Chrysler 2011 Annual Report Download - page 368

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Auditors’ Reports
Motions for AGM
Should you approve this proposal, the grant of the Rights to the CEO of the Company under the Plan would have immediate effect while, as required by law,
information on the Beneficiaries and actual number of financial instruments granted in relation to the Company Performance LTI and the Retention LTI will be
communicated to the market pursuant to the applicable laws and regulations.
The Plan, as for all other plans in effect, will continue to be administered by the Board of Directors of the Company, which has all necessary or advisable
powers in order to implement the Plan. Said powers include, without limitation, the power to establish any other terms and conditions for the implementation
of the Plan, provided that such terms and conditions do not contravene the general terms and conditions approved by the shareholders’ meeting.
Characteristics of the financial instruments
The Plan is based on the granting of Rights, which upon vesting conditions being fulfilled, will entitle the Beneficiaries to receive without cash consideration
an aggregate maximum of 31 million Company Shares. A separate section of the Plan is dedicated to the CEO with features focused on maximizing his
retention. To attain such objective, the CEO of the Company will be a beneficiary of the Retention LTI; this portion of the Plan will be equal to 7 million
Rights awarded, upon your approval of this proposal, with a one-time grant, and vesting one third each, subject to Mr. Marchionne still being in office as
CEO of the Company on February 22, 2013, February 22, 2014, and February 22, 2015, respectively.
A maximum of 24 million Rights would be available for allocation to the Beneficiaries other than the CEO of the Company.
Of the above mentioned maximum 24 million Rights, maximum 10 million would be granted over the three cycles under the Retention LTI and maximum
14 million for a one-time grant covering a three year performance period 2012-2014 under the Company Performance LTI.
With regard to the Company Performance LTI, Rights would vest subject to the achievement of pre-established financial performance targets for the period
January 1, 2012 and ending December 31, 2014 and remaining in office until approval of the 2014 consolidated financial statements by the Board of
Directors; the Rights will vest in a single tranche upon approval of the 2014 consolidated financial statements by the Board of Directors.
With regard to the Retention LTI, rights would vest solely subject to the Beneficiaries continued professional relationship with the Group through the
vesting; the rights relating to each of the three yearly grant cycles will vest ratably upon each of three anniversary dates of the grant.
The Plan is to be serviced through treasury shares bought on the market without issuing new shares and, therefore, would have no dilutive effects. The
Company will purchase additional treasury shares sufficient to service the Plan hereby submitted for your approval, at the appropriate time and to the
extent necessary, also taking into account currently owned treasury shares.
Specific rules (involving acceleration or forfeiting of the Rights) 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.
Other conditions of the Plan include, among others, specifically (i) the right of the Company to substitute, in whole or in part, Shares vested under the
Plan with a cash payment calculated on the basis of the Official Price of those shares published by Borsa Italiana on the date of vesting fulfillment, (ii) the
discretion of the CEO of the Company to determine, on one or more occasions, the number of Rights to be granted to each Beneficiary, as well as to
reassign any rights forfeited due to termination of the employment relationship.
Rights relating to the Plan are granted to the Beneficiaries only and are non-transferable, except by inheritance once vested, while the Shares received will
not be subject to any restrictions other than legal restrictions relating to the use of privileged information. The Board of Directors may set restrictions for
periods immediately prior to key dates in the corporate calendar.