Information on shareholder rights pursuant to sections 122 (2), 126 (1), 127, 131 (1) of the German Stock Corporation Act (Aktiengesetz – "AktG")
I. Requests for amendments to the agenda as per section 122 (2) of the AktG
Shareholders whose combined shareholdings amount to one-twentieth of the registered share capital, or a proportional amount of shares amounting to € 500,000.00 (rounded up, this equates to 166,667 shares), may request that certain items be included in the agenda and made public (section 122 (2) of the AktG). Each new item to be added must be accompanied by an explanation or a proposal. Applicants must prove that they have been holders of the relevant shares for a minimum of 90 days prior to the day the request is received and that they will continue to hold them until the Management Board has made a decision on their application. Evidence can be provided in form of a certificate issued by the custodian bank.
The application must be addressed in writing (section 126 of the German Civil Code (BGB)) or in electronic form, i.e. using the qualified electronic signature (section 126a of the German Civil Code (BGB)), to the Management Board of Aareal Bank AG and must be received by the Company no later than 22 April 2018 (24:00 hours CEST), at the following address:
Vorstand der Aareal Bank AG
65189 Wiesbaden, Germany
Unless already communicated at the date of convocation, amendments to the agenda requir-ing publication must be published, without undue delay following receipt, in the electronic German Federal Gazette (Bundesanzeiger) and in such other media that can be assumed to distribute information throughout the entire European Union. In addition, they are also pub-lished on the internet at www.aareal-bank.com (specifically: Investors / General Meeting 2018) and communicated to the shareholders.
Section 122 (1) and (2) of the AktG:
(1) The general meeting shall be called when shareholders whose combined shareholdings add up to a 20% share in the registered share capital submit a written request that the general meeting be called, stating the purpose of such meeting and the reasons for their request; said request must be addressed to the management board. The articles of association may require another form of request or make the right to request the calling of a general meeting dependent on a smaller share in the registered share capital. Applicants must prove that they have been holders of the shares for at least 90 days prior to the date of receipt of the request and that they hold the shares until the decision of the Board on the request. Section 121 paragraph 7 shall apply mutatis mutandis.
(2) Similarly, shareholders whose combined shareholdings add up to a 20% share in the registered share capital, or a proportional amount of shares amounting to €500,000, may request that certain items be included in the agenda and communicated. Each new item to be added must be accompanied by an explanation or a proposal. Any request within the meaning of sentence 1 must be received by the company no less than 24 days (30 days for stock exchange-listed companies) prior to the meeting; the day of receipt shall not be included in the calculation.
Section 121 (7) of the AktG:
Time limits or deadlines that are calculated backwards by the Annual General Meeting shall be calculated in a manner not reflecting the day of the meeting. A shift of a Sunday, Saturday or holiday to a temporally preceding or following working day is not to be taken into account. Sections 187 up to 193 of the German Civil Code (Bürgerliches Gesetzbuch - BGB) shall not apply accordingly. The articles of association may prescribe another calculation of the time limit.
II. Motions and nominations by shareholders under section 126 (1) and section 127 of the AktG
Shareholders may lodge counter-proposals to the proposals submitted by the Management Board and/or the Supervisory Board regarding agenda items, and submit nominations for the appointment of external auditors and Supervisory Board members. Any such counter-proposals must also state their reasons; nominations for elections do not require any sub-stantiation. Counter-proposals and nominations must be sent to the following address only:
Aareal Bank AG
CSEC- Board Office
Fax: +49 611 348-2965
Any counter-proposals and nominations received by the Company at the aforementioned address by no later than 8 May 2018 (24:00 hours CEST) will be made available on the Internet at (specifically: Investors / General Meeting 2018), including the shareholder's name and the reasons for the counter-proposal, taking the further stipulations set forth in sections 126 and 127 of the AktG into consideration. Any management statements will be published on the same website.
Section 126 of the AktG:
(1) Applications from shareholders, including the shareholder's name, the substantiation and any statement by the management, shall be made available to the entitled parties listed in section 125 (1) to (3), provided that the requirements stated therein are met, if the shareholder has forwarded a counter-proposal to a proposal of management board and supervisory board on a particular agenda item, including its substantiation, no less than 14 days prior to the Company's General Meeting to the address specified in the invitation for this purpose. The day of receipt shall not be included in the calculation of the deadline. For exchange-listed companies, the making available shall be effected via the company's website. Section 125 (3) shall apply mutatis mutandis.
(2) Counter-proposals and their substantiation do not need to be made available:
- where the management board would incur criminal liability by doing so;
- where the counter-proposal would result in the passing of a resolution by the gen-eral meeting that is in contravention of the law or the memorandum and articles of association;
- where material points of the substantiation contain manifestly incorrect or mis-leading information or insults;
- where a counter-proposal of the shareholder that is based on the same issue has already been made available to the company's general meeting pursuant to sec-tion 125;
- where the same counter-proposal of the shareholder, including essentially the same substantiation, was made available to at least two of the company's general meetings over the past five years pursuant to section 125 and less than 20 per cent of the registered share capital represented at the general meeting voted in favour of such counter-proposal;
- where the shareholder indicates that he does not wish to attend the general meet-ing in person or to be represented by a proxy; or
- where, at two general meetings during the past two years, the shareholder failed, in person or by proxy, to bring forward the counter-proposal previously communi-cated by him.
Substantiations do not need to be made accessible where they exceed 5,000 characters in total.
(3) Where several shareholders bring forward counter-proposals with regard to the same item to be resolved on, the management board may combine the counter-proposals and their substantiations.
Section 127 sentence 1 - 3 of the AktG:
Section 126 shall apply mutatis mutandis to shareholder's nominations of members to the supervisory board or external auditors. Such nominations do not require substantiation. Fur-thermore, the management board does not need to make said nomination accessible if such nomination does not include the information specified in section 124 (3) sentence 4 and sec-tion 125 (1) sentence 5.
Section 124 (3) sentence 4 of the AktG:
Nominations to the supervisory board or for external auditors shall contain name, occupation and domicile of the nominated person(s).
Section 125 (1) sentence 5 of the AktG:
For exchange-listed companies, any nomination for election to the supervisory board shall be accompanied by information on any offices held by the nominated person(s) on other statuto-ry supervisory boards as well as any offices held on similar governing bodies of commercial enterprises within Germany or abroad.
III: Right to disclosure pursuant to section 131 (1) of the AktG
At the Annual General Meeting, every shareholder or shareholder representative may request information from the Management Board regarding the Company's affairs, its legal and business relationships with affiliated companies and the situation of the Group and the com-panies within the Group's scope of consolidation, provided that such information is necessary to make a reasonable assessment of the relevant agenda item. Disclosure requests at Annual General Meetings must generally be made verbally during the debate.
Pursuant to Article 17(2) of the Company's Memorandum and Articles of Association, the Chairman of the General Meeting is authorised to set a reasonable time limit for shareholders exercising their right to speak or to ask questions. In particular, the Chairman is entitled to reasonably determine the timeframe for the proceedings and the debate on the agenda items as well as the individual enquiries and verbal contributions. The Chairman shall determine the order in which speakers take the floor and decide on any general restriction of the time allocated for making statements, the closing of the list of speakers and the closing of the discussion.
The Management Board may dispense with the answering of individual questions for the reasons listed in section 131 (3) AktG, for example if the making of such disclosure could, in accordance with prudent commercial judgement, have a serious adverse effect on the Com-pany or one of its affiliated companies (e.g. disclosure of business secrets) or the Manage-ment Board would incur criminal liability by answering such a question. Furthermore, the Management Board may also refuse to furnish information if the same information has been continuously available on the Company's website for a duration of no less than seven days prior to the commencement of the General Meeting as well as throughout the General Meet-ing.
Section 131 of the AktG:
(1) Every shareholder may request at the general meeting that the management board pro-vide information on company matters, provided that such information is necessary to make a reasonable assessment of the relevant agenda item. This disclosure obligation also relates to the company's legal and commercial relationships to its affiliated compa-nies. Where a company avails itself of the relief provided under section 266 (1) sentence 3, section 276 or section 288 of the German Commercial Code (Handelsgesetzbuch – "HGB"), every shareholder may request that, at the general meeting resolving on the annual financial statements, the annual financial statements be presented to him in the form they would have been presented the relief not had applied. The disclosure obliga-tion of the management board of the parent company (section 290 (1) and (2) of the HGB) at the annual general meeting, at which the consolidated financial statements and the group management report are presented, also extends to the situation of the group and the companies within the group's scope of consolidation.
(2) The information provided must comply with the principles of diligent and conscientious rendering of accounts. The chairperson of the meeting may be authorised by virtue of the company's articles of association, or by way of internal rules of procedure within the meaning of section 129, to set a reasonable time limit for shareholders exercising their right to speak or to ask questions; the articles of association or the internal rules of pro-cedure may contain further stipulations in this regard.
(3) The management board may refuse to disclose information:
- where the making of such a disclosure could, in accordance with prudent com-mercial judgement, have a serious adverse effect on the company or one of its af-filiated companies;
- where such disclosure relates to tax bases or the amount of specific taxes;
- regarding the difference between the carrying amount of items in the annual bal-ance sheet and the actual higher value of such items, unless the general meeting adopts the financial statements;
- regarding accounting policies, provided that the specification of these policies in the notes is sufficient to present a true and fair view of the company's net assets, financial position and results of operations within the meaning of section 264 (2) of the HGB; this does not apply if the general meeting adopts the annual financial statements;
- where the management board would incur criminal liability by making the re-quested disclosure;
- where, with regard to a bank or financial services provider, no information is re-quired as to the accounting policies used or any offsetting entries in the annual fi-nancial statements, management report, consolidated financial statements or the group management report;
- where the requested information has been continuously available on the compa-ny's website for a duration of no less than seven days prior to the commencement of the general meeting.
Disclosure cannot be refused for other reasons.
(4) Where a shareholder has been given information outside the general meeting, in its/his/her capacity as a shareholder, this information must be given to any other share-holder at the general meeting, upon such shareholder's request, even if such information is not necessary to make a reasonable assessment of the relevant agenda item. The management board cannot refuse the disclosure of any such information by invoking the provisions of paragraph (3) sentence 1 nos. 1 to 4. Sentences 1 and 2 do not apply where a subsidiary (section 290 (1) and (2) of the HGB), a joint venture (section 310 (1) of the HGB) or an associate (section 311 (1) of the HGB) makes such disclosure to the parent company (section 290 (1) and (2) of the HGB) for the purpose of inclusion into the parent company's consolidated financial statement, and such disclosure is required for this purpose.
(5) Where a shareholder is refused information, said shareholder may request that its/his/her query and the reason for the refusal are recorded in the minutes of the meeting.
Article 17(2) of the Memorandum and Articles of Association reads:
The Chairman shall preside over the proceedings and determine the order of agenda items and the order and manner of ballots. The Chairman may set reasonable time limits for shareholders exercising their right to speak or to ask questions. In particular, the Chairman shall be entitled to reasonably determine the timeframe for the proceedings and the debate on the agenda items as well as the individual inquiries and verbal contributions. The Chairman shall determine the order in which speakers take the floor and decide on any general restriction of the time allocated for making statements, the closing of the list of speakers and the closing of the discussion.