Siemens 2012 Annual Report Download - page 136

1 A. To our Shareholders 21 B. Corporate Governance
22 B. Corporate Governance Report
28 B. Corporate Governance statement pursuant to
Section a of the German Commercial Code
(part of the Combined Management Report)
29 B. Compliance Report
31 B. Compensation Report
(part of the Combined Management Report)
44 B. Takeover-relevant information (pursuant to
Sections  para.  and  para.  of the
German Commercial Code) and explanatory report
(part of the Combined Management Report)

of granting them to employees of Siemens AG and any of its
consolidated subsidiaries. To the extent permitted by law, em-
ployee shares may also be issued in such a manner that the
contribution to be paid on such shares is covered by that part
of the annual net income which the Managing Board and the
Supervisory Board may allocate to other retained earnings
under Section 58 para. 2 of the German Stock Corporation Act.
As of September 30, 2012, the total unissued authorized capital
of Siemens AG therefore consisted of €610.8 million nominal
that may be issued in installments with varying terms by issu-
ance of up to 203.6 million registered shares of no par value. For
details, please refer to Section 4 of the Articles of Association.
By resolution of the Annual Shareholders’ Meeting of January
26, 2010, the Managing Board was authorized until January 25,
2015 to issue bonds in an aggregate principal amount of up to
€15 billion with conversion rights or with warrants attached, or
a combination of these instruments, entitling the holders to
subscribe to up to 200 million new registered shares of Siemens
AG of no par value, representing a pro rata amount of up to
€600 million of the capital stock. The bonds under this authori-
zation are to be issued against cash or non-cash contributions.
Besides, by resolution of the Annual Shareholders’ Meeting of
January 25, 2011, the Managing Board was authorized until
January 24, 2016 to issue bearer or registered bonds in an ag-
gregate principal amount of up to €15 billion with conversion
rights or with bearer or registered warrants attached or a com-
bination of these instruments, entitling the holders to sub-
scribe to up to 90
million new registered shares of Siemens AG
of no par value, representing a pro rata amount of up to €270
million of the capital stock. The bonds under this authoriza-
tion are to be issued against cash contributions.
For further details of the authorizations please refer to the re-
spective resolutions of the Annual Shareholders’ Meetings. In
particular, the bonds are, as a matter of principle, to be offered
to shareholders for subscription, including the possibility of is-
suing them to banks with the obligation that they must be of-
fered to shareholders for subscription. However, the Managing
Board is authorized to exclude shareholders’ subscription
rights with the approval of the Supervisory Board (1) provided
that the issue price of the bonds is not significantly lower than
their theoretical market price computed in accordance with
generally accepted actuarial methods, (2) to the extent the ex-
clusion is necessary with regard to fractional amounts result-
ing from the subscription ratio, (3) in order to grant holders of
conversion or option rights or conversion or option obligations
on Siemens shares subscription rights as compensation against
the effects of dilution, and (4) to the extent that bonds were is-
sued against non-cash contributions, in particular within the
context of business combinations or when acquiring compa-
nies or interests therein.
In order to grant shares of stock to holders of convertible bonds
or warrant bonds issued until January 25, 2015 by the Company
or any of its consolidated subsidiaries in accordance with the
authorization of the Managing Board adopted by the Annual
Shareholders’ Meeting on January 26, 2010, the capital stock
was conditionally increased by €600
million through the issu-
ance of up to 200
million no-par value shares registered in the
names of the holders (Conditional Capital 2010). In order to
grant shares of stock to holders or creditors of convertible
bonds or warrant bonds issued until January 24, 2016 by the
Company or any of its consolidated subsidiaries in accordance
with the authorization of the Managing Board adopted by the
Annual Shareholders’ Meeting on January 25, 2011, the capital
stock was conditionally increased by €270
million through the
issuance of up to 90
million no-par value shares registered in
the names of the holders (Conditional Capital 2011).
The total of the shares to be issued on the basis of bond issues
under these authorizations pursuant to Section 186 para. 3 sen-
tence 4 of the German Stock Corporation Act, in combination
with other shares issued or sold by direct or mutatis mutandis
application of this statutory regulation during the effective pe-
riod of these authorizations, does not exceed 10% of the capital
stock at the date of using these authorization. This limit also
includes shares of stock issued up to this point in time against
non-cash contributions, under exclusion of shareholders’ sub-
scription rights, on the basis of the Authorized Capital 2009. In
addition, the issue of convertible bonds and/or warrant bonds
pursuant to both authorizations shall be limited to convertible
bonds and/or warrant bonds that entitle or oblige to subscribe
to a maximum number of 200
million Siemens shares repre-
senting a pro rata amount of €600
million of the capital stock
while both authorizations are simultaneously effective.
In February 2012 Siemens issued bonds with warrant units
with a volume of US$3 billion. The bonds with warrant units
with a minimum per-unit denomination of US$250,000 were
offered exclusively to institutional investors outside the U.S.
Pre-emptive rights of Siemens shareholders were excluded.
The bonds issued by Siemens Financieringsmaatschappij N.V.
are guaranteed by Siemens AG and complemented with war-
rants issued by Siemens AG. The warrants entitle their holders
to receive Siemens shares against payment of the exercise
price in Euros. At issuance, the warrants resulted in option
rights relating to a total of about 21.7 million Siemens shares.
The terms and conditions of the warrants enable Siemens to
service exercised option rights also by delivering treasury
stock as well as to buy back the warrants. The bonds with war-
rant units were issued in two tranches with maturities of