Siemens 2009 Annual Report Download - page 201

113
 Managing Board statements, Independent auditors’ report, Additional information
95 Net assets position 97 Report on post-balance sheet date events
98 Risk report
108 Information required pursuant to
§315 (4) HGB of the German Commercial
Code and explanatory report
114 Compensation report
114 Report on expected developments
As of September 30, 2009, the Company held 47,777,661 (2008:
52,645,665) shares of stock in treasury.
SIGNIFICANT AGREEMENTS WHICH TAKE EFFECT,
ALTER OR TERMINATE UPON A CHANGE OF CONTROL
OF THE COMPANY FOLLOWING A TAKEOVER BID
Siemens AG maintains lines of credit in an aggregate amount
of US$9 billion which provide its lenders with a right of termi-
nation in the event that (i) Siemens AG becomes a subsidiary
of another company or (ii) an individual or a group of individu-
als acting in concert acquires effective control over Siemens
AG by being able to exercise significant influence over its ac-
tivities. In addition, Siemens AG has a credit line at its disposal
in the amount of €450 million which may be terminated by the
lender if major changes in Siemens AG’s corporate legal situa-
tion occur that jeopardize the orderly repayment of the credit.
Agreements concluded by Siemens AG under the International
Swaps and Derivatives Association Inc. framework (“ISDA
agreements“) each give Siemens AG’s contractual party a right
of termination if (i) Siemens AG is merged into a third party, or
(ii) all or substantially all of the assets of Siemens AG are trans-
ferred to a third party. In the event that the third party does not
assume the obligations of Siemens AG, all outstanding trans-
actions under the respective agreements may be terminated. If
the third party chooses to assume the obligations of Siemens
AG under such agreement and its creditworthiness is materi-
ally weaker than that of Siemens AG, the affected transactions
under the respective agreements may be terminated. In either
situation, the outstanding payment claims under such agree-
ment are to be netted.
COMPENSATION AGREEMENTS WITH MEMBERS
OF THE MANAGING BOARD OR EMPLOYEES IN THE
EVENT OF A TAKEOVER BID
In the event of a change of control – i.e. if one or several share-
holders acting jointly or in concert acquire a majority of the
voting rights in Siemens AG and exercise a controlling influ-
ence, or if Siemens AG becomes a dependent enterprise as a
result of entering into an enterprise contract within the mean-
ing of §291 of the German Stock Corporation Act, or if Siemens
AG is to be merged into another company – any member of the
Managing Board has the right to terminate the contract of em-
ployment if such change of control results in a substantial
change in position (e.g. due to a change in corporate strategy
or a change in the Managing Board member’s duties and re-
sponsibilities). If this right of termination is exercised, the
Managing Board member will receive a severance payment
which amounts to the base compensation and target bonus
applicable at the time of contract termination for the remain-
ing contractual term of office, but at least for a period of three
years. In addition, non-monetary benefits are settled by a cash
payment equal to 5% of the severance payment. The stock-
based compensation components awarded remain unaffected.
Stock options may, alternatively, also be exercised upon termi-
nation of the contract of employment. No severance payments
are made if the Managing Board member receives benefits
from third parties in connection with a change of control. A
right of termination does not exist if the change of control oc-
curs within a period of twelve (12) months prior to a Managing
Board member’s retirement. Managing Board members’ em-
ployment contracts entered into in or after June 2008 provide
that severance payments in the event of a change of control
are limited to the amount recommended by the German Cor-
porate Governance Code.