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Allianz Annual Report 2012

Annual Report 2012    Allianz Group 73 Essential agreements of ­Allianz SE with change of control clauses and compensation agreements providing for takeover scenarios The following essential agreements of the Company are subject to a change of control condition following a take- over bid: −− Our reinsurance contracts in principle include a provi- sion under which both parties to the contract have an extraordinary termination right in the case where the other party to the contract merges or its ownership or control situation changes materially. Agreements with brokers regarding services connected with the purchase of reinsurance cover also provide for termination rights in case of a change of control. Such clauses are standard market practice. −− The 10-year exclusive bancassurance distribution agree- ment between ­Allianz and HSBC for life insurance prod- ucts in Asia (China, Indonesia, Malaysia, Australia, Sri Lanka, Taiwan, Brunei, Philippines), includes a provi- sion under which both parties have an extraordinary termination right in case there is a change of control of the other party’s ultimate holding company. −− Bilateral credit agreements in some cases provide for termination rights if there is a change of control, mostly defined as the acquisition of at least 30 % of the voting rights within the meaning of § 29 (2) of the German Take- over Act (“Wertpapiererwerbs- und Übernahmegesetz”, WpÜG). If such termination rights are exercised, the respective credit lines have to be replaced by new credit lines under conditions then applicable. TheCompanyhasenteredintothefollowingcompensation agreements with members of the Board of Management and employees providing for the event of a takeover bid: A change of control clause in the service contracts of the members of ­Allianz SE’s Board of Management provides that, if within 12 months after the acquisition of more than 50 % of the Company’s share capital by one shareholder or several shareholders acting in concert (change of control), the appointment as a member of the Board of Management is revoked unilaterally by the Supervisory Board, or if the mandate is ended by mutual agreement, or if the Manage- ment Board member resigns his or her office because the responsibilitiesasaBoardmemberaresignificantlyreduced through no fault of the Board member, he or she shall ­receive his or her contractual remuneration for the remain- ingtermoftheservicecontract,butlimited,forthepurpose hereof, to three years, in the form of a one-off payment. The one-off payment is based on the fixed remuneration plus 50 % of the variable remuneration, however, this basis being limited to the amount paid for the last fiscal year. To the extent that the remaining term of the service contract is less than three years, the one-off payment is generally ­increased in line with a term of three years. This applies accordingly if, within two years of a change of control, a mandate in the Board of Management is coming to an end and is not extended; the one-off payment will then be granted for the period between the end of the mandate and the end of the three-year period after the change of control. For further details, please refer to the Remuneration Report starting on page 74. Under the ­Allianz Sustained Performance Plan (ASPP), ­RestrictedStockUnits(RSU)–i.e.virtual­Allianzshares–are granted as a stock-based remuneration component to ­senior management of the ­Allianz Group worldwide. In ­addition, under the Group Equity Incentive (GEI) scheme, Stock Appreciation Rights (SAR) – i.e. virtual options on ­Allianz shares – were also granted until 2010. Some of these are still outstanding. The conditions for these RSU and SAR contain change of control clauses which apply if a majority of the voting share capital in ­Allianz SE is acquired, directly or indirectly, by one or more third parties which do not ­belong to the ­Allianz Group and which provide for an ­exception from the usual exercise periods. The RSU will be exercised, in line with their general conditions, by the Com- pany for the relevant plan participants on the day of the change of control without observing any vesting period that would otherwise apply. The cash amount payable per RSU must be at least the price offered per ­Allianz share in­ a preceding tender offer. In case of a change of control as described above, SAR will be exercised, in line with their general conditions, by the Company for the relevant plan participants on the day of the change of control without observing any vesting period. By providing for the non-­ application of the blocking period in the event of a change of control, the terms take into account the fact that the ­conditions under which the share price moves are very ­different when there is a change in control.   74  Remuneration Report B Corporate Governance 63 Corporate Governance Report 69 Statement on Corporate Management pursuant to § 289a of the HGB 71 Takeover-related Statements and Explanations 74 Remuneration Report

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