The Munich Reinsurance Company has transferred shareholdings which it
previously held directly in other companies to wholly owned subsidiaries, listed
below under a) to p). The company listed under q) mainly manages real estate
belonging to the Munich Reinsurance Company. Profit-transfer agreements have
been concluded with these companies.
The Supervisory Board and the Board of Management propose that these
profit-transfer agreements between the Munich Reinsurance Company and the
companies listed below ("companies") be approved:
a) MR Beteiligungen 1. GmbH
Profit-transfer agreement of 19 November
2002;
b) MR Beteiligungen 2. GmbH
Profit-transfer agreement of 19 November
2002;
c) MR Beteiligungen 3. GmbH
Profit-transfer agreement of 19 November
2002;
d) MR Beteiligungen 4. GmbH
Profit-transfer agreement of 19 November
2002;
e) MR Beteiligungen 5. GmbH
Profit-transfer agreement of 19 November
2002;
f) MR Beteiligungen 6. GmbH
Profit-transfer agreement of 19 November
2002;
g) MR Beteiligungen 7. GmbH
Profit-transfer agreement of 19 November
2002;
h) MR Beteiligungen 8. GmbH
Profit-transfer agreement of 19 November
2002;
i) MR Beteiligungen 9. GmbH
Profit-transfer agreement of 19 November
2002;
j) MR Beteiligungen 10. GmbH
Profit-transfer agreement of 20 December
2002;
k) MR Beteiligungen 11. GmbH
Profit-transfer agreement of 11 April
2003;
l) MR Beteiligungen 12. GmbH
Profit-transfer agreement of 19 November
2002;
m) MR Beteiligungen 13. GmbH
Profit-transfer agreement of 20 December
2002;
n) MR Beteiligungen 14. GmbH
Profit-transfer agreement of 19 November
2002;
o) MR Beteiligungen 15. GmbH
Profit-transfer agreement of 19 November
2002;
p) MR Beteiligungen 16. GmbH
Profit-transfer agreement of 19 November
2002;
q) Akademie Schloss Hohenkammer GmbH
Profit-transfer agreement of 11 April
2003.
The Munich Reinsurance Company is the sole shareholder in the case of all the
companies listed. The main points of the agreements are as follows:
– The companies are obliged to transfer their total profit for the year to
the Munich Reinsurance Company.
– The companies may establish revenue reserves from their net income to that
extent that this is economically justified, based on reasonable and prudent
business judgement.
– The Munich Reinsurance Company is obliged to compensate any annual net
losses of the companies in accordance with Section 302 of the German Stock
Companies Act insofar as such net losses are not offset by withdrawing amounts
from the revenue reserves allocated during the term of the agreement.
– The agreements with the companies – except for those listed under j), k),
m) and q) – are valid for a term of five years, commencing with the business
year 2002. The agreements with the companies listed under j), k), m) and q) are
valid initially for a term of five years with retroactive effect from 1 January
2003. All agreements are automatically renewed for a further year if they are
not terminated by either party with a period of notice of six months to the end
of the business year.
The following documents are available for inspection by the shareholders at
the head office of the Munich Reinsurance Company at Königinstrasse 107, 80802
München, and on the business premises of the respective companies:
– the respective profit-transfer agreement;
– the respective joint report of the Board of Management of the Munich
Reinsurance Company and the management of the respective company;
– annual financial statements and management reports of the Munich
Reinsurance Company for the business years 2000, 2001 and 2002;
– for Akademie Schloss Hohenkammer GmbH additionally:
· the annual financial statements for the three business years 2000, 2001 and
2002;
– for the companies listed under a) to p) additionally:
· respective annual financial statements for their only business year so far,
namely 2002.
Shareholders will be sent a copy of the above documents free of charge on
request. The documents will be open to inspection during the Munich Reinsurance
Company's AGM as well and can also be viewed on the internet at
www.munichre.com/AGM2003.
Preconditions for attending the Annual General Meeting
Every shareholder may attend the Annual General Meeting in person or be
represented by a proxy, provided the shareholder has given notice of his or her
intention to participate to the Board of Management of the Company not later
than Wednesday, 4 June 2003, and is entered in the register of shareholders. The
shares entered in the register of shareholders on 4 June 2003 shall be material
for establishing the right to participate and voting rights. All shareholders
who have fulfilled these conditions will receive an admission card for the AGM,
which they should bring with them to the meeting.
As a special service, we are again offering our shareholders the opportunity
to be represented at the AGM – in accordance with their instructions – by one of
the proxies nominated by the Company. The proxies may be appointed in writing by
means of the form sent to shareholders, or via the internet. They will exercise
the voting rights solely in accordance with the instructions they receive from
the shareholders.
Shareholders may also exercise their voting rights through a proxy, a bank or
a shareholders' association. In these cases the proxies must give due notice of
their intention to attend or arrange for the shareholders to give such notice
for them. If neither a bank nor a shareholders' association is authorised in
this way, authorisation should be granted in writing, by fax using number +49
(89) 38 91-92 16, or our via the internet at www.munichre.com/AGM2003. If a
bank is entered in the shareholders' register, it may only exercise the voting
rights for shares that it does not own if it has an authorisation to do so from
the shareholders concerned.
Shareholders may again use the internet (www.munichre.com/AGM2003) to order
admission cards or to appoint proxies nominated by the Company.
Transmission of the AGM on the internet
We are again offering shareholders the chance to follow the whole AGM live on
the internet (also at www.munichre.com/AGM2003). To do so, they will need their
shareholder number and the relevant AGM access code. This and other information
for registering, issuing proxies and following the AGM on the internet will be
sent by post to all shareholders entered in our shareholders' register. The
report of the Chairman of the Board of Management can be publicly viewed live on
the internet (www.munichre.com/AGM2003) and will be available after the AGM as a
recording. There will be no recording of the whole live transmission.
Enquiries or motions from shareholders
Enquiries from shareholders regarding the AGM should be sent to the following
address only:
Münchener Rückversicherungs-Gesellschaft
ZA/G – Aktienregister
80791
München
Germany
(Fax: +49 (89) 3891-9216)
or by e-mail to shareholder@munichre.com
This is also the address to which motions and any election proposals from
shareholders must be sent; motions and election proposals sent to other
addresses cannot be considered. Any countermotions or election proposals that
reach us by 24.00 hrs on 27 May 2003 will be published on the internet at
www.munichre.com/AGM2003; the German Stock Companies Act no longer provides for
this information to be mailed to all shareholders in printed form. Any comments
by the Supervisory Board and the Board of Management on such proposals will also
be published at the above-mentioned internet address.
Munich, 30 April 2003
The Board of Management
For the Annual General Meeting on 11 June 2003
Report of the Board of Management on the exclusion of subscription rights
proposed under items 6 and 8 of the agenda (in accordance with Section 186 para.
4 sentence 2 in conjunction with Sections 71 para. 1 item 8 and 221 para. 4 of
the German Stock Companies Act)
1) Re item 6 on the agenda
At past AGMs, resolutions were adopted authorising the Company to buy back
and sell its own shares. The latest of these authorisations is due to expire on
17 January 2004. The proposed resolution is designed to replace the current
authorisation granted by the AGM on 17 July 2002. It will enable the Company or
dependent Group companies, or enterprises in which the Company has a majority
shareholding, or third parties acting for its or their account, to buy back
shares up to a total amount of 10% of the Company's current share capital.
For this purpose, the Company is to be enabled to buy back shares not only
via the stock exchange but also through a public offer to shareholders of the
Company or through a public invitation to tender such an offer. The Company is
also to be given the possibility to offer not only cash but also shares in other
listed companies by way of exchange, which for shareholders can be an attractive
alternative to a public purchase offer. It gives the Company additional options
for optimally structuring share buy-backs, which is also in the interests of the
shareholders. In this regard, a specific exchange ratio is to be determined,
which may be supplemented by a cash benefit as an add itional payment to the
exchange offered or as compensation for any fractional shares.
Shares which the Company buys back may be sold again via the stock exchange
or a public offer to all shareholders. This takes account of the legal
requirement of equal treatment (Section 53a of the German Stock Companies
Act).
Besides this, the Company may also limit the shareholders' subscription
rights and, pursuant to Section 186 para. 3 sentence 4 of the German Stock
Companies Act, may sell the Company's own shares to institutional investors, for
example, or launch the shares on foreign stock exchanges. This is in the
interest of the Company and puts it in a position to react quickly and flexibly
to favourable stock market situations. The shares may only be sold at a price
which does not significantly undercut the current stock market price. The Board
of Management will endeavour – taking into account current market circumstances
– to keep any discount on the stock market price as low as possible. The Board
of Management will only avail itself of the authorisation to exclude
subscription rights in the sale of own shares, pursuant to Section 186 para. 3
sentence 4 of the German Stock Companies Act, insofar as together with existing
authorisations to issue shares from capital approved for this purpose, excluding
shareholders' subscription rights, or as a result of an issue of convertible
bonds or bonds with warrants, the limit provided for under Section 186 para. 3
sentence 4 of the German Stock Companies Act – namely 10% of the Company's share
capital – is not exceeded.
The authorisation also gives the Company the option of having own shares
available to offer as a consideration in connection with mergers, acquisitions
of companies or the purchase of shareholdings. International competition and the
globalisation of the economy increasingly require this type of acquisition
financing. The proposed authorisation is intended to give the Company the
necessary scope to take quick and flexible advantage of opportunities that arise
for acquiring companies or shareholdings. This is reflected in the proposed
exclusion of subscription rights. In determining the valuation ratios, the Board
of Management will ensure the interests of the shareholders are appropriately
considered. As a rule, when measuring the value of the shares offered as a
consideration, it will take as a basis the stock market price of Munich Re
shares. However, a systematic coupling of the valuation to a stock market price
is not provided for, in particular to prevent fluctuations in the share price
from jeopardising negotiation outcomes once they have been reached. The Company
currently also has Authorised Capital Increase 2002 available for the
acquisition of companies or shareholdings. The type of share procurement used to
finance such transactions will be decided on by the Board of Management, with
the consent of the Supervisory Board, its decision being guided by the interests
of the Company.
The Company will have the possibility to issue convertible bonds or bonds
with warrants against both cash and non-cash payment. To service these bonds, it
may be expedient to use own shares in part or in full, instead of a capital
increase. This is also provided for in the authorisation, with an exclusion of
shareholders' subscription rights to this extent.
Finally, the authorisation allows the possibility, in the event of own shares
being sold by means of an offer to all shareholders, for shareholders'
subscription rights to be partially excluded in favour of the holders of
convertible bonds or bonds with warrants. This enables the holders of
convertible bonds or bonds with warrants to be granted a subscription right as
protection against dilution, instead of a reduction of the exercise or
conversion price.
In addition, the Company is to be enabled to issue employee shares to staff
of the Company or of its affiliated enterprises.
The authorisation regarding the uses to which own shares may be put is to
apply not only in respect of shares acquired on the basis of this resolution.
Rather, the authorisation is also to include shares acquired on the basis of the
authorisations adopted by earlier AGMs pursuant to Section 71 para. 1 item 8 and
Section 71d sentence 5 of the German Stock Companies Act. It is advantageous for
the Company and creates further flexibility to be able to use these own shares
in the same way as those acquired on the basis of the above resolution.
Own shares acquired on the basis of this resolution and earlier resolutions
may be retired without requiring a new resolution of the AGM. This shall not
apply to shares acquired on the basis of Section 71d sentence 5 of the German
Stock Companies Act.
If the authorisation is utilised, the Board of Management will inform
shareholders about the details at the next AGM following the utilisation.
2) Re item 8 on the agenda
We are proposing that the AGM grant a new authorisation and a new contingent
capital for issuing convertible bonds or bonds with warrants, with the
authorisation framework for warrants and/or bonds with warrants remaining the
same at €3 billion and the contingent capital serving to safeguard the exercise
and conversion rights being increased from €30 million to €100 million. The
existing authorisation, due to expire on 17 July 2007, and the existing
contingent capital for this purpose, are to be cancelled.
Appropriate capitalisation is an essential basis for a company's development.
One financing instrument that may be used for this purpose is issuing
convertible bonds or bonds with warrants which raise outside capital for the
Company at a favourable interest rate. The premiums received on the conversion
rights or warrants accrue to the benefit of the Company. To give the Company the
continued necessary flexibility in procuring capital for investments, we are
proposing a new authorisation.
Authorisation is to be granted to issue bonds with a total value of up to €3
billion. To service them, shares totalling up to €100 million of the share
capital are to be made available.
Our shareholders are generally to be granted a subscription right in respect
of these bonds. This gives them the chance to invest their capital in the
Company and at the same time to maintain their participation quota. However, as
hitherto, pursuant to Section 186 para. 3 sentence 4 of the German Stock
Companies Act, the Board of Management is to be authorised, with the consent of
the Supervisory Board, to exclude shareholders' subscription rights if the issue
price for the bonds is not significantly lower than their market price. This
exclusion of subscription rights is necessary if a bond is to be placed quickly
in order to exploit a favourable market situation. Due regard is given to the
interests of shareholders through the fixing of the issue price at a level not
significantly lower than the market price, so that the value of a subscription
right would be practically zero. This possibility is restricted to bonds
carrying subscription rights for shares amounting to a maximum of 10% of the
share capital, both at the time the authorisation becomes effective and at the
time it is utilised. This 10% includes shares issued or sold by excluding
subscription rights pursuant to Section 186 para. 3 sentence 4 of the German
Stock Companies Act. Through this limitation, account is taken of shareholders'
need for protection against dilution of their stock.
In addition, subscription rights are to be excluded in respect of fractional
amounts or to satisfy the subscription rights of holders of previously issued
bonds. The exclusion of subscription rights for fractional amounts is expedient
and customary, since the costs of handling subscription rights for fractional
amounts are out of all proportion to the gain for shareholders. It is also
customary in the market to give the holders of bonds a subscription right for
future bond issues, so that bonds with conversion rights and warrants can be
placed more easily. Shareholders' subscription rights have to be excluded for
both purposes.
The Board of Management is also to have the possibility of excluding
subscription rights in issues of bonds against non-cash payment. This will only
happen if the value of the non-cash payment corresponds to the issue price of
the bond and is not significantly lower than the bond's market value, determined
according to recognised methods of financial mathematics. The issue of bonds
against non-cash payment is intended, in particular, to give us the opportunity
to use such bonds in connection with the acquisition of companies, parts of
companies, shareholdings or assets connected with such investments. The Company
wants to continue to have the chance to strengthen its competitiveness and to
increase its earnings power through such acquisitions. Often considerations for
these may be or need to be of a non-cash nature. Frequently sellers insist on
receiving a consideration in another form. An attractive alternative here can be
to offer convertible bonds or bonds with warrants instead of, or in addition to,
shares or cash. This option creates additional flexibility and increases the
Company's competitive chances in acquisitions. The Board of Management will
examine carefully in each case whether the acquisition and the issuing of bonds
against non-cash payment is in the interests of the Company. Only then will it
exclude the shareholders' subscription rights.
The exercising of conversion rights and warrants resulting from such bonds
issued against non-cash payment cannot be satisfied from the contingent capital,
but requires access to own shares or a non-cash capital increase. For this,
Authorised Capital Increase 2002 will be available.
Munich, 30 April 2003
The Board of Management
Information in accordance with Section 128 para. 2 sentences 6 to 8 of the
German Stock Companies Act:
1 Members of the Boards of Management of banks or employees of banks who hold
seats on the Munich Reinsurance Company's Supervisory Board:
Dr. jur. Albrecht Schmidt,
Chairman of the Supervisory Board of Bayerische
Hypo- und Vereinsbank AG
2 Banks on whose Supervisory Boards members of the Munich Reinsurance
Company's Board of Management or employees hold seats:
Bayerische Hypo- und Vereinsbank AG, Munich
3 Banks in which the Munich Reinsurance Company has a shareholding notifiable
under Section 21 of the German Securities Trading Act:
Bayerische Hypo- und Vereinsbank AG, Munich
Dresdner Bank AG,
Frankfurt
4 Banks which were members of a syndicate responsible for handling the most
recent issue of the Company's securities in the past five years:
Deutsche Bank AG London
UBS Limited
Bayerische Hypo- und Vereinsbank
AG
Re item 5 on the agenda:
Elections to the Supervisory Board
1 Re the Supervisory Board's proposal that the following gentlemen be elected
to the Supervisory Board as representatives of the shareholders:
a) Professor Dr. rer. nat. Hubert Markl
born in Regensburg on 17
August 1938
Degree in biology, chemistry and geography
Former President of the Max Planck Society
Professor of Biology at the University of Constance
Seats held on supervisory boards of other German companies:
Bayerische
Motoren Werke AG
Membership of comparable bodies of German and foreign business
enterprises:
Aventis S.A., Schiltigheim
Royal Dutch Petroleum Company/Shell, The
Hague
Appointed to the Munich Re Supervisory Board by resolution of the Munich
Registration Court with effect from 13 December 2002.
b) Wolfgang Mayrhuber
born in Waizenkirchen, Austria, on 22 March
1947
Degree in mechanical engineering
Deputy Chairman of the Board of Management of Deutsche Lufthansa AG and
Chairman of the Board of Management of Passage Airlines
Seats held on supervisory boards of other German companies:
Eurowings
Luftverkehrs AG
RWE Systems AG
Lufthansa CityLine GmbH* (Chairman)
*Own group companies.
Membership of comparable bodies of German and
foreign business enterprises:
HEICO Corporation, Miami
Ameco Corporation,
Beijing*
Appointed to the Munich Re Supervisory Board by resolution of the Munich
Registration Court with effect from 13 December 2002.
2 Re the Supervisory Board's proposal that the following gentlemen be elected
as substitute members for the representatives of the shareholders:
a) Dr. jur. Fedor Nierhaus
born in Dortmund on 28 March 1936
Degree in law
Former Member of the Board of Management of the Munich Reinsurance
Company
Seats held on supervisory boards of other German companies:
Membership of comparable bodies of German and foreign business
enterprises:
b) Hans Rathnow
born in Berlin on 30 December 1934
Degree in business management
Former Member of the Board of Management of the Munich Reinsurance
Company
Seats held on supervisory boards of other German companies:
Membership of comparable bodies of German and foreign business
enterprises:
*Own group companies.
