Chrysler 2012 Annual Report Download - page 184

183
Consolidated
Financial Statements
at 31 December 2012
Stock Grant plans linked to Fiat S.p.A. and Fiat Industrial S.p.A ordinary shares.
Following the vesting of the rights granted under the plans approved by Shareholders in their Annual General Meeting on 27 March 2009 and on 26 March
2010 and as amended, at the beginning of 2012 the Fiat Chief Executive Officer was assigned with 4,000,000 of Fiat S.p.A. ordinary shares and 4,000,000
of Fiat Industrial S.p.A. ordinary shares.
On 4 April 2012, General Shareholders Meeting resolved to approve the adoption of a Long Term Incentive Plan (the “Retention LTI”), in the form of stock
grants.
As a result of the Shareholders’ resolution the Company attributed the Chief Executive Officer with 7 million rights, representative of an equal number of
Fiat S.p.A. ordinary shares. The rights will vest ratably, one third on 22 February 2013, one third on 22 February 2014 and one third on 22 February 2015,
subject to the requirement that the Chief Executive Officer remains in office.
The Plan is to be serviced through treasury shares without issuing new shares. The Company has the right 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 fulfilment.
At 31 December 2012, the contractual terms of the Plan were therefore as follows:
Plan Beneficiary Number of shares Vesting date Vesting portion
Retention LTI Chief Executive Officer 7,000,000 Fiat S.p.A. 22 February 2013
22 February 2014
22 February 2015
2,333,333
2,333,333
2,333,333
Changes during 2012 were as follows:
2012
Number of
Fiat S.p.A. shares
Average Fair value
at the grant date
(in euro)
Outstanding shares unvested at the beginning of the year - -
Granted 7,000,000 4.205
Forfeited - -
Vested - -
Outstanding shares unvested at the end of the year 7,000,000 4.205
In 2012, a nominal cost of €9 million was recognised in the income statement for this plan.
Restricted Stock Unit Plans issued by Chrysler Group LLC
During 2009, the U.S. Treasury’s Office of the Special Master for Troubled Asset Relief Program Executive Compensation (the “Special Master”) and
the Compensation Committee of Chrysler approved the Chrysler Group LLC Restricted Stock Unit Plan (“RSU Plan”), which authorised the issuance of
Restricted Stock Units (“RSUs”) to certain key employees. RSUs represent a contractual right to receive a payment in an amount equal to the fair market
value of one Chrysler unit, as defined in the RSU plan. The fair value of each RSU is based on the fair value of the membership interests of Chrysler. RSUs
granted to employees generally vest if the participant is continuously employed by Chrysler through the third anniversary of the grant date.
Further, during 2009 Chrysler established the Chrysler Group LLC 2009 Directors’ Restricted Stock Unit Plan (“Directors’ RSU Plan”). In April 2012, the
Compensation Committee amended and restated the Chrysler Group LLC 2009 Directors’ Restricted Stock Unit Plan to allow grants having a one year
vesting term to be granted on an annual basis. Prior to the change, Director RSUs were granted at the beginning of a three-year performance period and
vested in three equal tranches on the first, second, and third anniversary of the date of grant, subject to the participant remaining a member of the Chrysler
Board of Directors on each vesting date. Under the plan, settlement of the awards is made within 60 days of the Director’s cessation of service on the board
of directors and awards are paid in cash; however, upon completion of an IPO, Chrysler has the option to settle the awards in cash or shares. The value of
the awards is recorded as compensation expense over the requisite service periods and is measured at fair value.