Annual Report 2010 - Hannover Re

last twenty trading days prior to the first day of the relevant
exercise period.
The amount paid out is limited to a maximum calculated as a
quotient of the total volume of compensation to be granted in
the allocation year and the total number of stock appreciation
rights awarded in the year in question.
In the event of cancellation of the employment relationship or
termination of the employment relationship as a consequence
of a termination agreement or a set time limit, a holder of
stock appreciation rights is entitled to exercise all such rights
in the first exercise period thereafter. Stock appreciation rights
not exercised in this period and those in respect of which the
waiting period has not yet expired shall lapse. Retirement,
disability or death of the member of management shall not be
deemed to be termination of the employment relationship for
the purpose of exercising stock appreciation rights.
The allocations for the years 2000, 2002 to 2004 as well as
2006, 2007 and 2009 gave rise to commitments in the 2010
financial year shown in the following table. No allocations
were made for 2001, 2005 or 2008.
Stock appreciation rights of Hannover Re
Allocation year
2009 2007 2006 2004 2003 2002 2000
Award date 15.03.10 28.03.08 13.03.07 24.03.05 25.03.04 11.04.03 21.06.01
Period 10 years 10 years 10 years 10 years 10 years 10 years 10 years
Waiting period 2 years 2 years 2 years 2 years 2 years 2 years 2 years
Basic price (in EUR) 22.70 34.97 30.89 27.49 24.00 23.74 25.50
Participants in year of issue 137 110 106 109 110 113 95
Number of rights granted 1,569,855 926,565 817,788 211,171 904,234 710,429 1,138,005
Fair value at 31.12.2010
(in EUR) 7.30 7.86 9.77 16.16 8.99 8.79 5.49
Maximum value (in EUR) 8.76 10.79 10.32 24.62 8.99 8.79 5.49
Weighted exercise price – 1.52 5.32 8.51 8.99 8.79 5.49
Number of rights existing at
31.12.2010 1,535,600 889,858 691,751 126,622 3,316 2,365 –
Provisions at 31.12.2010 (in
EUR million) 3.90 6.10 6.48 2.05 0.03 0.02 –
Amounts paid out in the 2010
financial year (in EUR million) – 0.02 0.50 0.25 0.49 0.07 0.01
Expense in the 2010 financial
year (in EUR million) 3.90 2.40 2.53 0.59 0.01 – –
The existing stock appreciation rights are valued on the basis
of the Black-Scholes option pricing model.
The calculations were based on the year-end closing price
of the Hannover Re share of EUR 41.38 as at 22 December
2010, expected volatility of 39.69% (historical volatility on a
five-year basis), a dividend yield of 5.32% and risk-free interest
rates of 1.02% for the 2002 allocation year, 1.39% for
the 2003 allocation year, 1.76% for the 2004 allocation year,
2.38% for the 2006 allocation year, 2.64% for the 2007 allocation
year and 3.05% for the 2009 allocation year.
In the 2010 financial year the waiting period expired for 100%
of the stock appreciation rights awarded in 2000 and 2002
to 2004, 60% of those awarded in 2006 and 40% of those
awarded in 2007. 1,503 stock appreciation rights from the
2000 allocation year, 7,682 stock appreciation rights from the
2002 allocation year, 52,581 stock appreciation rights from the
2003 allocation year, 29,832 stock appreciation rights from the
2004 allocation year, 95,380 stock appreciation rights from the
2006 allocation year and 10,399 stock appreciation rights from
the 2007 allocation year were exercised. The total amount
paid out stood at EUR 1.3 million.
The stock appreciation rights of Hannover Re developed as
follows:
Notes
Hannover Re Group annual report 2010
7.3 Share-based payment Notes
179