Authorization to acquire treasury shares for other purposes pursuant to § 71 (1) no. 8 AktG and to their utilization with the authorization to exclude shareholders’ subscription rights

Agenda Item 9 contains the proposal to authorize the Company to repurchase its own shares in an amount of up to 10% of the current share capital. This may be done by the Company itself, by other companies controlled by the Company, or by third parties acting for the account of such companies or the account of the Company. In case the share capital decreased by the time of execution of the authorization, the decreased amount shall be decisive. The authorization is to remain valid until May 8, 2023, thus exploiting the legally permitted timeframe of 5 years.

The repurchase via a stock exchange may also be carried out in the form of a structured repurchase program under the mandate of a credit institution or a business entity enterprise within the meaning of § 186 (5) sentence 1 AktG.

Pursuant to § 71 (1) no. 8 AktG, the shares may also be repurchased and sold in ways other than via a stock exchange. In addition to buying on a stock exchange, the Company shall also be given the alternative to acquire treasury shares by means of a public tender offer to the shareholders of the Company. The principle of equal treatment set forth by the German Stock Corporation Act must thereby be observed. In this instance, the shareholders may decide how many shares they wish to tender and, if a price range has been fixed, at what price.

The Company shall also be given the option to offer as consideration shares of a listed company as defined in § 3 (2) AktG instead of cash. Pursuant to this provision, a company is deemed to be a listed company if its shares are admitted to trading on a market which is regulated and supervised by state-recognized authorities, has regular trading and is directly or indirectly accessible to the general public. Thus, this allows the Company greater flexibility than if it were restricted to cash offers. At the same time, the Company would obtain the opportunity to dispose of its shareholdings. Correspondingly, shareholders could exchange all or part of their shares in Allianz for shares in such other companies.

If, in case of a public tender offer or a public exchange offer, the number of tendered shares exceeds the number of shares that had been intended for purchase, the purchase shall not take place in the ratio of the participation but in the ratio of the tendered shares. This serves to simplify the allocation process. A preferred consideration of up to 100 tendered shares per shareholder can be provided for (minimum allocation).

The treasury shares acquired may be used for any lawful purposes, including the following:

The acquired treasury shares can be sold for cash outside a stock exchange with exclusion of subscription rights. As a prerequisite, these shares must be sold against a cash consideration at a price that is, at the time of the sale, not substantially below the market price of shares of the Company. This authorization makes use of the eased exclusion of subscription rights provided for by § 71 (1) no. 8 AktG in corresponding application of § 186 (3) sentence 4 AktG. As shares may be sold only at a price not substantially below the applicable market price, shareholders are duly protected against dilution. The final sales price of the Company’s treasury shares will be determined shortly before the sale. The Management Board will set any potential discount on the shares’ market price as low as possible. The discount on the market price will in no event exceed 5% of the current stock exchange price at the time of the exercise of the authorization.

This authorization is, however, restricted pursuant to § 186 (3) sentence 4 AktG to the extent that the total number of shares issued under exclusion of subscription rights must not exceed 10% of the share capital of the Company, neither at the time when this authorization takes effect nor at the time when it is exercised. In determining this 10% limit, all shares must be included that are issued from authorized capital during the term of this authorization under exclusion of subscription rights pursuant to § 186 (3) sentence 4 AktG. Furthermore, shares required to be issued to meet obligations arising from bonds (including participation rights) carrying conversion or option rights or conversion obligations must also be included in determining this 10% limit, if these bonds (or participation rights) were issued under exclusion of subscription rights during the term of this authorization in corresponding application of § 186 (3) sentence 4 AktG. This limitation, and the fact that the sales price must be based on the stock exchange price, adequately protects the economic interests and voting rights of the shareholders. The shareholders have the option to maintain the percentage of their interest in the Company based on similar terms and conditions by buying Allianz shares on the stock exchange. This authorization is in the interest of the Company because it affords greater flexibility. It enables the Company, for example, to sell treasury shares to institutional investors or to target new investor groups.

The disposal of treasury shares may also be made against contributions in kind under exclusion of shareholders’ subscription rights. As a result, the Management Board would be able to offer treasury shares in appropriate cases as consideration for the acquisition of a company, interests in companies, or other assets. In negotiations, it may on occasion become necessary to provide shares rather than cash as consideration. The ability to offer treasury shares as consideration is advantageous when competing for attractive acquisition targets. If market opportunities arise, it also affords the necessary scope for acquiring companies, interests in companies or other assets, while at the same time maintaining liquidity. It can also be advantageous when optimizing the financing structure. When determining the valuation ratios, the Management Board will ensure that shareholder interests are adequately protected by taking into account the stock exchange price of the Allianz share.

In addition, the authorization allows the use of treasury shares under exclusion of shareholders’ subscription rights for the placement of Company shares on foreign stock exchanges on which they are not yet admitted for trading. This allowes for the expansion of the shareholder base in foreign countries and to increase the attractivity of the shares. The initial offer price (including incidental costs) of these shares when being placed on additional stock exchanges may not be more than 5% below the closing price in the Xetra-trading system (or any comparable successor system of the Frankfurt Stock Exchange) on the last trading day prior to the listing.

Furthermore, it might be feasible to use, in whole or in part, treasury shares, excluding shareholders’ subscription rights, instead of a capital increase to meet obligations under conversion and/or option rights or conversion obligations. The possibility to partially exclude shareholders’ subscription rights for the benefit of holders of bonds (including participation rights) that carry conversion or option rights or a conversion obligation enables the Company to offer shares instead of a reduction of the option or conversion price to such bond holders.

The acquired treasury shares may also be offered for sale to the employees of the Company or its Group companies. This may be an economically viable alternative to a capital increase. Offering shares to the employees is in the interests of the Company and its shareholders, because it enhances employee identification with the Company and encourages them to take responsibility for the Company. For treasury shares to be offered to employees, the shareholders’ subscription rights with regard to such shares must be excluded. In determining the price to be paid by the employees, a customary discount on offers of shares to employees may be granted. The authorization also provides the possibility to offer shares to employees without consideration. The treasury shares may also be transferred to a third party in charge of the administration of the employee stock participation program, if and as long it is legally guaranteed that the third party offers and transfers such shares to the aforementioned employees.

The Company may redeem treasury shares acquired on the basis of this authorization and previous authorizations without obtaining another resolution by the General Meeting. In principle, this leads to a decrease in the share capital. Alternatively, the Management Board is authorized to carry out the redemption without changing the share capital pursuant to § 237 (3) no. 3 AktG. In this case, the proportionate share in the share capital of the remaining shares pursuant to § 8 (3) AktG is increased.

The aforementioned possibilities of utilizing treasury shares also pertain to shares acquired (pursuant to § 71 (1) no. 8 AktG) on the basis of authorizations granted by previous General Meetings. This also applies to shares purchased by Group companies or pursuant to § 71d sentence 5 AktG.

The Management Board will report on the extent to which it has made use of the authorization at the respective next Annual General Meeting following such use.