Chrysler 2008 Annual Report Download - page 172

Changes during the period under the CNH Directors’ Plan are as follows:
2008 2007
Average exercise Average exercise
Number of options price (in USD) Number of options price (in USD)
Outstanding at the beginning of the year 73,841 30.93 126,770 23.16
Granted 18,667 31.35 13,188 53.09
Forfeited ––––
Exercised – – (66,117) 15.32
Expired ––––
Outstanding at the end of the year 92,508 31.01 73,841 30.93
Exercisable at the end of the year 64,508 32.45 37,841 36.20
The CNH Equity Incentive Plan (the “CNH EIP”)
The plan provides for grants of various types of awards on specific performance targets for the Sector linked to the IFRS results of
CNH, to officers and employees of CNH and its subsidiaries. As of 31 December 2008, CNH has reserved 15,900,000 shares for the
CNH EIP (15,900,000 shares at December 31, 2007). The plan envisages stock option and share incentives as described below.
Stock option plan
Prior to 2006, certain stock option grants were issued which vest rateably over four years from the grant date and expire after ten
years. Additionally, certain performance-based options, which had an opportunity for accelerated vesting tied to the attainment
of specified performance criteria were issued; however, the performance criteria were not achieved. In any event, vesting of these
performance-based options occurred seven years from the grant date. All options granted prior to 2006 have a contract life of ten
years.
Except as noted below, the exercise prices of all options granted under the CNH EIP are equal to or greater than the fair market
value of CNH Global N.V. common shares on the respective grant dates. During 2001, CNH granted stock options with an exercise
price less than the quoted market price of CNH common shares at the date of grant. The exercise price of this grant was based
upon the average closing price of CNH common shares on the New York Stock Exchange for the thirty-day period preceding the
date of grant.
Beginning in 2006, CNH no longer issued CNH Long-Term Incentive (“LTI”) awards, as discussed below, and began to issue awards
under plans providing performance-based stock options, performance-based shares and cash. In June, 2008, CNH granted
approximately 1.2 million performance-based stock options (at target award levels) under the CNH EIP. Target performance levels
for 2008 were not fully achieved, resulting in only a partial vesting. One-third of the options vested with the approval of 2008
results by the Board of Directors in January 2009. The remaining options will vest equally on the first and second anniversary
of the initial vesting date. It is expected that only 511,240 of these options will vest based on CNH’s 2008 results. Options granted
under the CNH EIP in 2008 have a contractual life of five years from the initial vesting date.
Fiat Group Consolidated Financial Statements at 31 December 2008 171