Siemens 2011 Annual Report Download - page 239

153 D. Consolidated Financial Statements
273 E. Additional information
143 C. Additional information for supplemental
financial measures
145 C. Siemens AG (Discussion on basis of
German Commercial Code)
151 C. Notes and forward-looking statements
140 C. Information required pursuant to Section  ()
and Section  () no.  of the German Commer-
cial Code (HGB) and explanatory report
142 C. Compensation report and Corporate Governance
statement pursuant to Section a of the German
Commercial Code (HGB)

ing the effective period of this authorization until the date of
using this authorization must not exceed % of the capital
stock at that point in time.
Furthermore, the Supervisory Board was authorized to use
shares acquired on the basis of this or any previously given
authorization to meet obligations or rights to acquire Siemens
shares that were or will be agreed with members of the Man-
aging Board of Siemens AG within the framework of rules
governing Managing Board compensation. In particular, re-
purchased shares may be offered for acquisition, or awarded
and / or transferred subject to a restriction period, by the Su-
pervisory Board to the members of the Managing Board, pro-
vided that Managing Board membership existed at the time of
the offer or award commitment.
As of September , , the Company held ,, (:
,,) shares of stock in treasury.
C.. 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 sub-
sidiary of another company or (ii) a person or a group of per-
sons acting in concert acquires effective control over Siemens
AG by being able to exercise decisive influence over its activi-
ties (Art.  () of Council Regulation (EC)  / ). In addi-
tion, Siemens AG has a bilateral credit line at its disposal in the
amount of € million which may be terminated by the lend-
er if major changes in Siemens AG’s corporate legal situation
occur that jeopardize the orderly repayment of the credit.
Framework agreements concluded by Siemens AG under In-
ternational Swaps and Derivatives Association Inc. documen-
tation (“ISDA Agreements”) grant the counterparty a right of
termination 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 re-
sulting entity ’s creditworthiness is materially weaker than the
Company ’s immediately prior to such event, or () the result-
ing entity fails to simultaneously assume the Company ’s obli-
gations under the ISDA Agreement; or (ii) additionally some
ISDA Agreements grant the counterparty a right of termina-
tion upon a third party acquiring the beneficial ownership of
equity securities having the power to elect a majority of the
Company ’s Supervisory Board or otherwise acquiring the
power to control the Company ’s material policy-making deci-
sions and the creditworthiness of the Company is materially
weaker than it was immediately prior to such event. In either
situation, ISDA Agreements are designed such that upon ter-
mination all outstanding payment claims documented under
them are to be netted.
C.. Compensation agreements
with members of the Managing Board
or employees in the event of a take-
over bid
In the event of a change of control – i.e. if one or several
shareholders acting jointly or in concert acquire a majority of
the voting rights in Siemens AG and exercise a controlling in-
fluence, or if Siemens AG becomes a dependent enterprise as
a result of entering into an intercompany agreement within
the meaning of Section  of the AktG, or if Siemens AG is to
be merged into another company – any member of the Man-
aging Board has the right to terminate the contract of employ-
ment 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 responsi-
bilities). If this right of termination is exercised, the Managing
Board member is entitled to a severance payment in the
amount of not more than two years’ compensation. The calcu-
lation of the annual compensation includes not only the base
compensation and the target amount for the bonus, but also
the target amount for the Stock Awards. This calculation will
be based on the last contractual year before the termination
of the contract. Additionally, the severance payments cover
non-monetary benefits by paying an amount of % of the
compensation or severance total. Furthermore, compensatory
or severance payments will be reduced % as a lump-sum al-
lowance for discounted values and for income earned else-
where. However, this reduction will apply only to the portion
of the compensatory or severance payment that was calculat-
ed without taking account of the first six months of the re-
maining term of the Managing Board member’s contract. The
stock-based compensation components for which a firm com-
mitment already exists remain unaffected. No severance pay-
ments are made if the Managing Board member receives ben-
efits from third parties on the occasion of, or in connection
with, a change of control. A right of termination does not ex-
ist if the change of control occurs within a period of twelve
months prior to a Managing Board member’s retirement.