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each of the 4 years and claimed a deduction for the market value
of the contributed shares for the years in which the
contributions were made. The contributed shares amounted to
approximately 22 percent of Chrysler’s outstanding shares at the
end of 1980, and the ESOT held the largest single block of
Chrysler common stock.
The ESOT’s trustee was a commercial bank named
Manufacturer’s National Bank of Detroit (MNB), and MNB’s nominee
was Calhoun & Co. Pursuant to the LGA, MNB allocated the stock
contributed by Chrysler to the individual accounts of the ESOP
participants in equal amounts, provided that the participant had
worked 650 hours or more during the plan year. MNB also invested
any dividends received on the stock allocated to a participant's
account in additional shares of Chrysler common stock. The LGA
authorized the participants to vote the shares in their accounts.
MNB had to vote the stock for which no directions had been
received in the same proportion as the stock as to which
directions had been received. The ESOP authorized distributions
to employees only in the event of: (1) Death, in which case the
proceeds were forwarded to the designated beneficiary,
(2) termination of employment, or (3) the ESOP’s termination.
Chrysler’s board of directors had the discretion to terminate the
ESOP at any time after June 30, 1984.
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