BMW 2008 Annual Report Download - page 45

46
14 Group Management Report
14 A Review of the Financial Year
16 General Economic Environment
20 Review of Operations
42 BMW Stock and Bonds
45 Disclosures pursuant to § 289 (4)
and § 315 (4) HGB
47 Financial Analysis
47
Internal Management System
49 Earnings Performance
51 Financial Position
52 Net Assets Position
55 Subsequent Events Report
55 Value Added Statement
57 Key Performance Figures
58 Comments on BMW AG
62 Risk Management
68 Outlook
The voting power percentages disclosed on the previous
page may have changed subsequent to the stated date
if these changes were not required to be reported to the
Company. Due to the fact that the Company’s shares are
issued to bearer, the Company is generally only aware of
changes in share-holdings if such changes are subject to
mandatory notification rules.
There are no shares with special rights which confer con-
trol rights.
The appointment and removal of members of the Board
of Management are based on the rules contained in   et
seq. AktG in conjunction with   of the German Co-De-
termination Law (MitbestG). In accordance with Article 
of the Articles of Incorporation, the Board of Management
consists of two or more members. The Supervisory Board
determines the number of the members of the Board
of Management. It is responsible for appointing members
to the Board of Management and for revoking appoint-
ments. It also designates one of the members as the
Chairman of the Board of Management.
Amendments to the Articles of Incorporation must comply
with   et seqq. AktG. All amendments must be resolved
by the shareholders at the Annual General Meeting (  
no. ,    AktG). The Supervisory Board is authorised
to approve amendments to the Articles of Incorporation
which only affect its wording (Article  no.  of the Articles
of Incorporation). Resolutions are passed at the Annual
General Meeting by simple majority of shares unless other-
wise explicitly required by binding provisions of law ( 
of the Articles of Incorporation).
In accordance with the resolution passed at the Annual
General Meeting on  May , the Board of Management
is authorised, up to  November  and subject to the
price limits stipulated in the resolution, to acquire shares of
common and / or non-voting preferred stock via the stock
exchange, up to a maximum of   of the share capital in
place at the date of the resolution. The Board of Manage-
ment is also authorised, without any further resolution by
the Annual General Meeting, to withdraw from circulation
the treasury shares (common and / or non-voting preferred
stock) acquired in accordance with the authorisation de-
scribed above. Furthermore, the Board of Management is
authorised to buy back shares and sell bought-back shares
in situations specified in   AktG, e. g. to avert serious
and imminent damage to the Company or for the purposes
of an employee share scheme. There is no authorised or
conditional capital at the reporting date.
BMW AG is party to the following significant agreements
which contain special provisions for the event of a change
in control or the acquisition of control which could arise, for
example, from a takeover offer:
– An agreement, concluded with an international con-
sortium of banks relating to a syndicated credit line
(which was not being utilised at the balance sheet date),
entitles the lending banks to give extraordinary notice
to terminate the credit line (such that all outstanding
amounts, including interest, would fall due immediately)
if one or more parties jointly acquire direct or indirect
control of BMW AG. The term “control” is defined as the
acquisition of more than   of the share capital of
BMW AG, the right to receive more than   of the divi-
dend or the right to direct the affairs of the Company
or appoint the majority of members of the Supervisory
Board.
– A cooperation agreement concluded with Peugeot SA
relating to the joint development and production of a
new family of small ( to . litre) petrol-driven engines
entitles each of the cooperation partners to give extra-
ordinary notification of termination in the event of a com-
petitor acquiring control over the other contractual party
and if any concerns of the other contractual party con-
cerning the impact of the change of control on the co-
operation arrangements are not allayed during the sub-
sequent discussion process.
–
BMW AG acts as the guarantor for all of the obligations
arising from the joint venture agreement relating to BMW
Brilliance Automotive Ltd. in China. This agreement
grants an extraordinary right of termination to either joint
venture partner in the event that, either directly or indi-
rectly, more than   of the shares of the other party
are acquired by a third party or the other party is merged
with another legal entity. The termination of the joint
venture agreement may result in the sale of the shares
to the other joint venture partner or in the liquidation of
the joint venture entity.
– Regarding the trading of derivative financial instruments,
framework agreements are in place with financial insti-
tutions
and banks (ISDA Master Agreements), each of
which contain extraordinary rights of termination which
trigger the immediate settlement of all current trans-
actions, in the event that the creditworthiness of the re-
spective party is materially weaker following the direct
or indirect acquisition of beneficial ownership of equity
securities having the power to elect a majority of the
Supervisory Board of a contractual party or any other
ownership interest enabling the acquirer to exercise
control of a contractual party or a merger or transfer of
assets.
The BMW Group has not concluded any compensation
agreements with members of the Board of Management
or with employees for situations involving a takeover offer.