20th June 1999

Dear Mr Thompson,

West Bromwich Albion plc

I refer to your second meeting with shareholders at the Moat House, West Bromwich and to your letter addressed to me as a shareholder dated 15th June 1999.

I have now had time to objectively consider the information so presented which has compelled me to write this open letter to try to find a platform to air my considered alternative views and conclusions to assist shareholders make a decision at the impending EGM which is in the best interests of the stakeholders of West Bromwich Albion Football Club.

As a Chairman of a public company you are well aware that you have responsibility to act in the best interests of all stakeholders, which includes staff and customers, and not just in the narrow interests of the shareholders. Furthermore the stakeholders must be able recognise in the Chairman a high degree of honesty and integrity in order to place their trust.

In your computer presentation at the Moat House you listed and prioritised the important elements of a successful football club and stressed that the club would only be as strong as its weakest link. The five elements you listed were the playing staff, the stadium, a plan for the business, the manager and the Chairman. You stressed the playing staff were the first priority at the meeting at the Moat House. Neither at the Moat House nor in your Letter have you expressed any thought, consideration or even acknowledged the interests of the FANS at this time, the real life-long supporters of West Bromwich Albion, the paying customers and surely a key and very important element of the club now and in the future.

I have to comment as follows on the points raised in your letter with additional comments arising from the position you took at the Moat House using the same headings as in your Letter.

So called independent Directors

I contend that the most independent director on the Board representing the interest of the Fans is John Wile. Your implication at the Moat House that he would come into line behind a new Chairman because of his financial dependence under threat of removal is beyond contempt. As to Mr Colston, the Board of Directors? appointed him therefore his independence cannot be an issue and should not be questioned.

Your questioning of the independence and motives of Mr Wile and Mr Colston however, begs similar questions regarding Mr Hurst and Mr Stapleton at this time. Also the unanswered questions as to what point in time did they really get behind your cause and why have not been addressed.

As a Chairman of a public company you will be aware of your responsibility to all stakeholders not to precipitate any public action without a plan. Since you have not revealed your plan behind this action I can only assume that your planned action is to engineer a situation to gain the position of Chairman of West Bromwich Albion FC.

At the Moat House you stressed the need for change which clearly strikes an emotional chord with all stakeholders of the football club but to play that emotional card simply to remove Mr Hale in favour of yourself really is a quantum leap in credibility.

Your intent to bring back Mr Hurst and Mr Stapleton with you on the Board surely cannot be regarded as change. The only effect is to remove Mr Hale, whom you state was, on occasions, in the minority at the time when you and your colleagues were Directors yet you admit you all failed, as trustees of the shareholders, to act on your conscience at that time. When questioned on this issue of your admitted failure you firmly stated that the role of the Chairman in a football club is different thereby clearly confirming that either Mr Hale must have acted properly within parameters you could not or would not define. This raises the concern that, if elected, you will act no differently. You surely must be aware that there is no distinction under law in the role of Chairman between different categories of public companies.

The issue here is, not whether Mr Hale should stay or go but, whether the shareholders should entrust the footfall club to a "group of 3" directors who were all the party to failures which they allege are solely the responsibility of Mr Hale. More importantly, the group of 3 were in a position to avoid such failures by responsible action in Board meeting.

Perilous League Position

I am at a total loss to understand how this position can be the sole responsibility of Mr Hale when the group of 3 were on the Board and, by your own admission, there was a time when you had direct involvement in the decision making process on player purchase. It would be of interest to all shareholders for you to declare with which players you had involvement rather than blame Mr Hale for making all of the bad decisions.

Perilous Financial Position

I am particularly concerned about the fact that you either do not understand basic financial accounts or you are deliberately misleading the shareholders.

At the Moat House, you waved the Accounts and described them as complex. You berated the Chairman over the significant drain in cash over recent months and the failure to turn in a profit. In response to questions from the floor, you confirmed that if the same position arose in your company where you are Chairman you would have little option but to resign. It is in this area that I contend a football club is different and surely you must recognise this.

It is not complex for the Fans and Shareholders to understand that:

• Significant cash receipts are taken in between June and July due to season ticket sales therefore it is not surprising that cash reserves fall in a period subsequent to such sales. Therefore to describe this phenomena over recent months to the shareholders as serious mismanagement is at best na?ve and at worst dishonest.
• The Accounts show the value of players at cost less a charge against profits in accordance with a fixed accounting policy. Since the cost of Lee Hughes and Enzo Maresca is very significantly below current market values it must be acknowledged that if they had been sold then the football club?s current financial position would have been remarkably transformed from perilous to very sound.

It therefore seems, as far as you are concerned as a shareholder, that had Mr Hale sold key players for profit he would have become a hero. Perhaps Mr Hale did not fall to this temptation because he had the interest of the Fans at heart.

• At the Moat House you and your fellow ex-directors stated that Calderwood could have come to the Hawthorns 6 weeks prior to his move to Aston Villa. You also stated that at that time you were convinced that the club would not get promotion through the ?play offs? Based upon your declared parameters of financial and cash management you therefore could not have supported the purchase due the immediate impact on cash and the unnecessary breach in the wages pay structure. Mr Hurst was clearly aggrieved that this purchase was not made whilst you and Mr Hale would have been in agreement. At no time has it been stated that the player was prepared to come to West Brom or even that discussion had taken place.
• You also stated that the Accounts would show a serious erosion in profitability and again implicated Mr Hale yet you failed to inform the shareholders of changes in accounting recognition imposed upon all football clubs this year which will materially and adversely affect the accounting profitability of all clubs.

Are these explanations really too complex for shareholders to understand? I don?t think so.

Meetings at the Moat House

I concede that you declared your commitment to the success of West Bromwich Albion and your definition of success embraced the following parameters:

• You cannot commit to the injection of further personal funds.
• A positive cash position must be restored.
• The club must consistently year on year make a profit.
• The club must adopt a rolling three-year plan.

You admitted you had no Plan at the moment to raise money externally.

At the meeting at the Moat House you stated that the playing squad is the most important element of the club but I can only conclude that, in order to meet your success parameters, players with market values in excess of balance sheet values must be sold. Who will be the first, Hughes, Maresca or Kilbane and then what effect will that have on attracting quality players to the club?

The magic future three-year rolling Plan is yet to be prepared. This Plan should have been made available at high level in order that shareholders could make a judgement on relevance and credibility. However, you did wave a Plan that you stated had been presented soon after you had joined the Board but which had not been adopted. You did not offer any detail of those aspects of the Plan that should have been adopted or implemented but when asked about the new training facility you said that it was in the original Plan but had yet to be financed. The only information available demonstrates that at least one major item of your plan was adopted and other shareholders and I are left to guess what items of importance were not adopted. I believe that information should have been shared bearing in mind by your own admission you had no experience of professional football management prior to joining the club yet within weeks of you joining you submitted a plan which you now complain was not adopted.

I cannot believe that in your Company you would have implemented a radical uncommissioned Plan submitted by a green newcomer. I know what action you would take against that green newcomer if he went public with his problem even if he happened to be the largest minority shareholder. I am certain he would be banished just as I am certain you would not resign.

I have no doubt that with your advisers you are more than capable of putting a plan together which may be in the best financial interests of the shareholders. I have grave doubts whether you personally could put together a balanced plan, which would address the interests of all stakeholders.

The question I believe you might find difficult to answer is; "If it was not in your mind to become Chairman, how could you assure the adoption of a 3 year Plan, the essential ingredient in your presentation to deliver change? You therefore must have planned to become Chairman and deliberately misled the shareholders on this issue.

You stated that you had on several occasions you had tried to persuade Mr Hale to stand down. Had you ever promoted yourself from within to become Chairman?

WHAT IS YOUR HIDDEN AGENDA Mr THOMPSON?

Rights Issue in May 1996

The plain fact is that your investment in 1996 is no reason whatsoever why you should be considered for Chairman now or indeed why you should bring about this public exchange when your perceived "problem" could so easily have been resolved in the Boardroom under law.

You state the club was strapped for cash having only spent a net of £145,000 in a period of 21 months on players prior to your arrival. Since you, just like Mr Colston, "had no personal knowledge of the way the club had been run" prior to your arrival it would have been more appropriate to have shared with the shareholders your understanding of the meaning of net £145,000. Your suggestion is that the club should have spent or wasted a lot more money in the transfer market which is contrary to your success criteria of good financial management. Maybe, it was good housekeeping by the Board at that time in difficult circumstances?

Your comments about Mr Hale wasting money on player transfers were deliberately restricted to and publicised in relation to Paul Groves, Paul Crichton and Sean Murphy. It is a great pity that you failed to mention the transfer of Paul Peschisolido, which clearly did not help your cause.

You stated that it was not appropriate to comment on current players yet comment was made in connection with DeFreitas. Further, your Freudian slip or throw away comment that Premier League football will require a Premier League manager was, I suggest, unfair to the current manager who will be presumably sacrificed should you gain control.

Your vote is important

For the first time there is a reference to supporters whom you allege will be consulted but only after the removal of Mr Hale as Chairman and the appointment of yourself.

Given your belief that the Chairman?s role in a football club is to be involved in and influence all major decisions I am certain that any consultation with shareholders and Fans will be limited to revealing such information as you believe is as appropriate and necessary to justify the Plan.

Hale! Wile! Colston! DeFreitas! Smith! How can you with so little experience and without any success in the football arena be certain that you are the only one that is right. Should we as responsible shareholders hand over absolute power to you on trust when you may be wrong?

My belief

Having started with an open mind I have analysed all the data available to me, written and oral, and I have come to the clear conclusion there is no objective basis to justify the EGM resolution.

If however a basis could be justified for the resolution, there is absolutely no justification to effect a change which involves bringing back the group of 3 directors who by their own admission were failures first time around.

This leads me to your personal position. Your investment in West Bromwich Albion was almost certainly driven by the tax advantage of investment which in real terms meant c£1.6m of your money plus c£400k generated by a reduction in your tax liability - £2m total. Since, by your own admission you were not a fan of West Brom prior to your investment then your investment clearly was made cold without emotion contrary to the majority of the investor/supporters. I can only therefore conclude that your end game must be related to a combination of achieving power as Chairman and enhancing and protecting shareholder value as your first priority.

I believe you have abused your position as the largest minority shareholder and as a consequence I do not believe that, given your past performance, you are capable of putting the interests of all stakeholders before your personal interests.

I just hope that the emotional quest for change for the good, yearned for by all shareholder/ supporters, will not cloud the reality that a vote against Mr Hale will not deliver their dream or bring new money into the club. The change will simply return three ex-Directors with control who were all party to all the failures they believe they have identified.

As a minority shareholder for 3 years just like you but an active Fan since my first visit to the Hawthorns in 1950 as an 8-year-old, I firmly believe that all stakeholders of West Bromwich Albion Football Club deserve a committed Fan as Chairman of their Club.

I am well aware that this letter bears emotion but it is from a genuine Fan and many Fans like myself are excluded from this debate simply because they are not shareholders. Emotion aside I have looked for honesty, integrity and trust in your persona but I am only able to conclude as follows:

• Honesty - I believe that there are many examples quoted in this letter where you have been economical with the truth to make your point.
• Integrity - You have expressed comment and blamed others in public when they are either unable to comment or are not in a position to defend or justify their position.
• Trust - Trust me I?m a Doctor!

My reading of your appeal is: "Dear Shareholders, I am not a Fan (they don?t matter), trust me because I am the largest minority shareholder from ?Hamelin? and I will look after my own interests."

My final thoughts

Today?s press reports talk of an additional share issue underwritten by you, which was blocked. The report states the issue was for the purpose of further ground improvements.

If this share issue had gone ahead, new investors and shareholders would have been asked put more money for ground improvements NOT players when you have clearly stated the squad is the most important ingredient of the club. Since such an issue of shares would have been a Rights Issue at presumably discounted rates then existing shareholders not taking up their rights by paying in further sums would have been diluted and you would have bought their discounted shares. I don?t know, but maybe, there are substantial grants available to push through such improvements.

However, here is the kicker, you are locked in to holding West Bromwich Albion Shares for a further 2 years unless you pay to the Inland Revenue the tax saving of c?400 referred to earlier in this Letter. By building a new stand with grant aided funds you improve the Balance Sheet underpin the share value, almost certainly gain additional shares at a discount and get very close to a stranglehold control over the football club. As a shareholder, why should I participate in a rights issue which, at ?2m is clearly inadequate and for a purpose I do not consider to be a priority, that is proposed and underwritten by an individual whose interest in the football club as a club is dubious and whose commitment is almost certainly driven by personal tax savings which need to be protected over the next two years.

Today?s public threats of litigation against Mr Hale is also another example of the lengths you will go to get your own way regardless of how much you tarnish the high esteem and reputation of West Bromwich Albion Football Club in the process. What are the Fans really thinking and feeling yet they can do nothing except make their feelings known through the supporters clubs.

The public face of you aggression and determination to get your own way leaves me in no doubt that that you will not listen to the shareholders or the fans. Unfortunately, I believe both Mr Hurst and Mr Stapleton will also find this out when the honeymoon is over.

What is really sad is that men of the calibre and integrity of Mr Hurst and Mr Stapleton who have been very effective and loyal servants of the Club for many years should be embroiled in this situation. I well understand the real contributions they have made within the club but I have yet to understand what your personal contribution has been. It is very clear in my mind that should either Mr Hurst or Mr Stapleton return as Directors of West Bromwich Albion Football Club it should be on their own individual merits and not on your coat tails.

You will therefore understand I will be there voting against the Resolution at the EGM.

Yours sincerely

Alan Reynolds