Mercedes 1999 Annual Report Download - page 99

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(in millions of €, except per share amounts)
NOTES TO THE CONSOLIDATED BALANCE SHEETS
Year ended December 31,
Tax
Effect Net PretaxNet
Tax
EffextPretax Pretax
Tax
Effect
Unrealized gains (losses) on securities:
Unrealized holding gains (losses)
Reclassification adjustments for
(gains) losses included in net income
Net unrealized gains (losses)
Foreign currency translation adjustments
Minimum pension liability adjustments
Other comprehensive income (loss)
1997
292 (163) 129 659 (354) 305 439 (230) 209
(623) 313 (310) (103) 57 (46) (106) 54 (52)
(331) 150 (181) 556 (297) 259 333 (176) 157
2,431 – 2,431 (1,402) – (1,402) 1,865 – 1,865
(13) 5 (8) (2) 1 (1) 1 (.) 1
2,087 155 2,242 (848) (296) (1,144) 2,199 (176) 2,023
Net
19981999
Convertible notes
In June 1997, DaimlerChrysler issued 5.75% subordinated manda-
tory convertible notes due June 14, 2002 with a nominal amount of
€66.83 per note. These convertible notes represent a nominal
amount of €508 including 7,600,000 notes which may be con-
verted into 0.86631 newly issuable shares before June 4, 2002.
Notes not converted by this date will be mandatorily converted at a
conversion rate between 0.86631 and 1.25625 Ordinary Shares per
note to be determined on the basis of the average market price for
the shares during the last 20 trading days before June 8, 2002.
During 1999, 665 (1998: 3,713; 1997: 156) DaimlerChrysler Ordi-
nary Shares were issued upon exercise.
During 1996, DaimlerChrysler Luxembourg Capital S.A., a wholly-
owned 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 (as
amended), entitles the bearer of the option to subscribe for shares
of DaimlerChrysler AG. The option price per share is €42.67 in
consideration of exchange of the notes or €44.49 in cash. During
1999, options for the subscription of 1,517,468 (1998: 5,027,002;
1997: 1,785) newly issued DaimlerChrysler Ordinary Shares have
been exercised.
Comprehensive income
The changes in the components of other comprehensive income
(loss) are as follows:
Miscellaneous
Minority stockholders of Dornier GmbH have the right to exchange
their interests in Dornier for holdings of equal value in
DaimlerChrysler Luft- und Raumfahrt Holding AG or Ordinary
Shares of DaimlerChrysler AG and such options are exercisable at
any time.
Under the German corporation law (Aktiengesetz), the amount of
dividends available for distribution to shareholders is based upon
the earnings of DaimlerChrysler AG (parent company only) as re-
ported in its statutory financial statements determined in accord-
ance with the German commercial code (Handelsgesetzbuch). For
the year ended December 31, 1999, DaimlerChrysler management
has proposed a distribution of €2,358 (€2.35 per share) of the
1999 earnings of DaimlerChrysler AG as a dividend to the stock-
holders.
21. STOCK-BASED COMPENSATION
The Group currently has various stock appreciation rights (“SARs”)
plans resulting from newly adopted plans and the conversion of
former Daimler-Benz Stock Option and former Chrysler plans. In
addition, the Group has a stock option plan which was originally
established by Daimler-Benz in 1996 and has been converted to op-
tions for DaimlerChrysler Ordinary Shares. The Group also has a
performance-based stock award plan. Prior to the Merger, Chrysler
had both fixed stock option and performance-based stock compen-
sation plans. These Chrysler plans were terminated as a result of
the Merger and all outstanding options and awards became vested
and were converted into equivalent DaimlerChrysler Ordinary
Shares. The Group accounts for all stock-based compensation plans
in accordance with APB Opinion No. 25 and related interpreta-
tions.
Stock Appreciation-Based Plans
In the first half of 1999, DaimlerChrysler established a new stock
appreciation rights plan (the “SAR Plan 1999”) which provides eli-
gible employees of the Group with the right to receive cash equal
to the appreciation of DaimlerChrysler Ordinary Shares subse-
quent to the date of grant. The stock appreciation rights granted
under the SAR Plan 1999 vest in equal installments on the second
and third anniversaries from the date of grant. All unexercised
93