CalPERS and Hermes Team to Form Corporate Governance Alliance.

SACRAMENTO, Calif.--(BUSINESS WIRE)--Nov. 23, 1998--Two of the world's largest institutional investors have joined forces to enhance shareowner value in the United States and the United Kingdom. By campaigning for better corporate governance.

The California Public Employees' Retirement System (CalPERS) and Hermes Pensions Management Limited (Hermes) announced today that they have teamed to create a transcontinental Corporate Governance Strategic Alliance. The Alliance is the first of its kind in the world.

The alliance agreement has three components: -0-

--   CalPERS and Hermes will each endorse the other's home market
     corporate governance proxy voting policies, and will generally
     vote their foreign proxies in accordance with these policies.

--   CalPERS and Hermes pledge to consult with each other when engaged
     in active governance discussions with a company within their home
     markets to develop strategies and determine if cooperative action
     is warranted.

--   CalPERS and Hermes will work cooperatively and represent each
     other in their respective markets, including annual shareholder
     meetings.

-0-

"Through this alliance, the corporate governance message will be louder and stronger, and will be heard in a voice that is influential and indigenous to each market," said William D. Crist, President of CalPERS Board of Administration.

The combined powers of both organizations may well mean greater shareowner pressure on companies that make their home in the United States and the United Kingdom. CalPERS and Hermes own more than $62 billion in US-based companies and more than $36 billion in companies headquartered in the United Kingdom.

"Our Board's action to approve this alliance will help shareowners worldwide as greater recognition is placed on the value of good corporate governance," said Charles P. Valdes, Chair of CalPERS Investment Committee.

Additionally, the formation of the alliance will give each organization greater fire power when approaching companies on performance, economic and corporate governance-related matters. Currently, CalPERS is preparing for the release of its annual list of poor performing companies in the Fund's U.S. stock portfolio. These companies will become the focus of the System's corporate governance activism. Hermes owns nearly 600,000 shares in five of the companies on CalPERS list that is expected to be announced in early 1999.

"Hermes and CalPERS both believe that active and constructive exercising of shareowner rights is an important element in enhancing shareowner value," said Peter R. Butler, Corporate Focus Director of Hermes. "We are therefore natural partners in this global initiative."

As the proxy season nears, CalPERS and Hermes officials have expressed the need to begin implementing focused shareowner activist efforts within their respective markets. They have also opened the doors of the Alliance to other institutional investors with like views.

CalPERS is the largest institutional investor in the United States with assets totaling more than $139 billion. The System provides retirement and health benefits to more than one million public employee and their families.

Hermes is the principal investment manager for two major pension schemes in the United Kingdom -- the BT pension scheme and the Post Office Superannuation Scheme. The firm manages assets totaling $59 billion.

For further information on the Alliance, please visit CalPERS web site at http://www.calpers.ca.gov/invest/corpgov/intlcorpgov.htm. For further information on Hermes, please visit the firm's web site at http://www.hermes.co.uk.

Editor's Note: Attached is the CalPERS/Hermes Corporate Governance Strategic Alliance mission statement and agreement document. -0-

                           6 CalPERS-Hermes
                Corporate Governance Strategic Alliance

-0-

Mission

The California Public Employees' Retirement System (CalPERS) and Hermes Investment Management Limited (Hermes) are each among the largest institutional investors within their home countries.(1) Both CalPERS and Hermes have also developed comprehensive programs designed to enhance the value of their respective investments, by actively but constructively exercising shareowner rights. Through these programs, CalPERS and Hermes are recognized as leaders within the corporate governance movement. To further their global efforts in this area, CalPERS and Hermes have joined together in a Corporate Governance Strategic Alliance. This mission of this Alliance is -0-

               To enhance shareowner value by achieving,
                     within the US and UK markets,
       greater recognition of the value of corporate governance

     Structure

     The Alliance has three components:

--   Endorsement

     CalPERS and Hermes each endorse the other's home market proxy
     voting policies, and will generally vote their foreign proxies in
     accord with these policies.

--   Consultation

     Where proxy voting policies call for case-by-case analysis,
     CalPERS and Hermes pledge to consult with each other, respecting
     the home market expertise and credibility that each will bring to
     these discussions. Similarly, in those circumstances where
     CalPERS or Hermes are engaged in active governance discussions
     with a company within their home markets, they will consult with
     each other to determine whether cooperative action is
     appropriate.

--   Cooperation(2)

     CalPERS and Hermes will work cooperatively in three types of
     scenarios:

     1.   Each has determined that the active and company-specific
          governance efforts of the other in the other's home market
          warrant the support of the Alliance;

     2.   Either has requested representation at an annual shareholder
          meeting to be held in the other's home market; and

     3.   Both have determined that a global issue exists (e.g.,
          executive remuneration, preemption rights) for which the
          development of a shared policy and plan of action will
          increase the ability to influence change.

     Expansion

     Institutional investors representing the domestic views of other
(i.e., non-US and non-UK) markets may join this Alliance, with the
mutual agreement of both CalPERS and Hermes.

-----
(1) See attached Fact Sheet
(2) CalPERS and Hermes activities will comply with all applicable
securities laws.

                              Fact Sheet
                        (Data as of 10/31/98)

     CalPERS:

--   Current assets under management: $139 billion (US) ((pounds) 83
     billion)

--   UK investments valued at $5.9 billion (US) ((pounds) 3.5
     billion); US equity valued at $59 billion (US) ((pounds) 35.6
     billion)

--   Largest public pension fund in the US; administered by 13-member
     Board of Administration (see www.calpers.ca.gov)

--   Relevant Corporate Governance policies: Domestic Proxy Voting
     Guidelines; U.S. Corporate Governance Principles & Guidelines

     Hermes:

--   Current assets under management (pounds) 35 billion ($59 billion
     (US))

--   US investments valued at (pounds) 2 billion ($3.4 billion (US));
     UK investments valued at (pounds) 18.3 billion ($30.7 billion
     (US))

--   Wholly owned by the BT Pension Scheme; principal investment
     manager for two major UK pension schemes (British
     Telecomunications PLC and the Post Office) (see www.hermes.co.uk)

--   Relevant Corporate Governance Policies: Statement on Corporate
     Governance and Voting Policy