BMW 2011 Annual Report Download - page 48

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18 COMBINED GROUP AND COMPANY
MANAGEMENT REPORT
18 A Review of the Financial Year
20 General Economic Environment
24 Review of Operations
43 BMW Stock and Capital Market
46 Disclosures relevant for takeovers
and explanatory comments
49 Financial Analysis
49 Internal Management System
51 Earnings Performance
53 Financial Position
56 Net Assets Position
59 Subsequent Events Report
59 Value Added Statement
61 Key Performance Figures
62 Comments on BMW AG
66 Internal Control System and
explanatory comments
67 Risk Management
73 Outlook
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 instru-
ments, framework agreements are in place with finan-
cial
institutions and banks (ISDA Master Agreements),
each of which contain extraordinary rights of ter-
mination which trigger the immediate settlement of
all current transactions, in the event that the credit-
worthiness of the respective party is materially weaker
following the direct or indirect acquisition of bene-
ficial
ownership of equity securities having the power
to elect a majority of the Supervisory Board of a con-
tractual party or any other ownership interest enabling
the acquirer to exercise control of a contractual party
or a merger or transfer of assets.
–
Financing agreements in place with the European
Investment Bank (EIB) entitle the EIB to request early
repayment of the loans in the event of an imminent
or actual change in control at the level of BMW AG
(which is in most cases the guarantor, in two cases, how-
ever,
the borrower), if the EIB has reason to assume –
either after the change of control has taken place or
30 days after it has requested to discuss the situation –
that the change in control could have a signifi-
cantly
adverse impact, or if – as stated in three of the
contracts – the borrower refuses to hold such dis-
cussions.
A change in control of BMW AG arises if
one
or more individuals take over or lose control
of BMW AG, with control being defined in the above-
mentioned financing agreements as (i) holding or
having control over more than 50 % of the voting rights,
(ii) the right to stipulate the majority of the members
of the Board of Management or Supervisory Board, or
(iii) the right to receive more than 50 % of dividends
payable, and, in two cases as an additional alternative
(iv) other comparable controlling influence over
BMW AG.
– BMW AG is party to an agreement with SGL Carbon
SE, Wiesbaden, relating to the joint ventures SGL
Automotive Carbon Fibers LLC, Delaware, USA, and
SGL Automotive Carbon Fibers GmbH & Co. KG,
Munich. The agreement includes call and put rights
in the event that 50 % or more of the voting rights
relating to the relevant other shareholder of the joint
venture are either directly or indirectly acquired by
a third party, or in the event that 25 % of such voting
rights are acquired by a third party who is a com-
petitor
of the party not affected by the acquisition of
voting rights. In the event of such acquisitions of
voting rights by a third party, the non-affected share-
holder has the right to purchase the affected share-
holder’s shares in the joint venture or to demand
the sale of its own shares in the joint venture to the
affected shareholder.
–
BMW AG is party to an agreement with Peugeot SA,
Paris, relating to the joint venture BMW Peugeot
Citroën Electrification B. V., the Netherlands. The
agreement includes call and put rights in the event
that 50 % or more of the voting rights relating to the
relevant other shareholder of the joint venture are
either directly or indirectly acquired by a third party,
or in the event that one-third of such voting rights
are acquired by a third party who is a competitor
of the party not affected by the acquisition of voting
rights. In the event of such acquisitions of voting
rights by a third party, the non-affected shareholder
has the right to purchase the affected shareholder’s
shares in the joint venture or to demand the sale
of
its own shares in the joint venture to the affected
shareholder.
– An engine supply agreement between BMW AG and
Toyota Motor Europe SA relating to the sale of diesel
engines entitles each of the contractual parties to give
extraordinary notification of termination in the event
that one of the contractual parties merges with an-
other company or is taken over by another company.
Compensation agreements with members of the Board
of Management or with employees in the event of a
takeover bid
The BMW Group has not concluded any compensation
agreements with members of the Board of Management
or with employees for situations involving a takeover bid.