Siemens 2006 Annual Report Download - page 219

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Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts) 215
In fiscal 2006, the Company granted 1,076,860 stock awards to 5,198 employees and mem-
bers of the Managing Board, of which 25,221 awards were granted to the Managing Board.
In fiscal 2005, the Company granted 1,152,508 stock awards to 5,343 employees and members
of the Managing Board, of which 24,177 awards were granted to the Managing Board. Details
on stock award activity and weighted average grant-date fair value are summarized in the
table below:
Stock awards are accounted under the fair value recognition provisions of SFAS 123R. Fair
value was determined as the market price of Siemens shares less the present value of divi-
dends expected during the 4 year vesting period which resulted in a fair value of €57.28 and
€55.63, respectively, per stock award granted in fiscal 2006 and 2005. Total fair value of stock
awards granted in fiscal 2006 and 2005 amounted to €62 and €64, respectively.
As of September 30, 2006, unrecognized compensation costs related to stock awards
amounted to €76, which is expected to be recognized over a weighted average vesting period
of 2.7 years.
Employee share purchase program
Under a compensatory employee share purchase program, employees may purchase a limited
number of shares in the Company at preferential prices once a year. Up to a stipulated date in
the first quarter of each fiscal year, employees may order the shares, which are usually issued
in the second quarter of the fiscal year. The employee share purchase program is measured at
fair value. During the years ended September 30, 2006 and 2005 the Company incurred com-
pensation expense (before income taxes) of €38 and €31, respectively, related to the sale of
repurchased shares to employees, based on a preferential employee share price of €46.12 and
€43.24, respectively, and a grant-date fair value of €21.19 and €16.86, respectively, per share.
For information on corresponding Siemens share repurchases, see Note 23.
Notes to Consolidated Financial Statements
Year ended September 30,
2006 2005
Weighted Weighted
average average
Grant-Date Grant-Date
Awards Fair value Awards Fair value
Nonvested, beginning of period 1,136,048 € 55.63 – –
Granted 1,076,860 € 57.28 1,152,508 € 55.63
Vested – – – –
Forfeited (58,037) € 56.17 (16,460) € 55.63
Nonvested, end of period 2,154,871 € 56.44 1,136,048 € 55.63
Exercisable, end of period – – – –