EXHIBIT I
COVERED EMPLOYEES

2009 Compensation

Company Name: Chrysler Financial

Stock Salary
(Performance based: | Long-Term Restricted Stock Total Direct
The stock vests at grant | (Performance based: Awarded | Compensation
and is redeemable in based on achievement of (Cash salary paid to
three equal, annual objective performance goals. | date plus two months at
Cash Salary _| installments beginning on| Vests after 3 years of service. | new run rate + stock
(Rate going | the 2nd anniversary of | Transferability dependent on | salary + long-term
Employee 1D forward.) grant.) TARP repayment.) restricted stock.)

A216G8 $1,500,000 SO 0) $875,000

A224F7 $216,000 $0 $0 $216,000

A272C1 $800,000 $0 $0 $466,667

|A288A8 $400,000 $0 $0. $218,667

|A296A7 $432,000 $0 0 $252,500

B225F8 $1,350,000 $0 so $704,167

B233F7 $410,000 $0 $0 $246,753

B241E6 $415,000 S80 $0 $250,767

B249D5 $490,000 Ss $0 $265,167

C250D6 $216,000 $0. $0 $216,000

C258D5 $490,000 $0 $0 $268,587

C298A9 $400,000 $0 $0 $245,667

D203H4 $194,436 $0 $0 $194,436

£212G4 $182,496 $0 $0 $182,496

12063 $410,000 $0 $0 $272,083

E236E1 $500,000 $0 $o $500,003

F245E1 $410,000 30 so $246,533

F253D9 $443,000 $0. so $234,263

G206H7 $490,000 $0 $0 $261,667

H207H8 $175,872 so 30. $175,872
H231F5 $425,000 $0 50
H279B8 $600,000 $0 $0

Comparison of 2009 Compensation to Prior Years: 2007 & 2008 Compensation

2008 Cash decreased by $4.3M or 29.9%
Total Direct Compensation decreased by $8.1M or 56.0%

2007 Company was created August 3, 2007. There is not enough data for a full year
2009 vs 2007 comparison

Note: 1: Amounts reflected in this Exhibit do not include amounts the Company has asserted to be payable pursuant to legally
31. CER, § 30.10(e)(2)
may be less than 25 because of terminations, departures and retirements

binding rights under valid employment contracts,
Note: 2

after January 1, 2009,

The total number of Covered Employ

El



of months, during which the Office of the Special Master and Chrysler Financial explored
potential compensation structures for the Covered Employees.

The Rule requires that each Exceptional Assistance Recipient submit proposed
compensation structures for each Senior Executive Officer and Most Highly
Compensated Employee no later than August 14, 2009. 31 C.F.R. § 30.16(a)(3). In
addition, the Rule authorizes the Special Master to request information from an
Exceptional Assistance Recipient “under such procedures as the Special Master may
determine.” /d. § 30.16(d). The Rule provides that the Special Master is required to
issue a compensation determination within 60 days of a substantially complete
submission. Jd. § 30.16(a)(3).

On July 20, 2009, the Special Master requested from each Exceptional Assistance
Recipient, including Chrysler Financial, certain data and documentary information
necessary to facilitate the Special Master’s review of the Company’s compensation
structures. The request required Chrysler Financial to submit data describing its
proposed compensation structures, and the payments that would result from the proposed
structures, concerning each Covered Employee. In addition, Chrysler Financial was
required to submit competitive market data indicating how the amounts payable under
Chrysler Financial’s proposed compensation structures relate to the amounts paid to
persons in similar positions or roles at similar entities. Chrysler Financial was also
required to submit a range of documentation, including information related to proposed
performance metrics, internal policies designed to curb excessive risk, and certain
previously existing compensation plans and agreements.

Chrysler Financial submitted this information to the Office of the Special Master
on August 13, 2009. Following a preliminary review of the submission, and the
submission of certain additional information, the Special Master determined that Chrysler
Financial’s submission was substantially complete on August 31, 2009. /d. § 30.16(a)(3).
The Office of the Special Master then commenced a formal review of Chrysler
Financial’s proposed compensation structures for the Covered Employees. The Rule
provides that the Special Master is required to issue a compensation determination within
60 days of a substantially complete submission. Id. § 30.16(a)(3).

The Office of the Special Master’s review of the Company’s proposals was aided
by analysis from a number of internal and external sources, including:

« Treasury personnel detailed to the Office of the Special Master, including
executive compensation specialists with significant experience in reviewing,
analyzing, designing and administering executive compensation plans, and
attorneys with experience in matters related to executive compensation;

© Competitive market data provided by the Company in connection with its
submission to the Office of the Special Master;

¢ External information on comparable compensation structures extracted from the
U.S. Mercer Benchmark Database-Executive;


In light of these considerations, the Special Master has concluded that Chrysler
Financial’s Proposed Structures and the amounts potentially payable under them are
consistent with the Public Interest Standard. The amounts payable pursuant to these
structures are described in further detail in Exhibits I and IT.

2. “Other” Compensation and Perquisites

Chrysler Financial also proposed payments of “other” compensation, as well as
perquisites, to the Covered Employees. The Special Master has concluded that, absent
special justification, employees—not the Company—generally should be responsible for
paying personal expenses, and that significant portions of compensation structures should
not be allocated to such perquisites and “other” compensation. See id. $30.16(b)(1) (iii).

The Rule requires that each Exceptional Assistance Recipient annually disclose to
Treasury any perquisites where the total value for any Senior Executive Officer or Most
Highly Compensated Employee exceeds $25,000. An express justification for offering
these benefits must also be disclosed. Accordingly, as described in Exhibits I and IT, the
compensation structures the Special Master has determined to be consistent with the
Public Interest Standard provide no more than $25,000 in “other” compensation and
perquisites to each of these employees. Any exceptions to this limitation will require that
the Company provide to the Office of the Special Master an independent justification for
the payment that is satisfactory to the Special Master. To the extent that payments
exceeding this limitation have already been made to a Covered Employee in 2009, those
amounts should be promptly returned to the Company.

3. Severance Arrangements

The Special Master has concluded that an increase in the amounts payable under
these arrangements would be inconsistent with the principle that compensation should be
performance-based, id. § 30.16(b)(1)(iv), and that payments should be appropriately
allocated among the elements of compensation, fd. § 30.16(b)(1)(iii). Accordingly, for
the compensation structures described in Exhibits I and IT to be consistent with the
Public Interest Standard, the Company must ensure that 2009 compensation structures for
these employees do not result in an increase in the amounts payable pursuant to these
arrangements.

4 Departed Employees

In addition, three employees that would have been Covered Employees had they
remained employed are no longer employed by the Company. With respect to these
employees, the Special Master has determined that cash salaries through the date of the
termination of employment, and payment of up to $25,000 in perquisites and “other”
compensation are consistent with the Public Interest Standard. No other payments to
these employees of any kind would be consistent with the Public Interest Standard. Any
exceptions to this limitation will require that the Company provide to the Office of the

AT


(3) Appropriate allocation. The compensation structure should appropriately allocate
the components of compensation such as salary and short-term and long-term
performance incentives, as well as the extent to which compensation is provided
in cash, equity, or other types of compensation such as executive pensions, and
other financial benefits or perquisites, based on the specific role of the employee
and other relevant circumstances, including the nature and amount of current
compensation, deferred compensation, or other compensation and benefits
previously paid or awarded. Jd. § 30.16(b)(iii).

(4) Performance-based compensation. An appropriate portion of the compensation
should be performance-based over a relevant performance period. Performance-
based compensation should be determined through tailored metrics that
encompass individual performance and/or the performance of the Exceptional
Assistance Recipient or a relevant business unit taking into consideration specific
business objectives. Performance metrics may relate to employee compliance
with relevant corporate policies. In addition, the likelihood of meeting the
performance metrics should not be so great that the arrangement fails to provide
an adequate incentive for the employee to perform, and performance metrics
should be measurable, enforceable, and actually enforced if not met. Id. §
30.16(b)(iv).

(5) Comparable structures and payments. The compensation structure, and amount
payable where applicable, should be consistent with, and not excessive, taking
into account compensation structures and amounts for persons in similar positions
or roles at similar entities that are similarly situated, including, as applicable,
entities competing in the same markets and similarly situated entities that are
financially distressed or that are contemplating or undergoing reorganization. /d.
§ 30.16(b)(v).

(6) Employee contribution to TARP recipient value. The compensation structure and
amount payable should reflect the current or prospective contributions of an
employee to the value of the Exceptional Assistance Recipient, taking into
account multiple factors such as revenue production, specific expertise,
compliance with company policy and regulation (including risk management),
and corporate leadership, as well as the role the employee may have had with
respect to any change in the financial health or competitive position of the
recipient. Id. § 30.16(b)(vi).

The Rule provides that the Special Master shall have discretion to determine the
appropriate weight or relevance of a particular principle depending on the facts and
circumstances surrounding the compensation structure or payment for a particular
employee. /d. § 30.16(b). To the extent two or more principles may appear inconsistent
in a particular situation, the Rule requires that the Special Master exercise his discretion
in determining the relative weight to be accorded to each principle. Id.

The Rule provides that the Special Master may, in the course of applying these
principles, take into account other compensation structures and other compensation

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e External information on comparable compensation structures extracted from
Equilar’s Executivelnsight database (which includes information drawn from
publicly filed proxy statements) and Equilar’s Top 25 Survey Summary Report
(which includes information from a survey on the pay of highly compensated
employees);

¢ Consultation with Lucian A. Bebchuk, a world-renowned expert in executive
compensation and the William J. Friedman and Alicia Townsend Friedman
Professor of Law, Economics, and Finance and Director of the Program on
Corporate Governance at Harvard Law School; and

e Consultation with Kevin J. Murphy, a world-renowned expert in executive
compensation and the Kenneth L. Trefftzs Chair in Finance in the department of
finance and business economics at the University of Southern California’s
Marshall School of Business.

The Special Master considered these views, in light of the statutory and regulatory
standards described in Part [I below, when evaluating the Company’s proposed
compensation structures for the Covered Employees for 2009.

III. STATUTORY AND REGULATORY STANDARDS

The Rule requires that the Special Master determine for each of the Covered
Employees whether Chrysler Financial's proposed compensation structures, including
amounts payable under the compensation structure, “will or may result in payments that
are inconsistent with the purposes of section 111 of EESA or TARP, or [is] otherwise
contrary to the public interest.” 31 C.F.R. § 30.16(a)(3) (as applied to Covered
Employees of Exceptional Assistance Recipients, the “Public Interest Standard”).
Regulations promulgated pursuant to the Rule require that the Special Master consider six
principles when making these compensation determinations:

(1) Risk. The compensation structure should avoid incentives which encourage
executive officers and employees to take unnecessary or excessive risks that could
threaten the value of the exceptional assistance recipient. including incentives that
reward employees for short-term or temporary increases in value or performance;
or similar measures that may undercut the long-term value of the Exceptional
Assistance Recipient. Compensation packages should be aligned with sound risk
management. /d. § 30.16(b)(i).

(2) Taxpayer return. The compensation structure and amount payable should reflect
the need for the Exceptional Assistance Recipient to remain a competitive
enterprise, to retain and recruit talented employees who will contribute to the
recipient’s future success, so that the Company will ultimately be able to repay its
TARP obligations. /d. § 30.16(b)(ii).

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2. “Other” Compensation and Perquisites

Chrysler Financial also proposed payments of “other” compensation, as well as
perquisites, to the Covered Employees. These proposed payments varied in value.

B. Determinations of the Special Master

The Special Master has reviewed the Proposed Structures in detail by application
of the principles set forth in the Rule and described in Part HI above. In light of this
review and analysis, the Special Master has determined that both the structural design of
Chrysler Financial’s proposals and the amounts potentially payable to Covered
Employees under the proposals are consistent with the Public Interest Standard.

The Special Master has determined, in light of the considerations that follow, that
the compensation structures described in Exhibits I and IT, to this Determination
Memorandum will not, by virtue of either their structural design or the amounts.
potentially payable under them, result in payments inconsistent with the Public Interest
Standard except as noted below.

1. Cash Salary

The Special Master reviewed Chrysler Financial's proposals with respect to cash
salary in light of the principle that compensation structures should generally be
comparable to “compensation structures and amounts for persons in similar positions or
roles at similar entities,” 31 C.F.R. § 30.16(b)(1)(v). This review made use of the
resources and analysis described in Part II. The Special Master generally has concluded
that, for Covered Employees at Exceptional Assistance Recipients, cash salaries should
generally target SOth percentile because such levels of cash salaries balance the need to
attract and retain talented with the need for compensation structures that reflect the
circumstances of Exceptional Assistance Recipients.

In addition, the Special Master reviewed the Company’s proposal in light of the
principle that compensation structures must “reflect the need for the TARP recipient to
remain a competitive enterpris nd ultimately to be able to repay TARP obligations.”
Id. § 30.16(b)(1)(ii). As noted above, the Company’s submission emphasized that its
business objectives—including an orderly wind-down of the Company’s operations that
would permit lenders and investors to be repaid—required cash base salaries that would
give employees clear incentives to remain with the firm during this period.

In general, the principles set forth in the Rule emphasize compensation structures
that are performance-based, id. § 30.16(b)(1)(iv), and payable over the long term, id.
Unlike other Exceptional Assistance Recipients, however, Chrysler Financial’s stated
business objective, developed in consultation with Treasury, is to wind down its business
in the near term. Under these unique circumstances, providing employees incentives over
the appropriate compensation horizon, see id. § 30.16(b)(1)(i), may require cash
compensation payable in base salary rather than longer-term incentives based on the
performance of the Company.

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DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220

October 22, 2009

Ms. Tracy Hackman, Esquire

Vice President, General Counsel and Secretary
Chrysler Financial

27777 Inkster Road

CIMS 405-27-16

Farmington Hills, MI 48334

Re: — Proposed Compensation Payments and
Structures for Senior Executive Officers and
Most Highly Compensated Employees

Dear Ms. Hackman:

Pursuant to the Department of the Treasury’s Interim Final Rule on TARP
Standards for Compensation and Corporate Governance, the Office of the Special Master
has completed its review of your 2009 compensation submission on behalf of the senior
executive officers and certain most highly compensated employees of Chrysler Financial.
Attached as Annex A is a Determination Memorandum (accompanied by Exhibits I and
ID) providing the determinations of the Special Master with respect to 2009 compensation
for those employees. 31 C.F.R. § 30.16(a)(3).

Pursuant to the Interim Final Rule, the Special Master is required to determine
whether the compensation structure for each senior executive officer and certain most
highly compensated employees “will or may result in payments inconsistent with the
purposes of section 111 of EESA or TARP. or [is] otherwise contrary to the public
interest.” Id. § 30.16(a)(3). The Special Master has determined that, to satisfy this
standard, 2009 compensation for Chrysler Financial’s senior executive officers and
certain most highly compensated employees generally must comport with the following
important standards:

* Base salary paid in cash should not exceed $500,000 per year, except in
appropriate cases for good cause shown. Overall, cash compensation must be
significantly reduced from cash amounts paid in 2008. In Chrysler Financial’s

cash compensation for these employees will decrease 30% from 2008 levels.

case,

¢ =Total compensation for each individual must be appropriate when compared with
total compensation of persons in similar positions or roles at similar entities, and
should generally target the SOth percentile of total compensation for comparable
employees. Overall, total compensation must be significantly reduced from the



(5) Policy as to excessive or luxury expenditures. Chrysler Financial must adopt an
excessive or luxury expenditure policy, provide that policy to Treasury, and post
it on Chrysler Financial’s website. If, after adopting an excessive or luxury
expenditures policy, Chrysler Financial's board of directors makes any material
amendments to this policy, within ninety days of the adoption of the amended
policy, the board of directors must provide the amended policy to Treasury and
post the amended policy on the Company’s Internet website. Id. § 30.12.

(6) Prohibition on tax gross-ups. Except as explicitly permitted under the Rule,
Chrysler Financial is prohibited from providing (formally or informally) tax
gross-ups to any of the Covered Employees. /d. § 30.11(d).

(7) CEO and CFO Certification. Chrysler Financial’s chief executive officer and
chief financial officer must provide to the Securities and Exchange Commission
(the “SEC”) written certification of the Company’s compliance with the various
requirements of section 111 of EESA, including all the requirements listed in this
section. The precise nature of the required certification is identified in the Rule.
Id. § 30.15 Appx. A.

VI. CONCLUSION

The Special Master has reviewed the Proposed Structures for the Covered
Employees for 2009 in light of the principles set forth at 31 C.F.R. § 30.16(b). On the
basis of that review, the Special Master has determined that the Proposed Structures
submitted by Chrysler Financial are generally consistent with the Public Interest
Standard.

The Special Master has separately reviewed the compensation structures set forth
in Exhibits I and I, in light of the principles set forth at 31 C.F.R. § 30.16(b). Pursuant
to the authority vested in the Special Master by the Rule, and in accordance with Section
30.16(a)(3) thereof, the Special Master hereby determines that the compensation
structures set forth in Exhibits I and I, including the amounts payable or potentially
payable under such compensation structures, will not result in payments that are
inconsistent with the purposes of section 111 of EESA or the TARP, and will not
otherwise be contrary to the public interest.

Pursuant to the Interim Final Rule, Chrysler Financial may, within 30 days of the
date hereof, request in writing that the Special Master reconsider the determinations set
forth in this Determination Memorandum. The request for reconsideration must specify a
factual error or relevant new information not previously considered, and must
demonstrate that such error or lack of information resulted in a material error in the initial
determinations. If Chrysler Financial does not request reconsideration within 30 days,
the determinations set forth herein will be treated as final determinations. 31 C.F.R.

§ 30.16(c)(1).

The foregoing determinations are limited to the compensation structures described
in Exhibits I and IT, and shall not be relied upon with respect to any other employee. The

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Special Master an independent justification for the payment that is satisfactory to the
Special Master.

V. CORPORATE GOVERNANCE

Pursuant to the requirements of the Rule, Chrysler Financial is required to
institute the following corporate governance reforms:

(1) Compensation Committee; Risk Review. Chrysler Financial must maintain a
compensation committee comprised exclusively of independent directors. Every
six months, the committee must discuss, evaluate, and review with Chrysler
Financial’s senior risk officers any risks that could threaten the value of Chrysler
Financial. In particular, the committee must meet every six months to discuss,
evaluate, and review the terms of each employee’s compensation plans to identify
and limit the features in (1) SEO compensation plans that could lead SEOs to take
unnecessary and excessive risks that threaten the value of Chrysler Financial; (2)
SEO or other employees’ compensation plans that could encourage behavior
focused on short-term results and not on long-term value creation; and (3)
employees’ compensation plans that could encourage the manipulation of
Chrysler Financial's reported earnings to enhance the compensation of any of the
employees. 31 C.F.R. § 30.4; id. § 30.5.

(2) Disclosure with Respect to Compensation Consultants. The committee must
disclose to Treasury an annual narrative description of whether Chrysler
Financial, its Board of Directors, or the committee has engaged a compensation
consultant during the past three years. If so, the compensation committee must
detail the types of services provided by the compensation consultant or any
affiliate, including any “benchmarking” or comparisons employed to identify
certain percentile levels of compensation. Id. § 30.11(c).

(3) Disclosure of Perquisites. As noted in Part IV, Chrysler Financial must provide
to Treasury an annual disclosure of any perquisite whose total value for the
Company’s fiscal year exceeds $25,000 for each of the Covered Employees.
Chrysler Financial must provide a narrative description of the amount and nature
of these perquisites, the recipient of these perquisites, and a justification for
offering these perquisites (including a justification for offering the prerequisite,
and not only for offering the perquisite with a value that exceeds $25,000). /d.

§ 30.11 (b).

(4) Clawback. Chrysler Financial must ensure that any incentive award paid to a
Covered Employee is subject to a clawback if the award was based on materially
inaccurate financial statements (which includes, but is not limited to, statements
of earnings, revenues, or gains) or any other materially inaccurate performance
metric criteria. Chrysler Financial must exercise its clawback rights except to the
extent that it is unreasonable to do so. /d. § 30.8.

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earned, accrued, or paid, including compensation and compensation structures that are
not subject to the restrictions of section 111 of EESA. For example, the Special Master
may consider payments obligated to be made by the Company pursuant to certain legally
binding rights under valid written employment contracts entered into prior to enactment
of the statute and the accompanying Rule. /d. § 30.16(a)(3).

IV. COMPENSATION STRUCTURES AND PAYMENTS

A. Chrysler Financial Proposals

Chrysler Financial has provided the Office of the Special Master with detailed
information concerning its proposed 2009 compensation structures for pertinent
executive officers and employees, including amounts proposed to be paid under the
compensation structure for each Covered Employee (the “Proposed Structures”).

Chrysler Financial supported its proposal with detailed assessments of each
Covered Employee’s tenure and responsibilities at the Company (or its applicable
subsidiary) and historical compensation structure. The submission also included market
data that, according to the Company, indicated that the amounts potentially payable to
each employee were comparable to the compensation payable to persons in similar
positions or roles at a “peer group” of entities selected by the Company.

Chrysler Financial is currently following Treasury's directive to liquidate its
business in an orderly fashion. Accordingly, Chrysler Financial is currently pursuing a
successful wind-down of its operations by December 31, 2011, and the repayment of its
lenders and investors. Chrysler Financial’s proposed compensation structures therefore
emphasize that the Company’s unique business objectives—to wind down, rather than to
grow, its operations—render the use of traditional business metrics in the determination
of appropriate compensation impractical. Rather, Chrysler Financial’s submission asserts
that its success in the wind-down of operations and repayment of lenders and investors is
largely dependent upon maintaining critical talent to enable the Company to service and
manage its portfolio during the wind-down process. The Company also contends that the
risk of employee departures must be minimized because Chrysler Financial has publicly
stated that it intends to wind-down its operations and will have difficulty attracting new
employees.

1. Cash Salary
Chrysler Financial’s Proposed Structures included proposed annual cash base

salaries ranging from $175,872 to $1,500,000. The proposal reflects cash decreases from
2008 levels for each employee ranging from 10% to 67%.

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ANNEX A
DETERMINATION MEMORANDUM

I. INTRODUCTION

The Emergency Economic Stabilization Act of 2008, as amended by the
American Recovery and Reinvestment Act of 2009 (“EESA”), requires the Secretary of
the Treasury to establish standards related to executive compensation and corporate
governance for financial institutions receiving financial assistance under the Troubled
Asset Relief Program (“TARP”). Through the Department of the Treasury's Interim
Final Rule on TARP Standards for Compensation and Corporate Governance (the
“Rule”), the Secretary delegated to the Office of the Special Master for TARP Executive
Compensation (the “Office of the Special Master” or, the “Office”) responsibility for
reviewing compensation structures of certain employees at financial institutions that
received exceptional financial assistance under the TARP (“Exceptional Assistance
Recipients”). 31 C.F.R. § 30.16(a); id. § 30.16(a)(3). For these employees, the Special
Master must determine whether the compensation structure will or may result in
payments “inconsistent with the purposes of section 111 of EESA or TARP, or [is]
otherwise contrary to the public interest.” Id.

Chrysler Financial, one of seven Exceptional Assistance Recipients, has
submitted to the Special Master proposed compensation structures for review pursuant to
Section 30.16(a)(3) of the Rule. These compensation structures apply to five employees
that the Company has identified as Senior Executive Officers (the “Senior Executive
Officers,” or “SEOs’) for purposes of the Rule, and seventeen employees the Company
has identified as among the most highly compensated employees of the Company for
purposes of the Rule (the “most highly compensated employees,” and, together with the
SEOs, the “Covered Employees”).

The Special Master has completed the review of the Company’s proposed
compensation structures pursuant to the principles set forth in the Rule. /d. Section
30.16(b)(1).. This Determination Memorandum sets forth the determinations of the
Special Master, pursuant to Section 30.16(a)(3) of the Rule, with respect to the Covered
Employees.

IL. BACKGROUND

On June 15, 2009, the Department of the Treasury (“Treasury”) promulgated the
Rule, creating the Office of the Special Master and delineating its responsibilities.
Immediately following that date, the Special Master, and Treasury employees working in
the Office of the Special Master, conducted extensive discussions with Chrysler Financial
officials and Company counsel. During these discussions, the Office of the Special
Master informed Chrysler Financial about the nature of the Office’s work and the
authority of the Special Master under the Rule. These discussions continued for a period

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EXHIBIT II
TERMS AND CONDITIONS OF PAYMENTS AND STRUCTURES
CONSISTENT WITH THE PUBLIC INTEREST STANDARD

The following general terms and conditions shall govern the compensation

structures described in Exhibit I. The Special Master’s determination that those
structures are consistent with the Public Interest Standard is qualified in its entirety by the
Company’s adherence to these terms and conditions.

Cash base salary. Cash base salaries reflect the go-forward rate for the employee
effective as of November 1, 2009. Compensation paid in the form of cash base
salary prior to that date in accordance with the terms of employment as of June
14, 2009 shall be permitted unless otherwise noted. 31 C.F.R. § 30.16(a)(3)(iii).

Other compensation and perquisites. No more than $25,000 in total other
compensation and perquisites may be provided to any Covered Employee, absent
exceptional circumstances for good cause shown, as defined by pertinent SEC

regulations.

Qualified Plans. For the avoidance of doubt, the Special Master has determined
that participation by the Covered Employees in tax-qualified retirement, health
and welfare, and similar plans is consistent with the Public Interest Standard.

E2


Pursuant to the Interim Final Rule, Chrysler Financial may, within 30 days of the
date hereof, request in writing that the Special Master reconsider the determinations set
forth in Annex A. If Chrysler Financial does not request reconsideration within 30 days,
these initial determinations will be treated as final determinations. /d. § 30.16(c)(1).

Very fan

Kenneth R. Feinberg
Office of the Special Master
for TARP Executive Compensation

Attachments

cc: Thomas F, Gilman


amounts paid in 2008. In Chrysler Financial’s case, total compensation for these
employees will decrease 56% from 2008 levels.

Any and all “other” compensation and perquisites will not exceed $25,000 for
each employee (absent exceptional circumstances for good cause shown to the
satisfaction of the Special Master).

No severance benefit to which an employee becomes entitled in the future may
take into account a cash salary increase, or any payment of stock salary, that the
Special Master has approved for 2009.

The Special Master has also determined that, in order for the approved

compensation structures to satisfy the standards of 31 C.F.R. § 30.16(a)(3), Chrysler
Financial must adopt policies applicable to these employees as follows:

Chrysler Financial may not provide a tax “gross up” of any kind to these
employees.

At least once every year, Chrysler Financial’s compensation committee must
provide to the Department of the Treasury a narrative description identifying each
compensation plan for its senior executive officers, and explaining how the plan
does not encourage the senior executive officers to take unnecessary and
excessive risks that threaten Chrysler Financial’s value.

These requirements are described in further detail in the attached Determination
Memorandum.

The Special Master’s review has been guided by a number of considerations,

including each of the principles articulated in the Interim Final Rule. /d. § 30.16(b)(1).
The following principle was of particular importance to the Special Master in his
determinations with respect to Chrysler Financial’s compensation structures:

Taxpayer return. The compensation structures approved by the Special Master
reflect the need for Chrysler Financial to remain a competitive enterprise and,
ultimately, to be able to repay TARP obligations. The Special Master has
determined that these approved compensation structures are competitive when
compared with persons in similar positions or roles at similar entities. Overall,
the compensation structures provide for total compensation packages that target
the 50th percentile when compared to such other executive officers and
employees. Id. § 30.16(b)(1)(ii).


determinations are limited to the authority vested in the Special Master by Section
30.16(a)(3) of the Rule, and shall not constitute, or be construed to constitute, the
judgment of the Office of the Special Master or Treasury with respect to the compliance
of any compensation structure with any other provision of the Rule. Moreover, this
Determination Memorandum has relied upon, and is qualified in its entirety by, the
accuracy of the materials submitted by the Company to the Office of the Special Master,
and the absence of any material misstatement or omission in such materials.

Finally, the foregoing determinations are limited to the compensation structures
described herein, and no further compensation of any kind payable to any Covered
Employee without the prior approval of the Special Master would be consistent with the
Public Interest Standard.

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