talanx group annual report 2011 en

276
Financial statements Notes
General information
Talanx Group. Annual Report 2011
Accounting principles
and policies
Segment reporting Consolidation,
business combinations
Non-current assets held for
sale and disposal groups
The maximum term of the stock appreciation rights is ten years, commencing at the end of the
year in which they are awarded. Stock appreciation rights which are not exercised by the end of
the 10-year period lapse. Stock appreciation rights may only be exercised after a waiting period
and then only within four exercise periods each year. For 40% of the stock appreciation rights (first
tranche of each allocation year) the waiting period is two years, for each further 20% (tranches two
to four of each allocation year) of the stock appreciation rights the waiting period is extended by
one further year. Each exercise period lasts for ten trading days, commencing on the sixth trading
day after the date of publication of each quarterly report of Hannover Rückversicherung AG.
On 4 November 2009, the Supervisory Board of Hannover Re resolved to extend the waiting period
applicable to members of the Executive Board from two to four years for stock appreciation rights
granted from the 2010 allocation onwards; on 23 November 2009 the Executive Board of Hannover
Re decided to extend the waiting period accordingly for the other members of the Group’s senior
management. Upon expiry of this waiting period a maximum 60% of the stock appreciation rights
awarded for any allocation year may be exercised. The waiting period for each further 20% of the
stock appreciation rights awarded to a member of managerial staff for that allocation year is one
year.
The amount paid out to the party exercising a stock appreciation right is the difference between the
baseline price and the current market price of the Hannover Re share at the time of exercise. In this
context, the baseline price corresponds to the arithmetic mean of the closing prices of Hannover Re
shares on all trading days of the first full calendar month of the allocation year in question. The current
market price of the Hannover Re share at the time when stock appreciation rights are exercised
is the arithmetic mean of the closing prices of the Hannover Re share on the last 20 trading days
prior to the first day of the exercise period.
The amount paid out is limited to a maximum calculated as the quotient of the total volume of
remuneration to be granted in the allocation year and the total number of stock appreciation rights
awarded in that year.
If the holder’s contract with the company is terminated by either party or by mutual agreement or
ends upon expiry of a fixed term, a holder of stock appreciation rights is entitled to exercise all such
rights in the first exercise period thereafter. Any stock appreciation rights not exercised within this
period and any in respect of which the waiting period has not yet expired will lapse. Retirement,
incapacity or death of the member of management does not constitute termination for the purpose
of the exercise of stock appreciation rights.