Chrysler 2013 Annual Report Download - page 195

194 Consolidated
Financial Statements
at 31 December 2013
Notes
Changes during 2013 were as follows:
2013 2012
Phantom Shares
Weighted average
Fair value at the
grant date (€)Phantom Shares
Weighted average
Fair value at the
grant date (€)
Outstanding shares at the beginning of the year 1,508,785 2.68 4,944,476 1.83
Granted and Vested - - - -
Settled (1,190,054) 2.13 (3,435,691) 1.43
Outstanding shares at the end of the year 318,731 4.53 1,508,785 2.68
The expense recognized in connection with this plan in 2013 and 2012 approximated €2 million and €2 million, respectively.
2012 Long-Term Incentive Plan of Chrysler Group LLC
In February 2012, the Compensation Committee of Chrysler adopted the 2012 Long-Term Incentive Plan (the “2012 LTIP”). The 2012 LTIP
covers senior Chrysler executives (other than the Chief Executive Officer). It is designed to retain talented professionals and reward their
performance through grants of phantom equity in the form of restricted share units (“LTIP RSUs”) and performance share units (“LTIP PSUs”).
LTIP RSUs may be granted annually, while LTIP PSUs are generally granted at the beginning of a three-year performance period. The
Compensation Committee also has authority to grant additional LTIP PSUs awards during the three-year performance period. The LTIP
RSUs will vest over three years in one-third increments on the anniversary of their grant date, while the LTIP PSUs will vest at the end of the
three-year performance period only if Chrysler meets or exceeds certain three-year cumulative financial performance targets. Concurrent
with the adoption of the 2012 LTIP Plan, the Compensation Committee established financial performance targets based on Chrysler Group’s
consolidated financial results for the three-year performance period, ending 31 December 2014. If Chrysler does not fully achieve these targets,
the LTIP PSUs will be deemed forfeited. LTIP RSUs and LTIP PSUs represent a contractual right to receive a payment in an amount equal to
the fair value of one Chrysler unit, as defined in the LTIP Plan. Once vested, LTIP RSUs and LTIP 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 of the LTIP RSUs and LTIP PSUs may
be accelerated in certain circumstances, including upon the participant’s death, disability or in the event of a change of control.