Agenda Annual General Meeting 2002

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Annual General Meeting 2002

Agenda Annual General Meeting 2002

01 Submission of the approved Company financial statements and management report for the business year 2001, the consolidated financial statements and management report for the Group for the business year 2001, and the report of the Supervisory Board

02 Resolution on the appropriation of the balance sheet profit from the business year 2001

The Supervisory Board and the Board of Management propose that the balance sheet profit of €220,979,251.25 be utilized for the payment of a dividend of €1.25 on each share entitled to dividend and that the amount apportionable to own shares be carried forward to new account.

03 Resolution to approve the actions of the Board of Management in respect of the business year 2001

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 2001

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

05 Elections to the Supervisory Board

With effect from 16 April 2002, Dr. techn. h.c. Dipl.-Ing. ETH Ferdinand Piëch, stepped down as a member of the Company's Supervisory Board. As his successor, the Munich Registry Court appointed Dr. e.h. Dipl.-Ing. Bernd Pischetsrieder. The Supervisory Board proposes that this appointment be ratified by the AGM and that

Dr. e.h. Dipl.-Ing.Bernd Pischetsrieder, Wolfsburg, Chairman of the Board of Management of Volkswagen AG,

be elected to the Supervisory Board as a representative of the shareholders for the remainder of the original term of office of Dr. tech. h.c. Dipl.-Ing. ETH Ferdinand Piëch, i.e. until the end of the AGM in 2004.

With effect from the end of this AGM, Dr. rer. pol. Alfons Titzrath will be retiring from the Company's Supervisory Board. The Supervisory Board proposes that

Professor Karel Van Miert, Breukelen, Netherlands, President of the University of Nyenrode, Netherlands

be elected to the Supervisory Board as a representative of the shareholders for the remaining term of office of Dr. rer. pol. Alfons Titzrath, i.e. until the end of the AGM in 2004.

 

The Supervisory also proposes that

Dr. jur. Fedor Nierhaus, Munich,

Hans Rathnow, Munich, Former Member of the Board of Management of the Munich Reinsurance Company,

be elected as substitute members for Dr. Pischetsrieder and Professor Van Miert. 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 their 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, Section 101 para 1, and Section 7 para. 1 sentence 2) 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.

06 Authorization to buy back shares

The authorization granted to the Board of Management by the AGM on 18th July 2001 to buy back shares in accordance with Section 71 para. 1 item 8 of the German Stock Companies Act expires on 18 January 2003 and therefore needs to be renewed.

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

(1) The Company shall be authorized to buy back its own shares up to a total amount of 10% of the current share capital. The authorization 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 authorization may not be used for trading in own shares and shall run until 17 January 2004. The authorization to buy back shares granted by the AGM on 18 July 2001 shall be cancelled as from the moment this new authorization comes into effect.

(2) In accordance with the requirement of equal treatment (Section 53a of the Stock Companies Act), the shares will be acquired by the Board of Management (a) via the stock exchange or (b) via a public purchase offer to all shareholders or (c) 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 Stock Companies Act. In the event of a public purchase or exchange offer, the provisions of the German Securities Acquisition and Takeover Act shall be observed where applicable.

c) 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 stock exchange in Frankfurt am Main.

b) If the shares are acquired via a public purchase 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 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 stock exchange in Frankfurt am Main on the third to fifth trading days before the date on which the offer is published. The volume may be limited, and if the offer is then 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).

c) In the case of 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 Stock Companies Act, the exchange price – in the form of one or more shares in the other listed company and fractional amounts, including cash compensation in respect of any fractional shares (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 each share in the other listed company shall be the respective mean price in the closing auction in Xetra trading (or a comparable successor system) on the stock exchange in Frankfurt am Main on the third to fifth trading days before the date on which the offer is published. If the shares in the other listed company 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 shares in that company in the course of the preceding calendar year.


The exchange offer may provide for additional terms and conditions. The volume may be limited, and if the offer is then 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).

(3) The Board of Management shall be empowered to use shares acquired on the basis of the aforementioned authorization for all legally admissible purposes, and in particular as follows:


a) They may be used for launching the Company's shares on foreign stock exchanges where they are not yet listed.

b) 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 the purchase of shareholdings.

c) They may be sold to third parties for cash other than via the stock exchange or via an offer to all shareholders.

d) 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.

e) They may be partially or wholly retired without a further resolution of the AGM being required.

 

(4) The price at which the shares are launched on other stock exchanges in accordance with item 3a or sold in accordance with item 3c 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 stock exchange in Frankfurt am Main (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 Stock Companies Act, may not exceed a total of 10% of the share capital at the time the shares are issued or sold.

(5) The authorizations in accordance with item 3 above may be utilized one or more times, partially or wholly, individually or jointly. The authorizations in accordance with item 3b, c or d may also be utilized by dependent Group companies or enterprises in which the Company has a majority shareholding, or for its or their account by third parties. They shall also include the use of shares of the Company acquired on the basis of earlier authorizations in accordance with Section 71 para. 1 item 8 of the Stock Companies Act and – with the exception of item 3e above – the use of shares acquired in accordance with Section 71d sentence 5 of the Stock Companies Act.

(6) 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 in items 3a, b, c or d. 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.
 

07 Resolution to cancel the existing authorizations for increasing the share capital under "Authorized Capital Increases I, II and III", to replace these with a new authorization "Authorized Capital Increase 2002", to rename "Authorized Capital Increase IV", and to make the relevant amendments to the Articles of Association

The current authorizations for increasing the share capital, granted until 19 July 2005 (Authorized Capital Increase I) and 5 November 2003 (Authorized Capital Increases II and III), are to be combined in a new authorization – Authorized Capital Increase 2002 – to give the Company more flexible access to additional shareholders' equity for long-term financing purposes and in particular to enable it to opt for a capital increase against non-cash contribution instead of a capital increase against cash contribution in order to take advantage of acquisition opportunities that may present themselves in the market.

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

(1) Cancellation of the authorizations of 19 July 2000 and 5 November 1998

The authorization granted by the AGM on 19 July 2000 regarding Authorized Capital I, as laid down in Article 4 para. 1 of the Articles of Association, and the authorizations granted by the AGM on 5th November 1998 regarding Authorized Capital Increases II and III, as laid down in Article 4 paras. 2 and 3 of the Articles of Association, shall be cancelled as soon as this resolution becomes effective through entry in the Commercial Register.

(2) Authorization

The Board of Management shall be authorized, with the consent of the Supervisory Board, to increase the Company's share capital at any time up to 17 July 2007 in one or more stages by an amount of up to €220 million by issuing new registered no-par-value shares against cash or non-cash contribution (Authorized Capital Increase 2002).

In the case of capital increases against cash contribution, shareholders shall be granted a subscription right. The Board of Management is entitled, with the consent of the Supervisory Board, to exclude shareholders' subscription rights in the following cases:

 

  • in order to exclude fractional amounts from the subscription rights;

 

  • insofar as this is necessary to grant the bearers of warrants or convertible bonds or bonds with warrants, issued by the Company or by one of its dependent Group companies, pre-emptive rights to the extent to which they would be entitled as shareholders after exercising their warrants or after the conversion requirements from such bonds have been satisfied; or

 

  • if the proportion of the share capital represented by the shares issued does not exceed €45 million and the issue price is not significantly lower than the stock market price.


In addition, the Board of Management shall be authorized, with the consent of the Supervisory Board, to exclude subscription rights in the case of capital increases against non-cash contribution.

The Board of Management shall also be authorized, with the consent of the Supervisory Board, to determine all other rights of the shares and the terms of issue.

(3) Amendment of the Articles of Association

 

a) In Article 4 of the Articles of Association, paragraphs 1, 2 and 3 shall be replaced by the following paragraph 1:

"(1) The Board of Management shall be authorized, with the consent of the Supervisory Board, to increase the Company's share capital at any time up to 17 July 2007 in one or more stages by an amount of up to 220 million euros by issuing new registered no-par-value shares against cash or non-cash contribution (Authorized Capital Increase 2002).

 

In the case of capital increases against cash contribution, shareholders shall be granted a subscription right. However, the Board of Management shall be entitled, with the consent of the Supervisory Board, to exclude fractional amounts from such subscription rights and also to exclude such subscription rights insofar as this is necessary to grant the bearers of warrants, or convertible bonds or bonds with warrants, issued by the Company or by one of its dependent Group companies, pre-emptive rights to subscribe for new shares 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 Board of Management shall also be entitled, with the consent of the Supervisory Board, to exclude subscription rights if the proportion of the share capital represented by the shares issued does not exceed 45 million euros and the issue price is not significantly lower than the stock market price.

In addition, the Board of Management shall be authorized, with the consent of the Supervisory Board, to exclude subscription rights in the case of capital increases against non-cash contribution.

The Board of Management shall also be authorized, with the consent of the Supervisory Board, to determine all other rights of the shares and the terms of issue."

b) Article 4 paragraph 4 of the Articles of Association shall become Article 4 paragraph 2. Without any further change to the contents, the designation in brackets in the current paragraph 4 shall be changed from "(Authorized Capital Increase IV)" to "(Authorized Capital Increase 2001)".

c) Article 4 paragraphs 5, 6, 7 and 8 of the Articles of Association shall become paragraphs 3, 4, 5 and 6.

08 Resolution to cancel the existing authorization to issue convertible bonds or bonds with warrants and to grant a new authorization to issue convertible bonds or bonds with warrants; to create a new contingent capital (Contingent Capital Increase 2002); to make the relevant amendment to the Articles of Association and to rename the two contingent capital increases in the current wording of Article 4 paragraphs 5 and 6 of the Articles of Association.

Appropriate capitalization is an essential basis for a company's development. One financing instrument that may be used for this purpose is the issuing of convertible bonds or bonds with warrants which raise third-party capital for the Company at a favourable interest rate. To give the Company the necessary flexibility in procuring capital, we propose a new authorization to replace the authorization granted at the AGM on 5 November 1998, making it possible to issue a larger volume of convertible bonds or bonds with warrants. To service these bonds, a new contingent capital is to be approved (Contingent Capital Increase 2002). As soon as this resolution becomes effective, the previous authorization and related contingent capital of €15,360,000 will be cancelled.

 

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

(1) Cancellation of the authorization of 5 November 1998

The authorization granted by the AGM on 5 November 1998 concerning the issue of convertible bonds or bonds with warrants shall be cancelled as soon as this resolution becomes effective through entry in the Commercial Register.

(2) Authorization

 

a) Period of authorization, nominal amount, maturity period, number of shares

The Board of Management shall be authorized, 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 17 July 2007 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 €30 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 b) aa of this resolution.

b) 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 they offer these to the shareholders for subscription. However, the Board of Management is authorized, with the consent of the Supervisory Board, to exclude the shareholders' subscription rights in the following cases:

 

aa) if the bonds are issued against cash and the issue price is not significantly below the bonds' theoretical market value determined according to recognized 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 authorization becomes effective or the date on which such authorization is exercised. This amount includes the share capital apportionable to shares issued or sold by excluding subscription rights pursuant to Article 186 para. 3 sentence 4 of the Stock Companies Act;

 

bb) for fractional amounts resulting from a particular subscription ratio;


cc) 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

dd) insofar as bonds are to be issued against non-cash payment and the exclusion of subscription rights is in the interests of the Company.

c) Exercise or conversion price, protection against dilution

 

In an issue of bonds with warrants, each bond shall be accompanied by one or more warrants entitling the bearer or creditor to subscribe for Company shares in accordance with the warrant conditions laid down by the Board of Management.

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 stock exchange in Frankfurt am Main 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 stock exchange in Frankfurt am Main, with the exception of the last two trading days for the subscription rights.

Notwithstanding Section 9 para. 1 of the Stock Companies Act, the exercise or conversion price thus fixed shall be reduced on the basis of a clause 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 terms and 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.

 

d) Further modalities


Subject to compliance with the above conditions, the Board of Management shall be authorized 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.


(4) Contingent capital increase

The share capital shall be conditionally increased by up to €30 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 17th July 2007 under the aforementioned authorization of 17 July 2002, 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 authorization. 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 authorized to determine the further details of the contingent capital increase (Contingent Capital Increase 2002).

(4) Amendment to the Articles of Association

a) Article 4 para. 7 of the current Articles of Association shall be replaced by the following para. 5:

"(5) A contingent increase in the share capital by a further amount of 30 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 authorized. 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 17 July 2007 under the authorization of the Annual General Meeting of 17 July 2002, 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 authorized to determine the further details of the contingent capital increase (Contingent Capital Increase 2002)."

 

b) Without any further change to the contents, the designation "(Contingent Capital Increase 1993)" shall be inserted at the end of Article 4 para. 5 of the current Articles of Association and the designation "(Contingent Capital Increase 1998)" shall be inserted at the end of Article 4 para. 6 of the current Articles of Association.
 

09 Other amendments to the Articles of Association

The Supervisory Board and Board of Management propose that the Articles of Association be amended as follows:

a) To adjust the Articles of Association to an expected change in the German Stock Companies Act with regard to Company announcements, the word "electronic" shall be inserted before "Bundesanzeiger" in Article 2.

Article 2 shall be worded as follows:

"The public announcements of the Company shall be published in the electronic Bundesanzeiger."

The Board of Management shall be instructed to file the amendment to Article 2 for entry in the Commercial Register as soon as a change in the German Stock Companies Act has entered into force that provides for the Company's announcements to be published in the electronic Bundesanzeiger.

b) To further facilitate the exercising of voting rights by shareholders at the AGM, the use of modern communication media for granting proxies shall be extended.

 

Article 7 shall therefore be reworded as follows:


"Voting rights may be exercised by proxy. The proxy may be given in writing, by fax, electronically, or in another form, details of which shall be specified by the Company in each case. The individual information necessary for granting these proxies shall be sent together with the invitation to the General Meeting."

c) To enable us to already take advantage at the next AGM of an expected change in the German Stock Companies Act with regard to the transmission of annual general meetings, Article 8 of the Articles of Association shall be amended now.

 

The following paragraph 3 shall be added to Article 8:


"(3) Subject to prior announcement in the invitation to the General Meeting, the person taking the Chair at the General Meeting may permit audio-visual transmission of the General Meeting in a form to be specified by him or her in more detail."

 

The Board of Management shall be instructed to file this amendment to the Articles of Association for entry in the Commercial Register as soon as a change in the German Stock Companies Act has entered into force that allows audio-visual transmission of the Annual General Meeting.

d) The Supervisory Board shall be enabled to adopt resolutions using modern communication media. The German law on registered shares – NaStraG – which entered into force last year, opens up the possibility for such resolutions.

 

In Article 13 the words "in writing" shall be deleted after the word "vote", so that Article 13 reads as follows:

"Once the Chairman of the Supervisory Board has been elected, a meeting of the Supervisory Board shall be quorate if all its members have been invited to the meeting or called upon to vote and if 10 members including the Chairman or alternatively 15 members participate in the vote."

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, 10 July 2002, and is entered in the register of shareholders. The shares entered in the register of shareholders on 10 July 2002 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 offer 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 shareholders' instructions.

 

Shareholders may also exercise their voting rights through a proxy appointed in writing, 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 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 authorization to do so from the shareholders concerned.

Shareholders may again use the Internet (www.munichre.com/AGM2002) to order admission cards or to appoint proxies nominated by the Company. We also offer shareholders the chance to follow the whole AGM live on the Internet (also at www.munichre.com/AGM2002). 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.

Enquiries or motions from shareholders for the AGM should be sent to the following address only:

 

Münchener Rückversicherungs-Gesellschaft
ZA/G – Aktienregister
80791 München
Germany
Fax: +49 (89) 38 91-92 16

or by e-mail to
shareholder@munichre.com

Munich, 6 June 2002

 

The Board of Management

 

For the Annual General Meeting on 17 July 2002

 

Report of the Board of Management on the exclusion of subscription subscription rights proposed under items 6, 7 and 8 of the agenda (in accordance with Section 186 paragraph 4 sentence 2 in conjunction with Sections 71 para. 1 item 8, 203 paragraph 2 sentence 2, and 221 paragraph 4 sentence 2 of the German Stock Companies Act)

 

1) Re item 6 on the agenda

 

At past AGMs, resolutions were adopted authorizing the Company to buy back and sell its own shares. The latest of these authorizations is due to expire on 18 January 2003. The proposed resolution is designed to replace the current authorization granted by the AGM on 18 July 2001. 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 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 additional 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 Article 186 para. 3 sentence 4 of the 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 authorization to exclude subscription rights in the sale of own shares, pursuant to 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, excluding shareholders' subscription rights, or as a result of an issue of convertible bonds or bonds with warrants, the limit provided for under Article 186 para. 3 sentence 4 of the German Stock Companies Act – namely 10% of the Company's share capital – is not exceeded.

 

The authorization 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 globalization of the economy increasingly require this type of acquisition financing. The proposed authorization 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 jeopardizing negotiation outcomes once they have been reached. The Company currently also has Authorized Capital Increase III (due to become Authorized Capital 2002 in future, subject to adoption of the resolution proposed under agenda item 7 and its entry in the Commercial Register) 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

 

After adoption of the resolution proposed under agenda item 8 and its entry in the Commercial Register, the Company will be authorized 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 authorization, with an exclusion of shareholder's subscription rights to this extent

 

Finally, the authorization 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

 

The authorization 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 authorization is also to include shares acquired on the basis of the authorizations adopted by earlier AGMs pursuant to Section 71 para. 1 item 8 and Section 71d sentence 5 of the 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 Stock Companies Act.

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

 

2) Re item 7 on the agenda

The proposal being made to the AGM is that a new authorization be granted for increasing the share capital by a total of up to €220 million (Authorized Capital Increase 2002), combining the current authorizations for increasing the share capital, granted until 19 July 2005 (in the case of Authorized Capital Increase I) and 5 November 2003 (Authorized Capital Increases II and III). The amount of Authorized Capital Increase 2002 is to remain below the combined amount of €222,258,376.24 authorized under the current Authorized Capital Increases I, II and III. In the interests of greater flexibility, Authorized Capital Increase 2002 is to be granted for capital increases against both cash and non-cash contribution.

In the case of utilization of Authorized Capital Increase 2002 through capital increases against cash contribution, the shareholders will generally have a subscription right.

 

This subscription right is to be excluded, with consent of the Supervisory Board, firstly if the shares are issued in accordance with Article 186 paragraph 3 sentence 4 of the German Stock Companies Act at a price that is not significantly lower than the market price and if the total amount does not exceed €45 million. The amount of €45 million remains below the limit of 10% of the share capital stipulated in Article 186 paragraph 3 sentence 4 of the German Stock Companies Act. The authorization will enable the Company to cover any capital needs at very short notice in order to take swift and flexible advantage of market opportunities in different fields of business. The exclusion of subscription rights enables the Company to act quickly and place the shares at a price close to the market price, i.e. without the discount usual in rights issues. Neither at the time the authorization becomes effective nor at the time of its execution may this capital increase exceed 10% of the current share capital. This 10% includes shares issued or sold by excluding subscription rights pursuant to Article 186 para. 3 sentence 4 of the Stock Companies Act. Through this limitation, account is taken of the shareholders' need for protection against dilution of their stock. As the new shares will be placed at a price close to the market price, shareholders wishing to maintain their proportionate holding in the Company always have the possibility of buying the requisite number of shares at approximately the same conditions on the stock market.

 

In addition, subscription rights are to be excluded to the extent that is necessary to grant holders or creditors of bonds a subscription right for new shares if the conditions of the bonds provide for this. To facilitate their placement on the capital market, such bonds have a protection against dilution which provides for the holders or creditors to be granted a subscription right for new shares in subsequent share issues. They are thus treated as if they were already shareholders. In order to equip the bonds with such protection against dilution, the subscription right of shareholders must be excluded in respect of these shares. This makes it easier to place the bonds and thus accords with the shareholders' interest in an optimum financing structure for the Company.

 

Subscription rights are also to be excluded for fractional amounts. This is to facilitate the handling of issues with a general subscription right for shareholders. Such fractional amounts may result from the volume of the respective issue and the fixing of a practicable subscription ratio. The value of the excluded rights per shareholder is usually small, whereas the expenditure for an issue without such exclusion rights would be markedly higher. In other words, such subscription rights are excluded for reasons of practicability and efficiency.

 

Subscription rights are also to be excluded for capital increases against non-cash contribution. We want to continue to be in a position to acquire companies, parts of companies, shareholdings or assets connected with such investments, in order to strengthen our competitiveness and to increase our earnings power and corporate value. It has become apparent that ever greater units are involved in such investments. In many cases, very high considerations have to be paid. Often these need to be or may be of a non-cash nature – for example, in order to achieve an optimum financing structure. Frequently sellers insist on receiving shares as a consideration, as this is more favourable for them. The option of using own shares for acquisition financing gives the Company the necessary scope to take quick and flexible advantage of acquisition opportunities that arise. It enables the Company to acquire larger units by transferring shares. There should also be the opportunity to acquire assets in return for shares. For both eventualities, it has to be possible to exclude shareholders' subscription rights. As such acquisitions have to be effected at short notice, they cannot be approved by an Annual General Meeting taking place only yearly. They require capital which the Board of Management – with the consent of the Supervisory Board – can have access to quickly. The amount of the new authorization for capital increases is designed to ensure that major acquisitions can be financed, be it through cash contribution or in return for shares.

3) Re item 8 on the agenda

 

We are proposing that the AGM grant a new authorization and a new contingent capital for issuing convertible bonds or bonds with warrants; the existing authorization, due to expire on 5 November 2003, and the existing contingent capital for this purpose are to be cancelled.

 

Appropriate capitalization 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 third-party 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 authorization.

 

Authorization is to be granted to issue bonds with a total value of up to €3 billion. To service them, shares totalling up to €30 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 Article 186 para. 3 sentence 4 of the Stock Companies Act, the Board of Management is to be authorized, 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 authorization becomes effective and at the time it is utilized. This 10% includes shares issued or sold by excluding subscription rights pursuant to Article 186 para. 3 sentence 4 of the 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 recognized 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 – assuming approval by the AGM – the newly proposed authorized capital increase will be available.

Munich, 6 June 2002

 

The Board of Management

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 Karel Van Miert
born in Oud-Turnhout (Belgium) on
17 January 1942

Degree in diplomatic sciences (Ghent)
Postgraduate studies at the European
University Centre, Nancy

President of the University of Nyenrode

 

Seats held on supervisory boards of other German companies:
Fraport AG
RWE AG

Membership of comparable bodies of German and foreign business enterprises:
Agfa-Gevaert NV, Mortsel
Anglo American plc, London
De Persgroep, Asse
DHV Holding BV, Amersfoort
Royal Philips Electronics NV, Amsterdam
Wolters Kluwer NV, Amsterdam

 

b) Dr. e.h. Dipl.-Ing. Bernd Pischetsrieder
born in Munich on 15 February 1948

Degree in mechanical engineering

 

Chairman of the Board of Management of Volkswagen AG

Seats held on supervisory boards of other German companies:
METRO AG
Audi AG (Chairman)*

Membership of comparable bodies of German and foreign business enterprises:
Rolls-Royce and Bentley Motor Cars Ltd. Crew
Tetra Laval Group, Pully
SEAT, S.A., Barcelona (Chairman)*

 

Appointed to the Munich Re Supervisory Board by resolution of the Munich Registry Court with effect from 17 April 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

 

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. Rolf-E. Breuer,
Chairman of the Supervisory Board
of Deutsche Bank AG

 

Dr. jur. Albrecht Schmidt,
Spokesman of the Board of Management 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:

Dresdner Bank AG, Frankfurt am Main

 

3. Banks in which the Munich Reinsurance Company has a shareholding notifiable under Article 21 of the German Securities Trading Act:
Bayerische Hypo- und Vereinsbank AG,
Munich
Dresdner Bank AG, Frankfurt am Main

 

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, Frankfurt am Main J. P. Morgan AG, Frankfurt am Main


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