Agenda Annual General Meeting 2013

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Agenda Annual General Meeting 2013

Appropriation of net retained profits

01 a) Submission of the report of the Supervisory Board and the corporate governance report including the remuneration report for the financial year 2012

b) Submission of the adopted Company financial statements and management report for the financial year 2012, the approved consolidated financial statements and management report for the Group for the financial year 2012, and the explanatory report on the information in accordance with Sections 289 para. 4 and 315 para. 4 of the German Commercial Code

These documents are available on the internet at www.munichre.com/agm as parts of the annual report of Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (hereinafter referred to as “Munich Reinsurance Company” or “the Company”) and in the Munich Re Group Annual Report. The annual reports will be sent to shareholders on request. In addition, the documents will be available and explained at the Annual General Meeting. The Supervisory Board has already approved the Company financial statements and the Group financial statements. In accordance with statutory provisions, there will therefore be no resolution in respect of this agenda item.

02 Resolution on the appropriation of the net retained profits from the financial year 2012 (updated)

As the number of Munich Re shares has changed since the invitation to the AGM was published and now stands at 42,313, the Supervisory Board and Board of Management have updated their proposal regarding appropriation of the net retained profits.

The Supervisory Board and the Board of Management propose that the net retained profits for 2012 of €1,255,388,484.00 be utilised as follows:

Appropriation of net retained profits

Payment of a dividend of €7.00 on each share entitled to dividend €1,255,092,293.00
Carried forward to new account €296,191.00
Net retained profits €1,255,388,484.00

03 Resolution to approve the actions of the Board of Management

The Supervisory Board and the Board of Management propose that approval for the actions of the members of the Board of Management in financial year 2012 be given for that period.

04 Resolution to approve the actions of the Supervisory Board

The Supervisory Board and the Board of Management propose that approval for the actions of the members of the Supervisory Board in financial year 2012 be given for that period.

05 Resolution to approve the remuneration system for the Board of Management

In accordance with Section 120 para. 4 of the German Stock Companies Act, the Annual General Meeting can pass a resolution to approve the remuneration system for members of the Board of Management.

The resolution pertaining to this agenda item relates to the remuneration system for members of the Board of Management applicable at Munich Reinsurance Company since 1 January 2013. A description of this system is provided in the remuneration report, which is a fixed part of the annual reports referred to under agenda item 1. As already mentioned, the annual reports can be found on our website at www.munichre.com/agm. They will also be sent to shareholders on request. In addition, they will be available and explained at the Annual General Meeting.

The Supervisory Board and the Board of Management propose that the remuneration system for members of the Board of Management applicable since 1 January 2013 be approved.

06 Resolution to appoint a member of the Supervisory Board

With effect from 31 December 2012, Dr. Hans-Jürgen Schinzler resigned from the Company’s Supervisory Board. On 3 January 2013, the Local Court Munich – Registration Court – appointed Prof. Dr. Dr. Ann-Kristin Achleitner to replace him as a member of the Supervisory Board. The appointment will expire at the close of the forthcoming Annual General Meeting.

The Supervisory Board proposes that

Prof. Dr. Dr. Ann-Kristin Achleitner, Munich,
Scientific Director of the Center for Entrepreneurial and Financial Studies (CEFS) at the Technical University of Munich,

be elected to the Supervisory Board as a shareholder representative for the remainder of Dr. Schinzler’s original term of office, namely until the end of the Annual General Meeting in 2014.

In accordance with Sections 96 para. 1 and 101 para. 1 of the German Stock Companies Act and Sections 5 item 1, 15 para. 1, and 22 of the German Act on the Co-Determination of Employees in Cross-Border Mergers in conjunction with the agreement concerning the co-determination of employees of Munich Reinsurance Company concluded between the managements of the Company and Münchener Rück Italia S.p.A. and with the Special Negotiating Body dated 28 November/ 10 December/12 December 2008 as well as Article 10 of the Company’s Articles of Association, the Supervisory Board shall be composed of ten members elected by the shareholders at the Annual General Meeting and ten members elected by the employees. The Annual General Meeting is not obliged to follow election proposals.

07 Resolution to amend Article 15 of the Articles of Association (remuneration of the Supervisory Board)

members of the Supervisory Board receive fixed remuneration plus a variable result-related remuneration component. In future, the Supervisory Board is to receive fixed remuneration only. The Company is of the opinion that fixed remuneration only is more appropriate to the control function of the Supervisory Board. In addition, the remuneration for serving on Supervisory Board committees is to be adapted to reflect the amount of responsibility and actual work involved.

The Board of Management and the Supervisory Board therefore propose that Article

15 of the Articles of Association be reworded as follows:

“(1) Each member of the Supervisory Board shall receive an annual remuneration of 90,000 euros. The Chairman of the Supervisory Board shall receive an annual remuneration of 180,000 euros, and the Deputy Chairman an annual remuneration of 135,000 euros.

(2) Supervisory Board members serving on committees shall receive the following additional amounts:

a) The Chairman of the Audit Committee, 90,000 euros; the other members of the Audit Committee, 45,000 euros

b) The Chairman of the Personnel Committee, 54,000 euros; the other members of the Personnel Committee, 27,000 euros

c) The Chairman of the Standing Committee, 27,000 euros; the other members of the Standing Committee, 13,500 euros No additional remuneration shall be paid for serving on the other Supervisory Board committees.

(3) In case of changes in the Supervisory Board and/or its committees, the remuneration shall be paid on a pro rata basis, rounded up to the next full month.

(4) In addition, the members of the Supervisory Board shall receive an attendance fee of 1,000 euros for each Supervisory Board meeting and each meeting of a Supervisory Board committee except the Conference Committee. If there are several meetings on the same day, the attendance fee shall be paid only once.

(5) The remuneration and the attendance fee shall be payable after the end of the financial year.

(6) The Company shall reimburse the members of the Supervisory Board for the expenses incurred by reason of their office and for any turnover taxes payable on the remuneration and the expenses reimbursed.

(7) These provisions shall apply for the first time to the remuneration payable for the financial year 2014.”

08 Resolution to cancel the existing authorisation for increasing the share capital under “Authorised Capital Increase 2009”, to replace this with a new authorisation “Authorised Capital Increase 2013”, and to amend Article 4 of the Articles of Association

The authorisation granted by the Annual General Meeting on 22 April 2009 regarding Authorised Capital Increase 2009 is due to expire on 21 April 2014. Since the Annual General Meeting in 2014 will probably take place after that date (it is scheduled to be held on 30 April 2014), the authorisation to increase the share capital is to be renewed for an equal amount now in order to seamlessly allow the Company, if necessary, to strengthen its shareholders’ equity by means of this instrument in the coming years.

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

a) Cancellation of the authorisation of 22 April 2009

The authorisation granted by the Annual General Meeting on 22 April 2009 regarding Authorised Capital Increase 2009, as laid down in Article 4 para. 1 of the Articles of Association, shall be cancelled as soon as this resolution becomes effective through entry in the Commercial Register.

b) Authorisation

The Board of Management shall be authorised, with the consent of the Supervisory Board, to increase the Company’s share capital at any time up to 24 April 2018 by an amount of up to €280m by issuing new registered no-par-value shares against contributions in cash or in kind (Authorised Capital Increase 2013). The authorisation may be exercised as a whole or in parts on one or more occasions. The Board of Management shall also be authorised, with the consent of the Supervisory Board, to determine all other rights of the shares and the terms of issue.

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

  • to take account of fractional amounts,
  • insofar as this is necessary to grant the bearers of warrants or convertible bonds issued or to be 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, at the time of the final determination of the issue price, which should occur as close in time as possible to the placement of the shares, the issue price of the new shares is not significantly lower than the stock market price of the Company shares already listed on the stock exchange, and the shares issued with exclusion of the shareholders’ subscription rights pursuant to Section 186 para. 3 sentence 4 of the German Stock Companies Act do not exceed a total of 10% of the share capital either at the time this authorisation becomes effective or at the time it is exercised. This maximum limit shall include shares sold or issued, or to be issued, during the term of this authorisation on the basis of other authorisations with exclusion of subscription rights, directly or indirectly pursuant to Section 186 para. 3 sentence 4 of the German Stock Companies Act.

In addition, the Board of Management shall be authorised, with the consent of the Supervisory Board, to exclude the shareholders’ subscription rights in the case of capital increases against non-cash contribution, especially in the context of company mergers or for the purpose of directly or indirectly acquiring companies, parts of companies, shareholdings in other companies, other assets, or rights to acquire assets.

The shares issued overall on the basis of this authorisation subject to the exclusion of shareholder subscription rights may not exceed 20% of the existing share capital at the time this authorisation is exercised for the first time.

c) Amendment to the Articles of Association

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

“(1) The Board of Management shall be authorised, with the consent of the Supervisory Board, to increase the Company’s share capital at any time up to 24 April 2018 by an amount of up to 280 million euros by issuing new registered no-parvalue shares against contributions in cash or in kind (Authorised Capital Increase 2013). The authorisation may be exercised as a whole or in parts on one or more occasions. The Board of Management shall also be authorised, with the consent of the Supervisory Board, to determine all other rights of the shares and the terms of issue.

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

  • to take account of fractional amounts,
  • insofar as this is necessary to grant the bearers of warrants or convertible bonds 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, at the time of the final determination of the issue price, which should occur as close in time as possible to the placement of the shares, the issue price of the new shares is not significantly lower than the stock market price of the Company shares already listed on the stock exchange, and the shares issued with exclusion of the shareholders’ subscription rights pursuant to Section 186 para. 3 sentence 4 of the German Stock Companies Act do not exceed a total of 10% of the share capital either at the time this authorisation becomes effective or at the time it is exercised. This maximum limit shall include shares sold or issued, or to be issued, during the term of this authorisation until the time they are exercised on the basis of other authorisations with exclusion of subscription rights, directly or indirectly pursuant to Section 186 para. 3 sentence 4 of the German Stock Companies Act.


In addition, the Board of Management shall be authorised, with the consent of the Supervisory Board, to exclude the shareholders’ subscription rights in the case of capital increases against non-cash contribution, especially in the context of company mergers or for the purpose of directly or indirectly acquiring companies, parts of companies, shareholdings in other companies, other assets, or rights to acquire assets.

The shares issued overall on the basis of this authorisation subject to the exclusion of shareholder subscription rights may not exceed 20% of the existing share capital at the time this authorisation is exercised for the first time.”

d) The Board of Management shall be instructed to submit the resolution on cancellation of Authorised Capital Increase 2009 listed under a) for entry in the Commercial Register in such a way that cancellation will only be entered if the new Authorised Capital Increase 2013 to be agreed under b) and c) of this agenda item is entered at the same time. The Board of Management shall be authorised to submit the Authorised Capital Increase 2013 for entry in the Commercial Register independently of the other resolutions adopted at the Annual General Meeting.

09 Report of the Board of Management on the exclusion of subscription rights proposed under item 8 of the agenda (Section 186 para. 4 sentence 2 in conjunction with Section 203 para. 1 and para. 2 of the German Stock Companies Act)

The proposal being made to the Annual General Meeting is that a new authorisation be granted for increasing the share capital by a total of up to €280m (Authorised Capital Increase 2013). It is intended to be available for capital increases against cash and non-cash contribution and replace the Authorised Capital Increase 2009 amounting to €280m, which expires on 21 April 2014, i.e. before the 2014 Annual General Meeting scheduled to be held on 30 April 2014. To date, the Company has not utilised the Authorised Capital Increase 2009.

The Authorised Capital Increase will enable the Company to react quickly and flexibly to changing stock market situations in the interests of its shareholders. As decisions regarding the coverage of capital requirements generally have to be taken quickly, it is imperative that the Company is not dependent on waiting for the next Annual General Meeting to come round or on the long period of notice required for an Extraordinary General Meeting. In designing the instrument of an authorised capital increase, legislation has taken such needs into account. The most common reasons for implementing an authorised capital increase are to strengthen the capital base and to finance acquisitions.

In the case of utilisation of Authorised Capital Increase 2013 through capital increases against cash contribution, the shareholders will generally have a subscription right.

However, the Board of Management may, subject to the approval of the Supervisory Board, exclude the subscription right 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 simplicity of the respective issue. The new shares excluded as free fractional amounts from the subscription right of shareholders will be utilised in the best possible interests of the Company.

Furthermore, the Board of Management may, subject to the approval of the Supervisory Board, exclude the subscription right provided it is necessary to give holders of convertible bonds or bonds with warrants a subscription right to new shares if stipulated under the conditions of these bonds. To facilitate their placement on the capital market, such bonds have a protection against dilution which provides for the holders 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 capital increases against cash contribution if the shares are issued in accordance with Section 186 para. 3 sentence 4 of the German Stock Companies Act at an amount that is not significantly lower than the 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 authorisation will enable the Company to cover any capital needs at very short notice in order to take swift and flexible advantage of business market opportunities. 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. This capital increase may not exceed 10% of the share capital either at the time the authorisation becomes effective or at the time of its execution. This maximum of 10% of the share capital relating to this exclusion of subscription rights includes shares issued, or to be issued, within the term of this authorisation by excluding subscription rights, pursuant to Section 186 para. 3 sentence 4 of the Stock Companies Act to service convertible bonds or bonds with warrants. It also includes own shares insofar as they are sold within the term of this authorisation by excluding subscription rights subject to an authorisation pursuant to Section 71 para. 1 item 8 in conjunction with Section 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.

Subscription rights are also to be excluded for capital increases against non-cash contribution. The Company should continue to be in a position to acquire companies, parts of companies, shareholdings or assets connected with such investments, in order to strengthen its competitiveness and to increase its 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 they need to be or may be of a non-cash nature – for example, in order to achieve an optimum financing structure. Frequently sellers insist in addition on receiving shares as a consideration, as that is more favourable for them. The possibility of deploying own shares as acquisition currency allows the Company the necessary scope to take quick and flexible advantage of such acquisition opportunities and enables it even to acquire larger units by transferring shares. There should also be the possibility 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 quickly access.

The shares issued overall on the basis of the Authorised Capital Increase 2013 subject to the exclusion of shareholder subscription rights may not exceed 20% of the existing share capital at the time this authorisation is first exercised.

There are no concrete plans at this juncture regarding utilisation of the new Authorised Capital Increase 2013. Corresponding general authorisations including the option to exclude subscription rights are standard practice at national and international level. The Board of Management will in any case carefully examine whether the utilisation of the Authorised Capital Increase 2013 is in the interests of the Company and its shareholders. The Board of Management will report to the Annual General Meeting on any utilisation of the Authorised Capital Increase 2013.


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