Chrysler 2012 Annual Report Download - page 185

Notes
184 Consolidated
Financial
Statements
at 31 December
2012
The liability from the vast majority of these awards is classified as Other current liabilities (Note 30). The liability is remeasured and adjusted to fair value at
each reporting date. The expense recognised for these awards for the year ended 31 December 2012 and during the seven month period from June to
December 2011 approximated €28 million and €2 million, respectively.
Deferred Phantom Shares issued by Chrysler Group LLC
During 2009 the Special Master approved the Chrysler Group LLC Deferred Phantom Share Plan (“DPS Plan”) which authorized the issuance of phantom
shares of the company (“Phantom Shares”). Under the DPS Plan, Phantom Shares were granted to certain key employees as well as to the Chief Executive
Officer in connection with his role as a member of the Chrysler Group Board of Directors. The grant to the Chief Executive Officer was economically identical
to the RSUs issued to the other members of the Chrysler Group Board except that it was issued under the DPS Plan to comply with certain structural
requirements applicable under Troubled Asset Relief Program (“TARP”). The Phantom Shares vested immediately on the grant date and will be settled in
cash. Chrysler began making payments of certain of these awards during the first quarter of 2012. The expense recognised in connection with these plans
during the year ended 31 December 2012 and during the seven-month period from June to December 2011 approximated €2 million and €3 million,
respectively.
Changes impacting Compensation of Chrysler Group LLC beginning in 2012
In February 2012, the Compensation Committee adopted the 2012 Long-Term Incentive Plan (the “2012 LTIP”). The 2012 LTIP covers senior Chrysler
Group executives (other than the Chief Executive Officer). It is designed to retain talented professionals and reward their performance through annual grants
of phantom equity in the form of restricted share units (“LTIP RSUs”) and performance share units (“PSUs”). LTIP RSUs may be granted annually, while
PSUs are generally granted at the beginning of a three-year performance period. The Compensation Committee has discretion to grant additional PSU
awards during the three-year performance period. The LTIP RSUs vest over three years in one-third increments on the anniversary of their grant date, while
the PSUs vest at the end of the three-year performance period only if the Company meets or exceeds certain three-year cumulative company performance
targets. If the Company does not fully achieve these targets, the PSUs will be deemed forfeited. Once vested, LTIP RSUs and PSUs will be settled in cash
or, in the event Chrysler conducts an IPO, in cash or shares of publicly traded stock, at the Compensation Committee’s discretion. Settlement will be made
as soon as practicable after vesting, but in any case no later than 15 March of the year following vesting. The expense recognised in connection with these
plans during the year ended 31 December 2012 was €24 million.
26. Provisions for employee benefits
This note refers to provisions for employee benefits determined in accordance with IAS 19 - Employee Benefits issued in February 1998 and subsequent
amendments; for the effects relating to the adoption of the amendment to IAS 19 issued in June 2011, reference should be made to the note - Accounting
standards and amendments not yet applicable and not early adopted by the Group. Indications on estimated impacts deriving from an adoption of the new
rules from 1 January 2012 are in any case provided hereinafter to improve comprehension.
A detail of provisions for employee benefits is as follows:
(€ million) At 31 December 2012 At 31 December 2011
Pension benefits 2,679 2,863
Health care and life insurance plans 1,875 1,922
Employee leaving entitlements in Italy 761 793
Other post-employment benefits 147 145
Total Post-employment benefits 5,462 5,723
Other provisions for employees and liabilities for share based payments 906 1,006
Other long-term employee benefits 326 297
Total Provision for employee benefits 6,694 7,026
Defined benefit plan assets 94 85
Total Defined benefits plan assets 94 85