Agenda Annual General Meeting 2000

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Annual General Meeting 2000

Agenda Annual General Meeting 2000

01 Submission of the approved company financial statements and management report for the business year 1999, the consolidated financial statements and management report for the Group for the business year 1999, and the report of the Supervisory Board

02 Resolution on the appropriation of the balance sheet profit from the business year 1999

The Supervisory Board and the Board of Management propose that the balance sheet profit of 168,073,787.20 euros be utilized for the payment of a dividend of 0.95 euros on each share entitled to dividend.

03 Resolution to approve the actions of the Board of Management in respect of the business year 1999

The Supervisory Board and the Board of Management propose that approval for the Board of Management's actions be given.

04 Resolution to approve the actions of the Supervisory Board in respect of the business year 1999

The Supervisory Board and the Board of Management propose that approval for the Supervisory Board's actions be given.

05 Resolution to cancel the existing authorization for increasing the share capital under Authorized Capital Increase I and replace this with a new amount, with corresponding amendment of the Articles of Association

Following its partial utilization in 1998, the amount authorized by the AGM on 8 December 1995 as Authorized Capital Increase I now totals 109,927,754.46 euros, with this authorization due to expire on 8 December 2000. So that the company can continue to use this instrument in the coming years to strengthen its shareholders' equity when necessary, the Supervisory Board and the Board of Management propose that the following resolution be adopted:

a) The authorization in accordance with Article 4 para. 1 of the Articles of Association to increase the company's share capital at any time up to 8 December 2000 in one or more stages by a nominal amount of up to 109,927,754.46 euros by issuing new shares against cash contribution (Authorized Capital Increase I) shall be cancelled.

A new amount of 120,000,000 euros shall be authorized for increasing the company's share capital as Authorized Capital Increase I. The Board of Management shall be entitled, subject to the consent of the Supervisory Board, to exclude fractional amounts from subscription rights and also to exclude subscription rights insofar as this is necessary to grant the bearers of warrants issued by Munich Re subscription rights to the extent to which they would be entitled as shareholders after exercising their warrants.

b) Article 4 para. 1 of the Articles of Association shall be reworded as follows:

"(1) The Board of Management is authorized, with the consent of the Supervisory Board, to increase the Company's share capital at any time up to 19 July 2005 in one or more stages by a nominal amount of up to 120,000,000 euros by issuing new shares against cash contribution (Authorized Capital Increase I). The Board of Management is entitled, with the consent of the Supervisory Board, to exclude fractional amounts from the pre-emptive subscription rights and also to exclude pre-emptive subscription rights insofar as this is necessary to grant the bearers of warrants issued by the Münchener Rückversicherungs-Gesellschaft pre-emptive rights to the extent to which they would be entitled as shareholders after exercising their warrants.

The Board of Management, with the consent of the Supervisory Board, shall determine all other details of the shares and the terms of issue."

06 Authorization to buy back shares

Article 71 para. 1 item 8 of the German Stock Companies Act gives stock companies the option of buying back their own shares – subject to prior authorization from the AGM – up to a total amount of 10% of their share capital. Most of the large public companies have this flexible instrument at their disposal. In the interests of the company and its shareholders, Munich Re wishes to have this option as well. The authorization for such a share buy-back is limited to a period of 18 months.

The Supervisory Board and the Board of Management propose that the following resolution be adopted:

In accordance with Article 71 para. 1 item 8 of the German Stock Companies Act, the company shall be authorized to buy back its own shares up to a total amount of 10% of the current share capital. The shares may be acquired via the stock exchange or via a public tender offer to all the shareholders. In the case of acquisition 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). In the case of a public tender offer, the purchase price offered or the limits of the price spread offered per share (excluding incidental expenses) may not exceed or undercut by more than 15% 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 second to fourth trading days before the date on which the offer is published. If the offer is oversubscribed, acceptance shall be based on quotas. For this, the company may provide for preferred acceptance of small numbers of shares up to 100 shares tendered per shareholder.

The authorization to buy back shares shall run until 19 January 2002. It may be exercised as a whole or in part amounts and for one or more purposes. The authorization may not be used by the company for trading in its own shares.

With the consent of the Supervisory Board, the shares acquired on the basis of this authorization may

a) be sold other than via the stock exchange or via an offer to all shareholders,

b) be used for the launching of the company's shares on foreign stock exchanges where they are not listed,

c) be offered in connection with mergers, acquisitions of companies or the purchase of shareholdings,

d) be partially or wholly withdrawn without a further resolution of the AGM being required.

Shareholders' subscription rights in respect of these bought-back shares shall be excluded insofar as the shares are used in accordance with the aforementioned authorizations a), b) or c).

The price at which the shares are sold in accordance with authorization a) or launched on other stock exchanges in accordance with b) may not significantly undercut the stock market price (excluding incidental costs) of company shares with the same securities reference number at the time of sale. In addition, in these cases the sum of the shares to be sold, together with any shares that may be issued in accordance with Article 186 para. 3 sentence 4 of the German Stock Companies Act on the basis of an authorization to increase the capital with exclusion of subscription rights or on the basis of bonds with conversion rights or warrants issued with exclusion of shareholders' subscription rights, may not exceed a total of 10% of the share capital at the time the shares are sold or issued.

The authorizations to sell bought-back shares may be utilized one or more times, partially or wholly, individually or jointly.

07 Resolution to amend the Articles of Association in order to facilitate the exercising of voting rights and to make further adjustments in view of the German bill on registered shares and facilitation of the exercising of voting rights (NaStraG)

The proposed German law on registered shares and facilitation of the exercising of voting rights (NaStraG) provides for changes in German stock company law which will make it easier for shareholders to exercise voting rights at annual general meetings. Thus, in future, proxies for the exercising of voting rights granted to banks and shareholders' associations will no longer have to be given in the traditional written form. This facilitation will apply to other proxies as well if the company's bylaws contain an appropriate provision. So that we can take advantage of this facilitation for next year's AGM after the new law has come into force, the following amendments to the Articles of Association are now being proposed. The amendments will permit proxies also to be given by fax or electronically to a representative nominated by the company.

In addition, the Articles of Association are to be adjusted to the changes also provided for in NaStraG regarding the deadline for notifying attendance at the AGM. In fact, the provision in Article 7 of the Articles of Association regarding the convening of the AGM could be amended on the basis of existing statutory regulations. Article 7 will in future provide for the aforementioned facilitation of the exercising of voting rights.

The Supervisory Board and the Board of Management therefore propose that the following resolution be adopted:

a) The Articles of Association shall be amended as follows:

– Article 6 para. 1 sentence 1 shall be reworded to read:

"(1) Every shareholder may attend the General Meeting in person or be represented by a proxy provided that he or she

1. has given notice of his or her intention to participate to the Board of Management of the Company not later than the last day of the legal notification period, unless the Board of Management has stipulated a later closing date for notification, and

2. is entered in the Company's register of shareholders."

– In Article 6 para. 1, the following sentence 2 shall be inserted after sentence 1:

"The closing date for notifying the Company of the intention to participate shall be announced when the invitation to the General Meeting is published in the publication specified in the Articles of Association."

– In Article 6 para. 1, the current sentences 2, 3 and 4 shall become sentences 3, 4 and 5.

 

– Article 7 shall be reworded as follows:

"If representatives are nominated by the company to exercise the voting rights, the proxy may be given by fax or electronically as specified in more detail by the Company. The individual information necessary for granting these proxies shall be published together with the invitation to the General Meeting in the publication specified in the Articles of Association."

b) The Board of Management shall be instructed to file the aforementioned amendments of the Articles of Association for entry in the commercial register as soon as a change in the German Stock Companies Act has come into force that permits these amendments to be entered as a whole.

Preconditions for attending the Annual General Meeting

Every shareholder may attend the General Meeting in person or be represented by a proxy appointed in writing, provided the shareholder has given notice of his or her intention to participate to the Board of Management of the Company not later than Friday, 14 July 2000, and is entered in the register of shareholders. For administrative reasons, the shares entered in the register of shareholders on 9 June 2000 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 Annual General Meeting, which they should bring with them to the Meeting.

Munich, 6 June 2000

The Board of Management

For the AGM on 19 July 2000

Report of the Board of Management on the exclusions of subscription rights as proposed under items 5 and 6 of the agenda (Article 186 para. 4 sentence 2 in conjunction with Articles 71 para. 1 item 8 and 203 para. 2 sentence 2 of the German Stock Companies Act)

1) Re item 5 on the agenda

 

The new Authorized Capital Increase I again provides for the possibility of excluding fractional amounts from subscription rights. These are the amounts which, after application of the subscription ratio to a round amount of capital being issued, remain as no longer proportionately distributable to all shareholders. The shares resulting from such fractional amounts will be placed at a market-commensurate price.

In the event of a rights issue, the bearers of Munich Re warrants are entitled under the customary anti-dilution clause to a reduction in the warrant exercise price by the value of the subscription right, if they are not granted such a subscription right. The authorization to exclude pre-emptive subscription rights therefore makes it possible to grant the bearers of warrants a subscription right equivalent to the shareholders' subscription right instead

The subscription price will be fixed so that, taking into account the respective capital market situation, due regard is given to the interests of both shareholders and the company.

2) Re item 6 on the agenda

 

The authorization proposed in agenda item 6 is intended to enable the Board of Management, in the interests of the company and its shareholders, to buy back shares via the stock exchange or a public tender offer up to a total amount of 10% of the current share capital.

In the case of a public tender offer, each shareholder can decide how many shares he or she wants to tender and, if a price spread is stipulated, at what price. If the number of shares tendered at the fixed price exceeds the maximum amount required by the company, an allocation procedure will be necessary. For this, we want to provide for the preferred acceptance of small tenders or small portions of tenders up to a maximum of 100 shares, so that fractional and small residual amounts can be avoided in fixing the quotas to be acquired and administration can be facilitated.

Shares which the company buys back may be sold again via the stock exchange or a public offer to all shareholders. With these sale possibilities, we have safeguarded the shareholders' right to equal treatment in the reissue of shares.

Besides this, the company may also limit the shareholders' pre-emptive rights and sell the bought-back shares not via the stock exchange and without a public offer to all shareholders, in accordance with Article 71 para. 1 item 8 pursuant to Article 186 of the Stock Companies Act.

The authorization proposed envisages that in application of Article 186 para. 3 sentence 4 of the Stock Companies Act the Board of Management may, subject to the consent of the Supervisory Board, 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 principle of protecting shareholders against dilution of their stock is taken into account through the fact that shares may only be sold at a price which does not significantly undercut the current stock market price. The final fixing of the sales price for own shares will be done just before the sale. 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 discount may on no account exceed 5%.

The Board of Management will only avail itself of the authorization to exclude subscription rights in the sale of own shares, based on Article 186 para. 3 sentence 4 of the Stock Companies Act, insofar as together with existing authorizations to issue shares from capital approved for this purpose or as a result of an issue of bonds with conversion rights or warrants, the limit provided for under Article 186 para. 3 sentence 4 of the Stock Companies Act – namely 10% of the company's share capital – is not exceeded.

The authorization also gives Munich Re the possibility 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 globalization of the economy increasingly require this type of acquisition financing. The authorization proposed 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 pre-emptive 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 jeopardizing negotiation outcomes once they have been reached. Munich Re currently also has Authorized Capital Increase III 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, the sole criteria being the interests of the shareholders and the company.

If the authorization is utilized, the Board of Management will inform shareholders about the details at the next AGM following the utilization.

Munich, 6 June 2000

The Board of Management


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