Chrysler 2010 Annual Report Download - page 219

FIAT GROUP
CONSOLIDATED
FINANCIAL
STATEMENTS
AT 31 DECEMBER
2010
NOTES
218
At 31 December 2010 the features of the stock option plan are as follows:
Strike
Date of price N° of options Vesting
Plan Beneficiary amendment Expiry date (€) granted Vesting date portion
Stock Options July 2004 (modified) Chief Executive Officer 27 March 2009 1 January 2016 6.583 10,670,000 31 December 2010 100%
On 3 November 2006 the Board of Directors of Fiat S.p.A. approved (subject to the subsequent approval of Shareholders in general meeting, which was
given on 5 April 2007) an eight year stock option plan, which granted certain managers of the Group and the Chief Executive Officer of Fiat S.p.A. the right to
purchase a specific number of Fiat S.p.A. ordinary shares at a fixed price of €13.37 each. More specifically, the 10,000,000 options granted to employees
and the 5,000,000 options granted to the Chief Executive Officer had a vesting period of four years, with an equal number vesting each year, were subject
to achieving certain predetermined profitability targets (Non-Market Conditions or “NMC”) in the reference period and may be exercised from the date on
which the 2010 financial statements are approved. The remaining 5,000,000 options granted to the Chief Executive Officer of Fiat S.p.A. also had a vesting
period of four years with an equal number vesting each year and may be exercised from November 2010. The ability to exercise the options is additionally
subject to specific restrictions regarding the duration of the employment relationship or the continuation of the position held.
The contractual terms of the 2006 plan are as follows:
Strike price N° of options Vesting
Plan Beneficiary Expiry date (€) granted Vesting date portion
Stock Option November 2006 Chief Executive Officer 3 November 2014 13.37 5,000,000 November 2007 25%
November 2008 25%
November 2009 25%
November 2010 25%
Stock Option November 2006 Chief Executive Officer 3 November 2014 13.37 5,000,000 1st Quarter 2008 (*) 25%*NMC
1st Quarter 2009 (*) 25%*NMC
1st Quarter 2010 (*) 25%*NMC
1st Quarter 2011 (*) 25%*NMC
Stock Option November 2006 Managers 3 November 2014 13.37 10,000,000 1st Quarter 2008 (*) 25%*NMC
1st Quarter 2009 (*) 25%*NMC
1st Quarter 2010 (*) 25%*NMC
1st Quarter 2011 (*) 25%*NMC
(*) On approval of the prior year’s consolidated financial statements; subject to continuation of the professional relationship.
As explained in greater detail in the section Amendments to the stock option plans and stock grant plans of Fiat S.p.A. arising from the Demerger which
follows, vesting conditions for each plan, whether they consisted in the continuation of a professional relationship with the Fiat Group or in the achievement
of specific performance objectives, expired on 31 December 2010. With specific reference to options granted under the 2006 Stock Option Plan, for which
vesting was subject to the achievement of pre-established profitability targets, only the first tranche (i.e. 25%) of those rights have vested as the profitability
targets established in 2006 for the 3-year period 2008-2010 were not met. As a result, the remaining 75% did not vest.
On 26 February 2008, the Board of Directors of Fiat S.p.A. passed an incentive plan which was subsequently approved by Shareholders in their annual general
meeting on 31 March 2008, by which an overall maximum of 4 million financial instruments could be assigned on a periodic basis until 2010 in the form of stock
options and/or stock appreciation rights. The plan had the aim of attracting and retaining managers in key roles who had been hired or promoted following the
granting of the stock option plan of 3 November 2006 or who had assumed greater responsibilities since the granting of the 2006 plan, and has the features of
that plan in terms of performance, vesting and exercise rights. Implementing the first grant under this program on 23 July 2008, the Board of Directors assigned
1,418,500 stock options having an exercise price of €10.24 and a vesting period of three years that was subject to achieving certain predetermined profitability
targets (Non-Market Conditions or “NMC”) in the reference period and together with rights exercisable from the date on which the 2010 financial statements are
approved. As these profitability targets had not been met at 31 December 2010, none of the rights granted to employees vested.