Siemens 2014 Annual Report Download - page 167

171 C. Combined Management Report 247 D. Consolidated Financial Statements 337 E. Additional Information

In the event of capital increases against contributions in cash,
the Managing Board is authorized to exclude shareholders’
subscription rights with the approval of the Supervisory Board
in the following cases:
> where the issue price of the new shares / bonds is not signi f-
icantly lower than the stock market price of the Siemens
shares already listed or the theoretical market price of the
bonds computed in accordance with generally accepted actu-
arial methods (exclusion of preemptive rights, limited to  %
of the capital stock, in accordance with or by mutatis mutan-
dis application of Section  para.  sentence  German
Stock Corporation Act)
>
where the exclusion is necessary with regard to fractional
amounts resulting from the subscription ratio
> where the exclusion is necessary in order to grant holders of
conversion or option rights or conversion or option obliga-
tions on Siemens shares a compensation for the effects of
dilution.
The total amount of new shares issued or to be issued under
the Authorized Capital  or in accordance with the bonds
mentioned above, in exchange for contributions in cash and in
kind and with shareholders’ subscription rights excluded, may
in certain cases be subject to further restrictions, such as the
restriction that they may not exceed  % of the capital stock.
The details of those restrictions are described in the relevant
authorization.
In February , Siemens issued bonds with warrant units
with a volume of US$  billion. The bonds with warrant units
with a minimum per-unit denomination of US$ , were
offered exclusively to institutional investors outside the U.S.
Subscription 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 . 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 warrant
units were issued in two tranches with maturities of . years
and . years, respectively. The maturities refer to both the
bonds and the related warrants.
The Company may not repurchase its own shares unless so
authorized by a resolution duly adopted by the shareholders
at a general meeting or in other very limited circumstances
set forth in the German Stock Corporation Act. On January ,
, the Annual Shareholders’ Meeting authorized the
Company to acquire until January ,  up to  % of its
capital stock existing at the date of adopting the resolution
or – if this value is lower – as of the date on which the autho-
rization is exercised. The aggregate of shares of stock of
Siemens AG repurchased under this authorization and any
other Siemens shares previously acquired and still held in
treasury by the Company or attributable to the Company pur-
suant to Sections d and e of the German Stock Corpora-
tion Act may at no time exceed  % of the then existing capi-
tal stock. Any repurchase of Siemens shares shall be
accomplished at the discretion of the Managing Board either
() by acquisition over the stock exchange or () through a
public share repurchase offer. The Managing Board is addi-
tionally authorized, with the approval of the Supervisory
Board, to complete the repurchase of Siemens shares in
accordance with the authorization described above by using
certain equity derivatives (such as put and call options, for-
ward purchases and any combination of these derivatives). In
exercising this authorization, all stock repurchases based on
the equity derivatives are limited to a maximum volume of
 % of Siemens’ capital stock existing at the date of adopting
the resolution at the Annual Shareholders’ Meeting. An equity
derivative’s term of maturity may not, in any case, exceed
 months and must be chosen in such a way that the repur-
chase of Siemens shares upon exercise of the equity deriva-
tive will take place no later than January , .
Besides selling them over the stock exchange or through a pub-
lic sales offer to all shareholders, the Managing Board is author-
ized by resolution of the Annual Shareholders’ Meeting on
January ,  to also use Siemens shares repurchased on the
basis of this or any previously given authorization as follows:
Such Siemens shares may be
> retired
> offered for purchase to individuals currently or formerly em-
ployed by the Company or any of its affiliated companies as
well as to board members of any of the Company’s affiliated
companies, or awarded and / or transferred to such individu-
als with a vesting period of at least two years
>
offered and transferred, with the approval of the Supervisory
Board, to third parties against non-cash contributions
>
sold, with the approval of the Supervisory Board, to third par-
ties against payment in cash if the price at which such
Siemens shares are sold is not significantly lower than
the market price of Siemens stock at the time of selling (ex-
clusion of subscription rights, limited to  % of the capital
stock, by mutatis mutandis application of Section  para. 
sentence  German Stock Corporation Act) or
> used to meet obligations or rights to acquire Siemens shares
arising from, or in connection with, convertible bonds or war-
rant bonds issued by the Company or any of its consolidated