Siemens 2009 Annual Report Download - page 290

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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
II. Cash-settled awards
Stock appreciation rights (SARs)
Where local regulations restrict the grant of stock options in
certain jurisdictions, the Company grants SARs to employees
under the same conditions as the 2001 Siemens Stock Option
Plan except that SARs are exercisable in cash only.
Details on SARs activity and weighted average exercise prices
are summarized in the table below:
For purposes of determining the fair value of SARs in fiscal
2009 and 2008, the expected volatility is based on historical
volatility of Siemens shares, implied volatility for traded
Siemens options with similar terms and features, and certain
other factors. The expected term is derived by applying the
simplified method and is determined as the average of the
vesting term and the contractual term. The risk-free interest
rate is based on applicable governmental bonds. Changes in
subjective assumptions can materially affect the fair value of
the SARs.
Phantom stock
Where local regulations restrict the grants of stock awards in
certain jurisdictions, the Company grants phantom stock to
employees under the same conditions as the Siemens stock
awards, except that grantees receive the share prices’ equiva-
lent value in cash only at the end of the four, respectively,
three year vesting period. In fiscal 2008, 24,303 phantom stock
rights were granted and 19,469 phantom stock rights forfeited/
were settled, resulting in a balance of 93,294 phantom stock
rights as of September 30, 2008. In fiscal 2009, 159,787 phan-
tom stock rights were granted, 18,460 were vested and trans-
ferred and 26,931 phantom stock rights forfeited/were settled,
resulting in a balance of 207,690 non-vested phantom stock
rights as of September 30, 2009.
 PERSONNEL COSTS
Expenses relating to pension plans and employee benefits in-
clude service costs for the period. Expected return on plan as-
sets and interest cost are included in Financial income (ex-
pense), net.
The average number of employees in fiscal years 2009 and
2008 was 413,650 and 420,800, respectively (based on con-
tinuing operations). Part-time employees are included on a
proportionate basis. The employees were engaged in the fol-
lowing activities:
Year ended
September 30, 2009
Year ended
September 30, 2008
SARs Weighted
average
exercise
price
SARs Weighted
average
exercise
price
Outstanding,
beginning of period 138,485 € 73.58 198,280 € 73.63
Granted – – – –
SARs exercised – – (40,555) € 73.72
SARs forfeited/
settled (83,540) € 73.41 (19,240) € 73.79
Outstanding,
end of period 54,945 € 73.85 138,485 € 73.58
Exercisable,
end of period 54,945 € 73.85 138,485 € 73.58
B27T092_E
Year ended September ,
2009 2008
Wages and salaries 20,320 21,486
Statutory social welfare contributions
and expenses for optional support payments 3,353 3,256
Expenses relating to pension plans
and employee benefits 996 904
24,669 25,646
B27T093_E
Year ended September ,
(in thousands)  
Manufacturing and services 264.9 260.3
Sales and marketing 82.8 91.2
Research and development 31.8 32.2
Administration and general services 34.2 37.1
413.7 420.8
B27T094_E