Adidas 2000 Annual Report Download - page 95

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adidas-Salomon ANNUAL REPORT 2000
91
Notes to Consolidated Financial Statements
Litigation
The Company is currently engaged in various lawsuits resulting
from the normal course of business, mainly in connection with
license and distribution agreements. The risks regarding these
lawsuits were estimated and are included under accrued liabilities
and provisions (see also note 13). In the opinion of Manage-
ment, the ultimate liabilities resulting from such claims will
not materially affect the consolidated financial position of the
Company.
28. Related Parties
Robert Louis-Dreyfus and Christian Tourres, members of the
Executive Board of adidas-Salomon AG, have indirect influence
on the French soccer club Olympique de Marseille. The Com-
pany has a promotion contract with this club.
Furthermore, Robert Louis-Dreyfus has indirect influence on the
Belgian soccer club Standard Liège. There is also a promotion
contract between the Company and this club, which, however,
existed prior to the personal engagement of Robert Louis-
Dreyfus, and no substantial changes have been made to this
contract since then.
The terms of the promotion contracts with both clubs are similar
to those with other clubs.
29. Equity Compensation Benefits
Special Reward and Incentive Plan (SRIP)
adidas-Salomon AG implemented a one-time offer share option
plan during the second quarter of 1997 for certain key employ-
ees and Executive Board members. The options can be exer-
cised at a fixed pre-determined price. The rights and terms
governing the exercise are fixed in the option agreement. One
half of the options were exercisable immediately after the
implementation of the plan. The other options are exercisable
in tranches through June 30, 2001. A total of 440,000 options
were granted to exercise the equal number of shares.
The option plan is sponsored by two shareholders (Robert
Louis-Dreyfus and Christian Tourres) who supply the shares
which are required to fulfil the Company’s obligation under
the plan. The shares are made available at a value equal to
the exercise price of the options. The contribution (being the
difference between realized share price and exercise price
for options exercised) from the two shareholders for the
years ended December 31, 2000 and 1999 of c 259,874 and
c 4,856,762 respectively is shown as extraordinary income;
the respective expenses of the same amounts are included
in the selling, general and administrative expenses.
Stock Option Plan
On May 20, 1999, the Ordinary Shareholders’ Meeting resolved
contingent capital in the amount of c 3,500,000 to grant stock
options for no-par-value bearer shares. These stock options
were to be granted to the members of the Executive Board of
adidas-Salomon AG, to the Managing Directors/Senior Vice
Presidents of its affiliated companies as well as to further senior
executives and executives of adidas-Salomon AG and its
affiliated companies.