annual report - FIAT SpA

As required by IFRS 2 the Group calculated the total incremental fair value arising from this change to the plan, which
amounted to €19 million. This incremental fair value is being recognised in the income statement over the residual
vesting period of the plan together with the fair value already calculated at the grant date and determined in 2009. The
incremental fair value was calculated on the basis of the price of the Fiat S.p.A. ordinary share at the date of the
change, which was €9.75 per share.
Amendments to the stock option plans and stock grant plans of Fiat S.p.A. arising from the Demerger
With regard to the above incentive plans and in consideration of the proposed Demerger, the Board of Directors, which
met on 21 July 2010, confirmed the continuation of the share-based incentive plans the Group had in place, and voted
to adopt, subject to the Demerger becoming effective and on the basis of the powers delegated to it by Shareholders,
the appropriate amendments necessary to ensure that these plans fulfil the objectives for which they were adopted,
even subsequent to the Demerger, while at the same time avoiding a revision of those plans that, even though fully
legitimate, might appear to dilute the intended alignment of the interests of management with those of the Company
and its shareholders. More specifically, applying the rules of the respective plans, the Board approved to realign the
plans with respect to the shares underlying the stock options and stock grants in strict relation to the allotment ratio
applicable for the Demerger and to allow employees leaving Fiat S.p.A. and joining Fiat Industrial S.p.A to retain their
existing rights. Those entitled to stock options or stock grants will, therefore, receive one ordinary Fiat S.p.A. share and
one ordinary Fiat Industrial S.p.A. share for each right they hold, with the option exercise price (for stock option plans)
and the free granting of shares (for the stock grant plan) remaining unchanged.
For the stock option plans, vesting conditions for each plan, whether these be the continuation of a professional
relationship with the Group or the achievement of specific performance objectives, will expire on 31 December 2010,
prior to the effective date of the Demerger.
Similarly, under the stock grant plan the participant will be entitled to receive free of charge one Fiat ordinary share and
one Fiat Industrial ordinary share for each right held, subject to the original conditions of the continuation of a
professional relationship with the Group and/or achievement of specific performance objectives for 2010 and 2011,
consistent with the 2010-2014 Business Plan. The 2011 performance objectives will consist of the portion relating to
the Fiat Group post Demerger of the objectives originally established as part of the total objectives for the pre-
Demerger Fiat Group.
All stock option and stock grant plans, with the exception of the portion of the 2006 Plan relating to managers for which
a capital increase was approved, will be serviced by the treasury shares held by Fiat S.p.A. and the ordinary shares of
Fiat Industrial that will be allotted to Fiat S.p.A. without payment as a result of the Demerger.
As the original conditions of the Plans allowed for amendments where there were extraordinary transactions impacting
Fiat S.p.A.'s share capital, a determination of the incremental fair value potentially resulting from such amendments is
not required.
Finally, the following shows availability of share capital and reserves:
Availability for use of main equity items
(€ thousand) 31 December 2010 Possible use Available amount
Share capital
Reserves:
6,377,263 -
Share premium reserve 1,540,885 A, B, C (*) 1,540,885
Legal reserve 716,458 B -
Reserve available for the purchase of own shares 543,447 A, B, C 543,447
Reserve for own shares 656,553 - -
Retained profit/(loss) 2,884,134 A, B, C 2,884,134
Reserve under law 413/1991 22,591 A, B, C 22,591
Extraordinary reserve 28,044 A, B, C 28,044
Reserve for Spin-off difference
Key:
A: capital increase
B: coverage of losses
C: dividend
39,194 A, B, C 39,194
(*) Fully available to increase capital and cover losses. Any other use requires that the legal reserve first be increased to 20% of share capital (which
may also occur through a transfer from the share premium reserve). At 31 December 2010, the required increase would be €558,995 thousand.
Fiat S.p.A. – Statutory Financial Statements at 31 December 2010 294