Chrysler 2005 Annual Report Download - page 275

274 Other Items on the Agenda and Related Reports and Motions
Stockholders,
The involvement of management personnel that holds key positions
in pursuing objectives relating to the Company’s and Group’s
operating performance allows us to reinforce their loyalty and
common interests with stockholders, and represents a fundamental
factor for corporate governance.
Moreover, the policy of motivating management by granting them
financial instruments representative of the Company’s value not only
provides the Group with a tool that is widely used and appreciated
at the international level but also contributes to the development
of confidence in the Company growth and alignment of management
interests with Group interests.
Accordingly, we propose that you authorize the adoption of an
incentive plan based on financial instruments issued by leading
financial institutions connected with Fiat shares. Such a plan would
be offered to a maximum of 200 Company and Group managers
who have a significant impact on business results. The participation
of these employees in this plan may be conditioned on their
achieving individual results and/or Group operating and financial
objectives. The participating individuals will be designated by the
Board of Directors, on recommendation by the Nominating and
Compensation Committee.
Incentive Plan pursuant to Article 114 Bis
of Legislative Decree no. 58/98
We will be assisted by international financial institutions that
specialize in the development of management motivation and loyalty
incentive tools for implementation of the plan. This will involve
further elaboration of the financial instruments offered as part of the
plan, enhancing their attractiveness within the specific context of Italy,
using options that can be exercised through intermediaries and their
marketability in accordance with predefined conditions, including
their deadlines.
The plan, which can be implemented in several tranches, will have
a duration of five years. The financial instruments issued by leading
financial institutions cannot be exercised during the first two years,
their exercise price will be determined in compliance with applicable
tax laws, or at the normal value of the underlying Fiat ordinary stock.
A maximum of 20 million shares will be involved in the plan. No
purchase of treasury stock by the Company is envisaged.
Therefore, we propose that you authorize the Board of Directors,
upon recommendation by the Nominating and Compensation
Committee, to execute an incentive plan with the characteristics
described above, identifying the beneficiaries and drafting the
conditions of the Plan, including the terms and conditions for
assignment. At least 15 days before the plan is executed, the market
will be provided with the detailed disclosure required pursuant to
Article 114 bis of the Consolidated Law on Financial Intermediation.
Turin, March 24, 2006
Board of Directors
By:
Luca Cordero di Montezemolo
Chairman