Siemens 2007 Annual Report Download - page 190

190 Management’s discussion and analysis
Furthermore, the Managing Board is authorized to increase, with the approval
of the Supervisory Board, the capital stock until January 25, 2011 by up to
€71,130,000 nominal through the issuance of up to 23,710,000 registered shares of
no par value against contributions in cash (Authorized Capital 2006). The authori-
zation may be implemented in installments. Preemptive rights of existing share-
holders are excluded. The new shares shall be issued under the conditions that they
are offered exclusively to employees of Siemens AG and its subsidiaries, provided
that these subsidiaries are not listed companies themselves and do not have their
own employee stock schemes.
As of September 30, 2007, the total unissued authorized capital of Siemens AG
therefore consisted of €671,130,000 nominal that may be issued in installments
with varying terms by issuance of up to 223,710,000 registered shares of no par
value. For details, please refer to §4 of the Articles of Association.
By resolution of the Annual Shareholders’ Meeting of January 23, 2003, the
Managing Board was authorized until December 31, 2007 to issue bonds in an
aggregate principal amount of up to €5,000,000,000 with conversion rights (con-
vertible bonds) or with warrants entitling the holders to subscribe to up to
89,000,000 new registered shares of no par value, representing a pro rata amount
of up to €267,000,000 of the capital stock. Based on this authorization, Siemens
issued €2,500,000,000 of convertible bonds in 2003 through its wholly owned Dutch
subsidiary, Siemens Finance B.V., which are fully and unconditionally guaranteed
by Siemens AG. The convertible bonds have a 1.375% coupon and mature on June 4,
2010.
The authorization of January 23, 2003 was replaced by resolution of the Annual
Shareholders’ Meeting on January 22, 2004, which authorized the Managing Board
until January 21, 2009 to issue bonds in an aggregate principal amount of up to
€11,250,000,000 with conversion rights (convertible bonds) or with warrants
entitling the holders to subscribe to up to 200,000,000 new registered shares of no
par value, representing a pro rata amount of up to €600,000,000 of the capital
stock. The bonds are to be issued against contributions in cash. The authorization
also includes the possibility to assume the guarantee for bonds issued by subsid-
iaries of Siemens AG and to grant the holders of such bonds Siemens shares in sat-
isfaction of the obligations under the conversion or option rights attaching to these
bonds. The bonds may be issued once or several times, in whole or in part. The indi-
vidual bonds shall rank pari passu in all respects.
The pro rata amount of the capital stock represented by the shares to be issued
upon exercise of the rights attached to the bonds must not exceed the principal
amount or an issue price below the principal amount of each bond. The conversion
or exercise price must not fall below 80% of the market price of the Siemens stock as
quoted by the XETRA trading system (or a comparable successor system) on the
Frankfurt Stock Exchange. The calculation shall be based on the mean closing price
over the fi ve trading days prior to the date on which the fi nal Managing Board reso-
lution is made to submit an offer for the subscription of bonds or to the Company’s
notice of acceptance following a public solicitation to submit subscription offers. In
the event that subscription rights are traded, the closing market prices during the
trading days on which the subscription rights are traded shall apply, with the
exception of the last two trading days of subscription rights trading. The provisions
of §9 (1) of the German Stock Corporation Act shall remain unaffected.