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34. Stock options

COMPENSATION COST IN CONNECTION WITH THE STOCK OPTION PLANS OF THE FRESENIUS GROUP

In 2011, the Fresenius Group recognized compensation cost in an amount of €35 million for convertible bonds and stock options granted since 2007. For stock incentive plans which are performance based, the Fresenius Group recognizes compensation cost over the vesting periods, based on the market values of the underlying stock at the grant date.

FAIR VALUE OF STOCK OPTIONS

The Fresenius Group elected to adopt FAS 123(R), Share-Based Payment, prospectively.

The Fresenius Group uses a binomial option pricing model in determining the fair value of stock options granted under the stock option plans of Fresenius SE & Co. KGaA and Fresenius Medical Care AG & Co. KGaA. Option valuation models require the input of highly subjective assumptions including expected stock price volatility. Fresenius Group’s assumptions are based upon its past experiences, market trends and the experiences of other entities of the same size and in similar industries. To incorporate the effects of expected early exercise in the model, an early exercise of vested options was assumed as soon as the share price exceeds 150% of the exercise price. Fresenius Group’s stock options have characteristics that vary significantly from traded options and changes in subjective assumptions can materially affect the fair value of the option.

The weighted-average assumptions for the calculation of the fair value of grants of the Fresenius SE Stock Option Plan 2008 made during the years 2011 and 2010 are as follows:

  2011 2010
€ in millions December Grant July Grant December Grant July Grant
Expected dividend yield 1.60% 1.58% 1.58% 1.92%
Risk-free interest rate 1.70% 2.68% 2.38% 2.12%
Expected volatility 29.18% 29.15% 28.44% 28.94%
Life of options 7 years 7 years 7 years 7 years
Exercise price per option in € 71.37 71.28 63.94 53.49

  2011 2010
€ in millions December Grant July Grant December Grant July Grant
Expected dividend yield 1.60% 1.58% 1.58% 1.92%
Risk-free interest rate 1.70% 2.68% 2.38% 2.12%
Expected volatility 29.18% 29.15% 28.44% 28.94%
Life of options 7 years 7 years 7 years 7 years
Exercise price per option in € 71.37 71.28 63.94 53.49

The expected volatility results from the historical volatility calculated over the expected life of options. The volatility was determined when the fair value of stock options was calculated for the first time and since then has been controlled every year upon issuance of a new tranche.

FRESENIUS SE & CO. KGAA STOCK OPTION PLANS

Description of the Fresenius SE & Co. KGaA stock option plans in place

On December 31, 2011, Fresenius SE & Co. KGaA had three stock option plans in place: the Fresenius AG stock option based plan of 1998 (1998 Plan), the Fresenius AG Stock Option Plan 2003 (2003 Plan) which is based on convertible bonds and the stock option based Fresenius SE Stock Option Plan 2008 (2008 Plan). Currently, stock options can only be granted under the 2008 Plan.

The following descriptions reflect the stock option plans at December 31, 2010 whereas the changes resulting from the conversion of the subscribed capital into bearer ordinary shares in combination with the change of legal form are shown in a separate chapter thereafter.

Stock Option Plan 2008

During 2008, Fresenius SE adopted the 2008 Plan to grant subscription rights to members of the Management Board and managerial employees of the Company and affiliated companies.

Under the 2008 Plan, up to 6.2 million options can be issued, which carry entitlement to obtain 3.1 million ordinary shares and 3.1 million preference shares. Up to 1.2 million options are designated for members of the Management Board of Fresenius SE, up to 3.2 million options are designated for members of the management of directly or indirectly affiliated companies (except for Fresenius Medical Care) and up to 1.8 million options are designated for managerial staff members of Fresenius SE and its affiliated companies (except for Fresenius Medical Care). With respect to the members of Fresenius SE’s Management Board, the Supervisory Board has sole authority to grant stock options and administer the 2008 Plan. The Management Board of Fresenius SE has such authority with respect to all other participants in the 2008 Plan. The options can be granted in five tranches with effect as of the first bank working day in July and/or the first bank working day in December. The exercise price of options shall be the average closing price of Fresenius SE’s ordinary shares and preference shares, respectively, on the Frankfurt Stock Exchange during the 30 trading days immediately prior to each grant date. For participants in the United States, the exercise price may be the average closing price of both share classes during the 30 calendar days immediately prior to the grant date, if these are higher. Options granted have a seven-year term but can be exercised only after a three-year vesting period. The vesting of options granted is mandatorily subject to the condition, in each case, that the annual success target within the three-year vesting period is achieved. For each such year, the success target is achieved if the consolidated net income attributable to Fresenius SE, adjusted for extraordinary effects, has increased by at least 8% compared to the respective adjusted net income attributable to Fresenius SE of the previous fiscal year. For each year in which the success target has not been met, one-third of the options granted shall forfeit. The adjusted net income attributable to Fresenius SE shall be calculated on the basis of the calculation method of the accounting principles according to U.S. GAAP. For the purposes of the 2008 Plan, the adjusted net income attributable to Fresenius SE is determined and will be verified bindingly by Fresenius SE’s auditor during the audit of the consolidated financial statements. The performance targets for 2009, 2010 and 2011 were met. Upon exercise of vested options, Fresenius SE has the right to grant treasury shares or a cash payment in lieu of increasing capital by the issuance of new shares. If all conditions are fulfilled, stock options may be exercised throughout the year with the exception of certain pre-determined black-out periods.

Stock Option Plan 2003

During 2003, Fresenius AG adopted the 2003 Plan for members of the Management Board and executive employees. This incentive plan which is based on convertible bonds was replaced by the 2008 Plan and no options have been granted since 2008. Under the 2003 Plan, eligible employees have the right to acquire ordinary and preference shares of Fresenius SE. The bonds expire in 10 years and one third of them can be exercised beginning after two, three and four years after the grant date, respectively. Upon issuance of the option, the employees have the right to choose options with or without a stock price target. The conversion price of options subject to a stock price target corresponds to the stock exchange quoted price of the ordinary or preference shares upon the first time the stock exchange quoted price exceeds the initial value (after the share split in 2007: 1/3 of the initial value) by at least 25%. If converted after the share split, the conversion price which entitles to three ordinary shares or preference shares, respectively, is equal to the triple of one third of the initial value. The initial value is the joint average stock exchange price of bearer ordinary shares and non-voting bearer preference shares during the last 30 trading days prior to the date of grant. The conversion price of options without a stock price target is the initial value. In the case of options not subject to a stock price target, the number of convertible bonds awarded to the eligible employee would be 15% less than if the employee elected options subject to the stock price target. Each convertible bond granted after the share split entitles to subscribe one ordinary or preference share, subject to payment of the conversion price. Bonds granted and converted prior to the share split were entitled to subscribe one ordinary or preference share, conversion after the share split entitles to three ordinary or preference shares.

Stock Option Plan 1998

During 1998, Fresenius AG adopted the 1998 Plan for members of the Management Board and executive employees. This stock incentive plan was replaced by the 2003 Plan and no options have been granted since 2003. Under the 1998 Plan, eligible employees have the right to acquire ordinary and preference shares of Fresenius SE. Options granted under this plan have a 10-year term. At December 31, 2011, all options were exercisable. Prior to the share split, one ordinary or one preference share could be acquired for each option. After the share split in 2007, each option entitles to acquire three ordinary or preference shares. The maximum number of ordinary or preference shares to be issued to the members of the Management Board or executive employees has been adjusted accordingly.

Adaptations of the stock option plans due to the change of legal form

Upon registration of Fresenius SE’s change of legal form to Fresenius SE & Co. KGaA with the commercial register on January 28, 2011, adaptations of the three stock option plans were required. Due to the conversion of all preference shares into ordinary shares in combination with the change of legal form, all previously issued subscription rights under the respective stock option plan are to be satisfied, in case of exercise, with ordinary shares. Furthermore, the beneficiaries under the 2008 Plan are exclusively granted subscription rights for ordinary shares. With regard to the eligible beneficiaries, the members of Fresenius Management SE’s Management Board replace the previous members of the Fresenius SE Management Board for future stock option grants. With regard to the 2008 Plan, the Supervisory Board of Fresenius Management SE determines the grants for the Management Board members of that company. All other plan participants will be determined by the Management Board of Fresenius Management SE. In addition, due to the discontinuation of the preference shares, the success target of the 2003 Plan was adjusted to the effect, that it is deemed to be achieved if and when the sum of the following price increases amounts to at least 25%:

  • increase of the joint average stock exchange price of ordinary and preference shares from the day of the issuance until the day when the change of legal form took effect
  • increase of the stock exchange price of ordinary shares since the change of legal form took effect

Whereas the number of stock options remained unchanged, in future, the exercise price of the stock options corresponds to the stock exchange price of the ordinary share without considering the stock exchange price of the preference share.

Transactions during 2011

In 2011, Fresenius SE & Co. KGaA awarded 1,143,440 stock options under the 2008 Plan, including 198,660 options to members of the Management Board of Fresenius Management SE, at a weighted-average exercise price of €71.28, a weighted-average fair value of €19.09 each and a total fair value of €22 million, which will be amortized over the three-year vesting period.

During the fiscal year 2011, Fresenius SE & Co. KGaA received cash of €31 million from the exercise of 787,246 stock options. The average stock price at the exercise date was €71.16 for ordinary shares and €61.64 for preference shares. The intrinsic value of options exercised in 2011 was €25 million.

Under the 1998 Plan, 29,942 stock options were outstanding and exercisable at December 31, 2011. No options were held by the members of the Fresenius Management SE Management Board. 1,412,135 convertible bonds were outstanding and exercisable under the 2003 Plan at December 31, 2011. The members of the Fresenius Management SE Management Board held 291,530 convertible bonds. At December 31, 2011, out of 4,052,050 outstanding stock options issued under the 2008 Plan, 806,006 were exercisable and 758,520 were held by the members of the Fresenius Management SE Management Board.

Stock option transactions are summarized as follows:

Ordinary shares
Dec. 31
Number of options Weighted-average exercise price in € Number of options exercisable
Balance 2009 2,696,726 39.49 1,205,185
Granted 554,869 53.61  
Exercised 567,357 32.90  
Forfeited 39,577 47.82  
Balance 2010 2,644,661 43.87 906,895
Granted 1,143,440 71.28  
Exercised 786,358 38.85  
Forfeited 151,389 48.38  
Converted from preference shares 2,643,773 43.87  
Balance 2011 5,494,127 50.25 2,248,083

Ordinary shares
Dec. 31
Number of options Weighted-average exercise price in € Number of options exercisable
Balance 2009 2,696,726 39.49 1,205,185
Granted 554,869 53.61  
Exercised 567,357 32.90  
Forfeited 39,577 47.82  
Balance 2010 2,644,661 43.87 906,895
Granted 1,143,440 71.28  
Exercised 786,358 38.85  
Forfeited 151,389 48.38  
Converted from preference shares 2,643,773 43.87  
Balance 2011 5,494,127 50.25 2,248,083

Preference shares Dec. 31 Number of options Weighted-average exercise price in € Number of options exercisable
Balance 2009 2,696,726 40.73 1,205,185
Granted 554,869 53.54  
Exercised 567,357 34.63  
Forfeited 39,577 48.95  
Balance 2010 2,644,661 44.74 906,895
Exercised 888 48.71  
Converted into ordinary shares 2,643,773 44.74  
Balance 2011 0    

Preference shares Dec. 31 Number of options Weighted-average exercise price in € Number of options exercisable
Balance 2009 2,696,726 40.73 1,205,185
Granted 554,869 53.54  
Exercised 567,357 34.63  
Forfeited 39,577 48.95  
Balance 2010 2,644,661 44.74 906,895
Exercised 888 48.71  
Converted into ordinary shares 2,643,773 44.74  
Balance 2011 0    

The following table provides a summary of fully vested options outstanding and exercisable for ordinary shares at December 31, 2011:

Options for ordinary shares


  Options outstanding Options exercisable
Range of exercise price in € Number of options Weighted-average remaining contractual life in years Weighted-average exercise price in € Number of options Weighted-average remaining contractual life in years Weighted-average exercise price in €
10.01 -15.00 87,033 1.50 13.65 87,033 1.50 13.65
15.01 -20.00 42,338 0.79 19.32 42,338 0.79 19.32
20.01 -25.00 100,235 2.50 21.96 100,235 2.50 21.96
25.01 -30.00 262,811 3.46 28.58 262,811 3.46 28.58
30.01 -35.00 1,008,816 4.50 33.81 0    
35.01 -40.00 396,164 4.40 39.23 392,664 4.39 39.26
40.01 -45.00 67,310 3.92 41.62 67,310 3.92 41.62
45.01 -50.00 14,496 4.50 48.81 14,496 4.50 48.81
50.01 -55.00 1,819,984 4.72 54.00 738,696 3.58 54.69
55.01 -60.00 525,646 5.50 56.43 525,646 5.50 56.43
60.01 -65.00 9,000 5.92 63.53 0    
70.01 -75.00 1,160,294 6.49 71.27 16,854 5.50 70.79
  5,494,127 4.91 50.25 2,248,083 4.01 45.33

  Options outstanding Options exercisable
Range of exercise price in € Number of options Weighted-average remaining contractual life in years Weighted-average exercise price in € Number of options Weighted-average remaining contractual life in years Weighted-average exercise price in €
10.01 -15.00 87,033 1.50 13.65 87,033 1.50 13.65
15.01 -20.00 42,338 0.79 19.32 42,338 0.79 19.32
20.01 -25.00 100,235 2.50 21.96 100,235 2.50 21.96
25.01 -30.00 262,811 3.46 28.58 262,811 3.46 28.58
30.01 -35.00 1,008,816 4.50 33.81 0    
35.01 -40.00 396,164 4.40 39.23 392,664 4.39 39.26
40.01 -45.00 67,310 3.92 41.62 67,310 3.92 41.62
45.01 -50.00 14,496 4.50 48.81 14,496 4.50 48.81
50.01 -55.00 1,819,984 4.72 54.00 738,696 3.58 54.69
55.01 -60.00 525,646 5.50 56.43 525,646 5.50 56.43
60.01 -65.00 9,000 5.92 63.53 0    
70.01 -75.00 1,160,294 6.49 71.27 16,854 5.50 70.79
  5,494,127 4.91 50.25 2,248,083 4.01 45.33

At December 31, 2011, the aggregate intrinsic value of exercisable options for ordinary shares was €59 million.

At December 31, 2011, total unrecognized compensation cost related to non-vested options granted under the 2003 Plan and the 2008 Plan was €24 million. This cost is expected to be recognized over a weighted-average period of 2.1 years.

FRESENIUS MEDICAL CARE AG & CO. KGAA STOCK OPTION PLANS

Fresenius Medical Care AG & Co. KGaA Long Term Incentive Program 2011

On May 12, 2011, the Fresenius Medical Care AG & Co. KGaA Stock Option Plan 2011 (2011 SOP) was established by resolution of Fresenius Medical Care AG & Co. KGaA’s (FMC-AG & Co. KGaA) Annual General Meeting (AGM). The 2011 SOP, together with the Phantom Stock Plan 2011, which was established by resolution of Fresenius Medical Care Management AG’s (FMC Management AG) Management and Supervisory Boards, forms FMC-AG & Co. KGaA’s Long Term Incentive Program 2011 (2011 Incentive Program). Under the 2011 Incentive Program, participants may be granted awards, which will consist of a combination of stock options and phantom stock. Awards under the 2011 Incentive Program will be granted over a five-year period and can be granted on the last Monday in July and/or the first Monday in December each year. Prior to the respective grant, the participants will be able to choose how much of the granted value is granted in the form of stock options and phantom stock in a predefined range of 75 : 25 to 50 : 50, stock options vs. phantom stock. The number of phantom shares that plan participants may choose to receive instead of stock options within the aforementioned predefined range is determined on the basis of a fair value assessment pursuant to a binomial model. With respect to grants made in July, this fair value assessment will be conducted on the day following FMC-AG & Co. KGaA’s AGM and with respect to the grants made in December, on the first Monday in October.

Members of the Management Board of FMC Management AG, members of the management boards of FMC-AG & Co. KGaA’s affiliated companies and the managerial staff members of FMC-AG & Co. KGaA and of certain affiliated companies are entitled to participate in the 2011 Incentive Program. With respect to participants who are members of FMC Management AG’s Management Board, FMC Management AG’s Supervisory Board has sole authority to grant awards and exercise other decision making powers under the 2011 Incentive Program (including decisions regarding certain adjustments and forfeitures). FMC Management AG has such authority with respect to all other participants in the 2011 Incentive Program.

The awards under the 2011 Incentive Program are subject to a four-year vesting period. The vesting of the awards granted is subject to achievement of performance targets measured over a four-year period beginning with the first day of the year of the grant. For each such year, the performance target is achieved if FMC-AG & Co. KGaA’s adjusted basic income per ordinary share (Adjusted EPS), as calculated in accordance with the 2011 Incentive Program, increases by at least 8% year over year during the vesting period or, if this is not the case, the compounded annual growth rate of the Adjusted EPS reflects an increase of at least 8% per year of the Adjusted EPS during the four-year vesting period. At the end of the vesting period, one-fourth of the awards granted is forfeited for each year in which the performance target is not achieved. All awards are considered vested if the compounded annual growth rate of the Adjusted EPS reflects an increase of at least 8% per year during the four-year vesting period. Vesting of the portion or portions of a grant for a year or years in which the performance target is met does not occur until completion of the four-year vesting period.

The 2011 Incentive Program was established with a conditional capital increase up to €12 million subject to the issue of up to 12 million non-par value bearer ordinary shares with a nominal value of €1.00, each of which can be exercised to obtain one ordinary share. Of these 12 million shares, up to 2 million stock options are designated for members of the Management Board of FMC Management AG, up to 2.5 million stock options are designated for members of management boards of direct or indirect subsidiaries of FMC-AG & Co. KGaA and up to 7.5 million stock options are designated for managerial staff members of FMC-AG & Co. KGaA and such subsidiaries. FMC-AG & Co. KGaA may issue new shares to fulfill the stock option obligations or FMC-AG & Co. KGaA may issue shares that it has acquired or which FMC-AG & Co. KGaA itself has in its own possession.

The exercise price of stock options granted under the 2011 Incentive Program shall be the average stock exchange price on the Frankfurt Stock Exchange of FMC-AG & Co. KGaA’s ordinary shares during the 30 calendar days immediately prior to each grant date. Stock options granted under the 2011 Incentive Program have an eight-year term and can be exercised only after a four-year vesting period. Stock options granted under the 2011 Incentive Program to U.S. participants are non-qualified stock options under the United States Internal Revenue Code of 1986, as amended. Options under the 2011 Incentive Program are not transferable by a participant or a participant’s heirs, and may not be pledged, assigned, or disposed of otherwise.

Phantom stock under the 2011 Incentive Program entitles the holders to receive payment in euro from FMC-AG & Co. KGaA upon exercise of the phantom stock. The payment per phantom share in lieu of the issuance of such stock shall be based upon the closing stock exchange price on the Frankfurt Stock Exchange of one of FMC-AG & Co. KGaA’s ordinary shares on the exercise date. Phantom stock will have a five-year term and can be exercised only after a four-year vesting period, beginning with the grant date. For participants who are U.S. tax payers, the phantom stock is deemed to be exercised in any event in the month of March following the end of the vesting period.

Stock Option Plan 2006

On May 9, 2006, as amended on May 15, 2007, the Fresenius Medical Care AG & Co. KGaA Stock Option Plan 2006 (Amended 2006 Plan) was established by resolution of FMC-AG & Co. KGaA’s Annual General Meeting with a conditional capital increase up to €15 million subject to the issue of up to 15 million non-par value bearer ordinary shares with a nominal value of €1.00 each, which can be exercised to obtain one ordinary share. Of the 15 million ordinary shares, up to 3 million options were designated for members of the Management Board of FMC Management AG, up to 3 million options were designated for members of management boards of direct or indirect subsidiaries of FMC-AG & Co. KGaA and up to 9 million options were designated for managerial staff members of FMC-AG & Co. KGaA and such subsidiaries. With respect to participants who are members of the Management Board of FMC Management AG, its Supervisory Board has sole authority to grant stock options and exercise other decision making powers under the Amended 2006 Plan (including decisions regarding certain adjustments and forfeitures). The Management Board of FMC Management AG has such authority with respect to all other participants in the Amended 2006 Plan.

The exercise price of options granted under the Amended 2006 Plan was the average closing price on the Frankfurt Stock Exchange of FMC-AG & Co. KGaA’s ordinary shares during the 30 calendar days immediately prior to each grant date. Options granted under the Amended 2006 Plan have a seven-year term but can be exercised only after a three-year vesting period. The vesting of options granted is subject to achievement of performance targets measured over a three-year period from the grant date. For each such year, the performance target is achieved if FMC-AG & Co. KGaA’s adjusted basic income per ordinary share (Adjusted EPS), as calculated in accordance with the Amended 2006 Plan, increases by at least 8% year over year during the vesting period, beginning with Adjusted EPS for the year of grant as compared to Adjusted EPS for the year preceding such grant. Calculation of Adjusted EPS under the Amended 2006 Plan excluded, among other items, the costs of the transformation of Fresenius Medical Care’s legal form and the conversion of preference shares into ordinary shares. For each grant, one-third of the options granted are forfeited for each year in which EPS does not meet or exceed the 8% target. The performance targets for 2011, 2010 and 2009 were met. Vesting of the portion or portions of a grant for a year or years in which the performance target is met does not occur until completion of the entire three-year vesting period.

Options granted under the Amended 2006 Plan to U.S. participants are non-qualified stock options under the United States Internal Revenue Code of 1986, as amended. Options under the Amended 2006 Plan are not transferable by a participant or a participant’s heirs, and may not be pledged, assigned, or otherwise disposed of.

After December 2010, no further grants were issued under the Amended 2006 Plan.

2001 International Stock Option Plan

Under the Fresenius Medical Care 2001 International Stock Incentive Plan (2001 Plan), options in the form of convertible bonds with a principal of up to €10.24 million were issued to the members of the Management Board and other employees of FMC-AG & Co. KGaA representing grants for up to 4 million non-voting preference shares. The convertible bonds originally had a par value of €2.56 and bear interest at a rate of 5.5%. In connection with the share split effected in 2007, the principal amount was adjusted in the same proportion as the share capital out of the capital increase and the par value of the convertible bonds was adjusted to €0.85 without affecting the interest rate. Except for the members of the Management Board, eligible employees may purchase the bonds by issuing a non-recourse note with terms corresponding to the terms of and secured by the bond. FMC-AG & Co. KGaA has the right to offset its obligation on a bond against the employee’s obligation on the related note; therefore, the convertible bond obligations and employee note receivables represent stock options issued by FMC-AG & Co. KGaA and are not reflected in the consolidated financial statements. The options expire 10 years from issuance and can be exercised beginning two, three or four years after issuance. Compensation costs related to awards granted under this plan are amortized on a straight-line basis over the vesting period for each separately vesting portion of the awards. Bonds issued to Management Board members who did not issue a note to FMC-AG & Co. KGaA are recognized as a liability on the Group’s statement of financial position. All awards granted under this plan are fully vested.

Upon issuance of the option, the employees had the right to choose options with or without a stock price target. The exercise price of options subject to a stock price target corresponds to the stock exchange quoted price of the preference shares upon the first time the stock exchange quoted price exceeds the initial value by at least 25%. The initial value is the average price of the preference shares during the last 30 trading days prior to the date of grant. In the case of options not subject to a stock price target, the number of convertible bonds awarded to the eligible employee would be 15% less than if the employee elected options subject to the stock price target. The exercise price of the options without a stock price target is the initial value. Each option entitles the holder thereof, upon payment of the respective conversion price, to acquire one preference share. Effective May 2006, no further grants can be issued under the 2001 Plan and no options were granted under the 2001 Plan after 2005.

Transactions during 2011

During 2011, FMC- AG & Co. KGaA awarded 1,947,231 options under the 2011 Incentive Program, including 307,515 stock options granted to members of the Management Board of FMC Management AG, at a weighted-average exercise price of €52.45, a weighted-average fair value of €13.41 each and a total fair value of €26 million, which will be amortized over the four-year vesting period. FMC-AG & Co. KGaA awarded 215,638 phantom shares, including 29,313 phantom shares granted to members of the Management Board of FMC Management AG, at a measurement date average fair value of €49.24 each and a total fair value of €11 million as of December 31, 2011, which will be amortized over the four-year vesting period.

During 2011, FMC-AG & Co. KGaA received cash of €58 million from the exercise of stock options. The intrinsic value of options exercised in 2011 was €36 million. FMC-AG & Co. KGaA recorded a related tax benefit of €9 million for 2011.

At December 31, 2011, the Management Board members of FMC Management AG held 2,354,875 stock options for ordinary shares and employees of FMC-AG & Co. KGaA held 9,669,942 stock options for ordinary shares and 49,090 stock options for preference shares under the various stock-based compensation plans of Fresenius Medical Care.

At December 31, 2011, the Management Board members of FMC Management AG held 29,313 phantom shares and employees of FMC-AG & Co. KGaA held 186,149 phantom shares under the 2011 Incentive Plan.

The table below provides reconciliations for options outstanding at December 31, 2011 as compared to December 31, 2010:

  Number of options in thousand Weighted-average exercise price in €
Balance at December 31, 2010 (options for ordinary shares 12,152 33.78
Granted 1,947 52.45
Exercised 1,886 30.87
Forfeited 188 34.93
Balance at December 31, 2011 (options for ordinary shares) 12,025 37.24
     
Balance at December 31, 2010 (options for preference shares) 59 19.19
Exercised 9 22.52
Forfeited 1 18.21
Balance at December 31, 2011 (options for preference shares) 49 18.64

  Number of options in thousand Weighted-average exercise price in €
Balance at December 31, 2010 (options for ordinary shares 12,152 33.78
Granted 1,947 52.45
Exercised 1,886 30.87
Forfeited 188 34.93
Balance at December 31, 2011 (options for ordinary shares) 12,025 37.24
     
Balance at December 31, 2010 (options for preference shares) 59 19.19
Exercised 9 22.52
Forfeited 1 18.21
Balance at December 31, 2011 (options for preference shares) 49 18.64

The following table provides a summary of fully vested options outstanding and exercisable for both preference and ordinary shares at December 31, 2011:

  Number of options in thousand Weighted-average remaining contractual life in years Weighted-average exercise price
in €
Aggregate intrinsic value
€ in millions
Options for ordinary shares 4,767 2.79 30.57 105
Aktienoptionen für Vorzugsaktien 49 2.80 18.64 1

  Number of options in thousand Weighted-average remaining contractual life in years Weighted-average exercise price
in €
Aggregate intrinsic value
€ in millions
Options for ordinary shares 4,767 2.79 30.57 105
Aktienoptionen für Vorzugsaktien 49 2.80 18.64 1

At December 31, 2011, total unrecognized compensation cost related to non-vested options granted under all plans was €37 million. This cost is expected to be recognized over a weighted-average period of 1.9 years.

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