Mercedes 2003 Annual Report Download - page 148
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Miscellaneous. The minority stockholders of Dornier GmbH, a
subsidiary of DADC Luft- und Raumfahrt Beteiligungs AG, have the
right, exercisable at any time, to exchange their shareholdings in
Dornier for cash or holdings in DaimlerChrysler AG or its subsidiary
DaimlerChrysler Luft- und Raumfahrt Holding Aktiengesellschaft.
Some of the Dornier minority stockholders partially exercised this
right in 2001. In 2002, an additional minority shareholder partially
exercised his right to transfer his Dornier shares to Daimler-
Chrysler AG.
Under the German corporation law (Aktiengesetz), the amount
of dividends available for distribution to shareholders is based
upon the unappropriated accumulated earnings of DaimlerChrysler
AG (parent company only) as reported in its statutory financial
statements determined in accordance with the German commercial
code (Handelsgesetzbuch). For the year ended December 31,
2003, DaimlerChrysler management has proposed a distribution of
€1,519 million (€1.50 per share) of the 2003 earnings of Daimler-
Chrysler AG as a dividend to the stockholders.
Exchange rate effects on the components of other comprehensive
income principally are shown within changes of the cumulative
translation adjustment.
24. Stock-Based Compensation
The Group currently has two stock option plans, various stock
appreciation rights (“SARs”) plans and medium term incentive
awards. As discussed in Note 1, DaimlerChrysler adopted the
provisions of SFAS 123 prospectively for all awards granted after
December 31, 2002. Awards granted in previous periods will
continue to be accounted for using the provisions of APB 25 and
related interpretations.
Stock Option Plans. In April 2000, the Group’s shareholders
approved the DaimlerChrysler Stock Option Plan 2000 which
provides for the granting of stock options for the purchase of
DaimlerChrysler Ordinary Shares to eligible employees. Options
granted under the Stock Option Plan 2000 are exercisable at a
reference price per DaimlerChrysler Ordinary Share determined in
advance plus a 20% premium. The options become exercisable
in equal installments on the second and third anniversaries from
the date of grant. All unexercised options expire ten years from
the date of grant. If the market price per DaimlerChrysler Ordinary
Share on the date of exercise is at least 20% higher than the
reference price, the holder is entitled to receive a cash payment
equal to the original exercise premium of 20%.
The table below shows the basic terms of options issued
(in millions) under the Stock Option Plan 2000:
In May 2000, certain shareholders challenged the approval of the
Stock Option Plan 2000 at the stockholders’ meeting on April 19,
2000. In October 2000, the Stuttgart District Court (Landgericht
Stuttgart) dismissed the case and the Stuttgart Court of Appeals
(Oberlandesgericht Stuttgart) dismissed an appeal in June 2001.
The shareholders appealed the decision of the Stuttgart Court of
Appeals to the Federal Supreme Court (Bundesgerichtshof) in July
2001. In March 2002, the Federal Supreme Court decided not to
admit the appeal. In April 2002, a constitutional appeal was filed
against this decision. The Federal Constitutional Court (Bundesver-
fassungsgericht) decided in May 2003 not to admit the constitu-
tional appeal.
DaimlerChrysler established, based on shareholder approvals, the
1998, 1997 and 1996 Stock Option Plans (former Daimler-Benz
plans), which provide for the granting of options for the purchase
of DaimlerChrysler Ordinary Shares to certain members of man-
agement. The options granted under the plans are evidenced by
non-transferable convertible bonds with a principal amount of €511
per bond due ten years after issuance. During certain specified
periods each year, each convertible bond may be converted into
201 DaimlerChrysler Ordinary Shares, if the market price per share
on the day of conversion is at least 15% higher than the predeter-
mined conversion price and the options (granted in 1998 and
1997) have been held for a 24 month waiting period.
The basic terms of the bonds and the related stock options
issued (in millions) under these plans are as follows:
In the second quarter of 1999, DaimlerChrysler converted all
options granted under the 1998 and 1997 Stock Option Plans into
SARs. All terms and conditions of the new SARs are identical to the
stock options which were replaced, except that the holder of a SAR
has the right to receive cash equal to the difference between the
exercise price of the original option and the fair value of the
Group’s stock at the exercise date rather than receiving Daimler-
Chrysler Ordinary Shares.
Year of Grant
14.2
8.9
–
–
14.2
17.7
19.6
20.0
15.2
18.7
20.0
20.5
€74.76
€66.96
€51.52
€34.40
€62.30
€55.80
€42.93
€28.67
Options
exercisable
Options
outstanding
Options
granted
At December 31, 2003
Exercise
price
Reference
price
2000
2001
2002
2003
Bonds granted in
€42.62
€65.90
€92.30
5.9%
5.3%
4.4%
Conversion
price
Stated
interest rate
.
5.4
6.2
0.9
7.4
8.2
Stock
options
outstanding
Related
stock
options
granted
.
–
–
Stock
options
exercisable
1996
1997
1998
At December 31, 2003