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Software AG GB 2012, englisch

SOFTWARE AG | ANNUAL REPORT 2012 128 shareholders prior to payment of a phantom share tranche. Members of the Management Board may elect to let the Company dispose of the amounts that have become due after the waiting period for an unlimited period of time and thus continue to participate in the success of the Company. Accounting procedures correspond with those of phantom shares that have not yet become due. This plan led to per- sonnel expenses for members of the Management Board of €3,618 thousand (2011: €6,105 thousand) in fiscal year 2012, which are mainly included in long-term remuneration components. b) Management Incentive Plan III 2007–2011 (MIP III) In the third quarter of 2007, a share-based incentive plan for members of the Management Board and officers was launched. A total of 3,150,000 (1,050,000 prior to the stock split in 2011) ownership rights were issued to members of the Management Board in past years. If performance targets are reached by June 30, 2016, the holders of these owner- ship rights are entitled to a payment of the value by which the Software AG stock surpasses the base price of €24.12 (€72.36 prior to the stock split). The defined performance target involves reaching €1,000,000 thousand for Group revenues by no later than fiscal year 2011, while at the same time doubling after-tax earnings compared to fiscal year 2006. These conditions were met in fiscal year 2010. Par- ticipants of MIP III can be paid an annual bonus for unexer- cised options in the amount of the dividend approved at the respective Annual Shareholders’ Meeting. This must be reap- proved every year. Variable remuneration/bonuses Individual Management Board members receive a perfor- mance-based bonus whose amount depends on the achievement of specific goals including the Group’s revenue and earnings targets that are communicated to the capital market. In addition, a variety of quantitative and qualitative targets have been agreed on depending on area of respon- sibility. The bonuses are calculated based on the extent to which targets are achieved. Medium and long-term remuneration components a) Phantom share plan A portion of the variable remuneration is paid as a long-term component on the basis of a phantom share plan. The por- tion accruing for fiscal year 2012 is converted into virtual (phantom) shares on the basis of the average share price of Software AG stock for the month of February at the end of February 2013 less 10 percent. The resulting number of shares will become due in three identical tranches with terms of one, two and three years. On the due dates in March 2014 to 2016, the number of phantom shares will be multiplied by the then-applicable share price for February. This amount is adjusted to reflect the amount (measured in percent) by which the shares outperform or underperform the TecDAX index and is then paid to the members of the Management Board. The TecDax adjustment for this out- or underperformance is limited to 50 percent. The mem- bers of the Management Board receive an amount per phantom share equal to the dividends paid to Software AG

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