Mercedes 2002 Annual Report Download - page 126

120 |Notes to Consolidated Balance Sheets
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 subsi-
diary DaimlerChrysler Luft- und Raumfahrt Holding Aktien-
gesellschaft. 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 DaimlerChrysler 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, 2002, DaimlerChrysler manage-
ment has proposed a distribution of 11,519 million (11.50 per
share) of the 2002 earnings of DaimlerChrysler AG as a
dividend to the stockholders.
As a result of the underfunded status of the accumulated
pension benefit obligations in 2002, DaimlerChrysler was
required to recognize an additional minimum pension liability
of 16.3 billion, after tax (see Note 22 and Note 25a).
24. Stock-Based Compensation
The Group currently has two stock option plans, various stock
appreciation rights (“SARs”) plans and medium term incentive
awards, which are accounted for based on APB 25.
Stock Option Plans
In April 2000, the Group’s shareholders approved the Daimler-
Chrysler 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 Daimler-
Chrysler 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 Stock Option Plan 2000, approved by the share-
holders of DaimlerChrysler AG in April 2000, was judicially
confirmed lawful and valid by the above named courts and
remains valid unless a court decides to the contrary.
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 management. The options granted
under the plans are evidenced by non-transferable convertible
bonds with a principal amount of 1511 per bond due ten years
after issuance. During certain specified periods each year,
each convertible bond may be converted into 201 Daimler-
Chrysler 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 rights issued (in millions) under these plans
are as follows:
Year of Grant
15.0
18.2
19.8
15.2
18.7
20.0
174.76
166.96
151.52
162.30
155.80
142.93
Options
exercisable
At December 31, 2002
Options
outstanding
Options
granted
Convesion
price
Reference
price
Bonds granted in
142.62
165.90
192.30
–
6.0
6.6
–
–
–
5.9%
5.3%
4.4%
Conversion
price
Number of
Rights
Rights
outstanding
Rights
convertible
At December 31, 2002
Stated interest
rate
7.5
–
–
1996
1997
1998
0.9
7.4
8.2
2000
2001
2002