Chrysler 2014 Annual Report Download - page 217

2014 | ANNUAL REPORT 215
As a result of these dilutive events and pursuant to the anti-dilution provisions in the share-based compensation
plans, the FCA US’s Compensation Committee approved an anti-dilution adjustment factor to increase the number
of outstanding FCA US Units (excluding performance share units granted under the 2012 LTIP Plan (“LTIP PSUs”))
in order to preserve the economic benefit intended to be provided to each participant. The value of the outstanding
awards immediately prior to the dilutive events is equal to the value of the adjusted awards subsequent to the dilutive
events. No additional expense was recognized as a result of this modification during 2014. For comparative purposes,
the number of FCA US Units and all December 31, 2013, and 2012 fair value references have been adjusted to reflect
the impact of the dilutive transactions and the anti-dilution adjustment.
Restricted Stock Unit Plans issued by FCA US
During 2009, the U.S. Treasury’s Office of the Special Master for Troubled Asset Relief Program Executive
Compensation (the “Special Master”) and FCA US’s Compensation Committee approved the FCA US 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 FCA
US Unit, as defined in the RSU plan. Originally, RSUs granted to FCA US’s employees in 2009 and 2010 vested
in two tranches. In September 2012, FCA US’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, FCA US determined that it was no longer probable that the
awards would be settled with FCA US’s company stock and accordingly 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 FCA US through the third anniversary of the grant date.
The settlement of these awards is in cash.
In addition, during 2009, FCA US established the Directors’ RSU Plan. In April 2012, FCA US’s Compensation
Committee amended and restated the FCA US 2009 Directors’ RSU Plan to allow grants having a one-year
vesting term to be granted on an annual basis. Director RSUs are granted to FCA US non-employee members of
the FCA US 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 FCA US 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, FCA US 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 resulting from these awards is measured and adjusted to fair value at each reporting date. The expense
recognized in total for both the RSU Plan and the Directors RSU plan for the years ended December 31, 2014, 2013
and 2012 was approximately €6 million, €14 million and €28 million, respectively. Total unrecognized compensation
expense at December 31, 2014 and at December 31, 2013 for both the RSU Plan and the Directors RSU plan was
less than €1 million.