Reebok 2006 Annual Report Download - page 36

032 ANNUAL REPORT 2006 › adidas Group ›
Number of Stock Options Outstanding Reduced
In 2006, a total of 9,100 options were exercised within the
scope of the Management Share Option Plan (MSOP) by the
current members of our Executive Board in the period ending
December 31, 2006. Compensation resulting from the exer-
cise of these options totaled € 603,410. As at December 31,
2006, our Executive Board members held 2,800 stock options,
which they have not exercised yet.
Employment Contracts Provide for Severance Payments
The open-ended employment contracts of our Executive Board
members contain provisions governing severance payments
in the event that adidas AG terminates their employment
without cause. Executive Board members Herbert Hainer,
Erich Stamminger and Glenn Bennett will each receive a sev-
erance payment totaling 100% of their annual fixed salaries at
the time of their departure. Robin J. Stalker’s severance pay-
ment will amount to 50% of his annual fixed salary at the time
of his departure. All severance payments are payable at the
time of the departure of the beneficiaries from the company.
If an Executive Board member dies during his term of office,
his spouse will receive a one-time payment amounting to 25%
of the annual fixed salary.
Pension Commitments to Executive Board Members
Pension commitments include old-age pension, disability
benefits as well as widow’s pensions.
» Old-age pension: Pensions are paid to Executive Board
members for life as soon as they reach the age of 65 and
retire from adidas AG. The pension allowance is based on a
percentage of the pensionable income currently equaling the
annual fixed salary. Starting from a base amount totaling 10%
or 20% of the pensionable income, the pension entitlement
increases by 2% for each full year of tenure as an Executive
Board member of adidas AG and can reach a maximum level
of 40% of pensionable income. In the event of the retirement
of an Executive Board member prior to reaching the statutory
retirement age, the non-forfeiture of the pension entitlement
will be in line with the provisions of the law. The increase of
current pension payments or pension entitlements is index-
linked in accordance with German law.
» Disability benefits: Should Executive Board members
become incapacitated for work before they have reached
retirement age, they are entitled to pension payments accord-
ing to the same conditions stated above.
» Widow’s pension: When an Executive Board member dies,
his spouse receives a surviving annuity amounting to 50% of
the pension entitlements.
Pension Fund Used to Cover Pension Entitlements
adidas AG has not created reserves pursuant to German
commercial law for the pension entitlements acquired by
current Executive Board members as at December 31, 2006
since adidas AG was released therefrom following a payment
into a pension fund. This payment, equaling the present value
of future pension entitlements calculated as at December 31,
2006, is split among the individual Executive Board members
in relation to the former provisions for pension obligations.
The pension fund complies with the requirements for plan
assets as defined in IAS 19 and is settled against the provi-
sions for pension obligations.
Herbert Hainer
(Chairman of the Executive Board) 4,490
Glenn Bennett 925
Robin J. Stalker 848
Erich Stamminger 2,412
Total 8,675
Payment to Pension Fund in 2006 € in thousands