Siemens 2014 Annual Report Download - page 169

171 C. Combined Management Report 247 D. Consolidated Financial Statements 337 E. Additional Information

B.. Compensation agreements with
members of the Managing Board or
employees in the event of a takeover bid
In the event of a change of control that results in a substantial
change in the position of a Managing Board member (for exam-
ple, due to a change in corporate strategy or a change in the
Managing Board member’s duties and responsibilities), the
member of the Managing Board has the right to terminate his
or her contract with the Company for good cause. A change of
control exists if one or several shareholders acting jointly or in
concert acquire a majority of the voting rights in Siemens AG
and exercise a controlling influence, or if Siemens AG becomes
a dependent enterprise as a result of entering into an intercom-
pany agreement within the meaning of Section  of the Ger-
man Stock Corporation Act, or if Siemens AG is to be merged
into an existing corporation or other entity. If this right of ter-
mination is exercised, the Managing Board member is entitled
to a severance payment in the amount of no more than two
years’ compensation. The calculation of the annual compensa-
tion includes not only the base compensation and the target
amount for the bonus, but also the target amount for the stock
awards, in each case based on the most recent completed fiscal
year prior to termination of the contract. The stock-based com-
pensation components for which a firm commitment already
exists will remain unaffected. There is no entitlement to a sev-
erance payment if the Managing Board member receives bene-
fits from third parties in connection with a change of control.
Moreover, there is no right to terminate if the change of control
occurs within a period of twelve months prior to a Managing
Board member’s retirement. Additionally, the severance pay-
ments cover non-monetary benefits by including an amount of
 % of the total severance amount. Severance payments will be
reduced by  % as a lump-sum allowance for discounted values
and for income earned elsewhere. However, this reduction will
apply only to the portion of the severance payment that was
calculated without taking account of the first six months of the
remaining term of the Managing Board member’s contract.