Siemens 2007 Annual Report Download - page 301

Notes to Consolidated Financial Statements 301
(in millions of €, except where otherwise stated and per share amounts)
Notes to Consolidated Financial Statements
I. Equity-settled awards
Cash received from stock option exercises and from the Company’s employee
share purchase program for the three years ended September 30, 2007 and 2006
amounts to €903 and €313, respectively.
Stock Option Plans
Description of plans – 1999 Siemens Stock Option Plan
As part of a stock option plan for members of the Managing Board, key executives
and other eligible employees, the Company’s shareholders authorized the Manag-
ing Board on February 18, 1999 to distribute non-transferable options exercisable
for up to an aggregate of 10 million common shares. The authority to distribute
options under this plan would have originally expired on February 18, 2004. With
the ratifi cation by Siemens shareholders of the 2001 Siemens Stock Option Plan
(for further details see below), the 1999 Siemens Stock Option Plan (the 1999 Plan)
has been replaced and no further options under this plan have been granted.
Under the 1999 Plan, the exercise price is equal to the average market price of
Siemens’ stock during the fi ve days preceding the date the options were granted.
The options are exercisable within the fi ve years following a holding period of two
years if Siemens AG stock price outperforms the Dow Jones Stoxx-Index by at least
two percentage points on fi ve consecutive days. This percentage applies to the fi rst
year of the fi ve-year option exercise period, and increases by 0.5 percentage
points in each subsequent year.
The terms of the plan allow the Company, at its discretion upon exercise of the
option, to offer optionees settlement of the options in either newly issued shares
of common stock of Siemens AG from the Conditional Capital reserved for this
purpose, treasury stock or cash. The alternatives offered to optionees are deter-
mined by the Managing Board in each case as approved by the Supervisory Board.
Compensation in cash is equal to the difference between the exercise price and
the average market price of the Company’s stock on the fi ve trading days preced-
ing the exercise of the stock options.
Description of plans – 2001 Siemens Stock Option Plan
At the Annual Shareholders’ Meeting on February 22, 2001, shareholders autho-
rized Siemens AG to establish the 2001 Siemens Stock Option Plan, making avail-
able up to 55 million options. Compared to the 1999 Plan, the number of eligible
recipients is signifi cantly larger. The option grants are subject to a two-year vest-
ing period, after which they may be exercised for a period of up to three years. The
exercise price is equal to 120% of the reference price, which corresponds to the
average opening market price of Siemens AG during the fi ve trading days preced-
ing the date of the stock option grant. However, an option may only be exercised if
the trading price of the Company’s shares reaches a performance target which is
equal to the exercise price at least once during the life of the option. The terms of
the plan allow the Company, at its discretion upon exercise of the option, to offer
optionees settlement of the options in either newly issued shares of common stock
of Siemens AG from the Conditional Capital reserved for this purpose, treasury