BT 2015 Annual Report Download - page 223

221
Overview
The Strategic Report
Purpose and strategy Delivering our strategy Group performance Governance Financial statements Additional information
must top up to 10% within 12 months or the right will lapse). Any such
appointment shall be made in consultation with the BT
Nominating &
Governance Committee
and the appointee must be approved by the BT
hairan such approval not to be unreasonabl withheld or delaed.
The Relationship Agreement provides for the establishment of a
new coittee of  the onicted atters oittee which
shall assess whether and to what extent the Board papers and Board
meetings of BT are likely to consider or refer to any matter in respect of
which the onicted atters oittee believes that either
i  and the eutsche eleo roup are copetitors or
ii there is an actual or potential conict of interest between  and
the eutsche eleo roup a onicted atter.
he onicted atters oittee shall coprise of at least three
members including at all times the Secretary to the Board, the Head
of Competition and Regulatory Law and the Director of Governance.
The Deutsche Telekom Representative Director shall not be a
eber of the onicted atters oittee. he eutsche eleo
Representative Director shall not attend any Board meeting of BT unless
a senior copliance ocer of eutsche eleo  has received prior
confiration that the onicted atters oittee has considered
whether such attendance raises an concerns in relation to a onicted
atter. n the event that the onicted atters oittee has a serious
or iediate concern in relation to a onicted atter the eutsche
Telekom Representative Director shall not attend any Board meetings in
relation to the onicted atter and shall not receive an inforation in
relation to the onicted atter.
Deutsche Telekom AG is also entitled to receive, subject to compliance
b  with its leal and reulator obliations such financial or other
information in relation to the BT Group as is necessary or reasonably
required by Deutsche Telekom AG in order to comply with its reporting
requirements and legal, regulatory or tax obligations.
Standstill and Lock-up Agreement with Orange SA
and Orange
6WDQGVWLOODQG/RFNXS$JUHHPHQW
At Completion, BT will enter into a Standstill and Lock-up Agreement
with Orange SA and Orange, which will regulate the ability of the Orange
Group to deal in shares and other securities of BT. The Standstill and
oc-up reeent will terinate if a the rdinar hares are no
loner listed on the preiu listin seent of the cial ist and
admitted to trading on the London Stock Exchange’s main market for
listed securities or b the rane roup ceases to be interested in ore
than 3% of the issued ordinary share capital of BT.
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The Standstill and Lock-up Agreement will contain standstill provisions
pursuant to which Orange SA will undertake on behalf of itself and its
group for a period of three years from the date of the Standstill and
Lock-up Agreement, subject 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 Orange Group and its concert parties increases above 4% of
Ordinary Shares in issue at any time;
ii act in concert with an person in respect of 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 the 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:
i where the rane roup announces an oer under ule . of 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
Directors of BT;
ii 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
iii where  aes an oerin or issue of shares or other securities
and the Orange Group takes up its rights to subscribe for or acquire
the shares or other securities oered to it b .
After expiry of the standstill period, the Orange Group will otherwise be
free to increase its shareholding in BT.
/RFNXS3URYLVLRQV
The Standstill and Lock-up Agreement will contain lock-up provisions
pursuant to which Orange SA and Orange undertake for a period of 12
months from the date of the Standstill and Lock-up Agreement, subject
to certain exceptions, that neither they nor any of their group members
will directl or indirectl eect an isposal as defined in /RFNXS
3URYLVLRQV on page 220 above). The exceptions include:
i an isposal to the eutsche eleo roup
ii where rane  or rane accepts an oer b a third part
for the whole of the ordinary share capital of BT, whether by
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 any
such oer
iii an isposal to an eber of the rane roup provided
that the transferee agrees to be bound by the restrictions of the
Standstill and Lock-up Agreement;
iv an sale of shares via an sinle o-aret trade to a inancial
Investor of up to all the shares of BT in which the Orange Group
has an interest, provided that the transferee enters into a lock-up
agreement on substantially similar terms to the lock-up provisions
of the Standstill and Lock-up Agreement; and
v if the rane roup owns 2% or less of the issued ordinary share
capital of the Company, any Disposal which is by way of a swap or
other agreement to transfer the economic ownership of the shares.
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Prior to any Disposal by Orange SA, Orange or any of their group
ebers in accordance with pararaph iv above  has a riht of
first oer in relation to the relevant shares subect to the passin of
the Buy-Back Resolution), and such right is set out in the Orange CP
Contract.
Pursuant to the Orange 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 shares detailed in the notice, or else its right to make an
oer will lapse. f the oer is not accepted the sellin entit a ae
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 a sell
the Ordinary Shares within three months of the delivery of the notice to
BT at any price. The Orange CP Contract will terminate 12 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 Deutsche Telekom AG and Deutsche Telekom,
the maximum amount of Ordinary Shares BT can acquire by exercise
of its rihts of first oer is approiatel 1% 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 rdinar hares 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 buy-back takes place. After expiry of the lock-up period described
above, the Orange Group will be free to dispose of its shareholding in BT
without further restriction.
A copy of the Orange 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.