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Capital structure
Capital and changes in capital The capital structure of Swiss Life Holding was as follows on the balance sheet date:
Since the establishment of Swiss Life Holding on 17 September 2002 with a share capital of CHF 250 000, divided into 5000 registered shares with a par value of CHF 50 each, a number of capital market transactions have been conducted. In a first step, this included the offer presented to the then Swiss Life/Rentenanstalt shareholders to exchange their registered shares for Swiss Life Holding registered shares on a 1:1 basis. Around 92% of Swiss Life/Rentenanstalt’s shareholders accepted the public exchange offer, and on 18 November 2002 the Swiss Life Holding share capital was increased, through taking delivery of 10 834 704 Swiss Life/Rentenanstalt registered shares with a par value of CHF 50 each, to CHF 541 985 200 (divided into 10 839 704 registered shares).
The Swiss Life Holding General Meeting on 18 November 2002 approved the creation of conditional capital of no more than CHF 270 992 600 through the issuance of a maximum number of 5 419 852 registered shares to be paid in full, with a par value of CHF 50 each. The conditional capital was (and the remaining conditional capital is) at the disposal of the holders of conversion or option rights granted by Swiss Life Holding or by companies belonging to the Group in connection with existing and new loan debentures or similar bonds issued by Swiss Life Holding and companies belonging to the Group. The shareholders are excluded from subscription rights, however their advance subscription rights remain safeguarded. The Board of Directors sets the terms of conversion and option conditions.
In December 2002, Swiss Life Holding completed an ordinary capital increase of CHF 541 985 200, divided into 10 839 704 registered shares with a par value of CHF 50 each, in which existing shareholders were granted negotiable subscription rights for each share. As a result, the share capital increased to CHF 1 083 970 400, divided into 21 679 408 registered shares with a par value of CHF 50 each. Also in December 2002, pursuant to the issue of the MCS I (2002–2005) mandatory convertible securities, 1 768 535 registered shares with a par value of CHF 50 each were created from the conditional capital. As a result, the ordinary share capital rose by CHF 88 426 750 from CHF 1 083 970 400 to CHF 1 172 397 150, divided into 23 447 943 registered shares. The conditional capital decreased accordingly, to CHF 182 565 850 or 3 651 137 registered shares with a par value of CHF 50 each.
At the end of 2003, Swiss Life Holding simplified its shareholder structure by making an offer to purchase the minority interests remaining in its Swiss Life/Rentenanstalt subsidiary after the exchange of Swiss Life/Rentenanstalt shares for Swiss Life Holding shares in 2002. The company issued the MSC II (2003–2004) mandatory convertible securities so as to be able to purchase these Swiss Life/ Rentenanstalt shares as efficiently as possible. In conjunction with this issue, on 30 December 2003 a further 1 586 098 registered shares, with a par value of CHF 50 each, were issued from conditional capital. Ordinary share capital thus expanded by CHF 79 304 900 to CHF 1 251 702 050, divided into 25 034 041 fully paid registered shares with a par value of CHF 50 each, while conditional capital fell to CHF 103 260 950 or 2 065 219 registered shares with a par value of CHF 50 each.
To partially finance the purchase of Banca del Gottardo from the Swiss Life/Rentenanstalt insurance company, the Annual General Meeting of Shareholders on 18 May 2004 created CHF 417 234 000 in authorised capital and authorised the Board of Directors to increase the share capital by a maximum of 8 344 680 fully paid registered shares with a par value of CHF 50 each, at the latest by 18 May 2006. At the same General Meeting the shareholders also resolved to increase the existing conditional capital by CHF 100 000 000 or 2 000 000 registered shares with a par value of CHF 50 each, bringing it to CHF 203 260 950, divided into 4 065 219 registered shares with a par value of CHF 50 each. On 2 June 2004 the Board of Directors decided to increase the ordinary capital out of the authorised capital by CHF 417 234 000 to CHF 1 668 936 050, divided into 33 378 721 registered shares with a par value of CHF 50 each, thus reducing the authorised capital to nil.
In conjunction with the adjustments of the conversion rate of the MCS I (2002–2005) and MCS II (2003–2004) mandatory convertible securities, which were required following capital dilution as a result of the capital increase, 397 078 registered shares with a par value of CHF 50 each were created from conditional capital on 30 June 2004. The ordinary share capital consequently increased to CHF 1 688 789 950, divided into 33 775 799 registered shares with a par value of CHF 50 each, while conditional capital decreased by CHF 19 853 900 to CHF 183 407 050, divided into 3 668 141 registered shares with a par value of CHF 50 each.
Due to partial conversion of the 0.625% convertible bond issue (2004–2010) (cf. section on “Convertible bonds and options” on page 41), 19 registered shares in all were created from conditional capital in 2004. The share capital thereby rose to CHF 1 688 790 900, divided into 33 775 818 registered shares with a par value of CHF 50 each, and the conditional capital was reduced by CHF 950 to stand at CHF 183 406 100, divided into 3 668 122 registered shares with a par value of CHF 50 each.
On 10 May 2005 the Swiss Life Holding General Meeting resolved to pay a dividend of CHF 4 per registered share in the form of a repayment of par value. As a result of the corresponding reduction in capital, the share capital went down to CHF 1 553 687 628, divided into 33 775 818 registered shares with a par value of CHF 46 each. Conditional capital was reduced accordingly to CHF 168 733 612, divided into 3 668 122 registered shares with a par value of CHF 46 each.
Again as a result of conversions of the 0.625% convertible bond issue (2004–2010), another 260 registered shares were created from conditional capital in 2005. Swiss Life Holding’s ordinary share capital as at 31 December 2005 therefore amounted to CHF 1 553 699 588, divided into 33 776 078 fully paid registered shares with a par value of CHF 46 each. The conditional capital amounted to CHF 168 721 652, divided into 3 667 862 registered shares with a par value of CHF 46 each.
At Swiss Life Holding’s Annual General Meeting on 9 May 2006, shareholders once more approved a reduction in par value of CHF 5 per registered share instead of a dividend distribution. The share capital was thus reduced to CHF 1 384 819 198, divided into 33 776 078 registered shares with a par value of CHF 41 each, and the conditional capital went down to CHF 150 382 342, divided into 3 667 862 registered shares of CHF 41 each.
In the year under review, the 0.625% convertible bond (2004-2010) was also partially converted to create 191 new registered shares. Ordinary share capital increased as a result to CHF 1 384 827 029, divided into 33 776 269 registered shares of CHF 41 each, and the conditional capital was reduced accordingly to CHF 150 374 511, divided into 3 667 671 registered shares of CHF 41 each.
Shares 33 776 269 fully paid Swiss Life Holding registered shares with a par value of CHF 41 each were outstanding on the balance sheet date. Subject to the 10% limit on voting rights set out in the Articles of Association (cf. the section below on “Shareholders’ participation rights” on page 52), each share conveys a right to one vote at the General Meeting of Shareholders.
There are no outstanding shares with either increased or limited voting rights, privileged or restricted voting rights, privileged dividend entitlements or other preferential rights. Moreover, no registration restrictions apply to Swiss Life Holding shares.
There are no other equity securities besides the registered shares mentioned above, nor do any participation certificates or dividend right certificates exist.
Limitations on transferability and nominee registrations Swiss Life Holding shares are not subject to any limitations on transferability. According to the Articles of Association, resolutions for the introduction, amendment or repeal of restrictions on transferability must be put before the General Meeting of Shareholders and must be approved by at least two-thirds of the voting shares represented and by at least an absolute majority of the share par value represented. Swiss and foreign banks, securities brokers and companies acting on their behalf may be entered in the share register as nominees if they are holding shares of Swiss Life Holding in their custody for the account of the beneficial owners. Professional asset managers may also be registered as nominees if, in a fiduciary capacity, they have deposited Swiss Life Holding shares for the account of third parties with Swiss or foreign banks or securities brokers in their own name. Nominees are required to be subject to banking or financial market supervision. A request must be filed to register as a nominee. The voting rights of nominees are restricted to 10% of the share capital, whereby nominees who are connected with regard to capital or voting rights under uniform management or contractual agreement will be counted as a single shareholder. The Board of Directors may approve exceptions to these restrictions on registration, observing the principle of responsible judgement. No such exceptions were granted during the period under review.
Convertible bonds and options One convertible bond issue was outstanding on the balance sheet date, the Swiss Life Holding 0.625% issue (2004–2010) amounting to CHF 317 000 000. The specific conditions attached to these convertible securities can be found in the Financial Statements (note 23) as well as in the issue prospectus of 8 June 2004.
Information on options granted by Swiss Life Holding or by Group companies on rights to participate in Swiss Life Holding under equity compensation plans for employees can be found in the Financial Statements (note 25).
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