Press Release 77 Date 2.12.99

Subject: last gasp attack by the carpetbaggers on 3 mutual building societies -Portman, Chelsea & Skipton Carpetbaggers submit Annual General Meeting (AGM) resolutions asking the societys board of directors to consider conversion The daleks are at work again! but hopefully soon the nightmare will end. New thresholds for requsitioning members resolutions will deter these type of people -who want reward without working for it. They are unlikely to make the effort required to raise the necessary 500 supporters -needed for the inclusion of future reslutions. So the snake has made one final strike now. Compelling legal reason NOT to allow the resolutions requested by the carpetbaggers! Boards of directors are democratically elected by members of societies and have a fiduciary duty under law to act only in the best interests of members. It is the clear expressed opinion of the board of directors of the 3 societies that mutual status offers the best deal for members in terms of lower mortgage rates, higher rates of interest for savers and better customer care through an extensive local branch network because they serve members and do not have to make fat profits for shareholders.

Therefore how can a board allow a resolutions to be put to the full membership whose outcome -if in favour of conversion the directors are duty bound by law to ignore? Members conversion resolutions are an expression of the views of members and are not legally binding on the board. Since the board of directors believe conversion is a mistake how can they take the society down that path. Legally we would argue, they can’t! Moreover, surely it would be a complete waste of members money to even present the resolutions to the members in the first place because whatever the outcome the directors are legally bound to follow their own judgement rather than accept the outcome of the vote. The only path for carpetbaggers is to elect a different board of directors who believe that conversion is best for members. SOBS will consider taking legal action -If the (pro-mutual) board of directors of the 3 societies are bullied into holding conversion Special General Meetings (SGM) -in the event of the carpetbagging resolutions at the AGMs being passed -SOBS will use the legal process to stop the SGMs taking place. Bradford & Bingley SOBS is also aware that the same reasoning applies to the decision by the board of Bradford of Bingley to hold a conversion SGM in the summer of 2000 following the passing of Stephen Majors carpetbagging resolution at their AGM. The board had clearly indicated that they believed that mutuality was in the best interests of members -so for that board of directors to allow a conversion SGM to take place may in fact be illegal.

Example Members could propose resolutions for the craziest of reasons. Would any building society honestly contemplate puttting them to the membership The answer is No! and the same should apply to any resolution proposing conversion. If the directors believe it isn’t in the best interests of members and cannot legally follow any decision arrived at it is only logical that such a resolution simply shouldn’t be allowed put to the members. Members money should not be frittered away on such resolutions. Press Release by Bob Goodall co-ordinator “Save our Building Societies” campaign tel 01727 847 370 (24hrs) Press Release 85 Date 5.1.00 Subject: last gasp attack by the carpetbaggers Skipton & Chelsea building societies have acceeded to the demand by carpetbaggers to put to the membership a conversion resolution at the societys AGM Storyline: SOBS have asked the Building Societies Commission (BSC) to immediately halt the process SOBS have faxed the BSC -asking them to instruct the societies to withdraw the resolution to avoid wasting their members money with a resolution, whose outcome the board will have to ignore for legal reasons.

Compelling reasons for the BSC NOT to allow the conversion resolution to be put to the membership 1)Boards of directors are democratically elected by members of societies and have a fiduciary duty under law to act only in the best interests of members. 2)It is the clear expressed opinion and judgement of the board of directors of the societies that mutual status offers the best deal for members in terms of lower mortgage rates, higher rates of interest for savers and better customer care through an extensive local branch network because they serve members and do not have to make fat profits for shareholders. 3)Therefore how can the board allow a resolutions to be put to the full membership? whose outcome -if in favour of conversion the directors are duty bound by building society law and guidelines -to ignore! 4) Members conversion resolutions are solely an expression and snapshot of the views of members at a particular moment and are not legally binding on the board. Since the board of directors believe conversion is a mistake how can they take the society any way down that path? including putting the resolution to the membership in the first place. SOBS would argue, they shouldn’t do this. 5) Moreover, SOBS would argue that it would be a complete waste of members money to even present resolutions -that are going nowhere- to the members in the first place Therefore the BSC should intervene immediately to avoid this farcical situation. Because whatever the outcome of the resolution the directors are legally bound to follow their own judgement rather than accept the outcome of the one-off vote if it favours steps to conversion. Example to clarify the point Members could propose resolutions for the craziest of reasons. ‘lets burn the offices down’ etc.

Would any building society honestly contemplate putting them to the membership The answer is No! and the same should apply to any resolution proposing conversion. If the directors believe it isn’t in the best interests of members and cannot legally follow any decision arrived at it is only logical that such a resolution simply shouldn’t be allowed put to the members. Members money should not be frittered away on such resolutions. There must be some control and logic exercised over resolutions that a society has to spend sometimes millions of pounds putting to their membership 6) SOBS have asked the Building Societies Commission to check the rules of the 2 societies to see if they contain the phrase (or something similar) -that resolutions will not be allowed -if they “purport to interfere with the directors’ right and duty to manage the affairs of the Society”. If this, or something similar is contained within the rules the carpetbagging resolution should NOT be put to the membership. The appropriate path for carpetbaggers The only appropriate path for carpetbaggers is to seek to elect a different board of directors who believe that conversion is best for members. SOBS says “From our point of view this would mean that the fuse would be lengthend as far as conversion of mutual building societies is concerned and we would have more time to introduce legislation to safeguard mutual building societies.”

Note to the editor We have faxed the chaiman of the Building Societies commisssion Geofrey Fitchew. His direct tel number is 0171 663 5025 The main office tel is 0171 663 5373 Press Release by Bob Goodall co-ordinator “Save our Building Societies” campaign tel 01727 847 370 (24hrs) FAO Geoffrey Fitchew Chairman Building Societies Commssion 5.1.00 Dear Geoffrey Fitchew Skipton & Chelsea building societies have acceeded to the demand by carpetbaggers to put to the membership a conversion resolution at the societys AGM I am writing to ask the Building Societies Commission to immediately halt the process on the following grounds: I ask you to instruct both building societies to withdraw the resolutions to avoid wasting their members money with a resolution, whose outcome the board will have ignore for legal reasons, which we will try and explain below: Compelling reasons for the Building Societies Commission (BSC) NOT to allow the conversion resolution to be put to the membership 1)Boards of directors are democratically elected by members of societies and have a fiduciary duty under law to act only in the best interests of members. 2) It is the clear expressed judgement of the board of directors of the societies that mutual status offers the best deal for members in terms of lower mortgage rates, higher rates of interest for savers and better customer care through an extensive local branch network because they serve members and do not have to make fat profits for shareholders. 3)Therefore (logically and practically) how can the board allow a resolutions to be put to the full membership? whose outcome -if in favour of conversion the directors are duty bound by building society law and guidelines -to ignore! 4) Members conversion resolutions are solely an expression and snapshot of the views of members at a particular moment and are not legally binding on the board. Since the board of directors believe conversion is a mistake how can they take the society any way down that path? including putting the resolution to the membership in the first place. SOBS would argue, they shouldn’t do this. 5) Moreover, SOBS would argue that it would be a complete waste of members money to even present resolutions -that are going nowhere- to the members in the first place Therefore the BSC should intervene immediately to avoid this farcical situation. Because whatever the outcome of the resolution the directors are legally bound to follow their own judgement rather than accept the outcome of the one-off vote if it favours steps to conversion. Example to clarify the point Members could propose resolutions for the craziest of reasons. ‘lets burn the offices down’ etc.

Would any building society honestly contemplate putting them to the membership The answer is No! and the same should apply to any resolution proposing conversion. If the directors believe it isn’t in the best interests of members and cannot legally follow any decision arrived at it is only logical that such a resolution simply shouldn’t be allowed put to the members. Members money should not be frittered away on such resolutions. There must be some control and logic exercised over resolutions that a society has to spend sometimes millions of pounds putting to their membership The appropriate path for carpetbaggers We would suggest that there is an appropriate alternative path for carpetbaggers to follow and that is to seek to elect a different board of directors who believe that conversion is in the best interests of members. They have the right and the ability to do this if supported by the membership of a society. This is therefore an entirely different matter, which is permissable under building society law and guidelines. We believe that Building Society law and guidelines would suggest that electing pro-conversion directors is the route pro-conversion members should follow. Perhaps it might be helpful and appropriate and in keeping with the responsibilities of the BSC for you to suggest this approach to them. I look forward to hearing from you Yours sincerely, Bob Goodall co-ordinator “Save our Building Societies” campaign tel 01727 847 370 (24hrs) NB Please could you also examine the rules of the 2 societies to check if they exclude resolutions such as those submitted by the carpetbaggers for the reasons we explain above. ie That they ‘purport to interfere with the directors’ right and duty to manage the affairs of the society”.