in the case of a Nonqualified Stock Option, at any time after such option has
been granted, or in the case of an Incentive Stock Option, at any time after
such option has been granted and the holder thereof has requested that he be
granted the appreciation right provided for in this subparagraph and consents to
any conversion of such option into a Nonqualified Stock Option as a result of
such grant), the right (below called a Limited Stock Appreciation Right) to
elect during the sixty day period following a Change in Control, as defined
below, as an alternative means of exercising the option, to forfeit his option
with respect to a number of shares up to the total number of shares subject
thereto, in which case he shall receive in cash with respect to those shares as
to which he elects to forfeit his option, the Change in Control Stock
Appreciation, as defined below.
Any shares as to which an option is forfeited through the exercise of a
Stock Appreciation Right or a Limited Stock Appreciation Right shall no longer
be subject to the option or the related Stock Appreciation Right or Limited
Stock Appreciation Right and shall not be available for granting further options
under this Plan.
For purposes of this paragraph 6, (a) "Maximum Number of Shares" shall mean
(i) if the option is a Nonqualified Stock Option and the Committee has directed
that the Stock Appreciation shall be paid all in cash, the total number of
shares that the holder then could have purchased under the option, or (ii) if
the option is a Nonqualified Stock Option and the Committee has directed that
the Stock Appreciation shall be paid all in shares of Common Stock or in a
combination of cash and shares of Common Stock, or if the option is an Incentive
Stock Option, the lesser of (A) the number of shares he then purchased or (B)
the remaining number of shares that he then could have purchased under the
option, and (b) "Stock Appreciation" with respect to any shares of Common Stock
shall mean an amount equal to the difference between the option price of such
shares and the Fair Market Value of such shares on the date the option is
exercised.
For purposes of this Plan, "Change in Control" shall mean a Change in
Control of the Corporation, which shall be deemed to have occurred if:
(a) any Person, as defined below, is or becomes the Beneficial Owner,
as defined below, of securities of the Corporation representing 20% or more
of the combined voting power of the Corporation's then outstanding
securities (unless the event causing the 20% threshold to be crossed is an
acquisition of securities directly from the Corporation);
(b) during any period of two consecutive years beginning after June 7,
1990, individuals who at the beginning of such period constitute the Board
of Directors and any new Director (other than a Director designated by a
Person who has entered into an agreement with the Corporation to effect a
transaction described in clauses (a), (c) or (d) of this Change in Control
definition) whose election or nomination for election was approved by a
vote of at least two-thirds of the Directors then still in office who
either were Directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board of Directors;
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<PAGE> 5
(c) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation (other than a
merger or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the entity surviving such merger or consolidation), in
combination with voting securities of the Corporation or such surviving
entity held by a trustee or other fiduciary pursuant to any employee
benefit plan of the Corporation or such surviving entity or of any
subsidiary of the Corporation or such surviving entity, at least 80% of the
combined voting power of the securities of the Corporation or such
surviving entity outstanding immediately after such merger or
consolidation); or
(d) the stockholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation or an agreement for the sale
or disposition by the Corporation of all or substantially all the
Corporation's assets.
For purposes of the definition of Change in Control, "Person" shall have
the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act as
supplemented by Section 13(d)(3) of the Exchange Act, provided, however, that
Person shall not include (a) the Corporation, any subsidiary of the Corporation
or any other Person controlled by the Corporation, (b) any trustee or other
fiduciary holding securities under any employee benefit plan of the Corporation
or of any subsidiary of the Corporation, or (c) a corporation owned, directly or
indirectly, by the stockholders of the Corporation in substantially the same
proportions as their ownership of securities of the Corporation.
For purposes of the definition of Change in Control, a Person shall be
deemed the "Beneficial Owner" of any securities which such Person, directly or
indirectly, has the right to vote or dispose of or has "beneficial ownership" of
(within the meaning of Rule 13d-3 under the Exchange Act), including pursuant to
any agreement, arrangement or understanding (whether or not in writing);
provided, however, that: (a) a Person shall not be deemed the Beneficial Owner
of any security as a result of an agreement, arrangement or understanding to
vote such security (i) arising solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the Exchange Act and the applicable rules and regulations
thereunder or (ii) made in connection with, or to otherwise participate in, a
proxy or consent solicitation made, or to be made, pursuant to, and in
accordance with, the applicable provisions of the Exchange Act and the
applicable rules and regulations thereunder, in either case described in clause
(i) or clause (ii) above, whether or not such agreement, arrangement or
understanding is also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); and (b) a Person engaged
in business as an underwriter of securities shall not be deemed to be the
Beneficial Owner of any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the expiration of forty
days after the date of such acquisition.
For purposes of this paragraph 6, "Change in Control Stock Appreciation"
with respect to any share of Common Stock shall mean an amount equal to the
excess, if any, of
(a) the higher of (i) the Market Value of such share on the date the
option is exercised or (ii) (A) in the case of transactions described in
clauses (a) or (c) of the Change in Control definition, the highest per
share price paid (below called the Highest Price) for shares of Common
Stock of the Corporation in the transaction constituting the Change in
Control, (B) in the case of a transaction described in clause (b) of the
Change in Control definition which occurs in connection with a transaction
described in clauses (a), (c) or (d) of the Change in Control definition,
the Highest Price, (C) in the case of a transaction described in clause (b)
of the Change in Control definition which does not occur in connection with
a transaction described in clauses (a), (c) or (d) of the Change in Control
definition, the average of the daily closing prices per share of Common
Stock of the Corporation on the New York Stock Exchange, if such shares are
traded thereon, or, if not, such other national securities exchange on
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
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<PAGE> 6
in clause (d) of the Change in Control definition, the equivalent of the
Highest Price as determined by the Committee, over
(b) the option price of such share, provided, however, that with
respect to a Limited Stock Appreciation Right associated with an option
which is an Incentive Stock Option immediately prior to the exercise of
such Limited Stock Appreciation Right, the Change in Control Stock
Appreciation thereon shall not exceed the maximum amount which will permit
such option to continue to qualify as an Incentive Stock Option.
7. PERIOD OF OPTION AND CERTAIN LIMITATIONS ON THE RIGHT TO EXERCISE
The person to whom an option is granted under this Plan (below called the
Option Holder) must remain in the continuous employ of the Corporation, any
subsidiary or any Related Entity of the Corporation for twelve consecutive
months from the date the option is granted before he can exercise any part of
the option, except that such requirement shall not apply to the exercise of
options, Stock Appreciation Rights, Additional Appreciation Rights or Limited
Stock Appreciation Rights following a Change in Control and except as provided
in paragraphs 8, 9 and 10 of this Plan. Thereafter,
(a) on and after the first anniversary of the date of granting the
option and before the second anniversary, he may buy not more than 40% of
the number of shares covered by the option,
(b) on and after the second anniversary and before the third
anniversary, he may buy not more than 70% thereof, and
(c) on and after the third anniversary and before the expiration of
the term of the option, which shall be not more than ten years from the
date of granting the option, he may buy all or from time to time any part
thereof
(the provisions of the foregoing clauses (a), (b) and (c) being hereinafter
called the Normal Exercise Provisions); provided, however, that
(x) the Committee shall have authority in its discretion to determine
that an option shall be exercisable under provisions other than the Normal
Exercise Provisions, so long as such other provisions do not at any time
permit the Option Holder to purchase a greater percentage of the shares
subject to the option than the Option Holder could purchase at such time
under the Normal Exercise Provisions, and in connection with any such
determination the Committee
(i) may retain the discretion to subsequently change any such other
provisions to the Normal Exercise Provisions or to other provisions not
more favorable than the Normal Exercise Provisions, and
(ii) may alter the application of paragraphs 8 and 9 of this Plan
with respect to any of the types of termination of employment referred
to therein but only during the period that any such other provisions
determined or changed pursuant to this proviso are in effect,
(y) except as otherwise determined pursuant to proviso (x) above, no
options may be exercised unless the Option Holder has been in the employ of
the Corporation, a subsidiary or a Related Entity continuously from the
date of granting the option or his employment was terminated for one of the
reasons referred to in paragraphs 8 and 9 of this Plan, and
(z) upon the occurrence of a Change in Control, all options, Stock
Appreciation Rights and Additional Appreciation Rights outstanding on the
date of such Change in Control shall become immediately and fully
exercisable.
In no case may an option be exercised for a fraction of a share.
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<PAGE> 7
8. TERMINATION OF EMPLOYMENT
All the rights of an Option Holder under his option shall lapse if his
employment with the Corporation, any subsidiary or any Related Entity is
terminated for any reason other than those referred to in this paragraph 8 or in
paragraph 9 of this Plan.
If the employment of an Option Holder with the Corporation, any subsidiary
or any Related Entity is terminated (a) by reason of retirement or permanent
total disability, or (b) at or after age 55 under circumstances which the
Committee, in its discretion, deems equivalent to retirement, and in either case
he has been in the employ of the Corporation, any subsidiary or any Related
Entity continuously from the date of granting the option until the termination
of his employment, the Option Holder may exercise the option (and any associated
Stock Appreciation Right, Additional Appreciation Right or Limited Stock
Appreciation Right) after such termination of employment at any time within the
five year period commencing on the date of termination of his employment, but
not beyond the term of his option, and only to the extent that he would on the
date of exercise have been entitled under paragraph 7 of this Plan to exercise
the option (or any associated Stock Appreciation Right, Additional Appreciation
Right or Limited Stock Appreciation Right) if he had continued to be employed by
the Corporation, such subsidiary or such Related Entity.
If the employment of an Option Holder with the Corporation or any
subsidiary is terminated by the Corporation or such subsidiary under mutually
satisfactory conditions, or if an Option Holder's employment with a Related
Entity is terminated under conditions mutually satisfactory to such Related
Entity and the Option Holder, and he has been in the employ of the Corporation,
any subsidiary or any Related Entity continuously from the date of granting the
option until the termination of his employment, the Committee, in its
discretion, may permit the Option Holder to exercise the option (and any
associated Stock Appreciation Right, Additional Appreciation Right or Limited
Stock Appreciation Right) after such termination of employment at any time
within the one year period commencing on the date of termination of his
employment, but not beyond the term of his option, and only to the extent that
he would on the date of exercise have been entitled under paragraph 7 of this
Plan to exercise the option (or any associated Stock Appreciation Right,
Additional Appreciation Right or Limited Stock Appreciation Right) if he had
continued to be employed by the Corporation, such subsidiary or such Related
Entity.
Notwithstanding the above, the exercise of any option after termination of
employment shall be subject to satisfaction of the conditions precedent that the
Option Holder neither, (a) takes other employment or renders services to others
without the written consent of the Corporation, nor (b) conducts himself in a
manner adversely affecting the Corporation.
Notwithstanding the foregoing provisions of this paragraph 8 (including,
without limitation, the immediately preceding subparagraph of this paragraph 8),
if the employment of an Option Holder is terminated by the Corporation, any
subsidiary or any Related Entity for any reason within the two year period
immediately following a Change in Control, and he has been in the employ of the
Corporation, any subsidiary or any Related Entity continuously from the date of
granting the option until the termination of his employment, the Option Holder
shall be permitted to exercise the option (and any associated Stock Appreciation
Right, Additional Appreciation Right or Limited Stock Appreciation Right) after
such termination of employment at any time within the three month period
commencing on the date of termination of his employment, but not beyond the term
of his option, and only to the extent that he would on the date of exercise have
been entitled under paragraph 7 of this Plan to exercise the option (or any
related Stock Appreciation Right, Additional Appreciation Right or Limited Stock
Appreciation Right) if he had continued to be employed by the Corporation.
Options granted under this Plan shall not be affected by any change of
employment so long as the Option Holder continues to be an employee of the
Corporation, any subsidiary or any Related Entity. The option agreements may
contain such provisions as the Committee shall approve regarding the effect of
approved leaves of absence. Nothing in this Plan or in any option granted under
it shall confer any right to continue in the employ of the Corporation, any
subsidiary or any Related Entity, or interfere in any way with the right of the
Corporation, any subsidiary or any Related Entity, to terminate any employment
at any time.
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<PAGE> 8
9. DEATH OF OPTION HOLDER
If (a) the employment of an Option Holder terminates by reason of death,
(b) an Option Holder dies within the five year period following termination of
employment (i) by reason of retirement or permanent total disability, or (ii) at
or after age 55 under circumstances which the Committee, in its discretion,
deems equivalent to retirement, (c) an Option Holder dies within the one year
period following termination of employment under mutually satisfactory
conditions and the Committee has determined that he may exercise the option
after such termination of employment, or (d) an Option Holder dies within the
three month period following termination of employment for any reason within the
two year period immediately following a Change in Control and if in any such
case he has been in the employ of either the Corporation, any subsidiary or any
Related Entity continuously from the date of granting the option until the
termination of his employment, the option theretofore granted to him may be
exercised by the legal representative of the deceased Option Holder at any time
within a period of one year after his death, but not beyond the term of the
option, and only to the extent that he was entitled to exercise the option on
the date of his death, plus, a pro rata portion of the additional number of
shares, if any, he would have become entitled to purchase under the option on
the anniversary of the date of granting the option that next follows the date of
his death (such pro rata portion to be 2 1/2% of the full number of shares for
which the option was granted for each full month during the twelve month period
preceding such anniversary that the Option Holder was alive).
10. GRANTING OF OPTIONS TO NONEMPLOYEE DIRECTORS
Each person who is not an employee of the Corporation or any of its
subsidiaries and who on and after May 14, 1986 is elected or reelected as a
Director of the Corporation at any annual or special meeting of stockholders of
the Corporation, shall as of the date of each such election or reelection
automatically be granted an option to purchase 1,000 shares of Common Stock (as
constituted at the time of the annual meeting of stockholders on May 14, 1986)
for an option price equal to 100% of Market Value on such date (and,
notwithstanding the discretion of the Committee under paragraph 6 of this Plan,
each such option granted on or after May 14, 1986 shall automatically have
associated with it a Stock Appreciation Right, the Stock Appreciation on which
shall be payable all in cash, and each such option granted on or after June 7,
1990 shall automatically have associated with it a Limited Stock Appreciation
Right, subject, in each case, to applicable law). The action of the stockholders
in electing or reelecting a nonemployee Director shall constitute the granting
of the option (and the associated Stock Appreciation Right and Limited Stock
Appreciation Right), and the date when the stockholders shall take such action
shall be the date of granting the option (and the associated Stock Appreciation
Right and Limited Stock Appreciation Right). All such options shall be
designated as Nonqualified Stock Options and, except as otherwise expressly
provided in this Plan, shall be subject to the same terms and provisions as are
then in effect with respect to granting of Nonqualified Stock Options to
salaried officers and key employees of the Corporation. Subject to the
foregoing, all provisions of this Plan not inconsistent with the foregoing shall
apply to options granted to nonemployee Directors, except that with respect to
an option (and the associated Stock Appreciation Right and Limited Stock
Appreciation Right) granted to a nonemployee Director, (a) any requirement for
employment with the Corporation, any subsidiary or any Related Entity shall be
deemed to be a requirement for service as a Director, (b) any requirement of
continuous employment shall be deemed to be a requirement of continuous service
as a Director, and (c) any reference to termination of employment shall be
deemed to mean termination of service as a Director. The maximum number of
shares as to which options may be granted to any nonemployee Director under this
Plan, as in effect through April 17, 1992, shall be 6,000 shares (as constituted
at the time of the annual meeting of stockholders on May 14, 1986).
11. NONTRANSFERABILITY OF OPTIONS; DEFERRAL OF PROCEEDS
No option granted under this Plan shall be transferable by the Option
Holder otherwise than by will or the laws of descent and distribution, and any
option may be exercised during the lifetime of the Option Holder only by him.
The Option Holder may elect, on or after the date of grant of an option
hereunder, to defer receipt of all or any portion of the proceeds, whether in
the form of cash or shares of Common Stock, deliverable to such
8
<PAGE> 9
Option Holder upon the exercise of an option or Stock Appreciation Right
hereunder set forth, in each case to the extent permitted by and subject to the
terms and conditions set forth in any deferral or similar plan or arrangement
enacted by the Board of Directors or the Committee in its sole discretion.
12. ADJUSTMENT FOR CHANGES IN CAPITALIZATION
Notwithstanding any other provision of this Plan, in the event of any
change in the outstanding Common Stock of the Corporation by reason of a stock
dividend, recapitalization, merger, consolidation, split-up, combination or
exchange of shares, and the like, the aggregate number and class of shares
available under this Plan and the number and class of shares subject to each
outstanding option and the option prices shall be appropriately adjusted by the
Board of Directors, whose determination shall be conclusive.
13. INTERPRETATION
The Board of Directors shall have full power and authority to interpret and
construe this Plan and its interpreting and construing of this Plan and acts
pursuant to this Plan in good faith shall be final and conclusive. The Board of
Directors may correct any defect or supply any omission or reconcile any
inconsistency in such a manner and to such an extent as it shall find expedient
to carry this Plan into effect, and it shall be the sole and final judge of the
expediency. If any such interpreting or construing shall involve a question of
law, the Board of Directors may rely and act upon the opinion of counsel (who
may be of counsel to the Corporation) on the question of law.
This Plan is intended to satisfy the conditions of Rule 16b-3 under the
Exchange Act, and all interpretations of this Plan shall to the extent permitted
by law, regulations and rulings be made in a manner consistent with and so as to
satisfy the conditions of Rule 16b-3. In interpreting and applying the
provisions of this Plan any option granted as an Incentive Stock Option pursuant
to this Plan shall to the extent permitted by law, regulations and rulings be
construed as, and any ambiguity shall be resolved in favor of preserving its
status as, an "incentive stock option" within the meaning of Subsection (b) of
Section 422(A) of the Internal Revenue Code.
Notwithstanding any provision to the contrary in this Plan or in any
Incentive Stock Option granted pursuant to this Plan, if any change in law or
any regulation or ruling of the Internal Revenue Service shall have the effect
of disqualifying any Incentive Stock Option granted under this Plan as an
"incentive stock option" within the meaning of Subsection (b) of Section 422(A)
of the Internal Revenue Code, the option granted shall nevertheless continue to
be outstanding as and shall be deemed to be a Nonqualified Stock Option under
this Plan, and in such event paragraph 5 of this Plan shall cease to be
operative with respect to such option.
14. AMENDMENT AND TERMINATION
The Board of Directors of the Corporation or the Committee may at any time
terminate this Plan or make such changes in it and additions to it as it shall
deem advisable, including but not limited to, provisions changing the percentage
of shares as to which an option that so provides must be exercised relative to
shares forfeited in connection with the receipt of the appreciation on the
forfeited shares; provided, however, that except as provided in paragraph 12
hereof, the Board of Directors may not, without further approval by the holders
of a majority of the shares of Common Stock of the Corporation then outstanding
and entitled to vote, increase the maximum number of shares as to which options
may be granted under this Plan or reduce the minimum option price or extend the
period during which options may be granted or exercised or change the class of
persons eligible to receive options under this Plan. Unless terminated earlier
by the Board of Directors, this Plan shall terminate on April 17, 1992, and no
options under it shall be granted thereafter; provided, however, that options
granted prior to April 17, 1992 may extend beyond that date; and provided,
further, however, that Reload Options may be granted prior to and on and after
April 17, 1992, but no Reload Option shall be exercisable after any date which
is later than the date on which a Stock Option granted prior to April 17, 1992
could be exercised. No termination or amendment of this Plan may, without the
written
9
<PAGE> 10
consent of the Option Holder of an option then existing, terminate his option or
materially and adversely affect his rights under the Option.
15. EFFECTIVE PERIOD
The effective date of this Plan was originally January 13, 1972, subject,
however, to approval of this Plan by the vote of the holders of a majority of
the shares of Common Stock of the Corporation outstanding and entitled to vote,
which approval was obtained at the annual meeting of the stockholders on April
18, 1972. This Plan was readopted by the Board of Directors following approval
by the vote of the holders of a majority of the shares of Common Stock of the
Corporation outstanding and entitled to vote at the annual meeting of the
stockholders on June 3, 1982. Subject to the express provisions of this Plan,
options may be granted under this Plan at any time and from time to time prior
to termination of this Plan.
10
<PAGE> 1
EXHIBIT 11
CHRYSLER CORPORATION AND CONSOLIDATED SUBSIDIARIES
EARNINGS PER COMMON SHARE DATA
APB OPINION NO. 15 CALCULATION
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1997 1996
---- ----
(IN MILLIONS OF
DOLLARS AND SHARES)
<S> <C> <C>
PRIMARY:
Net earnings................................................ $1,029 $1,005
Preferred stock dividend declared........................... -- (1)
------ ------
Earnings attributable to common stock....................... $1,029 $1,004
====== ======
Weighted average shares outstanding......................... 697.7 752.4
Shares issued on exercise of dilutive options............... 26.5 25.8
Shares purchased with proceeds of options................... (19.0) (18.1)
Shares contingently issuable................................ 0.7 0.8
------ ------
Shares applicable to primary earnings....................... 705.9 760.9
====== ======
FULLY DILUTED:
Net earnings................................................ $1,029 $1,005
====== ======
Weighted average shares outstanding......................... 697.7 752.4
Shares issued on exercise of dilutive options............... 26.5 25.9
Shares purchased with proceeds of options................... (19.0) (16.7)
Shares applicable to convertible preferred stock............ 1.9 7.1
Shares contingently issuable................................ 1.3 1.5
------ ------
Shares applicable to fully diluted earnings................. 708.4 770.2
====== ======
PER COMMON SHARE DATA: (IN DOLLARS)
Primary:
Net earnings per common share............................. $ 1.46 $ 1.32
====== ======
Fully Diluted:
Net earnings per common share............................. $ 1.45 $ 1.30
====== ======
</TABLE>
NOTE: Primary earnings per common share amounts were computed by dividing
earnings after deduction of preferred stock dividends by the average number of
common and dilutive equivalent shares outstanding. Computations of primary
earnings per common share exclude the effect of common stock equivalents and
shares contingently issuable for any period in which their inclusion would have
the effect of increasing the earnings per common share amount otherwise
computed. 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. All per-share data have been adjusted to
reflect the two-for-one stock split declared in the second quarter of 1996.
<PAGE> 1
[DELOITTE & TOUCHE LOGO]
EXHIBIT 15A
-------------------------------------------
Suite 900 Telephone: (313) 396-3000
600 Renaissance Center
Detroit, Michigan 48243-1704
INDEPENDENT ACCOUNTANTS' REPORT
Shareholders and Board of Directors
Chrysler Corporation
Auburn Hills, Michigan
We have reviewed the accompanying condensed consolidated balance sheet of
Chrysler Corporation and consolidated subsidiaries as of March 31, 1997 and 1996
and the related condensed consolidated statements of earnings and cash flows for
the three-month periods ended March 31, 1997 and 1996. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Chrysler Corporation and
consolidated subsidiaries as of December 31, 1996, and the related consolidated
statements of earnings and cash flows for the year then ended (not presented
herein); and in our report dated January 21, 1997, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of December 31, 1996 is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.
Deloitte & Touche LLP
April 10, 1997
DELOITTE TOUCHE TOHMATSU INTERNATIONAL
<PAGE> 1
[DELOITTE & TOUCHE LETTERHEAD] EXHIBIT 15B
April 10, 1997
Chrysler Corporation
1000 Chrysler Drive
Auburn Hills, Michigan
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
financial information of Chrysler Corporation and consolidated subsidiaries for
the periods ended March 31, 1997 and 1996, as indicated in our report dated
April 10, 1997. Because we did not perform an audit, we expressed no opinion on
that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, is
incorporated by reference in the following Registration Statements:
<TABLE>
<CAPTION>
REGISTRATION
FORM STATEMENT NO. DESCRIPTION
<S> <C> <C>
S-8 33-5588 Chrysler Salaried Employees' Savings Plan
S-8 33-6117 Chrysler Corporation Stock Option Plan
S-3 33-13739 Chrysler Corporation Common Stock deliverable to Selling
stockholder named therein
S-3 33-15716 Chrysler Corporation Common Stock deliverable to Selling
stockholders named therein
S-8 33-15544 Chrysler Corporation Common Stock deliverable pursuant to
(Post-Effective the 1972 and 1980 American Motors Corporation Stock Option
Amendment No. 1) 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
stockholder named therein
S-8 33-55817 Chrysler Corporation 1991 Stock Compensation Plan
S-3 33-21589 Chrysler Corporation Debt Securities
S-4 333-21849 Chrysler Corporation Debt Securities
</TABLE>
We also are aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
Deloitte & Touche Sig
Deloitte & Touche International
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 6,202
<SECURITIES> 2,461
<RECEIVABLES> 1,763
<ALLOWANCES> 43
<INVENTORY> 5,562
<CURRENT-ASSETS> 0
<PP&E> 23,733
<DEPRECIATION> 8,442
<TOTAL-ASSETS> 59,596
<CURRENT-LIABILITIES> 0
<BONDS> 9,296
0
0<F2>
<COMMON> 822
<OTHER-SE> 10,945
<TOTAL-LIABILITY-AND-EQUITY> 59,596
<SALES> 15,156
<TOTAL-REVENUES> 16,116
<CGS> 11,968<F1>
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5
<INTEREST-EXPENSE> 234
<INCOME-PRETAX> 1,704
<INCOME-TAX> 675
<INCOME-CONTINUING> 1,029
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,029
<EPS-PRIMARY> 1.46<F3>
<EPS-DILUTED> 1.45<F3>
<FN>
<F1>Excludes depreciation and special tools amortization and employee retirement
benefits.
<F2>Less than $1 million
<F3>In May 1996, Chrysler declared a two-for-one stock split in the form of a 100
percent stock dividend which was distributed on July 15, 1996 to shareholders
of record on June 15, 1996. Financial data schedules for prior years have not
been restated for this stock split.
</FN>
</TABLE>
