Registered Shares and Share Split
In the following we provide you some information on the planned 1:3 share split and the conversion from bearer to registered shares in exchange trading and custodian banks, both effective as of August 4, 2008.
Registered Share
General
What is a registered share?
A registered share is registered in the name of the owner. A company issuing registered shares maintains a stock register, which records shareholders with their name, date of birth and address as well as the number of shares they are holding. Only shareholders listed in the stock register are accepted as shareholders of the company (Section 67, paragraph 1 and 2 of the German Stock Corporation Act –AktG). Shareholders are entitled to receive information from the company about personal data recorded in the stock register.
What is E.ON permitted to use the information from the stock register for?
Information held in the stock register is subject to applicable privacy provisions. The company is permitted to use stock register information for its investor relations activities. Any dissemination of this data outside of the group is prohibited. The company may only use this data for advertising purposes if the shareholder has not objected.
What is the difference between depositing bearer and registered shares with a bank?
There are no differences between bearer and registered shares regarding depositing or fungibility.
The company informs owners of registered shares about the Shareholders’ Meeting directly.
The company informs owners of registered shares about the Shareholders’ Meeting directly.
What does converting to registered shares change for the shareholder?
In the future, shareholders recorded in the stock register will receive company information directly from E.ON and no longer from their depository bank. Shareholders can either register personally to attend the Shareholders’ Meeting or appoint a proxy (e.g. a bank, a shareholders’ association or the proxy agent of E.ON) to exercise voting rights. Dividends are still credited via the shareholder’s depository bank.
Can a shareholder refuse to be recorded in the stock register?
Yes, this is an option. In these cases, the depository bank has to be entered into the stock register. In that case, however, the company accepts the depository bank as the shareholder. Shareholders, who have objected to being recorded in the stock register do not receive any information from the company directly. This applies specifically to the invitation to the Shareholders’ Meeting, which shareholders do not receive from the company as well as to shareholders’ rights, which shareholders then are not able to exercise directly.
Do shareholders who have objected to being recorded in the stock register receive a dividend?
Yes.
Advantages for shareholders and the company
What are the advantages for shareholders?
Registered shares facilitate immediate communications between the company and the shareholder. The company can provide shareholders with information more quickly and accurately and (if shareholders agree) can send invitations to the Shareholders’ Meeting by e-mail. Shareholders can register for the Shareholders’ Meeting via the internet and vote online.
What are the advantages for the company?
By recording shareholders in a stock register the company knows its shareholders and its shareholder structure better. The company is in a position to address its shareholders directly (at least if they are registered). This means that investor relations activities are more directly and consequently more efficient.
Expenses
Which expenses are incurred by shareholders in the conversion to registered shares?
The conversion to registered shares is free of charge for shareholders.
Do shareholders incur higher expenses due to a stock register being maintained and is there an increase in depository fees?
There are no ongoing expenses for shareholders as a result of a maintaining a stock register. There is no increase in depository fees for shareholders either.
Shareholders' Meeting
Can shareholders, who are not recorded in the stock register, attend the Shareholders’ Meeting?
In that case, attending the Shareholders’ Meeting is not possible without further steps as the company only accepts shareholders recorded in the stock register as being shareholders. Unregistered shareholders are not permitted to register themselves for the Shareholders’ Meeting. Attending the Shareholders’ Meeting, therefore, requires a proxy by the authorized party recorded in the stock register.
Is an issued continuing proxy still valid?
The general voting proxy (continuing proxy) issued to a depository bank also applies for registered shares.
Anonymity and Data Protection
Who has access to the stock register and where can it be viewed?
All shareholders can view their personal stock register data on the company’s premises. Shareholders can also use their personal password to view and edit their address data online.
Is data recorded in the stock register reported to other organizations or bodies?
No, it is not reported anywhere else. The data is exclusively for company purposes.
How is privacy monitored?
According to the Federal Data Protection Act (Bundesdatenschutzgesetz) data protection is monitored by the company’s Data Protection Officer and the respective regulatory authority.
Entry in Stock Register
Does the company have to be informed about changes in address?
Depository banks are obliged to inform the respective companies about changes in address. It is also possible for shareholders to submit a brief note on the change in address. This can either be done by e-mail or the shareholders can edit their address data online with a personal password. It is however, always recommendable to inform your depository bank.
Is it possible to enter the bank instead of the shareholder?
Generally, this is possible if a shareholder has expressly objected to being recorded in the stock register. In that case, the depository bank can be recorded.
If the shareholder is not recorded personally, he/she is not accepted as a shareholder by the company. Information provided by the company and invitations issued to the Shareholders’ Meeting don’t reach shareholders directly in that case.
If the shareholder is not recorded personally, he/she is not accepted as a shareholder by the company. Information provided by the company and invitations issued to the Shareholders’ Meeting don’t reach shareholders directly in that case.
Tax Impacts
Is there a tax implication from converting to registered shares?
There are no tax implications as a result of converting to registered shares. In tax law there is no differentiation between bearer and registered share.
Miscellaneous
Will converting to registered shares influence the development of the share price?
This is not to be expected.
Will trading be interrupted during conversion?
No, trading will not be interrupted.
Share Split
What happens in a share split?
On April 30, 2008, the E.ON AG Shareholders’ Meeting resolved to split shares in a ratio of one to three. This means, that for every outstanding E.ON share two additional shares will be issued. As a result of the share split, the share price is only mathematically divided by three, which also applies to the future dividend per share.
Why has E.ON opted for a share split?
The E.ON share price has been significantly higher than EUR 100 for some time. At first glance, the share looks expensive compared to other DAX companies. With the proposed share split in a ratio of 1:3 two new shares are issued for each outstanding share. This means, that the share price is going to be one third, putting it in line with industry levels.
Does the share split have an impact on dividends?
The share split does not have an impact on the dividend total as the dividend per share is only mathematically divided by three. On the other hand shareholders then have three shares instead of one.
What are the implications of the share split on the price of the E.ON share?
In principal, the price of each share is reduced to a third of the price before the share split.
Which implications does the share split have on already acquired shares held in a depository account?
The share split has no impact on the value of your assets, i.e. the total value of the stocks held in your depository account does not change. The number of stocks held in your depository account increases by a factor of three while the value of each share is mathematically reduced to one third. Both effects theoretically offset each other.
Does the share split have any tax implications?
The share split has no tax implications.
Capital Increase
Why is E.ON increasing its capital in conjunction with the stock split?
As the legal prerequisite for the share split in a 1:3 ratio, E.ON is simultaneously conducting a capital increase with company funds without issuing new shares. EUR 266.8 million were transferred from the capital reserve to registered share capital. After the share split the mathematical nominal value per share is EUR 1.00 (before the split it was EUR 3.00). The value of E.ON and the price of its shares are not influenced.
