Kerkorian SEC Filing Lists Proposals for Chrysler Shareholder Vote
Nov. 22, 1995
DETROIT (AP) _ Dissatisfied with Chrysler Corp.'s response to his pressure for change in the way it operates, dissident shareholder Kirk Kerkorian is taking his case to the company's other owners.
Chrysler shareholders may face votes on several Kerkorian proposals at their annual meeting next spring. They were outlined Tuesday in a Securities and Exchange Commission filing by Tracinda Corp., the Las Vegas billionaire's investment company.
Kerkorian and his associates, including former Chrysler Chairman Lee Iacocca, control nearly 54 million shares of Chrysler stock. That comprises 14.1 percent of the company, worth about $2.7 billion. Only FMR Corp., the parent of Fidelity Investments mutual funds, owns more.
The SEC filing clears the way for Kerkorian to recruit allegiance and voting authority from FMR and other Chrysler shareholders.
And if Kerkorian requests it before a Dec. 3 deadline, Chrysler's own proxy statement _ essentially the agenda for the annual meeting _ will list his proposals and put them before shareholders. Such a request seems likely.
Kerkorian wants Chrysler to share more of its wealth with the people who own shares in the automaker. Chrysler earned $3.6 billion last year. The company wants to accumulate a $7.5 billion cash reserve to allow it to operate smoothly during the auto industry's next downturn without gutting product development programs or passing up investment opportunities.
Kerkorian contends a smaller cash cushion would be adequate. His proposed takeover of the company last spring would have been financed in part by some of what he sees as excess Chrysler cash. The takeover idea died for lack of lenders to back it.
The proposals outlined in Tuesday's SEC filing dealt mostly with issues Kerkorian has raised with the company before, issues that apparently were not settled in a meeting Monday between Kerkorian and Chrysler Chairman Robert J. Eaton.
_ The election of Jerome B. York to the Chrysler board. York was Chrysler's chief financial officer until 1993. He recently left the CFO job at IBM Corp. to join Tracinda.
_ The removal of director Joseph Antonini, a Chrysler board member since 1989. Antonini was chairman of struggling discount retailer Kmart Corp. until he was forced out earlier this year. Tracinda officials would not say why Antonini's seat was targeted, but it is not unusual for corporate directors who lose their jobs to leave the boards they serve on. Reached at his office Tuesday in Troy, Mich., Antonini declined comment.
_ A nonbinding resolution urging the board to add two additional seats to be filled by people who are not Chrysler officers and who do not do business with Chrysler.
_ Raising the threshold of Chrysler's anti-takeover defenses so that they are not triggered until an individual shareholder controls 20 percent of the company's stock. The current trigger point is 15 percent.
_ A nonbinding resolution urging the board to appoint a committee of outside directors to study Chrysler's cash management policies.
_ Amending the company's bylaws to prohibit ``greenmail,'' the practice of buying stock at premium prices from large shareholders who might be engaged in attempts to take over the company.
_ Requiring the company to get shareholder approval before issuing special classes of stock designed to dilute the voting power of existing shareholders.
Reacting to Kerkorian's earlier pressure for action on these issues, Chrysler's board started a 90-day review of its corporate governance policies on Nov. 2.
A Chrysler spokesman said the review is continuing. He would not discuss steps Chrysler might take to counter Kerkorian's courting of other shareholders.