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 amount of this component depends on the achievement of the same targets and is subject to the same limits as was agreed for the one-year variable remuneration for fiscal year 2013.
The long-term remuneration component accruing for fiscal year 2013 is not paid out, but converted into virtual (phan-tom) shares on the basis of the average share price of Software AG stock for the month of February 2014 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 2015 to 2017, 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.
No. of options in € in € Years No. of options
Karl-Heinz Streibich (Chief Executive Officer) 900,000 24.12 6.80 3.5 0
Arnd Zinnhardt 450,000 24.12 6.80 3.5 0
MIP III 2007–2011 (Table 2) Forfeited
options in 2013 No. of options
Exercised options in 2013 No. of options
Expired options in 2013 No. of options
Karl-Heinz Streibich (Chief Executive Officer) 0 0 0
Arnd Zinnhardt 0 0 0
MIP III 2007–2011 (Table 3) Balance on
Dec. 31, 2013
No. of options
Thereof exercisable on Dec. 31, 2013
No. of options
Remaining term on Dec. 31, 2013
Years
Accounting expenses from MIP III stock options in 2013 in €
Karl-Heinz Streibich (Chief Executive Officer) 900,000 900,000 2.5 0.00
Arnd Zinnhardt 450,000 450,000 2.5 0.00
puting megatrend into account in its calculations of relevant revenue. This means that the cloud revenue that is gener-ated on a pro rata subscription basis is recognized with a multiplying factor; IFRS revenue from new products must however be at least €450 million in fiscal year 2015. Instead of doubling net income, it was determined that the Soft-ware AG Group’s publicized non-IFRS EBIT margin must be at least 10 percent respectively by 2015, whereby under-performance of the non-IFRS EBIT margin may be balanced out by an appropriate outperformance of the revenue per-formance target. In accordance with the adjustment of long-term performance targets, only a lineal increase of new product revenue will be included in the medium-term per-formance target. Furthermore, 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.
share-based incentive plan for members of the Manage-ment Board and executive managers was launched in the second quarter of 2011. A total of 1,655,000 ownership rights were issued to members of the Management Board as of December 31, 2013. 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 the Soft-ware 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 perfor-mance 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 rev-enue performance target are mainly all products outside of the Adabas, Natural and EntireX product portfolios. The plan includes a medium-term performance target that requires that the long-term doubling of new product revenue and net income must be achieved along a lineal 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 per-centage point under 10 percent. The reduction can be re-covered with growth greater than 15 percent annually in the following years. But the original award cannot be in-creased. 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.
No. of options in € Years Years No. of options in € in € Karl-Heinz Streibich
(Chief Executive Officer)
840,000 41.34 11.34 8.5 30,000 41.34 5.84
Dr. Wolfram Jost 350,000 41.34 10.49 8.5 0 – –
Arnd Zinnhardt 420,000 41.34 11.34 8.5 15,000 41.34 5.84
MIP IV 2011–2016 (Table 3) Balance on
Dec. 31, 2013
No. of options
Thereof exercisable on Dec. 31, 2013
No. of options
Remaining term on Dec. 31, 2013
Years
Accounting expenses from MIP IV stock options in 2013 in €
Karl-Heinz Streibich (Chief Executive Officer) 870,000 0 7.5 1,007,583.00
Dr. Wolfram Jost 350,000 0 7.5 349,816.00
Arnd Zinnhardt 435,000 0 7.5 432,987.00
MIP IV 2011–2016 (Table 2) Forfeited
options in 2013 No. of options
Exercised options in 2013 No. of options
Expired options in 2013 No. of options
Karl-Heinz Streibich (Chief Executive Officer) 0 0 0
Dr. Wolfram Jost 0 0 0
Arnd Zinnhardt 0 0 0
For further information on total remuneration of the Man-agement Board, on the remuneration of former members of the Management Board and pension provisions for former members of the Management Board, please refer to the Notes to the consolidated financial statements.