Stock Option Plan 1998
The stock option plan resolved by the Annual General Meeting of June 18, 1998, authorises the Managing Board of Fresenius AG, with the approval of the Supervisory Board, to issue subscription rights to members of the Managing Board and/or managerial staff of Fresenius AG and its affiliated companies (with the exception of Fresenius Medical Care AG and companies affiliated with it other than through the company) once or several times during a period of five years. Altogether, these subscription rights entitle their holders to purchase up to 450,000 bearer ordinary shares and up to 450,000 bearer preference shares. The entitlement to exercise the rights in one group of shares excludes the entitlement to exercise the rights in another group of shares. Thereof, 100,000 bearer ordinary and non-voting bearer preference shares are available to Managing Board members and 350,000 bearer ordinary and non-voting bearer preference shares are available to managerial staff members entitled to options. Subscription rights are issued to the members of the Managing Board, the senior vice presidents and vice presidents as well as the management of the German and foreign subsidiaries of the company (with the exception of Fresenius Medical Care AG and companies affiliated with it other than through the company). These altogether are around 270 people.
In 2001 the Annual General Meeting authorised and transacted a capital increase from corporate funds through the conversion of capital reserves to subscribed capital in the ratio 1:1. Therefore, the number of shares resulting from options has doubled accordingly.
Through a resolution of the Annual General Meeting, the current conditional from the 1998 Stock Option Plan was reduced to the amount necessary to secure the subscription rights from the stock options issued up to date. These stock options for bearer ordinary shares and bearer non-voting preference shares were issued with the authorization of the Annual General Meeting of 18.6.1998. The conditional capital now amounts to 3,296,010.24 euros, divided into 643,752 bearer ordinary shares and 643,752 bearer preference shares.
The options may only be exercised under the following conditions:
- An option has a duration of 10 years from the date it was granted (duration).
- One third of the options can be exercised at the earliest two years after the date they were granted, another third at the earliest three years and the last third of the options at the earliest four years after the date they were granted (vesting period).
- Within the two-year vesting period, EBIT must have increased by at least 15 % (hurdle rate). The Managing Board has availed itself of its entitlement to increase this percentage to 30 % for the stock options granted in 1998, and to 20 % for the stock options granted in 1999, 2000 and 2001.
- The options can only be exercised within a maximum period of fifteen working days after the results of the respective past quarter have been announced (exercise period).
- The options are not transferable. The person entitled to options must be in an unterminated employment or service relationship on the date he/she exercises the options (employment relationship).
Conditions defining the exercise price
With the exercise of the option the entitled person has to pay an exercise price per each exercised ordinary share and per each exercised preference share. The exercise price corresponds to the average standard price of the ordinary and preference shares at the Frankfurt Stock Exchange during the last 30 market days before the grant of the option to the entitled person in the official German currency.