2006 Annual Report - Fiat SpA

The Board of Directors, at its meeting of November 3 2006,
approved an incentive plan that will be submitted, pursuant
to Article 114 bis of the Consolidated Law on Financial
Intermediation, to the Stockholders’ Meeting that will be called
to approve the 2006 Financial Statements. The plan will have a
duration of eight years and envisages the granting of options
for the purchase of 20 million Fiat ordinary shares at a strike
price of 13.37 euros, equal to the arithmetical average of the
official prices posted on the Borsa Italiana S.p.A.’s market in
the thirty days preceding the Board resolution. Grantees of the
plan are the Chief Executive Officer of Fiat S.p.A. Sergio
Marchionne, for 10 million options corresponding to an equal
number of outstanding ordinary shares, and for an additional
10 million options, corresponding to an equal number of
newly-issued shares, more than 300 executives who have a
significant impact on business results. The options granted
to employees and 50% of the options granted to Sergio
Marchionne have a four-year vesting period, in equal annual
quotas, predicated on the achievement of predetermined
54 Report on Operations Stock Options Plans
financial targets in the reference period and are exercisable
starting from the approval of the 2010 Financial Statements.
The residual 50% of the options granted to the Chief Executive
Officer of Fiat S.p.A., which also has a four-year vesting period
in equal annual quotas, is exercisable starting November 2010.
The Board therefore exercised the powers granted to it
pursuant to Article 2443 of the Italian Civil Code for the capital
increase to service the incentive plan. The capital increase is
reserved to employees of the Company and/or its subsidiaries,
within a limit of 1% of the capital stock, i.e. for a maximum of
50,000,000 (fifty million) euros through the issue of a
maximum of 10,000,000 (ten million) ordinary shares with a
par value of 5 (five) euros each, corresponding to 0.78% of the
capital stock and 0.92% of the ordinary capital, at the
abovementioned price of 13.37 euros. Execution of this capital
increase is subject to the approval by the Stockholders Meeting
of the incentive plan and is dependant on the conditions of the
plan being satisfied.
Interests held by Members of the Board of Directors and Control Bodies, General Managers
and Executives with strategic responsibilities (Art. 79 of Consob Regulation, Resolution
No. 11971 of May 14, 1999)
(number of shares)
Change in the
Number of Number of Number of number of shares Number of
Description shares held shares bought shares sold for incoming/ shares held
First name and last name of investment at 12.31.2005 in 2006 in 2006 (outgoing) Executives at 12.31.2006
Luca Cordero di Montezemolo Fiat ordinary 19,172 108,000 – 127,172
Sergio Marchionne Fiat ordinary 220,000 20,000 – 240,000
Gian Maria Gros-Pietro Fiat ordinary – 3,300 – 3,300
Cesare Ferrero Fiat ordinary 1 – – 1
Executives with strategic responsibilities Fiat ordinary 81,884 45,950 46,707 -11,615 69,512
Fiat preference 1,144 – – -1,144 –
Fiat savings 2,188 – 728 -842 618
CNH ordinary 2,000 2,212 – – 4,212
Transactions among Group Companies
and with Related Parties
Transactions among Group companies, whether they are made
to support vertical manufacturing integration or to provide
services, are carried out at market conditions that are normal
in the respective markets, taking into account the
characteristics of the goods sold and the services provided.
The main transactions that took place during 2006 between
the Parent Company, Fiat S.p.A., and its subsidiaries and
associated companies are provided in Note 30 of the Notes
to the Financial Statements of Fiat S.p.A.
Relationships with related parties, whose definition was
extended in accordance with IAS 24, include not only normal
business relationships with listed groups or other major
groups in which the directors of the Company or its parent
companies hold a significant position, but also purchases
of Group products at normal market prices or, in the case
of individuals, the prices that are usually charged
to employees.
Information on transactions with related parties, as required
by Consob communication of July 28, 2006, are presented
respectively in Note 35 of the Notes to the Consolidated
Financial Statements and Note 30 of the Notes to the Financial
Statements of Fiat S.p.A.
Based on the information received from the various Group
companies, there were no atypical or unusual transactions
– as such transactions are defined by Consob – during the year.
Extraordinary transactions among Group companies that
occurred during the year included:
■ the “Series A” preference shares of CNH Global N.V. held
by Fiat Netherlands Holding N.V. were automatically converted
into ordinary shares when the underlying conditions were met.
In this connection, reference should be made to the section on
the Scope of consolidation in the Notes to the Consolidated
Financial Statements;
■ the corporate structure of the subholding companies was
rationalised. This has led to placing Fiat Partecipazioni S.p.A.
at the head of certain industrial Sectors and, as a result, to
simplifying the chain of foreign subholding companies. Fiat
Auto Holding B.V. was unwound in 2006 as part of this process
after transferring to Fiat Partecipazioni S.p.A. its entire
holdings in the capital of Fiat Auto S.p.A. (now Fiat Group
Automobiles S.p.A.) and Fiat Powertrain Italia S.r.l. (now Fiat
Powertrain Technologies S.p.A.). Fiat Netherlands Holding N.V.
similarly transferred its 100% holding in Iveco S.p.A. on a prorata
basis to its stockholders Fiat S.p.A. and Fiat Partecipazioni
S.p.A. Finally, Fiat S.p.A. contributed its investments in
Magneti Marelli Holding S.p.A. (99.99%) and Teksid S.p.A.
(84.79%) to Fiat Partecipazioni S.p.A. in February 2007.
Report on Operations Transactions among Group Companies and with Related Parties 55