DHL 2004 Annual Report Download - page 107

103
Consolidated Financial Statements
Notes
In accordance with the resolution by the Annual General
Meeting on May 6, 2004, the company’s share capital has been con-
tingently increased by up to a further € 56 million through the issue
of up to 56,000,000 new, no-par value registered shares (Contingent
Capital III). Contingent Capital III was entered in the commercial
register on June 2, 2004. Its purpose is to service warrant or conver-
sion rights and obligations from bonds with warrants or convertible
bonds.
Authorization to acquire own shares
By way of a resolution by the Annual General Meeting on May 6,
2004, Deutsche Post AG is authorized to acquire own shares
totaling up to 10% of the existing share capital at the time of the
resolution during the period from May 6, 2004, until October 31,
2005, inclusive. Shares acquired as a result of this authorization
together with other shares of the company that Deutsche Post AG
has already acquired and still holds may not exceed more than
10% of the share capital at any point. The authorization can be
exercised in full or in part on one or more occasions.
The authorization of May 6, 2004, permits the Board of
Management to exercise it for every purpose authorized by law,
particularly to pursue the goals mentioned in the resolution of the
Annual General Meeting on May 6, 2004.
Deutsche Post AG did not hold any own shares as of Decem-
ber 31, 2004.
Share-based payment system for executives
(Stock Option Plans 2000 and 2003)
Under the Stock Option Plan 2000, eligible participants were
granted stock options in two annual tranches. Certain employees
(Group management levels one to three and some specialists)
were granted stock options for the first time on March 15, 2001
(Tranche 2001). The second tranche was issued on July 1, 2002
(Tranche 2002).
On the basis of the Stock Option Plan 2003 adopted by the
Annual General Meeting on June 5, 2003, no further options were
granted under the previous plan. Options were granted under the
new stock option plan for the first time on August 1, 2003 (Tranche
2003). The second tranche (Tranche 2004) was issued to the
executives on July 1, 2004. The last tranche from this plan is
scheduled to be issued on the first trading day in July 2005.
Compared with the Stock Option Plan 2000, Stock Option
Plan 2003 expands the group of beneficiaries and provides for an
altered percentage distribution of the stock options to be issued
among the various groups of beneficiaries, along with an increase
in the total number of stock options to be issued.
The grant of stock options to members of the Board of Man-
agement and executives in Group management level two still
requires eligible participants to invest in shares of Deutsche Post
AG. Eligible participants in Group management levels three and
four receive stock options without any requirement to buy shares.
Tranches
Number
Stock
options
Stock
Appreciation
Rights (SARs)
Tranche 2001
Board of Management 466,908 0
Other senior executives 5,070,576 345,432
Tranche 2002
Board of Management 1,223,418 0
Other senior executives 9,082,620 446,934
Tranche 2003
Board of Management 1,096,236 0
Other senior executives 11,953,356 731,736
Tranche 2004
Board of Management 841,350 0
Other senior executives 8,486,946 1,116,374
The stock options issued under both stock option plans can only
be exercised within a two-year period following the expiration
of a lock-up period of three years after the relevant grant date.
The options can only be exercised if an absolute or a relative
performance target has been met at the end of the lock-up period.
Unexercised options lapse after the end of the exercise period.
The average price or index performance during two periods
(reference period = issue price; performance period = final price)
is compared to establish whether and to what extent the perform-
ance targets have been satisfied. The reference period is the 20
consecutive trading days prior to the issue date; the performance
period is the last 60 trading days prior to expiration of the lock-up
period. The average price is calculated as the average closing price of
Deutsche Post stock in Deutsche Börse AG’s Xetra trading system.
The absolute performance target depends on the perform-
ance of Deutsche Post stock and is deemed to have been satisfied if
the increase in the price of Deutsche Post stock (final price – issue
price) amounts to at least 10, 15, 20 or 25%.
The relative performance target is tied to the performance of
the shares versus the performance of the Dow Jones Euro STOXX
Total Return Index. The relative performance target is satisfied
if the performance of Deutsche Post stock during the above-
mentioned performance period matches the performance of the
Index or outperforms it by at least 10%.
For every six options, a maximum of four may be earned on
the basis of the absolute performance target, and a maximum of
two on the basis of the relative performance target. If no absolute
or relative performance targets are satisfied by the end of the lock-
up period, the attributable stock options of the respective tranche
lapse without compensation.
Each stock option entitles the holder to acquire one share or
to a cash settlement in the amount of the difference between the
issue price and the average price of Deutsche Post stock during the
five days prior to the exercise date, at the Board of Management’s
discretion.
Additional Information Consolidated Financial Statements