Mercedes 1999 Annual Report Download - page 101

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(in millions of €, except per share amounts)
NOTES TO THE CONSOLIDATED BALANCE SHEETS
No compensation expense was recognized for Chrysler fixed stock
option grants since the options had conversion 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 execu-
tives). At the end of each cycle, participants earned no Perfor-
mance 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 Direc-
tors based on the Chrysler’s performance in relation to the perform-
ance goals established at the beginning of the performance cycle.
Compensation expense recognized for Performance Share awards
was €65 and €18 for 1998 and 1997, respectively. Unearned
Chrysler Performance Share awards outstanding at the date of the
Merger and December 31, 1997 were 1.9 million and 0.9 million,
respectively. As a result of the Merger, all Performance Shares
were vested and converted into DaimlerChrysler 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 basic and di-
luted earnings per share would have been reduced by approxi-
mately €127 and €25 (basic earnings per share: €0.13 and €0.03;
diluted earnings per share: €0.13 and €0.03) in 1998 and 1997, re-
spectively. No additional compensation expense would have been
recognized under SFAS 123 in 1999.
Average
conversion
price per
share
Number of
Stock
Options
Balance at beginning of year
Bonds sold
Converted
Repayment
Exchanged for SARs
Outstanding at year-end
Exercisable at year-end
1999
15.5 €79.63 7.5 €65.60 0.2 €42.62
– – 8.2 92.30 7.4 65.90
– – (.) 42.62 (0.1) 42.62
(0.2) 79.10 (0.2) 72.22 (.) 65.90
(15.2) 79.79 – – – –
0.1 42.62 15.5 79.63 7.5 65.60
0.1 €42.62 0.1 €42.62 0.1 €42.62
Number of
Stock
Options
1998
Average
conversion
price per
share
Number of
Stock
Options
1997
Average
conversion
price per
share
Weighted-
average
conversion
price
Chrysler
shares
under
option
1998
Chrysler
shares
under
option
1997
Weighted-
average
conversion
price
30.7 $27.71 28.5 $23.68
9.2 39.82 10.1 33.72
(3.8) 23.38 (7.8) 20.92
(0.1) 30.60 (0.1) 26.70
(36.0) 31.24 – –
– – 30.7 27.71
– – 13.4 $23.43
Analysis of the Stock Options issued to management is as follows
(options in millions):
No compensation expense was recognized in 1999 in connection
with the stock option plans (1998: €38; 1997: none).
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 and 1997, and changes during the years ending on those
dates is presented below (options in millions):
95
Outstanding at beginning of year
Granted
Exercised
Forfeited
Converted to DaimlerChrysler shares
Outstanding at end of year
Options exercisable at year-end