2006 Annual Report - Fiat SpA
2006 Annual Report - Fiat SpA
2006 Annual Report - Fiat SpA
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The reconciliation of the number of shares outstanding at December 31, 2004 and at December 31, <strong>2006</strong> is as follows:<br />
At (Purchases)/ At (Purchases)/ At<br />
December Capital Sales of December Capital Sales of December<br />
(number of shares in thousand) 31, 2004 increase treasury stock 31, 2005 increase treasury stock 31, <strong>2006</strong><br />
Ordinary shares issued 800,417 291,829 – 1,092,246 – – 1,092,246<br />
Less: Treasury stock (4,384) – 52 (4,332) – 559 (3,773)<br />
Ordinary shares outstanding 796,033 291,829 52 1,087,914 – 559 1,088,473<br />
Preference shares issued 103,292 – – 103,292 – – 103,292<br />
Less: Treasury stock – – – – – – –<br />
Preference shares outstanding 103,292 – – 103,292 – – 103,292<br />
Saving shares issued 79,913 – – 79,913 – – 79,913<br />
Less: Treasury stock – – – – – – –<br />
Saving shares outstanding 79,913 – – 79,913 – – 79,913<br />
Total Shares issued by <strong>Fiat</strong> S.p.A. 983,622 291,829 – 1,275,451 – – 1,275,451<br />
Less: Treasury stock (4,384) – 52 (4,332) – 559 (3,773)<br />
Total <strong>Fiat</strong> S.p.A. outstanding shares 979,238 291,829 52 1,271,119 – 559 1,271,678<br />
In regard to changes in 2005, it is recalled that the Mandatory Convertible Facility was extinguished by its conversion to capital<br />
stock through subscription by the Lending Banks to an increase in capital stock for consideration, as approved by the Board of<br />
Directors on September 15, 2005; the operation took place on September 20, 2005 (see Note 28). Capital stock increased in this<br />
manner from 4,918,113,540 euros to 6,377,257,130 euros, through the issue of 291,828,718 ordinary shares, each of par value of 5<br />
euros, having the same characteristics as those currently in circulation, including dividend rights from January 1, 2005, pursuant to<br />
article 2441, paragraph 7 of the Italian Civil Code, at a price of 10.28 euros, of which 5.28 euros represents additional paid-in<br />
capital. The operation increased capital stock by 1,459 million euros, other reserves by 682 million euros, and generated unusual<br />
financial income of 858 million euros, net of related costs (see Note 9).<br />
In regard to <strong>2006</strong>, treasury stock was sold when the stock options were exercised.<br />
The following matters have relevance with respect to the capital stock:<br />
■ Pursuant to resolutions approved by the Board of Directors on December 10, 2001 and June 26, 2003, capital could have been<br />
increased through rights offerings for a maximum of 81,886,460 euros, with the issuance of a maximum of 16,377,292 ordinary shares<br />
at a par value of 5 euros each on February 1, 2007, following the exercise of the residual “FIAT ordinary share warrants 2007”.<br />
146<br />
<strong>Fiat</strong> Group Consolidated Financial Statements at December 31, <strong>2006</strong> - Notes<br />
<strong>Fiat</strong> had nonetheless reserved the right to pay the warrant holders in cash, starting on January 2, 2007, in lieu of the shares to be<br />
issued (shares in exchange for warrants), for the difference between the average of the official market price of <strong>Fiat</strong> ordinary shares<br />
in December <strong>2006</strong> and the warrant exercise price, unless this difference were to exceed the maximum amount set and previously<br />
communicated by <strong>Fiat</strong>, in which case the holder of the warrants could opt to subscribe to the shares in exchange for the warrants.<br />
In the financial statements prepared in accordance with IFRS, these rights were recognised as an implicit component of the<br />
additional paid-in capital reserve at their fair value of 18 million euros on issue. As described in Note 41 on subsequent events,<br />
4,676 warrants were exercised in January 2007 which led to the issue of 1,169 ordinary shares at a total price of 34,327 euros on<br />
February 1, 2007. The remaining warrants have expired and have accordingly been cancelled.<br />
■ Pursuant to the resolution approved by the Extraordinary Stockholders’ Meeting on September 12, 2002, the Board of Directors<br />
has the right to increase the capital one or more times by September 11, 2007, up to a maximum of 8 billion euros.<br />
■ In a meeting held on November 3, <strong>2006</strong>, the Board of Directors of <strong>Fiat</strong> S.p.A. exercised its delegated powers pursuant to article<br />
2443 of the Italian Civil Code to increase capital stock to service the employee incentive plan reserved for employees of the<br />
company and/or its subsidiaries up to a maximum of 1% of that stock, being 50,000,000 euros, by taking a decision to issue a<br />
maximum of 10,000,000 ordinary shares each of nominal value 5 euros, corresponding to 0.78% of capital stock and 0.92% of<br />
ordinary capital stock, at a price of 13.37 euros each, to service the new employee stock option plan described in the following<br />
paragraph. The execution of this increase in capital is subject to the approval of the <strong>Annual</strong> General Meeting of Stockholders and is<br />
dependant on the conditions of the increase being satisfied.<br />
Stock-based compensation<br />
At December 31, <strong>2006</strong> and at December 31, 2005, the following stock-based compensation plans relating to managers of <strong>Fiat</strong> Group<br />
companies or members of the Board of Directors of <strong>Fiat</strong> S.p.A. were in place.<br />
Stock Option plans linked to <strong>Fiat</strong> S.p.A. ordinary shares<br />
The Board of Directors of <strong>Fiat</strong> S.p.A. approved certain stock option plans between March 1999 and September 2002 which provide<br />
managers of the Group with the title of Direttore and high management potential included in “management development<br />
programmes” and members of the Board of Directors of <strong>Fiat</strong> S.p.A. with the right to purchase a determined number of <strong>Fiat</strong> S.p.A.<br />
ordinary shares at a fixed price (strike price). These rights may be exercised over a fixed period of time from the vesting date to<br />
the expiry date of the plan. These stock option plans do not depend on any specific market conditions.<br />
These options may generally be exercised once a three year period has passed from the grant date and for the following six years,<br />
consistent with tax law and regulations on the subject; nonetheless, the full amount granted as options is not exercisable until the<br />
end of the fourth year.<br />
<strong>Fiat</strong> Group Consolidated Financial Statements at December 31, <strong>2006</strong> - Notes 147