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Prospective Board Changes & CEO Appointment

13 September 2004

Contact Energy – Prospective Board Changes & CEO Appointment

Contact Energy today announced the intended composition of the board from the time that Origin Energy (Origin) becomes the company’s majority shareholder, which is expected to occur in early October.

“While the new board won’t be constituted until Origin completes its purchase of the Edison Mission Energy (EME) stake, we felt that it would be best to announce the intended changes now to reduce uncertainty in this area” said Contact’s Chairman Mr Phil Pryke.

Today’s announcement follows the receipt of a Notice of Takeover Offer from Origin earlier today, and Origin’s statement that it wishes to reduce the size of the board from eight to six directors when it becomes majority shareholder.

Origin has signalled that it will propose the appointment of Mr Grant King, Mr Bruce Beeren and Ms Karen Moses to fill the casual board vacancies created when the current EME affiliated directors resign. Origin has also indicated that it would like Mr King to assume the chair (a brief background on each of the proposed new directors is attached).

Contact’s board believes that it is in the best interests of the company to have a smooth transition when Origin becomes majority shareholder, and will facilitate the move to the proposed new board structure.

Accordingly, Mr Phil Pryke will step aside from the chair upon the change in majority ownership, and assume the role of deputy chair. To facilitate the move to a six member board, Dr Patrick Strange, who is the most recently appointed independent director, will resign from the Contact board, effective from the date of change in majority ownership. The other two independent directors, Mr John Milne and Mr Tim Saunders, will remain on the board.

“Another key area where greater certainty is desirable has been the position of the current Chief Executive, Mr Stephen Barrett, who is a secondee from EME” said Mr Pryke.

“Mr Barrett is widely respected within the sector for his leadership and business skills, and has overseen a challenging period of growth for Contact. For these reasons, the company has been very keen to retain Mr Barrett through the change in majority ownership.”

“The independent directors, acting on behalf of the board, have been in discussion with Mr Barrett on this issue. We are delighted to announce today that Mr Barrett has agreed to remain with Contact following the change in majority ownership” said Mr Pryke.

“Mr Barrett’s secondment will cease when EME completes the sale of its Contact shares, and he will step aside from the board and become an employee of Contact at that time. Mr Barrett has agreed to continue with Contact through to 30 September 2005.”

“Mr Barrett will receive a base salary of $900,000 per annum, and be eligible for performance related bonuses of up to $436,000 per annum. Contact will also meet certain other costs associated with his expatriate-equivalent status, and these total approximately $589,000 per annum.

While the total remuneration received by Mr Barrett will remain broadly unchanged when he moves from EME employment to Contact, the effective cost to Contact will increase. This is because some secondment costs were being borne by EME without full recompense from Contact.

“Contact’s board strongly believes that it is in the best interests of the company to continue to have access to Mr Barrett’s services. This judgement is based on Mr Barrett’s excellent track record, and the importance of maintaining strategic focus through this period of change. The board also consulted Origin as the incoming majority shareholder, and has strong support from that quarter” said Mr Pryke.

The other three non-executive directors affiliated with EME who are currently on the board have indicated that they will resign as directors when EME ceases to be the majority shareholder. They are Mr Robert Edgell, Mr Raymond Vickers, and Mr Kevin Smith.

“The retiring directors have all contributed to Contact’s successful development and record of achievement, and I would like to thank them all for their time and dedication” said Mr Pryke.

“While we will miss their counsel, the proposed new board structure will bring together an excellent mix of experience covering the upstream, generation and retail sectors. It will also provide a balance of fresh perspectives and continuity” said Mr Pryke.


Mr Grant King
Managing Director, Origin Energy

Mr King was appointed Managing Director of Origin Energy at the time of its demerger from Boral in February 2000 and was Managing Director of Boral Energy from 1994. Prior to joining Boral, Mr King was General Manager AGL Gas Companies. He is a Director of Envestra Limited, a Councillor of the Australian Petroleum Production and Exploration Association, and a past Chairman of the Australian Gas Association. He has a Civil Engineering degree and a Masters of Management.

Mr Bruce Beeren
Executive Director, Origin Energy

Mr Beeren joined the Board in March 2000. With over 25 years experience in the energy industry, Mr Beeren was establishment Chief Executive Officer of VENCorp and held a number of senior management positions at AGL, including Chief Executive Officer and General Manager, AGL Pipelines. Mr Beeren is a Director of Envestra Limited, Coal & Allied Industries Limited, Equipsuper Pty Ltd, and is a former director of Natural Gas Corporation Holdings Ltd (now NGC Holdings Ltd). He has a Science degree, a Commerce degree and a Masters of Business Administration, and is a Fellow of CPA Australia and the Australian Institute of Company Directors.

Ms Karen Moses
Executive General Manager Wholesale and Trading, Origin Energy

Ms Moses is responsible for the wholesale supply of natural gas, electricity and LPG for sale by Origin Energy's retail businesses, energy sales to wholesale customers, the management of risks associated with commodities bought and sold by Origin and assessment of the long-term strategic risk.

Ms Moses is also responsible for Origin’s LPG operations in Australia, New Zealand and the Pacific. Prior to joining Origin, Ms Moses held development and trading roles in the Exxon Group (1983-94). Ms Moses holds an Economics degree and Diploma of Education from the University of Sydney. She is also an Industry Council Member of the World LP Gas Association.


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