SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
CHRYSLER CORPORATION
(Name of Registrant as Specified in Its Charter)
TRACINDA CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a) (2) of Schedule 14A.
[X] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:_____________
(2) Aggregate number of securities to which transaction
applies:_____________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which
the filing fee is calculated and state how it was
determined):_________________
(4) Proposed maximum aggregate value of transaction:_____________________
(5) Total fee paid:___________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:_______________
(2) Form, Schedule or Registration Statement No.:________________
(3) Filing Party:____________
(4) Date Filed:_____________
PRELIMINARY COPIES
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SUBJECT TO COMPLETION--NOVEMBER 21, 1995
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1996 ANNUAL MEETING OF STOCKHOLDERS
OF
CHRYSLER CORPORATION
PRELIMINARY PROXY STATEMENT
OF
TRACINDA CORPORATION
This Preliminary Proxy Statement (this "Proxy Statement") is being
furnished in connection with a possible solicitation of proxies by Tracinda
Corporation, a Nevada corporation ("Tracinda"), at the 1996 Annual Meeting of
Stockholders of Chrysler Corporation, a Delaware corporation (the "Company" or
"Chrysler"), and at any adjournments or postponements thereof (the "Annual
Meeting").
As of the date of this Proxy Statement, Chrysler has not announced the
date, time or place of the Annual Meeting or fixed the date for the
determination of shareholders of record entitled to vote at the Annual Meeting.
As described in more detail below, Chrysler has announced that its Board of
Directors is conducting a 90-day review of Chrysler's corporate governance
procedures and Board membership. Tracinda believes that it is important that
Tracinda be able to participate actively in this review process. Accordingly,
Tracinda is filing this Proxy Statement in order to assure that Tracinda will be
free to communicate directly with Chrysler shareholders while the Board of
Directors of Chrysler is conducting its review. Depending upon the results of
Chrysler's review and Tracinda's discussions with other Chrysler shareholders,
Tracinda reserves the right to solicit proxies or consents for use at the Annual
Meeting or otherwise with respect to one or more proposals, including one or
more of the proposals described herein. Alternatively, Tracinda may determine
not to pursue any of such proposals and may withdraw this Proxy Statement.
According to the Company's filings with the Securities and Exchange
Commission (the "SEC"), as of September 30, 1995, there were 382,560,840 shares
of common stock, par value $1.00 per share, of the Company (the "Common Stock")
issued and outstanding, each of which is entitled to one vote. As of such date,
Tracinda and Mr. Kirk Kerkorian, the sole shareholder of Tracinda, were the
beneficial owners of 51,900,000 shares of Common Stock in the aggregate, or
approximately 13.6% of the number of shares of Common Stock reported by the
Company to be outstanding.
______________________
This Proxy Statement is first being furnished to Chrysler shareholders on
or about [ ], 1995. If Tracinda determines to solicit proxies
for use at the Annual Meeting, Tracinda intends to amend this Proxy Statement
and to furnish such amended Proxy Statement in definitive form, together with a
form of proxy, to Chrysler shareholders on or about [ ], 1996. Any
such proxy solicited may be revoked as to all matters at any time prior to the
time a vote is taken by filing a later dated written revocation, by submitting a
duly executed proxy bearing a later date, or by attending and voting at the
Annual Meeting in person. The principal executive offices of Chrysler are
located at 12000 Chrysler Drive, Highland Park, Michigan 48288-0001.
IMPORTANT: TRACINDA IS NOT CURRENTLY ASKING YOU FOR A PROXY AND YOU ARE
- - ---------
REQUESTED NOT TO SEND US A PROXY.
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BACKGROUND
On October 25, 1995, Tracinda delivered the following letter to Mr. Robert
J. Eaton, Chairman of the Board and Chief Executive Officer of Chrysler:
Mr. Robert J. Eaton
Chairman and Chief Executive Officer
Chrysler Corporation
12000 Chrysler Drive
Highland Park, Michigan 48288
Dear Bob:
Tracinda Corporation has been an owner and supporter of Chrysler for
more than five years. During this period, Tracinda has raised its
ownership to almost 52 million shares, a significant number of which were
purchased at Chrysler's request. As we have told you in the past, our
interests and those of other shareholders are identical -- we want Chrysler
to grow and prosper, thereby increasing value for all shareholders.
Tracinda has always viewed, and continues to view, its investment in
Chrysler as a long-term investment. Given the magnitude of our position
and our long-term focus, we will continue to actively manage our
investment. As you know, we currently have no intention to acquire
Chrysler. We intend to remain focused on enhancing long-term value for all
Chrysler shareholders; we will not be deterred from that objective.
Among the key areas that we believe are important to Chrysler and all
of its shareholders are the following:
. Changes to ensure appropriate shareholder participation in
corporate governance, including representation on the Board of Directors
and providing shareholders with voting rights on significant corporate
transactions;
. Consideration of additional stock buybacks and other value
enhancement strategies; and
. Continued emphasis on product quality and cost containment.
We have formulated the following proposal based on the premise that
you are working with us in good faith to achieve a mutually satisfactory
resolution which benefits all of Chrysler's constituencies. Our proposal
is offered in a spirit of compromise, in the hope of creating an atmosphere
of mutual support:
-3-
First and foremost, Jerry York and two other persons to be mutually
agreed upon by Chrysler and Tracinda should join the Board of Directors of
Chrysler. These new Board members would, of course, represent the
interests of all shareholders and would be voted on annually by the
shareholders.
Second, while Chrysler and we share the objective of long-term growth
for the company, it is apparent that we do not appear to agree on
Chrysler's cash retention policy. We believe that a committee of outside
directors should be appointed to review the appropriate size of Chrysler's
cash cushion. We suggest that Chrysler designate one of its investment
bankers to work with Wasserstein Perella to study these issues. The two
bankers would then report jointly to the committee.
Third, we request that Chrysler review its corporate governance
policies and, at a minimum, make the following specific modifications:
. Adopt an anti-greenmail bylaw or charter amendment;
. Require shareholder approval of issuances of significant
amounts of Chrysler's blank check preferred stock and other
block placements of voting stock; and
. Raise the threshold under the company's poison pill rights
plan from 15% to 20%.
We believe that all of the elements of this program should be
implemented. We further believe that a majority of Chrysler shareholders
will share our view. We would like to see a prompt and amicable resolution
to these issues, as we believe this would be in the best interests of all
involved. In any event, Tracinda will continue to act in a prudent and
determined manner.
If it would be helpful in resolving these issues, we would welcome the
opportunity to meet in person with the Executive Committee of the Board of
Directors or the complete Board to discuss these matters.
Sincerely,
Jerome B. York
Vice Chairman
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On November 2, 1995, Mr. Eaton delivered the following letter to Mr.
Kerkorian:
Mr. Kirk Kerkorian
Chief Executive Officer and President
Tracinda Corporation
4835 Koval Lane
Las Vegas, Nevada 89109
Dear Kirk:
We are sending the attached letter and press release to our major
shareholders today. As we discussed by phone, the Chrysler Board of
Directors will consider all of your proposals as part of its overall
governance review. It will take all of them seriously, but precisely
because it is serious business, the Board believes the review must be
thorough and involve direct discussions with other major shareholders. I
hope you agree that this makes sense given the importance of your proposals
and their potential impact on the Company.
As I mentioned to you, I plan to visit with you soon to seek your
personal input on the Board's governance review.
I look forward to seeing you.
Sincerely,
Bob
The text of the form of letter sent to major shareholders of Chrysler on
November 2, 1995 and the press release issued by Chrysler on November 2, 1995
are set forth below:
Dear __________:
As we promised during our meetings and conversations in recent months, we
want to keep you informed of events at Chrysler. The attached press
release outlines initiatives approved by the Chrysler Board of Directors at
its meeting today. I hope you will agree that the steps outlined represent
a significant commitment on the part of Chrysler to ensure that the Company
continues to hear and respond to shareholders on important matters of
corporate governance and corporate policy.
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Chrysler's Board, its management team and I are all dedicated to building
the world's top-performing car company and thereby maximizing long-term
value for all Chrysler shareholders. The cornerstone of the value creation
process is a long-term strategic plan and a management team that together
can best utilize the Company's assets to create the most exciting and
satisfying products for our customers and to manufacture and sell those
products competitively.
I believe that we have a management team and a long-term strategy that will
accomplish these goals. Indeed, I think you will agree that the progress
Chrysler has made in both the product and financial markets in the past
five years has been outstanding.
Chrysler's Board believes, as do I, that a critical part of the value
creation process lies in an effective corporate governance process. The
Board must be strong and reflective of shareholder interests. In addition,
consultation with shareholders is important. We must understand how our
shareholders feel about the Company, and we must seek to respond to any
concerns that they may have.
In recent weeks we have visited with many of our largest shareholders. As
you know, during that period, we have also received a series of proposals
from Kirk Kerkorian. The Board regularly reviews Chrysler's governance
structure, financial policies, and Board membership. Overall, we believe
that Chrysler's current corporate governance and financial policies are
sound.
We also believe, however, that it is possible that some changes could
benefit the Company and its shareholders. We are open to suggestions for
change - if they genuinely enhance value and strengthen the Company for all
---
Chrysler shareholders.
In this regard, let me emphasize that in conducting the review outlined in
the attached press release, the Board and management will weigh, and
separate, issues that benefit particular parties from those that benefit
all Chrysler holders. Our Board has a responsibility to ensure that
Chrysler's decisions do not provide differential benefits to any specific
shareholder.
The Board anticipates completing this review and announcing its decisions
on these matters within approximately 90 days.
-6-
We believe in a strong governance process and are committed to a
continuing, constructive dialogue with Chrysler's major holders. You will
be hearing from us in the near future to schedule a time when we can speak
directly to you and get your input on these issues.
Sincerely yours,
Robert J. Eaton
CHRYSLER BOARD OF DIRECTORS ANNOUNCES
IT WILL INITIATE A CORPORATE GOVERNANCE REVIEW
HIGHLAND PARK, Mich. - Chrysler Corporation announced today that its Board
of Directors will review the Company's corporate governance procedures and
Board membership to evaluate whether incremental changes would be in the
long term best interests of the Company and all of its shareholders. The
review, to be conducted jointly by the Board and Chrysler's senior
management, will involve direct consultation with Chrysler shareholders.
Chrysler Chairman Robert J. Eaton cited two factors that influenced the
Board's decision to conduct this review -- the recently received proposals
from Kirk Kerkorian on corporate governance and Board membership and recent
meetings between senior Chrysler executives and a number of Chrysler
shareholders.
"The meetings with our shareholders have convinced us that, while they are
quite satisfied with Chrysler's performance and with our approach to
corporate governance, we must remain committed to an ongoing dialogue and
continuous self-examination," Eaton said. He indicated that the review
represents an effort to ensure that Chrysler remains responsive to
suggestions from its holders, while concurrently ensuring that no single
shareholder has undue influence and that the Company's actions do not
provide differential benefits to any individual.
With respect to Mr. Kerkorian's proposals, Eaton said Kerkorian's
suggestions regarding Board composition will be reviewed by the Board in
light of its continuing belief that all directors should represent the
interests of all shareholders. Eaton also noted that the 15 percent
threshold in the Company's shareholder rights plan "is important in
protecting shareholders against abusive takeover tactics, such as the
acquisition of effective control of the Company without paying a premium."
With respect to Kerkorian's governance proposals, Eaton said that the
Company already has in place a formal policy adopted by its Board last
April that restricts the Company's ability to issue preferred stock. In
keeping with the Company's
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previously announced intention not to pay greenmail to anyone, Eaton said
the Board also will consider adopting an anti-greenmail bylaw.
Concerning Kerkorian's proposal for a special committee to review
Chrysler's cash targets, Eaton noted that the full Chrysler Board regularly
reviews this issue, together with other financial and operating policies,
as part of its strategic planning process. Eaton added that the
determination of the appropriate level of cash reserves is "an integral and
vital part of this strategic planning process, and is best addressed by the
full Board of Directors."
Eaton indicated that Chrysler would discuss its policies in all of these
areas with major shareholders as part of its governance review initiative,
which the Company expects to complete within approximately 90 days.
On November 20, 1995, Tracinda delivered the following letter to Mr. Eaton:
Mr. Robert J. Eaton
Chairman of the Board and
Chief Executive Officer
Chrysler Corporation
12000 Chrysler Drive
Highland Park, MI 48288-0001
Dear Bob:
We appreciate having had the opportunity to meet with you today to
discuss Chrysler's 90-day corporate governance review process. We continue
to believe that our discussions together have been helpful and have the
potential for resolving issues.
As we have discussed with you, it is extremely important that this
process be objective. We believe this process should involve each of the
following elements: (1) procedural fairness, including active
-------------------
participation by your outside directors, the opportunity for Tracinda to
communicate directly with other Chrysler shareholders regarding our
proposals and this process, and an understanding of your schedule for
meeting with Chrysler shareholders; (2) a balanced presentation of all of
---------------------
the proposals contained in Tracinda's letter of October 25, 1995; and (3)
impartial reporting on the results of this process, including interim
-------------------
status reports, and the involvement of a neutral party or independent
expert to explain all sides and to report to shareholders. We also would
like to have the opportunity to express our views directly to the Board.
As you know, in order to communicate our views directly to other
Chrysler shareholders, it is required that we make appropriate filings with
the SEC since
-8-
the Chrysler Board does not include a person affiliated with Tracinda.
Accordingly, we plan to file preliminary proxy soliciting materials
promptly with the SEC. The materials will relate to Chrysler's 1996 Annual
Meeting of Shareholders. We will not currently solicit or accept proxies
for use at that meeting, but reserve the right to do so in the future
depending upon a number of factors, including the response of Chrysler
shareholders to the process to be conducted over the next two and a half
months. This filing is being made solely so that we can take part in the
very process that you have designed and is of course not a hostile act.
Bob Lanigan's and your statements at our meeting today that none of
our proposals have been prejudged by the Board, that the Board would
control and monitor this process and that management would take a neutral
position regarding our program during this process were encouraging. The
skepticism of the financial media regarding your process might well be
eliminated if Chrysler would issue a press release to that effect. This is
particularly true, since certain recent statements attributed to Chrysler
representatives reflect an apparent rush to judgment regarding certain
elements of our program. In your letter to Tracinda of November 2, 1995,
you stated that "the Chrysler Board of Directors will consider all of
[Tracinda's] proposals as part of its overall governance review [and] ...
will take all of them seriously". However, the response attributed to
Chrysler with regard to my inclusion on its Board of Directors appears to
suggest either that I would not be cognizant of my fiduciary duties to all
Chrysler shareholders or that it is contrary to the interests of all
shareholders that any Board member be affiliated with a significant
shareholder. As you are aware, all directors have a fiduciary duty to all
--- ---
shareholders. As a former Chrysler and IBM director, I fully appreciate my
fiduciary responsibilities. Your Board members, in the aggregate, own less
than 0.1% of Chrysler's outstanding shares; we own 51,900,000 shares or
13.6% of Chrysler's outstanding shares. We purchased our shares for cash,
the way other shareholders do -- we received no grants of shares and
exercised no stock options. Unlike management, we have sold no shares in
the past five years. It should be self-evident that shareholders are
better served by a Board which has substantial equity ownership than by a
Board comprised of members having little or no stock ownership. Moreover,
the inclusion on the Chrysler Board of an outside director with substantial
and broad experience in the automotive industry can only benefit all
Chrysler shareholders and other Chrysler stakeholders.
Our preliminary proxy materials will indicate that we propose
replacing Joseph Antonini as a director. While we can imagine that Mr.
Antonini's perspective has been valuable to Chrysler, Tracinda believes
that my broad background and experience in both the automotive industry and
at Chrysler, including as CFO, would enable me to make a substantial
contribution to the Chrysler Board.
-9-
We were perplexed by the disclosure in your November 2, 1995 press
release that the Chrysler Board in April of this year adopted a policy
restricting certain issuances of preferred stock. We do not understand why
this policy was not previously disclosed or your reluctance to provide us
with a copy of the policy.
We also noted your apparent immediate rejection of our proposal for a
review of Chrysler's cash retention policies by a committee of outside
directors. Of course, the establishment of such a committee would not
diminish the ultimate authority and responsibility of the full Chrysler
Board to act on the committee's recommendations. In our view, having an
independent committee review this issue with its own independent advisers
can only be beneficial to Chrysler, and we are disturbed that an issue of
this significance to all Chrysler shareholders appears to have been
prejudged.
Tracinda has been an owner and supporter of Chrysler for more than
five years. No element of our program would benefit Tracinda at the
expense of other shareholders. We believe that these proposals are
important to all shareholders, will strengthen Chrysler and should not be
inconsistent with the interests of Chrysler's management.
Sincerely,
Jerome B. York
Vice Chairman
PURPOSE OF THIS PRELIMINARY PROXY STATEMENT
Tracinda believes that it is important that Tracinda be able to participate
actively in Chrysler's 90-day corporate governance and Board membership review
process, including communicating directly with shareholders of Chrysler.
Tracinda intends to urge Chrysler shareholders to support the proposals
contained in its October 25, 1995 letter to Mr. Eaton, in order to convince the
Board of Directors of Chrysler to adopt these proposals. While Tracinda
believes that such participation should not be deemed to constitute a
solicitation of proxies or consents, Tracinda is filing this Proxy Statement in
order to ensure that Tracinda will be free to engage in discussions with
Chrysler shareholders while the Board of Directors of Chrysler is conducting its
review. Depending upon the results of Chrysler's review and Tracinda's
discussions with Chrysler shareholders, Tracinda reserves the right to solicit
proxies or consents for use at the Annual Meeting or otherwise with respect to
one or more proposals, including one or more of the proposals described below
under "The Proposals". Alternatively, Tracinda may determine not to pursue any
of such proposals and may withdraw this Proxy Statement.
-10-
THE PROPOSALS
At the Annual Meeting, Tracinda may present one or more of the following
proposals for approval by Chrysler shareholders:
(1) A proposal for the election of Jerome B. York as a director of
Chrysler.
(2) A proposal opposing the re-election of Joseph E. Antonini as a director
of Chrysler.
(3) A proposal for the adoption of the following non-binding resolution to
increase the size of the Board of Directors of Chrysler to add two additional
directors:
WHEREAS, the shareholders of Chrysler Corporation (the "Company")
believe that it is in the best interests of the Company and its
shareholders to increase the number of independent, non-officer directors
of the Company;
RESOLVED, that the shareholders of the Company hereby urge the Board
of Directors of Chrysler to increase the size of the Board of Directors to
add two additional directors who (a) are not officers of Chrysler, (b) have
no material business relationship with, and are not affiliates or
associates (within the meaning of Rule 405 under the Securities Act of
1933, as amended) of any person who has any material business relationship
with, Chrysler or any of its subsidiaries or directors or any affiliate or
associate of any of the foregoing persons, and (c) in the opinion of the
Nominating Committee of the Board of Directors of Chrysler, taking into
consideration the suggestions of Chrysler's major shareholders, are
otherwise qualified to serve as directors of Chrysler.
Tracinda believes that it would be in the best interests of Chrysler and
its shareholders to add two additional disinterested directors to the Chrysler
Board of Directors in order to bring a fresh perspective to the Board of
Directors. These two additional board members would represent the interests of
all shareholders and would be elected annually with the other members of the
Board of Directors. The purpose of this resolution is to provide all Chrysler
shareholders with the opportunity to express their views regarding composition
of the Board of Directors.
(4) A proposal for the adoption of the following non-binding resolution
seeking the formation of a Shareholder Value Committee of the Board of Directors
of Chrysler:
WHEREAS, the shareholders of Chrysler Corporation (the "Company")
believe that a comprehensive, independent review of the Company's financial
policies is in the best interests of the Company and its shareholders;
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RESOLVED, that the shareholders hereby urge the Board of Directors to:
(a) designate a committee of directors who are not officers of the Company
(the "Shareholder Value Committee") to undertake a comprehensive review of
the Company's financial policies, including its policies with respect to
cash retention, capitalization, cost containment, international expansion
and disposition of non-core assets;
(b) designate, at the Company's option, either (i) a nationally recognized
investment banking firm which does not have a material relationship with
the Company, or (ii) one of the Company's current investment banking firms
and Wasserstein, Perella & Co., Inc. (such firm or firms, as the case may
be, hereinafter called the "Financial Adviser"), to undertake, subject to
the supervision and direction of the Shareholder Value Committee, a
detailed analysis of the Company's financial policies, and provide to the
Financial Adviser all information in the Company's possession relevant to
such analysis;
(c) cause the Financial Adviser to report to the Shareholder Value
Committee the results of its analysis and any recommendations of the
Financial Adviser; and
(d) cause the Shareholder Value Committee to report to the Board of
Directors its conclusions as to the appropriateness of the Company's
current financial policies and any recommendations of the Committee with
respect to changes to such policies to enhance value for all Chrysler
shareholders.
Tracinda previously has urged the Chrysler Board of Directors to form a
committee of outside directors to review Chrysler's cash retention policies. In
Tracinda's view, having an independent committee review Chrysler's financial
policies with its own advisers can only be beneficial to Chrysler. The purpose
of this resolution is to permit all Chrysler shareholders to communicate to the
Board of Directors the importance of a serious and independent review of
Chrysler's financial policies.
(5) A proposal for the adoption of the following resolution in order to
amend the By-Laws of Chrysler to prohibit the practice of "greenmail":
WHEREAS, the Board of Directors of Chrysler Corporation (the
"Company") has previously announced its opposition to the practice of
"greenmail"; and
WHEREAS, the shareholders of the Company believe it is in the best
interests of the Company and its shareholders that the Board of Directors'
position
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be reflected by an amendment to the By-Laws of the Company prohibiting the
payment of "greenmail";
RESOLVED, that the By-Laws of the Company shall be amended to add the
following provisions:
Anti-Greenmail. (a) Except as set forth in subsection (b) hereof, in
--------------
addition to any affirmative vote of stockholders required by any provision
of law, the Certificate of Incorporation or By-Laws of the Corporation, or
any policy adopted by the Board of Directors, neither the Corporation nor
any subsidiary shall knowingly effect any direct or indirect purchase or
other acquisition of any shares of any class or classes of capital stock
issued by the Corporation from any Interested Person (i.e., any person who
----
is the direct or indirect beneficial owner of more than one percent (1%) of
the aggregate voting power of the shares of capital stock of the
Corporation), without the affirmative vote of the majority of shares
present in person or represented by proxy at a meeting of the Corporation's
stockholders and entitled to vote on the matter, excluding shares of
capital stock beneficially owned by such Interested Person, voting together
as a single class. Such affirmative vote shall be required notwithstanding
the fact that no vote may be required, or that a lesser percentage may be
specified, by law or any agreement with any national securities exchange,
or otherwise.
(b) The provisions of subsection (a) hereof shall not be applicable
with respect to:
(i) any purchase, acquisition, redemption or exchange of shares of
capital stock, the purchase, acquisition, redemption or exchange of
which, at the time any such transaction is entered into, is provided
for in the Certificate of Incorporation (including any resolution or
resolutions of the Board of Directors providing for the issuance of
Preferred Stock by the Corporation);
(ii) any purchase or other acquisition of shares of any class of
capital stock made as part of a tender or exchange offer by the
Corporation to purchase shares of the same class made on the same
terms to all holders of such shares and complying with the
applicable requirements of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (or any successor
provisions to such Act, rules or regulations);
(iii) any purchase or acquisition of shares of capital stock made
pursuant to an open market purchase program which has been approved
by the Board of Directors; or
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(iv) any purchase or acquisition of shares of capital stock made
from, or any purchase or acquisition of shares of capital stock made
pursuant to or on behalf of, an employee benefit plan maintained by
the Corporation, or any subsidiary or any trustee of, or fiduciary
with respect to any such plan when acting in such capacity.
(c) The Board of Directors shall have the exclusive right and power to
interpret the provisions of this By-Law, including, without limitation, the
adoption of written definitions of terms used in this By-Law (any such
definitions shall be filed with the Secretary, and such definitions as may
prevail shall be made available to any stockholder upon written request);
any such interpretation made in good faith shall be binding and conclusive
upon all holders of shares of capital stock.
(d) This By-Law may not be amended without the affirmative vote of the
majority of shares present in person or represented by proxy at a meeting
of the Corporation's stockholders and entitled to vote on the matter.
Tracinda believes that the practice of "greenmail" can result in unfair
treatment of shareholders and corporate disruption that is detrimental to the
interests of a company and its shareholders. This By-Law amendment is designed
to deter persons from accumulating a significant position in Chrysler's stock
with a view to forcing Chrysler to repurchase their stock and to provide
assurance to Chrysler shareholders that no 1% or greater shareholder will be
able to effect any sale of capital stock to Chrysler or its subsidiaries other
than in a transaction open to all shareholders. Under the proposed By-Law,
shareholder approval (subject to the exceptions described above in subsection
(b) of the proposed By-Law) would be required for any repurchase of capital
stock from a 1% or greater shareholder.
(6) A proposal for the adoption of the following resolution in order to
amend the By-Laws of Chrysler to require shareholder approval of issuances of
Chrysler's "blank check" preferred stock and block placements of Common Stock:
WHEREAS, the Certificate of Incorporation of Chrysler corporation
authorizes the issuance, in one or more series, of "blank check" preferred
stock, or of common stock, without stockholder approval; and
WHEREAS, such preferred stock or common stock may be issued on terms
which may unfairly impact the rights of existing stockholders;
RESOLVED, that the By-Laws of the Company shall be amended to add the
following provisions:
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Certain Issuances of Capital Stock. (a) In addition to any affirmative
----------------------------------
vote of stockholders required by any provision of law, the Certificate of
Incorporation or By-Laws of the Corporation, the Corporation shall not (i)
issue or sell any shares of any class or series of Preferred Stock or (ii)
issue or sell, in one transaction or series of related transactions with
the same person or any affiliate (as defined in Rule 405 under the
Securities Act of 1933, as amended) of such person, a number of shares of
Common Stock representing 10% or more of the then outstanding shares of
Common Stock, without the affirmative vote of the majority of shares
present in person or represented by proxy at a meeting of the Corporation's
stockholders and entitled to vote on the matter.
(b) The provisions of subsection (a) hereof shall not be applicable with
respect to:
(i) any issuance of shares of the Corporation's Junior Participating
Cumulative Preferred Stock in accordance with the Amended and
Restated Rights Agreement dated as of December 14, 1990, as amended,
between the Corporation and First Chicago Trust Company of New York;
or
(ii) any issuance or sale of shares of any series of Preferred Stock
or Common Stock pursuant to a transaction (whether by way of stock
dividend, stock split, recapitalization, corporate restructuring,
reorganization, merger, exchange offer, rights offering or similar
transaction) made on the same terms to all holders of Common Stock
and in compliance with the applicable requirements of federal and
state laws.
(c) This By-Law may not be amended without the affirmative vote of the
majority of shares present in person or represented by proxy at a meeting
of the Corporation's stockholders and entitled to vote on the subject
matter.
Tracinda believes that the ability to place a block of Common Stock or to
issue "blank check" preferred stock may have the effect of unfairly diluting the
economic or voting rights of existing shareholders and may have certain "anti-
takeover" effects. Under the rules of the New York Stock Exchange (the "NYSE"),
shareholder approval is required for any issuance (other than in a public
offering for cash) by Chrysler of Common Stock or other securities convertible
or exercisable for Common Stock if (i) the Common Stock has or will have upon
issuance voting power equal to or in excess of 20% of the voting power
outstanding before the issuance of such stock or other securities, or (ii) the
Common Stock to be issued is or will be equal to or in excess of 20% of the
number of shares of Common Stock outstanding before the issuance of the stock.
Tracinda believes that the above-described rules of the NYSE do not provide
adequate protection to Chrysler's shareholders against the effects described
above. Moreover,
-15-
based on current market prices, Chrysler could place in excess of $3.5 billion
of stock with a single purchaser without shareholder approval. Under the
proposed By-Law, shareholder approval (subject to the exceptions described above
in subsection (b) of the proposed By-Law) would be required (i) for any issuance
of Common Stock representing 10% or more of the then outstanding shares of
Common Stock, or (ii) for any issuance of "blank check" preferred stock.
(7) A proposal for the adoption of the following resolution in order to
amend the By-Laws of Chrysler to require shareholder approval of certain poison
pill rights plans:
WHEREAS, Chrysler Corporation (the "Company") is a party to the
Amended and Restated Rights Agreement dated as of December 14, 1990, as
amended (the "Existing Rights Agreement"), between the Company and First
Chicago Trust Company of New York; and
WHEREAS, the Company hereafter may become a party to another agreement
or instrument similar to the Existing Rights Agreement (all such other
agreements and instruments hereinafter called "Future Rights Agreements");
and
WHEREAS, certain provisions of the Existing Rights Agreement or any
Future Rights Agreements may be unduly restrictive and adversely impact the
market for the Company's common stock; and
RESOLVED, that the By-Laws of the Company shall be amended to add the
following provisions:
Rights Plans (a) In addition to any affirmative vote of stockholders
------------
required by any provision of law, the Certificate of Incorporation or By-
Laws of the Corporation, the Corporation shall not maintain any Rights
Agreement (as hereinafter defined) that triggers dilution of the stock
ownership interest of any beneficial owner of Common Stock by reason of the
beneficial ownership by such stockholder of less than 20% of the
outstanding shares of Common Stock, without the affirmative vote of the
majority of shares present in person or represented by proxy at a meeting
of the Corporation's stockholders and entitled to vote on the matter (the
"Requisite Stockholder Vote"). The term "Rights Agreement" means the
Amended and Restated Rights Agreement dated as of December 14, 1990, as
amended, between the Company and First Chicago Trust Company of New York or
any similar agreement or instrument entered into by the Company.
(b) Within 60 days of the effective date of this By-Law, the Company shall
either amend the Existing Rights Agreement so as to bring the Existing
Rights Agreement into compliance with this By-Law, or redeem all the
Preferred Share Purchase Rights issued under the Existing Rights Agreement.
-16-
(c) This By-Law may not be amended without the affirmative vote of the
majority of shares present in person or represented by proxy at a meeting
of the Corporation's stockholders and entitled to vote on the matter.
Under Chrysler's original rights agreement, adopted on February 4, 1988,
the threshold of beneficial ownership at which the Preferred Share Purchase
Rights (the "Rights") "flip-in" (i.e., become exercisable to buy Common Stock at
----
a reduced price) was 30%. On September 7, 1989, Chrysler reduced such 30%
trigger to 20%. On December 14, 1990, after Tracinda purchased 23 million
shares of Common Stock, which then represented approximately 9.8% of the
outstanding Common Stock, Chrysler reduced the trigger to 10%. Following a
request by Tracinda in November 1994 that Chrysler redeem all the Rights issued
under the Existing Rights Agreement, on December 1, 1994, Chrysler increased the
trigger under the Existing Rights Agreement from 10% to 15%. Tracinda believes
that the present 15% ownership threshold in the Existing Rights Agreement
unnecessarily restricts acquisitions of Chrysler stock and may adversely affect
the market for the Common Stock. Adoption of this By-Law would shift from the
Board to the shareholders the power to determine whether restricting ownership
at a level below 20% is in the interests of Chrysler and its shareholders.
Under the proposed By-Law, (i) Chrysler would have to obtain shareholder
approval for the 15% trigger in the Existing Rights Agreement or would have to
either increase the trigger to 20% or redeem the Rights, and (ii) Chrysler could
not adopt a Future Rights Agreement with a trigger of less than 20% without
shareholder approval.
IMPORTANT: TRACINDA IS NOT CURRENTLY ASKING YOU FOR A PROXY WITH RESPECT TO THE
- - ---------
FOREGOING PROPOSALS AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Following the conclusion of Chrysler's review of its corporate governance
policies and Board membership, Tracinda will make a determination whether to
submit one or more of the foregoing proposals for approval by shareholders of
Chrysler at the Annual Meeting. Tracinda also reserves the right to make one or
more additional proposals, including proposals for the election of additional
nominees of Tracinda as directors of Chrysler. If Tracinda determines to
nominate Jerome B. York for election as a director of Chrysler at the Annual
Meeting, it intends to oppose the re-election of Joseph E. Antonini as a
director of Chrysler.
VOTING PROCEDURES
The shares of Common Stock are the only class of capital stock of Chrysler
entitled to vote on any of the proposals set forth under "The Proposals" above.
Every holder of Common Stock is entitled to one vote for each share of Common
Stock held. In accordance with Chrysler's By-Laws, at the Annual Meeting, the
holders of all the shares
-17-
of Common Stock issued and outstanding and entitled to vote, present in person
or represented by proxy, shall constitute a quorum of the shareholders for all
purposes, unless the representation of a larger number shall be required by law,
Chrysler's Certificate of Incorporation or the By-Laws for the purpose of a
quorum, and in that case the representation of the number so required shall
constitute a quorum. In accordance with Chrysler's By-Laws, the election of
directors and all other matters before the Annual Meeting will be decided by a
plurality vote, except as otherwise provided by law, Chrysler's Certificate of
Incorporation or the By-Laws. If Tracinda determines to submit any of the
proposals set forth under "The Proposals" above for approval by shareholders of
Chrysler at the Annual Meeting, such proposal will be decided by plurality vote.
Abstentions and broker non-votes are not votes cast and therefore will not be
counted in determining voting results, although abstentions and broker non-votes
will be counted in the determination of a quorum. Inspectors of election that
are appointed by the Board of Directors or, if no such appointment is made, by
the presiding officer at the Annual Meeting, will tabulate the votes cast.
Under Article I, Section 9 and Article I, Section 10 of the By-Laws of
Chrysler, a shareholder's notice of business to be brought at an annual meeting
or of nominations for director must be delivered to or mailed and received at
the principal executive offices of Chrysler not less than 60 days nor more than
90 days prior to the annual meeting; provided, however, that if less than 70
-------- -------
days' prior notice or prior public disclosure of the date of the annual meeting
is given or made to shareholders, notice by the shareholder to be timely must be
so received not later than the close of business on the 10th day following the
day on which notice of the date of the meeting or such public disclosure was
made.
As of the date of this Proxy Statement, Chrysler has not announced the
date, time or place of the Annual Meeting or fixed the date for the
determination of shareholders of record entitled to vote at the Annual Meeting.
If Tracinda determines to submit one or more proposals for approval by Chrysler
shareholders at the Annual Meeting, including one or more of the proposals
described above under "The Proposals", it will comply with the advance notice
requirements described above.
INFORMATION ABOUT PROPOSED NOMINEE
Jerome B. York (age 57) has served in a number of executive positions at
Chrysler, including Executive Vice President-Finance and Chief Financial Officer
from 1990 to 1993. He also served as a director of Chrysler from 1992 to 1993.
In 1993 he joined International Business Machines Corporation as Senior Vice
President and Chief Financial Officer, and he served as a director of IBM from
January 1995 to August 1995. He has served as Vice Chairman of Tracinda since
September 1, 1995. Mr. York's
-18-
business address is 4835 Koval Lane, Las Vegas, NV 89109. Mr. York also is a
director of MGM Grand, Inc. (an affiliate of Tracinda).
The preceding information concerning the age, principal occupation and
business experience during the last five years has been furnished to Tracinda by
Mr. York. Mr. York has expressed his willingness to serve on the Board of
Directors of Chrysler. Tracinda has agreed to bear all costs and expenses of
Mr. York in connection with his candidacy and his participation in this
solicitation. Tracinda anticipates that, if elected, Mr. York will receive the
usual and customary compensation from Chrysler for his services as director.
According to Chrysler's 1995 Notice of Annual Meeting and Proxy Statement,
the fees being paid to directors who are not officers of Chrysler or its
subsidiaries are as follows: annual fee for serving as a director, $21,000; fee
for each Board meeting attended, $500; fee for each other day of service,
$2,000; annual fee for serving on a Board committee (Management Resources and
Compensation Committees considered as one), $4,000; additional annual fee for
serving as chairperson of a committee, $2,000; and fee for attending one or more
committee meetings held on the same day, $500.
Under the Chrysler Corporation 1991 Stock Compensation Plan approved by the
stockholders, nonemployee directors receive options with related stock
appreciation rights ("SARs") for 1,500 shares of Common Stock as of the date of
their election or reelection as a director at any annual or special meeting of
stockholders. The Company also provides business travel accident insurance
coverage in the amount of $250,000 to each nonemployee director. In addition,
the Company provides an annual retirement benefit payable for life to
nonemployee directors with five or more years of service equal to one hundred
percent of the annual retainer for directors in effect at the time of the
individual's retirement from the Board. A director retiring from the Board with
less than five years service receives an annual retirement benefit in the same
amount, but only for a period equal to the time served as a director.
Under the Chrysler Salaried Employees' Supplemental Savings Plan,
nonemployee directors may elect in advance to defer all or a portion of the
above fees and proceeds in connection with the exercise of options or SARs,
whether payable in the form of cash or Common Stock. Such directors may self-
direct assets in their deferral accounts among a variety of investments.
Directors may elect to receive payment of their deferred compensation in a lump
sum or in annual installments not to exceed ten years.
OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
Tracinda anticipates that at the Annual Meeting shareholders will be asked
(1) to elect a slate of directors who will serve until the 1997 Annual Meeting
of Stockholders,
-19-
(2) to ratify the selection of Chrysler's independent public accountants to
audit the books, records and accounts of Chrysler for the year 1996, and (3) to
act upon other shareholder proposals, if such proposals are presented at the
meeting. Tracinda is not making any recommendation on these matters at this time
and is not soliciting your proxy on these matters at this time.
SOLICITATION OF PROXIES
If Tracinda determines to solicit proxies for use at the Annual Meeting,
such proxies may be solicited by mail, advertisement, telephone or facsimile and
in person. Solicitations may be made by officers and other employees of
Tracinda, none of whom will receive additional compensation for such
solicitation. Tracinda may request banks, brokerage houses and other
custodians, nominees and fiduciaries to forward all its solicitation materials
to the beneficial owners of Common Stock they hold of record. If Tracinda
determines to solicit proxies for use at the Annual Meeting, Tracinda will
reimburse these record holders for customary clerical and mailing expenses
incurred by them in forwarding these materials to their customers.
Tracinda has retained D.F. King & Co., Inc. ("D.F. King") for solicitation
and advisory services. Tracinda has agreed to pay D.F. King a fee of $[
] and to reimburse D.F. King for its reasonable out-of-pocket expenses.
Tracinda has also agreed to indemnify D.F. King against certain liabilities and
expenses. If Tracinda determines to solicit proxies for use at the Annual
Meeting, D.F. King will solicit proxies from individuals, brokers, banks, bank
nominees and other institutional holders. D.F. King has informed Tracinda that
it anticipates that it would employ up to approximately 350 persons to solicit
shareholders for the Annual Meeting.
The following describes the arrangements entered into between Tracinda and
Wasserstein, Perella & Co., Inc. ("WP&Co.") under the terms of an engagement
letter, dated May 28, 1995; revisions to these arrangements between Tracinda and
WP&Co. currently are being discussed. Tracinda has engaged WP&Co. to act as its
financial advisor. Under the terms of its engagement letter, Tracinda has paid
WP&Co. an initial fee of $7.5 million and also has agreed to pay WP&Co.: (i) an
additional fee of $7.5 million if, during the period of WP&Co.'s engagement and
the 18 months following the termination thereof, (a) Chrysler implements a
transaction the stated of purpose which is to repurchase or exchange not less
than $5 billion of Chrysler's then outstanding Common Stock within no more than
12 months of such announcement by Chrysler of such transaction (but excluding
the $1 billion share repurchase program announced by Chrysler on December 1,
1994), or (b) Chrysler declares a dividend of not less than $5.00 per share
payable on an annualized basis for no less than eight consecutive quarters; (ii)
an additional fee of $12.5 million (against which any fees paid under clause (i)
above shall be credited) upon the consummation of certain transactions at any
time during the period of WP&Co.'s engagement and the 18 months following the
termination thereof,
-20-
including (a) a purchase by Tracinda or any of its affiliates of a majority of
the then outstanding voting securities of Chrysler on a fully diluted basis, (b)
a merger or consolidation involving Tracinda or any of its affiliates and
Chrysler, (c) an asset transfer by Chrysler of all or a substantial portion of
its assets to Tracinda or any of its affiliates, or (d) the election of, or the
acquisition of the right to elect, such number of nominees, representatives or
any affiliates to the Board of Directors of Chrysler representing in the
aggregate at least a majority of the directors of Chrysler, without the vote of
any other shareholder, whether or not such an election occurs; (iii) a fee of $5
million (which fee shall be credited against the fees paid or payable under
clauses (i) and (ii) above) in the event Tracinda or any of its affiliates
should sell more than 50% of the shares of Common Stock now owned or
subsequently acquired at any time during the period of WP&Co.'s engagement and
the 12 months following the termination thereof; (iv) customary fees (a) if
WP&Co. acts as lead or co-lead managing underwriter or managing placement agent
or renders any other service with respect to obtaining private or public
financing for Tracinda in connection with any transaction covered by clause (ii)
above, and (b) if WP&Co. performs any other service for which compensation has
not previously been provided; and (v) a fee of $5 million (credited against the
fees paid or payable under clause (iii) above) if a definitive agreement with
respect to any of the transactions described in clause (ii) above has been
executed and then subsequently abandoned by Tracinda for reasons reasonably
deemed to be within its control.
Tracinda also has agreed to reimburse WP&Co. for all reasonable out-of-
pocket expenses, including reasonable fees and expenses of its counsel and any
other consultants or advisors retained by WP&Co. in connection with the
performance of its engagement and to indemnify WP&Co. and certain related
persons against certain liabilities and expenses. If Tracinda determines to
solicit proxies for use at the Annual Meeting, WP&Co. has informed Tracinda that
approximately 20 employees of WP&Co. may communicate in person, by telephone or
otherwise with institutions, brokers or other persons who are shareholders of
Chrysler for the purpose of assisting in the solicitation of proxies for the
Annual Meeting.
Tracinda has engaged Whitworth and Associates ("Whitworth") to act as an
advisor with respect to Tracinda's investment in Chrysler. Under the terms of
such engagement, Tracinda has paid Whitworth a base fee of $1.5 million and has
also agreed to pay Whitworth: (i) an additional single fee of $3.5 million, in
the event that prior to the termination of Whitworth's engagement (a) Chrysler
enters into a "Value Enhancing Transaction" as defined below; (b) Tracinda
and/or any partnership, affiliate or joint venture to which Tracinda is a party
(singly or collectively "Acquiror") is successful in obtaining minority
representation on Chrysler's board of directors; or (c) Acquiror enters into an
agreement with Chrysler pursuant to which (1) Chrysler effects a Value Enhancing
Transaction, (2) Tracinda obtains minority representation on Chrysler's board of
directors, or (3) Acquiror ceases in whole or in part its efforts to influence
Chrysler; and (ii) an additional single fee of $6 million, less any amount paid
pursuant to clause (i)
-21-
above, in the event that prior to the termination of Whitworth's engagement
Acquiror is successful in (a) effecting an acquisition, directly or indirectly,
of a majority of the Common Stock or of a material portion of the assets of
Chrysler and its subsidiaries taken as a whole by way of tender offer, merger,
negotiated business combination or otherwise, or (b) replacing a majority of the
board of directors of Chrysler with nominees of Acquiror's choosing, in one
transaction or a series of transactions. A "Value Enhancing Transaction" shall
mean with respect to Chrysler (A) any increase or increases in Chrysler's annual
dividend (whether paid in cash, securities (other than Common Stock) or assets)
of more than 20% in the aggregate from the amount of Chrysler's regular dividend
as of the date of Whitworth's engagement (i.e., $2.00 per share per year), (B)
----
the consummation of stock repurchases by Chrysler exceeding $1 billion in the
aggregate (but not including any repurchases pursuant to the stock repurchase
programs of $2 billion in the aggregate previously announced by Chrysler for
1995 and 1996), or (C) any spin-off of material assets or securities by Chrysler
to shareholders, any recapitalization, reorganization, capital restructuring or
partial or complete liquidation of Chrysler, any sale, merger or combination of
Chrysler or any significant subsidiary to or with any party not affiliated with
Tracinda, or any similar transaction.
In addition, if within 18 months after termination of Whitworth's
engagement an event occurs which would have entitled Whitworth to a fee pursuant
to clause (i) or (ii) above, Whitworth will be entitled to compensation to the
same extent as if Whitworth's services had not been terminated (unless
Whitworth's engagement is terminated by reason of (x) a breach of Whitworth's
obligations under its engagement or violation of law by Whitworth arising out of
or relating to the services contemplated by its engagement, as determined by a
final judgment of a court of competent jurisdiction, or (y) any action taken by
Whitworth which Tracinda specifically instructed Whitworth in writing not to
take). Tracinda has agreed to reimburse Whitworth for its reasonable out-of-
pocket expenses and to indemnify Whitworth and certain related persons against
certain liabilities and expenses. If Tracinda determines to solicit proxies for
use at the Annual Meeting, Tracinda anticipates that Mr. Ralph Whitworth, the
principal of Whitworth, may communicate in person, by telephone or otherwise
with institutions, brokers or other persons who are shareholders of Chrysler for
the purpose of assisting in the solicitation of proxies for the Annual Meeting.
Whitworth has advised Tracinda that Whitworth has retained, at its own
expense, Batchelder & Partners, Inc. to act as a consultant in connection with
Whitworth's engagement. Under the terms of Whitworth's engagement, the
retention by Whitworth of any consultant must be approved by Tracinda, and this
retention has been approved.
The entire expense of any solicitation by Tracinda of proxies for the
Annual Meeting would be borne by Tracinda. At present, Tracinda does not intend
to seek reimbursement for such expenses from Chrysler. Tracinda estimates that,
if it determines to solicit proxies for use at the Annual Meeting, the costs
incidental to such solicitation,
-22-
including expenditures for advertising, printing, postage, legal and related
expenses would be approximately $[ ]. Total costs incurred to date in
furtherance of or in connection with the possible solicitation of proxies by
Tracinda are approximately $[ ].
CERTAIN INFORMATION ABOUT CHRYSLER
Chrysler is a Delaware corporation with its principal executive offices
located at 12000 Chrysler Drive, Highland Park, Michigan 48288-0001. The
telephone number of Chrysler is (313) 956-5741.
Chrysler is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and, in accordance therewith, files reports
and other information with the SEC. Reports, proxy statements and other
information filed by Chrysler may be inspected and copied at the public
reference facilities maintained by the SEC in Washington, D.C. at 450 Fifth
Street, N.W., Room 1024, and at the following Regional Offices of the SEC: New
York Regional Office, 7 World Trade Center, Suite 1300, New York, New York
10048, and Chicago Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Requests should be directed to the SEC's Public
Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549; copies can be
obtained at prescribed rates. Such material may also be inspected at the
library of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
Schedule III sets forth certain information, as made available in public
documents, regarding shares of Common Stock held by Chrysler management and
persons who own more than five percent of the Common Stock.
1996 SHAREHOLDER PROPOSALS
Chrysler's 1995 Notice of Annual Meeting and Proxy Statement indicates that
any shareholder proposal to be considered for inclusion in the proxy soliciting
material distributed by Chrysler prior to the 1996 Annual Meeting must be
received by Chrysler not later than December 3, 1995, and should be addressed to
Mr. William J. O'Brien, Vice President, General Counsel and Secretary of
Chrysler, at the address given above under "Certain Information About Chrysler".
INFORMATION ABOUT TRACINDA
Tracinda is a Nevada corporation and an investment company wholly owned by
Mr. Kerkorian with its executive offices at 4835 Koval Lane, Las Vegas, NV
89109. Schedule I sets forth certain information about the director and the
executive officers of Tracinda, as well as information about certain employees
and other representatives of Tracinda who also may assist in any solicitation of
proxies. Schedule II sets forth certain
-23-
information relating to (i) securities owned by Tracinda and its director,
executive officers, employees and other representatives, and (ii) transactions
between any of them and Chrysler.
OTHER MATTERS
Chrysler owns two Michigan domiciled insurance companies, Chrysler
Insurance Company and Chrysler Life Insurance Company. The Michigan Insurance
Code provides that a person shall not enter into an agreement to merge with or
otherwise to acquire control of a Michigan domestic insurer or any person
controlling a Michigan domestic insurer unless, at the time an offer, request or
invitation is made or an agreement is entered into, or prior to the acquisition
of the securities if no offer or agreement is involved, the offer, request,
invitation, agreement, or acquisition has been approved by the Michigan
Commissioner of Insurance. Under the Michigan Insurance Code, it is presumed
that any person owning 10% or more of an insurance holding company controls that
company. The Michigan Commissioner of Insurance has entered orders entitled In
--
the matter of a disclaimer by Tracinda Corporation with respect to its
- - ----------------------------------------------------------------------
acquisition of an additional 14 million shares of the common stock of Chrysler
- - ------------------------------------------------------------------------------
Corporation, Order No. 95-368-M (collectively, the "Orders"), approving
- - -------------------------------
Tracinda's petition for disclaimer of affiliation with Chrysler and the two
Michigan insurance companies. The Orders provide that the scope of the
commissioner's approval applies to Tracinda's ownership of up to 14.99% of the
outstanding Common Stock, as well as to all shares of Common Stock held by Mr.
Kerkorian either individually or collectively with Tracinda. The Orders were
subject to certain conditions, among them that Tracinda would not take any of
the following actions with respect to Chrysler's insurance companies without
first obtaining the consent of the commissioner: (i) change management
personnel or otherwise be involved with either of the insurance companies; (ii)
seek any extraordinary dividends or distributions; or (iii) pledge the assets or
stock. The Orders do not apply to any other future activity Tracinda may choose
to pursue with respect to Chrysler, including the purchase of additional Common
Stock or the undertaking of a proxy or consent solicitation in which Tracinda
would name a slate of candidates for the Chrysler Board of Directors. If
Tracinda determines to solicit proxies or consents with respect to any of the
proposals described above, before commencing a proxy or consent solicitation,
Tracinda will undertake such steps as Tracinda deems necessary to ascertain the
applicability of the Michigan Insurance Code to that solicitation and/or to
comply with, modify or amend the Orders.
TRACINDA CORPORATION
[ ], 1995
-24-
______________________
Questions, or requests for additional copies of materials, should be
directed to:
D.F. King & Co., Inc.
77 Water Street
New York, NY 10005
Call Toll-Free:
1-800-290-6424
-25-
SCHEDULE I
INFORMATION CONCERNING THE PARTICIPANTS
The following tables set forth the name and the present principal
occupation or employment, and the name, principal business and address of any
corporation or other organization in which such employment is carried on, of the
persons who may be deemed to be participants on behalf of Tracinda, including
the director and the executive officers of Tracinda, as well as certain
employees and other representatives of Tracinda who also may solicit proxies
from shareholders of the Company. The principal business address of the
director and each such executive officer and employee of Tracinda is 4835 Koval
Lane, Las Vegas, Nevada 89109.
DIRECTOR, EXECUTIVE OFFICERS,
AND EMPLOYEES OF TRACINDA
Present Office or Other Principal
Name Occupation or Employment with Tracinda
- - ---- --------------------------------------
Kirk Kerkorian Director, Chief Executive Officer, Chairman and
President
Jerome B. York Vice Chairman
Anthony L. Mandekic Secretary and Treasurer
James D. Aljian Executive
Richard E. Sobelle Executive
Daniel J. Taylor Executive
OTHER PARTICIPANTS
Name and Principal Present Office or Other Principal
Business Address Occupation or Employment
- - ------------------ ---------------------------------
Alfred Boyer Private investor and sole partner of Boyer
9665 Wilshire Blvd., Suite 200 Capital Management
Beverly Hills, CA 90212
I-1
Lee Iacocca Private investor and consultant
1440 South Sepulveda Boulevard to Tracinda; former President, Chairman of
Los Angeles, CA 90025 the Board and Chief Executive Officer of
Chrysler
Alex Yemenidjian President and Chief Operating Officer of
3799 Las Vegas Boulevard South MGM Grand, Inc.
Las Vegas, NV 89109
I-2
SCHEDULE II
SHARES OF COMMON STOCK OWNED BY TRACINDA, ITS DIRECTOR,
OFFICERS AND EMPLOYEES, AND BY OTHER PARTICIPANTS
The following persons own the shares of Common Stock indicated below:
Percentage of
Name Number of Shares Outstanding Shares (1)
- - ---- ---------------- ----------------------
Tracinda Corporation 50,000,000/(2)/ 13.1%
Kirk Kerkorian 51,900,000/(2) (3)/ 13.6%
James D. Aljian 5,000 less than 0.1%
Daniel J. Taylor 1,000/(4)/ less than 0.1%
Alfred Boyer 5,000/(2) (5)/ less than 0.1%
Lee A. Iacocca 2,053,826/(2) (6)/ 0.5%
- - ---------
(1) Based upon 382,560,840 shares of Common Stock outstanding, as listed in
Chrysler's Form 10-Q for the quarter ended September 30, 1995.
(2) Included in the Schedule 13D previously filed by Kirk Kerkorian, Tracinda,
Lee Iacocca and Alfred Boyer with the SEC.
(3) Includes the 50,000,000 shares of Common Stock owned by Tracinda.
(4) All 1,000 shares were purchased at $49.00 per share on December 29, 1994.
(5) Represents 5,000 Long Term Equity Anticipation options at an exercise price
of $40 per share. The options expire January 20, 1996.
(6) Includes 388,986 shares of Common Stock held in a revocable grantor trust,
options to purchase 1,549,090 shares of Common Stock, and 115,750 shares of
Common Stock held by the Iacocca Foundation, a registered charitable
foundation, over which Mr. Iacocca may be deemed to share dispositive and
voting power through a board membership position. The Iacocca Foundation
is located at 17 Arlington Street, Boston, MA 02116.
II-1
TRANSACTIONS IN THE SECURITIES OF CHRYSLER
WITHIN THE PAST TWO YEARS BY PARTICIPANTS
TRACINDA
- - --------
Number of Shares Purchased Price per Share Date
- - -------------------------- --------------- ----
(Sold)
- - ------
279,500 $46.05 December 19, 1994
21,000 $45.925 December 20, 1994
738,800 $46.05 December 20, 1994
20,000 $46.175 December 20, 1994
22,200 $45.925 December 21, 1994
134,800 $46.05 December 21, 1994
41,000 $46.30 December 21, 1994
135,700 $46.425 December 21, 1994
42,800 $46.55 December 21, 1994
55,600 $46.80 December 21, 1994
7,800 $47.30 December 22, 1994
30,600 $47.425 December 22, 1994
5,500 $47.55 December 22, 1994
249,600 $47.925 December 22, 1994
344,400 $48.05 December 22, 1994
25,000 $48.55 December 23, 1994
28,000 $48.675 December 23, 1994
11,000 $48.80 December 23, 1994
69,100 $48.925 December 23, 1994
152,700 $49.05 December 23, 1994
5,500 $49.05 December 27, 1994
107,100 $49.175 December 27, 1994
150,500 $48.925 December 28, 1994
821,800 $49.05 December 28, 1994
5,000 $48.55 December 29, 1994
39,000 $48.80 December 29, 1994
80,000 $48.925 December 29, 1994
72,600 $49.05 December 29, 1994
50,000 $49.175 December 29, 1994
42,000 $49.30 December 29, 1994
85,400 $49.675 December 29, 1994
10,500 $49.675 December 30, 1994
115,500 $50.05 December 30, 1994
14,000,000 $50.00 August 6, 1995
II-2
All shares of Common Stock are pledged to Bank of America National Trust
and Savings Association pursuant to a Credit Agreement dated as of June, 1991,
as amended (the "Tracinda Credit Agreement"). As of [ ], 1995,
the total amount of outstanding indebtedness under the Tracinda Credit Agreement
was approximately $ [ ].
On November 20, 1995, Tracinda decided to donate (the "Donation") 10
million shares of Common Stock (the "Donation Shares") to the Lincy Foundation,
a California non-profit public benefit corporation (the "Lincy Foundation").
The Lincy Foundation is a charitable foundation formed in 1989 by Tracinda and
is funded by Tracinda. Pursuant to the terms of the Donation, Tracinda will
deliver to the Lincy Foundation 25% of the Donation Shares on November 20, 1997,
25% on November 20, 1998, and 50% on November 20, 1999 (each such date herein
called a "Donation Date"). The Donation is subject to the satisfaction of
certain conditions, including any required consent of any lender that is a party
to a credit agreement with Tracinda. Currently, the consent of the lender under
the Tracinda Credit Agreement would be required because the Donation Shares
constitute a portion of the collateral pledged to the lender pursuant to the
Tracinda Credit Agreement. The Lincy Foundation will not assume any of
Tracinda's obligations under the Tracinda Credit Agreement. Until each Donation
Date, Tracinda will retain sole voting power and sole dispositive power in
respect of the Donation Shares required to be delivered on such Donation Date.
If, prior to a Donation Date, Tracinda has disposed of all or a portion of the
Donation Shares that are required to be delivered on such Donation Date, then
Tracinda shall deliver, in lieu of such Donation Shares, the proceeds received
by Tracinda from the disposition thereof (net of income taxes and other expenses
incurred or payable by Tracinda in connection therewith). Kirk Kerkorian is a
member of the board of directors of the Lincy Foundation. The other members of
the board of directors of the Lincy Foundation are James D. Aljian, Walter
Sharp, Anthony L. Mandekic and Alex Yemenidjian. Messrs. Aljian, Mandekic and
Yemenidjian also comprise all the executive officers of the Lincy Foundation.
Each of Messrs. Aljian, Sharp, Mandekic and Yemenidjian also is a director,
executive officer or executive of Tracinda or MGM Grand, Inc. (an affiliate of
Tracinda) or both.
II-3
MR. KERKORIAN
- - -------------
Number of Shares Purchased Price per Share Date
- - -------------------------- --------------- ----
(Sold)
- - -------
58,000 $51 August 11, 1995
142,000 $50.875 August 11, 1995
50,000 $50.875 August 18, 1995
32,500 $50.75 August 18, 1995
50,000 $50.75 August 21, 1995
50,000 $50.625 August 21, 1995
50,000 $50.5 August 21, 1995
50,000 $50.375 August 21, 1995
20,000 $50 August 22, 1995
60,000 $50.125 August 22, 1995
102,500 $50.25 August 22, 1995
26,000 $50.375 August 22, 1995
50,000 $50.5 August 22, 1995
2,000 $50.625 August 23, 1995
98,000 $50.75 August 23, 1995
15,700 $50.875 August 23, 1995
129,000 $51 August 23, 1995
57,000 $51.125 August 23, 1995
450,000 $51.25 August 23, 1995
73,500 $51.25 August 24, 1995
14,000 $51.375 August 24, 1995
70,500 $51.5 August 24, 1995
28,000 $51.625 August 24, 1995
135,600 $51.75 August 24, 1995
55,700 $51.875 August 24, 1995
30,000 $52 August 25, 1995
These shares of Common Stock are subject to a pledge in favor of Swiss Bank
Corporation pursuant to a Credit Agreement dated as of August 4, 1995, between
Mr. Kerkorian and Swiss Bank. As of [ ], 1995, the total amount of
outstanding indebtedness under this Credit Agreement was approximately $[ ].
II-4
MR. YORK
- - --------
Number of Shares Purchased Price per Share Date
- - -------------------------- --------------- ----
(Sold)
- - ------
(65)/(1)/ -- December 7, 1993
(100)/(1)/ -- December 23, 1993
(100)/(1)/ -- December 30, 1993
(7,000) $54.75 January 4, 1994
(2,400) $56.00 January 6, 1994
(3,206) $56.25 January 6, 1994
(403)/(2)/ $49.00 July 18, 1995
- - ---------
(1) Indicates shares donated by Mr. York as a charitable contribution.
(2) Indicates shares which were sold by Mr. York's Individual Retirement
Account.
In September 1995, Tracinda entered into a Value Sharing Agreement with Mr.
York, pursuant to which Tracinda has agreed to share certain incremental value
with respect to 32,000,000 of the shares of Common Stock held by Tracinda. Mr.
York will receive in September 2000 (or earlier at Mr. York's election, subject
to certain limits) 6% of the amount by which the market value of a share of
Common Stock exceeds $47.00 but does not exceed $65.00 and 3% of the amount by
which the market value of a share of Common Stock exceeds $65.00 (or, in the
case of the sale of shares of Common Stock for cash prior to that time, of the
amount by which the cash proceeds of the sale exceed $47.00, subject to
adjustment under certain circumstances).
MR. IACOCCA
- - -----------
Number of Shares Purchased Price per Share Date
- - -------------------------- --------------- ----
(Sold)
- - ------
29,783 /(1)/ -- December 2, 1993
(50,000)/(2)/ $60.228 January 1, 1994
(38,087)/(3)/ -- July 6, 1994
15,560 /(1)/ -- December 1, 1994
(123,750)/(4)/ -- December 28, 1994
(58,000)/(2)/ $ 50.00 August 10, 1995
- - ---------
II-5
- - ----------
(1) Indicates shares (net of shares withheld for payment of taxes) which were
granted to Mr. Iacocca by Chrysler as incentive compensation.
(2) Indicates shares which were sold by the Iacocca Foundation.
(3) Indicates shares donated by Mr. Iacocca directly to a charitable trust
which pays 8% of its value to the Iacocca Foundation annually for 20 years.
(4) Indicates shares donated by Mr. Iacocca directly to the Iacocca Foundation.
In June 1995, Tracinda entered into a Value Sharing Agreement with Mr.
Iacocca (the "Iacocca Value Sharing Agreement"), pursuant to which Tracinda has
agreed to share certain incremental value with respect to 32,000,000 of the
shares of Common Stock held by Tracinda. Mr. Iacocca will receive 4% of the
amount by which the market value of a share of Common Stock exceeds $47.00 in
June 1999 (or, in the case of the sale of shares of Common Stock for cash prior
to that time, of the amount by which the cash proceeds of the sale exceed
$47.00, subject to adjustment under certain circumstances). The amount payable
to Mr. Iacocca under the Iacocca Value Sharing Agreement also may be limited by
the terms of the November 1995 Agreement (as defined below).
During his tenure with Chrysler, Mr. Iacocca received equity-based
incentive compensation, comprised largely of options to purchase Common Stock.
These stock options were granted over the years under stock option plans
maintained by Chrysler, pursuant to stock option agreements (the "Stock Option
Agreements") between Mr. Iacocca and Chrysler. During the period of Mr.
Iacocca's service to Chrysler, he earned compensation in the form of options to
purchase over 2.5 million shares of Common Stock. Of these stock options, (i)
Mr. Iacocca owns options to purchase 1,436,590 shares of Common Stock as of
November 21, 1995, all of which are fully vested and currently exercisable, and
(ii) Mr. Iacocca previously has attempted to exercise options to purchase
112,500 shares of Common Stock, the exercisability of which are the subject of a
dispute between Mr. Iacocca and Chrysler, as discussed below (such options,
together with the options referred to in clause (i) above, are herein called the
"Iacocca Options"). The Iacocca Options are exercisable at prices ranging from
$11.75 to $44.07 per share.
In addition to stock options, under certain of the Stock Option Agreements,
Mr. Iacocca also was granted related Limited Stock Appreciation Rights ("Limited
Stock Appreciation Rights"). As of November 21, 1995, Mr. Iacocca holds Limited
Stock Appreciation Rights with respect to 286,590 shares of Common Stock.
Limited Stock Appreciation Rights are exercisable only during the 60-day period
following a "change of control" (as defined in Chrysler's stock option plans) of
Chrysler. Upon the occurrence of a change of control of Chrysler, Mr. Iacocca
may elect to exercise all or some of his
II-6
Limited Stock Appreciation Rights, and to receive in cash, with respect to each
share of Common Stock underlying such Limited Stock Appreciation Rights, the
amount equal to the excess, if any of (i) the higher of (x) the market value of
Common Stock on the date of the exercise or (y) the highest price paid for
shares of Common Stock in the transaction constituting the "change of control",
or, in the case of a "change of control" resulting from certain changes in the
membership of the Board of Directors of Chrysler, the average of the closing
price of Common Stock for the 30-day period prior to such change in the
membership of the Board of Directors of Chrysler that constitutes a "change of
control", over (ii) the exercise price of the related stock option, as set forth
in the applicable Stock Option Agreement. Upon the exercise of a Limited Stock
Appreciation Right, the related stock option, or the portion thereof with
respect to which such Limited Stock Appreciation Right is exercised, terminates
and, similarly, upon the exercise of a stock option related to a Limited Stock
Appreciation Right, such Limited Stock Appreciation Right, or the portion
thereof with respect to which such stock option is exercised, terminates.
The Stock Option Agreements generally provide, among other things, the
number of stock options granted, exercise prices, expiration dates, vesting
schedule, if any, reload features, if any, procedures for exercising the stock
options, Limited Stock Appreciation Rights, if any, and the plan under which the
terms of the stock options are granted. By the terms of the Stock Option
Agreements and the plans under which the stock options were granted, the Iacocca
Options and Limited Stock Appreciation Rights will expire on or before December
31, 1997.
Mr. Iacocca also was granted stock appreciation rights ("Stock Appreciation
Rights") by Chrysler under a letter agreement, dated July 12, 1990, as amended
on June 22, 1992 (the "SAR Agreement"). Of the Stock Appreciation Rights
granted under the SAR Agreement, Stock Appreciation Rights relating to 187,500
shares of Common Stock remain outstanding, all of which are fully vested and
currently exercisable. Pursuant to the SAR Agreement, Mr. Iacocca will be
entitled to receive, upon exercise, an amount equal to all or any part of
187,500 multiplied by the difference between $15.50 (the market value of Common
Stock on July 12, 1990) and the market value of Common Stock on the date of
exercise. The remaining Stock Appreciation Rights will expire on December 31,
1997.
On June 11, 1992, Chrysler and Mr. Iacocca entered into a two-year
agreement (the "Chrysler Consulting Agreement") commencing upon his retirement
as Chairman of the Board and Chief Executive Officer effective December 31,
1992, pursuant to which Mr. Iacocca was required to be available to devote up to
50% of his time to perform consulting and other services at Chrysler's request.
Pursuant to the Chrysler Consulting Agreement, Mr. Iacocca received (a) $500,000
per year, (b) certain perquisites made available to Chrysler's executive
officers, and (c) use of an office facility, staff support and certain related
services, including the use of Chrysler's company aircraft by
II-7
Mr. Iacocca in connection with the performance of his consulting services. The
Chrysler Consulting Agreement further contemplated that Mr. Iacocca would be
nominated for election to Chrysler's Board of Directors during the term of the
Chrysler Consulting Agreement and, if elected to the Board of Directors of
Chrysler, that Mr. Iacocca would serve as a director and as Chairman of the
Executive Committee of the Board without any additional compensation.
On November 6, 1995, Mr. Iacocca commenced a lawsuit in the Superior Court
of California, Los Angeles County, against Chrysler. The lawsuit arises out of
Chrysler's refusal to honor the exercise of certain of the Iacocca Options
granted to Mr. Iacocca as compensation during his years of service as Chrysler's
President, Chairman of the Board and Chief Executive Officer. Chrysler has
taken the position that the conditions to the exercise of such Iacocca Options
have not been satisfied, which position is disputed by Mr. Iacocca. Mr.
Iacocca's complaint alleges that Chrysler's management and Board of Directors
have sought to impose a forfeiture of some or all of those Iacocca Options in
retaliation against Mr. Iacocca's affiliation with Tracinda. The complaint
asserts causes of action for breach of contract, specific performance, omissions
of material facts, breach of fiduciary duty, equitable estoppel and declaratory
relief, and seeks, among other things, compensatory and punitive damages.
On November 3, 1995, Tracinda entered into an agreement with Mr. Iacocca
(the "November 1995 Agreement"), pursuant to which Mr. Iacocca will receive at
least $42 million in the aggregate, whether from Chrysler, Tracinda or both, in
respect of his interest in the Iacocca Options and his rights under the Iacocca
Value Sharing Agreement. If, with respect to the Iacocca Options, Mr. Iacocca
receives at least $42 million upon their exercise or sale, or pursuant to a
judgment against or a settlement with Chrysler, then Mr. Iacocca will receive
all amounts to which he is entitled under the Iacocca Value Sharing Agreement.
If Mr. Iacocca does not so receive $42 million in the aggregate with respect to
the Iacocca Options, then Mr. Iacocca will receive payments under the Iacocca
Value Sharing Agreement and the November 1995 Agreement equal to the excess of
$42 million over all amounts received by Mr. Iacocca in respect of the Iacocca
Options upon their exercise or sale, or pursuant to a judgment or settlement
with Chrysler, and will not be entitled to any other value sharing payment under
the Iacocca Value Sharing Agreement. Under the November 1995 Agreement,
Tracinda also has agreed to pay Mr. Iacocca's legal fees in respect of
litigation relating to the Iacocca Options up to a maximum of $2 million,
subject to reimbursement by Mr. Iacocca to the extent Mr. Iacocca receives
amounts in respect of the Iacocca Options in excess of $42 million.
MR. BOYER
- - ---------
In June 1995, Tracinda entered into a Value Sharing Agreement with Mr.
Boyer, pursuant to which Tracinda has agreed to share certain incremental value
with respect to
II-8
32,000,000 of the shares of Common Stock held by Tracinda. Mr. Boyer will
receive 1% of the amount by which the market value of a share of Common Stock
exceeds $47.00 in June 1999 (or, in the case of the sale of shares of Common
Stock for cash prior to that time, of the amount by which the cash proceeds of
the sale exceed $47.00, subject to adjustment under certain circumstances).
II-9
SCHEDULE III
BENEFICIAL OWNERSHIP OF CHRYSLER COMMON STOCK
The following information is derived from publicly available information on
file with the SEC, and sets forth the number of shares of Common Stock
beneficially owned by the directors and executive officers of Chrysler as of
July 6, 1995 (unless otherwise noted):
NUMBER OF SHARES TOTAL NUMBER
WHICH MAY BE OF SHARES
NAME OF NUMBER OF ACQUIRED WITHIN BENEFICIALLY
BENEFICIAL OWNER (1) SHARES OWNED 60 DAYS (2) OWNED (3)(4)
- - ------------------------- ------------ ---------------- ------------
Lilyan H. Affinito 3,466 6,600 10,066
Robert E. Allen 1,000 600 1,600
Joseph E. Antonini 6,130 2,100 8,230
Joseph A. Califano, Jr. 3,466 5,100 8,566
Theodor R. Cunningham 27,176 241,699 268,875
Thomas G. Denomme 23,044 92,698 115,742
Robert J. Eaton 103,872 549,410 653,282
Earl G. Graves 1,980 6,150 8,130
Kent Kresa 2,180 6,150 8,330
Robert J. Lanigan 3,337 3,000 6,337
Robert A. Lutz 58,381 493,034 582,066
Peter A. Magowan 15,430 3,000 18,430
Malcolm T. Stamper 4,577 2,100 6,677
Gary C. Valade 12,887 125,298 138,185
Lynton R. Wilson 1,500 600 2,100
All Directors and Executive
Officers, including those
named above, as a Group 672,480 3,158,841 3,861,972(5)
- - ------------------
(1) No director or executive officer is the beneficial owner of other equity
securities of Chrysler or any of its subsidiaries. No director or
executive officer beneficially owns more than 1.0% of the shares of Common
Stock outstanding.
(2) This column lists the number of shares which the directors and executive
officers have the right to acquire within 60 days after July 6, 1995
through the exercise of stock options. The shares shown in this column are
included in the Total Number of Shares Beneficially Owned column.
(3) Unless otherwise indicated, each person included in the group has sole
investment power and sole voting power with respect to the shares of Common
Stock beneficially owned by such person.
III-1
(4) Does not include shares of Common Stock held by the dividend reinvestment
plan and the trustees under the Chrysler savings plans.
(5) Includes 13,497 shares of Common Stock held by family members of executive
officers, the beneficial ownership of which has been disclaimed by such
officers in the reports filed with the SEC.
According to public documents filed with the SEC, the following person (in
addition to Kirk Kerkorian and Tracinda) beneficially owned more than 5% of the
shares of Common Stock as of July 31, 1995:
Voting Power Disposition Power
------------------- ------------------ Percent of
Name and Address Sole Shared Sole Shared Total(2) class (2)
- - ------------------------------------------------------------------------------------------
FMR Corp. (1) 1,257,073 0 48,338,267 0 48,338,267 13.04%
82 Devonshire Street
Boston, MA 02109
- - ------------------------------------------------------------------------------------------
(1) Based on the Schedule 13G filed by FMR Corp. with the Commission on August
7, 1995. The Schedule 13G indicates that beneficial ownership of
substantially all of these shares arises through the investment advisory
activities of Fidelity Management and Research Company ("FMRC") and the
investment management activities of Fidelity Management Trust Company, each
a wholly owned subsidiary of FMR Corp., and Fidelity International Limited,
an investment advisor to various investment companies.
(2) The Schedule 13G additionally reports that Mr. Edward C. Johnson 3rd,
chairman of FMR Corp., together with other family members part of a
controlling group of FMR Corp., is the beneficial owner of the same shares.
Subsequent to July 31, 1995, a Form 13F-E, dated November 15, 1995, for the
quarter ended September 30, 1995, was filed with the Commission by FMRC, on
behalf of itself and other affiliated institutional investment managers, and
indicated holdings of 55,082,374 shares of Common Stock, in respect of which
there was (i) sole voting authority as to 1,125,997 shares, (ii) shared voting
authority as to 0 shares, and (iii) no voting authority as to 53,956,377 shares.
______________________
Although Tracinda does not have any information that would indicate that
any information contained in this Schedule III, which has been taken from
documents on file with the SEC, is inaccurate or incomplete, Tracinda assumes no
responsibility for the accuracy or completeness of such information.
III-2