Siemens 2010 Annual Report Download - page 293

147 Consolidated Financial Statements
148 Consolidated Statements of Income
149 Consolidated Statements of Comprehensive Income
150 Consolidated Statements of Financial Position
151 Consolidated Statements of Cash Flow
152 Consolidated Statements of Changes in Equity
154 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated
and per share amounts)
261 Additional information

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 determining
the fair values. The fair value of matching shares granted on
December , , amounts to €. per share. The fair val-
ues of matching shares granted amounted to €. and
€., per share, respectively, depending on the grant date
being either November ,  or December , . In fiscal
 and , the weighted average grant-date fair value of
the resulting matching shares is €. and €. per share
respectively, based on the number of instruments granted.
Total fair value of matching shares granted in fiscal  and
 amounted to € and €, respectively.
Jubilee Share Program
In fiscal , Siemens changed its jubilee benefit program,
which applies to a number of Siemens companies, from cash
to share-based compensation. Under the Jubilee Share Pro-
gram, eligible employees are granted jubilee shares after hav-
ing been continuously employed by the Company for  and 
years (vesting period), respectively. Settlement of jubilee
grants is in shares. Jubilee shares are measured at fair value
considering biometrical factors. The fair value is determined as
the market price of Siemens shares at grant date less the pres-
ent value of dividends expected to be paid during the vesting
period for which the employees are not entitled to. The weight-
ed average fair value of each jubilee share granted in fiscal
 for the th and the th anniversary is €. and €.
respectively, based on the number of shares granted. The
weighted average fair value of each jubilee share granted ad-
justed by biometrical factors (considering fluctuation) is
€. and €., respectively, in fiscal . The weighted
average fair value of each jubilee share granted in fiscal 
for the 
th
and the 
th
anniversary is €. and €., re-
spectively, based on the number of shares granted. The
weighted average fair value of each jubilee share granted ad-
justed by biometrical factors (considering fluctuation) is €.
and €., respectively, in fiscal .
In fiscal  and , . million and . million jubilee
shares were granted. . million and none were transferred,
. million and . million forfeited, resulting in an out-
standing balance of . million and . million jubilee shares
as of September ,  and . Considering biometrical
factors, . million and . million jubilee shares are ex-
pected to vest as of September ,  and .
Stock Option Plan
 Siemens Stock Option Plan
At the Annual Shareholders’ Meeting on February , ,
shareholders authorized Siemens AG to establish the 
Siemens Stock Option Plan, making available up to  million
options. The option grants are subject to a two-year vesting
period, after which they may be exercised for a period of up to
three years. The exercise price is equal to  percent of the
reference price, which corresponds to the average opening
market price of Siemens AG during the five trading days pre-
ceding 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 ex-
ercise 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 op-
tions 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 determined by the Managing Board in each case
as approved by the Supervisory Board. Compensation in cash
shall be equal to the difference between the exercise price and
the opening market price of the Company ’s stock on the day of
exercising the stock options.
The issuance of stock options to members of the Managing
Board on or after October , , has been subject to the pro-
viso that the Supervisory Board may restrict the stock option
exercise in the event of extraordinary, unforeseen changes in
the market price of the Siemens share. Those restrictions may
reduce the number of options exercisable by each Board Mem-
ber, provide for an exercise in cash for a constricted amount
only, or suspend the exercise of the option until the extraordi-
nary effects on the share price have ceased. The fair value of
the options has not been adjusted for effects resulting from
such restrictions. Reasonable estimates cannot be made until
it is probable that such adverse events will occur. Since it is not
possible to reliably estimate the fair value of those options at
the grant date, compensation costs are determined based on
the current intrinsic value of the option until the date at which
the number of shares to which a Board member is entitled to
and the exercise price are determinable. Upon that date, fair
value will be determined in accordance with the fair value
recognition provisions of IFRS , Share-Based Payment, based
on an appropriate fair value option pricing model.
The authority to distribute options under the  Siemens
Stock Option Plan expired on December , . Accordingly,
no further options will be granted under this plan.