Siemens 2009 Annual Report Download - page 287

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 Managing Board statements, Independent auditors’ report, Additional information
 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise
stated and per share amounts)
in a September 30, 2009 ending balance of 1,266,444 non-
vested matching shares.
Fair value was determined as the market price of Siemens
shares less the present value of expected dividends during the
vesting period as matching shares do not carry dividend rights
during the vesting period. Non-vesting conditions, i.e. the
condition neither to transfer, sell, pledge nor otherwise en-
cumber the underlying shares, were considered in determin-
ing the fair values. Depending on the grant date being either
November 30, 2008 or December 17, 2008, the fair values of
the granted instruments amounted to €20.32 and €21.34 per
share. In fiscal 2009, the weighted average grant-date fair
value of the resulting matching shares is €21.29 per share,
based on the number of instruments granted. Total fair value
of matching shares granted in fiscal 2009 and 2008, amounts
to €28 and €– , respectively.
Jubilee Share Program
In fiscal 2009, Siemens changed its jubilee benefit program,
which applies to certain Siemens’ companies, from cash to
share-based compensation including amounts under the pre-
vious program. Under the share-based jubilee program, eligi-
ble employees are granted a certain number of shares after
having been (continuously) employed with the Company for
25 and 40 years (vesting period), respectively. Settlement of
the jubilee grants is in shares only. The share awards are mea-
sured at fair value considering biometrical factors. The fair
value was determined as the market price of Siemens shares at
grant date less the present value of dividends expected to be
paid during the years of service until the jubilee date as share
awards do not carry dividend rights during the vesting period.
The weighted average fair value of each share award granted
under the jubilee share program for the 25th and the 40th jubi-
lee is €34.46 and €29.01 respectively, based on the number of
instruments granted. The weighted average fair value of each
share award granted adjusted by biometrical factors (consider-
ing fluctuation) amounts to €25.18, and €20.56 respectively. In
fiscal 2009, 4.87 million jubilee shares were granted, 0.08 mil-
lion forfeited, resulting in an ending balance of 4.79 million ju-
bilee shares as of September 30, 2009, of which, considering
biometrical factors, 3.52 million jubilee shares are ultimately
expected to vest.
€69.19 per share, and a grant-date fair value of €37.20 per
share. Shares purchased under the Base Share Program grant
the right to receive matching shares under the same condi-
tions described below at Share Matching Plan.
b) Share Matching Plan
In the first quarter of fiscal 2009, the Company introduced the
Share Matching Plan to members of the Managing Board and
to employees of Siemens AG and Siemens’ companies. Plan
participants may invest a certain percentage of their compen-
sation in Siemens shares at a predetermined price set at the
resolution date (investment shares). In exchange, plan partici-
pants receive the right to one free share (matching share) for
every three investment shares continuously held over a period
of three years (vesting period) provided the plan participant
has been continuously employed by Siemens AG or another
Siemens’ company until the end of the vesting period. Up to
the stipulated grant-dates in the first quarter of each fiscal
year, employees may order the investment shares, which are
issued in the second quarter of the fiscal year. During the vest-
ing period, matching shares are not entitled to dividends. The
right to receive matching shares forfeits if the underlying in-
vestment shares are transferred, sold, pledged or otherwise
encumbered. The Managing Board and the Supervisory Board
of the Company will decide, each fiscal year, whether a new
Share Matching Plan will be issued.
Investment Shares are measured at fair value at grant-date,
which is determined as the market price of Siemens shares
less the present value of expected dividends as investment
shares do not carry dividend rights until they are issued in the
second quarter, less the share price paid by the participating
employee. Depending on the grant-date being either Novem-
ber 30, 2008 or December 17, 2008, the fair values amount to
€3.47 and €5.56, respectively, per instrument. The weighted
average grant-date fair value amounts to €5.39 per instrument,
based on the number of instruments granted.
c) Resulting Matching Shares
As of the grant-date, shares purchased through the programs
as described above at a) and b) resulted in 1,324,596 matching
shares of which 25,962 relate to the Managing Board. In fiscal
2009, 58,152 matching shares forfeited/were settled, resulting