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Software AG GB 2013. englisch

Because there is no obligation to settle in cash, these rights are accounted for as an equity-settled stock option program pursuant to IFRS 2. Pursuant to IFRS 2, the date of the 2012 Annual Shareholders’ Meeting was the date on which all rights awarded prior to May 2012 were granted, since rights can be serviced in shares, so final allocation requires the approval of the Annual Shareholders’ Meeting. Accordingly, the expense of these rights is calculated based on the fair value of the rights on May 4, 2012. The expense is allocated to the period starting with the date they were awarded until the expected date the aforementioned performance targets are reached. After the date of the Annual Shareholders’ Meeting the fair value was determined based on a binomial model. For the measurement, the market condition that stipulates that the share price must be at least €60.00 on one of the last five weekdays prior to exercise was taken into account. Valuation was based on the following parameters: The expected volatility was derived by applying the implied volatility of stock options with comparable terms of maturity to Software AG shares. This results in a fair value of €5.84 for all rights awarded prior to May 4, 2013 (6,515,500 rights) under the program. The fair values on the respective award dates for rights awarded after May 4, 2012 (1,204,501 rights) were ­between €5.00 and €7.50. Expenses of €3,408 thousand (2012: €4,389 thousand) were incurred under this plan during fiscal year 2013. Software AG share price on May 4, 2012 €25.44 Strike price of rights €41.34 Assumed average volatility 43.0% Expected dividend yield 2.0% Risk-free interest rate 1.1% Expected average term until exercise of the rights 7.0 years Management Incentive Plan 2007 (MIP III) (2007-2011) In 2007, a share-based incentive plan for members of the Management Board and upper management was launched. A total of 7,342,500 (before stock split: 2,447,500) partici- pation rights have been issued to Management Board mem- bers and managers under the plan. As part of the plan, the defined performance target involved reaching the €1,000,000 thousand mark 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 performance targets were achieved at the end of fiscal year 2010. Accordingly, since May 19, 2011, partici- pants are entitled to payment of the difference between the price of Software AG shares and the base price of €24.12. However, the Company is entitled to elect to issue shares in lieu of a cash payment at its discretion. The rights granted under Management Incentive Plan 2007 (MIP III) changed as follows in fiscal years 2013 and 2012: Software AG | Annual Report 2013 194 Letter from the Management Board About Software AG Software AG ShareHighlights 2013

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