DHL 2002 Annual Report Download - page 119

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The stock options can only be exercised within a two
year period following the expiration of a lock-up period of
three years after the relevant grant date. The options lapse
after the expiry of the exercise periods. The options can only
be exercised if both the absolute and the relative performance
targets have been satisfied.
The absolute performance target depends on the per-
formance of the shares during the course of the lock-up
period and is deemed to have been satisfied if the increase in
the price of Deutsche Post AG stock exceeds 10, 15, 20, 25%
or more. The relative performance target is tied to the
performance of the shares versus the performance of the
Dow Jones Euro Stoxx Total Return Index. The stock options
can only be exercised if Deutsche Post shares outperform the
benchmark by at least 10% over the lock-up period. The stock
options lapse without compensation if either the absolute or
the relative performance targets are not satisfied by the end
of the lock-up period. For every six options, a maximum of
four may be earned on the basis of the absolute performance
target, and a maximum of two on the basis of the relative
performance target. Two performance periods are compared
to establish whether and to what extent the performance
targets have been satisfied. Period I is the average closing price
of Deutsche Post stock in Deutsche Börse AG’s Xetra trading
system on trading days 60 to 79 following the IPO. Period II
is the average closing price of Deutsche Post stock in Deutsche
Börse AG’s Xetra trading system on the final 60 trading days
prior to expiration of the lock-up period.
Each stock option entitles the holder to buy one share
or to a cash settlement in the amount of the difference
between the exercise price and the average price of the shares
during the five days prior to the exercise date.
Information on the individual tranches is presented
in the following tables:
The stock options and Stock Appreciation Rights
were measured at their intrinsic values in fiscal year 2001.
However, as the stock options had no intrinsic value at
either the date of grant or the reporting date, no expense
was recognized.
The accounting policy for the stock options was changed
in fiscal year 2002. Starting in fiscal year 2002, the stock
option program is measured using investment techniques by
applying option pricing models (fair value measurement).
The prior-period amounts were restated to reflect the new
accounting policy. This resulted in staff costs of €6 million
for fiscal year 2001. The prior-period amounts were restated
accordingly. This resulted in an expense of €12 million for
fiscal year 2002.
Reserves
The Group’s reserves are composed of the following items:
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Stock options Stock
Appreciation
Rights
Tranche 1
Board of Management 466,908 0
Other senior executives 5,070,576 345,432
Tranche 2
Board of Management 1,223,418 0
Other senior executives 9,082,620 446,934
Tranches
Tranche 1 Tranche 2
Grant date Mar. 15, 2001 July 1, 2002
Stock options granted 5,537,484 10,306,038
Stock Appreciation Rights (SARs) granted 345,432 446,934
Issue price €23.05 €14.10
Lock-up expires Mar. 14, 2004 June 30, 2005
Number of stock options/SARs
Outstanding stock options at beginning of year – –
Options granted 5,537,484 10,306,038
SARs granted 345,432 446,934
Options exercised 0 0
SARs exercised 0 0
Options lapsed 364,344 0
SARs lapsed 8,556 0
Outstanding options at end of year 5,173,140 10,306,038
Eligible for exercise at end of year 336,876 446,934
Information on individual tranches
in €m 2001 2002
Capital reserves 344* 356
Revaluation reserve in accordance with IAS 39 -93 -495
Hedging reserve in accordance with IAS 39 -1 -37
Retained earnings 2,413 3,499
2,663* 3,323
*Prior-period amount restated (see note 7)
Reserves