Global Corporate Governance Guidelines Capital Management and will be analysed in light of our criteria AllianzGI will support private Corporate Finance issues for share issuance authorities. placements and issuances of warrants and/or convertible debentures in a AllianzGI believes that proposed AllianzGI will vote case-by-case on the private placement, if it is expected dividend payments should be conversion of securities taking into that the company will file for disclosed in advance to shareholders consideration the dilution to existing bankruptcy if the transaction is not and be put to a vote. Shareholders shareholders, the conversion price approved. should also be able to approve the relative to market value, financial company’s financial statements and issues, control issues, termination Shareholder Rights its dividend policy. penalties, and conflicts of interest. AllianzGI will support the conversion if AllianzGI considers the ability to call a AllianzGI would normally only support it is expected that the company will be special meeting or to put resolutions scrip dividend proposals that allow for subject to onerous penalties or will be to a shareholder meeting’s agenda to a cash option to offer investors a forced to file for bankruptcy if the be a fundamental shareholder right. choice. In such instances, we expect transaction is not approved. We encourage companies to establish companies to offset dilution caused by thresholds for shareholder resolutions scrip dividend through share AllianzGI will consider proposals that are high enough to prevent buybacks. We are generally not regarding private placements, abuse, but low enough to allow issues supportive of scrip dividends where warrants, and convertible debentures that concern a large number of scrip is offered at a discount to the on a case-by-case basis, taking into smaller shareholders being raised in cash option. consideration: shareholder meetings. This can be – Dilution to existing shareholders; achieved if the threshold is set by a AllianzGI will approve share – Terms of the offer (discount/ reference to either a shareholding repurchase programs where these are premium in purchase price to requirement or the size of a proponent deemed in the best interests of investors, including any fairness group. shareholders, all shareholders can opinion, conversion features, participate in the buyback termination penalties, exit strategy); Shareholders should be able to programme on equal terms and – Financial issues (the company’s nominate candidates for the board of AllianzGI agrees that the company financial condition, degree of need directors. AllianzGI supports proxy cannot use the cash in a more for capital, use of proceeds, effect access proposals with reasonable productive way. AllianzGI will also of the financing on the company’s ownership threshold and duration view such programs in conjunction cost of capital, current and requirements that do not impose limits with the company’s capital allocation proposed cash burn rate, going on the number of shareholders in a policy. concern viability, and the state of nomination group or set an the capital and credit markets); unreasonably low cap on the AllianzGI will vote in favour of share – Management’s efforts to pursue proportion of shareholder nominees repurchase authorities in excess of alternatives and whether the on the board. 10% of the issued share capital only if company engaged in a process to the company provides clear and evaluate alternatives; AllianzGI believes that companies convincing justification for the – Control issues (potential change in should enable holders of a specified proposal. AllianzGI believes that share management/board composition, portion (eg, 5-25%) of its outstanding buybacks at a significant premium to change in control, standstill shares or a specified number of the market price can be value provisions, voting agreements, veto shareholders to call a meeting of destructive and are generally not in power over certain corporate shareholders for the purpose of the interests of shareholders. We will actions, and minority versus transacting the legitimate business of not support share repurchase majority ownership and the company. Shareholders should be authorities where these can be used corresponding minority discount or enabled to work together to make as a takeover defence mechanism. majority control premium); such a proposal. Shareholders should – Conflicts of interest (as viewed from be able to exercise both rights to call AllianzGI is in favour of debt issuance the perspective of the company and special meetings and act by written proposals that enhance companies’ the investor), considering whether consent. long-term prospects and do not result the terms of the transaction were in unacceptable levels of financial negotiated at arm’s length, and AllianzGI does not support proposals leverage. AllianzGI agrees that whether managerial incentives are that can facilitate a concert party investors should be consulted on aligned with shareholder interests; gaining or increasing control of the significant issuances of debt and and company without paying an proposals to raise borrowing limits. – Market reaction to the proposed appropriate premium to minority Any proposal to issue convertible debt deal. shareholders. 14