The automatic 'box on a W108 was long before the two mode boxes first seen on the likes of W201 and W124 models .
The 'S' you refer to must be the one as in P R N D S L : Park , Reverse , Neutrtal , Drive , Slope , Low .
The first three letters are self explanatory .
Drive allows forward gears to be selected automatically with all four forward gears available ; the car normally starts in second with first only used if kickdown applied from standstill .
Slope - as Drive above but with 4th gear locked out - so named as it is useful for descending slopes and allows the use of engine braking to hold the car back .
Low - only first and second gears available ; in this position the car will start off in first even with light pressure on the accelerator .