These documents can be inspected as components of the annual reports of the Munich Reinsurance Company and the Munich Re Group at the Company's head office at Königinstrasse 107, 80802 München, and on the internet at www.munichre.com/AGM2003. They will be sent to shareholders on request.
The Supervisory Board and the Board of Management propose that the balance sheet
profit of €1,303,081,179.47 be utilised as follows:
Payment of a dividend of €1.25
per share entitled to dividend | €222,913,645.00 |
| Allocation to the revenue reserves | €1,079,747,070.72 |
| Carried forward to new account | €420,463.75 |
| Balance sheet profit | €1,303,081,179.47 |
The proposal for the appropriation of the profit takes into account own shares held directly or indirectly by the Company, which under Section 71b of the German Stock Companies Act are not entitled to dividend. Up to the Annual General Meeting the number of shares entitled to dividend may decrease or increase through the further acquisition or sale of own shares. In this case, an
appropriately modified proposal for the appropriation of the profit, with an unchanged dividend of €1.25 per share entitled to dividend, will be made to the Annual General Meeting.
The Supervisory Board and the Board of Management propose that approval for the Board of Management's actions be given.
The Supervisory Board and the Board of Management propose that approval for
the Supervisory Board's actions be given.
With effect from 6 December 2002, Dr. jur. Rolf-E. Breuer and Dr. jur.
Henning Schulte-Noelle left the Supervisory Board; as their successors on the
Supervisory Board, the Munich Registration Court appointed Professor Dr. rer.
nat. Hubert Markl and Mr. Wolfgang Mayrhuber. The Supervisory Board proposes
that these appointments be ratified by the AGM and that
Professor Dr. rer. nat. Hubert Markl, Constance
Professor of Biology at
the University of Constance,
and
Wolfgang Mayrhuber, Hamburg,
Deputy Chairman of the Board of Management of
Deutsche Lufthansa AG,
be elected to the Supervisory Board as representatives of the shareholders
for the remainder of the original term of office of Dr. jur. Rolf-E. Breuer and
Dr. jur. Henning Schulte-Noelle, i.e. until the end of the AGM in 2004.
The Supervisory Board also proposes that
Dr. jur. Fedor Nierhaus, Munich,
Former Member of the Board of Management
of Munich Reinsurance Company,
and
Hans Rathnow, Munich,
Former Member of the Board of Management of Munich
Reinsurance Company,
be elected as substitute members for Professor Dr. rer. nat. Markl and Mr.
Mayerhuber.
They will become members of the Supervisory Board in the above order if one
of the above representatives of the shareholders proposed for election to the
Supervisory Board retires from the Board before the end of his term of office
and the AGM does not elect a successor prior to his retirement. The above two
gentlemen will become substitute members again in the same order if they cease
to be members of the Supervisory Board before the end of the term of office of
the Supervisory Board members they have replaced.
In accordance with the German Stock Companies Act (Section 96 para. 1 and
Section 101 para. 1) in conjunction with the German Co-Determination Act of 1976
(Section 7 para. 1 sentence 2 in conjunction with sentence 1 item 3) the
Supervisory Board is composed of ten members elected by the shareholders at the
AGM and ten members elected by the employees. The AGM is not obliged to follow
election proposals.
The authorisation granted to the Board of Management by the AGM on 17 July
2002 to buy back shares in accordance with Section 71 para. 1 item 8 of the
German Stock Companies Act expires on 17 January 2004 and therefore needs to be
renewed.
The Supervisory Board and the Board of Management propose that the following
resolution be adopted:
a) The Company shall be authorised to buy back its own shares up to a
total amount of 10% of the current share capital. The authorisation may be
exercised as a whole or in part amounts, on one or more occasions and for one or
more purposes by the Company, but also by dependent Group companies or
enterprises in which the Company has a majority shareholding, or by third
parties for its or their account. The shares acquired plus other own shares in
the possession of the Company or attributable to the Company in accordance with
Sections 71a ff. of the German Stock Companies Act shall at no time amount to
more than 10% of the share capital. The authorisation may not be used for
trading in own shares.
The authorisation shall run until 11 December 2004. The share buy-back
authorisation granted by the AGM on 17 July 2002 shall be cancelled as from the
moment this new authorisation comes into effect.
b) In accordance with the requirement of equal treatment (Section 53a
of the German Stock Companies Act), the shares will be acquired by the Board of
Management aa) via the stock exchange or bb) via a public purchase offer to all
shareholders or via a public invitation to tender such an offer, or cc) via a
public offer to all shareholders to exchange Munich Re shares for shares in
another listed company as defined in Section 3 para. 2 of the German Stock
Companies Act or via a public invitation to tender such an offer. In the event
of bb) and cc), the provisions of the German Securities Acquisition and Takeover
Act shall be observed where applicable.
aa) If the shares are acquired via the stock exchange, the purchase
price (excluding incidental expenses) may not exceed or undercut by more than
10% the price determined for Company shares with the same securities reference
number in the opening auction in Xetra trading (or a comparable successor
system) on the Frankfurt stock exchange.
bb) If the shares are acquired via a public purchase offer or a public
invitation to tender such an offer, the purchase price per share or the upper
and lower limits of the price range (excluding incidental expenses) may not
exceed or undercut by more than 20% the mean price for Company shares with the
same securities reference number in the closing auction in Xetra trading (or a
comparable successor system) on the Frankfurt stock exchange on the third
trading day before the date on which the offer is published. If after a public
purchase offer or a public invitation to tender such an offer there are
significant deviations in the relevant share price, the offer or the invitation
to tender such an offer may be adjusted. In this case the basis for the
adjustment will be the mean price in the closing auction on the third trading
day before the date of the public announcement of the adjustment. The volume may
be restricted. If the offer is then oversubscribed or, in the case of an
invitation to tender such an offer, not all equivalent offers can be accepted,
acceptance shall be based on quotas. For this, the Company may provide for
preferred acceptance of small lots of shares (up to 100 shares tendered per
shareholder). The purchase offer or the invitation to tender such an offer may
provide for other conditions.
cc) In the case of a public offer to exchange, or a public invitation
to tender an offer to exchange, Munich Re shares for shares in another listed
company ("exchange shares") as defined in Section 3 para. 2 of the German Stock
Companies Act, a certain exchange ratio may be specified or also determined by
way of an auction procedure. A cash benefit may also be provided for as an
additional payment to the exchange offered or as compensation for any fractional
shares. In each of these procedures for the exchange of shares, the exchange
price or the applicable upper and lower limits of the price range in the form of
one or more exchange shares and calculated fractional amounts, including any
cash or fractional amounts (excluding incidental expenses), may not exceed or
undercut by more than 20% the relevant value of Munich Re shares.
The basis for calculating the relevant value of each Munich Re share and of
each exchange share shall be the respective mean price in the closing auction in
Xetra trading (or a comparable successor system) on the Frankfurt stock exchange
on the third trading day before the date on which the exchange offer or the
invitation to tender such an offer is published. If the exchange shares are not
traded in the Xetra trading system on the Frankfurt stock exchange, the basis
will be the closing prices quoted on the stock exchange having the highest
average trading volume in respect of the exchange shares in the course of the
preceding calendar year. If after a public exchange offer or a public invitation
to tender such an offer there are significant deviations in the relevant share
price, the offer or the invitation to tender such an offer may be adjusted. In
this case the basis for the adjustment will be the mean price in the respective
closing auctions on the third trading day before the date of the public
announcement of the adjustment. The volume may be restricted. If the exchange
offer is then oversubscribed or, in the case of an invitation to tender an
exchange offer, not all of several equivalent offers are accepted, acceptance
shall be based on quotas. For this, the Company may provide for preferred
acceptance of small lots of shares (up to 100 shares tendered per shareholder).
The exchange offer or the invitation to tender such an offer may provide for
other conditions.
c) The Board of Management shall be empowered to use shares acquired
on the basis of the aforementioned authorisation for all legally admissible
purposes, and in particular as follows:
aa) They may be used for launching the Company's shares on foreign
stock exchanges where they are not yet listed.
bb) They may be sold in return for non-cash payment, in particular as
part of offers to third parties in connection with mergers, acquisitions of
companies or parts of companies, shareholdings or assets connected with such
investments. Selling in this connection may also include the granting of
conversion or subscription rights or of warrants and the transferring of shares
in conjunction with securities lending.
cc) They may be sold to third parties for cash other than via the
stock exchange or via an offer to all shareholders.
dd) They may be offered for subscription to the holders of conversion
rights or warrants issued by the Company or one of its dependent Group
companies.
ee) They may be offered as employee shares to staff of the Company or
of enterprises affiliated with the Company within the meaning of Sections 15 ff.
of the German Stock Companies Act.
ff) They may be partially or wholly retired without a further
resolution of the AGM being required.
d) The price at which the shares are launched on other stock exchanges
in accordance with item c) aa) or sold in accordance with item c) cc) may not
significantly undercut the stock price determined for Company shares with the
same securities number in the opening auction in Xetra trading (or a comparable
successor system) on the Frankfurt stock exchange (excluding incidental costs)
on the day the shares are launched or the binding agreement with the third party
is concluded. In addition, in these cases the sum of the shares to be sold,
together with any shares that may be issued or sold by excluding the
shareholders' subscription rights pursuant to Section 186 para. 3 sentence 4 of
the German Stock Companies Act, may not exceed a total of 10% of the share
capital at the time the shares are issued or sold.
e) The authorisations in accordance with item c) above may be utilised
one or more times, partially or wholly, individually or jointly; the
authorisations in accordance with item c) bb), cc), dd) or ee) may also be
utilised by dependent Group companies or enterprises in which the Company has a
majority shareholding, or utilised for its or their account by third parties.
The authorisations shall also include the use of shares of the Company acquired
on the basis of earlier authorisations in accordance with Section 71 para. 1
item 8 of the German Stock Companies Act and – with the exception of item c) ff)
above – the use of shares acquired in accordance with Section 71d sentence 5 of
the German Stock Companies Act.
f) Shareholders' subscription rights in respect of these bought-back
shares shall be excluded insofar as the shares are used in accordance with the
aforementioned authorisations in items c) aa), bb), cc), dd) or ee). Beyond
this, if bought-back shares are sold via an offer to the shareholders, the Board
of Management shall be entitled to exclude shareholders' subscription rights
insofar as this is necessary to grant pre-emptive rights to the bearers of
Company or Group-company convertible bonds or bonds with warrants to the extent
to which such bearers would be entitled as shareholders after exercising their
warrants or after the conversion requirements from such bonds have been
satisfied.
The authorisation to issue warrants granted at the AGM of 3 December 1993 has
expired and, apart from a residual amount of €6,945.28, Contingent Capital
Increase 1993 created for this purpose has been exhausted by the issues in the
years 1994 and 1998. Contingent Capital Increase 1993 is therefore to be
cancelled. The authorisation to issue warrants granted at the AGM of 5 November
1998 expires on 5 November 2003 and is also to be cancelled, together with
Contingent Capital Increase 1998 created for that purpose. A new authorisation
to issue warrants and a Contingent Capital Increase 2003 I are to be
created.
The Supervisory Board and the Board of Management therefore propose the
following:
a) Cancellation of Contingent Capital Increase 1993
The existing Contingent Capital Increase 1993 still remaining shall be
cancelled.
b) Cancellation of the authorisation of 5 November 1998 and Contingent
Capital Increase 1998
The authorisation to issue warrants granted by the AGM of the Munich
Reinsurance Company on 5 November 1998 under agenda item 11, due to expire on 5
November 2003, and the remaining Contingent Capital Increase 1998 created for
this purpose, amounting to €15,360,000, shall be cancelled.
The cancellation of the aforementioned authorisation and of the Contingent
Capital Increase 1998 shall become effective as soon as the new authorisation to
issue warrants has been granted in accordance with the resolution on c) and
Contingent Capital Increase 2003 I has been created in accordance with the
proposed resolutions on d) and e).
c) Authorisation to issue warrants
In the event of a capital increase at any time up to 11 June 2008 from the
capital authorised for this purpose, the Board of Management shall be empowered,
with the consent of the Supervisory Board, to attach one bearer warrant to each
of the new shares to which the shareholders have a subscription right when the
capital authorised for this purpose is utilised. These warrants shall entitle
the bearer, on the basis of the warrant conditions then stipulated, to acquire
registered Munich Re shares. At least two, and a maximum of ten, warrants will
entitle the bearer to subscribe for one further share.
Exercise periods of up to six years may be fixed for the warrants. Warrants
may be issued for registered shares totalling up to €35 million of the share
capital.
The warrant exercise price for one Munich Re registered share shall be fixed
in euros. It shall correspond to the average of the mean price in the closing
auction of Xetra trading (or a comparable successor system) on the Frankfurt
stock exchange for Munich Re registered shares on the ten trading days prior to
the date of the Board of Management's resolution to issue the warrants. A
discount of up to 25% of the average market price may be applied.
The respective warrant exercise price shall be reduced on the basis of a
clause safeguarding against dilution of stock in the event that during the term
of the warrants the Munich Reinsurance Company, granting its shareholders
subscription rights, either increases its capital or creates conversion rights
or warrants. No reduction will be granted on warrant exercise prices if the
bearers of the warrants are granted a subscription right.
The Board of Management shall be authorised to decide on the further details
of the bearer warrants issue.
d) Creation of a Contingent Capital Increase 2003 I
To safeguard the warrants described under c), the Company's share capital
shall be conditionally increased by up to €35 million through the issue of
registered no-par-value shares (Contingent Capital Increase 2003 I). The
contingent capital increase shall be carried out only to the extent that bearers
of warrants attached to shares issued from capital authorised for this purpose,
on the basis of the authorisation granted to the Board of Management on 11 June
2003, exercise these warrants. The new shares shall be entitled to dividend from
the beginning of the business year in which they come into being through the
exercise of warrants.
The Board of Management shall be authorised to decide on the further details
of the contingent capital increase.
e) Amendment to the Articles of Association
In Article 4 of the Articles of Association, paragraphs 3 (Contingent Capital
Increase 1993) and 4 (Contingent Capital Increase 1998) shall be deleted and
replaced by the following new paragraph 3:
"(3) A contingent increase in the share capital by an amount of 35 million
euros, consisting of registered shares, has been authorised. This increase in
the share capital shall be carried out only to the extent that bearers of
warrants attached to shares issued from capital authorised for this purpose, on
the basis of the authorisation granted to the Board of Management on 11 June
2003, exercise these warrants. The new shares shall be entitled to dividend from
the beginning of the business year in which they come into being through the
exercise of warrants. The Board of Management shall be authorised to decide on
the further details of the contingent capital increase (Contingent Capital
Increase 2003 I)."
By resolution of the AGM of 17 July 2002, under agenda item 8, the Board of
Management was authorised to issue convertible bonds and/or bonds with warrants,
subject to the consent of the Supervisory Board. With a view to expanding the
authorisation and adjusting the contingent capital, the proposal is to grant a
new authorisation to issue convertible bonds and/or bonds with warrants, and a
new contingent capital (Contingent Capital Increase 2003 II). As soon as this
resolution becomes effective, the previous authorisation and Contingent Capital
Increase 2002 related thereto will be cancelled.
The Supervisory Board and the Board of Management propose that the following
resolutions be adopted:
a) Cancellation of the authorisation of 17 July 2002
The authorisation granted by the AGM on 17 July 2002 concerning the issue of
convertible bonds and/or bonds with warrants, and the Contingent Capital
Increase 2002 amounting to €30 million, shall be cancelled.
The cancellation of the authorisation and the contingent capital shall not
become effective until the authorisation proposed under the resolution on b) and
the new contingent capital proposed under the resolution on c) have been
adopted.
b) Authorisation
aa) Period of authorisation, nominal amount, maturity period, number
of shares
The Board of Management shall be authorised, with the consent of the
Supervisory Board, to issue convertible bonds or bonds with warrants (referred
to in the following as "bonds") on one or more occasions up to 11 June 2008 for
a maximum nominal amount of €3 billion with a maturity period of up to 20 years
or to guarantee on behalf of the Company the redemption of such bonds issued by
a dependent Group company, and to grant the bearers or creditors of such bonds
subscription rights in respect of new shares issued by the Company up to a
maximum amount of €100 million of the share capital, in accordance with the
respective bond conditions (referred to in the following as "conditions").
The bonds may be denominated in the legal currency of another OECD country as
well as in euros, provided the equivalent amounts to those stated above in euros
are not exceeded. They may also be issued by Group companies.
Bonds may also be issued against non-cash payment insofar as the value of the
non-cash payment accords with the issue price and the latter does not
significantly undercut the bond's market value determined in accordance with
item bb) (1) of this resolution.
bb) Subscription rights, exclusion of subscription rights
Shareholders shall generally be granted a pre-emptive right to subscribe for
the bonds. The bonds may also be underwritten by a banking syndicate subject to
the obligation that it offers these to the shareholders for subscription.
However, the Board of Management is authorised, with the consent of the
Supervisory Board, to exclude the shareholders' subscription rights in the
following cases:
(1) if the bonds are issued against cash and the issue price is not
significantly below the bonds' theoretical market value determined according to
recognised principles of financial mathematics. However, this shall apply only
to the extent that the shares issued to cover the related conversion rights
and/or warrants do not represent more than 10% of the share capital, either with
respect to the date on which the authorisation becomes effective or the date on
which such authorisation is exercised. This amount includes the share capital
apportionable to shares issued or sold by excluding subscription rights pursuant
to Section 186 para. 3 sentence 4 of the German Stock Companies Act;
(2) for fractional amounts resulting from a particular subscription
ratio;
(3) insofar as it is necessary to grant the bearers of warrants or conversion
rights in respect of shares of the Company pre-emptive rights to subscribe for
new shares to the extent to which they would be entitled as shareholders after
exercising their warrants or after the conversion requirements of such bonds
have been satisfied; or
(4) insofar as bonds are to be issued against non-cash payment and the
exclusion of subscription rights is in the interests of the Company.
cc) Conversion right, conversion obligation
In the event of a convertible bonds issue, the bearers obtain the right to
convert their bonds into Munich Re shares in accordance with the bond
conditions. The proportional amount of share capital represented by the shares
to be issued as a result of the conversion may not exceed the nominal amount of
the convertible bond. The conversion ratio is determined by dividing the nominal
amount of one convertible bond by the conversion price fixed for obtaining one
Munich Re share. The conversion ratio may also be determined by dividing a
convertible bond issue price that lies below the nominal amount by the
conversion price fixed for obtaining one Munich Re share. The conversion ratio
may be rounded off to an even amount. In addition, a supplementary cash payment
may be specified. Furthermore, the conditions may provide for fractional amounts
to be combined or compensated for in cash.
The bond conditions may also provide for a conversion obligation at the end
of the term (or at an earlier juncture). In this case the Company shall be
entitled to compensate fully or partially in cash any difference between the
nominal amount of the convertible bonds and a share price at the time of the
bond issue specified in the bond conditions – as described under e) – multiplied
by the conversion ratio.
dd) Warrants
In the event of a warrants issue, one or more warrants will be attached to
each bond which entitle the bearer to subscribe for Munich Re shares in
accordance with the warrant conditions. The proportional amount of the share
capital to be subscribed for per bond may not exceed the nominal value of the
bond.
ee) Exercise or conversion price, protection against dilution
The exercise or conversion price fixed in each case must be at least 80% of
the average market price of Company shares in the closing auction in Xetra
trading (or a comparable successor system) on the Frankfurt Stock Exchange on
the ten trading days prior to the decision of the Board of Management to issue
the bonds or during the days on which the subscription rights are traded on the
Frankfurt stock exchange, with the exception of the last two trading days for
the subscription rights.
Notwithstanding Section 9 para. 1 of the German Stock Companies Act, the
exercise or conversion price thus fixed shall be reduced on the basis of a
clause in the bond conditions safeguarding against the dilution of stock in the
event that during the exercise period of the conversion rights or warrants the
Company, whilst granting its shareholders subscription rights, either increases
its capital or issues further bonds and does not grant the holders of conversion
rights and/or warrants pre-emptive rights to the extent to which they would have
been entitled after exercising the conversion or subscription rights. The bond
conditions may also provide for the conversion rights and/or warrants to be
adjusted in the case of other measures of the Company that might lead to a
dilution in the value of the conversion rights and/or warrants.
The proportional amount of the share capital to be subscribed for per bond
may on no account exceed the nominal value of the bond.
ff) Further modalities
Subject to compliance with the above conditions, the Board of Management
shall be authorised to determine all further details of the issue and terms of
the bonds or to establish these in agreement with the executive bodies of the
Group companies issuing the bonds, particularly the interest rate, the issue
price, the maturity period and denomination, agreement of subordination compared
with other liabilities, subscription or conversion ratio (e.g. depending on the
performance of the share price during the term, either a variable conversion
ratio or a conversion ratio based on a bond issue price lower than the nominal
value), fixing of an additional cash payment, compensation for or combination of
fractional amounts, cash payment instead of delivery in shares, the amount of
the exercise or conversion price, and the exercise or conversion period.
c) Contingent capital increase
The share capital shall be conditionally increased by up to €100 million
through the issue of registered no-par-value shares entitled to dividend from
the beginning of the business year in which they are issued. This contingent
capital increase is for granting shares to the holders or creditors of
convertible bonds or bonds with warrants issued by the Company or by a dependent
Group company up to 11 June 2008 under the aforementioned authorisation of 11
June 2003, insofar as the issue is against cash payment. The new shares shall be
issued at the exercise and conversion price fixed in accordance with the
criteria of the aforementioned authorisation. The increase in the share capital
shall be carried out only to the extent that warrants or conversion rights from
the bonds are exercised or conversion requirements from such bonds are
satisfied. The Board of Management shall be authorised to decide on the further
details of the contingent capital increase (Contingent Capital Increase 2003
II).
b) Amendments to the Articles of Association
aa) Article 4 paragraph 5 of the current Articles of Association
(Contingent Capital Increase 2002) shall be replaced by the following new
paragraph 4:
"(4) A contingent increase in the share capital by a further amount of 100
million euros, consisting of registered no-par-value shares entitled to dividend
from the beginning of the business year in which they are issued, has been
authorised. This contingent capital increase is for granting shares to the
holders or creditors of convertible bonds or bonds with warrants issued by the
Company or by a dependent Group company up to 11 June 2008 under the
authorisation of the Annual General Meeting of 11 June 2003, insofar as the
issue is against cash payment. The increase in the share capital shall be
carried out only to the extent that warrants or conversion rights from the bonds
are exercised or conversion requirements from such bonds are satisfied. The
Board of Management shall be authorised to decide on the further details of the
contingent capital increase (Contingent Capital Increase 2003 II)."
bb) The current paragraph 6 in Article 4 of the Articles of
Association shall become paragraph 5.
The Supervisory Board and the Board of Management propose that the Articles
of Association be amended as follows:
a) The AGM is to be given the possibility to elect representatives of
the shareholders to the Supervisory Board for a shorter term than the period of
around five years that has been the rule hitherto.
The Supervisory Board and the Board of Management propose that the following
sentence 3 be added to Article 10 para. 2 of the Articles of Association:
"When electing members to represent the shareholders, the General Meeting may
decide that their term of office shall be shorter."
Article 10 para. 2 of the Articles of Association currently reads as
follows:
"Their term of office shall end on the date of the ordinary General Meeting
which resolves whether to approve the actions of the Supervisory Board during
the fourth business year after the commencement of their term of office, not
counting the business year in which the term commences."
b) The German Code of Corporate Governance recommends that the
remuneration of Supervisory Board members should take account of the duties of
chairmanship and membership of Supervisory Board committees.
The Supervisory Board and the Board of Management therefore propose that the
provision in Article 15 of the Articles of Association regarding the
remuneration of Supervisory Board members be reworded as follows:
"(1) Each member of the Supervisory Board shall receive an annual
remuneration of 25,000 euros, which shall be increased by 250 euros for every
cent by which the dividend per share exceeds the amount of 15 cents. The
Chairman of the Supervisory Board shall be entitled to twice, and each of the
Deputy Chairmen to one-and-a-half times, this remuneration.
(2) Each member of a committee shall receive an additional amount equivalent
to 25%, and the chairman of a committee an additional amount equivalent to 50%,
of the remuneration provided for under paragraph 1 sentence 1. This shall not
apply to the chairman and members of the Conference Committee set up in
accordance with Section 27 para. 3 of the German Co-Determination Act.
(3) The members of the Audit Committee shall receive an attendance fee of
2,000 euros for each meeting of the Committee they attend which does not take
place on the same day as a Supervisory Board meeting.
(4) The total annual remuneration of the Chairman of the Supervisory Board in
accordance with paragraphs 1 to 3 shall be limited to three times, and that of
each of the Deputy Chairmen to two-and-a-half times, the amount payable under
paragraph 1 sentence 1.
(5) The Company shall reimburse the members of the Supervisory Board for
their expenses and for turnover taxes.
(6) Supervisory Board members who have only served on the Supervisory Board
or one of its committees for part of the business year shall be remunerated on a
pro rata basis.
(7) This provision shall apply for the first time to the remuneration payable
for the business year 2003."
The current wording of Article 15 of the Articles of Association is as
follows:
"Apart from the reimbursement of their expenses, the members of the
Supervisory Board shall receive a fixed annual remuneration of 25,000 euros,
which shall be increased by 250 euros for every cent by which the dividend per
share exceeds the amount of 15 cents. The Chairman of the Supervisory Board
shall be entitled to twice, and each of the Deputy Chairmen to one-and-a-half
times, this remuneration. Turnover taxes due on this remuneration shall be
reimbursed to the Supervisory Board members. This provision shall supersede the
previous provision pertaining to the calculation of the remuneration, commencing
with the remuneration payable for the business year 1999."
c) As the result of an amendment to Section 58 para. 5 of the German
Stock Companies Act through the German Transparency and Public Disclosure Act,
the AGM may also resolve that dividends be distributed in kind if such
distribution is provided for in the Articles of Association. The Company is to
be granted such an option and the article regarding the appropriation of profit
amended accordingly.
The Supervisory Board and the Board of Management therefore propose that the
following sentence 2 be added to Article 20 of the Articles of Association:
"The distribution may be a dividend in kind instead of, or in addition to, a
cash dividend."
The current wording of Article 20 of the Articles of Association is as
follows:
"The balance sheet profit shall be at the disposal of the General Meeting,
which shall determine the dividend to be paid to the shareholders."
The Munich Reinsurance Company has transferred shareholdings which it
previously held directly in other companies to wholly owned subsidiaries, listed
below under a) to p). The company listed under q) mainly manages real estate
belonging to the Munich Reinsurance Company. Profit-transfer agreements have
been concluded with these companies.
The Supervisory Board and the Board of Management propose that these
profit-transfer agreements between the Munich Reinsurance Company and the
companies listed below ("companies") be approved:
a) MR Beteiligungen 1. GmbH
Profit-transfer agreement of 19 November
2002;
b) MR Beteiligungen 2. GmbH
Profit-transfer agreement of 19 November
2002;
c) MR Beteiligungen 3. GmbH
Profit-transfer agreement of 19 November
2002;
d) MR Beteiligungen 4. GmbH
Profit-transfer agreement of 19 November
2002;
e) MR Beteiligungen 5. GmbH
Profit-transfer agreement of 19 November
2002;
f) MR Beteiligungen 6. GmbH
Profit-transfer agreement of 19 November
2002;
g) MR Beteiligungen 7. GmbH
Profit-transfer agreement of 19 November
2002;
h) MR Beteiligungen 8. GmbH
Profit-transfer agreement of 19 November
2002;
i) MR Beteiligungen 9. GmbH
Profit-transfer agreement of 19 November
2002;
j) MR Beteiligungen 10. GmbH
Profit-transfer agreement of 20 December
2002;
k) MR Beteiligungen 11. GmbH
Profit-transfer agreement of 11 April
2003;
l) MR Beteiligungen 12. GmbH
Profit-transfer agreement of 19 November
2002;
m) MR Beteiligungen 13. GmbH
Profit-transfer agreement of 20 December
2002;
n) MR Beteiligungen 14. GmbH
Profit-transfer agreement of 19 November
2002;
o) MR Beteiligungen 15. GmbH
Profit-transfer agreement of 19 November
2002;
p) MR Beteiligungen 16. GmbH
Profit-transfer agreement of 19 November
2002;
q) Akademie Schloss Hohenkammer GmbH
Profit-transfer agreement of 11 April
2003.
The Munich Reinsurance Company is the sole shareholder in the case of all the
companies listed. The main points of the agreements are as follows:
— The companies are obliged to transfer their total profit for the year to
the Munich Reinsurance Company.
— The companies may establish revenue reserves from their net income to that
extent that this is economically justified, based on reasonable and prudent
business judgement.
— The Munich Reinsurance Company is obliged to compensate any annual net
losses of the companies in accordance with Section 302 of the German Stock
Companies Act insofar as such net losses are not offset by withdrawing amounts
from the revenue reserves allocated during the term of the agreement.
— The agreements with the companies – except for those listed under j), k),
m) and q) – are valid for a term of five years, commencing with the business
year 2002. The agreements with the companies listed under j), k), m) and q) are
valid initially for a term of five years with retroactive effect from 1 January
2003. All agreements are automatically renewed for a further year if they are
not terminated by either party with a period of notice of six months to the end
of the business year.
The following documents are available for inspection by the shareholders at
the head office of the Munich Reinsurance Company at Königinstrasse 107, 80802
München, and on the business premises of the respective companies:
— the respective profit-transfer agreement;
— the respective joint report of the Board of Management of the Munich
Reinsurance Company and the management of the respective company;
— annual financial statements and management reports of the Munich
Reinsurance Company for the business years 2000, 2001 and 2002;
— for Akademie Schloss Hohenkammer GmbH additionally:
· the annual financial statements for the three business years 2000, 2001 and
2002;
— for the companies listed under a) to p) additionally:
· respective annual financial statements for their only business year so far,
namely 2002.
Shareholders will be sent a copy of the above documents free of charge on
request. The documents will be open to inspection during the Munich Reinsurance
Company's AGM as well and can also be viewed on the internet at
www.munichre.com/AGM2003.
Preconditions for attending the Annual General Meeting
Every shareholder may attend the Annual General Meeting in person or be
represented by a proxy, provided the shareholder has given notice of his or her
intention to participate to the Board of Management of the Company not later
than Wednesday, 4 June 2003, and is entered in the register of shareholders. The
shares entered in the register of shareholders on 4 June 2003 shall be material
for establishing the right to participate and voting rights. All shareholders
who have fulfilled these conditions will receive an admission card for the AGM,
which they should bring with them to the meeting.
As a special service, we are again offering our shareholders the opportunity
to be represented at the AGM – in accordance with their instructions – by one of
the proxies nominated by the Company. The proxies may be appointed in writing by
means of the form sent to shareholders, or via the internet. They will exercise
the voting rights solely in accordance with the instructions they receive from
the shareholders.
Shareholders may also exercise their voting rights through a proxy, a bank or
a shareholders' association. In these cases the proxies must give due notice of
their intention to attend or arrange for the shareholders to give such notice
for them. If neither a bank nor a shareholders' association is authorised in
this way, authorisation should be granted in writing, by fax using number +49
(0) 89/ 38 91-92 16, or our via the internet at www.munichre.com/AGM2003. If a
bank is entered in the shareholders' register, it may only exercise the voting
rights for shares that it does not own if it has an authorisation to do so from
the shareholders concerned.
Shareholders may again use the internet (www.munichre.com/AGM2003) to order
admission cards or to appoint proxies nominated by the Company.
Transmission of the AGM on the internet
We are again offering shareholders the chance to follow the whole AGM live on
the internet (also at www.munichre.com/AGM2003). To do so, they will need their
shareholder number and the relevant AGM access code. This and other information
for registering, issuing proxies and following the AGM on the internet will be
sent by post to all shareholders entered in our shareholders' register. The
report of the Chairman of the Board of Management can be publicly viewed live on
the internet (www.munichre.com/AGM2003) and will be available after the AGM as a
recording. There will be no recording of the whole live transmission.
Enquiries or motions from shareholders
Enquiries from shareholders regarding the AGM should be sent to the following
address only:
Münchener Rückversicherungs-Gesellschaft
ZA/G — Aktienregister
80791
München
Germany
(Fax: +49(0)89/3891-9216)
or by e-mail to shareholder@munichre.com
This is also the address to which motions and any election proposals from
shareholders must be sent; motions and election proposals sent to other
addresses cannot be considered. Any countermotions or election proposals that
reach us by 24.00 hrs on 27 May 2003 will be published on the internet at
www.munichre.com/AGM2003; the German Stock Companies Act no longer provides for
this information to be mailed to all shareholders in printed form. Any comments
by the Supervisory Board and the Board of Management on such proposals will also
be published at the above-mentioned internet address.
Munich, 30 April 2003
The Board of Management
For the Annual General Meeting on 11 June 2003
Report of the Board of Management on the exclusion of subscription rights
proposed under items 6 and 8 of the agenda (in accordance with Section 186 para.
4 sentence 2 in conjunction with Sections 71 para. 1 item 8 and 221 para. 4 of
the German Stock Companies Act)
1) Re item 6 on the agenda
At past AGMs, resolutions were adopted authorising the Company to buy back
and sell its own shares. The latest of these authorisations is due to expire on
17 January 2004. The proposed resolution is designed to replace the current
authorisation granted by the AGM on 17 July 2002. It will enable the Company or
dependent Group companies, or enterprises in which the Company has a majority
shareholding, or third parties acting for its or their account, to buy back
shares up to a total amount of 10% of the Company's current share capital.
For this purpose, the Company is to be enabled to buy back shares not only
via the stock exchange but also through a public offer to shareholders of the
Company or through a public invitation to tender such an offer. The Company is
also to be given the possibility to offer not only cash but also shares in other
listed companies by way of exchange, which for shareholders can be an attractive
alternative to a public purchase offer. It gives the Company additional options
for optimally structuring share buy-backs, which is also in the interests of the
shareholders. In this regard, a specific exchange ratio is to be determined,
which may be supplemented by a cash benefit as an add itional payment to the
exchange offered or as compensation for any fractional shares.
Shares which the Company buys back may be sold again via the stock exchange
or a public offer to all shareholders. This takes account of the legal
requirement of equal treatment (Section 53a of the German Stock Companies
Act).
Besides this, the Company may also limit the shareholders' subscription
rights and, pursuant to Section 186 para. 3 sentence 4 of the German Stock
Companies Act, may sell the Company's own shares to institutional investors, for
example, or launch the shares on foreign stock exchanges. This is in the
interest of the Company and puts it in a position to react quickly and flexibly
to favourable stock market situations. The shares may only be sold at a price
which does not significantly undercut the current stock market price. The Board
of Management will endeavour – taking into account current market circumstances
– to keep any discount on the stock market price as low as possible. The Board
of Management will only avail itself of the authorisation to exclude
subscription rights in the sale of own shares, pursuant to Section 186 para. 3
sentence 4 of the German Stock Companies Act, insofar as together with existing
authorisations to issue shares from capital approved for this purpose, excluding
shareholders' subscription rights, or as a result of an issue of convertible
bonds or bonds with warrants, the limit provided for under Section 186 para. 3
sentence 4 of the German Stock Companies Act – namely 10% of the Company's share
capital – is not exceeded.
The authorisation also gives the Company the option of having own shares
available to offer as a consideration in connection with mergers, acquisitions
of companies or the purchase of shareholdings. International competition and the
globalisation of the economy increasingly require this type of acquisition
financing. The proposed authorisation is intended to give the Company the
necessary scope to take quick and flexible advantage of opportunities that arise
for acquiring companies or shareholdings. This is reflected in the proposed
exclusion of subscription rights. In determining the valuation ratios, the Board
of Management will ensure the interests of the shareholders are appropriately
considered. As a rule, when measuring the value of the shares offered as a
consideration, it will take as a basis the stock market price of Munich Re
shares. However, a systematic coupling of the valuation to a stock market price
is not provided for, in particular to prevent fluctuations in the share price
from jeopardising negotiation outcomes once they have been reached. The Company
currently also has Authorised Capital Increase 2002 available for the
acquisition of companies or shareholdings. The type of share procurement used to
finance such transactions will be decided on by the Board of Management, with
the consent of the Supervisory Board, its decision being guided by the interests
of the Company.
The Company will have the possibility to issue convertible bonds or bonds
with warrants against both cash and non-cash payment. To service these bonds, it
may be expedient to use own shares in part or in full, instead of a capital
increase. This is also provided for in the authorisation, with an exclusion of
shareholders' subscription rights to this extent.
Finally, the authorisation allows the possibility, in the event of own shares
being sold by means of an offer to all shareholders, for shareholders'
subscription rights to be partially excluded in favour of the holders of
convertible bonds or bonds with warrants. This enables the holders of
convertible bonds or bonds with warrants to be granted a subscription right as
protection against dilution, instead of a reduction of the exercise or
conversion price.
In addition, the Company is to be enabled to issue employee shares to staff
of the Company or of its affiliated enterprises.
The authorisation regarding the uses to which own shares may be put is to
apply not only in respect of shares acquired on the basis of this resolution.
Rather, the authorisation is also to include shares acquired on the basis of the
authorisations adopted by earlier AGMs pursuant to Section 71 para. 1 item 8 and
Section 71d sentence 5 of the German Stock Companies Act. It is advantageous for
the Company and creates further flexibility to be able to use these own shares
in the same way as those acquired on the basis of the above resolution.
Own shares acquired on the basis of this resolution and earlier resolutions
may be retired without requiring a new resolution of the AGM. This shall not
apply to shares acquired on the basis of Section 71d sentence 5 of the German
Stock Companies Act.
If the authorisation is utilised, the Board of Management will inform
shareholders about the details at the next AGM following the utilisation.
2) Re item 8 on the agenda
We are proposing that the AGM grant a new authorisation and a new contingent
capital for issuing convertible bonds or bonds with warrants, with the
authorisation framework for warrants and/or bonds with warrants remaining the
same at €3 billion and the contingent capital serving to safeguard the exercise
and conversion rights being increased from €30 million to €100 million. The
existing authorisation, due to expire on 17 July 2007, and the existing
contingent capital for this purpose, are to be cancelled.
Appropriate capitalisation is an essential basis for a company's development.
One financing instrument that may be used for this purpose is issuing
convertible bonds or bonds with warrants which raise outside capital for the
Company at a favourable interest rate. The premiums received on the conversion
rights or warrants accrue to the benefit of the Company. To give the Company the
continued necessary flexibility in procuring capital for investments, we are
proposing a new authorisation.
Authorisation is to be granted to issue bonds with a total value of up to €3
billion. To service them, shares totalling up to €100 million of the share
capital are to be made available.
Our shareholders are generally to be granted a subscription right in respect
of these bonds. This gives them the chance to invest their capital in the
Company and at the same time to maintain their participation quota. However, as
hitherto, pursuant to Section 186 para. 3 sentence 4 of the German Stock
Companies Act, the Board of Management is to be authorised, with the consent of
the Supervisory Board, to exclude shareholders' subscription rights if the issue
price for the bonds is not significantly lower than their market price. This
exclusion of subscription rights is necessary if a bond is to be placed quickly
in order to exploit a favourable market situation. Due regard is given to the
interests of shareholders through the fixing of the issue price at a level not
significantly lower than the market price, so that the value of a subscription
right would be practically zero. This possibility is restricted to bonds
carrying subscription rights for shares amounting to a maximum of 10% of the
share capital, both at the time the authorisation becomes effective and at the
time it is utilised. This 10% includes shares issued or sold by excluding
subscription rights pursuant to Section 186 para. 3 sentence 4 of the German
Stock Companies Act. Through this limitation, account is taken of shareholders'
need for protection against dilution of their stock.
In addition, subscription rights are to be excluded in respect of fractional
amounts or to satisfy the subscription rights of holders of previously issued
bonds. The exclusion of subscription rights for fractional amounts is expedient
and customary, since the costs of handling subscription rights for fractional
amounts are out of all proportion to the gain for shareholders. It is also
customary in the market to give the holders of bonds a subscription right for
future bond issues, so that bonds with conversion rights and warrants can be
placed more easily. Shareholders' subscription rights have to be excluded for
both purposes.
The Board of Management is also to have the possibility of excluding
subscription rights in issues of bonds against non-cash payment. This will only
happen if the value of the non-cash payment corresponds to the issue price of
the bond and is not significantly lower than the bond's market value, determined
according to recognised methods of financial mathematics. The issue of bonds
against non-cash payment is intended, in particular, to give us the opportunity
to use such bonds in connection with the acquisition of companies, parts of
companies, shareholdings or assets connected with such investments. The Company
wants to continue to have the chance to strengthen its competitiveness and to
increase its earnings power through such acquisitions. Often considerations for
these may be or need to be of a non-cash nature. Frequently sellers insist on
receiving a consideration in another form. An attractive alternative here can be
to offer convertible bonds or bonds with warrants instead of, or in addition to,
shares or cash. This option creates additional flexibility and increases the
Company's competitive chances in acquisitions. The Board of Management will
examine carefully in each case whether the acquisition and the issuing of bonds
against non-cash payment is in the interests of the Company. Only then will it
exclude the shareholders' subscription rights.
The exercising of conversion rights and warrants resulting from such bonds
issued against non-cash payment cannot be satisfied from the contingent capital,
but requires access to own shares or a non-cash capital increase. For this,
Authorised Capital Increase 2002 will be available.
Munich, 30 April 2003
The Board of Management
Information in accordance with Section 128 para. 2 sentences 6 to 8 of the
German Stock Companies Act:
1 Members of the Boards of Management of banks or employees of banks who hold
seats on the Munich Reinsurance Company's Supervisory Board:
Dr. jur. Albrecht Schmidt,
Chairman of the Supervisory Board of Bayerische
Hypo- und Vereinsbank AG
2 Banks on whose Supervisory Boards members of the Munich Reinsurance
Company's Board of Management or employees hold seats:
Bayerische Hypo- und Vereinsbank AG, Munich
3 Banks in which the Munich Reinsurance Company has a shareholding notifiable
under Section 21 of the German Securities Trading Act:
Bayerische Hypo- und Vereinsbank AG, Munich
Dresdner Bank AG,
Frankfurt
4 Banks which were members of a syndicate responsible for handling the most
recent issue of the Company's securities in the past five years:
Deutsche Bank AG London
UBS Limited
Bayerische Hypo- und Vereinsbank
AG
Re item 5 on the agenda:
Elections to the Supervisory Board
1 Re the Supervisory Board's proposal that the following gentlemen be elected
to the Supervisory Board as representatives of the shareholders:
a) Professor Dr. rer. nat. Hubert Markl
born in Regensburg on 17
August 1938
Degree in biology, chemistry and geography
Former President of the Max Planck Society
Professor of Biology at the University of Constance
Seats held on supervisory boards of other German companies:
Bayerische
Motoren Werke AG
Membership of comparable bodies of German and foreign business
enterprises:
Aventis S.A., Schiltigheim
Royal Dutch Petroleum Company/Shell, The
Hague
Appointed to the Munich Re Supervisory Board by resolution of the Munich
Registration Court with effect from 13 December 2002.
b) Wolfgang Mayrhuber
born in Waizenkirchen, Austria, on 22 March
1947
Degree in mechanical engineering
Deputy Chairman of the Board of Management of Deutsche Lufthansa AG and
Chairman of the Board of Management of Passage Airlines
Seats held on supervisory boards of other German companies:
Eurowings
Luftverkehrs AG
RWE Systems AG
Lufthansa CityLine GmbH* (Chairman)
*Own group companies.
Membership of comparable bodies of German and
foreign business enterprises:
HEICO Corporation, Miami
Ameco Corporation,
Beijing*
Appointed to the Munich Re Supervisory Board by resolution of the Munich
Registration Court with effect from 13 December 2002.
2 Re the Supervisory Board's proposal that the following gentlemen be elected
as substitute members for the representatives of the shareholders:
a) Dr. jur. Fedor Nierhaus
born in Dortmund on 28 March 1936
Degree in law
Former Member of the Board of Management of the Munich Reinsurance
Company
Seats held on supervisory boards of other German companies:
Membership of comparable bodies of German and foreign business
enterprises:
b) Hans Rathnow
born in Berlin on 30 December 1934
Degree in business management
Former Member of the Board of Management of the Munich Reinsurance
Company
Seats held on supervisory boards of other German companies:
Membership of comparable bodies of German and foreign business
enterprises:
*Own group companies.