Dear Member

AN INVESTMENT IN MILLERS

I write to tell you that your Board has reached agreement in principle with our managers to make an investment in their parent company, Thomas Miller Holdings Ltd. Heads of Agreement containing the principal investment terms have been agreed with the senior management at Millers, who will seek the endorsement of their shareholding staff.

Last year Millers changed from a partnership, owned by a small number of partners working in the firm, to a private company owned by the majority of their employees worldwide. They wish to remain a private company, independent of outside interests. They are seeking capital to invest in the development of innovative new products and services, to which they attach importance as enabling them to attract and retain the high quality staff that we need them to have. Millers and the Club have a long history together and are heavily dependent upon each other, which makes the Club the ideal investment partner for Millers.

The Club will buy loan stock that in five years' time will be convertible into a ten per cent stake in Millers, an arrangement designed to fit with their existing share structure; the proceeds will be used by Millers for the development described above. The Club will also be ready to provide some limited support for their internal share market, in order to improve its liquidity. A senior director from our Board will sit as a non-executive director on the board of Thomas Miller Holdings Ltd.

The Board believes that this investment is in the best interests of the Club and of its Members. External advisors have helped us to ensure that it is sound, financially and legally. It also helps preserve the independence of our managers and supports our key strategic aim of strengthening the mutual club system, an essential feature of which is dedicated service from experienced management.

Yours faithfully

N-G Palmgren

Chairman