Reebok 2010 Annual Report Download - page 36

32 To Our Shareholders Compensation Report
Commitments to Executive Board
members upon premature end of tenure
In the service contracts of the Executive
Board members Glenn Bennett, Robin
J. Stalker and Erich Stamminger, a
severance payment cap in the case of
premature termination of tenure which
is not due to good cause is not provided
for due to the relatively short contractual
terms of up to three years. The service
contract of Herbert Hainer, on the other
hand, which has a contractual term of
more than three years, does provide for a
severance payment relating to payment
claims for the remaining period of his
service contract. However, the severance
payment has been limited to a maximum
of twice the overall annual compensation
(Severance Payment Cap). In this
respect, the overall annual compensation
means the overall compensation for
the last full financial year prior to his
resignation from the Executive Board
while considering the expected total
compensation for the current financial
year. If the service contract is terminated
due to a change of control, a possible
severance payment is limited to 150% of
the Severance Payment Cap.
Commitments to Executive Board
members upon regular end of tenure
In case of regular termination of
the service contract, i.e. in case of
non-renewal of the service contract
or termination due to reaching the
retirement age, the respective Executive
Board member is entitled to a follow-up
bonus as individually agreed. This bonus
amounts to 75% for Glenn Bennett, 100%
for Robin J. Stalker and 125% for Herbert
Hainer and is based on the Performance
Bonus granted to the respective
Executive Board member for the last
full financial year. The follow-up bonus
is payable in two tranches, 12 and 24
months following the end of the contract.
Instead of the follow-up bonus, the
service contract with Erich Stamminger
contains a severance payment of 100% of
the last annual fixed salary in the event
that adidas AG decides not to renew his
contract although he would be willing to
continue his function as Executive Board
member under the existing conditions.
In this case, the amount is based on the
annual fixed salary of the financial year
at the time of retirement from office. The
severance payment is granted instead
of the follow-up bonus. The Supervisory
Board has aligned this contractual
provision to the system valid for the other
Executive Board members as of the 2011
financial year and set a follow-up bonus
in the amount of 125%.
Other benefits and additional Other benefits and additional
commitments to the Executive Boardcommitments to the Executive Board
– Except for the other benefits listed in
the table, the Executive Board members
did not receive any additional payments.
– The Executive Board members did not
receive any additional compensation for
mandates within the adidas Group.
– The Executive Board members did not
receive any loans or advance payments
from adidas AG.
– The company maintains a
consequential loss and liability
insurance for Board members of the
adidas Group (D&O Insurance). It
covers the personal liability in the event
of claims raised against Executive
Board members for indemnification
of losses incurred in connection with
their acts and omissions. For cases of
damage occurring after July 1, 2010,
there is a deductible in accordance
with the statutory provisions and
recommendations of the German
Corporate Governance Code. This
deductible amounts to 10% of the
damage up to a maximum of one and
a half times the fixed annual salary for
all cases of damage within one financial
year.
Payments to former members of the Payments to former members of the
Executive Board and their surviving Executive Board and their surviving
dependantsdependants
In the 2010 financial year, pension
payments to former Executive
Board members or to their surviving
dependants amounted to € 3.235 million
(2009: € 2.607 million). As at December
31, 2010, the provisions for pension
entitlements of this group of persons
totalled € 45.884 million (2009:
€ 45.658 million). The dynamisation
of the pension payments is made in
accordance with statutory regulations or
regulations under collective agreements
unless a surplus from the pension fund
is used after the commencement of
retirement for an increase in retirement
benefits.