Chrysler, Kerkorian Resolve Long Dispute

Chrysler Corp. ended its 10-month battle with dissident shareholder Kirk Kerkorian by agreeing to put a Kerkorian ally on the board and to step up its stock repurchase program.

In return, Kerkorian agreed not to raise his stake in the company for at least five years. Chrysler also retained its right to maintain a cash fund of at least $7.5 billion, an amount that Kerkorian deemed excessive.

In addition, Chrysler and former chairman-turned-opponent Lee Iacocca dropped lawsuits against each other over Iacocca’s right to exercise Chrysler stock options. Chrysler rejected Kerkorian’s request that it raise the level at which its “poison pill” defense is activated.