Siemens 2007 Annual Report Download - page 191

Management’s discussion and analysis 191
Management’s discussion and analysis
The Managing Board is authorized to determine, alone or in cooperation with
the management bodies of the issuing subsidiaries, the further terms and condi-
tions of the bonds.
As a matter of principle, the bonds are to be offered to the shareholders for
purchase. However, the Managing Board is authorized to exclude, with the
approval of the Supervisory Board, any preemptive rights of shareholders, (i) if
the issue price of a bond is not signifi cantly lower than its fair market value deter-
mined in accordance with generally accepted actuarial methods, (ii) if this is
necessary with regard to residual amounts, and (iii) in order to grant subscription
rights to holders of conversion or option rights for shares of the Company as rea-
sonable compensation for dilution of the economic value of such rights.
If the economic value of conversion or option rights is diluted during the life of
the bonds and no subscription rights are granted as compensation, the conversion
or option rights shall be adjusted in value in accordance with the trading terms
and conditions applicable to dilution on the Eurex Deutschland exchange as
detailed in the conditions of issue relating to the bonds and without prejudice to
§9 (1) of the German Stock Corporation Act, unless such adjustment is mandatory
under German law.
To service the exercise of the conversion or option rights issued until January
21, 2009 by the Company or any of its subsidiaries in accordance with authori-
zations of the Managing Board adopted by the Annual Shareholders’ Meetings
on January 23, 2003 and January 22, 2004, the capital stock was conditionally
increased by up to €733,527,750 through the issuance of up to 244,509,250 regis-
tered shares of no par value (Conditional Capital 2004).
As a result of the exercise of convertible rights attaching to the guaranteed
1.375% convertible bonds issued in 2003, a total of 10,347,460 new registered
shares of no par value were issue by September 30, 2007, representing a pro rata
amount of €31,042,380 of the capital stock. After the early redemption of the con-
vertible bonds by the issuer in August 2007 and the termination of the conversion
rights in accordance with the terms and conditions of the bonds, no further shares
will be issued from the Conditional Capital 2004 to service these bonds. As of Sep-
tember 30, 2007, the Conditional Capital 2004 amounted to €702.485.370.
At the Annual Shareholders’ Meeting on January 25, 2007, the Company’s
shareholders authorized the Company to repurchase until July 24, 2008 up to 10%
of its 891,635,721 shares of capital stock existing at the time of the resolution. The
aggregate of shares acquired under this authorization and any other shares pre-
viously acquired and still held in treasury by the Company or to be attributed to
the Company pursuant to §71d and §71e of the German Stock Corporation Act,
shall at no time exceed 10% of the then existing capital stock. The authorization
may be exercised by the Company in whole or in part, once or several times, but
also by any of its subsidiaries or by third parties on behalf of the Company or its
subsidiaries.
The acquisition of the shares of stock is accomplished at the discretion of the
Managing Board either by purchase over the stock exchange or through a public
share purchase offer. If the shares are acquired over the stock exchange, the pur-
chase price paid per share (excluding incidental transaction charges) may neither
exceed nor fall below the market price of the Siemens stock on the trading day, as
determined at the opening auction of XETRA trading (or a comparable successor