be 87.63 per Share. Nevci~theles tlle Bayer Entities sclected C89.00 as the Put Price in the Donlination Agreement. The court-appointed auditor, Wart11 & Klein GmbH Wirtschaftspriifui~gsgcsellscl~ ("tW&K"), confirmed that the Put Price of C89.00 set forth in the Domillation Agreement was adequate under applicable Gerillail law in a separate report dated August 2, 2006 (the "W&K Report"). If the weighted average price of the Shares for the three inonths preccding the extraordinary general meeting of Schering's shareholders held on September 13, 2006, as published by the German Federal Financial Supervisory Auithority (Rundesanstalt fur Finanzdienst1eiLstungsaufsichon its webpage for Septenlber 13, 2006, exceeds C89.00 per Share, the Put Price will be increased accordingly.
The Doinination Agreeinent was executed on July 31, 2006. Also on July 31, 2006, the Mairagement Board of Schering and the Managing Directors of the Offeror, issued their joint report (the "Joint Report") on the Doinillation Agreement. The Joint Report, along with thc KPMG Report and the W&K Report, were made available to shareholders of Schering beginning on August 4, 2006. The Donlination Agreement, the Joint Report, the KPMG Repoi-t and tlle W&K Report, among other documents, are included in a pre- coinlnencement communication filed with the Cominission by Bayer under cover of Schedule TO on August 7, 2006.
Structure of the Put Rights
The Put Rights are nlandated by, subject to, and required and structured to be exercisablc in accordance with, Section 305 of the Stock Corporation Act and the applicable rulings and interpretations thereunder. In addition, except to the extent permitted pursuant to the relief requcsted herein, thcy are subject to Sections 14(d) and 14(c) of the Exchange Act and the rules and regulations proinulgated thereunder. IJnlike the Voluntary Tender Offer, the Put Rights are not considered, from a Gernlan legal perspective, to constitute a takeover offer or a tender offer for any purposes. They are therefore not subject to regulation under the Gerinan Securities Acquisition and Takeover Act (WpUG,the "Takcover Code"). In line therewith and in contrast to the Voluntary Tender Offer, the Offeror is not required, for instance, to publish or disseininate an offer doculllent in Germany or coinply with other Gernlan takcover offer rulcs in connection with the Put Rights. Under German law and practice, the Offeror would siinply notify depositary banks, proinptly after the Registration Anllouncement Date, that thc Doillination Agrecinent had become effective, depositary banks would then scnd a short lettcr to clients inaking thein aware of the availability of the Put Rights, and a shareholder would notify its depositary bank if it desired to request the Offeror to purchase its Sharcs against payincnt of the Put Price. In addition, it is also customary in Ge~.manyalthough not legally required, for the Offeror to publish an advertisement in Gernlan newspapers to illforin shareholders about the availability of the Put Rights. If an unaffiliated shareholder wishes to surrender Shares against paynleilt of the Put Price, it could do so at any time from the Effective ate^ until two months after the Registration Anilouilcernent Date (tlic "Exercise Period") (the Exercise Period being subject to extension in the event of legal challenges to the adequacy of the ainount of the Put Price or thc
1 In practlcc, the shareholders are first placed In a position to exercise the Put R~ght once the Offeror has made the not~ficat~o described above, which havc the effect of publishing the ineails to exercise thein