Mercedes 1998 Annual Report Download - page 96

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1996 July 2006 5.9 % € 42.62
1997 July 2007 5.3 % € 65.90
1998 July 2008 4.4 % € 92.30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
92
Balance at beginning of year 7.5 65.60 0.2 42.62 – –
Bonds sold 8.2 92.30 7.4 65.90 0.9 42.62
Converted (.) 42.62 (0.1) 42.62 (0.7) 42.62
Repayment (0.2) 72.22 (.) 65.90 (.) 42.62
Outstanding at year-end 15.5 79.63 7.5 65.60 0.2 42.62
Exercisable at year-end 0.1 42.62 0.1 42.62 0.2 42.62
Stated
Bonds granted in Due interest Conversion
rate price
In 1997, a stockholder challenged the approval of the 1997
Stock Option Plan at the stockholders‘ meeting on May 28,
1997. A regional court in Stuttgart (the Landgericht) dismissed
this case and a higher court in Stuttgart (the Oberlandes-
Analysis of the Stock Options issued to management is as
follows (shares in millions; adjusted for the Merger):
1998 1997 1996
Number Average Number Average Number Average
of Stock conversion of Stock conversion of Stock conversion
Options price per Options price per Options price per
share share share
At December 31, 1998, no additional convertible bonds may be
subscribed under these plans.
Compensation cost recognized in 1998 in connection with the
variable stock option plans amounted to € 38 (1997: € 0; 1996:
€ 0).
gericht) dismissed an appeal. The stockholder has subse-
quently appealed these decisions. The conversion rights for
the 1997 and 1998 Stock Option Plans are exercisable only
upon successful resolution of the stockholder legal action.
Stock Appreciation Rights
In conjunction with the consummation of the Merger, the
Group implemented a new Stock Appreciation Rights plan
(“SARs”). SARs provide eligible employees of the Group with
the right to receive cash equal to the appreciation of
DaimlerChrysler Ordinary Shares subsequent to the date of
grant. The initial grant of SARs replaced Chrysler fixed stock
options that were converted to DaimlerChrysler Ordinary
Shares as of the consummation of the Merger. SARs which
replaced stock options that were exercisable at the time of the
consummation of the Merger were immediately exercisable at
the date of grant. SARs related to stock options that were not
exercisable at the date of consummation of the Merger will
become exercisable in two installments; 50 percent on the six-
month and one-year anniversaries of the consummation date.
A summary of the activity related to the SARs as of and for the
year ended December 31, 1998 is presented below (shares in
millions):