Chrysler 2005 Annual Report Download - page 47

46 Reporton Operations Stock Options Plans
01 Report on Operations
Stock Options Plans
Thus far, the Board has approved Stock Option Plans offered to
about 900 managers of the Group’s Italian and foreign companies
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
objectiveparametersthat 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 on the basis of the
average stock market price for the month preceding the option
grant, can vary as a result of transactions affecting the Company’s
capital stock. It must be paid in cash upon the purchase of the
underlying shares.
The options are normallyexercisable 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.
In consideration of the options previously granted under the aforesaid
plans and that have since expired upon termination of employment, a
total of 7,749,500 option rights corresponding to the same number of
shares represent treasury stock to be assigned to the holders of options
pursuant to the conditions envisaged in the specific Regulations.
In addition, the Board of Directors granted Mr. Sergio Marchionne,
as a portion of his variable compensation as Chief Executive Officer,
options for the purchase of 10,670,000 Fiat ordinaryshares at the
price of 6.583 euros per share, exercisable from June 1, 2008 to
January 1, 2011. In each of the first three years since the grant, he
accrues the right to purchase, from June 1, 2008, a maximum of
2,370,000 shares per year and on June 1, 2008 he accrues the right
to purchase, effective that date, the residual portion amounting to
3,560,000 shares. The right to exercise the options related to this
last portion of shares is subject to certain predetermined profitability
targets that should be reached during the reference period.
Ferrari S.p.A. granted its Chairman and Chief Executive Officer, Luca
Cordero di Montezemolo, options for the purchase of 184,000
Ferrarishares at the price of 175 euros per share, exercisable until
December 31, 2010.The exercise of 80,000 of said shares is subject
to the placement of Ferrari shares on the stock market.
Options granted as part of Stock Options Plans on Fiat shares
and outstanding at December 31, 2005 are shown in the next page.
Options granted to Board Members are instead shown in a specific
table in the Notes to the Financial Statements.