AXA STAKE IN KLM

On July 21 a Dutch newspaper (Het Financieële Dagblad) reported that AXA has increased its stake in KLM to 22.5 percent. Furthermore, it suggested that KLM has violated Dutch securities law. KLM wishes to inform the public and its shareholders that this information is not correct.

Until 1999, under the Dutch Act on the Disclosure of Holdings in Listed Companies (de Wet Melding Zeggenschap or WMZ), a party that held a stake in a company of 5 percent or more, had to make a filing with such company, that in turn was obliged to make a filing with the Securities Board of the Netherlands (the Stichting Toezicht Effectenverkeer or STE).

In the years 1996, 1997 and 1998, KLM received such filings for stakes above 5 percent (but below 10 percent) from Equitable Companies Inc. on behalf of Alliance Capital (an AXA affiliate). These filings were submitted by KLM to the STE. The STE informed KLM that the shareholding of AXA did not require reporting under the WMZ. According to the STE, AXA was not a legal or beneficial shareholder; it held the shares for the account of third parties.

Only last Friday, July 21, and after having contacted Alliance Capital, KLM received a copy of a filing of AXA and seven of its affiliates with the United States Securities and Exchange Commission (the SEC), reporting an increase of the number of shares held to 11,637,368. These shares are held by Alliance Capital Management LP, and Donaldson, Lufkin & Jenrette Securities Corporation, and according to the filing, were acquired solely for investment purposes on behalf of client discretionary investment advisory accounts, and held for investment purposes, respectively.

Since 1999, under the WMZ, filings to be made by a shareholder under the WMZ need to be made by the shareholder to the STE directly with a copy to the company.

Until today, KLM does not have knowledge of an AXA affiliate or any third party for whom AXA holds such shares for five percent or more in KLM. Since the filings were made with the SEC and under US security law, KLM is reviewing further details of the filing.