annual report - FIAT SpA

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 2009 and 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 these grants 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 began to issue awards under plans providing performance-based stock options,
performance-based shares, and cash. In April 2010, CNH granted approximately 1.5 million performance-based stock
options (at target award levels) under the CNH EIP. One-third of the options vested in February 2011 following the
approval of 2010 results by the Board of Directors which met in February 2011. The remaining options will vest
equally on the first and second anniversary of the initial vesting date. As the CNH's 2010 results exceeded the target
performance levels, it is expected that 2.9 million of these options will vest. Options granted under the CNH EIP in
2010 have a contractual life of five years from the initial vesting date.
The following table summarises outstanding stock options under the CNH EIP:
At 31 December 2010
Weighted Average
At 31 December 2009
remaining
Average
Average
Number of options Contractual Exercise Price Number of options Exercise Price
Exercise Price (in USD)
Outstanding life (in years)
(in USD)
Outstanding
(in USD)
13.58 - 19.99 1,536,464 4.0 13.66 2,243,243 13.70
20.00 - 29.99 53,333 1.2 21.20 186,760 21.20
30.00 - 39.99 3,734,654 4.4 33.00 1,256,178 37.21
40.00 - 68.85 464,520 2.9 49.33 646,654 52.80
Total 5,788,971 4,332,835
Changes during the period in all CNH stock option plans are as follows:
Number of
2010
Average
exercise price
shares (in USD)
Outstanding at the beginning of the year 4,332,835 26.67
Granted 2,888,625 31.69
Forfeited (324,494) 31.91
Exercised (992,535) 20.69
Expired (115,460) 68.85
Outstanding at the end of the year 5,788,971 29.07
Exercisable at the end of the year 1,431,524 36.40
Number of
2009
Average
exercise price
shares (in USD)
2,718,109 40.82
4,144,800 13.58
(2,404,528) 18.06
(8,136) 18.65
(117,410) 68.85
4,332,835 26.67
1,488,840 37.81
Performance Share Grants
Under the CNH EIP, performance-based shares may also be granted to selected key employees and executive
officers. CNH establishes the period and conditions of performance for each award. Performance-based shares vest
upon the attainment of specified performance objectives.
In September 2010, CNH granted approximately 2 million performance-based, non-vested share awards under the
CNH EIP. These performance shares will vest in three equal instalments if specified targets are achieved on a
cumulative basis during the three-, four- and five-year periods ending 31 December 2012, 2013 and 2014. The fair
value of this award is $34.74 per share.
CNH granted performance-based, non-vested share awards under the Top Performance Plan ("TPP") in 2006 through
2009. Vesting of the TPP performance shares was dependent on achievement of specified targets by 2010. In 2006
and 2007, CNH recognised expense for TPP awards based on an assumption that the specified performance targets
would be achieved in 2009. In 2008, CNH determined achievement of these performance targets to be improbable
and CNH reversed all previously recognised stock-based compensation expense for an amount of €7 million
(US$11 million). Achievement of the performance targets did not occur in either 2009 or 2010 and these awards were
forfeited. CNH did not recognise any stock-based compensation expense related to TPP awards in 2009 or 2010.
Fiat Group Consolidated Financial Statements at 31 December 2010 179