Chrysler 2013 Annual Report Download - page 225

224 Consolidated
Financial Statements
at 31 December 2013
Notes
Other commitments and important contractual rights
The Group has important commitments and rights deriving from outstanding agreements, summarized below.
Teksid
Fiat S.p.A. is subject to a put contract with Renault in reference to the original investment of 33.5% in Teksid, now 15.2%. In particular, Renault
would acquire the right to exercise a sale option to Fiat on its interest in Teksid, in the following cases:
in the event of non-fulfillment in the application of the protocol of the agreement and admission to receivership or any other redressement
procedure;
in the event Renault’s investment in Teksid falls below 15% or Teksid decides to invest in a structural manner outside the foundry sector;
should Fiat be the object of the acquisition of control by another car manufacturer.
The exercise price of the option is established as follows:
for the original 6.5% of the share capital of Teksid, the initial investment price as increased by a given interest rate;
for the remaining amount of share capital of Teksid, the share of the accounting net equity at the exercise date.
Chrysler
At 31 December 2013 Fiat held a 58.5% membership interest in Chrysler; the remaining 41.5% was held by the VEBA Trust. As described in
Note 39 - Subsequent events, on 1 January 2014, Fiat S.p.A. announced an agreement with the VEBA Trust, under which its wholly-owned
subsidiary, Fiat North America LLC (“FNA”), acquired all of the VEBA Trust’s equity membership interests in Chrysler, representing 41.5%
interest of Chrysler. The transaction closed on 21 January 2014. In consideration for the sale of its membership interests in Chrysler, the VEBA
Trust received an aggregate consideration of $3,650 million consisting of a special distribution paid by Chrysler to its members, in an aggregate
amount of $1,900 million (FNA directed its portion of the special distribution to the VEBA Trust as part of the purchase consideration), and
a payment from FNA for the remainder of $1,750 million in cash purchase consideration to the VEBA Trust. At the date of publication of
this Annual report, therefore, Fiat holds a 100% interest in Chrysler and all rights (VEBA Trust Call Option and Equity Recapture Agreement)
previously existing in respect to Fiat’s investment in Chrysler lapsed.
Agreement with UAW
On 21 January 2014 Chrysler and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America
(the “UAW”) entered into a memorandum of understanding (“MoU”) under the collective bargaining agreement with the UAW, in which the
UAW made commitments to continue to support Chrysler industrial operations and the further implementation of the Fiat-Chrysler Alliance.
In particular, the UAW has committed to use its best efforts to cooperate in the continued roll-out of our World Class Manufacturing
(“WCM”) programs, actively participate in benchmarking efforts associated with implementation of WCM programs across all Fiat-Chrysler
manufacturing sites to ensure objective performance assessments and provide for proper application of WCM principles, and to actively assist
in the achievement of the Group long-term business plan. In consideration of these commitments, Chrysler agreed to make payments to the
VEBA Trust totaling $700 million to be paid in four equal annual installments. The initial payment of $175 million was made on 21 January 2014
and additional payments will be payable on each of the next three anniversaries of the initial payment.