Membership Meeting 13th July 2012

Objectives– To Ensure That the Port of Dover is Owned in Perpetuity

by the People of Dover and Dover District– To Ensure That the Port of Dover is Run Efficiently in the

Best Interests of All its Current Stakeholders– To Endow the Community With Sufficient Funds to Seed

Regeneration Efforts and Ensure an Ongoing Revenue Stream to Revitalise Dover to the Benefit of the

Surrounding District and the Nation

What Does The Government Want to See?1. Essential Criteria

Community participation: The Secretary of State will not approve an application for the sale of a trust port under the 1991 Act

unless the sale is considered likely to deliver an enduring and significant level of community participation in the port. Such participation could take a variety of forms, but must include the ability to influence the port’s long term development and may include the right to receive a share in the profits of the port, or the future increase in its value. It does not necessarily require a community role in the operation of the port.

Future investment in, and development of, the port The Secretary of State will not approve an application unless the sale is considered likely to deliver an

ownership model with the capability and access to capital to meet future investment needs and to exploit development potential of the port.

Fair price The Secretary of State will not approve an application unless the sale is considered likely to represent

good value for money, having regard not only to Exchequer proceeds and market conditions, but also to other benefits including those to the community and the wider economy.

Fair competition The Secretary of State will not approve an application that is likely to deliver an ownership model which

results in unsatisfactory levels of competition in the relevant sector.

2. Highly Desirable criteria

3. Desirable criteria

What Do The Dover Harbour Board Propose?

• Sale of the Vast Majority (at least 85%) of Shares in the Port of Dover to Private Equity Investors or Investor

• Set up a Trust for the Community (PDCT) with a cash endowment of £10million and £20million of Shares in the Port of Dover

• Pay the PDCT £1million cash per year for 5 years in lieu of Dividend Payments

• Pay a Total of £5.6million of shares to employees to be held by an Employee Share Ownership Trust. These Shares Will be Distributed as Follows:

1. £3.68m shared amongst all employees on a sliding scale related to salary.

2. £920,000 shared between Senior Managers and Executives part way through handover process when senior managers transfer to new owner.

3. £1m awarded to Executives in proportion to their contribution to making privatisation successful

So, What’s Different?

• PDCT is granted a veto over certain matters

• PDCT shares can be sold

• Two Partnership Directors are appointed to the Board of the private port company

• Various new advisory forums set up, to be organised by the Partnership Directors

• PDCT registered a shelf company in November 2011 and to be launched with community ownership in due course

• PDCT has no charitable status• No enhancement in proposed share

ownership, endowment or dividends• More detail on shareholding:

– right of veto which could be overridden on sale

– PDCT not free to sell its shares and have rights to tag along on any sale

– two PDCT directors on operating company board

• PDCT will be subject to scrutiny by the privatised operating company who can make non-binding expressions or wishes as to PDCT’s activities

• To influence majority owner decisions, both Partnership Directors must vote the same way

• No guarantee of permanent community involvement or minority ownership

• Port of Dover more likely to have foreign ownership

Why Do We Think This?Just take a look at the following example copied from the DHB papers which have been presented

to Government.

VetoIn order to enhance the rights attaching to the PDCT's equity stake, it is proposed that the PDCT

should benefit from a right of veto in relation to:

1. the sale by the Company of all or a major part of the statutory harbour undertaking of the Port of Dover (other than as part of an internal group reorganisation);

2. variations or reductions of share capital (including share buy-backs) which are designed to return capital to investors otherwise than on a pro rata basis to all shareholders;

3. alteration of the Company's name or its registered office;4. amendments to the Company's Articles of Association to the extent that

such amendments adversely impact on the PDCT's rights as a shareholder (including any amendments to the articles relating to Partnership Directors);

5. the disapplication of pre-emption rights; and6. any forced transfer of PDCT's shares (unless such transfer is

required as a matter of law).

Why Do We Think This? Part 2

The scope of the consent matters listed in this note may need to be amended in the run up to privatisation in order to reflect regulatory requirements or developments (for example in order to satisfy UKLA/EU Prospectus rules and/or Takeover Panel requirements (if applicable)) or commercial discussions with potential investors.

As a responsible partner, the PDCT would provide a commitment that it would not unreasonably withhold or delay any consent and, accordingly, if a matter in respect of which the PDCT had a veto right was being put to shareholders generally the PDCT would decide whether or not to exercise its right of veto at the same time as the matter is put to all shareholders.

Furthermore, in recognition of the need for continued and meaningful participation and alignment of interests,

(a) the PDCT would be required to retain the securities issued to it at the time ofprivatisation (the "Initial Securities") for at least so long as it is entitled to theguaranteed payments; and

(b) following the expiry of this period, the PDCT would cease to benefit from theadditional consent rights referred to above should it dispose of more than half ofthe Initial Securities.

How do we Stop the Privatisation?

• Step by Step• Now and until 27th July• Make a personal submission to the Minister• After 27th July• Agitate, Protest, Write to the DfT, Email the DfT, Email

the Prime Minister and other Government Ministers• The Government need to know how strongly the People

of Dover District feel about the Port of Dover and that it should be owned by its People.

• Try an email a day, ask your friends and relatives in other parts of the country to email their MPs, The Prime Minister’s Office and The DfT as well.

Making a Submission

• You are the Community, so Concentrate on the Community Criteria

• Use information from today, from the DHB proposal papers and from the letters and/or handouts that you have received

• Remember that the DHB proposal has to offer both Enduring AND Significant influence and benefit to the Community

• Submissions should show that it does not• Use Your own words as much as possible• Include Your name and address

What is the Process? Will Making a Submission Make a Difference?

Decision MinisterExamines EvidenceCompares against CriteriaExamines SubmissionsConsiders all the EvidenceMakes Decision

DHB Presents and Defends Evidence(its Proposal)

Community of Dover District and other stakeholdersAct in the role of Prosecutors. Submissions are Cross-examination

Of the Evidence.

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