28 June 1999
Letter to shareholders
Dear Shareholders,
Please find enclosed the invitation to this year's Annual General Meeting of Shareholders at 10 a.m. on Thursday, 22 July 1999. The AGM is being held for the first time at the ICM - International Congress Centre Munich, Messegelände, München-Riem.
In this letter we would like to inform you about the final figures for the short business year 1998 and let you have a first interim report on the current business year 1999. In addition, we wish to explain some of the items on the attached agenda for the 1999 AGM in more detail.
The short business year 1998
This year we are able to report to you substantially earlier than hitherto and thus also provide for payment of the dividend at an earlier date. We have achieved this by bringing forward the Munich Reinsurance Company's balance sheet date by half a year. This measure is part of a process in which, among other things, we are continually improving the quality of information provided to our shareholders. Further steps include publication for the first time of provisional figures in March this year and of a halfyear report in September 1999, and presentation of the 1999 consolidated accounts on the basis of International Accounting Standards (IAS).
The Munich Re Group is continuing on a successful course
In the year under review we achieved an improved Group result and a marked increase in premium income, despite the fact that part of the parent company's regular income from investments was missing owing to its short business year. The positive development was attributable above all to the first full consolidation of VICTORIA and D. A. S.
The premium income of the companies consolidated in the Group accounts rose by 11.8% to DM 49.8bn (44.5bn). Without the changes in the consolidated group, the increase would have been approximately 2.5%. Net premiums totalled DM 46.0bn (40.5bn) or 13.7% more than in the previous year. Around half the premium volume now derives from the reinsurers and half from the direct insurers.
The Group's underwriting profit increased to DM 692m (596m). The pleasing growth in profits from direct insurance more than compensated for the deterioration in reinsurance results, thus improving the overall underwriting result. The investment result also improved markedly to DM 15.2bn (13.3bn); in accordance with accounting regulations, DM 11.5bn (9.4bn) of this is incorporated in the underwriting result.
The claims equalization provision and similar provisions have once more been increased by a very large amount, totalling DM 0.8bn (1.3bn). Even so, the allocation is lower than in the previous two years, when the excellent result situation in reinsurance meant that exceptionally high amounts had to be allocated. By contrast, the special allocations to the provision for outstanding claims are, at DM 282m, on a par with the previous year (DM 270m).
The Group profit for the year is slightly higher than in the previous year, despite the parent company's short business year. It shows an increase of 4.2% to DM 1,197m (1,149m). As expected, earnings per share - calculated in accordance with the DVFA/GDV system - were down on the previous year, but at an excellent DM 13.95 (19.13) they still compare favourably with those of other companies.
The Munich Reinsurance Company's profit for the year is DM 309m (303m). We have allocated DM 150m of this to the revenue reserves. The balance sheet profit at the disposal of the AGM is thus DM 159m (153m).
At the AGM the Supervisory Board and the Board of Management will be proposing that this balance sheet profit be utilized for the payment of an unchanged dividend - despite the short business year - of DM 1.80 per share.
Interim report on the current business year 1999
For 1999 we currently expect a better Group result than last year. In particular, a considerably higher profit for the year looks likely for the parent company in its first business year on a calendar-year basis. As things stand at present, it should be possible to maintain a dividend of DM 1.80 even though the number of shares has doubled as a consequence of the stock split and the capital measure for the holders of bearer shares, meaning that the overall dividend amount would need to be doubled to keep the dividend rate unchanged. This naturally presupposes that no exceptional loss events occur before the end of the current business year and that we are not hit by big price losses on the capital markets.
In detail:
Trends in reinsurance worldwide have not changed significantly compared with last year. Around 30% of our reinsurance premium income derives from the German market. Owing to the substantial market share of the parent company in Germany, we are particularly affected by restructurings in reinsurance programmes here, including increases in our clients' retentions. Thus the premium volume of our German business will fall even if our market share remains the same or even grows.
In other markets, too, reinsurers' opportunities for growth are generally limited at present. Nevertheless, through innovative products and outstanding service we, as leading international reinsurers, often succeed in extending our position even in shrinking markets, whilst still adhering to our business principles. Increases in retentions usually apply only to simple risks; for complex and particularly exposed risks, there continues to be an unchanged or even enhanced demand for financially strong and experienced reinsurers like Munich Re.
For 1999 we expect our gross premium from reinsurance as a whole to increase, with growth above all in life reinsurance. The reinsurers' underwriting result will deteriorate as a consequence of falling original rates and further erosion of reinsurance prices and conditions. The extent of the deterioration in the result will, however, mainly depend on the claims costs from natural catastrophes and other major losses.
The positive development of our direct insurers should continue in 1999, both in terms of premiums and as regards the result. Their gross premiums will probably increase by around 3%. As last year, the mainstays of this growth will be the life and health insurers, who are reckoning with growth rates of 3% to 4%. In propertycasualty insurance we anticipate an increase in premium of around 2%, despite the keen competition in important lines of business and counter to the general market trend. Barring any unforeseen developments, our direct insurers expect another good underwriting result.
As far as investments are concerned, low yields on new issues on the bond markets and high price levels on the stock markets are making it more difficult to achieve above-average returns when investing liquid funds. The insurers and reinsurers in the Group are therefore continuing to pursue their investment policy oriented towards stocks and real assets with appropriate caution. A central point of emphasis remains new investments in shares. Here the European stock markets still appear to have catching-up potential in relation to the USA. In the medium term, too, we consider the European financial markets to be particularly attractive internationally. We have refrained from making major investments in the Asian region.
The direct insurers are increasing the proportion of real estate in their investment portfolios through investments in property and real estate trusts. However, particularly in the case of the life and health insurers, over 40% continues to be invested in registered bonds and mortgage loans, i.e. in investments that guarantee a continual flow of income and a high degree of security.
For 1999 we expect investments to show a further increase and another improvement in the result, always assuming that the situation on the capital markets does not undergo any fundamental negative changes before the end of the year.
One subject that has occupied us a great deal in the last few months and has also given us great cause for concern is tax legislation. The new German tax reform law entered into force with retroactive effect as from 1 January 1999. This means that the parent company and its German subsidiaries will have to face considerable additional tax burdens in 1999. These mainly result from the discounting requirement for provisions and the so-called "more realistic" valuation of claims provisions. Other negative factors are the retroactive requirement to reinstate original values and the limitations in respect of writedowns to the lower going-concern value.
According to the German government, the total tax burden for the insurance industry from the revaluation of claims provisions should not exceed DM 8.75bn. The implementation regulations, which are crucial in this respect, have yet to be issued, so that the additional tax which Munich Re will have to pay as a result of the tax reform cannot be quantified at present. However, on the basis of the above-mentioned government statement, it will probably be less than originally assumed. Also, transitional regulations make it possible to spread the additional tax resulting from discounting and the reinstatement of values over a period of several years.
It is to be hoped that the business tax reform that has now been announced, holding out the prospect of lower tax rates, will indeed ease the tax burden so that Germany can regain some of its attractiveness internationally as a location for the insurance industry.
In order to make Munich Re shares more transparent, more liquid and thus even more attractive for German and foreign shareholders, we have carried out a series of shareholder-friendly capital measures in the last twelve months. These were prepared with intensive press work and have all gone according to plan. A facility that has proved very effective in this connection is our shareholder service telephone, which many of you have used and which has enabled us to give direct answers to your enquiries regarding our capital measures. The extensive package of measures will be concluded with the delisting of the bearer shares, scheduled for the end of November 1999. Thus there will only be one category of Munich Re share on the stock exchange in future: fully paid-up no-par-value registered shares.
We will be preparing the consolidated accounts for 1999 on the basis of International Accounting Standards for the first time. Our chief objectives in this respect are
a further broadening of our annual report's acceptance among shareholders, investors and analysts (even higher information content, even more transparency),
greater comparability of our consolidated accounts with those of our international competitors (comparable accounting and valuation rules)
and consequently even greater interest in our shares.
In the second half of 1999 we intend to inform our shareholders in more detail about the differences to be expected from the change in our accounting.
On 28 September 1999 we will be publishing our main interim report: now that the balance sheet date has been switched to 31 December, the report will for the first time deal with the development of the Munich Re Group's business in the first six months of the current calendar year.
Explanatory information on the agenda for the Annual General Meeting
The agenda for the AGM is enclosed with this letter. We wish to provide you with the following explanatory information in addition to that given in the agenda:
Item 5: Elections to the Supervisory Board
Under the Articles of Association the term of office of the Supervisory Board members elected by the shareholders expires at the end of this year's AGM.
The following gentlemen are no longer available for re-election and will cease to be members of the Supervisory Board at the end of the AGM on 22 July 1999:
Dr.-Ing. E. h. Eberhard v. Kuenheim,
Former Chairman of the Supervisory Board of Bayerische Motoren Werke AG, Member of the Supervisory Board since 1978,
Dr. rer. pol. Wolfgang Röller,
Honorary Chairman of the Supervisory Board of Dresdner Bank AG, Member of the Supervisory Board since 1994,
Dr.-Ing. Dieter Soltmann,
General Partner of Gabriel Sedlmayr Spaten-Franziskaner-Bräu KGaA, Member of the Supervisory Board since 1990.
We wish to thank Dr. v. Kuenheim, Dr. Röller and Dr. Soltmann very much for the valuable contributions they have made to the development of our company in their years of service on the Supervisory Board.
To replace them, it is proposed that
Professor Dr. Henning Kagermann,
Spokesman of the Board of Management of SAP AG,
Dr. Dr.-Ing. E. h. Heinrich v. Pierer,
Chairman of the Board of Management of Siemens AG,
Dr. Alfons Titzrath,
Chairman of the Supervisory Board of Dresdner Bank AG,
be newly elected to the Munich Re Supervisory Board.
All the other Supervisory Board members elected by the shareholders are available for re-election, and it is proposed that they be re-elected.
At the same time, it is proposed that the following substitute members be elected for the abovementioned representatives of the shareholders:
Dr. jur. Fedor Nierhaus,
Member of the Board of Management of the Munich Reinsurance Company until 30 June 1999, and
Hans Rathnow,
Former member of the Board of Management of the Munich Reinsurance Company.
Item 6: Resolution to increase the share capital out of retained earnings so that the amount of the share capital apportionable to each share is rounded up to an even cent amount.
Through a small capital increase out of retained earnings, without the issue of new shares, the share capital is to be increased so that an amount of exactly EUR 2.56 is apportionable to each no-par-value share. This will serve to technically facilitate future capital measures, since uneven cent amounts and the rounding up or down that would then be necessary are avoided. The above measure also results in a corresponding adjustment of the contingency capital amounts, whereas the amounts of the capital authorized for capital increases do not need to be changed.
Items 7 and 8: Resolution on the conversion of bearer shares into unrestrictedly transferable registered shares and related amendments to the Articles of Association, and on a further amendment to the Articles of Association to exclude the right to have share certificates issued
The resolution proposed here marks the conclusion of the measures to streamline Munich Re's share structure that were announced in our letter to shareholders of 29 June last year. The delisting of our bearer shares on the stock exchanges in Frankfurt am Main and Munich on 30th November 1999 will mean that there will only be very few bearer shares left at this date which have not been converted into restrictedly transferable registered shares, the future single Munich Re share category. To enable the company to inform all shareholders more simply than hitherto in a uniform procedure and to facilitate the conduct of AGMs, it is proposed that the bearer shares be converted into unrestrictedly transferable registered shares. A resolution of the AGM, approved by the requisite majority to amend the Articles of Association, is sufficient for this. It is not intended to apply for these unrestrictedly transferable registered shares to be admitted for trading on the stock exchange. The resolution will not take effect until after the delisting of the bearer shares.
New German legislation makes it possible to exclude the right to have share certificates issued. The aim of this is to avoid the relatively high costs involved in printing certificates for only a few shareholders. This applies particularly, for instance, to the costs that would be incurred for printing new certificates for the few non-listed unrestrictedly transferable registered shares.
Yours sincerely,
Münchener Rückversicherungs-Gesellschaft
Munich, 28 June 1999
|
Consolidatedbalance sheet
|
|
Consolidatedbalance sheet in DM m
|
31.12.1998
|
30.6.1998
|
| Investments (including deposits retained on assumed reinsurance business) |
217,143 |
208,845 |
| Reinsurers |
75,222 |
71,091 |
| Insurers |
141,921 |
137,754 |
| Shareholders' funds |
12,262 |
9,962 |
| Claims equalization provisions |
7,744 |
6,956 |
| Underwriting provisions (without claims equalization provisions) |
187,246 |
182,929 |
| Life |
118,567 |
117,959 |
| Non-life |
68,679 |
64,970 |
|
Consolidated profit and loss account in DM m
|
1998
|
1997/98
|
| Gross premiums written |
49,791 |
44,522 |
| Life |
15,599 |
13,691 |
| Non-life |
34,192 |
30,831 |
| Net premiums written |
46,010 |
40,477 |
| Life |
14,851 |
12,711 |
| Non-life |
31,159 |
27,766 |
| Net earned premiums |
45,971 |
40,485 |
| Underwriting result |
692 |
596 |
| Life |
719 |
400 |
| Non-life |
-27 |
196 |
| Investment result |
15,153 |
13,252 |
| Thereof incorporated in underwriting result |
11,524 |
9,384 |
| Unadjusted earnings |
3,706 |
3,755 |
| Special allocations to the provision for outstanding claims |
-282 |
-270 |
| Change in the claims equalization provision |
-772 |
-1,282 |
| Operating result |
2,652 |
2,203 |
| Tax |
-1,455 |
-1,054 |
| Profit for the year |
1,197 |
1,149 |
Invitation to the Annual General Meeting
We hereby invite our shareholders to the 112th Annual General Meeting, to be held at the ICM - International Congress Centre Munich, Messegelände, München-Riem, at 10 a.m. on Thursday, 22 July 1999.
Agenda
1. Submission of the approved company accounts and the Board of Management report for the short business year 1998, the consolidated accounts and the Board of Management report for the Group for the short business year 1998, and the report of the Supervisory Board
2. Resolution on the appropriation of the balance sheet profit from the short business year 1998
The Supervisory Board and the Board of Management propose that the balance sheet profit of DM 159,227,712 be utilized for the payment of a dividend of DM 1.80 on each no-par-value bearer and registered share entitled to dividend.
3. Resolution to approve the actions of the Board of Management in respect of the short business year 1998
The Supervisory Board and the Board of Management propose that approval for the Board of Management's actions be given.
4. Resolution to approve the actions of the Supervisory Board in respect of the short business year 1998
The Supervisory Board and the Board of Management propose that approval for the Supervisory Board's actions be given.
5. Elections to the Supervisory Board
The term of office of the Supervisory Board members elected by the shareholders expires at the end of this AGM. In accordance with the German Stock Companies Act (Article 96 para. 1 and Article 101 para. 1) and the German law on co-determination of 1976 (Article 7 para. 1 sentence 2 in conjunction with sentence 1 item 3) the Supervisory Board is for the first time to be 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.
The Supervisory Board proposes that for the next term of office
Dr. jur. Rolf-E. Breuer, Frankfurt am Main, Spokesman of the Board of Management of Deutsche Bank AG,
Rudolf Ficker, Munich, Versicherungskaufmann, Former member of the Board of Management of the Munich Reinsurance Company,
Ulrich Hartmann, Düsseldorf, Chairman of the Board of Management of VEBA AG,
Dr. techn. h. c. Dipl.-Ing. ETH
Ferdinand Piëch, Wolfsburg, Chairman of the Board of Management of Volkswagen AG,
Dr. jur. Albrecht Schmidt, Munich, Spokesman of the Board of Management of Bayerische Hypo- und Vereinsbank AG,
Dr. jur. Henning Schulte-Noelle, Munich, Chairman of the Board of Management of Allianz AG,
Dr. phil. Ron Sommer, Cologne, Chairman of the Board of Management of Deutsche Telekom AG,
be re-elected as representatives of the shareholders
and that
Prof. Dr. rer. nat. Henning Kagermann, Walldorf,
Spokesman of the Board of Management of
SAP AG,
Dr. jur. Dr.-Ing. E. h. Heinrich v. Pierer, Munich,
Chairman of the Board of Management of Siemens AG,
Dr. rer. pol. Alfons Titzrath, Frankfurt am Main, Chairman of the Supervisory Board of Dresdner Bank AG,
be newly elected to the Supervisory Board as representatives of the shareholders.
In addition, the Supervisory Board proposes that, along with the members of the Supervisory Board to be elected by the shareholders at the AGM,
Dr. jur. Fedor Nierhaus, Munich, Member of the Board of Management of the Munich Reinsurance Company until 30 June 1999, and
Hans Rathnow, Munich, Former member of the Board of Management of the Munich Reinsurance Company,
be elected as substitute members. They will become members of the Supervisory Board in the above order if Supervisory Board members elected by the shareholders retire from the Board before the end of their term of office and the AGM does not elect a successor prior to their retirement. The above two gentlemen will become substitute members again in the same order if they cease to be members of the Supervisory Board before the end of the term of office of the Supervisory Board members they have replaced.
6. Resolution to increase the share capital out of retained earnings, to adjust the amounts of the contingent capital and to amend the Articles of Association accordingly
The AGM of 5 November 1998 approved the conversion of the share capital into no-par-value units and authorized its conversion to euros. On this basis the share capital, divided into no-par-value units, and other DM amounts in the Articles of Association were converted in May 1999 at the irrevocably fixed conversion rate of EUR 1 = DM 1.95583. This has led to uneven and in some cases rounded-off euro amounts for the share capital, the capital authorized for capital increases, and the contingent capital. The amount of the share capital apportionable to each no-par-value share currently totals EUR 2.5564594 (rounded off). In order to avoid technical difficulties resulting from uneven cent amounts in future capital measures, the share capital is to be increased through a capital increase out of retained earnings, without the issue of new shares, so that exactly EUR 2.56 of the share capital is apportionable to each no-par-value share. By law this simultaneously results in a corresponding adjustment of the contingent capital, whereas the capital authorized for capital increases can remain unchanged.
The Board of Management and the Supervisory Board therefore propose that
a) The company's share capital be increased by EUR 626,400.76 from EUR 452,287,980.04 to EUR 452,914,380.80 by converting EUR 626,400.76 (= DM 1,225,133.40) of the capital reserve shown in the balance sheet as at 31 December 1998 into share capital. The capital increase will not involve the issue of new shares; it will be executed by increasing the amount apportionable to each no-par-value share.
This resolution is based on the company's annual balance sheet as at 31 December 1998 adopted by the Board of Management and the Supervisory Board. The balance sheet has been audited by the Bayerische Treuhandgesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Munich, and has received an unqualified auditor's opinion.
b) Under Article 218 of the German Stock Companies Act the contingent capital in Article 3 a para. 4 of the Articles of Association (hitherto 4,474,622.03 euros) will be correspondingly increased to 4,480,819.20 euros, the contingent capital in Article 3 a para. 5 (hitherto 15,338,756.44 euros) to 15,360,000 euros, and the contingent capital in Article 3 a para. 6 (hitherto 15,338,756.44 euros) to 15,360,000 euros.
c) Article 3 para. 1 sentence 1 of the Articles of Association shall be amended as follows:
"The share capital of the Company amounts to 452,914,380.80 euros."
d) In Article 3 a para. 4 of the Articles of Association the amount of 4,474,622.03 euros shall be amended to 4,480,819.20 euros, in Article 3 a para. 5 the amount of 15,338,756.44 euros to EUR 15,360,000 euros, and in Article 3 a para. 6 the amount of 15,338,756.44 euros to EUR 15,360,000 euros.
7. Resolution on the conversion of the remaining bearer shares into unrestrictedly transferable registered shares and a change in the right of conversion into restrictedly transferable registered shares, along with the relevant amendments to the Articles of Association
The conversion of bearer shares into restrictedly transferable registered shares, linked to the rights issue for the holders of bearer shares in spring 1999, achieved the desired high conversion rate, which will make it possible to delist the bearer shares on the stock exchange. To enable the company to inform all its shareholders in a uniform procedure in future, invite them to Annual General Meetings and conduct these meetings more simply with only one category of share, the remaining bearer shares are to be converted by resolution of the AGM into unrestrictedly transferable registered shares. It is not intended to apply for listing of these shares on the stock exchange. At the same time the shareholders in question are to be granted a right of unlimited duration in the Articles of Association to convert these shares into restrictedly transferable listed registered shares. The relevant amendments to the Articles of Association will not be filed for entry in the Commercial Register until after delisting of the bearer shares, scheduled for 30 November 1999. It will continue to be possible to sell bearer shares on the stock exchange or to convert them into restrictedly transferable registered shares until that date.
The Supervisory Board and the Board of Management therefore propose the following:
a) The no-par-value bearer shares shall be converted into unrestrictedly transferable no-par-value registered shares.
b) The Articles of Association shall be amended as follows:
Article 3 para. 1 sentence 2 shall read: "It is divided into 176,919,680 no-par-value shares."
The current Article 4 shall be deleted. Article 3 shall acquire a new paragraph 2, which in sentences 2 and 3 shall take over the provisions of Article 4 item 1 and shall be worded as follows:
"The shares are registered shares. Transfer to a new acquirer may be effected only with the approval and at the discretion of the Company. The Company shall not be obliged to state reasons for declining the transfer. The Company's approval is not required for the transfer of shares converted from bearer shares into unrestrictedly transferable registered shares by resolution of the General Meeting on 22 July 1999."
The current Article 3 para. 2 shall become Article 3 para. 3.
Article 3 a shall become Article 4 and in paragraph 7 shall read:
"Article 3 paragraph 3 applies here accordingly."
Article 4 a sentence 1 shall read: "Every shareholder is entitled to have unrestrictedly transferable registered shares converted into restrictedly transferable registered shares."
Article 6 para. 1 shall read:
"Every shareholder may attend the General Meeting in person or be represented by a proxy appointed in writing, provided the shareholder has given notice of his or her intention to participate to the Board of Management of the Company not later than three working days before the General Meeting and is entered in the Company's register of shareholders. In the invitation to the General Meeting the shareholders may also be required to furnish a list of their share numbers. If the last day of the period for giving notice of intention to participate falls on a Sunday, on a recognized public holiday at the seat of the Company or on a Saturday, the preceding working day shall apply instead. Saturday shall not be deemed a working day within the meaning of this provision"
Resolution to be voted on by all shareholders and separately by the holders of bearer sharers and registered shares.
The Board of Management shall be instructed not to file these amendments to the Articles of Association before filing the resolution to increase the share capital out of retained earnings (item 6 on the agenda) and only after the delisting of the bearer shares on the stock exchanges in Munich and Frankfurt am Main. If in the period up to the filing of the amendments there are any changes in the number of shares or in the amount of the share capital, the Board of Management and the Supervisory Board shall be authorized to amend the wording of the Articles of Association accordingly when filing the amendments for entry in the Commercial Register.
8. Resolution on the exclusion of the right to have share certificates issued and amendment of the Articles of Association
The German law on control and transparency in the corporate sector (KonTraG) has made it possible - through amendment of Article 10 para. 5 of the German Stock Companies Act - to exclude the right of shareholders to have certificates issued for their shares. The aim of this provision is to avoid the relatively high costs of issuing share certificates for individual shareholders. More than 99.3% of Munich Re registered shares are now included in the German giro transfer system, introduced in spring 1997. Share certificates have therefore almost ceased to have any practical significance. The costly printing of new share certificates is to be avoided in future, also in view of the measure proposed under agenda item 7 - conversion of the remaining bearer shares into unrestrictedly transferable registered shares.
The Supervisory Board and the Board of Management therefore propose that the company avails itself of the option to exclude the right to have share certificates issued and that Article 5 para. 1 of the Articles of Association be reworded as follows:
"The right of shareholders to have share certificates issued for their shares is excluded. The Company may issue certificates for individual shares (single share certificates) or for more than one share (multiple share certificates). The form of share certificates and of dividend and renewal coupons shall be determined by the Board of Management."
Preconditions for attending the Annual General Meeting
Every shareholder may attend the Annual General Meeting in person or be represented by a proxy appointed in writing, provided the shareholder has given notice of his or her intention to participate to the Board of Management not later than Monday, 19 July 1999, and, by the same date,
1. has deposited with the company or one of the following banks fully paid-up bearer shares or certificates issued thereon by either a collective securities depositary or a German Notary Public, such shares or certificates being retained by the depositary up to the end of the Annual General Meeting:
Dresdner Bank AG
Bayerische Hypo- und Vereinsbank AG
BHF-BANK AG
Commerzbank AG
Deutsche Bank AG
Goldmann, Sachs & Co. oHG
B. Metzler seel. Sohn & Co. KGaA
J. P. Morgan GmbH
Morgan Stanley Bank AG
Warburg Dillon Read AG
or any of their branches
and - in Switzerland - UBS AG
The deposit shall also be deemed to have been properly made if the shares, with the consent of one of the depositaries, are kept in a blocked deposit at another bank up to the end of the Annual General Meeting.
2. in respect of registered shares, is entered in the register of shareholders. For administrative reasons, the shares entered in the register of shareholders on 18 June 1999 shall be material for establishing the right to participate and voting rights.
Every shareholder who has fulfilled these conditions will receive an admission card for the Annual General Meeting.
Munich, 17 June 1999
The Board of Management