Chrysler 2009 Annual Report Download - page 366

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Consequently, the total number of rights available for allocation under the Plan (8 million at the inception of the Plan, of which
2 million for the Chief Executive Officer of Fiat S.p.A. and a maximum of 6 million for allocation to other Group executives)
would increase to 12 million, of which 4 million for the Chief Executive Officer of Fiat S.p.A. and a maximum of 8 million for
other Group executives.
In addition, it is proposed that the Plan be extended to 2011 and that vesting of the 8 million rights, of which 2 million are for
Sergio Marchionne and a maximum of 6 million for other Group executives, be subject to both continuation of a professional
relationship with the Group until the date of approval of the 2011 consolidated financial statements and achievement of Group
performance targets. In particular, the 2 million rights already allocated to the Chief Executive Officer of Fiat S.p.A. include
500,000 rights related to 2009 performance objectives that have been met - and are therefore subject solely to his remaining in
office - and 1.5 million rights which we propose be subject, together with the maximum 6 million rights to be allocated to other
Group executives, to achievement of 2010 and 2011 performance objectives, rather than the previous reference period of 2009
and 2010, thereby extending the incentivization and retention effects of the Plan.
The other conditions of the Plan remain unchanged and, specifically, the right of the Company to substitute, in whole or in part,
Fiat ordinary shares granted to plan beneficiaries with a cash payment calculated on the basis of the Official Price of those
shares published by Borsa Italiana on the date of approval of the 2011 consolidated financial statements, the discretion of the
Chief Executive Officer to determine, on one or more occasions, the number of rights to be granted to each executive, as well
as to reassign any rights forfeited due to termination of the employment relationship.
The Official Price published by Borsa Italiana for Fiat ordinary shares on 16 February 2010 was e7.79 per share.
Should you approve these proposals, the grant to the Chief Executive Officer of Fiat S.p.A. would have immediate effect while,
as required by law, information on the beneficiaries and actual number of financial instruments granted in relation to the 2009-
2011 Plan for Group executives will be communicated to the market on the grant date.
As with all existing incentive plans, the Plan will continue to be administered by the Board of Directors of Fiat S.p.A.,
which has the power to modify the terms, conditions and targets at any time, including as a consequence of extraordinary
transactions or significant events.
Characteristics of the financial instruments
The 2009-2011 Plan is based on the granting of rights under which beneficiaries would receive an aggregate maximum of 12
million Fiat ordinary shares, 4 million of which are for the Chief Executive Officer, Sergio Marchionne, and a maximum of 8 million
shares would be available for allocation to executives in key positions that have a significant impact on business results.
The rights would be vested in a single tranche upon approval of the 2011 consolidated financial statements by the Board
of Directors. On that date, shares relating to the rights which vest on a retention-only basis as well as those subject to the
achievement of performance objectives will be granted. With particular reference to the latter, shares corresponding to
25% of the rights allocated will be granted if the 2010 performance targets are reached and 100% if the 2011 performance
targets are reached. As already specified, the Company shall retain the right to substitute those shares, in whole or in part,
with a cash payment calculated on the basis of the Official Price of those shares published by Borsa Italiana on that date.
Specific rules apply to certain cases of early termination of the relationship, such as, for example, a change of employer
within the Group, retirement or death of the beneficiary.
Rights relating to the Plan are granted to the beneficiary only and are non-transferable, except by inheritance, while the ordinary
shares received will not be subject to any restrictions other than legal restrictions relating to the use of privileged information. As
such, the Board of Directors may set restrictions for periods immediately prior to key dates in the corporate calendar.
The Plan is to be serviced through shares bought on the market rather than through the issue of new shares and, therefore,
would have no dilutive effects. The Company currently holds sufficient own shares to fully service existing incentive plans,
as well as the Plan hereby submitted for your approval.