Siemens 2009 Annual Report Download - page 286

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 Reports Supervisory Board /
Managing Board  Corporate Governance  Management’s discussion and analysis  Consolidated Financial Statements
 Consolidated Statements of Income  Consolidated Statements of Income
and Expense Recognized in Equity
 Consolidated Balance Sheets  Consolidated Statements of Cash Flow
Fair value was determined as the market price of Siemens
shares less the present value of dividends expected during the
4 year and 3 year vesting period, respectively, as stock awards
do not carry dividend rights during the vesting period, which
resulted in a fair value of €37.65 and €97.94, respectively, per
stock award granted in fiscal 2009 and 2008. Total fair value of
stock awards granted in fiscal 2009 and 2008 amounted to €75
and €72, respectively.
Share Matching Program and its underlying plans:
a) Base Share Program
In the first quarter of fiscal 2009, Siemens replaced its previous
employee share purchase program by the Base Share Program.
Under the Base Share Program, members of the Managing
Board and employees of Siemens AG and participating
Siemens’ companies could purchase a limited number of
Siemens shares at a preferential price once a year. Up to a stip-
ulated date in the first quarter of the fiscal year, employees
were allowed to order the shares, which were issued in the
second quarter of the fiscal year. The Base Share Program is
measured at fair value at grant-date. In fiscal 2009, the Com-
pany incurred pre-tax expense of €42, based on a preferential
share price of €22 per share and a grant-date fair value of the
equity instrument of €25.56 per share, which is determined as
the market price of Siemens shares less the present value of
expected dividends as investment shares of the Base Share
Program do not carry dividend rights until they are issued in
the second quarter, less the share price paid by the participat-
ing employee. In fiscal 2008, under the previous employee
share purchase program, the Company incurred pre-tax com-
pensation expense of €27, based on a preferential price of
I. Equity-settled awards
Stock awards
In the first quarter of fiscal 2005, the Company introduced
stock awards and phantom stock as another means for provid-
ing share-based compensation to members of the Managing
Board and other eligible employees. Stock awards are subject
to a four year vesting period for awards granted up to fiscal
2007 and a three year vesting period for awards granted there-
after. Upon expiration of the vesting period, the recipient re-
ceives Siemens shares without payment of consideration.
Stock awards are forfeited if the grantee’s employment with
the Company terminates prior to the expiration of the vesting
period. During the vesting period, grantees are not entitled to
dividends. Stock awards may not be transferred, sold, pledged
or otherwise encumbered. Stock awards may be settled in
newly issued shares of common stock of Siemens AG, treasury
stock or in cash. The settlement method will be determined by
the Managing Board and the Supervisory Board.
Each fiscal year, the Company decides whether or not to grant
Siemens stock awards. Siemens stock awards may be granted
only once a year within thirty days following the date of publi-
cation of the business results for the previous fiscal year. The
Supervisory Board decides annually after the end of each fiscal
year how many stock awards to grant to the Managing Board
and the Managing Board decides annually how many stock
awards to grant to members of the top management of domes-
tic and foreign subsidiaries and eligible employees.
In fiscal 2009, the Company granted 1,992,392 stock awards:
1,740,063 awards were granted to 4,156 employees and 252,329
awards were granted to members of the Managing Board. In
fiscal 2008, the Company granted 737,621 stock awards to 4,357
employees and members of the Managing Board, of which
79,133 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:
Year ended Sept. ,  Year ended Sept. , 
Awards Weighted
average
Grant-Date
Fair Value
Awards Weighted
average
Grant-Date
Fair Value
Nonvested, be-
ginning of period 3,489,768 €67.56 3,270,910 €60.58
Granted 1,992,392 €37.65 737,621 €97.94
Vested (881,097) €55.63 (79,068) €79.03
Forfeited/settled (162,760) €48.01 (439,695) €64.50
Nonvested,
end of period 4,438,303 €57.22 3,489,768 €67.56
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