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Software AG GB 2012, englisch

SOFTWARE AG | ANNUAL REPORT 2012 130 increased. The rights can be exercised for the first time four years after they were allotted. An additional condition for exercising rights was defined whereby Software AG’s stock price must be at least €60 on one of the five trading days before rights are exercised. In November 2012 the Management Incentive Plan IV was adjusted to reflect the new strategy of the Company, which requires substantial investments in growth and an intensified focus on the cloud market. The megatrend of cloud comput- ing was therefore taken into account in the calculation of relevant revenues. Pro rata cloud revenue generated on a subscription basis is determined using a multiple factor. IFRS revenue from new products must however total at least €450 million in fiscal year 2015. Instead of doubling net income, it was determined that the Software AG Group’s publicized non-IFRS EBIT margin must be at least 10 percent respectively by 2015, whereby underperformance of the non-IFRS EBIT margin may be balanced out by an appropri- ate outperformance of the revenue performance target. In accordance with the adjustment of long-term performance targets, only a linear increase of new product revenue will be included in the medium-term performance target. Fur- thermore, participants of MIP IV can be paid an annual bonus on exercisable but unexercised options in the amount of the dividend approved at the respective Annual Shareholders’ Meeting. This must be reapproved every year. c) Management Incentive Plan IV 2011–2016 (MIP IV) After Software AG had met the secondary conditions of MIP III (2007–2011) in 2010, it was necessary to launch a new long-term success-based incentive plan. Accordingly, a share-based incentive plan for members of the Manage- ment Board and managers was launched in the second quarter of 2011. A total of 1,610,000 ownership rights have been issued to members of the Management Board to date. If performance targets are reached by fiscal year 2015, the holders of these ownership rights are entitled to a payment of the value by which Software AG stock surpasses the base price. This entitlement is valid until June 30, 2021. The base price for ownership rights issued thus far is €41.34. The defined long-term performance target involves doubling Group revenue for new products and net income compared to fiscal year 2010 by no later than 2015. “New products” as defined for the revenue performance target are mainly all products outside of the ADABAS-Natural and EntireX prod- uct portfolios. The plan includes a medium-term perfor- mance target that requires that the long-term doubling of new product revenue and net income must be achieved along a linear progression of at least 15 percent per year. If annual growth in revenue from new products or net income is less than 10 percent during one year, the total ownership right award will be reduced on a pro rata basis by 0.5 percent for every percentage point under 10 percent. The reduction can be recovered with growth greater than 15 percent annu- ally in the following years. But the original award cannot be