Chrysler 2009 Annual Report Download - page 202

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Cash-settled share-based payments
Various entities belonging to the former joint venture with General Motors reached agreements with certain employees in 2001, 2002, 2003 and 2004 over
four cash-settled share-based payment schemes entitled Stock Appreciation Rights (SAR) plans. Under these plans, certain of the employees involved have
the right to receive a payment corresponding to the increase in price between the grant date and the exercise date of General Motors $1 2/3 shares listed
in New York and Fiat S.p.A. ordinary shares listed in Milan. The right is exercisable from the vesting date to the expiry date of the plans and is subordinated
to certain conditions (Non-Market Conditions “NMC”). The contractual terms of these rights are as follows:
Outstanding Outstanding
Vesting date rights on GM $1 rights on Fiat Grant price Grant price
2/3 shares at S.p.A. shares at GM $1 2/3 Fiat S.p.A. Vesting
Plan Grant date From Until 31 December 2009 31 December 2009 (in USD) (€) portion
2001 (Expired) 12 February 2002 1° March 2002 12 February 2009 - - 49.57 15.50 100%*NMC
2002 12 February 2002 12 February 2003 12 February 2010 - 118,110 49.57 15.50 1/3*NMC
12February 2004 12 February 2010 1/3*NMC
12 February 2005 12 February 2010 1/3*NMC
2003 11 February 2003 11 February 2004 11 February 2011 - 60,854 36.26 7.95 1/3*NMC
11 February 2005 11 February 2011 1/3*NMC
11 February 2006 11 February 2011 1/3*NMC
2004 10 February 2004 10 February 2005 11 February 2012 - 45,456 49.26 6.03 1/3*NMC
10 February 2006 11 February 2012 1/3*NMC
10 February 2007 11 February 2012 1/3*NMC
With reference to the stock appreciation rights on the General Motors $1 2/3 shares, the plans are no longer applicable following the Chapter 11 procedure
involving General Motors.
Changes during the period are as follows:
Rights on GM $1 2/3 shares Rights on Fiat S.p.A. shares
Outstanding at the beginning of the year 176,747 397,820
Granted - -
Forfeited - (34,334)
Exercised - (25,550)
Expired (176,747) (113,516)
Outstanding at 31 December 2009 - 224,420
Exercisable at 31 December 2009 - 224,420
Exercisable at 31 December 2008 176,747 397,820
In accordance with IFRS 2, the Group measures the liability arising from cash-settled share-based payment transactions at fair value at each reporting date
and at the date of settlement; the changes in the fair value of these liabilities are recognised in the income statement for the period. At 31 December 2009
and 2008, the Group measured the fair value of the liabilities generated by these plans using the binomial method based on the following assumptions:
At 31 December 2009 At 31 December 2008
Fiat S.p.A. GM $1 Fiat S.p.A.
ordinary share 2/3 share ordinary share
Closing price €10.26 $3.36 €4.59
Expected volatility (%) 59.89 109.81 74.17
Expected dividend yield (%) (a) - (a)
(a) The dividends expected to be paid on the ordinary shares of Fiat S.p.A. and used in the binomial model to calculate the fair value of these stock appreciation rights at 31 December 2008 are those
declared by the Group in 2006. The dividends expected to be paid on the ordinary shares of Fiat S.p.A. and used to calculate the fair value of these stock appreciation rights at 31 December 2009
have been taken from an external provider.