Chrysler 2007 Annual Report Download - page 284

■A company may not purchase treasury stock for an amount exceeding the distributable profits and available reserves stated in its
most recently approved financial statements. Any purchase must be approved by stockholders in general meeting and in no case
may the nominal value of the shares acquired exceed one tenth of capital stock.
The following matters are also relevant to the capital stock of Fiat S.p.A.:
■Pursuant to the resolution approved by the Extraordinary Stockholders Meeting on September 12, 2002, the Board of Directors
had the right to increase the capital one or more times by September 11, 2007, up to a maximum of 8 billion euros.
■In a meeting held on November 3, 2006, the Board of Directors of Fiat S.p.A. exercised its delegated powers pursuant to
Article 2443 of the Italian Civil Code for a capital increase reserved for employees of the company and/or its subsidiaries up to a
maximum of 1% of that stock, i.e. 50,000,000 euros, by issuance of a maximum of 10,000,000 ordinary shares each of nominal
value 5 euros, corresponding to 0.78% of capital stock and 0.92% of ordinary capital stock, at a price of 13.37 euros each, to service
the employee stock option plan described in the following paragraph. The execution of this increase in capital is dependant on the
conditions of the plan being satisfied.
In this context it is recalled that Fiat S.p.A. has a dividend policy by which it intends to distribute a total dividend to its
stockholders of 25% of consolidated profits until 2010. On the basis of the Group’s 2007 consolidated results and in line with the
above dividend policy, the Board of Directors proposed to the stockholders at the Annual Stockholders Meeting an aggregate
dividend payout of 522.6 million euros (509.4 million euros excluding the treasury shares owned at the date of the publication of
these Statutory Financial Statements). The dividend distribution will be proposed as follows:
– 0.40 euros per ordinary and preference share;
– 0.555 euros per savings share.
The objectives identified by Fiat S.p.A. for managing capital are to create value for stockholders as a whole, to safeguard business
continuity and support the growth of the Group. As a result Fiat S.p.A. endeavours to maintain an adequate level of capital that at
the same time enables it to obtain a satisfactory economic return for its stockholders and guarantee economic access to external
sources of funds, including through the achievement of an adequate rating.
Fiat S.p.A. constantly monitors the evolution of the ratio between debt and equity of the Group and in particular the level of net
debt and the generation of cash from its industrial activities.
In order to reach these objectives Fiat S.p.A. aims at a continuous improvement in the profitability of the business in which it
operates. Furthermore, it may sell part of its assets to reduce the level of its debt, while the Board of Directors may make proposals
to stockholders in general meeting to reduce or increase capital stock or, where the law permits, to distribute reserves. In this
context, Fiat S.p.A. also makes purchases of treasury stock, without exceeding the limits authorized by stockholders in general
meeting, under the same logic of creating value, compatible with the objectives of achieving financial equilibrium and an
improvement in its rating.
In this respect capital is to be understood in the widest sense of the term, meaning both the value brought into a company by its
stockholders (capital stock, additional paid-in capital reserve less treasury stock, for a total value of 7,498,838 thousand euros), and
the value generated by Fiat S.p.A. in terms of the results achieved (retained earnings and other reserves, before allocation of the
net profits for the year, equal in total to 4,177,245 thousand euros, excluding gains and losses recognised directly in equity).
Fiat S.p.A. Financial Statements at December 31, 2007 - Notes to the Financial Statements 283