Chrysler 2014 Annual Report Download - page 214

212 2014 | ANNUAL REPORT
Consolidated
Financial Statements
Notes to the Consolidated
Financial Statements
24. Share-based compensation
The following share-based compensation plans relating to managers of Group companies and the Chief Executive
Officer of FCA were in place.
Stock option plans linked to Fiat and CNHI ordinary shares
On July 26, 2004, the Board of Directors granted the Chief Executive Officer, as a part of his variable compensation
in that position, options to purchase 10,670,000 Fiat ordinary shares at a price of €6.583 per share. Following the
de-merger of CNHI, from Fiat, the beneficiary had the right to receive one ordinary Fiat share and one ordinary CNHI
share for each original option, with the option exercise price remaining unchanged. The options were fully vested and
they were exercisable at any time until January 1, 2016. The options were exercised in total in November 2014 and
the beneficiary received 10,670,000 shares of FCA since the options were exercised after the Merger, in addition to
10,670,000 CNHI shares.
On November 3, 2006, the Fiat Board of Directors approved (subject to the subsequent approval of Shareholders
obtained on April 5, 2007), the “November 2006 Stock Option Plan”, an eight year stock option plan, which granted
certain managers of the Group and the Chief Executive Officer of Fiat the right to purchase a specific number of Fiat
ordinary shares at a fixed price of €13.37 each. More specifically, the 10,000,000 options granted to employees and
the 5,000,000 options granted to the Chief Executive Officer had a vesting period of four years, with an equal number
vesting each year, were subject to achieving certain predetermined profitability targets (Non-Market Conditions or
“NMC”) in the reference period and were exercisable from February 18, 2011. An additional 5,000,000 options were
granted to the Chief Executive Officer of Fiat that were not subject to performance conditions but also had a vesting
period of four years with an equal number vesting each year and were exercisable from November 2010. The ability
to exercise the options was also subject to specific restrictions regarding the duration of the employment relationship
or the continuation of the position held. Following the demerger of CNHI, the beneficiaries had the right to receive
one ordinary Fiat share and one ordinary CNHI share for each original option, with the option exercise price remaining
unchanged.
The contractual terms of the plan were as follows:
Plan Recipient Expiry date
Strike
price
(€)
N° of
options
vested Vesting date
Vesting
portion
Stock Option - November 2006 Chief Executive Officer November 3, 2014 13.37 5,000,000 November 2007
November 2008
November 2009
November 2010
25%
25%
25%
25%
Stock Option - November 2006 Chief Executive Officer November 3, 2014 13.37 5,000,000 1st Quarter 2008(*)
1st Quarter 2009(*)
1st Quarter 2010(*)
1st Quarter 2011(*)
25%xNMC
25%xNMC
25%xNMC
25%xNMC
Stock Option - November 2006 Managers November 3, 2014 13.37 10,000,000 1st Quarter 2008(*)
1st Quarter 2009(*)
1st Quarter 2010(*)
1st Quarter 2011(*)
25%xNMC
25%xNMC
25%xNMC
25%xNMC
(*) On approval of the prior year’s Consolidated financial statements; subject to continuation of the employment relationship.
With specific reference to the options under the November 2006 Stock Option Plan, for which vesting was subject
to the achievement of pre-established profitability targets, only the first tranche of those rights had vested as the
profitability targets originally established for the 3-year period 2008-2010 were not met.