Mercedes 2006 Annual Report Download - page 50

Purpose of the company. The general purpose for which the
company is organized is defined in Article 2 of the Articles
of Incorporation. Pursuant to Section 179 of the German Stock
Corporation Act, the Articles of Incorporation can only be
changed through a resolution of the Annual Meeting. In accordance
with Article 19, Paragraph 1 of the Articles of Incorporation,
resolutions of the Annual Meeting are passed with a simple majority
of the votes cast unless otherwise required by binding provisions
of applicable law, and with a simple majority of the capital stock
represented at the Annual Meeting if this be required. Pursuant
to Section 179, Subsection 2, Sentence 2 of the German Stock
Corporation Act, any amendment to the purpose of the company
requires a 75% majority of the capital stock represented at the
Annual Meeting.
Change of control. DaimlerChrysler AG has concluded various
material agreements that include clauses regulating the possible
occurrence of a change of control given below. One of the issues
involved is a number of non-utilized syndicated credit lines in
a total amount of US $12 billion, which the lenders are entitled to
terminate if DaimlerChrysler AG becomes a subsidiary of another
company or is controlled by one person or several persons acting
jointly. Furthermore, DaimlerChrysler AG is a party in a joint
venture for the development of fuel cell systems. This joint venture
can be terminated by either of the contracting parties if the
other party is subject to a change of control. A change of control is
defined here as the right to give instructions to the Board of
Management and to determine the company’s guiding principles,
the possibility to elect the majority of the members of the
Supervisory Board, or possession of at least 40% of the voting
rights. In addition, DaimlerChrysler AG is a party to an
agreement concerning the intellectual property rights in connection
with a joint venture for the development of a hybrid drive system,
which in the case of a change of control of one of the partners
involved, allows the other partners to terminate the agreement.
A change of control as defined by this agreement refers to the
beneficial ownership of the majority of the voting rights in the
company, and with a stock-exchange listed company the beneficial
ownership of at least 20% of the voting rights in the company
if within 18 months after this limit is exceeded the majority of the
members of the Supervisory Board representing the shareholders
consists of persons who were proposed by the owner of the 20%
of the voting rights; a change of control is also understood
as a merger or amalgamation with another company, unless in the
case of a stock-exchange listed company after the merger the
majority of the votes are held by the previous owners and no-one
has beneficial ownership of more than 20% of the voting rights;
a change of ownership is also understood as the transfer of all or
nearly all of the assets. Finally, DaimlerChrysler AG is a party
to an agreement regulating the exercise of voting rights in EADS
N.V. In the case of a change of control, this agreement stipulates
that DaimlerChrysler AG is obliged, if so requested by the French
party to the agreement, to make all efforts to dispose of its
shares in EADS under appropriate conditions to a third party that
is not a competitor of EADS or of the French contracting party
of DaimlerChrysler AG. In this case, the French party has the right
of preemption under the same conditions as were offered by a
the third party. A change of control can also lead to the dissolution
of the voting consortium. According to the EADS agreement,
a change of control has taken place if a competitor of EADS N.V.
or of the French contracting party either appoints so many
members of the Supervisory Board of DaimlerChrysler AG that
it can appoint the majority of the members of the Board of
Management or holds an investment that enables it to control
the day-to-day business of DaimlerChrysler AG.
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