By resolution pertaining to Agenda item 9 for the Annual General Meeting on May 5, 2010, the Management Board was authorized, upon the approval of the Supervisory Board, to issue bonds (including participation rights) carrying conversion or option rights for shares of the Company, on one or more occasions, on or before May 4, 2015, with a nominal value of up to EUR 10,000,000,000. To service these conversion or option rights, a Conditional Capital 2010 amounting to EUR 250,000,000 was created.
A new authorization shall be created and the current authorization, unless fully utilized, shall be cancelled. The current authorization was partially utilized in 2011 by issuing a bond carrying conversion rights in the total nominal amount of EUR 500,000,000 which both entitles and obligates the holder thereof to draw up to 6,632,285 shares of the Company (subject to possible adjustment according to the terms and conditions of the bond). Consequently, the Conditional Capital 2010 (§ 2 (5) of the Statutes) for securing the holder of the current bond must further be retained. To be able to also use the Conditional Capital 2010 for this authorization, the Conditional Capital 2010 should be amended to the effect that it is available also to service conversion or option rights or a conversion obligation, which are issued on the basis of the authorization requested under Agenda Item 8.
The Management Board and the Supervisory Board therefore propose that the following resolution be adopted:
a) Authorization to issue bonds carrying conversion rights, bonds carrying option rights and/or convertible participation rights
aa) Nominal amount, term of authorization, number of shares
The Management Board of Allianz SE shall be authorized, upon the approval of the Supervisory Board, to issue bonds carrying conversion rights, bonds carrying option rights and/or convertible participation rights (hereinafter jointly referred to as “the bonds”) in bearer or registered form, once or several times on or before May 6, 2019, in the nominal amount of up to EUR 10,000,000,000 with or without definite maturity, and to grant the holders of the bonds conversion or option rights for the shares of the company in a proportionate amount of the capital stock of up to EUR 230,000,000 according to the terms and conditions of the bonds. The bonds may also be issued against contributions in kind.
In addition to euros, the bonds may also be issued in the legal currency of an OECD country – limited to the appropriate equivalent amount in euros. The bonds may also be issued by Group companies of the Company; in such case, the Management Board shall be authorized to issue a guarantee in respect of the bonds on behalf of the Company and to grant the holders of such bonds conversion or option rights, as applicable, on shares of the Company.
bb) Granting of subscription rights, exclusion of subscription rights
Shareholders shall generally have a subscription right to acquire the bonds. The bonds may also be acquired by one or several financial institutions, provided that such institutions commit to offer them for subscription to the shareholders. The Management Board shall, however, be authorized, upon the approval of the Supervisory Board, to exclude subscription rights of shareholders
- for fractional amounts;
- to the extent necessary to grant subscription rights to shares of the Company to holders of bonds carrying conversion or option rights or mandatory convertible bonds and/or convertible participation rights to such an extent as such holders would be entitled to after having exercised their conversion or option rights or after any conversion obligations have been fulfilled;
- if the bonds are issued against payment in cash and the issue price is not significantly lower than the theoretical market value of the bonds as calculated using recognised finance-mathematical methods. This authorization to exclude subscription rights shall only apply, however, to bonds carrying rights to receive shares corresponding to a proportionate amount of the capital stock not exceeding 10% in the aggregate, neither on the date on which this authorization takes effect nor on the date of exercise of this authorization. The sale of treasury shares shall be counted towards this limitation, if the sale occurs during the term of this authorization to the exclusion of subscription rights pursuant to § 186 (3), sentence 4 of the German Stock Corporation Act. In addition, shares issued during the term of this authorization from Authorized Capital shall be counted towards this limitation, provided that subscription rights are excluded pursuant to § 186 (3), sentence 4 of the German Stock Corporation Act;
- if the bonds are issued against contributions in kind, provided that the value of the contribution in kind is proportionate to the market value of the bonds as calculated pursuant to the preceding paragraph.
The sum total of shares which are to be issued in connection with bonds, which in accordance with this authorization had been issued to the exclusion of the subscription right or which have been issued to the exclusion of the subscription right in exercise of the authorization set out in Agenda item 9 of the Annual General Meeting dated May 5, 2010, shall, taking into account shares issued during the term of this authorization from the Authorized Capital 2014/I subject to the exclusion of the subscription right, not exceed a proportionate amount of the capital stock of EUR 233,728,000 (equivalent to 20% of the current capital stock).
cc) Conversion right, conversion obligation
If bonds carrying conversion rights are issued, the holders can convert their bonds into Company shares according to the terms and conditions of the bonds. The proportionate share in the capital stock of the shares to be issued upon conversion shall not exceed the nominal value, or a lower issue amount, of the convertible bond or the convertible participation right. The exchange ratio is calculated by dividing the nominal value of the bond by the conversion price for one share of the Company. The exchange ratio can also be calculated by dividing the issue price of the bond, which may be lower than its nominal value, by the conversion price for one share of the Company. The exchange ratio may be rounded up or down to a whole number; in addition, a cash premium may be stipulated. It may also be stipulated that fractional amounts are to be combined and/or settled in cash. The terms and conditions may also stipulate a fixed or a variable exchange ratio.
The terms and conditions may stipulate a conversion obligation. The terms and conditions may further stipulate the right of the Company to grant holders of convertible bonds or convertible participation rights, on maturity or at any prior time, either in whole or in part, in lieu of the payment of the due sum, shares of the Company (Company’s right to substitute).
The terms and conditions of the bonds may entitle the Company to settle in cash, either in part or in whole, any difference between the nominal value of the convertible bonds or the convertible participation right and the result obtained from multiplying the exchange ratio and a stock market price of the shares at the time of the mandatory exchange. The stock market price, in accordance with the calculation described in the previous sentence, shall amount to at least 80% of the relevant stock market price per share for the lower conversion price limit, pursuant to lit. ee) below.
dd) Option right
If bonds carrying option rights are issued, one or more warrants shall be attached to each bond, entitling the bearer to purchase shares of the Company pursuant to the terms and conditions of the warrants to be more closely defined by the Management Board. The proportionate share in the capital stock of the shares to be issued per bond may not exceed the nominal value of the bond carrying option rights. The terms and conditions of the bonds may also stipulate that the number of shares to be subscribed on exercising the option rights is variable. The terms and conditions of the bonds or option rights may stipulate that the option price can also be paid by means of transferring bonds (part-exchange) and where applicable by making an additional cash payment.
ee) Conversion/option price
The conversion or option price, as applicable, per share must be equal to either at least 80% of the average closing prices of shares of Allianz SE in the Xetra-trading system (or any comparable successor system) over the ten trading days in Frankfurt am Main preceding the day on which the Management Board resolves to issue the bonds or at least 80% of the average closing price of Allianz SE shares in Xetra-trading (or any comparable successor system) over the days on which the subscription rights are traded on the Frankfurt Stock Exchange, except the last two trading days of the subscription rights trading period.
In the case of bonds with mandatory conversion or a substitution right of the Company, the conversion price for a share to be set must correspond at least to either the aforementioned minimum price or the average closing price of the share of Allianz SE over the ten trading days in the Xetra-trading system (or any comparable successor system) before the day on which the conversion becomes effective.
The terms and conditions of the bonds may stipulate that the option or conversion price, subject to the above mentioned minimum prices, can be changed within a margin to be specified by the Management Board based on the development of the share price over the term.
Notwithstanding § 9 (1) of the German Stock Corporation Act, the terms and conditions of the bonds may contain anti-dilution clauses to provide protection during the conversion or option period against the Company raising its capital stock, issuing additional bonds carrying conversion or option rights or convertible participation rights or granting or guaranteeing further option rights without granting the holders of conversion or option rights the subscription rights to which they would be entitled if they exercised their conversion or option rights or if the conversion obligation were fulfilled. The terms and conditions may also stipulate, to cover other measures taken by the Company or events that might result in a dilution of the value of the conversion or option rights (e.g. dividends), a value-preserving adjustment of the conversion or option price or of the option ratio, or the granting cash components. The proportionate share in the capital stock of the shares to be issued per bond may not, in any instance, exceed the nominal value of the bond.
ff) Further structuring possibilities
The terms and conditions may stipulate that treasury shares also be granted in the case of a conversion or exercise of option rights. It may also be stipulated that the Company does not grant holders of conversion or option rights shares in the Company, but instead pays the equivalent amount in cash.
gg) Authorization to define further terms and conditions
The Management Board is authorized to define the further details related to the issue and structuring of the bonds, particularly with respect to interest rate, issue price, term and denomination, conversion or option price, and conversion or option period, or to stipulate such details in agreement with the administrative bodies of the Group issuing the bonds.
b) Amendment of the resolution passed on May 5, 2010 for creating a Conditional Capital 2010
The resolution by the Annual General Meeting of the Company on May 5, 2010, for creating a Conditional Capital 2010 (§ 2 (5) of the Statutes) is amended as follows:
The capital stock shall be conditionally increased by up to EUR 250,000,000 by issuing up to 97,656,250 new, registered, no-par value shares with entitlement to share in profits from the start of the financial year of their issue (Conditional Capital 2010/2014). The conditional capital increase shall enable the issue of shares to the holders of bonds or participation rights, which were issued according to the authorization of the Annual General Meeting of May 5, 2010 under Agenda Item 9 or according to the authorization referred to above, insofar as such bonds have been issued against payment in cash.
The new shares shall be issued at the conversion or option price pursuant to the aforementioned authorization or the authorization of May 5, 2010, on issuing bonds carrying conversion and/or option rights. The conditional capital increase shall be carried out only to the extent that conversion or option rights granted under bonds issued against cash are exercised or that conversion obligations of such bonds are fulfilled, and to such extent as the conversion or option rights or conversion obligations are not serviced through treasury shares, through shares from authorized capital or through other forms of fulfilment.
The Management Board shall be authorized to determine further details of the conditional capital increase.
c) Cancellation of the authorization of May 5, 2010, unless fully utilized
The authorization to issue bonds carrying conversion and/or option rights resolved by the Annual General Meeting on May 5, 2010 under Agenda Item 9 shall, unless fully utilized, be cancelled. This cancellation will not become effective until the new authorization to issue bonds carrying conversion and/or option rights, as well as convertible participation rights pursuant to the resolution under lit. a), as well as the amendment of the Conditional Capital 2010 pursuant to the resolution under lit. b) has come into force.
d) Amendment to the Statutes
§ 2 (5) of the Statutes is being amended as follows:
“2.5 The capital stock shall be conditionally increased by up to EUR 250,000,000 by issuing up to 97,656,250 new, registered, no-par value shares with entitlement to share in profits from the start of the financial year of their issue (Conditional Capital 2010/2014). The conditional capital increase shall be carried out only to the extent that conversion or option rights are exercised by holders of conversion or option rights attached to bonds which Allianz SE or its Group companies have issued against cash payments according to the authorization resolution of the Annual General Meeting of May 5, 2010 or the authorization resolution of the Annual General Meeting of May 7, 2014, or that conversion obligations under such bonds are fulfilled, and only insofar as the conversion or option rights or conversion obligations are not serviced through treasury shares, through shares from authorized capital or through other forms of fulfilment. The Management Board is authorized to determine further details of the conditional capital increase.”
e) Registration with the commercial register, authorization to amend the Statutes
The Management Board is authorized to register the amendment of the Conditional Capital 2010 for entry in the commercial register, irrespective of the other resolutions of the Annual General Meeting.
The Supervisory Board shall be authorized to make adjustments to the wording of the Statutes in accordance with the respective issue of shares to be subscribed, as well as any other amendments to the Statutes in connection therewith that concern merely the wording. The same applies in the event that the authorization to issue bonds has not been utilized upon expiry of the term of authorization, as well as in the event that the Conditional Capital 2010/2014 has not been utilized upon expiry of the deadlines for exercising conversion and option rights or for fulfilling conversion obligations.