El Gran Hermano

Notes to the Consolidated Financial Statements Other disclosures

The exercise price for a share of the Company corresponds to the arithmetic mean of the closing auction prices of the Company’s shares in Xetra trading (or an equivalent successor system) on the Frankfurt stock exchange on the last five market days before the corresponding stock option is issued (the day on which the beneficiary’s declara- tion that he intends to take up shares is accepted by the Company or by the credit institution engaged by the Company for processing purposes). Alternatively, the exercise price for stock options issued before the start of trading for shares within the framework of the company IPO corresponds to the price at which the Company shares were placed within the framework of the IPO.

Subscription rights in relation to stock options can only be exercised if the closing auction price of the shares of the Company in Xetra trading (or an equivalent successor system) on the Frankfurt stock exchange has outperformed the SDAX index (or a comparable successor index) on at least ten successive trading days within one year before the day on which the subscription right is exercised.

In 2009 and 2011, two individual commitment to one member of the Executive Board amounting to a total of 100,000 stock options were made: of this figure, 0 option rights had not expired on the reporting date (previous year: 37,500).

The expense of the share-based payment shown in the income statement for the period ending December 31, 2013, amounted to € 66 thousand (previous year: € 515 thousand).

The weighted average exercise price is € 27.08 (previous year: € 27.90) and is calculated as the exercise price of the options in question less the fair value of the amount of future service to be rendered over the remainder of the vesting period of these options. The weighted average term remaining for options which were outstanding as of December 31, 2013, is 2.3 years (previous year: 3.6 years).

The weighted average fair value for the stock options still outstanding as of December 31, 2013, is € 6.18 (previous year: € 7.70).

In financial year 2012, 35,550 stock options which had been issued to selected senior executives and employees of XING subject to equiva- lent conditions became exercisable ahead of schedule as a result of the acquisition of control in accordance with Section 29 WpUG by Burda Digital GmbH, Munich. The cost recognized in the consolidated income statement as of December 31, 2012 for this share-based pay- ment amounted to a total of € 1,516 thousand, of which € 1,095 thou- sand is a special effect resulting from the acquisition of control. The multi-year incentive program for members of the Executive Board is based on a virtual replication of shares allocated to the beneficia- ries in annual tranches under specific conditions and which, provided certain conditions are met and following a waiting period of three years from allocation, provide an entitlement to a cash payment tied to the share price or, at the Company’s discretion, to the allocation of shares. Shares are allocated based on quantitative multi-year tar- gets set by the Supervisory Board, such as consolidated revenues and consolidated EBITDA. Through the granting of shadow shares a remu- neration component is used that takes account of the performance of the Company’s shares and therefore provides a sustainable, long-term incentive for the members of the Executive Board.

As remuneration for the current financial year, the fair value for the virtual options granted in this year is shown on the basis of a tar- get achievement level of 100 %. Overall, personnel expenses of € 404 thousand (previous year: € 83 thousand) for cash-settled share-based payment were recognized in the income statement in the 2013 finan- cial year. Provisions of € 487 thousand (previous year: € 83 thousand) were recognized as of December 31, 2013 for entitlements arising from the long-term incentive programs.

The calculations are based on an actuarial report obtained for mea- suring the value of the stock options and the parameters set out in the report. The fair value of the option rights under the stock option plan 2010 was determined using a binominal model as of the issue date (March 29, 2011). An expected volatility of 30 % was taken into account. The term was assumed to be 4.5 years and the risk-free discount rate was assumed to be 2.59 %. The fair value determined this way was € 6.07 per option. The fair value of the shadow shares is determined using binomial models, applying expected volatility of 45 %, a term of 2.5 years, and a risk-free discount rate of 0.34 %. These measurement bases give rise to a fair value for the options of € 65.47 as of December 31, 2013.

RelaTIons WITh RelaTeD PaRTIes

The members of the Executive Board and the Supervisory Board of XING AG are deemed to be related parties for the purposes of IAS 24. In the year under review, with the exception of their executive body activities, there were no significant business relations between the Executive Board and the Supervisory Board and the companies included in the consolidated financial statements. The Executive Board and the Supervisory Board received total remuneration of € 2,147 thousand and € 280 thousand (previous year: € 1,192 thousand and € 280 thousand) for their work in the financial year ended. Since December 18, 2012, Hubert Burda Media Holding Kommandit- gesellschaft, Offenburg, has held more than 50 % of the share capital of XING AG. XING AG is accordingly a dependent company in accord- ance with Section 312 (1) Clause 1 in conjunction with Section 17 (2) AktG. Because a control agreement does not exist between XING AG and Hubert Burda Media Holding Kommanditgesellschaft, Offenburg, the Executive Board of XING AG prepares a report regarding relations with affiliated companies in accordance with Section 312 (1) Clause 1 AktG. In the 2013 financial year, XING AG or its affiliated companies and Hubert Burda Media Holding Kommanditgesellschaft, Offenburg, or its affiliated companies as in the previous year purchased products and services from each other subject to arm’s length conditions, the scope of which was insignificant with the following exception. In the financial year ended, revenues of € 2,693 thousand were generated

with TOMORROW FOCUS Media GmbH, of which € 557 thousand was still outstanding as of December 31, 2013 and is shown as receivables from services.

nUmbeR oF emPloYees

XING employed an average of 530 persons (previous year: 500) as well as 4 members of the Executive Board (previous year: 4) during financial year 2013. As of December 31, 2013, a total of 571 persons (previous year: 509) as well as 4 Executive Board members (previous year: 4) were employed by the Group.

noTIFICaTIons ReCeIVeD In aCCoRDanCe WITh seCTIon 21 WPhg

With regard to the notification obligation in accordance with Sec- tion 21 WpHG, please refer to the comments in the notes to the single- entity financial statements of XING AG.

membeRs oF The sUPeRVIsoRY boaRD

The following persons served on the Supervisory Board of the Com- pany in the year under review:

Dr. Neil Vernon Sunderland, independent entrepreneur, Zumikon, Switzerland (Chairman until May 24, 2013)

Other Supervisory Board posts/memberships in control bodies (as of May 24, 2013):

▶ Chairman of the Administrative Board and Chairman of Manage- ment of AdInvest AG and AdInvest Holding AG, Zumikon, Switzer- land

▶ Member of the Administrative Board of Elsevier Holdings SA, Neuchâtel, Switzerland, Elsevier Finance SA, Neuchâtel, Switzer- land, and Elsevier Properties SA, Neuchâtel, Switzerland

▶ Chairman of the Board of Adconion Media Group, Limited, London, United Kingdom

▶ Member of the Board of Industrial Origami Inc., Cleveland, USA

▶ Chairman of the Board of Crupe Systems International Holdings (Singapore) Pte. Ltd. Singapore

▶ Member of the Board of exxeta AG, Karlsruhe, Germany

XING AG Annual Report 2013

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