ESB ESOP Trustee Ltd.
Employee Share Ownership Plan for ESB Email: intoshare@esbie
43 Merrion Square
Dublin2
15th February 2008 Dear ESOP ParticipantIn our December mailing we advised you that we had requested a meeting with the Minister for Communications, Energy & Natural Resources to discuss recent developments in European energy policy and, in particular, that the separation of grid assets — as set out in the White Paper — is not an EU requirement. We met with Minister Eamon Ryan TD earlier today to discuss this and other matters that impact on our shareholding in ESB. We have issued a press statement on this meeting and a copy is now enclosed for your information.
We also advised you in December that our proposals for a fair market for the ESOP shares were with the Departments of Finance and Communications, Energy & Natural Resources for their approval. As we explained, the Trust Deed governing the ESOP requires that we seek consent from both Departments. We raised our concerns over the unacceptable delay in gaining this consent at our meeting with Minister Ryan and have written again to the Minister for Finance stressing the need for a decision on this. A copy of this letter is also enclosed. As soon as we have Departmental consent, we will be writing to you, setting out the proposed internal market arrangements.
Yours faithfully
David Beattie
Chairman
Oirectors: Adrian Bannister Chris McElhirrney, Michael McNicholas, John Nugent, Peter O’Sullivan, Sean Treacy. Trustee Chairman: David Beattie.
ESB ESOP Trustee Ltd. Reqistered in Ireland at 43 Merrion Square, Dublin 2. Registration Number: 351161
Government’s flawed energy plans
The ESOP reminded the Minister that his Department and the then Government was party to a tripartite agreement signed in 2000 with the ESB and its group of unions that no divestment of the transmission assets would take place.
The ESOP also took the opportunity at the meeting to urge the Minister to finalise agreement with his colleague the Minister for Finance on the creation of a sustainable and fair internal market for ESB stock amongst the ESOP’s beneficiaries.
In concluding the meeting, the Minister said he recognised the legitimate needs and concerns of the ESOP and that he will engage with the ESOP and other interested parties as a matter of urgency in the coming months.
The Tánaiste and Minister for Finance
Government Buildings
Upper Merrion Street
Dublin 2
13 February 2008
Dear Minister
Proposed Internal Market Rule Changes
We refer to our previous correspondence dated 9 July 2007, setting out our proposed changes to the internal market rules of the ESB ESOP. On the instruction of the Trustee Board, I now write to express our disappointment that we are still awaiting any real progress with our proposal.
We did receive an acknowledgement by letter from your Private Secretary dated 13 July last and there has been a number of meetings with your officials and our advisors who had made a number of proposals. These were to be considered by your officials in consultation with the ESB as a point of urgency. That was mid October last.
We are aware that discussions have taken place with ESB, however we would respectfully suggest that the proposals are the ESOP’s, that the ESOP has the necessary expertise on the legislative and the practical constraints governing ESOPs and could assist your officials in reaching a workable conclusion. After all, the proposals were developed over a period with our professional advisers who are recognised experts in this field, who consulted with both ESB and the Group of Unions and were accepted by all concerned, including the Revenue, as the best compromise possible in the circumstances.
The ESOP has a pressing legal obligation to operate the internal market and its motive in seeking these changes was solely so as to ensure that all its beneficiaries were treated fairly and no subset of them profited unfairly at the expense of another. All of the other stakeholders and regulators have agreed to the reasoning behind our objectives, our analysis of the potential problems and our proposed solution, but no progress seems to have been made by us with your Department.
Given the legal imperative that we have, and time is running out in this regard, and the increasing difficulties in explaining the delays to our more than 10,000
beneficiaries we are forced to have to review our legal position on this matter unless agreement is reached before the end of this month.
We genuinely believe that what we are seeking comprise no more than minimum amendments (without the need for extra resources) to the relevant rules to make the proposed market an even playing field for all concerned and urgently look forward to a rapid conclusion of the matter.
Yours sincerely
David Beattie -—
Chairman
cc: Minister for Communications, Energy & Natural Resources
Mr. Bernard Byrne, Group Finance Director, Electricity Supply Board
