resented unless otherwise stipulated by man- datory law or the Articles of Incorporation. The law prescribes a mandatory majority of three quarters of the share capital represented when resolutions are made, for example, for amend- ments to the Articles of Incorporation involving substantial capital measures, such as resolu- tions concerning the creation of authorized or contingent capital.
7. Authorizations of the Executive Board, particularly with regard to its options for issuing or withdrawing shares
7.1 The Executive Board can issue new shares only on the basis of resolutions by the Shareholders’ Meet- ing.
a) By way of resolution of the Annual Sharehold- ers’ Meeting of April 23, 2009 (Article 4 (2) of the Articles of Incorporation), the Executive Board is authorized, with the approval of the Supervisory Board, to increase the share capi- tal by up to €66.0 million by issuing up to 25,781,250 new shares against cash or non- cash contributions by April 22, 2014 (Author- ized Capital 2009).
In doing so, the Executive Board may exclude shareholders’ pre-emptive rights with the ap- proval of the Supervisory Board,
(1) if this is necessary in order to exclude any fractional amounts from shareholders’ pre- emptive rights;
(2) if this is necessary in order to ensure that holders of option or conversion rights from warrant-linked bonds or convertible bonds are granted pre-emptive rights to new shares to the extent they would have been entitled after exercising their option or con-
amount”) and the issue price of the new shares is not significantly less than the quoted price of shares of the same type al- ready listed at the time the issue price is conclusively established. The pro rata amount of share capital relating to new or previously acquired treasury shares issued or sold during the term of this authorization with the simplified disapplication of pre- emptive rights as per or in accordance with Section 186 (3) Sentence 4 AktG, and the pro rata amount of share capital relating to shares that can or must be subscribed to on the basis of option or conversion rights or requirements issued during the term of this authorization with pre-emptive rights disapplied in accordance with Section 186 (3) Sentence 4 AktG, mutatis mutandis, must be deducted from this maximum amount;
(4) if new shares are issued against contribu- tions in kind and the pro rata amount of share capital relating to the new shares does not exceed 10% of the share capital at the time of this authorization taking ef- fect.
b) By way of resolution of the Annual Sharehold- ers’ Meeting of April 27, 2012 (Article 4 (3) of the Articles of Incorporation), the Executive Board is authorized, with the approval of the Supervisory Board, to increase the share capi- tal by up to €70.0 million by issuing new shares against cash or non-cash contributions by April 26, 2015 (Authorized Capital 2012). In doing so, the Executive Board may exclude shareholders’ pre-emptive rights with the ap- proval of the Supervisory Board,
version rights or meeting the conversion requirement as shareholders;
(3) if the capital is increased against cash con- tributions and the entire pro rata amount relating to shares to be issued and already issued against cash contributions using this authorization and disapplying pre-emptive rights exceeds neither the amount of €51.0 million nor the amount of 10% of share capital at the time of this authorization be- ing exercised (“maximum amount”) and the issue price of the new shares is not signifi- cantly less than the quoted price of shares of the same type already listed at the time the issue price is conclusively established. The pro rata amount of share capital relat- ing to new or previously acquired treasury shares issued or sold during the term of this authorization with the simplified disap- plication of pre-emptive rights as per or in accordance with Section 186 (3) Sen- tence 4 AktG, and the pro rata amount of share capital relating to shares that can or must be subscribed to on the basis of op- tion or conversion rights or requirements issued during the term of this authorization with pre-emptive rights disapplied in ac- cordance with Section 186 (3) Sentence 4
AktG, mutatis mutandis, must be deducted
from this maximum amount.
c) The Executive Board is also authorized to issue new shares to the beneficiaries of the 2004 and 2008 stock option plans resolved by the Annual Shareholders’ Meeting in accordance with the conditions of these plans. 47,900 pre- emptive rights have been issued that can be exercised when the exercise price is met. In to- tal, no more than 47,900 shares can therefore be issued under the stock option plans. This corresponds to pro rata share capital of up to €122,624.
d) Finally, on the basis of the contingent capital in place in accordance with Article4 (6) of the Ar- ticles of Incorporation, the Executive Board may issue up to 19,921,875 shares to the bearers or creditors of convertible bonds and/or warrant-linked bonds, participation
rights and/or income bonds (or combinations of these instruments) that are issued by the company, or by domestic or foreign companies in which it directly or indirectly holds a majority interest, on the basis of the authorization re- solved by the Annual Shareholders’ Meeting of April 27, 2012, and that grant a conversion or option right in relation to bearer shares of the company or stipulate a conversion require- ment. To date, none of the above rights have been issued on the basis of this authorization. 7.2 The Executive Board may only buy back shares
under the conditions codified in Section 71 AktG. The Annual Shareholders’ Meeting has not author- ized the Executive Board to acquire treasury shares in line with Section 71 (1) Number 8 AktG. 8. Material agreements of the company subject
to a change of control following a takeover bid and their consequences
The following material agreements are subject to a change of control at Continental AG:
a) The agreement concluded in January 2013 for a syndicated loan of €4.5 billion, which replaces the syndicated loan originally amounting to €13.5 billion that was in place as of the bal- ance sheet date, grants each creditor the right to terminate the agreement prematurely and to demand repayment of the loans granted by it if one person or several persons acting in con- cert acquire control of Continental AG and subsequent negotiations concerning a continu- ation of the loan do not lead to an agreement. The term “control” is defined as the holding of more than 50% of the voting rights or if Conti- nental AG concludes a domination agreement as defined under Section 291 AktG with Conti- nental AG as the company dominated. b) The bonds issued by a subsidiary of Continen-
tal AG, Conti-Gummi Finance B.V. Maastricht, Netherlands (“issuer”), on July 16, 2010, Sep- tember 13, 2010, and Oc-tober 5, 2010, at a nominal amount of €750 million, €1,000 million, €625 million and €625 million respectively and guaranteed by Continental AG, and the bond issued by another subsidiary of Continen- tal AG, Continental Rubber of America Corp.,
Wilmington, Delaware, U.S.A., on September 24, 2012, at a nominal amount of U.S. $950 million, entitle each bondholder to demand that the issuer redeem or acquire the bonds held by the bondholder at a price established in the bond conditions in the event of a change of control at Continental AG. The bond conditions define a change of control as one person or several persons acting in concert, pursuant to Section 2 (5) of the German Securities Acquisi- tion and Takeover Act (Wertpapiererwerbs-
und Übernahmegesetz – WpÜG), holding more
than 50% of the voting rights in Continental AG by means of acquisition or as a result of a mer- ger or other form of combination with the par- ticipation of Continental AG. The holding of voting rights by Schaeffler GmbH (operating as Schaeffler AG following the change in its legal form), its legal successor or its affiliated com- panies does not constitute a change of control within the meaning of the bond conditions. If a change of control occurs as described in the agreements above and a contractual part- ner or bondholder exercises its respective rights, it is possible that required follow-up fi- nancing may not be approved under the exist- ing conditions, which could therefore lead to higher financing costs.
c) In 1996, Compagnie Financière Michelin and Continental AG founded MC Projects B.V. in the Netherlands, with each owning 50%. Mich- elin contributed the rights to the Uniroyal brand for Europe to the company. MC Projects B.V. licenses these rights to Continental. According to the agreements, this license can be termi- nated without notice if a major competitor in the tire business acquires more than 50% of the voting rights of Continental. In this case Michelin also has the right to acquire a majority
9. Compensation agreements of the company with members of the Executive Board or employees for the event of a takeover bid No compensation agreements have been conclud- ed between the company and the members of the