Annual General Meeting 2017

As the number of Munich Re shares has changed since the invitation to the AGM was published and now stands at 6,025,989, the Supervisory Board and the 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 of €1,753,507,758.53 for 2016 be utilised as follows:

Pursuant to Section 120 (4) AktG, 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 forms part of the combined management report included in the Munich Re Group Annual Report 2016 referred to under agenda item 1. The Annual Report can be accessed on our website at www.munichre.com/agm (under “Documents”). It will also be sent to shareholders on request. In addition, it 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.

Unless expressly permitted by law, Munich Reinsurance Company requires the authorisation of the Annual General Meeting to buy back shares. The authorisation granted on 27 April 2016 has been exhausted to a significant extent by the share buy-back programme launched in June 2016. To again provide the Company with the full scope of active capital management afforded by such authorisation, it will be proposed to the Annual General Meeting that the Company be granted a further authorisation to buy back own shares.

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

a) The Company is authorised to buy back shares up to a total amount of 10% of the share capital at the time the resolution is adopted. If at the time this authorisation is first exercised, the existing share capital is lower, that amount shall be deemed material. The authorisation may be exercised as a whole or in partial amounts, on one or more occasions and for one or more purposes by the Company, but also by dependent companies or enterprises in which the Company has a majority shareholding (“Group companies”), or by third parties for its or their account. The shares acquired plus other treasury shares in the possession of the Company, or attributable to the Company pursuant to Sections 71d and 71e AktG may at no time amount to more than 10% of the share capital. The authorisation may not be used for trading in treasury shares.

b) The shares shall be acquired at the discretion of the Board of Management aa) via the stock exchange; or bb) via a public purchase offer to all shareholders; or cc) via a solicitation to all shareholders to submit sales offers (request to sell); or dd) via a public offer to all shareholders to exchange Munich Re shares for shares in another listed company as defined in Section 3 (2) AktG.

aa) If the shares are bought back via the stock exchange, the purchase price (excluding incidental expenses) may not exceed by more than 10% or undercut by more than 20% the arithmetic mean of the closing price in Xetra trading on the Frankfurt Stock Exchange determined for Company shares with the same securities number on the last three days of trading prior to the commitment to purchase.

bb) If the shares are bought back via a public purchase offer, the purchase price per share or the upper and lower limits of the price range (excluding incidental expenses) may not exceed by more than 10% or undercut by more than 20% the arithmetic mean of the closing price determined in Xetra trading on the Frankfurt Stock Exchange for Company shares with the same securities number on the fifth, fourth and third trading day before the date on which the offer is published. If after a public purchase offer there are significant deviations in the relevant share price, the offer may be adjusted. In this case, the basis for determining the purchase price or the purchase price range will be the arithmetic mean of the closing price determined in Xetra trading on the Frankfurt Stock Exchange for Company shares with the same securities number on the fifth, fourth and third trading day before the public announcement of the adjustment. The volume may be restricted. If the offer is oversubscribed, the shareholders’ right to tender shares may be excluded insofar as acceptance is based on quotas. The Company may provide for preferred acceptance of small lots of shares (up to 100 shares tendered per shareholder). The purchase offer may provide for further conditions.

cc) If the Company publicly solicits submission of offers to sell Munich Reinsurance Company shares, the Company may in its solicitation state a purchase price range within which offers may be submitted. The solicitation may provide for a submission period, terms and conditions, and the possibility of adjusting the purchase price range during the submission period if, after publication of the solicitation, significant share price fluctuations occur during the submission period. Upon acceptance, the final purchase price shall be determined from all the submitted sales offers. The purchase price (excluding incidental expenses) for each Company share may not exceed by more than 10% or undercut by more than 20% the average closing price of Company shares in Xetra trading on the fifth, fourth and third trading day prior to the date on which the Company accepts the offers. If the number of Company shares offered for sale exceeds the total volume of shares the Company intended to acquire, the shareholders’ right to tender shares may be excluded insofar as acceptance is based on quotas. The Company may provide for preferred acceptance of small lots of shares (up to 100 shares tendered per shareholder).

dd) In the case of a public offer to exchange Munich Re shares for shares in another listed company (“exchange shares”) as defined in Section 3 (2) AktG, 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 amounts. 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 by more than 10% or undercut by more than 20% the relevant value of Company shares. The basis for calculating the relevant value of each Company share and of each exchange share shall be the respective arithmetic mean of the closing price in Xetra trading on the Frankfurt Stock Exchange on the fifth, fourth and third trading day before the date on which the exchange offer is published. If the exchange shares are not traded in the Xetra trading system on the Frankfurt Stock Exchange, the basis shall 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 there are significant deviations in the relevant share price, the offer may be adjusted. In this case, the basis for the adjustment shall be the arithmetic mean closing price on the fifth, fourth and third trading day before the date of the public announcement of the adjustment. The volume may be restricted. If the exchange offer is oversubscribed, the shareholders’ right to tender shares may be excluded insofar as acceptance is based on quotas. The Company may provide for preferred acceptance of small lots of shares (up to 100 shares tendered per shareholder). The exchange offer may provide for further conditions.

c) The Board of Management is empowered to use the Company’s shares acquired on the basis of the aforementioned or previously granted authorisations or pursuant to Section 71d, sentence 5 AktG 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 admitted to trading.

bb) They may be sold directly or indirectly in return for non-cash payment, in particular as part of offers to third parties in connection with mergers or acquisitions of companies or parts of companies, shareholdings or other assets. 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 used for the hedging of or delivery under warrants or conversion rights or conversion obligations, in particular arising out of or in connection with convertible bonds or bonds with warrants issued by the Company or by one of its dependent Group companies. If treasury shares are offered to all shareholders, the number of shares to which holders of such warrants or conversion rights/obligations would be entitled as shareholders after exercising their conversion right or warrant or meeting their conversion obligation may also be offered to such holders of warrants or conversion rights/obligations.

ee) They may be directly or indirectly offered for purchase and transferred to current or former employees of the Company or its affiliated companies, or to present or former Board members of its affiliated companies. The shares may also be transferred to a third party provided that it is ensured from a legal perspective that such third party will offer and transfer the shares to the persons mentioned above.

ff) They can be offered to all shareholders in order to enable them to subscribe for treasury shares against full or partial assignment of their right to payment of the dividend arising out of the resolution on the appropriation of profits at the Annual General Meeting (scrip dividend).

gg) They may be retired without a further resolution of the Annual General Meeting being required. Any retirement may be limited to a portion of the boughtback shares. The Board of Management may determine that the shares can also be retired in a simplified process, without reducing the share capital, by adjusting the proportion of the Company’s share capital represented by each of the remaining no-par-value shares. In this case, the Board of Management shall be authorised to adjust the number of no-par-value shares in the Articles of Association.

d) The Supervisory Board is empowered to use Company shares acquired on the basis of the aforementioned or previously granted authorisations or pursuant to Section 71d sentence 5 AktG as follows:

They may be transferred to the members of the Company’s Board of Management as part of their remuneration. This particularly applies if the rules governing the remuneration of the members of the Board of Management require or will require the Board members to invest part of the variable remuneration assigned to them in Company shares that must be held for a specific period of time. If this requirement relates to a variable remuneration component assessed on a multi-year basis, a minimum holding period of around two years shall be stipulated. In all other cases, the minimum holding period shall be approximately four years.

To be eligible, an individual must be a member of the Board of Management either at the time of transfer of, or at the beginning of the assessment period for, the variable remuneration component concerned. The details of remuneration for members of the Board of Management are established by the Supervisory Board. These include rules on how to deal with holding periods in special cases such as retirement, disability or death.

e) The price at which the shares are launched on other stock exchanges in accordance with subitem c) aa) or sold in accordance with subitem c) cc) may not significantly undercut the opening stock price in Xetra trading on the Frankfurt Stock Exchange determined for Company shares with the same securities number (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 sold, together with any shares that may have been or will be issued or sold during the term of this authorisation by directly or indirectly excluding the shareholders’ subscription rights, pursuant to Section 186 (3) sentence 4 AktG, may not exceed a total of 10% of the share capital, either at the time this authorisation enters into force or when the shares are issued or sold.

f) Should the Xetra trading system be replaced by a comparable successor system, the latter shall also take the place of the Xetra trading system for the purposes of this authorisation.

g) The authorisations in accordance with subitems c) and d) may be utilised one or more times, partially or wholly, individually or jointly; the authorisations in accordance with subitems 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.

h) Shareholders’ subscription rights in respect of these bought-back shares shall be excluded insofar as the shares are used in accordance with the authorisations in subitems c) aa, bb), cc), dd), ee) or d). If the own shares are used for the purpose mentioned in subitem c) ff), the Board of Management shall be authorised to exclude the right of subscription.

i) The authorisation is valid until 25 April 2022. The authorisation to buy back and use own shares granted by the Annual General Meeting on 27 April 2016 is cancelled as from the moment this new authorisation comes into effect.

In addition to the acquisition channels proposed in the authorisation under item 6 of the agenda, the possibility to buy back own shares by using derivatives is also to be provided for.

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

a) By virtue of the authorisation granted at the Annual General Meeting on 26 April 2017 under item 6 of the agenda, the Company may in accordance with the provisions of subitems b) to h) below also buy back own shares by using derivatives in the form of put options, call options, forward purchase contracts (where shares are delivered more than two days after conclusion of the purchase contract), or a combination of such instruments (hereinafter all referred to as “derivatives”).

b) Derivatives may be used in one of the ways outlined under aa), bb) or cc) below, or in a combination of these:

aa) Derivatives may be issued or acquired via Eurex Deutschland or LIFFE (or a comparable successor system). In this case, the Company shall inform shareholders of any planned issue or acquisition of derivatives by placing a public announcement in the newspapers. Different exercise prices (excluding incidental expenses) on different due dates may be selected for the derivatives, even if they are being issued or acquired at the same time.

bb) The issue of put options, the purchase of call options, the conclusion of forward purchase contracts or a combination of such derivatives and their respective fulfilment may also be conducted outside the stock exchanges listed under aa) if the shares to be delivered to the Company on exercise of the derivatives have previously been acquired via the stock exchange at the current share price in Xetra trading on the Frankfurt Stock Exchange.

cc) The conclusion of put or call option contracts may be publicly offered to all shareholders, or option contracts may be concluded with a bank or a credit institution (hereinafter referred to as “underwriter”) pursuant to Section 53 (1) sentence 1, Section 53b (1) sentence 1, or Section 53b (7) of the German Banking Act (Kreditwesengesetz), subject to the obligation to offer these options to all shareholders for subscription.

The Company may only buy back the derivatives outlined under items aa) to cc) in order to retire them.

c) In the case of subitems b) aa) and bb), the exercise price of the options or the acquisition price payable in settlement of a forward purchase contract (in each case excluding incidental expenses) per share may not exceed by more than 10% or undercut by more than 20% the opening price determined in Xetra trading on the Frankfurt Stock Exchange for Company shares with the same securities number on the day the derivative contract is concluded. If own shares are bought back using options, the acquisition price (excluding incidental expenses) payable by the Company for the shares corresponds to the exercise price agreed on in the option. The acquisition price (excluding incidental expenses) paid by the Company for options may not exceed, nor may the sale price (excluding incidental expenses) collected by the Company for options fall short of, the theoretical market value of the respective option determined according to recognised principles of financial mathematics, the calculation of such market value considering among other things the agreed exercise price. The forward price agreed on by the Company in forward purchase contracts may not be substantially higher than the theoretical forward price determined according to recognised principles of financial mathematics, the calculation of such forward price considering among other things the current stock market price and the term of the forward purchase contract.

d) In the case of subitem b) cc), the exercise price of the options (excluding incidental expenses) per share may not exceed by more than 10% or undercut by more than 20% the arithmetic mean of the closing price determined for Company shares with the same securities number in Xetra trading on the Frankfurt Stock Exchange on the fifth, fourth and third trading day prior to publication of the offer. In the event that the offer to shareholders is oversubscribed, the shareholders’ right to tender shares may be excluded insofar as acceptance is based on quotas. The Company may provide for a preferred offer for concluding option contracts or a preferred allocation of options for small lots of shares (options up to 100 shares per shareholder).

e) The term of the derivatives shall be a maximum of 18 months in each case and be so determined that exercising derivatives to acquire shares will be completed by 25 April 2022 at the latest. The Company may use derivatives to acquire own shares up to a maximum of 5% of the share capital at the time the resolution is adopted at the Annual General Meeting. If at the time this authorisation is first exercised the existing share capital is lower, that amount shall be deemed material.

f) If derivatives are used to buy back own shares pursuant to subitem b) aa) or bb), shareholders shall not have a claim to conclude such derivative contracts with the Company, in line with the provisions of Section 186 (3) sentence 4 AktG. Shareholders shall also not have the right to conclude derivative contracts to the extent that, on conclusion of derivative contracts pursuant to subitem b) cc), the Company has provided for a preferred offer or preferred allocation for the conclusion of derivative contracts with regard to small lots of shares. Shareholders shall have a right to tender their shares to the Company only insofar as the Company is obligated to purchase shares from them pursuant to the derivative contracts.

g) 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.

h) In all other respects, the conditions and uses of the authorisation granted under item 6 of the agenda apply.

Wolfgang Mayrhuber resigned from the Supervisory Board of Munich Reinsurance Company with effect from 31 December 2016. On 3 January 2017, the Registration Court of the Amtsgericht (Local Court) in Munich appointed Renata Jungo Brüngger to replace him as a member of the Supervisory Board.

The Supervisory Board proposes that

Renata Jungo Brüngger, of Horgen, Switzerland,
Member of the Board of Management of Daimler AG,

be elected to the Supervisory Board as a shareholder representative for the remainder of Wolfgang Mayrhuber’s original term of office, namely until the end of the Annual General Meeting in 2019.

The Supervisory Board’s proposal is based on the recommendation of the Nomination Committee and takes into account the objectives approved by the Supervisory Board regarding its composition.

Pursuant to Sections 96 (1) and 101 (1) of the German Stock Corporation Act (AktG) and Sections 5 (1), 15 (1) and 22 of the German Act on the Co-Determination of Employees in Cross-Border Mergers (MgVG) in conjunction with the Co-determination Agreement of Munich Reinsurance Company concluded between the managements of the Company and Münchener Rück Italia S.p.A. and the Special Negotiating Body dated 28 November/10 December/12 December 2008 (as amended on 25 March 2014) and pursuant to Article 10 of Munich Reinsurance 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. Pursuant to Section 96 (3) of the Stock Corporation Act, at least 30% of the members of the Supervisory Board should be women, and at least 30% should be men.

The Authorised Capital 2013 capital increase of up to €280m authorised by the Annual General Meeting on 25 April 2013 expires on 24 April 2018. Since the 2018 Annual General Meeting (currently scheduled for 25 April 2018) will likely not be held before that date, the Authorised Capital 2013 is to be renewed now in the same amount, so that the Company may, if necessary, seamlessly continue to strengthen capital using this tool in the future as well.

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

a) Cancellation of the authorisation of 25 April 2013

The authorisation granted by the Annual General Meeting on 25 April 2013 regarding an Authorised Capital 2013, as laid down in Article 4 (1) of the Articles of Association, shall be cancelled as soon as the new authorisation takes effect upon entry in the Commercial Register.

b) Authorisation

The Board of Management is authorised, with the consent of the Supervisory Board, to increase the Company’s share capital at any time before 25 April 2022 by an amount of up to €280m by issuing new registered no-par-value shares against contributions in cash and/or in kind (Authorised Capital 2017). The authorisation may be exercised as a whole or in parts, on one or more occasions. The Board of Management is also authorised, with the consent of the Supervisory Board, to determine all other rights of the shares and the terms of issue.

Shareholders are to be granted subscription rights where the capital increase is made by cash contribution; the new shares may also be acquired by credit institutions or companies within the meaning of Section 186 (5), sentence 1 AktG, under the obligation that they offer them for subscription to the shareholders. However, the Board of Management is authorised, with the consent of the Supervisory Board, to exclude the shareholders’ subscription rights in the following cases:

• insofar as it is necessary in respect of fractional amounts resulting from the subscription ratio;
  
  
• 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;
  
  
• 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 (3) sentence 4 AktG 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 Article 186 (3) sentence 4 AktG; or
  
  
• in order to offer the new shares to all shareholders, to enable them to subscribe for new shares against full or partial contribution in kind of their right to payment of the dividend arising out of the resolution on the appropriation of profits at the Annual General Meeting (scrip dividend).

In addition, the Board of Management is 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 a calculated quota of 20% of the existing share capital at the time this authorisation is exercised for the first time. New shares issued by the Company during this authorisation period from the Authorised Capital 2015, against cash contributions and excluding the shareholders’ subscription rights, are to be included in this calculation. New shares that are issued based on a bond with conversion or option rights or conversion requirements, issued without subscription rights during the term of this authorisation, are also to be included in this calculation.

c) Amendment to the Articles of Association

Article 4 (1) of the Articles of Association is to be reworded as follows:

“(1) The Board of Management is authorised, with the consent of the Supervisory Board, to increase the Company’s share capital at any time before 25 April 2022 by an amount of up to €280m by issuing new registered no-par-value shares against contributions in cash or in kind (Authorised Capital 2017). 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.

Shareholders are to be granted subscription rights where the capital increase is made by cash contribution; the new shares may also be acquired by credit institutions or companies within the meaning of Section 186 (5) sentence 1 AktG, under the obligation that they offer them for subscription to the shareholders. The Board of Management is authorised, with the consent of the Supervisory Board, to exclude the shareholders’ subscription rights in the following cases:

• insofar as it is necessary in respect of fractional amounts resulting from the subscription ratio;
  
  
• 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,
  
  
• 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 (3), sentence 4 AktG 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 (3), sentence 4 AktG, or
  
  
• in order to offer the new shares to all shareholders, to enable them to subscribe for new shares against full or partial contribution in kind of their right to payment of the dividend arising out of the resolution on the appropriation of profits at the Annual General Meeting (scrip dividend).

In addition, the Board of Management is 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 a calculated 20% share of the existing share capital at the time this authorisation is exercised for the first time. New shares issued by the Company during this authorisation period, against cash contributions and excluding the shareholders’ subscription rights, from the Authorised Capital 2015, are to be included in this calculation. New shares that are issued based on a bond with conversion or option rights or conversion requirements, issued without subscription rights during this authorisation period, are also to be included in this calculation.”

d) The Board of Management is instructed to register the resolution on the cancellation of the Authorised Capital 2013, under subitem a), in the Commercial Register such that the cancellation be registered only if the Authorised Capital 2017, to be adopted under subitems b) and c) of this agenda item, is registered at the same time.

A profit transfer agreement was concluded between Munich Reinsurance Company and MR Infrastructure Investment GmbH (“MR Infrastructure”) on 20 February 2017. Munich Reinsurance Company holds 100% of the shares of MR Infrastructure. MR Infrastructure’s corporate objective is to acquire and manage assets, particularly shares in corporations and partnerships, real estate, fixed-interest securities and borrower’s note loans (Schuldscheindarlehen), as well as similar assets for the purpose of asset investment. Transacting business that requires state approval is not part of MR Infrastructure’s corporate objectives.

The profit transfer agreement mainly contains the following provisions:

• MR Infrastructure is required to transfer its total profit for the year to Munich Reinsurance Company.
  
  
• MR Infrastructure may, with Munich Reinsurance Company’s consent, transfer parts of its profit for the year to other revenue reserves only to the extent permissible under commercial law, and provided that the transfer makes prudent commercial sense.
  
  
• Munich Reinsurance Company is obliged to compensate for any MR Infrastructure losses for the year, in accordance with the provisions of Section 302 AktG (in its current version).
  
  
• The contract is conditional on the approval of MR Infrastructure’s shareholder meeting, the approval of Munich Reinsurance Company’s Annual General Meeting, and registration in the Commercial Register in the place where MR Infrastructure is registered. MR Infrastructure’s shareholders’ meeting has already approved the profit transfer agreement.
  
  
• The profit transfer agreement has a term of five years. It applies retroactively to the entire financial year in which the contract was registered in the Commercial Register in the place where MR Infrastructure is registered. The contract will be extended by respective one-year terms if it is not terminated by one of the parties with six months’ notice to the end of MR Infrastructure’s financial year.
  
  
• The contract may be terminated by either party for good cause. Any final and binding or immediately enforceable order to terminate the contract issued by the German Federal Financial Supervisory Authority (BaFin) shall be deemed to provide good cause. Moreover, Munich Reinsurance Company is entitled to terminate the Agreement for good cause particularly in the case of an – at least partial – sale of shares in MR Infrastructure.
  
  
• The contract contains a typical severability clause, in case any stipulations in the contract are or become invalid or unworkable, or if an important provision has been omitted from the contract.

Pursuant to Section 293a AktG, the Board of Management of Munich Reinsurance Company and MR Infrastructure’s management submitted a joint report explaining and justifying, from a legal and economic standpoint, the contents of and reasons for conclusion of the profit transfer agreement. The joint report is available, together with the following mandatory documentation, on Munich Reinsurance Company’s website (www.munichre.com/agm) under “Documents”:

• The profit transfer agreement between Munich Reinsurance Company and MR Infrastructure dated 20 February 2017;
  
  
• Munich Reinsurance Company’s annual financial statements and consolidated financial statements for the 2014, 2015 and 2016 financial years, the 2014 management and group management reports, and the 2015 and 2016 combined management reports for Munich Reinsurance Company and the Group;
  
  
• MR Infrastructure’s annual financial statements for the 2014, 2015 and 2016 financial years.

All documents requiring disclosure will also be made available at the Annual General Meeting. Since Munich Reinsurance Company is MR Infrastructure’s sole shareholder, it was not necessary to have the contract audited or to present an auditor’s report (Sections 293b et seq. AktG).

The Supervisory Board and Board of Management propose to approve the profit transfer agreement concluded between Munich Reinsurance Company and MR Infrastructure on 20 February 2017.

On 6 March 2017, Munich Reinsurance Company concluded profit transfer agreements with MR Beteiligungen 2. GmbH (“MR Beteiligungen 2”) and MR Beteiligungen 3. GmbH (“MR Beteiligungen 3”) (together referred to as the “MR companies”), respectively. Munich Reinsurance Company holds 100% shares in each of the MR companies. The MR companies’ corporate objective is to acquire and manage own assets, especially equity holdings in corporations and partnerships. Transacting business that requires state approval is not part of MR companies ’ corporate objectives.

The MR companies were incorporated so that Munich Reinsurance Company may potentially, at a later date, undertake operative business, or transfer such business to them. The MR companies are planned for business activities that are reasonable to keep organisationally, but not economically, separate from Munich Reinsurance Company. The MR companies are currently purely shelf companies. No operative business activities have been planned to date.

The wording of the profit transfer agreements that Munich Reinsurance Company has concluded with the MR companies is – with the exception of the names of the parties – identical to that of the profit transfer agreement concluded between Munich Reinsurance Company and MR Infrastructure on 20 February 2017. We therefore refer to the remarks under agenda item 10 as to the main contents of the profit transfer agreements with the MR companies. The shareholders’ meetings (of MR Beteiligungen 2 and MR Beteiligungen 3 respectively) have also approved the profit transfer agreements accordingly.

Pursuant to Section 293a AktG, the Board of Management of Munich Reinsurance Company and the MR companies’ managements submitted respective joint reports explaining and justifying, from a legal and economic standpoint, the contents of and reasons for conclusion of the respective profit transfer agreements. The joint reports are available, together with the following mandatory documentation, on Munich Reinsurance Company’s website (www.munichre.com/agm) under “Documents”:

• The profit transfer agreement between Munich Reinsurance Company and MR Beteiligungen 2 dated 6 March 2017;
  
  
• The profit transfer agreement between Munich Reinsurance Company and MR Beteiligungen 3 dated 6 March 2017;
  
  
• Munich Reinsurance Company’s annual financial statements and consolidated financial statements for the 2014, 2015 and 2016 financial years, the 2014 management and group management reports, and the 2015 and 2016 combined management reports for Munich Reinsurance Company and the Group.

The MR companies were only registered in the Commercial Register on 23 February 2017 (MR Beteiligungen 2) and 28 February 2017 (MR Beteiligungen 3). They have not yet prepared any financial statements or management reports.

All documents requiring disclosure will also be made available at the Annual General Meeting. Since Munich Reinsurance Company is the MR companies’ sole shareholder, it was not necessary to have the contract audited or to present an auditor’s report (Sections 293b et seq. AktG).

The Supervisory Board and the Board of Management propose to approve

a) the profit transfer agreement between Munich Reinsurance Company and MR Beteiligungen 2 dated 6 March 2017, and

b) the profit transfer agreement between Munich Reinsurance Company and MR Beteiligungen 3 dated 6 March 2017.

The profit transfer agreements are to be approved by separate votes.