Mercedes 1998 Annual Report Download - page 97

Download and view the complete annual report

Please find page 97 of the 1998 Mercedes annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 126

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126

Outstanding at beginning of year 30.7 $27.71 28.5 $23.68 29.4 $19.40
Granted 9.2 39.82 10.1 33.72 9.2 28.66
Exercised (3.8) 23.38 (7.8) 20.92 (7.2) 16.11
Forfeited (0.1) 30.60 (0.1) 26.70 (2.9) 14.79
Converted to DaimlerChrysler shares (36.0) 31.24 – – – –
Outstanding at end of year – – 30.7 27.71 28.5 23.68
Options exercisable at year end – – 13.4 $23.43 13.3 $20.12
93
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Granted 22.3 $75.56
Exercised (0.1) 75.56
Outstanding at end of year 22.2 75.56
SARs exercisable at year end 11.3 $75.56
1998
Number Weighted-avg.
of SARs exercise
price
Compensation expense (benefit) is recorded based on changes
in the market price of DaimlerChrysler Ordinary Shares,
the number of exercisable SARs and a pro-rata portion of the
unexercisable SARs. Compensation expense recognized
subsequent to the Merger for SARs was € 251 ($279).
Chrysler Fixed Stock Option Compensation Plans
A summary of the status of fixed stock option grants under
Chrysler’s stock-based compensation plans as of December 31,
1998, 1997 and 1996, and changes during the years ending on
those dates is presented below (shares in millions):
1998 1997 1996
Chrysler Weighted- Chrysler Weigthed- Chrysler Weighted-
shares average shares average shares average
under exercise under exercise under exercise
option price option price option price
No compensation expense has been recognized for Chrysler
fixed stock option grants since the options had exercise prices
of not less than the market value of Chrysler´s common stock
at the date of grant.
Chrysler Performance-Based Stock Compensation Plan
Chrysler’s stock-based compensation plans also provided for
the awarding of Performance Shares, which rewarded
attainment of performance objectives. Performance Shares
were awarded at the commencement of a performance cycle
(two to three years) to each eligible executive (officers and a
limited number of senior executives). At the end of each cycle,
participants may earn no Performance Shares or a number of
Performance Shares, ranging from a set minimum to a
maximum of 150 percent of the award for that cycle, as
determined by a committee of Chrysler´s Board of Directors
based on the Chrysler’s performance in relation to the
performance goals established at the beginning of the
performance cycle.
Compensation expense recognized for Performance Share
awards (since the awards had no exercise price) was € 65 ($72),
€ 18 ($20) and € 23 ($30) for 1998, 1997 and 1996,
respectively. Unearned Chrysler Performance Share awards
outstanding at the date of the Merger and December 31, 1997
and 1996 were 1.9 million, 0.9 million and 0.8 million,
respectively. As a result of the Merger, all Performance Shares
were vested and converted to DaimlerChryler Ordinary Shares.
Miscellaneous
If compensation expense for stock-based compensation had
been based upon the fair value at the grant date, consistent
with the methodology prescribed under SFAS 123, “Accounting
for Stock Based Compensation,” the Group’s net income and