Chrysler 2002 Annual Report Download - page 37

when handling and publishing such information. The purpose
of this procedure is to prevent potential leaks of confidential
information. It imposes the penalties that the Code of Ethics
provides for employees who violate confidentiality rules and
makes clear that the same level of compliance with its provisions
and the same prudent behavior is expected of the Directors and
Statutory Auditors.
In compliance with the new norms issued by the Italian Stock
Exchange, a code of conduct was also adopted for disclosure by
relevant persons of internal dealing transactions. The envisaged
deadlines and quantities, which are lower than those prescribed
in the Italian Stock Exchange norms – defined in the annex to
the Internal Dealing Regulation found on the Corporate
Governance page of the Group’s Web site – require prompt
reporting by relevant persons of individual transactions whose
countervalue exceeds 80,000 euros and those whose aggregate
amount exceeds 15,000 euros on a monthly basis.
Relations with stockholders
One of the Company’s principal concerns is to establish
and maintain an ongoing dialogue with its stockholders
and institutional investors. To that end, Fiat created specific
entities that are responsible for managing these relationships.
The Group organizes frequent meetings and conference calls
with institutional investors and analysts and uses its Web site
(www.fiatgroup.com) to disseminate publicly and in real time
the material discussed on those occasions.
The Web site is also used to disseminate corporate, operating
and financial information on a regular basis as well as to present
news of special transactions. The schedule of corporate events
and all documents pertaining to corporate governance are
available in a recently created section of the Web site.
In addition, a toll-free number (800-804027) and two e-mail
addresses ([e-mail] and
investor.r[email protected]oup.com) are available to anyone
seeking additional information regarding transactions that affect
stockholders.
Regulations were adopted in 2000 to ensure that
Stockholders’ Meetings run in an orderly and efficient fashion.
These Regulations define the rights and obligations of all
parties attending a Stockholders’ Meeting and provide clear
and unambiguous rules, without limiting or in any way
hampering the right of individual stockholders to voice their
opinions and demand explanations about items on the Agenda.
The Board of Directors has not submitted motions to the
Stockholders’ Meeting that would decrease the minimum
number of shares that must be held in order to file motions
and exercise the rights accorded to minority stockholders.
Board of Statutory Auditors
The Board of Statutory Auditors comprises three Statutory
Auditors and three Alternates, all of whom, as required by
the Company’s Articles of Association, must be entered in
the Auditors’ Register.
In accordance with the Company’s Articles of Association
and as allowed under the Consolidated Law on Financial
Intermediation, properly organized minority groups may
appoint one Statutory Auditor. According to the Company’s
Articles of Association, the minimum level of ownership
needed to submit a slate of candidates is 3%. The purpose
of this threshold is to ensure that the candidates being
proposed are supported by a group of minority stockholders
that is sufficiently representative and authoritative to speak
in juxtaposition to the majority.
The Articles of Association envisage that slates of candidates
must be accompanied by statements certifying satisfaction
of the requirements prescribed by law and the Articles of
Association and the absence of factors that would disqualify
them, on penalty of rejection of those slates.
STOCK OPTION PLANS
Thus far, the Board has approved five Stock Option Plans
offered to about 900 managers of the Group’s Italian and
foreign subsidiaries who are qualified as “Direttore” or have
been included in the Management Development Program
for high-potential managers. Plan Regulations share these
common features:
❚Options are granted to individual managers on the basis
of objective parameters that take into account the level
of responsibility assigned to each person and his or her
performance.
❚If employment is terminated or an employee’s relationship
with the Group is otherwise severed, options that are not
exercisable become null and void. However, vested options
may be exercised within 30 days from the date of termination,
with certain exceptions.
❚The option exercise price, which is determined based on
the average stock market price for the month preceding
the option grant, can vary as a result of eventual transactions
affecting the Company’s capital stock. It must be paid in
cash upon the purchase of the underlying shares.
❚The options are normally exercisable starting one year after
they are granted and for the following eight years, but during
the first four years, exercise is limited to annual tranches,
which may be accumulated, of no more than 25% of the total
granted.
A total of 6,420,000 options were granted in 2002, expiring in
2010 and subject to the limits for the first four years described
hereinabove.
In consideration of the options previously granted under the
aforesaid plans and that have since expired upon termination
35 Report on Operations Corporate Governance and Stock Option Plans