Siemens 2010 Annual Report Download - page 198

6 To our shareholders 21 Corporate Governance 49 Combined management’s discussion and analysis
50 Business and operating environment
78 Fiscal  – Financial summary
81 Results of operations
98 Financial position
110 Net assets position
113 Overall assessment of the economic position

shares offered for purchase. Furthermore, the acceptance of
small lots of up to  Siemens shares offered per shareholder
may receive priority consideration.
The Managing Board was additionally authorized, with the
approval of the Supervisory Board, to sell options whereby the
Company takes on the obligation of buying Siemens shares
upon exercise of the options (“put options”), to purchase and
exercise options whereby the Company has the right to acquire
Siemens shares upon exercise of the options (“call options”),
and to acquire Siemens shares by using a combination of put
and call options. In exercising this authorization, all stock re-
purchases based on put or call options, or a combination of put
and call options, are limited to a maximum volume of % of the
capital stock of ,, shares existing at the date of
adopting the resolution at the Annual Shareholders’ Meeting.
The term of the options must be chosen in such a way that the
repurchase of Siemens shares upon exercise of the options will
take place no later than July , . It must be stipulated in
the option terms and conditions that the exercise of options is
to be satisfied only by using Siemens shares which were previ-
ously acquired over the stock exchange, in compliance with
the principle of equal treatment, at the then current market
price of Siemens stock in Xetra trading (or a comparable suc-
cessor system). The predetermined purchase price to be paid
per Siemens share upon exercise of the option (“strike price”)
may neither exceed the average closing price of Siemens stock
in Xetra trading (or a comparable successor system) during the
last three trading days prior to conclusion of the relevant op-
tion contract by more than % nor fall below this average
closing price by more than % (in each case excluding inci-
dental transaction charges, but taking into account option
premiums received or paid).
By resolution of the Annual Shareholders’ Meeting on January
, , the Managing Board was authorized to also use
Siemens shares repurchased on the basis of this or any previ-
ously given authorization as follows: (i) such Siemens shares
may be retired; (ii) such Siemens shares may be used to meet
the obligations under the  Siemens Stock Option Plan; (iii)
such Siemens shares may be offered for purchase to individu-
als currently or formerly employed by the Company or any of
its consolidated subsidiaries as well as to board members of
any of the Company ’s consolidated subsidiaries, or they may
be granted and transferred to such individuals with a vesting
period of at least two years; (iv) such Siemens shares may, with
the approval of the Supervisory Board, be offered and trans-
ferred to third parties against non-cash contributions, particu-
larly in connection with business combinations or the acquisi-
tion of companies or interests therein, (v) such Siemens shares
may, with the approval of the Supervisory Board, be sold to
third parties against payment in cash if the price (excluding
incidental transaction costs) at which such Siemens shares are
to be sold is not significantly lower than the market price of
Siemens stock on the trading day, as determined during the
opening auction of the Xetra trading platform (or a comparable
successor system), or (vi) such Siemens shares may be used to
meet obligations under convertible bonds or warrant bonds
issued by the Company or any of its consolidated subsidiaries.
Furthermore, the Supervisory Board was authorized to offer
shares acquired on the basis of this or any previously given
authorization as share-based compensation to the members of
the Managing Board of Siemens AG for purchase under the
same terms and conditions as those offered to the Company ’s
employees, or to grant and transfer them with a vesting period
of at least two years.
As of September , , the Company held ,, (:
,,) 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 two lines of credit in an aggregate
amount of U.S. $ billion which provide its lenders with a right
of termination in the event that (i) Siemens AG becomes a
subsidiary of another company or (ii) a person or a group of
persons acting in concert acquires effective control over
Siemens AG by being able to exercise decisive influence over
its activities (Art.  () of Council Regulation (EC) /). In
addition, Siemens AG has a bilateral credit line at its disposal
in the amount of € 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.
Framework agreements concluded by Siemens AG under Inter-
national Swaps and Derivatives Association Inc. documenta-
tion (“ISDA Agreements”) grant the counterpart a right of ter-
mination upon the occurrence of the following events: (i) the
Company consolidates with, merges into, or transfers at least
substantially all its assets to a third party and () the resulting
entity ’s creditworthiness is materially weaker than the Com-
pany ’s immediately prior to such event, or () the resulting
entity fails to simultaneously assume the Company ’s obliga-
tions under the ISDA Agreement; or (ii) additionally some ISDA
Agreements grant the counterparty a right of termination up-
on an entity acquiring the beneficial ownership of equity secu-