Chrysler 2007 Annual Report Download - page 159

158 Fiat Group Consolidated Financial Statements at December 31, 2007 - Notes
Changes during the period under the CNH Directors’ Plans are as follows:
2007 2006
Average exercise Average exercise
Number of options price (in USD) Number of options price (in USD)
Outstanding at the beginning of the year 126,770 23.16 169,042 21.60
Granted 13,188 53.09 54,589 25.75
Forfeited – – (33,874) 34.74
Exercised (66,117) 15.32 (62,987) 14.10
Expired ––––
Outstanding at the end of the year 73,841 30.93 126,770 23.19
Exercisable at the end of the year 37,841 36.20 82,770 22.43
The CNH Equity Incentive Plan (the “CNH EIP”)
The plan provides for grants of various types of awards on specific performance targets for the Sector linked to the US GAAP
consolidated financial statements of CNH, to officers and employees of CNH and its subsidiaries. As of December 31, 2007, CNH
has reserved 15,900,000 shares for the CNH EIP. The plan envisages stock option and share incentives as described below.
■Stock option plan
Prior to 2006, certain stock option grants were issued which vest rateably over four years from the grant date and expire after ten
years. Certain performance-based options, which had an opportunity for accelerated vesting tied to the attainment of specified
performance criteria were issued; however, the performance criteria was not achieved. In any event, vesting of these options
occurs seven years from the grant date. All options granted prior to 2006 have a contract life of ten years.
Except as noted below, the exercise prices of all options granted under the CNH EIP are equal to or greater than the fair market
value of CNH common shares on the respective grant dates. During 2001, CNH granted stock options with an exercise price less
than the quoted market price of our common shares at the date of grant. The exercise price of this grant was based upon the
average closing price of CNH common shares on the New York Stock Exchange for the thirty-day period preceding the date of
grant.
Beginning in 2006, CNH entities no longer issued CNH Long-Term Incentive (“LTI”) awards, as discussed below, and begun to issue
awards under plans providing performance-based stock options, performance-based shares and cash. In February, 2007, CNH
granted approximately 1.5 million performance-based stock options under the CNH EIP. One-third of the options vested with the
approval of 2007 results by the Board of Directors in January, 2008. The remaining options will vest equally on the first and second
anniversary of the initial vesting date. Options granted under the CNH EIP in 2007 have a six year contractual life.