Agenda Annual General Meeting 2003

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Annual General Meeting 2003

Agenda Annual General Meeting 2003

01 Submission of the adopted Company financial statements and management report for the business year 2002, the approved consolidated financial statements and management report for the Group for the business year 2002, and the report of the Supervisory Board.

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/agm/archive. They will be sent to shareholders on request.

02 Resolution on the appropriation of the balance sheet profit from the business year 2002

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.

03 Resolution to approve the actions of the Board of Management in respect of the business year 2002

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 2002

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 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.


06 Authorisation to buy back and use own shares

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.


07 Resolution to cancel Contingent Capital Increase 1993 as well the existing authorisation to issue warrants of 5 November 1998 and Contingent Capital Increase 1998; to grant a new authorisation to issue warrants; to create a new contingent capital (Contingent Capital Increase 2003 I); and to amend the Articles of Association

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)."

08 Resolution to cancel the existing authorisation to issue convertible bonds and/or bonds with warrants and to grant a new authorisation to issue convertible bonds and/or bonds with warrants; to create a new contingent capital (Contingent Capital Increase 2003 II); and to make the relevant amendment to the Articles of Association.

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.

09 Further amendments to the Articles of Association

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."

10 Approval of profit-transfer agreements

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/agm/archive.


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 (89) 38 91-92 16, or our via the internet at www.munichre.com/agm/archive. 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/agm/archive) 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/agm/archive). 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/agm/archive) 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 (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/agm/archive; 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.


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