ANNUAL REPORT 2006
Insurance | Asset Management | Banking
Shareholder Company Success Factors Business Development Consolidated Financial Statements

Statements in accordance with Section 315 Paragraph 4 of the German Commercial Code and Explanations


The share capital of Allianz SE was € 1,106,304,000 as of December 31, 2006; it was divided into 432,150,000 registered no-par value shares. All shares carry the same rights and obligations. Each no-par value share grants one vote. Each shareholder’s share in the Company’s profit is determined in proportion to the share in the share capital held by it (Section 60 German Stock Corporation Act (Aktiengesetz, AktG)). Pursuant to Article 3 Paragraph 1 of the Statutes, shareholders shall not have the right to receive share certificates.

Shares may only be transferred with the consent of the Company. Pursuant to Article 2 Paragraph 2 of the Statutes, the Company will withhold a duly applied approval only, if it deems this to be necessary in the interest of the Company on exceptional grounds. The applicant will be informed about the reasons.

Under German stock corporation law in case of registered shares only those persons who appear in the share register are deemed by the company to be shareholders. This is particularly important for such things as taking part in general meetings and making use of voting rights. Appearing in the share register also facilitates direct communications with the shareholders. In this way, for instance, all shareholders can be personally invited to attend general meetings. The restriction on share transferability goes right back to the creation of Allianz in 1890. This practice is widespread in the insurance industry in Germany. In accordance with the Statutes, the company will only withhold the approval necessary for transfer of shares when this is for extraordinary reasons and is considered to be in the interest of the company. For several decades no such case has occurred. With the standardization of share transfer processes, the restriction on share transferability does not cause any delay in the registration in the share register and does not impede in any way the quotation of the shares on stock exchanges.


Shares acquired by employees of the Allianz Group as part of the employee share purchase program are in principle subject to a one-year lock-up period; outside Germany, the lock-up period may in some cases be up to five years for tax reasons. In some countries the employee shares are held throughout the lock-up period by a bank or other natural person or legal entity as trustee, in order to ensure that the lock-up period is observed. Nevertheless, employees may instruct the trustee on exercising voting rights, or have power-of-attorney granted to them to exercise such voting rights. Providing lock-up periods contributes to the employee share purchase programs’ purpose to commit employees to the company and let them participate in the performance of the stock price.

Direct or indirect interests in the share capital of Allianz SE that exceed 10% of the voting rights have not been reported to Allianz SE, nor is it otherwise aware of any such interests.

The members of the Board of Management of Allianz SE are appointed by the Supervisory Board for a maximum term of five years (Article 9 Paragraph 1, Article 39 Paragraph 2 and Article 46 SE Regulation, Sections 84, 85 AktG, Section 5 Paragraph 3 of the Statutes). Reappointments, in each case for a maximum of five years, are permitted. The members of the Board of Management may be dismissed by the Supervisory Board if there is an important reason (Section 84 AktG). If a required member of the Board of Management is absent, in urgent cases the court must appoint the member upon the application of an involved party, by virtue of Section 85 AktG. With respect to the appointment, it is essential to ensure in particular that the members of the Board of Management are suited to managing an insurance company in terms of reliability and professional competence (Sections 121a, 7a German Insurance Supervision Act (Versicherungsaufsichtsgesetz, VAG)). The intention of appointing a member to the Board of Management must be notified to the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) (Sections 121a, 13 d No. 1 VAG).

Amendments to the Statutes must be resolved upon by the General Meeting. In the case of an SE, the resolution amending the Statutes must be passed with a majority of at least two thirds of the votes cast, unless the laws and regulations in the SE’s country of domicile provide for or permit a greater majority (Article 59 Paragraph 1 SE Regulation). Any Member State may stipulate, however, that a simple majority of votes is sufficient, provided at least half of the share capital is represented (Article 59 Paragraph 2 SE Regulation). German legislation has made use of this in Section 51 Sentence 1 SE Implementation Act (SE-Ausführungsgesetz), pursuant to which the Statutes may stipulate that, a simple majority of votes is sufficient for the resolution of the General Meeting amending the Statutes, provided at least half of the share capital is represented. This does not apply to a change in the corporate object, relocation of the registered office to another Member State and to cases in which a higher majority is mandatory by law (Section 51 Sentence 2 SE Implementation Act). Accordingly, Article 13 Paragraph 4 Sentence 2 of the Statutes of Allianz SE stipulates that, unless this conflicts with mandatory legal provision, changes of the Statutes require a majority of two thirds of the votes cast, or, as the case may be, if at least half of the share capital is represented, a simple majority of the votes cast. The Supervisory Board may alter the wording of the Statutes (Section 179 Paragraph 1 Sentence 2 AktG and Article 10 of the Statutes).

The Board of Management has the following authority to issue shares:


The Board of Management has the authority to buy back Allianz shares on the basis of the authorization of the Extraordinary General Meeting of February 8, 2006 to acquire treasury shares for other purposes (Section 71 Paragraph 1 No. 8 AktG). On that basis, the Company is authorized, on or before August 7, 2007, to acquire treasury shares; together with other treasury shares that are in the possession of Allianz SE or which are attributable to it under Sections 71a et sequ. AktG, such shares may not exceed 10% of the share capital at any time. The shares acquired according to this authorization may be used, under exclusion of subscription rights, for any legally admissible purposes and in particular those specified in the authorization. There is also an authorization to acquire treasury shares for the purposes of securities trading (Section 71 Paragraph 1 No. 7 AktG).

The authority explained in the management report to buy back or make use of treasury shares or issue convertible bonds or bonds with warrants or issue new shares out of authorized capital enables the Management Board to raise capital swiftly and flexibly taking advantage of attractive financing opportunities as and when they arise on the markets and, for example, offer Allianz stock as consideration when making acquisitions of participations. Furthermore Allianz stock can be offered to employees of the Allianz Group. The authority to deal in own stock for trading purposes is especially useful for Dresdner Bank giving it the possibility to deal in Allianz stock.

The section below describes the agreements entered into by Allianz SE which contain provisions or conditions for the event of a change of control.

Under the terms and conditions of the participation certificates issued by Allianz SE, the participation certificate holders are entitled to call for redemption of the participation certificates and to demand payment of a redemption amount per participation certificate of 122.9% of the average official price (Einheitskurs) of the Allianz share on the Munich Stock Exchange for the last three months prior to termination of the participation certificate relationship, if an enterprise acquires a majority shareholding in Allianz SE. These rules correspond to usual market practice and protect in an adequate way the interests of holders of participation certificates.

The reinsurance agreement with Münchener Rückversicherungsgesellschaft AG provides for an extraordinary termination right if the ownership structure or control of Allianz SE should change substantially. The provision accounts for the fact that in case of a change in control the conditions on which the contractual relation is based can materially change.

The service contracts of the members of the Allianz SE Board of Management contain a “change-of-control” clause. If, within twelve months after acquisition of more than 50% of the 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, the mandate is ended by mutual agreement, or the mandate is ended by the Management Board member through resigning his office because the responsibilities as a board member are significantly reduced without the board member’s fault, the member of the Board of Management member shall receive his contractual remuneration for the remaining term of the service contract in the form of a one-off payment. To the extent the remaining term of the service contract is less than three years, the one-off payment is generally increased with regard to fixed remuneration and the annual bonus in line with a term of three years. This applies accordingly if a board mandate that is coming to an end and is not extended within two years of a change of control. Please refer to the Remuneration Report for further details.

The Group Equity Incentive (GEI) scheme also contains provisions in respect of a change of control. Under this scheme, Stock Appreciation Rights (SAR) and Restricted Stock Units (RSU) are granted as a stock-based remuneration component worldwide to senior management of the Allianz Group (please see also pages 213 to 219, you find them in the PDF file "Other information", which you can download on page Notes to the Consolidated Financial Statements). SARs are virtual options on Allianz shares; they obligate the Allianz Group to pay in cash the excess of the market price of the Allianz share over the reference price on the exercise date. They vest after two years. If a majority of the voting share capital in Allianz SE is acquired, directly or indirectly, by one or more third parties who do not belong to the Allianz Group, in derogation of the above, however, the SARs shall be exercised, pursuant to the general conditions for the SAR, by the Company for the relevant plan participants without observing any vesting period.

RSUs are virtual Allianz shares which obligate the Allianz Group to pay in cash an amount corresponding to the average market price for Allianz shares in the ten trading days preceding the vesting date, or to issue one Allianz share, or other equivalent equity instrument, for each RSU granted. RSUs vest after five years and are exercised by the Allianz Group on the first trading day after their vesting date. If a majority of the voting capital in Allianz SE is acquired, directly or indirectly, by one or more third parties who do not belong to the Allianz Group, the RSUs shall be exercised, pursuant to the general conditions for the RSUs, by the Company for the relevant plan participants without observing any vesting period. In providing for the non application, in the event of a change of control, of any limitation on the period for exercising rights under such plans, account is taken of the fact that the conditions under which the share price moves are very different when there is a change in control.
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