Long-Term Incentive Plan - Daimler Chrysler Corp.

                              CHRYSLER CORPORATION
                            LONG-TERM INCENTIVE PLAN
 
                           EFFECTIVE JUNE 11, 1987
                      (AS AMENDED THROUGH MAY 6, 1998)
 
1. PURPOSE
 
The purpose of the Chrysler Corporation Long-Term Incentive Plan (below
called the Plan) is to provide an incentive to the officers and other 
key salaried employees (below called collectively Employees) of 
Chrysler Corporation (below called Chrysler) and its subsidiaries 
(Chrysler and its subsidiaries collectively below called the 
Corporation) by enabling them to earn shares of common stock of 
Chrysler (below called the Chrysler Common Stock) as a reward
for the achievement of long-term goals and objectives of the 
Corporation, in accordance with the resolution most recently adopted 
by the stockholders of Chrysler at their Annual Meeting on May 19, 
1994, amending a resolution originally adopted on April 16, 1929, as 
it has been and may be further amended from time to time (below called 
the Stockholders' Resolution). All capitalized terms used below shall 
have the meanings ascribed to them in Section 3 below.
 
2. INTEGRATION WITH INCENTIVE COMPENSATION PLAN
 
This Plan shall be fully integrated with the Incentive Compensation 
Plan. The funds for the purchase of Chrysler Common Stock to be 
awarded as Performance Shares under this Plan shall be provided out of 
the earnings of the Corporation available for incentive compensation 
under the Incentive Compensation Plan, as the Board from time to time 
shall determine. Awards made hereunder shall complement awards made 
under the Incentive Compensation Plan as the Committee shall determine 
in its sole discretion. An amount equal to 150% of the total Fair 
Market Value of Performance Shares granted, on the day they were 
granted, shall be charged against the Incentive Compensation Fund (as 
that term is defined in the Incentive Compensation Plan). Any amount 
charged against the Incentive Compensation Fund for any Performance 
Shares not earned and delivered shall be returned to the funds 
available for incentive compensation under the Incentive Compensation 
Plan, and shall be carried forward and may be awarded in a subsequent 
fiscal year.
 
3. DEFINITIONS
 
"Beneficial Owner" -- with respect to any securities, shall mean any 
Person who, directly or indirectly, has the right to vote or dispose 
of such securities or otherwise has "beneficial ownership" of such 
securities (within the meaning of Rule 13d-3 under the Securities 
Exchange Act of 1934, as amended (the "Exchange Act")), including 
pursuant to any agreement, arrangement or understanding (whether or 
not in writing); provided, however, that (i) a Person shall not be 
deemed the Beneficial Owner of any security as a result of an agreement, 
arrangement or understanding to vote such security (x) arising solely
from a revocable proxy or consent given in response to a public proxy 
or consent solicitation made pursuant to, and in accordance with, the 
Exchange Act and the applicable rules and regulations thereunder or 
(y) made in connection with, or to otherwise participate in, a proxy 
or consent solicitation made, or to be made, pursuant to, and in 
accordance with, the applicable provisions of the Exchange Act and the 
applicable rules and regulations thereunder, in either case described 
in clause (x) or clause (y) above, whether or not such agreement,
arrangement or understanding is also then reportable by such Person 
on Schedule 13D under the Exchange Act (or any comparable or successor 
report), and (ii) a Person engaged in business as an underwriter of 
securities shall not be deemed to be the Beneficial Owner of any 
securities acquired through such Person's participation in good faith 
in a firm commitment underwriting until the expiration of forty days 
after the date of such acquisition."
 
"Board" means the Board of Directors of Chrysler.

 
"Change in Control" -- means a change in control of Chrysler, which 
shall be deemed to have occurred: 
 
(a) if any Person shall become the Beneficial Owner of securities of
Chrysler representing 20% or more of the combined voting power of
Chrysler's then outstanding securities (unless the event causing the 20%
threshold to be crossed is an acquisition of securities directly from
Chrysler);
 
(b) if during any period of two consecutive years beginning after June
7, 1990, individuals who at the beginning of such period constitute the
Board of Directors and any new director (other than a director designated
by a Person who has entered into an agreement with Chrysler to effect a
transaction described in paragraph (a), (c) or (d) of this Change in
Control definition) whose election or nomination for election was approved
by a vote of at least two-thirds (2/3) of the Directors then still in
office who either were Directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for
any reason to constitute a majority of the Board; or
 
(c) upon the approval by the stockholders of Chrysler of a merger or
consolidation of Chrysler with any other corporation (other than a merger
or consolidation which would result in the voting securities of Chrysler
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
entity surviving such merger or consolidation), in combination with voting
securities of Chrysler or such surviving entity held by a trustee or other
fiduciary pursuant to any employee benefit plan of Chrysler or such
surviving entity or any subsidiary of Chrysler or such surviving entity, at
least 80% of the combined voting power of the voting securities of Chrysler
or such surviving entity outstanding immediately after such merger or
consolidation) if, and only if, such merger or consolidation is
ultimately consummated; or
 
(d) if the stockholders of Chrysler approve a plan of complete
liquidation or dissolution of Chrysler or an agreement for the sale or
disposition by Chrysler of all or substantially all Chrysler's assets.
 
"Change in Control Fund" -- with respect to any Performance Cycle, means
the outstanding amount charged against the Fund with respect to such Performance
Cycle immediately prior to the occurrence of a Change in Control, increased by
the sum of the amounts described in "(i)" and "(ii)" below:
 
(i) the sum of (x) any amount authorized and approved by the Board for
any fiscal year completed prior to the Change in Control but not previously
awarded from, or charged against, the Incentive Compensation Fund pursuant
to this or any other plan of the Corporation, and (y) any amount awarded
from, or charged against, the Incentive Compensation Fund for any fiscal
year completed prior to the Change in Control that has been forfeited;
 
(ii) the aggregate amount calculated for the fiscal year in which
Change in Control occurs, from its inception up to and including the date
of the Change in Control, in the ordinary course of business and based on
the Stockholders' Resolution. The determinations (made prior to the Change
in Control) of the Corporation's internal accountants in making any such
calculation shall be conclusive.
 
"Change in Control Value" -- means, with respect to the Performance Shares,
the higher of (i) the Fair Market Value of a share of Chrysler Common Stock on
the relevant valuation date or (ii) the value of a share of Chrysler Common
Stock, determined as follows:
 
          (w) in the case of transactions described in paragraphs (a) or (c) of
     the Change in Control definition, the highest per share price paid (the
     "Transaction Value") for shares of Chrysler Common Stock in the transaction
     constituting the Change in Control,
 
          (x) in the case of a transaction described in paragraph (b) of the
     Change in Control definition which occurs in connection with a transaction
     described in paragraph (a), (c) or (d) of the Change in Control definition,
     the Transaction Value,
 
          (y) in the case of a Change in Control described in paragraph (b) of
     the Change in Control definition which does not occur in connection with a
     transaction described in paragraph (a), (c) or (d) of the Change in Control
     definition, the average of the daily closing prices per share of Chrysler
     Common Stock on the New York Stock Exchange, if such shares are traded
     thereon, or, if not, such other national
 
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     securities exchange on which such shares are admitted to trade, or, if
     none, the National Association of Securities Dealers Automated Quotation
     System if such shares are admitted for quotation thereon, during the thirty
     (30) consecutive trading days immediately preceding the Change in Control,
     or
 
          (z) in the case of a transaction described in paragraph (d) of the
     Change in Control definition, the equivalent of the Transaction Value as
     determined by the Committee.
 
     "Committee" -- means the Incentive Compensation Committee of the Board.
 
     "Fair Market Value" -- means for purposes of Performance Shares, the mean
of the high and low trading prices of Chrysler Common Stock on the date on which
it is to be valued hereunder, as reported on the New York Stock Exchange, or if
the Exchange is closed on such day, the next preceding day on which the Exchange
was open for trading.
 
     "Incentive Compensation Plan" -- means the Chrysler Corporation Incentive
Compensation Plan adopted in accordance with the Stockholders' Resolution.
 
     "Participant" -- means an Employee who is selected by the Committee to
receive an award of Performance Shares under the Plan.
 
     "Performance Cycle" or "Cycle" -- means the period of years determined by
the Committee during which the performance of the Corporation is measured for
the purpose of determining the extent to which an award of Performance Shares
has been earned.
 
     "Performance Goals" -- means one or more corporate objectives established
by the Committee for a Performance Cycle, for the purpose of determining the
extent to which Performance Shares which have been contingently awarded for such
Cycle are earned. Such objectives shall relate to: quality, customer
satisfaction, profitability, net margin as a percentage of revenue, return on
sales, return on capital, breakeven, productivity, and/or debt to
capitalization.
 
     "Performance Share" -- means an award expressed as a share of Chrysler
Common Stock contingently awarded under this Plan.
 
     "Person" -- shall have the meaning ascribed to such term in Section 3(a)(9)
of the Exchange Act, as supplemented by Section 13(d)(3) of the Exchange Act,
provided, however, that Person shall not include (i) Chrysler, any subsidiary of
Chrysler or any other Person controlled by Chrysler, (ii) any trustee or other
fiduciary holding securities under any employee benefit plan of Chrysler or any
subsidiary of Chrysler, or (iii) a corporation owned, directly or indirectly, by
the stockholders of Chrysler in substantially the same proportions as their
ownership of securities of Chrysler.
 
4. INCENTIVE COMPENSATION COMMITTEE
 
     The Plan shall be administered by the Committee, composed of not less than
two nonemployee directors, each of whom shall be a "Non-Employee Director"
within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended from time to time (the "Exchange Act"), or meet any other applicable
standard for administrators under that or any similar rule which may be in
effect from time to time.  Each member of the Committee shall be appointed by
the Board and serve at the pleasure of the Board. Subject to the provisions of
this Plan, the  Committee shall have authority, in its discretion, to
prescribe, amend, and  rescind rules and regulations relating to this Plan.
 
5. ELIGIBILITY
 
     All Employees who are eligible to participate in the Incentive Compensation
Plan, as determined by the Committee, are eligible to be Participants in this
Plan. The Committee shall have sole and complete authority to determine the
Employees who shall be awarded Performance Shares under this Plan.
 
6. PERFORMANCE CYCLES
 
     During 1987 the Committee shall establish Performance Cycles for the years
1987, 1987 through 1988 and 1987 through 1989. During each of the years 1988 and
thereafter the Committee may, but shall not be required to, establish a new
Performance Cycle with respect to a future period, which shall not be less than
 
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two nor more than five years. The Committee shall have sole and complete
authority to determine the duration of each Performance Cycle. More than one
Performance Cycle may be in effect at any one time, and the duration of one
Performance Cycle may differ from another.
 
7. PERFORMANCE GOALS
 
     The Committee shall establish one or more Performance Goals for each
Performance Cycle consisting of such criteria and for the accomplishment of such
corporate objectives as the Committee may designate. If a Performance Share
award for a given Performance Cycle is intended to be qualified
performance-based compensation under Section 162(m) of the Internal Revenue
Code, then the related Performance Goal shall be established no later than the
90th day of the first year of such Performance Cycle.  During any Cycle, the 
Committee may adjust the Performance Goals for such Cycle as it deems 
equitable in recognition of unusual or non-recurring events affecting the 
Corporation or changes in applicable tax laws or accounting principles.
 
8. PERFORMANCE AWARDS
 
     At the commencement of each Performance Cycle the Committee shall (a) award
to each Participant the number of Performance Shares that would be deliverable
to the Participant if the Performance Goals for that Cycle are fully achieved at
a 100% level of performance, which number shall be determined by dividing an
amount (expressed as a percentage -- not to exceed 150% -- of the Participant's
base salary, or the average base salary or midpoint of the salary range of a
class of Participants, at the time of the award) by the then fair market price
of Chrysler Common Stock and (b) establish a range within which greater or
lesser percentages (including a minimum and maximum percentage) of the number of
shares awarded as Performance Shares would be earned based on the actual
performance level attained. The maximum of such range shall not exceed 150% of
the number of shares awarded as Performance Shares.
 
     When a person becomes employed by the Corporation in, or is promoted by the
Corporation to, a position that constitutes him an Employee eligible to
participate in the Plan, the Committee may, in its sole discretion, award to
such person Performance Shares for one or more Performance Cycles commenced and
then in progress.
 
     The Committee may, in its sole discretion, supplement any award previously
made to any Participant, provided that such award has not yet been earned out
and paid; and provided further, that the Committee may not exercise such
discretion to the extent that the ability to exercise such discretion would
cause the Performance Share award to fail to qualify as other performance based
compensation under Section 162(m) of the Internal Revenue Code.
 
9. PAYMENT OF PERFORMANCE SHARES
 
     The Committee shall determine the percentage of the Performance Shares
which were earned by each Participant with respect to each Performance Cycle.
Such determination shall be made by considering the Corporation's performance in
relation to the Performance Goals established for that Performance Cycle and
deriving therefrom a percentage of attainment of the Performance Goals. Such
percentage (but not more than 150%) multiplied by the number of shares awarded
as Performance Shares to each Participant shall be the number of shares of
Chrysler Common Stock earned and to be delivered to such Participant. Such
shares shall be shares held by the Corporation in its treasury.
 
     A Participant may elect, on or after the date of grant of any award and
before the year in which such award is to be paid, to defer receipt of all or
any portion of the Performance Shares deliverable to such Participant upon
earning such award, subject to the terms and conditions contained in any
applicable deferral or similar plan or arrangement.
 
10. DIVIDEND EQUIVALENTS
 
     Participants shall be entitled to receive cash payments equivalent to the
dividend payments, if any, made to the owners of Chrysler Common Stock during
the Performance Cycle, on the dates such dividend payments are made. Such
payments are payable from and after the date Performance Shares are awarded
(i.e., during
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the relevant Performance Cycle) without regard to the attainment of Performance
Goals. Such cash payments equivalent to dividends shall not be charged against
the funds available for incentive compensation.
 
11. TERMINATION OF EMPLOYMENT
 
     A Participant must be an Employee at the end of a Performance Cycle in
order to be entitled to payment of Performance Shares in respect of such Cycle;
provided, however, that in the event a Participant ceases to be an Employee
prior to the end of that Cycle (a) by reason of death, disability under any
disability plan of the Corporation, or retirement at or after age 65 under a
pension plan of the Corporation, he (or the legal representative of his estate
or his legatees) shall continue to earn, as if he had not ceased to be an
Employee, any Performance Shares awarded to him for that Cycle, or (b) by reason
of layoff, or by reason of retirement before age 65 under a pension plan of the
Corporation, the Committee, in its discretion and after taking into
consideration the performance of such Participant and the performance of the
Corporation during the Cycle, may authorize payment to such Participant with
respect to some or all of the Performance Shares awarded to him for that Cycle.
No award of Performance Shares shall confer upon any Employee any right to
continued employment with the Corporation nor shall it interfere with the right
of the Corporation to terminate the employment of any Employee at any time.
 
12. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION
 
     Notwithstanding any other provision of this Plan, in the event of any
change in the outstanding Chrysler Common Stock by reason of a stock dividend,
recapitalization, merger, consolidation, split-up, combination or exchange of
shares, and the like, the number and class of shares subject to each outstanding
award of Performance Shares shall be appropriately adjusted by the Board, whose
determination shall be conclusive.
 
13. CHANGE IN CONTROL
 
     (A) First, subject to Section 13(D) hereof, upon the occurrence of a Change
in Control, any Performance Shares for a completed Performance Cycle which the
Committee has previously determined that a Participant has earned (but with
respect to which no delivery of Chrysler Common Stock has been made) shall be
paid no later than the tenth day following such Change in Control to such
Participant, in cash, in an amount equal to the Change in Control Value of each
such Performance Share multiplied by the number of such Performance Shares
(together with dividend equivalents on such shares calculated pursuant to
Section 10 hereof).
 
     (B) Second, subject to Section 13(D) hereof, upon the occurrence of a
Change in Control, any Performance Shares for a completed Performance Cycle
previously awarded to a Participant who was an Employee (or otherwise entitled
to payment under Section 11 hereof) at the end of such Performance Cycle (but as
to which the Committee has made no determination with respect to the number of
such shares earned by such Participant) shall be deemed earned out, at the
higher of a 100% level of performance or at the highest level of performance
attained in any of the three most recently completed previous Performance
Cycles. The Performance Shares so earned out shall be paid immediately to each
such Participant, in cash, in an amount equal to the Change in Control Value of
each Performance Share multiplied by the number of such shares deemed to have
been earned out (together with dividend equivalents on such shares calculated
pursuant to Section 10 hereof).
 
     (C) Third, subject to Section 13(D) hereof, upon the occurrence of a Change
in Control, a pro rata percentage (determined as provided below) of all
Performance Shares for each outstanding Performance Cycle previously awarded to
a Participant who is an Employee on the date immediately preceding the date of
the Change in Control which have not yet been earned out shall be deemed earned
out, at the higher of a 100% level of performance or at the highest level of
performance attained in any of the three most recently completed Performance
Cycles. The Performance Shares so earned out shall be paid immediately to each
such Participant in cash, in an amount equal to the Change in Control Value of
each Performance Share multiplied by the number of such shares deemed to have
been earned out (together with dividend equivalents on such shares calculated
pursuant to Section 10 hereof).
 
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     The number of Performance Shares deemed to have been earned out by a
Participant with respect to each outstanding Performance Cycle, upon a Change in
Control, shall be determined by first multiplying the total Performance Shares
awarded to the Participant for such Performance Cycle by a fraction, the
numerator of which shall be the number of complete months in such Performance
Cycle which have elapsed at the date of the Change in Control and the
denominator of which shall be the total number of months in such Performance
Cycle. Next, the number of Performance Shares determined in the first step shall
be multiplied by the applicable percentage level of performance for such
Performance Cycle.
 
     (D) Notwithstanding Sections 13(A), (B) and (C) hereof, the aggregate
amount payable with respect to any Performance Cycle pursuant to this Section 13
shall not exceed such Performance Cycle's Change in Control Fund and, if
necessary, the individual amounts otherwise payable with respect to a particular
Performance Cycle shall be reduced proportionally until the aggregate amount
equals such Performance Cycle's Change in Control Fund.
 
14. ADMINISTRATIVE COSTS
 
     All costs of administering this Plan shall be borne by the Corporation and
shall not be charged against the funds available for incentive compensation.
 
15. INTERPRETATION
 
     The Board shall have full power and authority to interpret and construe
this Plan and its interpreting and construing of this Plan and acts pursuant to
this Plan in good faith shall be final and conclusive. The Board may correct any
defect or supply any omission or reconcile any inconsistency in such a manner
and to such an extent as it shall find expedient to carry this Plan into effect,
and it shall be the sole and final judge of expediency. If any such interpreting
or construing shall involve a question of law, the Board may rely and act upon
the opinion of counsel (who may be counsel to Chrysler) on the question of law.
 
     Notwithstanding anything else contained in this Plan to the contrary, if
any award of Performance Shares is intended at the time of grant to be other
performance based compensation within the meaning of Section 162(m)(4)(C) of the
Code, to the extent required to so qualify any award hereunder, the Committee
shall not be entitled to exercise any discretion otherwise authorized under this
Plan with respect to such award if the ability to exercise such discretion (as
opposed to the exercise of such discretion) would cause such award to fail to
qualify as other performance based compensation.
 
16. EFFECTIVE PERIOD
 
     This Plan shall become effective beginning June 11, 1987, and shall remain
in effect until terminated as provided in Paragraph 17.
 
17. AMENDMENT AND TERMINATION
 
     At any time the Board may terminate this Plan or make such changes in it
and additions to it (consistent with the Stockholders' Resolution) as the Board
shall deem advisable; provided, however, that the Board may not: (a) without the
approval of the holders of a majority of the shares of Common Stock of Chrysler
voting on the matter, increase the total amount that under the Stockholders'
Resolution may be provided out of the earnings of the Corporation for incentive
compensation and (b) without the approval of the holders of a majority of the
shares of Common Stock of Chrysler issued and outstanding, issue shares of
Chrysler Common Stock for purposes of this Plan; and provided further, however,
that terminating or amending this Plan shall not terminate the right of any
Participant to earn and thereby become entitled to receive, in the same manner
as if this Plan had not been terminated or amended, any unearned Performance
Shares awarded to him under this Plan prior to the terminating or amending of
this Plan.
 
     Nothing in this Plan shall be interpreted to preclude Chrysler from
granting awards under, or paying compensation outside the parameters of, the
Plan including, without limitation, base salaries, awards under any other plan
of Chrysler (whether or not approved by stockholders), incentive compensation
(whether or
 
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not based on the attainment of pre-established performance objectives) or
retention or other special payments, that is not deductible for Federal, State
or local income tax purposes by reason of Section 162(m) of the Internal Revenue
Code or otherwise, should the Board or any committee thereof (including the
Committee), whichever is applicable, determine that such action is in the best
interests of Chrysler and its stockholders.
 
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