ANNUAL REPORT ARCELOR 2003 - paperJam

NOTE 13 – EQUITY13.1 Issued capital and share premiumAt the conclusion of the Public Exchange Offers in February2002, 118,792,739 Aceralia shares (representing95.03%), 11,559,672 Arbed shares (representing99.45%) and 245,697,269 Usinor shares (representing97.58%) were converted into 528,354,061 Arcelorshares. These shares were added to the 6,450 existingshares issued on the incorporation of Arcelor S.A. onJune 8, 2001.The contribution of shares in Arcelor S.A. was determinedbased on a EUR 14 value per share for a totalamount of EUR 7,397 million. This contribution wasrecorded as EUR 2,642 million issued capital and EUR4,755 million as share premium.In the context of the public share for share offer byArcelor S.A. on July 9, 2002 for the Usinor shares,3,351,776 Arcelor S.A. shares were issued in exchangefor Usinor shares on December 31, 2002. Moreover,after the de-listing of the Usinor shares from the primarymarket on Euronext Paris and within the framework ofthe public exchange offer of Usinor shares, 654,122Arcelor S.A. shares were issued in 2002 and a further674,387 shares were issued in 2003.Subsequent to these purchases Arcelor S.A. holds99.24% of Usinor’s issued shares.As at December 31, 2003, subscribed capital comprisesof 533,040,796 ordinary shares, fully paid up with anominal value of EUR 2,665,203,980. The share premiumamounts to EUR 4,795,105,775.Authorised share capital, including subscribed sharecapital, amounts to EUR 5 billion.The number of shares in circulation is as follows:13.2 Exchange differencesThe movement on foreign exchange differences of EUR-71 million (2002: EUR -309 million) is primarily due tothe depreciation of the US dollar relative to the euro.13.3 Share option planAs at June 30, 2003, Arcelor S.A. established a shareoption plan. 1,300,000 share options were made to73 beneficiaries.Furthermore, the beneficiaries of the Usinor share optionplans have the option of converting their Usinor sharesinto Arcelor shares.As at December 31, 2002, Usinor S.A. had two shareoption plans in place.The first plan, established on November 21, 1997 covers1,374,000 shares attributable to 295 beneficiaries.The second plan, established on March 7, 2000 covers2,380,000 shares attributable to 460 beneficiaries.The plan established on December 11, 1995 covering757 000 shares attributable to 66 beneficiaries expiredon December 10, 2002. On the expiry of this plan optionsover 628,000 shares were exercised and 129,000lapsed.The movement in the number of share options duringthe period was as follows:(Number of share options) 2003 2002Options at the beginning of year 3,465,400 4,139,900Options issued during year 1,300,000 -Options exercised during year (539,000)Options lapsed during year (85,900) (135,500)Options at the end of year 4,679,500 3,465,400Outstanding options as at December 31, 2003:Number of shares (thousands)DECEMBER 31, 2001 (USINOR) 251,776Initial capital from Newco 6Capital increase - contribution to Arcelor 282,657Unconverted Usinor shares (2,073)DECEMBER 31, 2002 (ARCELOR) 532,366Capital increase 675DECEMBER 31, 2003 533,041Maturity date Exercise price (in EUR) Number of optionsNovember 21, 2002 to November 21, 2004 13,92 1,198,600April 7, 2003 to April 7, 2008 15,24 2,180,900July 1, 2006 to June 30, 2010 9,94 1,300,000TOTAL 4,679,500154ANNUAL REPORT ARCELOR 2003