To ask the Minister for Transport the way in which he responds to former Aer Lingus and current Aer Lingus workers who have been given in a number of cases 3,500 Aer Lingus shares each in lieu of settlements under a recent wage agreement and as such 2,000 hold between them 5,000,000 shares; and the way in which shares will be disposed of without the permission of the shareholders.
- Trevor Sargent.
For WRITTEN answer on Tuesday, 14th June, 2005.
Ref No: 18992/05
Answered by Minister for Transport
The total staff shareholding is currently 14.9% of the issued share capital of Aer Lingus Group plc.
This includes a shareholding of around 5% provided under an Employee Share Participation Scheme (ESPS) agreed with staff in the context of the Cahill Plan in 1993 and an additional 9.9% provided under an Employee Share Ownership Plan (ESOP) agreed in the context of the 2001 Survival Plan.
I understand that 11.6% of the total staff shareholding is currently held under the ESOP while individual staff hold 3.3%.
The terms of the ESOP provide that for so long as the State holds any shares in Aer Lingus, the total staff shareholding will not exceed 14.9% of the entire issued share capital of the Company.
However, in accordance with the terms of the ESOP agreement, in the event of a third party investment in Aer Lingus, the Employee Share Ownership Trust (ESOT) has the opportunity to acquire shares through its own means to restore the staff shareholding to 14.9%.
The conditions relating to the 3.3% individual staff shareholding, including their disposal, are covered in the provisions of the ESPS agreement together with the Articles of Association of the Company. In particular, staff who have left the Company and who have been allocated their shares, are entitled to retain these shares for three years. Should they wish to dispose of their shares within that three year period, they can specify a minimum price which they must receive if the shares are sold in an internal market in the Company. After that three year period, they are required to submit these shares to the Trustees for auction in the internal market with no minimum price and these shares can be purchased by the remaining staff or by the ESOT.
The remaining 11.6% staff shareholding has been notionally allocated by the ESOT to its beneficiaries. Until those shares are formerly allocated, they continue to be held by the ESOT on behalf of their beneficiaries and cannot be sold.
Once formerly allocated, the disposal rules which apply to the ESPS shares will also apply to these shares.