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certain rollover provisions not normally available to
non-pension-plan compensation to postpone further their taxation
on their distributions. The principal benefit to corporate
employers is that they may deduct currently their contributions
to the plans. The principal benefit to the plan itself is that
the underlying trust is exempt from current taxation on its
earnings.
Pursuant to the LGA, Chrysler established the ESOP effective
July 1, 1980, and funded the ESOT by issuing to it new shares of
Chrysler common stock during each of the ESOT’s fiscal years
ended June 30, 1981 through 1984. Pursuant to the terms of the
ESOP, employees could participate in the plan if they had:
(1) Worked for Chrysler or any of its subsidiaries or affiliates
for 9 continuous months at the beginning of the plan year and
(2) been affected by the wage and benefit concessions required by
the LGA. Chrysler established the ESOP to: (1) Satisfy the
LGA’s requirement for obtaining the Federal Government’s loan
guaranties, (2) compensate employees for wage and benefit
concessions, and (3) contribute to Chrysler’s financial recovery
and long-term viability by enhancing employee motivation and
increasing productivity.
Chrysler contributed $162.5 million (15,251,891 shares) of
its common stock to the ESOT from 1981 through 1984. Chrysler
contributed approximately one-fourth of that dollar amount in
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