Chrysler 2013 Annual Report Download - page 194

193
Consolidated
Financial Statements
at 31 December 2013
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 authorized 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 value of one Chrysler unit, as defined in the RSU plan. Originally, RSUs granted to Chrysler’s employees in 2009 and 2010
vested in two tranches. In September 2012, Chrysler’s Compensation Committee approved a modification to the second tranche of RSUs.
The modification removed the performance condition requiring an IPO to occur prior to the award vesting. Prior to this modification, the second
tranche of the 2009 and 2010 RSUs were equity-classified awards. In connection with the modification of these awards, Chrysler determined
that it was no longer probable that the awards would be settled with Chrysler’s company stock. Chrysler reclassified the second tranche of
the 2009 and 2010 RSUs from equity-classified awards to liability-classified awards. As a result of this modification, additional compensation
expense of €12 million was recognized during 2012. RSUs granted to employees generally vest if the participant is continuously employed by
Chrysler through the third anniversary of the grant date. The settlement of these awards is in cash.
Further, during 2009 Chrysler established the Amended and Restated Chrysler Group LLC 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. Director RSUs are granted to Chrysler non-employee
members of our Board of Directors. 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.
The liability from the vast majority of these awards is measured and adjusted to fair value at reporting date. The expense recognized in total for
both of the RSU Plans for the year ended 31 December 2013 and 2012 approximated €14 million and €28 million, respectively.
Changes during 2013 were as follows:
2013 2012
Restricted
Stock Units
Weighted average
Fair value at the
grant date (€)
Restricted
Stock Units
Weighted average
Fair value at the
grant date (€)
Outstanding shares unvested at the beginning of the year 4,735,442 4.34 5,952,331 2.51
Granted 161,290 7.46 1,466,523 5.87
Vested (977,573) 2.61 (2,586,060) 0.95
Forfeited (225,403) 5.25 (97,352) 4.76
Outstanding shares unvested at the end of the year 3,693,756 4.72 4,735,442 4.34
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 Phantom Shares vested
immediately on the grant date and will be settled in cash. The Phantom Shares are redeemable in three equal annual installments.