Siemens 2014 Annual Report Download - page 168

108 A. To our Shareholders 131 B. Corporate Governance
132 B. Corporate Governance Report
136 B. Corporate Governance statement pursuant to
Section a of the German Commercial Code
(part of the Combined Management Report)
138 B. Compliance Report
(part of the Combined Management Report)
144 B. Compensation Report
(part of the Combined Management Report)
165 B. Takeover-relevant information (pursuant to
Sections  para.  and  para.  of the
German Commercial Code) and explanatory report
(part of the Combined Management Report)

subsidiaries (exclusion of subscription rights, limited to  %
of the capital stock, by mutatis mutandis application of Sec-
tion  para.  sentence  German Stock Corporation Act).
Furthermore, the Supervisory Board is authorized to use shares
acquired on the basis of this or any previously given authoriza-
tion to meet obligations or rights to acquire Siemens shares
that were or will be agreed with members of the Managing
Board within the framework of rules governing Managing
Board compensation.
In November , the Company announced that it would carry
out a share buyback of up to €  billion in volume within the
next up to  months using the authorization given by the An-
nual Shareholders’ Meeting on January , . The buyback
commenced on May , . Under this share buyback
Siemens repurchased ,, shares by September , .
The total consideration paid for these shares amounted to
about € . billion (excluding incidental transaction charges).
The buyback may serve only to cancel and reduce the capital
stock, issue shares to employees, board members of affiliated
companies and members of the Managing Board of Siemens AG,
or service convertible bonds and warrant bonds.
As of September , , the Company held ,, (:
,,) shares of stock in treasury.
For details on the authorizations, especially with respect to the
restrictions to exclude subscription rights and the terms to in-
clude shares when calculating such restrictions, please refer to
the relevant resolution and to Section  of the Articles of Associ-
ation. For further information on the authorized and conditional
capitals and on the treasury stock of the Company as of Sep-
tember , , see NOTE  EQUITY in D. NOTES TO
CON SOLIDATED FINANCIAL STATEMENTS on pages  -  of this
Annual Report.
B.. 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 amount of
€  billion and an amount of US$  billion, respectively, which
provide its lenders with a right of termination in the event that
() Siemens AG becomes a subsidiary of another company or
() 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 Regu-
lation (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 situation occur that jeopardize
the orderly repayment of the credit.
In March , a consolidated subsidiary as borrower and
Siemens AG as guarantor entered into two bilateral loan agree-
ments, each of which has been drawn in the full amount of
US$  million. Both agreements provide their respective
lenders with a right of termination in the event that ()
Siemens AG becomes a subsidiary of another company or ()
a person or a group of persons acting in concert acquires effec-
tive control over Siemens AG by being able to exercise decisive
influence over its activities (Art. () of Council Regulation
(EC)  / ).
Framework agreements concluded by Siemens AG under Inter-
national Swaps and Derivatives Association Inc. documenta-
tion (ISDA Agreements) grant the counterparty a right of termi-
nation when Siemens AG consolidates with, merges into, or
transfers substantially all its assets to a third party. However,
this right of termination only exists, if () the resulting entity’s
creditworthiness is materially weaker than Siemens AG’s im-
mediately prior to such event or () the resulting entity fails to
simultaneously assume Siemens AG’s obligations under the
ISDA Agreement. Additionally, some ISDA Agreements grant
the counterparty a right of termination if a third party acquires
the beneficial ownership of equity securities that enable it to
elect a majority of Siemens AG’s Supervisory Board or other-
wise acquire the power to control Siemens AG’s material policy-
making decisions and if the creditworthiness of Siemens AG is
materially weaker than it was immediately prior to such an
event. In either situation, ISDA Agreements are designed such
that upon termination all outstanding payment claims docu-
mented under them are to be netted.
In February , Siemens issued bonds with warrant units
with a volume of US$  billion. In case of a change of control,
the terms and conditions of these warrants enable their hold-
ers to receive a higher number of Siemens shares in accordance
with an adjusted strike price if they exercise their option rights
within a certain period of time after the change of control. This
period of time shall end either () not less than  days and no
more than  days after publication of the notice of the issuer
regarding the change of control, as determined by the issuer or
()  days after the change of control first becomes publicly
known. The strike price adjustment decreases depending on
the remaining term of the warrants and is determined in detail
in the terms and conditions of the warrants. In this context, a
change of control occurs if control of Siemens AG is acquired
by a person or by persons acting in concert.