Mercedes 1998 Annual Report Download - page 94

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
90
19. PREPAID EXPENSES
Prepaid expenses are comprised of the following:
Prepaid pension cost 5,309 4,696
Other prepaid expenses 825 1,734
6,134 6,430
At December 31,
1998 1997
As of December 31, 1998, € 5,280 of the total prepaid expenses
mature after more than one year (1997: € 4,511).
20. STOCKHOLDERS’ EQUITY
Number of shares issued and outstanding (adjusted for the
Merger)
At December 31, 1998, DaimlerChrysler had issued and
outstanding 1,001,733,220 registred, Ordinary Shares of no
par value. However, each share represents € 2.56 of capital
stock.
Special Distribution
On May 27, 1998 the Daimler-Benz shareholders approved, and
on June 15, 1998 Daimler-Benz paid, a special distribution of €
10.23 (€ 10.04 after adjustment to reflect the approximately 20 %
discount to market value at which the Daimler-Benz Ordinary
Shares and ADS were sold in the rights offering) per Ordinary
Share/ADS.
Rights Offering
In June 1998, Daimler-Benz issued to holders of Daimler-Benz
Ordinary Shares, ADS’s and convertible debt securities, rights
to acquire up to an aggregate of 52.4 million newly issued
Daimler-Benz Ordinary Shares and on June 25, 1998, Daimler-
Benz issued and sold 52.4 million Daimler-Benz Ordinary
Shares for net proceeds of € 3,827. The rights issued by
Daimler-Benz entitled the holders to purchase Daimler-Benz
Ordinary Shares at approximately a 20% discount to the
market price of Daimler-Benz Ordinary Shares. Basic and
diluted earnings per Ordinary Share have been restated to
reflect the dilutive effect resulting from the discount to market
value at which the Daimler-Benz Ordinary Shares were sold in
the rights offering.
Treasury Stock
In November 1998, Chrysler contributed 23.5 million shares of
its common stock to the Chrysler Corporation Retirement
Master Trust, which serves as a funding medium for and holds
the assets of various pension and retirement plans of Chrysler.
Preferred Stock
On July 24, 1998, Chrysler redeemed all of the outstanding
Chrysler Depositary Shares representing its Series A
Convertible Preferred Stock.
Authorized and conditional capital (DaimlerChrysler AG)
Through April 30, 2003, the Board of Management is
authorized, upon approval of the Supervisory Board, to
increase capital stock by a total of up to € 256 (authorized
capital (i)) and to issue shares of up to € 26 to employees
(authorized capital (ii)). Up to December 31, 1999, and upon
approval of the Supervisory Board, the Board of Management
may issue capital stock of up to € 77 for the subscription of
shareholders of the former Daimler-Benz Aktiengesellschaft
(authorized capital (iii)).
With respect to the 4.125% convertible notes and the 5.75%
subordinated mandatory convertible notes described below,
capital stock may be conditionally increased by up to € 43.7 in
the period from July 1, 1998, up to the time the merger with
Daimler-Benz Aktiengesellschaft became effective (conditional
capital (iv)) and € 43.7 for conversions after this date
(conditional capital (i)). A contingent increase of capital stock
may also result upon conversions related to the 1996, 1997
and 1998 Stock Option Plans as described in Note 21. For this
purpose, amounts of up to € 40.0 each are reserved for the
period from July 1, 1998, up to the time the merger with
Daimler-Benz Aktiengesellschaft became effective (conditional
capital (v)) and for conversions after this date (conditional
capital (ii)). In addition, DaimlerChrysler is authorized for
future issuances of shares equaling up to € 102 of capital stock
in connection with convertible bonds or bonds with warrants
issued or guaranteed by April 30, 2003 (conditional capital
(iii)).
Convertible notes
During 1996, DaimlerChrysler Luxembourg Capital S.A.
(formerly: Daimler-Benz Capital (Luxembourg) AG), a
subsidiary of DaimlerChrysler, issued 4.125% bearer notes
with appertaining warrants due July 5, 2003, in the amount of
€ 383 with a nominal value of € 511 each, including a total of
7,690,500 options which, on the basis of the option
agreement, entitled the bearer of the option to subscribe for
shares of Daimler-Benz AG. The option price per share
(adjusted for the Merger) is € 42.67 in consideration of
exchange of the notes or € 44.49 in cash. During 1998, options
for the subscription of 5,027,002 (1997: 1,785; 1996: 36) newly
issued Daimler-Benz Ordinary Shares have been exercised.