Chrysler 2011 Annual Report Download - page 367

Motions
for AGM
366
The Company Performance LTI consists primarily of a performance based component and is linked to the Group’s pre-established performance targets.
The vesting period is through the end of the performance period (i.e., the approval by the Board of Directors of the 2014 consolidated financial statements)
and is based on cumulative three-year results. Therefore, the Company Performance LTI will be based on a one-time grant covering 2012-2014 period:
this part of the Plan will be vested at the end of the performance period and will be based on cumulative three-year results, it being understood that all
targets assigned to the Beneficiaries should be cumulatively met in order to fulfill the vesting conditions.
The Retention LTI has a retention-only component and is linked to individual contribution. The vesting period is through the third anniversary of said
Retention LTI, being understood that one-third of this component will be vested on each grant anniversary over the three years. Under the Plan, it is
envisaged that the Company will assign three different cycles of Retention LTIs: the first award would occur in 2012 (and it will vest over the 2012-2015
period), the second in 2013 (and it will vest over the 2013-2016 period), and the third in 2014 (and it will vest over the 2014-2017 period).
For more detailed information on the characteristics of the financial instruments and the vesting period, please refer to the relevant paragraph below.
The performance targets and the other criteria relating to the Company Performance LTI and the Retention LTI will be set forth (and from time to time
amended according to market conditions) by the CEO of the Company, in accordance with criteria approved by the Compensation Committee.
The maximum amount of Rights to be granted to each Beneficiary, other than the CEO of the Company, will be set forth by the CEO of the Company but
it is not expected to exceed at the grant date 150% of the annual fixed compensation of each Beneficiary.
The amount of Rights granted to the CEO of the Company is submitted to the approval of the shareholders’ meeting. For further information on this
amount, please refer to paragraph “Characteristics of the financial instruments” below.
The Shares attributed under the Plan are ordinary shares issued by the Company; no financial instruments will be issued by the Company, the Company’s
subsidiaries, the Company’s parent or by any third party under the Plan.
The Plan is in line with latest international best practice and would take the form of stock grants which are based, for the portion whose vesting is subject
to the achievement of performance objectives, on performance measurement tools that are consistent with current market conditions and linked to key
performance indicators for the Group.
Tax effects of the Plan benefits are the responsibility of the Beneficiaries.
Given its characteristics, no special funds (including the special fund for the encouragement of worker participation, referred to in Article 4, paragraph 112,
of the Italian Law December 24, 2003 no. 350) would support the Plan.
Procedure for approval of the Plan
The Plan was discussed and proposed by the Compensation Committee, composed of the independent directors R. Berger (Committee Chairman),
L. Garavoglia and M. Zibetti, which examined the matter during several of its meetings in October and December 2011 and February 2012.
On February 22, 2012, the Board of Directors, with Sergio Marchionne abstaining during the discussion and approval of the Plan due to his status as a
Beneficiary, unanimously approved the Compensation Committee’s proposal and submitted the proposed Plan to Shareholders for approval, pursuant to
Article 114-bis of the Financial Act.
The entire process of definition of the characteristics of the Plan was developed in a collective manner with the active support of the Compensation Committee,
in compliance with the recommendations of the Corporate Governance Code of Listed Companies and with the best corporate practices in this matter.
The Official Price published by Borsa Italiana for the Company Shares on 22 February 2012 was €4.838 per share.