BT 2015 Annual Report Download - page 222

220 BT Group plc
Annual Report 2015
iii neither it nor an eber of the eutsche eleo roup will
propose or procure the proposal of a shareholder resolution
which is intended or appears to be intended to circumvent the
proper application of the istin ules the ndependence
Provisions”).
Deutsche Telekom AG undertakes to procure the compliance of its group
members with the Independence Provisions.
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The Relationship Agreement will contain standstill provisions pursuant
to which Deutsche Telekom AG undertakes on behalf of itself and the
Deutsche Telekom Group for a period of three years from the date of
the elationship reeent the nitial tandstill eriod subect to
certain exceptions, not to:
i acuire or oer to acuire an interest in an shares or other
securities of BT as a result of which the aggregate interest of the
Deutsche Telekom Group and any of its concert parties increases
above 12% of Ordinary Shares in issue at any time;
ii act in concert with an person with respect to the holdin votin
or disposition of any shares or other securities of BT;
iii solicit or participate in an solicitation of hareholders to vote in a
particular manner at any meeting of Shareholders; or
iv activel or publicl ae an proposals for an erer
consolidation or share exchange involving shares or other securities
of  for the purposes of this art onl the tandstill
Provisions”).
The exceptions to the Standstill Provisions include circumstances:
i where the eutsche eleo roup acuires an interest in an
shares or other securities of BT from the Orange Group provided
that such acquisition does not increase the aggregate interest of
the Deutsche Telekom Group and its concert parties above 15% of
the Ordinary Shares in issue;
ii where the eutsche eleo roup announces an oer under ule
. of the it ode on aeovers and erers the ode or taes
an action reuirin it to ae an oer under ule 9 of the ode in
each case if such oer is recoended b the irectors of 
iii where an third part aes or announces under ule . of the
ode an oer to acuire the issued ordinar share capital of 
whether such oer is recoended b the irectors of  or not
and
iv where  aes an oerin or issue of shares or other securities
and the Deutsche Telekom Group takes up its rights to subscribe for
or acuire the shares or other securities oered to it b .
Under the Relationship Agreement, Deutsche Telekom AG undertakes,
among other things, that for a period of two years from the expiry of the
Initial Standstill Period, in the event that the Deutsche Telekom Group
acuires other than as a result of a reduction or re-oranisation of share
capital or re-purchase of shares or other securities of BT) any Shares
in excess of 15% of the rdinar hares in issue the cess hares
it shall procure that the votes attaching to such Excess Shares shall be
eercised subect to the provisions of the ode and applicable law or
regulation) in accordance with the recommendation of the Board of
Directors of BT on all shareholder resolutions which relate to a transfer of
an interest in Ordinary Shares carrying in aggregate 30% or more of the
voting rights of BT and on all special resolutions of BT. After expiry of the
Initial Standstill Period, the Deutsche Telekom Group will otherwise be
free to increase its shareholding in BT.
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The Relationship Agreement contains lock-up provisions pursuant to
which Deutsche Telekom AG and Deutsche Telekom undertake for a
period of 18 months from the date of the Relationship Agreement,
subject to certain exceptions, that neither they nor any of their group
ebers will directl or indirectl oer sell contract to sell rant or
sell options over, purchase any option or contract to sell, transfer, charge,
pledge, grant any right or warrant or otherwise transfer, lend or dispose
of any shares in BT or any securities convertible into or exercisable or
exchangeable for such shares, or announce or otherwise publish an
intention to do an of the foreoin each of the above activities bein a
isposal. he eceptions include
i where eutsche eleo  or eutsche eleo accepts an oer
by a third party for the whole of the ordinary share capital of BT,
whether b tender oer or schee of arraneent or provides
an irrevocable undertaking or letter of intent to accept or vote in
favour of an such oer
ii an isposal to an eber of the eutsche eleo roup
provided that the transferee agrees to be bound by the restrictions
of the Relationship Agreement; and
iii an sale of shares via an sinle o-aret trade to a inancial
Investor of no more than 5% each of the Ordinary Shares in issue of
 or on one occasion onl the sale of two staes of not ore than
5% each at the sae tie to two dierent inancial nvestors
provided that any transferee enters into a lock-up agreement
on substantially similar terms to the lock-up provisions of the
Relationship Agreement.
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Prior to any Disposal by Deutsche Telekom AG, Deutsche Telekom or any
of their roup ebers in accordance with pararaph iii above 
has a riht of first oer in relation to the relevant shares subect to the
passing of the Buy-Back Resolution), and such right is set out in the DT
CP Contract.
Pursuant to the DT CP Contract, prior to an intended Disposal to Financial
Investors, the relevant selling entity is obliged to issue a notice to
BT specifying the number of Ordinary Shares proposed to be sold or
transferred.  has nine usiness as within which to ae an oer
for all of the Ordinary Shares detailed in the notice, or else its right to
ae an oer will lapse. f the oer is not accepted the sellin entit
may make the sale or transfer within three months of the delivery of the
notice to  at a price eual to or reater than the price oered b .
f  does not ae an oer within the allotted tie the sellin entit
may sell the Ordinary Shares within three months of the delivery of the
notice to BT at any price. The DT CP Contract will terminate 18 months
from Completion.
The notice from the selling entity may be issued to BT during a close
period or prohibited period as such ters are defined in the odel
Code of Chapter 9 of the Listing Rules) of BT. If any such period does not
expire prior to the end of the nine Business Day period within which BT
a elect to ae an oer to bu-bac the shares  will not be able to
eercise its riht of first oer.
hen eercised in conunction with s riht of first oer in relation to
Ordinary Shares held by Orange and Orange SA, the maximum amount
of rdinar hares  can acuire b eercise of its rihts of first oer is
approximately 14% of BT’s share capital on an enlarged basis post-
Acquisition. The price at which Ordinary Shares can be bought back shall
be no more than the higher of the closing price of the Ordinary Shares
on i the date on which  aes an oer to bu-bac the rdinar
hares and ii the last tradin da before the bu-bac taes place. n
addition, BT has separately undertaken to give the Sponsor prior notice
of its intention to ae an oer for rdinar hares under the  
ontract to consult with the ponsor reardin such oer and not to
ae such oer unless at the relevant tie the oard havin been so
advised b the ponsor considers such oer to be fair and reasonable
as far as Shareholders are concerned. After expiry of the lock-up period
described above, the Deutsche Telekom Group will be free to dispose of
its shareholding in BT without further restriction.
A copy of the DT CP Contract will be available for inspection at the
opans reistered oce not less than 1 das before the date of the
General Meeting.
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Under the Relationship Agreement, subject to compliance with any
applicable regulatory requirements, Deutsche Telekom AG is able
to appoint one on-ecutive irector the eutsche eleo
Representative Director”) to the Board for so long as the Deutsche
Telekom Group holds 10% or more of the issued share capital of BT
provided that if the shareholdin is reduced below 10% as a result of
a non-pre-emptive share issuance by BT, the board appointment right
shall continue for as long as the Deutsche Telekom Group holds at least
8% of BT’s shares but provided further that such reduced shareholding
shall not have occurred as a result of the Deutsche Telekom Group selling
Ordinary Shares, and also provided that the Deutsche Telekom Group