SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
(Rule 13d-101)
(Amendment No. 1)
Under the Securities Exchange Act of 1934
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
TeleWest Communications plc
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(Name of Issuer)
Ordinary Shares of 10p each
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(Title of Class of Securities)
*
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(CUSIP Number)
Wayne A. Wirtz
SBC Communications Inc.
175 East Houston
San Antonio, Texas 78205
(210) 351-3736
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
September 8, 1998
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
NOTE: Schedules files in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
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* CUSIP number for the American Depository Shares, each representing ten
Ordinary Shares of 10p each is 879956P 10 5.
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CUSIP NO. - None*
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1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
SBC Communications Inc.; I.R.S. Identification No. 43-1301883
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
Not Applicable
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 207,392,584**
EACH -----------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH -----------------------------------------------------
10. SHARED DISPOSITIVE POWER
207,392,584**
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* The CUSIP Numbers for the American Depositary Shares Representing the
Ordinary Shares is 87956P 10 5.
** On September 10, 1998 SBUK-1 (as defined herein) entered into the
Letter Agreement (as defined herein) pursuant to which SBUK-1 agreed to
sell up to 180,000,000 Ordinary Shares (as defined herein) to MediaOne
Holdings (as defined herein).
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
207,392,584**
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.7%***
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14. TYPE OF REPORTING PERSON
HC, CO
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*** On September 15, 1998, the closing of the General Cable Transaction is
expected to occur. Following such event, the percentage set forth on line
13 will be 9.7%.
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CUSIP NO. - None*
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1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Southwestern Bell International Holdings (UK-1) Corporation; I.R.S.
Identification No. 51-0362082
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
Not Applicable
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 207,392,584**
EACH -----------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH -----------------------------------------------------
10. SHARED DISPOSITIVE POWER
207,392,584**
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* The CUSIP Numbers for the American Depositary Shares representing the
Ordinary Shares is 87956P 10 5.
** On September 10, 1998 SBUK-1 entered into the Letter Agreement pursuant
to which SBUK-1 agreed to sell up to 180,000,000 Ordinary Shares to
MediaOne Holdings.
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
207,392,584**
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.7%***
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14. TYPE OF REPORTING PERSON
CO
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*** On September 15, 1998, the closing of the General Cable Transaction is
expected to occur. Following such event, the percentage set forth on line
13 will be 9.7%.
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AMENDMENT NO. 1 TO SCHEDULE 13D
RELATING TO THE ORDINARY SHARES OF
TELEWEST COMMUNICATIONS PLC
This Amendment No. 1 (this "Amendment") to the Statement on Schedule
13D is being filed by SBC Communications Inc., a Delaware corporation ("SBC")
and Southwestern Bell International Holdings (UK-1) ("SBUK-1"), a Delaware
corporation and a wholly-owned subsidiary of SBC International, Inc., a Delaware
corporation and a wholly-owned subsidiary of SBC ("SBCI") to amend and restate
in its entirety the Statement on Schedule 13D (the "13D") filed with the
Securities and Exchange Commission on October 13, 1995 by SBC, SBUK-1 and
Southwestern Bell International Holdings (UK-2), formerly a Delaware corporation
and formerly a wholly-owned subsidiary of SBCI ("SBUK-2").
Item 1. Security and Issuer.
This statement relates to the Ordinary Shares, of 10p each ("Ordinary
Shares"), of TeleWest Communications plc ("TeleWest"), a company organized and
existing under the laws of England and Wales.
The address of the principal executive office of TeleWest is: TeleWest
Communications plc, Genesis Business Park, Albert Drive, Woking, Surrey GU21
5RW, United Kingdom.
Item 2. Identity and Background.
The principal business address of SBC is 175 East Houston, San Antonio,
Texas 78205. SBC is a communications holding company whose subsidiaries are
engaged principally in communications.
SBUK-1's principal business address is #2 Read's Way, Corporate
Commons, Suite 117, New Castle, Delaware 19720. SBUK-1 is a wholly-owned
subsidiary of SBCI.
SBC and SBUK-1 are sometimes together referred to herein as the
"Reporting Persons".
On October 10, 1996, SBUK-1 merged with SBUK-2, with SBUK-1 being the
corporation surviving such merger (the "SBUK Merger").
(a)-(c);(f) The name, business address, present principal occupation or
employment, and the name and principal business of any corporation or other
organization in which such employment is conducted of each of the directors,
advisory director and executive officers, as applicable, of SBC and SBUK-1 is
set forth in Exhibit
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A hereto. Except as otherwise indicated in Exhibit A, each person listed in
Exhibit A hereto is a citizen of the United States.
(d)-(e) During the last five years, none of SBC or SBUK-1 or, to the
knowledge of SBC or SBUK-1, any of the persons listed on Exhibit A hereto, (i)
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws, or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Except as provided in the SBCC Share Exchange Agreement (as defined
herein), no separate consideration was paid by the Reporting Persons in
connection with the acquisition of beneficial ownership of Ordinary Shares or
Preference Shares (as defined herein).
No consideration was paid by the Reporting Persons in connection with
the acquisition of beneficial ownership of Ordinary Shares as a result of the
conversion of the Preference Shares referred to in Item 5 below.
Item 4. Purpose of the Transaction.
(a)-(j) On September 6, 1995, the shareholders of TeleWest
Communications plc (the predecessor company to TeleWest, "TeleWest Predecessor")
approved a merger (the "Merger") with SBC CableComms (UK) ("SBCC"), whereby the
shareholders of TeleWest Predecessor and of SBCC would transfer all of their
shares in those companies to TeleWest in exchange for the Ordinary Shares, and,
in certain cases, Convertible Preference Shares, par value 10p each (the
"Preference Shares"), of TeleWest. Pursuant to the Merger and under a share
exchange agreement among TeleWest Predecessor, TeleWest, SBCC, SBCI, SBUK-1,
SBUK-2, Cox Communications, Inc. ("Cox"), and the Cox Affiliate (as defined
below), dated as of August 11, 1995 (the "SBCC Share Exchange Agreement"), the
outstanding ordinary shares of SBCC were exchanged for 183,994,960 Ordinary
Shares and 230,790,208 Preference Shares. SBUK-1 and SBUK-2 together received a
total of 91,997,480 Ordinary Shares and 115,395,104 Preference Shares.
The foregoing description of the SBCC Share Exchange Agreement is
qualified in its entirety by reference to the SBCC Share Exchange Agreement, a
copy of which was previously filed as Exhibit B to the 13D and is specifically
incorporated herein by reference.
Immediately prior to the Merger, the outstanding ordinary shares of
SBCC were owned as follows:
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25% each by SBUK-1 and SBUK-2, for a total of 50%, and 50% by
Cox U.K. Communications, L.P. (the "Cox Affiliate").
Upon the consummation of the SBUK Merger, SBUK became the beneficial
owner of all of the 91,997,490 Ordinary Shares and 115,395,104 Preference Shares
formerly held by SBUK-1 and SBUK-2.
On September 8, 1998, SBUK-1 converted all 115,395,104 of its
Preference Shares into Ordinary Shares and became the holder of a total of
207,392,584 Ordinary Shares. On September 10, 1998, SBUK-1 entered into the
Letter Agreement (as defined herein) providing for the sale of up to 180,000,000
Ordinary Shares to MediaOne Holdings (as defined herein). Pursuant to the terms
of the New Articles (as defined herein), upon consummation of the transactions
contemplated by the Letter Agreement, SBUK-1 will no longer have the right to
appoint a director to the Board.
The Reporting Persons, on behalf of the above mentioned entities,
subject to the provisions contained in the agreements summarized herein, reserve
the right to purchase additional Ordinary Shares or to dispose of the Ordinary
Shares in the open market or in privately negotiated transactions or in any
other lawful manner in the future and to take whatever action with respect to
the Ordinary Shares it deems to be in the best interests of the Reporting
Persons.
Except as set forth in this Amendment, the Registration Rights
Agreement (as defined herein), the Amended Relationship Agreement (as defined
herein), the New Articles or the Letter Agreement, none of SBC, SBUK-1 or, to
the best of SBC's or SBUK-1's knowledge, any of the individuals named in Exhibit
A hereto, has any plans or proposals which relate to or which would result in or
relate to any of the actions specified in subparagraphs (a) through (j) of Item
4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a)-(b) SBC and SBUK-1 currently beneficially own 207,392,584 Ordinary
Shares representing, based on information provided to SBC by TeleWest,
approximately 14.7% of TeleWest's outstanding Ordinary Shares. The Reporting
Persons have shared voting and disposition power over all of the Ordinary Shares
that they beneficially own. Upon the issuance of Ordinary Shares in connection
with the General Cable Transaction (as defined herein), SBUK-1 expects, based on
information provided to it by TeleWest, that it will beneficially own
approximately 9.7% of the Ordinary Shares. It has been announced that the
closing of the General Cable Transaction will occur on September 15, 1998 and
that the Ordinary Shares to be issued pursuant thereto will be issued on such
date. Until September 8, 1998, SBC beneficially owned 91,997,480 Ordinary
Shares, which represented approximately 10% of the then outstanding Ordinary
Shares and 115,395,104 Preference Shares which represented approximately 23.3%
of the then outstanding Preference Shares. Each Preference Share was convertible
into one Ordinary Share. On September 8, 1998, SBUK-1 converted all of the
Preference Shares it beneficially owned into Ordinary Shares at a rate of one
for one, thereby acquiring an additional 115,395,104 Ordinary Shares. Neither
SBC nor SBUK-1 holds any Preference Shares.
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Prior to the SBUK Merger, the Ordinary Shares and Preference Shares
which were beneficially owned by SBC were held by SBUK-1 and SBUK-2, each
holding 50% of those Ordinary Shares and 50% of those Preference Shares.
Following the SBUK Merger, all Ordinary Shares and Preference Shares were held
by SBUK-1. All 207,392,584 Ordinary Shares beneficially owned by SBC are held by
SBUK-1.
SBC believes that, notwithstanding the terms of the Letter Agreement,
because of the conditions precedent to the consummation of the sale contemplated
thereby SBC and SBUK-1 continue to beneficially own 207,392,584 Ordinary Shares.
Except as set forth in this Item 5, none of SBC, SBUK-1 or, to the best
of SBC's and SBUK-1's knowledge, any of the individuals named in Exhibit A
hereto owns any Ordinary Shares.
(c) Except with respect to the transactions contemplated by the Letter
Agreement described in Response to Item 6 below, none of SBC, SBUK-1 or, to the
best of SBC's and SBUK-1's knowledge, any of the individuals named in Exhibit A
hereto, has effected any transaction in Ordinary Shares during the past 60 days.
(d) No other person is known to have the right to receive or the power
to direct the receipt of dividends from, or the proceeds from the sale of the
Ordinary Shares beneficially owned by SBC.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
In addition to the SBCC Share Exchange Agreement described in Item 4,
the following agreements have been entered into by the Reporting Persons:
REGISTRATION RIGHTS AGREEMENT
Pursuant to a Registration Rights Agreement among TeleWest, the Cox
Affiliate, SBUK-1, SBUK-2, United Artists Programming--Europe, Inc., U S West UK
Cable, Inc. and U S WEST Cable Partnership Holdings, Inc., dated October 3, 1995
(the "Registration Rights Agreement"), TeleWest agreed that SBUK-1 and the Cox
Affiliate would have the right, subject to certain limited exceptions, to
require TeleWest to include all or any portion of their Ordinary Shares in any
sale to the public by TeleWest or a shareholder of TeleWest in the United States
pursuant to a registration statement filed by TeleWest under the Securities Act
of 1933 (other than a registration on Form S-4 or S-8) or in any public offering
under the laws of the United Kingdom. In addition, SBUK-1 and the Cox Affiliate
have the right to cause TeleWest on up to four separate occasions (two each) to
offer all or any part of their Ordinary Shares for sale in such an offering. The
foregoing description of the Registration Rights Agreement is
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qualified in its entirety by reference to the Registration Rights Agreement, a
copy of which was previously filed as Exhibit C to the 13D and is specifically
incorporated herein by reference.
AMENDED AND RESTATED RELATIONSHIP AGREEMENT/NEW ARTICLES
The Amended and Restated Relationship Agreement (the "Amended
Relationship Agreement") made as of April 15, 1998, between MediaOne
International Holdings, Inc., a Delaware corporation ("MediaOne Holdings"),
MediaOne UK Cable, Inc. and MediaOne Cable Partnership Holdings, Inc.,
Tele-Communications International, Inc. ("TINTA"), United Artists
Programming-Europe, Inc., Cox Communications, Inc., the Cox Affiliate, SBCI,
SBUK-1 and TeleWest was entered into in connection with the merger of TeleWest
and General Cable plc, a company organized under the laws of England and Wales
(the "General Cable Transaction") and became effective on September 1, 1998.
Also in connection with the General Cable Transaction, TeleWest amended its
Articles of Association (the "New Articles"). The Amended Relationship Agreement
supercedes the Co-Operation Agreement and the Share Dealing Agreement (each as
defined in the 13D). The following summary sets forth certain provisions of the
Amended Relationship Agreement and the New Articles relevant to SBC.
Appointment of Directors
Pursuant to the Amended Relationship Agreement and the New Articles,
each of the Cox, SBC and Vivendi Groups (each as defined in the Amended
Relationship Agreement) has the right to appoint one Director to the Board of
Directors of TeleWest (the "Board") for so long as members of such group hold a
Lesser Qualifying Interest (as defined in the Amended Relationship Agreement).
Each committee of the Board must include at least one Director
designated by TINTA (as defined in the Amended Relationship Agreement) and one
Director designated by MediaOne (as defined in the Amended Relationship
Agreement), and a majority of the members of each such committee shall be
independent of TINTA and MediaOne. The chairman of any committee shall also be
independent of TINTA and MediaOne. In addition, for so long as it holds a Lesser
Qualifying Interest, each of Cox, SBC and Vivendi (each as defined in the
Relationship Agreement) has the right to appoint a non-voting observer to any
committee.
Transfer Restrictions on SBC and Cox
All transfers by SBC or Cox are subject to rights of first offer in
favor of TINTA and MediaOne other than in respect of:
(a) Public Transfers (as defined in the Amended Relationship
Agreement);
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(b) transfers where the shares remain controlled by SBC or Cox;
(c) transfers to members of the same group or from SBC to Cox or vice
versa, provided the transferee agrees to be bound by the Amended Relationship
Agreement; or
(d) transfers following a general takeover offer for TeleWest (whether
by a third party or by SBC or Cox).
Non-compete Undertakings/Scope of Business Restrictions
The Amended Relationship Agreement provides that TeleWest and the
shareholder groups will accept a number of restrictions on their ability to
extend the scope of their business.
For the purpose of these restrictions, the following definitions set
forth in the Amended Relationship Agreement apply:
"Cable Telephony" any voice or data telecommunications
service which operates in whole or in part by cable
links to subscribers' premises, is interconnected at
some point to a public switching network and is
intended to serve customers in the UK.
"Cable Television" any service provided to customers on a
subscription or pay-per-view basis which sends
sounds or visual images or both by means of cable,
radio or microwave transmission systems for
television reception at two or more locations,
whether sent for simultaneous reception or at
different times in response to subscribers'
requests, including, without limitation,
video-on-demand services and other interactive
services and other entertainment, telecommunications
and information services.
Pursuant to the Amended Relationship Agreement, each of TINTA and
MediaOne has accepted certain non-compete obligations for so long as the TINTA
Group or the MediaOne Group (as appropriate) has a Qualifying Interest (as
defined in the Amended Relationship Agreement) and for one year thereafter.
Equivalent restrictions apply to SBC and Cox for so long as they have a Lesser
Qualifying Interest and for one year thereafter. The provisions restrict direct
ownership of UK Cable Television and Cable Telephony assets and the acquisition
of equity interests in companies with such assets subject to certain de minimis
and other exceptions, and allow TINTA, MediaOne, SBC or Cox (as appropriate) to
take up an opportunity in Cable Television or Cable
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Telephony in the United Kingdom provided that they first offer the opportunity
to TeleWest.
Tax Based Restrictions
Affiliates of TINTA, MediaOne (as defined in the Amended Relationship
Agreement), SBC and Cox have entered into "gain recognition agreements" (the
"GRAs") with the Internal Revenue Service in connection with the transfer of
stock to TeleWest. GRAs provide that for a specified number of years (generally,
10 years) a US person who transfers stock to a foreign corporation will be
required to recognize gain, for US tax purposes, attributable to the transferred
stock in the event the transferee foreign corporation disposes of the
transferred stock (or all or a substantial portion of the assets of the
corporation whose stock was transferred). To ensure that gain will not be
triggered under the GRAs, TeleWest has made certain covenants under the Amended
Relationship Agreement, restricting its ability to dispose of its assets, in
favor of the TINTA Group, the MediaOne Group, the SBC Group and the Cox Group to
the extent any group individually holds, or MediaOne and TINTA or SBC and Cox
collectively hold, 7.5% or more of the TeleWest shares.
The foregoing descriptions of the Amended Relationship Agreement and
the New Articles are summaries and do not purport to be complete and are
qualified in their entirety to the full text of the Amended Relationship
Agreement and the form of the New Articles, copies of which have been attached
hereto as Exhibits G and H, respectively, and are incorporated by reference
herein.
LETTER AGREEMENT
On September 10, 1998, SBUK-1 and MediaOne Holdings entered into an
agreement (the "Letter Agreement") pursuant to which within five business days
from satisfaction of the conditions set forth in the Letter Agreement, MediaOne
Holdings will purchase from SBUK-1 up to 180,000,000 Ordinary Shares, subject to
a minimum number (the "Minimum Share Number") equal to the lesser of (a)
170,000,000 and (b) the number of Ordinary Shares as shall be available for
SBUK-1 to sell following any exercise by TINTA of its right of first offer,
contained in the Amended Relationship Agreement, at a price of $2.25 per
Ordinary Share. The Letter Agreement further provides that the number of
Ordinary Shares that SBUK-1 will sell to MediaOne Holdings shall be equal to the
lesser of (a) such number of Ordinary Shares as when aggregated with those held
by MediaOne Holdings would represent 29.9% of the voting rights of TeleWest (but
in no event less than the Minimum Share Number) or (b) all of the 180,000,000
Ordinary Shares beneficially owned by SBUK-1 which are proposed to be sold by
SBUK-1 to MediaOne Holdings or any lesser number of Ordinary Shares owned by
SBUK-1 proposed to be sold by SBUK-1 to MediaOne Holdings as shall be available
for SBUK-1 to sell following any exercise by TINTA of its right of first offer
referred to above. MediaOne Holdings has indicated that, subject to confirmation
following the consummation of the General Cable Transaction, it believes it will
be entitled to acquire 178,077,333 Ordinary Shares from SBUK-1.
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The purchase of Ordinary Shares by MediaOne Holdings from SBUK-1 is
conditioned upon, among other things, (A) the London Takeovers and Mergers Panel
confirming by September 25, 1998, (i) that should MediaOne Holdings not acquire
all of SBUK-1's shareholding in TeleWest, it will not treat SBUK-1 as acting in
concert with MediaOne Holdings, and (ii) that MediaOne Holdings will not be
entitled or obliged to acquire any shares of capital stock of TeleWest the
acquisition of which would trigger a mandatory offer requirement under Rule 9 of
the London City Code on Takeovers and Mergers and (B) either SBUK-1 providing a
waiver from TINTA in respect of Ordinary Shares regarding TINTA's rights of
first offer or SBUK-1 providing written notice to commence the procedures
prescribed by clause 9.1 of the Amended Relationship Agreement in respect of
Ordinary Shares.
The foregoing description of the Letter Agreement is a summary of the
Letter Agreement and does not purport to be complete, it is qualified in its
entirety to the full text of the Letter Agreement, a copy of which is attached
hereto as Exhibit F and is incorporated by reference herein.
Except as provided in the Letter Agreement, the Registration Rights
Agreement, the Amended Relationship Agreement, the New Articles or as set forth
in this Amendment, none of SBC, SBUK-1 or, to the best of SBC's and SBUK-1's
knowledge, any of the individuals named in Exhibit A hereto, has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to any securities of TeleWest, including, but not limited
to, transfer or voting of any of the securities, finder's fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division of
profits or losses, or the giving or withholding of proxies.
Item 7. Material to be filed as Exhibits.*
Exhibit (A) -- Directors and Executive Officers of SBC
Communications Inc. and Southwestern Bell International
Holdings (UK-1) Corporation.
Exhibit (F) -- Letter Agreement dated September 10, 1998 between
Southwestern Bell International Holdings (UK-1)
Corporation and MediaOne International Holdings, Inc.
Exhibit (G) -- Amended and Restated Relationship Agreement made
as of April 15, 1998, between MediaOne International
Holdings, Inc., MediaOne UK Cable, Inc. and MediaOne
Cable Partnership Holdings, Inc., Tele - Communications
International, Inc., United Artists Programming-Europe,
Inc., Cox Communications, Inc., Cox U.K.
Communications, LP, SBC International, Inc.,
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* Exhibits B, C, D and E have been previously filed.
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Southwestern Bell International Holdings (UK-1)
Corporation, and TeleWest Communications plc.
Exhibit (H) -- Form of Articles of Association of TeleWest
Communications plc.
Exhibit(I) -- Filing Agreement between SBC Communications Inc.,
and Southwestern Bell International Holdings
(UK-1) Corporation dated September 14, 1998.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment is true, complete and
correct.
Dated: September 14, 1998
SBC COMMUNICATIONS INC.
By: /s/ Donald E. Kiernan
----------------------------
Name: Donald E. Kiernan
Title: Senior Vice President and
Chief Financial Officer
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment is true, complete and
correct.
Dated: September 14, 1998
SOUTHWESTERN BELL
INTERNATIONAL HOLDINGS (UK-1)
CORPORATION
By: /s/ Roger W. Wohlert
----------------------------
Name: Roger W. Wohlert
Title: Treasurer
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Exhibit A
DIRECTORS AND EXECUTIVE OFFICERS OF
SBC COMMUNICATIONS INC., AND SOUTHWESTERN
BELL INTERNATIONAL HOLDINGS (UK-1) CORPORATION
The name, present principal occupation or employment, and the name of
any corporation or other organization in which such employment is conducted, of
each of the director, advisory director and executive officers of SBC
Communications Inc. ("SBC") and Southwestern Bell International Holdings (UK-1)
Corporation ("SBUK-1"), as applicable, is set forth below. Except as set forth
below each of the directors and executive officers is a citizen of the United
States. The business address of each director and officer is SBC Communications
Inc., 175 East Houston, San Antonio, TX 78205. Unless otherwise indicated, each
occupation set forth opposite an executive officer's name refers to employment
with SBC.
Name and Business Present Principal Occupation or Employment
SBC
Directors
Edward E. Whitacre, Jr. Chairman of the Board and Chief Executive Officer
Royce S. Caldwell President - SBC Operations
Clarence C. Barksdale Vice Chairman, Board of Trustees, Washington
University
James E. Barnes Chairman of the Board, President and Chief Executive
Officer, MAPCO Inc., Retired
August A. Busch, III Chairman of the Board and President, Anheuser-Busch
Companies, Inc.
Ruben R. Cardenas Partner, Cardenas, Whitis & Stephen, L.L.P., Attorneys
William P. Clark Chief Executive Officer, Clark Company
Martin K. Eby, Jr. Chairman of the Board and Chief Executive Officer, The
Eby Corporation
Herman E. Gallegos Independent Management Consultant
Jess T. Hay Chairman, HCB Enterprises Inc.; Chairman of the Texas
Foundation for Higher Education
Bobby R. Inman United States Navy, Retired
Charles F. Knight Chairman and Chief Executive Officer, Emerson Electric
Co.
A-1
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Mary S. Metz Dean, University Extension, University of California,
Berkeley
Haskell M. Monroe, Jr. Dean of Faculties Emeritus and Director of Academic
Development, Texas A&M University
Toni Rembe Partner, Pillsbury Madison & Sutro LLP
S. Donley Ritchey Managing Partner, Alpine Partners
Richard M. Rosenberg Chairman and Chief Executive Officer (Retired),
BankAmerica Corporation
Carlos Slim Helu* Chairman of the Board, Grupo Carso, S.A. de C.V.
Patricia P. Upton President and Chief Executive Officer, Aromatique, Inc.
Advisory Director
Gilbert F. Amelio Technologist, Aircraft Ventures, LLC
Executive Officers
Edward E. Whitacre, Jr. Chairman of the Board, President and Chief Executive
Officer
Royce S. Caldwell President-SBC Operations
Cassandra C. Carr Senior Vice President-Human Resources
William E. Dreyer Senior Executive Vice President-External Affairs
J. Cliff Eason President - SBC International
James D. Ellis Senior Executive Vice President and General Counsel
Charles E. Foster Group President - SBC
James S. Kahan Senior Vice President-Corporate Development
Donald E. Kiernan Senior Vice President, Treasurer and Chief Financial
Officer
Stanley T. Sigman President and Chief Executive Officer -
SBC Wireless, Inc.
SBUK-1
Directors
J. Cliff Eason President- SBC International
James S. Kahan Senior Vice President - Corporate Development
- --------
* Citizen of Mexico
A-2
<PAGE>
Executive Officers
J. Cliff Eason President- SBC International
James S. Kahan Senior Vice President - Corporate Development
A-3
Exhibit F
Mr. Rick Moore
Southwestern Bell International Holdings (UK-1) Corporation ("SBC")
175 East Houston
Room 11 B80
San Antonio
TX 78205
PRIVATE & CONFIDENTIAL
Dear Rick,
TELEWEST COMMUNICATIONS PLC ("TELEWEST")
Further to our discussions over the weekend, I want to confirm with you the
agreement we have reached:
1. Subject to the matters outlined in paragraph 3 below, SBC agrees to
sell and MediaOne International Holdings, Inc. ("MEDIAONE HOLDINGS")
agrees to buy as soon as reasonably practical, but in any event within
five business days from satisfaction of the conditions set out in
paragraph 3, up to 180,000,000 ordinary shares of 10p each in the
capital of TeleWest ("TELEWEST SHARES") subject to a minimum number
("MINIMUM") equal to the lesser of (a) 170,000,000 of such ordinary
shares and (b) the number of TeleWest Shares as shall be available for
SBC to sell following any exercise by TeleCommunications International,
Inc. ("TINTA") in regard to its right of first offer referred to in
3(a) below at a price of US$2.25 per share.
2. Within five business days of satisfaction of the conditions in
paragraph 3 below, MediaOne Holdings shall acquire and SBC shall sell
the lesser of (a) such number of the TeleWest Shares as when aggregated
with those then held by MediaOne Holdings and persons treated as acting
in concert with MediaOne Holdings for the purposes of the City Code on
Takeovers and Mergers, would represent 29.9% of the voting rights of
TeleWest (but in no event less than the Minimum) or (b) all of the
TeleWest Shares or any lesser number of TeleWest Shares as shall be
available for SBC to sell following any exercise by TINTA in regard to
its right of first offer referred to in 3(a) below ("SALE SHARES"). SBC
will be under no obligation to sell and MediaOne Holdings will be under
no obligation to buy any TeleWest Shares from SBC other than the Sale
Shares. MediaOne Holdings confirms that based on the provisional
figures produced in connection with the merger of TeleWest and General
Cable by J. Henry Schroder & Co. Ltd., London ("SCHRODERS") dated 7
September 1998 and aggregating the number of shares held by MediaOne
Holdings
<PAGE>
and persons treated as acting in concert with it for the purposes of
the City Code on Takeovers and Mergers, the number of Sale Shares that
it will be entitled to acquire will be 178,077,333. However, the
precise number of Sale Shares to be acquired by MediaOne is subject to
confirmation by Schroders, which confirmation is expected to be given
by Tuesday 15 September. At completion MediaOne Holdings will pay to
SBC in same day funds of US$2.25 per share by electronic transfer to an
account notified by SBC against delivery to MediaOne Holdings of duly
executed stock transfer forms in respect of the Sale Shares in favor of
MediaOne Holdings (or its designee) and the relative share
certificates. Completion shall take place at MediaOne Holdings' offices
in London. SBC and MediaOne will defer to the opinion if Schroders in
the event of a dispute over level or calculation of shareholdings.
3. This agreement and completion of the sale and purchase is conditional
on the following:
a. (subject to Schroders first confirming to MediaOne the number of
Sale Shares which MediaOne is entitled to acquire and MediaOne
notifying SBC of that number) either SBC providing a waiver from
TINTA in respect of the Sale Shares regarding the rights of first
offer under clause 9.1 of the Amended and Restated Relationship
Agreement dated as of 15 April 1998 relating to TeleWest or SBC
providing written notice to commence the procedures prescribed by
clause 9.1 in respect of the Sale Shares and once completed SBC
being free to sell the Sale Shares to MediaOne Holdings or its
designee at US$2.25 per share;
b. the Panel confirming by Friday 25 September 1998 that should
MediaOne Holdings not acquire the whole of SBC's shareholdings in
TeleWest, it will not trust SBC as acting in concert with
MediaOne Holdings (such that SBC's residual shareholding would be
aggregated with the shareholdings of MediaOne Holdings and its
other concert parties so as to trigger a mandatory offer
requirement under Rule 9 of the City Code on Takeovers and
Mergers);
c. the Panel confirming by Friday 25 September 1998 that MediaOne
Holdings will not be entitled or obliged to acquire any shares in
the capital of TeleWest the acquisition of which would trigger a
mandatory offer requirement under Rule 9 of the City Code on
Takeovers and Mergers;
d. compliance by Friday 25 September 1998 by MediaOne Holdings with
all applicable US legal requirements including, without
limitation, applicable United States Federal and State securities
laws.
4. MediaOne Holdings shall use commercially reasonable efforts to satisfy
the conditions in 3b, 3c and 3d above and SBC shall use commercially
reasonable efforts to satisfy the condition in 3a above. Each party
shall promptly notify the other of the
<PAGE>
satisfaction of any condition referred to in paragraph 3 above for
which it is responsible and shall provide evidence reasonably
satisfactory to the other party of the fulfilment of the relevant
condition.
5. MediaOne Holdings undertakes that it shall not, and that it shall use
all its rights and powers to procure that no other person acting in
concert with it shall not, take any action which would reduce the
number of Sale Shares which it would otherwise be obliged to buy
pursuant to this Agreement.
6. MediaOne Holdings agrees that it will not resell any Sale Shares
required by it under this Agreement except pursuant to an effective
registration statement covering those Sale Shares or pursuant to an
exemption from registration under the U S Securities Act of 1933.
7. Both parties shall first approve any public announcement regarding this
Agreement save to the extent that any announcement is required by law
or the rules of any applicable stock exchange.
8. Each party represents to the other that it has due authority to execute
this Agreement.
This is intended to represent a legally binding agreement between SBC and
MediaOne Holdings and I suggest that it be governed by English law. I should be
grateful if you would confirm your agreement to the above terms on behalf of SBC
by signing and returning the enclosed copy of this letter.
Yours sincerely,
/s/ Robert J. Ford
For and on behalf of
MediaOne International Holdings, Inc.
Dated: 9/10/98
Agreed and Accepted:
/s/ James S. Kahan
For and on behalf of
SBC International Holdings (UK-1) Corporation
Exhibit G
MEDIAONE INTERNATIONAL HOLDINGS, INC.
MEDIAONE UK CABLE, INC and MEDIAONE CABLE PARTNERSHIP HOLDINGS, INC.
TELE-COMMUNICATIONS INTERNATIONAL, INC.
UNITED ARTISTS PROGRAMMING-EUROPE, INC.
COX COMMUNICATIONS, INC.
COX U.K. COMMUNICATIONS, LP
SBC INTERNATIONAL, INC.
SOUTHWESTERN BELL INTERNATIONAL HOLDINGS (UK-1) CORPORATION
TELEWEST COMMUNICATIONS plc
-----------------------------------------------
AMENDED AND RESTATED RELATIONSHIP AGREEMENT
-----------------------------------------------
CLIFFORD CHANCE
<PAGE>
CONTENTS
CLAUSE PAGE
1. INTERPRETATION............................................................2
2. CONDITIONS...............................................................13
3. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS.............................15
4. DIRECTORS................................................................15
5. CLOSING..................................................................17
6. MATTERS REQUIRING CONSENT................................................19
7. VOTING AGREEMENT AMONG TINTA GROUP AND U S WEST GROUP....................20
8. RESTRICTIONS ON TRANSFERS BY TINTA GROUP AND U S WEST GROUP..............21
9. RIGHTS OF FIRST OFFER, RIGHTS OF FIRST REFUSAL AND CHANGE OF
CONTROL..................................................................22
10. SPECIFIC RIGHTS OF SHAREHOLDER GROUPS TO MAINTAIN OWNERSHIP
LEVEL....................................................................27
11. GENERAL RIGHTS OF SHAREHOLDER GROUPS TO MAINTAIN OWNERSHIP
LEVEL....................................................................30
12. NON-COMPETITION..........................................................31
13. SCOPE OF COMPANY BUSINESS................................................35
14. CONTRACTUAL RESTRICTIONS.................................................35
15. INDEMNIFICATIONS.........................................................35
16. GAIN RECOGNITION CONSENT REQUIREMENTS....................................37
17. CITY CODE ON TAKEOVERS AND MERGERS.......................................38
18. CONFIDENTIALITY..........................................................38
19. JOINT AND SEVERAL LIABILITY FOR CONTROLLED AFFILIATES....................38
20. TERM.....................................................................38
21. TERMINATION OF 1994 AND 1995 AGREEMENTS..................................38
<PAGE>
22. COMPETITION..............................................................39
23. COSTS....................................................................39
24. FURTHER ASSURANCE........................................................39
25. GENERAL..................................................................39
26. ASSIGNMENT...............................................................40
27. NOTICES..................................................................40
28. GOVERNING LAW AND JURISDICTION...........................................42
29. COUNTERPARTS.............................................................43
SCHEDULE 1 - CONTRACTUAL RESTRICTIONS........................................44
SCHEDULE 2 - DEED OF ADHERENCE...............................................45
SCHEDULE 3 - PROVISIONS PRESERVED FROM THE OLD RELATIONSHIP AGREEMENT........46
Agreed form documents:
1. Announcement
2. New Articles
3. TW Holdings Operating Agreement
<PAGE>
THIS AGREEMENT is made as of 15 April 1998
BETWEEN:
(1) MEDIAONE INTERNATIONAL HOLDINGS, INC. (previously known as US WEST
International Holdings Inc.), a company incorporated in Delaware, USA whose
principal place of business is 7800 East Orchard Road, Englewood, Colorado
80111, USA ("MediaOne Holdings");
(2) MEDIAONE UK CABLE, INC. (previously known as US WEST UK Cable Inc.) and
MEDIAONE CABLE PARTNERSHIP HOLDINGS, INC. (previously known as US WEST
Cable Partnership Holdings Inc.), each being a company incorporated in
Delaware, USA whose principal place of business is 7800 East Orchard Road,
Englewood, Colorado 80111, USA ("MediaOne UK" and "MediaOne Cable"
respectively );
(3) TELE-COMMUNICATIONS INTERNATIONAL, INC., a company incorporated in
Delaware, USA whose principal place of business is 5619 DTC Parkway,
Englewood, Colorado 80111, USA ("TINTA");
(4) UNITED ARTISTS PROGRAMMING-EUROPE, INC., a company incorporated in
Colorado, USA whose principal place of business is 5619 DTC Parkway,
Englewood, Colorado 80111, USA ("UAP-E ");
(5) COX COMMUNICATIONS, INC., a company incorporated in Delaware, USA whose
principal place of business is 1400 Lake Hearn Drive, Atlanta, Georgia
30319, USA ("Cox");
(6) COX U.K. COMMUNICATIONS, L.P., a limited partnership incorporated in
Delaware, USA whose principal place of business is c/o The Corporation
Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, USA ("CUK");
(7) SBC INTERNATIONAL, INC., a company incorporated in Delaware, USA whose
principal place of business is #2 Reed's Way, Suite 222, Corporate Commons,
New Castle, Delaware 19720, USA ("SBCI");
(8) SOUTHWESTERN BELL INTERNATIONAL HOLDINGS (UK-1) CORPORATION, a company
incorporated in Delaware, USA whose principal place of business is #2
Reed's Way, Suite 222, Corporate Commons, New Castle, Delaware 19720, USA
("SBIHUK-1"); and
(9) TELEWEST COMMUNICATIONS plc, a company incorporated in England and Wales
(registered no. 2983307), whose registered office is at Genesis Business
Park, Albert Drive, Woking, Surrey GU21 5RW, England (the "Company").
-1-
<PAGE>
WHEREAS:
(A) The parties to this Agreement entered into an agreement dated 15 April 1998
in substantially the same form as this Agreement (the "Original
Agreement");
(B) The parties have agreed that a number of amendments should be made to the
Original Agreement, which amendments are incorporated in this Agreement;
and
(C) The parties have agreed that this Agreement shall replace the Original
Agreement in all respects with effect from 15 April 1998.
THE PARTIES AGREE as follows:
1. INTERPRETATION
1.1 In this Agreement, unless indicated to the contrary:
"Act" means the Companies Act 1985 (as amended);
"Affiliate" means with respect to any Person, any other Person
directly or indirectly Controlling, directly or
indirectly Controlled by or under direct or
indirect common Control with such Person;
"ADS" means an American Depository Share representing
Ordinary Shares;
"Announcement" means the announcement in the agreed form of
the Company's firm intention to make the Offer;
"Assumptions" means the assumptions that (a) all options over
shares in the capital of General Cable plc have
been exercised during the Offer; (b) the Offer
has been accepted in full and all Ordinary
Shares required to be issued as consideration
under the Offer have been issued; (c) all the
Ordinary Shares proposed to be issued under the
Telewest Open Offer have been issued and TW
Holdings owns all the Ordinary Shares which
TINTA, MediaOne Holdings and their Affiliates
are entitled to subscribe under the Telewest
Open Offer or required to subscribe or procure
subscribers for under the Subscription
Agreement; (d) all options outstanding on the
Issue Date over shares in the capital of the
Company which are exercisable in accordance
with their terms prior to 31 December 1999 have
been exercised; and (e) neither TINTA, MediaOne
Holdings nor any of their respective Affiliates
has disposed of any
-2-
<PAGE>
interest in any Ordinary Shares or Preference
Share in issue on the date of this Agreement;
"Board" means the board of directors of the Company;
"business day" means any day other than a Saturday or Sunday
or a public holiday in the State of Colorado,
the State of Delaware or England and Wales;
"Cable Telephony" means any voice or data telecommunications
transmission service which operates in whole or in
part by cable links to subscribers' premises, is
interconnected at some point to a public switched
network and is intended to serve customers in the
United Kingdom;
"Cable Television" means any service provided to customers on a
subscription or pay-per-view basis which sends
sounds or visual images or both by means of
cable, radio or microwave transmission systems
for television reception at two or more
locations, whether sent for simultaneous
reception or at different times in response to
subscribers' requests, including without
limitation video on demand and other
interactive services and other entertainment,
telecommunications and information services
proposed to be offered by the Company, as
described in the Disclosure Documents;
"Change in Control" means with respect to MediaOne Holdings and its
Affiliates (other than MediaOne) or TINTA and
its Affiliates (other than TCI), the
acquisition (whether by merger, consolidation,
sale, assignment, lease, transfer or otherwise,
in one transaction or any related series of
transactions) of beneficial ownership by any
Person (other than pursuant to a distribution
in specie, spin off, share dividend, demerger
or similar transaction and other than, with
respect to beneficial ownership of equity
interests in TINTA or any of its Affiliates, by
TINTA or any of its Affiliates and, with
respect to beneficial ownership of equity
interests in MediaOne Holdings or any of its
Affiliates, by MediaOne Holdings or any of its
Affiliates) of equity interests in TINTA and/or
any of its Affiliates (other than TCI) or
MediaOne Holdings and/or any of its Affiliates
(other than MediaOne), as the case may be, as a
result of which such Person has
-3-
<PAGE>
the power, directly or indirectly, to direct the
voting and disposition of Ordinary Shares held by
TINTA and its Affiliates or MediaOne Holdings and
its Affiliates, as the case may be, representing
at least 15 per cent. of the outstanding Ordinary
Shares of the Company. A Change in Control shall
be deemed voluntary if it is the result of a
transaction agreed to by TINTA or any of its
Affiliates or by MediaOne Holdings or any of its
Affiliates, as the case may be. A Change in
Control shall be deemed involuntary if it is the
result of actions by Persons (other than TINTA or
any of its Affiliates or MediaOne Holdings or any
of its Affiliates, as the case may be) taken
without the agreement or consent of TINTA or any
of its Affiliates or of MediaOne Holdings or any
of its Affiliates, as the case may be;
"Closing Price" means the sale price for Ordinary Shares (i)
with respect to Ordinary Shares to be offered
on the London Stock Exchange, the sale price
which appears on the relevant Reuters Screen
for the Company as of 11:00 a.m. (London time)
on a Trading Day, provided that if such
Ordinary Shares do not appear on such Reuters
Screen or such Reuters Screen is temporarily
unavailable, the sale price with respect to the
Ordinary Shares will be the last reported sale
price which appears in the Official List of the
London Stock Exchange on a Trading Day and (ii)
with respect to Ordinary Shares to be offered
on the New York Stock Exchange in the form of
ADSs the last reported sale price on a Trading
Day or, in case no such sale takes place on
such day, the average of the reported closing
bid and asked prices as reported on the New
York Stock Exchange Composite Tape, or, if such
sales are not so reported, the reported last
sale price or, if no such sale takes place on
such day, the average of the reported closing
bid and asked prices on the principal national
securities exchange on which the ADSs are
listed or admitted to trading, or if not listed
or admitted to trading on any national
securities exchange, on the NASDAQ National
Market System ("NASDAQ"), or if the ADSs are
not quoted on such National Market System, the
average of the closing bid and asked prices in
the over-the-counter market
-4-
<PAGE>
as furnished by any New York Stock Exchange
member firm selected by the Board for that
purpose;
"Control" means with respect to any Person, the
possession, directly or indirectly, by another
Person of the power to direct or cause the
direction of the management or policies of such
Person, whether through equity ownership, by
contract or otherwise, but a Person shall not
be deemed to Control another Person solely by
virtue of any veto rights granted to it as a
minority equity owner or by virtue of super
majority voting rights and the words
"Controlled" and "Controlling" shall be
construed accordingly;
"Controlled Affiliate" means with respect to any Person, any Affiliate
of such Person which is under the Control of
such Person provided that each of Flextech plc,
At Home Corporation, Princes Holdings Limited
and MPC shall not be treated as a Controlled
Affiliate of the TINTA Group or the MediaOne
Group and TWE shall not be treated as a
Controlled Affiliate of the MediaOne Group and
for the purposes of this definition, any Person
in which both Cox or one or more of its
Affiliates and SBCI or one or more of its
Affiliates own equity interests shall be deemed
a Controlled Affiliate of each of Cox and SBCI
if (i) the aggregate of such equity interests
would be sufficient, if owned by one Person, to
confer Control of such Person on the Person
owning such equity interests and (ii) Cox or
its Affiliates and SBCI or its Affiliates have
entered into binding arrangements regarding the
exercise of voting rights in such equity
interests or have otherwise agreed in writing
to co-operate so as to direct the management or
policies of such Person;
"Controlling Shareholder" has the same meaning as in paragraph 3.12 of
Chapter 3 of the Listing Rules;
"Co-operation Agreement" means the co-operation agreement dated 3 October
1995 and entered into between the Company/Old
Telewest, Cox, CUK, SBCI, SBIHUK-1 and SBIHUK-2;
"Cox Group" means Cox and its Affiliates from time to time
or any Person or group of Persons within the
meaning
-5-
<PAGE>
given to the expression "Cox Group" in the New
Articles;
"Cox Shareholder" means CUK (whilst it is a member of the Cox
Group and a Shareholder) and/or any Shareholder
who is a member of the Cox Group for the time
being;
"Director" means a director of the Company;
"Disclosure Documents" means the prospectus, registration statement and
listing particulars filed, distributed or used in
connection with Old Telewest's initial public
offering of Ordinary Shares in 1994 or in
connection with the Company's acquisition of SBC
CableComms and Old Telewest in 1995;
"Fair Market Value" means as to any property, the price at which a
willing seller would sell and a willing buyer
would buy such property having full knowledge of
the facts, in an arm's length transaction without
time constraints, and without being under any
compulsion to buy or sell;
"Fixed Wireless Telephony" means a telecommunication service consisting of
the conveyance of messages through the agency of
Wireless Telegraphy (as defined in the United
Kingdom Wireless Telegraphy Act 1949) to or from
any Applicable Cable System (as defined in the
relevant telecommunications license) operated by
the Company or an Affiliate under a
Telecommunications License (as defined in the IPO
Documents) held by it or an Affiliate directly
from or to any apparatus designed or adapted to be
capable of being used while in motion, provided
that such service would not involve the operation
of a network capable of handing calls off from
radio or cell site to cell site;
"Fully Diluted Ordinary means, at any time, the Ordinary Shares in
Shares" issue at such time and the Ordinary Shares
which would be in issue if all options and rights
outstanding for the time being to subscribe for
Ordinary Shares or securities convertible into or
exchangeable for Ordinary Shares were exercisable
and had been exercised and the relevant Ordinary
Shares and securities issued and all securities
convertible into or
-6-
<PAGE>
exchangeable for Ordinary Shares in issue (or
assumed to be in issue) at such time were
convertible or exchangeable and had been converted
or exchanged and the relevant Ordinary Shares
issued;
"General Cable" means General Cable PLC;
"Group System" means any Cable Television or Cable Telephony
system in which the Company has a direct or
indirect ownership interest from time to time;
"Independent Directors" means those Directors who are not designated by
the TINTA Group or the MediaOne Group in
accordance with Article 72 of the New Articles and
are not partners, officers or employees of, and do
not have a material consultancy with, the TINTA
Group or the MediaOne Group;
"IPO Documents" means the prospectus, registration statement and
listing particulars filed, distributed or used in
connection with Old Telewest's initial public
offering of Ordinary Shares in 1994;
"Issue Date" means such date as is agreed in writing between
the Company, TINTA, MediaOne and Cox and, failing
agreement, the day falling 14 days after the later
of the first closing date of the Offer and the
date the Offer becomes or is declared wholly
unconditional (or if not a business day, the next
preceding day);
"MediaOne" means MediaOne, Inc., a Delaware corporation (to
be renamed MediaOne Group, Inc.);
"MediaOne Cable
Conversion Shares" means a number of Preference Shares equal to the
product of the number of TW Holdings Conversion
Shares multiplied by the number of Preference
Shares held by MediaOne Cable and divided by the
total number of TW Holdings Preference Shares, any
fraction being rounded up;
"MediaOne Group" means MediaOne Holdings and its Affiliates
from time to time or any Person or group of
Persons within the meaning given to the expression
"MediaOne Group" in the New Articles;
"MediaOne Shareholder" means each of MediaOne UK and MediaOne Cable
(whilst it is a member of the MediaOne Group and a
-7-
<PAGE>
Shareholder) and/or any Shareholder who is a
member of the MediaOne Group for the time being;
"MediaOne UK Conversion
Shares" means a number of Preference Shares equal to the
product of the number of TW Holdings Conversion
Shares multiplied by the number of Preference
Shares held by MediaOne UK and divided by the
total number of TW Holdings Preference Shares, any
fraction being rounded up;
"MPC" means Mercury Personal Communications, a
partnership doing business as "One-2-One";
"New Articles" means the articles of association to be adopted by
the Company in the agreed form with effect from
the date on which the Offer becomes or is declared
wholly unconditional;
"1994 Agreements" means the Old Shareholders Agreement and the Old
Relationship Agreement;
"1995 Agreements" means the Co-operation Agreement and the Share
Dealing Agreement;
"Offer" means the proposed general offer to be made by or
on behalf of the Company for the entire issued and
to be issued share capital of General Cable in the
terms described in the Announcement or on such
revised terms as each of MediaOne Holdings, TINTA
and Cox may agree by notice to the Company;
"Offer Documents" means the offer documents and circulars
to be sent to shareholders of the Company and/or
General Cable and the disclosure documents
incorporating UK listing particulars and US proxy
solicitation materials to be published in
connection with the Offer and the Telewest Open
Offer;
"Old Relationship
Agreement" means the relationship agreement entered into as
of 22 November 1994 by and among Old Telewest,
TINTA, MediaOne Holdings and the parties to the
Old Shareholders' Agreement as amended by an
agreement between the same parties as of 19 June
1995 and as further supplemented by an agreement
between the same parties and the Company dated 3
October 1995;
-8-
<PAGE>
"Old Shareholders
Agreement" means the shareholders' agreement dated as of 22
November 1994 by and between United Artists Cable
Television UK Holdings, Inc., UAP-E, MediaOne UK
and MediaOne Cable as amended by an agreement
between the same parties dated 19 June 1995 and
supplemented by a further agreement between the
same parties, Old Telewest and the Company dated 3
October 1995;
"Old Telewest" means Telewest Communications Cable Limited, a
company incorporated in England and Wales
(registered no. 2883742) whose registered office
is at Genesis Business Park, Albert Drive, Woking,
Surrey GU21 5RW, England;
"Ordinary Share" means an ordinary share, 10p par value, of the
Company, including any such share represented by
an ADS, and wherever this Agreement requires or
permits the calculation of a number or percentage
of Ordinary Shares in issue held by any
Shareholder or Shareholder Group such number or
percentage shall include the Pro Rata Shares of
that Shareholder or Shareholder Group and, except
in the case of clause 10.3, the Ordinary Shares
into which any Preference Shares are convertible
for the time being (ignoring any prohibition or
restriction on the conversion thereof);
"Ownership Interest" means, with respect to each Person owning an
interest in TW Holdings, all of the interests of
such Person in TW Holdings (including, without
limitation, an interest in the profits and losses
of TW Holdings, a capital account interest in TW
Holdings and all other rights and obligations of
such Person under the TW Holdings Operating
Agreement);
"Percentage Ownership" has the meaning given to that expression in
clause 10.1;
"Permitted Demerger" means a distribution in specie, share
dividend, spin off, demerger or similar
transaction resulting in one or more Affiliates of
the transferor owning 80 per cent. or more of the
Ordinary Shares owned by the transferor
immediately prior to such transaction;
"Person" means an individual, corporation, general or
limited partnership, limited or unlimited
liability company,
-9-
<PAGE>
trust, association, unincorporated organisation,
government or any authority, agency or body
thereof, or other entity;
"Preference Share" means a convertible preference share, 10p par
value, of the Company;
"Private Transfer" means the Transfer of Shares by a Shareholder in a
negotiated transaction, rather than through a
brokerage transaction effected on a national
securities exchange, NASDAQ or the London Stock
Exchange;
"Pro Rata Shares" means, with respect to any Shareholder Group at
any time, the number of Ordinary Shares held by TW
Holdings attributable to such Shareholder Group
being:
(a) in the case of the MediaOne Group and the
TINTA Group, the product rounded to the
nearest whole number of (x) the sum of the
number of Ordinary Shares owned by TW Holdings
less the number of such shares in which
another Shareholder Group has a beneficial
interest as of such time, multiplied by (y)
the aggregate percentage Ownership Interest in
TW Holdings, expressed as a decimal, held by
members of such Shareholder Group as at such
time; and
(b) in the case of the Cox Group, the Ordinary
Shares owned by TW Holdings in which any
member of the Cox Group has a beneficial
interest;
"Public Transfer" means the Transfer of Shares by a Shareholder
through a brokerage transaction effected on a
national securities exchange, NASDAQ or the London
Stock Exchange, including a Private Transfer to a
broker in anticipation of a Public Transfer to be
effected by that broker;
"Qualifying Group" has the meaning given to that expression in
clause 10.1;
-10-
<PAGE>
"Relevant Person" means a director, officer or employee of any of
TINTA, MediaOne Holdings, SBCI or Cox or their
respective Affiliates;
"Required Consent" has the meaning given to that expression in
clause 6.2;
"SBC Group" means SBCI and its Affiliates from time to time;
"SBC Shareholder" means SBIHUK-1 (whilst it is a member of the SBC
Group and a Shareholder) and/or any Shareholder
who is a member of the SBC Group for the time
being;
"SBIHUK-2" Southwestern Bell International Holdings (UK-2)
Corporation (which has merged with and into
SBIHUK-1);
"Share Dealing
Agreement" means the share dealing agreement dated 3 October
1995 and made between Cox, CUK, SBCI, SBIHUK-1,
SBIHUK-2, TINTA, MediaOne Holdings and the
Company/Old Telewest;
"Shareholders" means each of MediaOne UK, MediaOne Cable, UAP-E,
CUK and SBIHUK-1 and each Person who acquires
Shares and becomes a party to this Agreement by
completing, executing and delivering a deed of
adherence in accordance with clause 26.2, for so
long as it holds any Shares or owns any Shares
and remains a party to this Agreement;
"Shareholder Group" means any of the Cox Group, the SBCI Group, the
TINTA Group or the MediaOne Group;
"Shares" means the Ordinary Shares and the Preference
Shares;
"Subscription Agreement" means the subscription agreement of
today's date between TINTA, MediaOne, Cox and the
Company relating to the Telewest Open Offer;
"TCI" means Tele-Communications, Inc., a Delaware
corporation;
"Telewest Group" means the Company and every Person Controlled by
the Company;
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"Telewest Open Offer" means the open offer proposed to be
made on behalf of the Company in connection with
the Offer as more particularly described in the
Subscription Agreement;
"TINTA Group" TINTA and its Affiliates from time to time
or any Person or group of Persons within the
meaning given to the expression "TINTA Group" in
the New Articles;
"TINTA Shareholder" means UAP-E (whilst a member of the TINTA Group
and a Shareholder) and/or any Shareholder who is
a member of the TINTA Group for the time being;
"Trading Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday other than a day on which
securities are not traded on the applicable
exchange or market;
"Transfer" means, in relation to any Shares, to sell, assign,
pledge, grant a security interest in, or otherwise
dispose of such shares or any legal or beneficial
interest therein or agree to do any of the
foregoing;
"TWE" means Time Warner Entertainment Company, L.P.;
"TW Holdings" means TW Holdings, L.L.C., a Colorado limited
liability company;
"TW Holdings Conversion
Shares" has the meaning given to that expression in
clause 5.2.5;
"TW Holdings Operating
Agreement" means the amended and restated operating agreement
of TW Holdings to be entered into in the agreed
form;
"TW Holdings Preference
Shares" means the Preference Shares held by MediaOne
Cable, MediaOne UK and UAP-E and owned by TW
Holdings at the date hereof;
"UAP-E Conversion
Shares" means a number of Preference Shares equal to the
product of the number of TW Holdings Conversion
Shares multiplied by the number of Preference
Shares held by UAP-E and divided by the total
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number of TW Holdings Preference Shares, any
fraction being rounded up;
"United Kingdom" means England, Wales, Scotland and Northern
or "UK" Ireland, as their territories and boundaries
exist on the Issue Date;
"Wireless means any voice or data telecommunications
Telephony" transmission service which operates by means
of radiowave, microwave, cellular or other similar
technology as part of a licensed mobile
communications system or personal communications
network.
1.2 In this Agreement unless indicated to the contrary, a reference to:
1.2.1 a document in the "agreed form" is a reference to a document in a form
approved and for the purposes of identification signed by or on behalf
of each party;
1.2.2 a statutory provision includes a reference to the statutory provision
as modified or re-enacted or both from time to time whether before or
after the date of this Agreement and any subordinate legislation made
under the statutory provision whether before or after the date of this
Agreement;
1.2.3 a Person includes a reference to that Person's legal personal
representatives, successors and lawful assigns;
1.2.4 a clause or schedule, unless the context otherwise requires, is a
reference to a clause of or schedule to this Agreement; and
1.2.5 a document is a reference to that document as from time to time
supplemented or varied.
1.3 The headings in this Agreement do not affect its interpretation.
2. CONDITIONS
2.1 The provisions of this Agreement (other than this clause 2 and clauses
5.1(a) and (c) and 15 and those provisions relevant to the
interpretation or enforcement of clauses 2, 5.1(a) and (c), 5.5 and 15)
are conditional upon the following conditions being satisfied, or
waived by notice by each of MediaOne Holdings, TINTA and Cox to the
Company:
2.1.1 the publication of the Announcement through the Regulatory News Service
of the London Stock Exchange on the date of this Agreement (or such
later time and/or date as MediaOne Holdings, TINTA and Cox may agree in
writing); and
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2.1.2 the formal document containing the Offer having been posted to holders
of General Cable shares by 30 June 1998 (or such later time and/or date
as MediaOne Holdings, TINTA and Cox may agree in writing) and the Offer
being declared unconditional in all respects on or before 15 September
1998.
2.2 The Company agrees with MediaOne Holdings, TINTA and Cox not to declare
the Offer unconditional unless the Resolutions (as defined in the
Subscription Agreement), including the following shareholders
resolutions have been passed at a duly convened and held general
meeting of the Company on or before 15 September 1998 and such
resolutions remain in full force and effect:
2.2.1 to approve this Agreement in accordance with Chapter 11 of the Listing
Rules of the London Stock Exchange;
2.2.2 to increase the Company's ordinary share capital and for a period of
five years to authorise the Directors under section 80 of the Companies
Act 1985 to allot Ordinary Shares and to the extent necessary to
disapply section 89 of the Companies Act 1985 to allow for the
consummation of the Telewest Open Offer and the Offer and the issue of
Ordinary Shares upon the exercise, conversion or exchange of the
options, rights and securities (other than issued Ordinary Shares)
comprised in the Fully Diluted Ordinary Shares; and
2.2.3 to adopt the New Articles.
2.3 If at any time any party becomes aware of a fact or circumstance that
might prevent a condition set out in clause 2.1 being satisfied, it
shall immediately inform the other parties.
2.4 If a condition set out in clause 2.1 has not been satisfied or waived
in accordance with clause 2.1 on or before 29 September 1998 or becomes
incapable of satisfaction or the Offer lapses or is withdrawn, this
Agreement shall terminate and each party's further rights and
obligations shall cease upon such termination, provided that
termination shall not affect a party's accrued rights and obligations
at the date of termination.
2.5 Each party shall use all reasonable endeavours to facilitate the
preparation, filing and circulation of all documents required by
applicable laws and competent authorities to be prepared, filed and
circulated by the Company or General Cable in connection with the Offer
and the Telewest Open Offer (including the provision to the Company of
information relating to its Shareholder Group that is reasonably
requested by the Company for inclusion therein).
2.6 SBCI and SBIHUK-1 undertake to MediaOne Holdings, TINTA and Cox that
they shall not, and shall procure that their Affiliates will not, take
up any rights under the Telewest Open Offer or otherwise acquire any
Shares or any interest in any Shares prior to the Issue Date.
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3. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
Each party represents, warrants and undertakes to each other party
(other than a member of the same Shareholder Group), as of the date of
execution of this Agreement, as follows:
3.1 it is duly organised or formed, validly existing and in good standing
under the laws of its jurisdiction of incorporation or formation;
3.2 it has full power and authority to conduct its business as currently
conducted, to execute and deliver this Agreement and to carry out the
transactions contemplated by this Agreement and the execution, delivery
and performance by it of this Agreement and the consummation by it of
the transactions contemplated by this Agreement have been duly
authorised by all necessary corporate or partnership action;
3.3 the obligations expressed to be undertaken by it under this Agreement
are legal, valid and binding upon it, except as validity, binding
effect and the enforceability may be subject to or limited by
bankruptcy, insolvency, reorganisation, moratorium and other similar
laws relating to or affecting the rights of creditors generally, and
subject to general principles of equity, regardless of whether
considered in a proceeding at law or in equity;
3.4 the execution and delivery of this Agreement by it and compliance by it
with the provisions of this Agreement will not violate, result in any
breach of, constitute a default under or require a consent or waiver
under its certificate of incorporation, articles of incorporation,
bylaws, memorandum and articles of association, operating agreement or
partnership agreement, as the case may be, or any indenture, lease,
agreement or instrument to which it is a party or by which it or any of
its property may be bound, or under any decree, judgment, order,
statute, legal principle, rule or regulation applicable to it, other
than any violation, breach or default that would not have an adverse
effect on the performance by it of the terms of this Agreement;
3.5 it has obtained, made or given all material authorisations, orders,
approvals, consents, registrations, filings and notices required to be
obtained, made or given by it from, with or to any Person with respect
to entering into this Agreement.
4. DIRECTORS
4.1 As at the date hereof the Board comprises:
A.G. Ames (Chairman) (appointed by MediaOne)
A.W.P Stenham (Deputy Chairman)
D.R. Van Valkenburg (acting Chief Executive)
C.J. Burdick (Finance Director)
Lord Borrie QC
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S. Brett (appointed by TINTA)
D. Evans (appointed by TINTA)
J.O. Robbins (appointed by Cox)
R.W. Shaner (appointed by SBCI)
4.2 The Company shall convene a meeting of the Board to be held upon the
Offer becoming or being declared unconditional in all respects at which
the parties shall use all reasonable endeavours, subject to the
agreement of terms, to ensure that a resolution is passed to appoint an
executive director of General Cable nominated by General Cable as an
executive Director.
4.3 Any Director appointed by the Cox Group to the Board in accordance with
article 72.4 of the New Articles shall, if not a director, officer or
employee of Cox or an Affiliate of Cox, not be appointed until Cox
shall have received the prior written consent of the Board to such
appointment (such consent not to be unreasonably withheld or delayed).
4.4 Any Director appointed by the SBC Group to the Board in accordance with
article 72.3 of the New Articles shall, if not a director, officer or
employee of SBCI or an Affiliate of SBCI, not be appointed until SBCI
shall have received the prior written consent of the Board to such
appointment (such consent not to be unreasonably withheld or delayed).
4.5 Notwithstanding the right of the TINTA Group to appoint a director to
the Audit Committee in accordance with article 97 of the New Articles
it hereby agrees with the Company that it will not do so whilst the Cox
Group and the SBC Group have the right to so appoint a director to the
Audit Committee.
4.6 For so long as the TINTA Group foregoes its right to appoint a director
to the Audit Committee in accordance with article 97 of the New
Articles, the Company hereby agrees with the TINTA Group that it will
allow the TINTA Group to appoint an observer to the Audit Committee in
the same manner as the Cox Group and the SBC Group have the right to so
appoint an observer to Committees pursuant to article 97 of the New
Articles.
4.7 The Directors other than the MediaOne Designated Directors or the TINTA
Designated Directors or the Cox Designated Director or the SBC
Designated Director or the CGE Designated Director (each as defined in
the New Articles) shall be appointed by the board or the Company in
general meeting provided that each such appointee shall be a person
reasonably acceptable to the MediaOne Designated Directors for so long
as the MediaOne Group is a Qualifying Group and the TINTA Designated
Directors for so long as the TINTA Group is a Qualifying Group.
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5. CLOSING
5.1 The Company shall (a) not issue any Ordinary Shares to the General
Cable shareholders pursuant to the Offer prior to the Issue Date, (b)
issue on the Issue Date those Ordinary Shares due to be allotted to
General Cable shareholders from whom valid acceptances are received on
or before the date when the Offer is declared wholly unconditional,
after the conversion of the Preference Shares in accordance with clause
5.2 and after the allotment and issue of all the Ordinary Shares
offered under the Telewest Open Offer (other than any Ordinary Shares
not subscribed for by any party in accordance with the Subscription
Agreement), and (c) not increase the Fully Diluted Ordinary Share
capital prior to the Issue Date otherwise than pursuant to the Telewest
Open Offer, the Offer or the Subscription Agreement.
5.2 Not later than the day preceding the Issue Date the Company shall
calculate and notify MediaOne Holdings, TINTA and Cox of:
5.2.1 the number of Ordinary Shares TW Holdings, MediaOne Holdings, TINTA and
their Affiliates will hold on the Issue Date on the basis of the
Assumptions (before any conversions pursuant to clauses 5.3 and 5.4
below and before any transfer of Ordinary Shares by Cox to TW Holdings)
(the "Basic TW Holdings Shares");
5.2.2 the number of Ordinary Shares which will represent 50.1 per cent.
of all of the Ordinary Shares in issue on the Issue Date on the basis
of the Assumptions (before any of the conversions pursuant to clauses
5.3 and 5.4 below and before any transfer of Ordinary Shares by Cox to
TW Holdings) (the "Basic 50.1 per cent. Shares");
5.2.3 the number of Ordinary Shares which CUK will hold on the Issue Date on
the basis of the Assumptions (before any of conversions pursuant to
clauses 5.3 and 5.4 below and before any transfer of Ordinary Shares by
Cox to TW Holdings) (the "Basic Cox Shares");
5.2.4 (if the Basic 50.1 per cent. Shares exceed the sum of the Basic TW
Holdings Shares and the Basic Cox Shares) the number of Preference
Shares (if any) required to be converted on the Issue Date (the "First
Conversion Shares"), being the number required to ensure that TW
Holdings and CUK will own 50.1 per cent. of the Telewest Ordinary
Shares in issue on the basis of the Assumptions and on the basis of the
First Conversion Shares having been converted;
5.2.5 if applicable, the allocation of the First Conversion Shares between TW
Holdings (the "TW Holdings Conversion Shares") and CUK (the "Cox
Conversion Shares") on the basis that:
(a) if it would be possible for a number of Preference Shares
owned by TW Holdings equal to the number of First Conversion
Shares to be converted on behalf of TW Holdings whilst leaving
TW Holdings owning 50.1 per cent. of the Preference Shares
remaining in issue, the TW Holdings Conversion Shares shall
equal all the First Conversion Shares; and
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(b) otherwise the First Conversion Shares shall be allocated
between TW Holdings and CUK so that following conversion of
the TW Holdings Conversion Shares and the Cox Conversion
Shares TW Holdings will own exactly 50.1 per cent. of the
Preference Shares remaining in issue;
5.2.6 the number of MediaOne Cable Conversion Shares, MediaOne UK Conversion
Shares and the UAP-E Conversion Shares; and
5.2.7 the number of Ordinary Shares which CUK has agreed with TW Holdings,
MediaOne Holdings and TINTA to transfer to TW Holdings before the
issue of Ordinary Shares to General Cable shareholders in accordance
with clause 5.1(b) (the "Cox Transfer Shares"), in the case of there
being no First Conversion Shares being the number by which the Basic
50.1 per cent. Shares exceed the Basic TW Holdings Shares and in the
case of there being First Conversion Shares being the sum of the Basic
Cox Shares plus the Cox Conversion Shares (if any).
5.3 If any First Conversion Shares are allocated to TW Holdings in
accordance with clause 5.2.5, each of MediaOne UK, MediaOne Cable and
UAP-E hereby exercises its right to convert the MediaOne UK Conversion
Shares, MediaOne Cable Conversion Shares and UAP-E Conversion Shares
respectively and the Company shall convert such shares on the Issue
Date (which shall be the "conversion date" for such shares for the
purposes of the New Articles) before the issue of the Ordinary Shares
to General Cable shareholders in accordance with clause 5.1(b) and
after the allotment and issue of all the Ordinary Shares offered under
the Telewest Open Offer (other than any Ordinary Shares not subscribed
for by any party in accordance with the Subscription Agreement), and
article 4.7 of the New Articles shall not apply to such conversion.
5.4 CUK hereby exercises its right to convert the Cox Conversion Shares and
the Company shall convert such shares on the Issue Date (which shall be
the "conversion date" for such shares for the purposes of the New
Articles) before the issue of the Ordinary Shares to General Cable
shareholders in accordance with clause 5.1(b) and after the allotment
and issue of all the Ordinary Shares offered under the Telewest Open
Offer (other than any Ordinary Shares not subscribed for by any party
in accordance with the Subscription Agreement), and article 4.7 of the
New Articles shall not apply to such conversion.
5.5 If at any time any holder or holders of Preference Shares exercise(s)
its or their right to convert any number of Preference Shares on a
particular conversion date each Shareholder within the MediaOne Group,
the TINTA Group and the Cox Group shall be treated as having exercised
its right to convert its entire holding of Preference Shares for the
time being on the same conversion date. Article 4.7 of the New Articles
shall apply to such conversions accordingly and all the Preference
Shares converted on such date shall be converted simultaneously.
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5.6 The Company shall use all reasonable efforts to ensure that all the
Ordinary Shares arising from conversion of the Preference Shares are
admitted to the Official List by the London Stock Exchange.
6. MATTERS REQUIRING CONSENT
6.1 For so long as the MediaOne Group or the TINTA Group hold 15 per cent.
or more of the Ordinary Shares in issue for the time being and from
time to time (ignoring any Ordinary Shares issued after the date hereof
pursuant to or for the purposes of share options), the Company shall
not and shall procure that none of its subsidiary undertakings will do,
or agree to do, any of the following things without the Required
Consent and no Shareholder shall knowingly acquiesce in the doing
thereof without the Required Consent:
6.1.1 any material acquisition or disposal outside the ordinary course of the
business of the Telewest Group, and for these purposes an acquisition
or disposal shall be deemed material and outside the ordinary course of
the business of the Telewest Group if it represents a class 2
transaction under the Listing Rules of the London Stock Exchange or the
Company intends in any event to announce the acquisition or disposal;
6.1.2 incur any borrowings or indebtedness in the nature of borrowings after
(otherwise than under a facility or agreement entered into before)
this Agreement becomes unconditional which when aggregated with any
borrowings or indebtedness in the nature of borrowings of the Telewest
Group so incurred and outstanding at the time being (ignoring
intra-group borrowings and indebtedness and borrowings or indebtedness
under any facility or agreement for which the Required Consent has
already been obtained) exceeds (pound)50 million or, after this
Agreement becomes unconditional, grant any security interests in any
assets which, when aggregated with other assets of the Telewest Group
over which security interests are granted after this Agreement becomes
unconditional (ignoring any security interests for which the Required
Consent has already been obtained), together have a Fair Market Value
of (pound)50 million or more, or agree to any material amendment,
supplement or variation of the terms of any borrowings, indebtedness
in the nature of borrowings or security interests;
6.1.3 allot or issue any shares or securities convertible into or
exchangeable for shares or grant any options or rights to subscribe
for shares or any such securities (other than the issue of Ordinary
Shares pursuant to clause 10 and pursuant to the Telewest Open Offer
and the Offer and the conversion of Preference Shares and any issue of
shares pursuant to the exercise of any option (to the extent required
under its terms to be met by an issue of new shares rather than a
transfer of existing shares) or the conversion or exchange of any
security granted or issued prior to today's date or with the Required
Consent after the date on which this Agreement becomes unconditional);
6.1.4 appoint or remove the Chief Executive Officer of the Company; or
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6.1.5 increase the number of Directors holding office for the time being
beyond 14.
6.2 For the purposes of clause 6.1, "Required Consent" means prior consent
by notice to the Company from:
6.2.1 the MediaOne Group, for so long as the MediaOne Group holds or owns in
aggregate 15 per cent. or more of the Ordinary Shares in issue for the
time being; and
6.2.2 the TINTA Group, for so long as the TINTA Group holds or owns in
aggregate 15 per cent. or more of the Ordinary Shares in issue for the
time being.
7. VOTING AGREEMENT AMONG TINTA GROUP AND U S WEST GROUP
7.1 Subject to clause 7.3 the MediaOne Shareholders and the TINTA
Shareholders undertake to one another that they shall exercise the
voting rights attached to the Ordinary Shares owned by them and shall
cause the Directors nominated by them to vote (subject to their
fiduciary duties as Directors of the Company) in all matters in such
manner as shall be agreed upon by the TINTA Shareholders and the
MediaOne Shareholders provided that if the TINTA Shareholders or the
MediaOne Shareholders (or the directors nominated by them respectively)
have a conflict of interest in any matter, they shall abstain and the
others may vote on such matter as they deem appropriate.
7.2 If the TINTA Shareholders and the MediaOne Shareholders cannot agree on
any matter within a period of 10 days after the matter is first
presented for decision, the matter in dispute shall be referred to the
Chief Executive Officers of the ultimate parent companies of the TINTA
Shareholders and the MediaOne Shareholders (or other representatives
designated by each of such Shareholder Groups) and the decision of such
officers shall be final and binding. If those officers cannot agree on
any matter presented to them prior to the earlier of the date the vote
is to be taken or five days after the matter is first submitted to
them, voting shall occur in such manner that would be most likely to
continue the status quo, without materially increasing the Company's
financial obligations or materially deviating from its approved budget
and business plan.
7.3 Clauses 7.1 and 7.2 shall cease to apply if after 31 December 1999 the
TINTA Group or the MediaOne Group so elect by notice given to the other
following the disposal by the other after the date hereof of more than
43 million Ordinary Shares (through one or more transactions) otherwise
than to an Affiliate or pursuant to a Permitted Demerger or a transfer
permitted by clause 8.3.2.
7.4 Subject to clause 7.8, each TINTA Shareholder and MediaOne Shareholder
shall exercise its voting rights attached to the Ordinary Shares owned
by it (and its rights under the TW Holdings Operating Agreement in
respect of the voting rights attached to the Ordinary Shares held by TW
Holdings) and shall make reasonable efforts to ensure that (subject to
their fiduciary duties) its appointees on the Board conduct themselves,
in such a way that:
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7.4.1 the terms of this Agreement are implemented in full; and
7.4.2 no amendments to the New Articles shall be effected which would be
contrary to the maintenance of the Company's independence from the
TINTA Group and the MediaOne Group.
7.5 Subject to clause 7.8, each TINTA Shareholder and MediaOne Shareholder
agrees with the Company not to use its voting rights attached to the
Ordinary Shares owned by it (other than its rights arising under
article 72 of the New Articles) (and to exercise its rights under the
TW Holdings Operating Agreement in respect of the voting rights
attached to the Ordinary Shares held by TW Holdings) to vote in favour
of the appointment of a person to the Board who is an employee, partner
or officer of, or has a material consultancy with, any member of the
TINTA Group or the MediaOne Group.
7.6 Subject to clause 7.8, if any transaction, arrangement or agreement (or
amendment thereto) to which the Telewest Group is a party or proposes
to be a party gives rise to a conflict between the interests of the
TINTA Group or the MediaOne Group and the interests of the Telewest
Group, the prior approval of the Board consisting solely of the
Independent Directors and the Directors appointed by the MediaOne Group
(in the case of an arrangement with the TINTA Group) or by the TINTA
Group (in the case of an arrangement with the MediaOne Group) shall be
required before the Telewest Group can proceed with the transaction,
arrangement or agreement (or amendment thereto), as the case may be.
7.7 Subject to clause 7.8, any transactions, agreements or arrangements
(including trading arrangements) between any member of the TINTA Group
or the MediaOne Group and the Telewest Group shall be at arm's length
on a normal commercial basis and will be subject to the prior approval
of the Board consisting solely of Independent Directors and the
Directors appointed by the MediaOne Group (in the case of an
arrangement with the TINTA Group) or by the TINTA Group (in the case of
an arrangement with the MediaOne Group).
7.8 Clauses 7.4, 7.5, 7.6 and 7.7 shall only apply for so long as the
MediaOne Group and the TINTA Group continue to be the Controlling
Shareholder of the Company.
8. RESTRICTIONS ON TRANSFERS BY TINTA GROUP AND U S WEST GROUP
8.1 Subject to clause 8.3, the MediaOne Shareholders undertake to TINTA
that the MediaOne Group shall not Transfer any Shares to any Person on
or before 31 December 1999.
8.2 Subject to clause 8.3, the TINTA Shareholder undertakes to MediaOne
Holdings that the TINTA Group shall not Transfer any Shares to any
Person on or before 31 December 1999.
8.3 The restrictions contained in clauses 8.1 and 8.2 shall not apply:
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8.3.1 to the Transfer of Shares to an Affiliate of the transferor if such
Affiliate first complies with clause 26.2 (and for such purpose an
entity jointly controlled by the TINTA Group and the MediaOne Group
shall be deemed an Affiliate of each such Group); or
8.3.2 to the Transfer of Shares with the written consent of the TINTA Group
(in the case of a Transfer by the MediaOne Group) or the MediaOne Group
(in the case of a Transfer by the TINTA Group) provided that such
Shareholder Group approves (in its sole discretion) the identity of the
transferee and, if the transferee becomes a member of the MediaOne
Group or the TINTA Group, the transferee first complies with clause
26.2; or
8.3.3 to the Transfer of Ordinary Shares pursuant to a Permitted Demerger.
8.4 Any attempted Transfer of Shares contrary to the requirements of this
clause 8 shall be void and as such shall not be registered by the
Company.
9. RIGHTS OF FIRST OFFER, RIGHTS OF FIRST REFUSAL AND CHANGE OF CONTROL
9.1 TCI and MediaOne rights of first offer
9.1.1 Clauses 9.1.2 to 9.1.7 shall not apply:
(a) to any Public Transfer by the Cox Group or the SBC Group;
(b) to any Transfer of shares or other equity in a holding
company of the Shareholder where the Shares remain
Controlled by the Cox Group or the SBC Group (as the case
may be);
(c) to any Transfer of shares to a transferee who is a member of
the same Shareholder Group as the transferor or, in the case
of a Transfer by the SBC Group, is a member of the Cox Group
or, in the case of a Transfer by the Cox Group, is a member
of the SBC Group and who, prior to the Transfer taking
effect, duly completes, executes and delivers to the Company
a deed of adherence in the form set out in Schedule 2;
(d) to any Transfer accepting a third party offer for all the
shares of the Company (including giving an irrevocable
undertaking to accept such an offer);
(e) to any Transfer selling shares to a bona fide third party
offeror for all the Shares of the Company; or
(f) to any Transfer pursuant to an offer by either the SBC Group
or the Cox Group for all the shares of the Company, but shall
apply to all Transfers including, without limitation,
involuntary Transfers such as a Transfer pursuant to a
foreclosure sale and Transfers of any shares or other
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equity in a holding company of the Shareholder whereby the Shares cease
to be Controlled by the SBC Group or the Cox Group (as the case may be)
or whereby the SBC Group or the Cox Group (as the case may be) dispose
of any Person of which the Shares directly or indirectly held by such
Person represent 50 per cent. or more of the assets of such Person.
9.1.2 If at any time the Cox Group or the SBC Group (as relevant, the
"Seller") have decided to Transfer all (or some) of its Shares ("Sale
Shares") other than to any Person in accordance with clause 9.1.1, the
Seller shall first give a written notice ("Sale Notice") to the Board
on behalf of the Company and to TINTA and MediaOne Holdings (each of
TINTA and MediaOne Holdings being a "Relevant Purchaser"). The Seller
and each Relevant Purchaser shall meet and shall enter into good faith
negotiations and use their best efforts to agree a price at which, and
the proportions in which, all of the Sale Shares will be sold to all
or some of them. If the Seller and the Relevant Purchasers are not
able to agree any such price and proportions within a period of 30
days after the date of the Sale Notice, the Seller shall be entitled,
within 5 days after the expiry of such period, to serve a further
written notice (a "Transfer Notice") on the Relevant Purchasers,
inviting the Relevant Purchasers to offer to purchase or procure the
purchase of all of the Sale Shares as provided below in clause 9.1.3.
9.1.3 The Relevant Purchasers shall have the right to offer to purchase or
procure the purchase of all of the Sale Shares (in such proportions as
may be agreed between them) by giving notice to the Seller within 20
days of receipt of the Transfer Notice (the "Acceptance Period") which
notice (the "Offer Notice") shall specify the price (the "Offer
Price") at which, and the proportions in which, they are prepared to
purchase or procure the purchase of all the Sale Shares. The Relevant
Purchasers shall not be entitled to give separate Offer Notices and
any such separate Offer Notices received shall be deemed to be invalid.
9.1.4 On receipt of an Offer Notice in respect of the Sale Shares, the Seller
shall within 10 days after the Acceptance Period serve a written notice
on each Relevant Purchaser either unconditionally accepting or
unconditionally refusing the offer comprised therein.
9.1.5 If the Seller accepts the offer contained in any Offer Notice pursuant
to clause 9.1.3:
(a) subject to sub-paragraph (b) the Relevant Purchasers shall
become bound (in the proportions specified in the Offer
Notice) to purchase or procure the purchase of, and the Seller
shall become bound to sell all of, the Sale Shares at the
Offer Price; and
(b) completion of the sale and purchase of the Sale Shares shall
take place in accordance with clause 9.4.
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9.1.6 If:
(a) following service of a Transfer Notice pursuant to clause
9.1.2 the Relevant Purchasers do not serve a valid Offer
Notice in respect of all of the Sale Shares; or
(b) the Seller does not accept the offer contained in any Offer
Notice pursuant to clause 9.1.3; or
(c) the Relevant Purchasers have not completed the purchase of
the Sale Shares in accordance with clause 9.4, the Seller shall be
entitled to Transfer the Sale Shares to one or more third party
purchasers (the "Third Party Purchasers") at any price (in a case
within paragraph (a) or (c) above) or at a price being not less than
the Offer Price which was not accepted (in a case within paragraph (b)
above) provided that in each such case the Transfer shall be completed
(subject to registration) within a period of 90 days after the date of
the Transfer Notice. For such purposes, in respect of any Preference
Shares comprising Sale Shares closing will be deemed to have taken
place upon the delivery to the registrars for the time being of the
Company by a Third Party Purchaser of a valid conversion notice in
accordance with article 4.6 of the New Articles.
9.1.7 If the Seller is unable to complete (or procure the completion of) the
Transfer of the Sale Shares to a Third Party Purchaser within the
period specified in clause 9.1.6 it shall not be entitled to transfer
any of the Sale Shares to a Third Party Purchaser otherwise than in
accordance with the foregoing provisions of this clause 9.1 following
service of a further Transfer Notice or Sale Notice as relevant.
9.2 Rights of first refusal between the TINTA Group and the MediaOne
Group
9.2.1 Clauses 9.2.2 to 9.2.7 shall not apply to any Transfer by a Shareholder
to an Affiliate of that Shareholder or to any Transfers pursuant to a
Permitted Demerger (provided that any transferee who is or becomes a
member of the same Shareholder Group as the transferor, first duly
completes, executes and delivers to the Company a deed of adherence in
the form set out in Schedule 2).
9.2.2 Subject to clause 9.2.1, a TINTA Shareholder or MediaOne Shareholder
desiring to make a Transfer of Shares (the "Seller") shall first make
a written offer (the "Offer") to sell such Shares to the MediaOne
Group or the TINTA Group respectively (the "Relevant Purchaser") on
the same terms and conditions on which the Seller proposes to Transfer
the Shares. If the proposed Transfer is a Public Transfer, the Seller
shall give notice to the Relevant Purchaser stating the number of
Shares it proposes to Transfer and that such Shares will be sold to
the Relevant Purchaser at a price per Share equal to the average of
the Closing Prices for six Trading Days comprising the three Trading
Days prior to and including the date that any notice is sent pursuant
to clause 9.2.3 and the three Trading Days following the date of such
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notice. If the proposed Transfer is a Private Transfer, such offer
shall state the price and the other terms and conditions of the
proposed Transfer and shall be accompanied by a copy of the offer from
the proposed transferee. The price as so determined or stated in the
Seller's notice shall be the "Offer Price". The foregoing
notwithstanding, the Seller may withdraw the Offer without liability to
the Relevant Purchaser hereunder if the Offer Price, determined with
respect to any Public Transfer, is less than 90 per cent. of the
Closing Price on the date of the Offer (or if such date is not a
Trading Day, on the immediately preceding Trading Day).
9.2.3 The Relevant Purchaser shall have the right for a period of 30 days
after receipt of the Offer to elect to purchase all, but not less than
all, of the Shares offered at the Offer Price (less, in case of a
proposed Public Transfer, any underwriting or sales commission or
discount that would have been paid in the proposed Public Transfer) by
giving written notice of acceptance to the Seller within that period.
If the Relevant Purchaser does not elect to purchase all the Shares
offered, the Seller may Transfer the offered Shares pursuant to the
terms disclosed under clause 9.2.2 which, in the case of a Private
Transfer, shall be at a price equal to or greater than the Offer
Price. If the offered Shares are not Transferred within 90 days after
the Relevant Purchaser's option period expires, a new offer shall be
made to the Relevant Purchaser before any Transfer is made.
9.2.4 If in the case of a Private Transfer, a third party's offer involves
consideration other than immediate payment of cash at closing, the
Relevant Purchaser may pay the Fair Market Value of such other
consideration, as determined by agreement between the Seller and the
Relevant Purchaser, in cash. If they cannot agree on such cash
equivalent within seven days after the Relevant Purchaser gives notice
of its election to purchase the offered Shares, the Relevant Purchaser
may, by written notice to the Seller, initiate appraisal proceedings
under clause 9.2.5 for determination of the Fair Market Value of such
consideration. The Fair Market Value shall be determined without
regard to income tax consequences to the Seller as a result of
receiving cash in lieu of other consideration. Once the Fair Market
Value is determined, (i) the Relevant Purchaser, in its sole
discretion, may elect either to purchase the Shares in cash by giving
notice of such election to the Seller within 10 days after receipt of
the appraiser's decision or to withdraw its acceptance of the Offer,
and (ii) the Seller may in its sole discretion withdraw the Offer
provided that in such case it may not Transfer such Shares pursuant to
the proposed Private Transfer.
9.2.5 Any appraisal of the Fair Market Value of consideration shall be made
by an appraiser jointly appointed by the TINTA Group and the MediaOne
Group to make such determination. If the parties fail to agree on an
appraiser within 20 days after receipt of the notice requiring or
permitting an appraisal of Fair Market Value, each of the TINTA Group
and the MediaOne Group shall appoint one appraiser, which shall be an
investment banking firm of national repute. The two appraisers so
selected shall each make an appraisal of Fair Market Value within 30
days after their selection. If such determinations vary by 20 per
cent. or more of the higher determination, the two appraisers shall
select a third appraiser with similar
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qualifications which shall make its determination of such Fair Market
Value within 30 days after its selection. Such third appraiser shall
not be informed of or otherwise consider the appraisals of the other
two in reaching its determination. The Fair Market Value shall be the
average of the two closest values if three appraisals are made or, if
the determinations of the first two appraisers vary by 20 per cent. or
less of the higher of such two determinations, the average of those two
determinations. If any Shareholder Group fails to appoint an appraiser
as required hereunder, the other Shareholder Group may refer the matter
to the American Arbitration Association, which shall promptly appoint
an appraiser hereunder on behalf of the Shareholder Group failing to
make such appointment. Appraisers appointed under this clause 9.2.5
shall act as experts and not as arbitrators and, absent fraud or
manifest error, the determination of an appraiser or appraisers
hereunder shall be binding on the parties.
9.3 Change in Control of TINTA or MediaOne
If at any time there is an involuntary Change in Control with respect
to MediaOne Holdings and its Affiliates or TINTA and its Affiliates,
MediaOne Holdings and its Affiliates or TINTA and its Affiliates, as
the case may be, experiencing the Change in Control (the "Subject
Group") shall give notice to the other group (the "Responding Group")
promptly after the Subject Group becomes aware of the Change in
Control. If at any time a Subject Group experiences a voluntary Change
in Control, the Subject Group shall give notice to the Responding Group
promptly after the terms of the Change in Control are set forth in a
binding agreement. The Responding Group must within 30 days after its
receipt of such notice give notice to the Subject Group either (a)
consenting to the Change in Control or (b) stating the price at which
the Responding Group is willing to sell all of its Shares to the
Subject Group or to buy all of the Subject Group's Shares (the "Quoted
Price"). Failure to give notice of such election within the time
permitted shall be deemed consent to the Change in Control. If the
Responding Group notifies the Subject Group that it does not consent to
the Change in Control, the Subject Group must, within 30 days after its
receipt of the Responding Group's notice, give notice to the Responding
Group of its election to sell all of its Shares to the Responding Group
or to buy all of the Responding Group's Shares, in either case at the
Quoted Price.
9.4 General transfer provisions
9.4.1 The closing of the purchase of any Shares by the TINTA Group or the
MediaOne Group pursuant to clauses 9.1, 9.2 or 9.3 shall take place at
the Company's principal offices:
(a) in the case of clause 9.1, within 60 days after agreement of
the price and proportions in which the Sale Shares can be
transferred by the Seller pursuant to clause 9.1.2 or within
30 days after acceptance ("Acceptance") by the Seller of the
offer contained in any Offer Notice pursuant to clause 9.1.3;
and
(b) in the case of clauses 9.2 and 9.3 on a day specified by the
purchaser (other than a Saturday, Sunday or day on which
banking institutions in New York
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are required by law to be closed) which is no more than 90
days after the day of exercise of the relevant purchase
option,
or, if later, the date on which all necessary consents to such Transfer
by governmental authorities shall have been obtained which, in the case
of clause 9.1, shall be no later than 30 days from the date of
Acceptance. At the closing the Seller shall deliver certificates
representing the Shares to be sold free and clear of any lien, charge
or encumbrance, duly endorsed or accompanied by stock transfers
executed in blank, and such other documents as may be reasonably
necessary to effectuate the sale. The Seller shall give customary
representations and warranties regarding the title of such shares to
the Relevant Purchaser(s). The purchase price (to the extent payable in
cash) shall be paid in cash in immediately available funds.
9.4.2 The Relevant Purchaser may rescind its notice of acceptance given
pursuant to clause 9.2.3 at any time on or prior to the thirtieth day
following the date on which such notice is given (but not thereafter)
if (i) prior to the date of such notice of acceptance the Relevant
Purchaser had sought in good faith a waiver from the Panel with
respect to the application of any provision of Rule 9 of the City Code
on Take-overs and Mergers which absent such waiver would require the
Relevant Purchaser to offer to purchase all of the outstanding
Ordinary Shares, and (ii) such waiver or any shareholder approval
required by the Panel has been denied (or has not been granted as of
the last day of such rescission period) provided that if the Relevant
Purchaser so rescinds its acceptance, the 90 day period referred to in
clause 9.4.1(b) shall be extended by the number of days between the
date of such acceptance and the date of rescission.
9.4.3 Notwithstanding any other provision of this clause 9, no Person may
Transfer any Shares unless it has complied with all applicable legal
requirements, including without limitation applicable United States
federal and state securities laws. Upon the exercise by a Person of
any right to acquire Shares hereunder, the parties shall use
commercially reasonable efforts to obtain any necessary consents or
approvals of any governmental authorities or other third parties
necessary to promptly effect such Transfer.
10. SPECIFIC RIGHTS OF SHAREHOLDER GROUPS TO MAINTAIN OWNERSHIP LEVEL
10.1 The following definitions are used in this clause 10: "15 Per Cent.
Group" means each of the following Shareholder Groups: (a) the TINTA
Group, for so long as the TINTA Group holds 15 per
cent. or more of the Ordinary Shares in issue for the time
being and from time to time (ignoring any Ordinary Shares
issued after the date hereof pursuant to or for the purposes
of share options); and
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(b) the MediaOne Group, for so long as the MediaOne Group holds 15
per cent. or more of the Ordinary Shares in issue for the time
being and from time to time (ignoring any Ordinary Shares
issued after the date hereof pursuant to or for the purposes
of share options);
"Percentage Ownership" means:
(a) in relation to each 15 Per Cent. Group, issued Ordinary
Shares representing 15 per cent. of the Fully Diluted
Ordinary Shares; and
(b) in relation to each 7.5 Per Cent. Group, issued Ordinary
Shares representing 7.5 per cent. of the Fully Diluted
Ordinary Shares;
"Qualifying Group" means a 15 Per Cent. Group or a 7.5 Per Cent. Group;
"Qualifying Shareholder" means a Shareholder within a Qualifying Group;
"Rights Issue" means an offering of Ordinary Shares or securities
convertible into Ordinary Shares or carrying the right to vote at
general meetings of the Company's shareholders (whether by way of a
rights issue, open offer or otherwise) to holders of Ordinary Shares in
the capital of the Company in proportion (as nearly as may be) to their
existing holdings of Ordinary Shares but subject to the Directors
having a right to make such exclusions or other arrangements in
connection with the offer as they deem necessary or expedient: (a) to
deal with equity securities representing fractional entitlements; and
(b) provided that such exclusions or arrangements do not affect
any Shareholder Group, to deal with legal or practical
problems under the laws of, or the requirements of any
recognised regulatory body or any stock exchange in, any
territory;
"7.5 Per Cent. Group" means:
(a) each of the TINTA Group and the MediaOne Group for so long as
such group holds 7.5 per cent. or more but less than 15 per
cent. of the Ordinary Shares in issue for the time being and
from time to time (ignoring any Ordinary Shares issued after
the date hereof pursuant to or for the purposes of share
options); and
(b) the Cox Group for so long as the Cox Group holds 7.5 per cent.
or more of the Ordinary Shares in issue for the time being and
from time to time (ignoring any Ordinary Shares issued after
the date hereof pursuant to or for the purposes of share
options).
10.2 Subject to clause 6.1.3, the Company shall give notice to each
Qualifying Shareholder of any proposed issuance (other than a Rights
Issue) of Ordinary Shares or of securities convertible into or
exchangeable for Ordinary Shares or carrying the right
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to vote at general meetings of the Company's shareholders which would
(assuming the conversion or exchange of any such convertible securities
into or for Ordinary Shares) reduce the number of Ordinary Shares owned
by a Qualifying Group below its Percentage Ownership (a "Dilutive
Issue").
10.3 Without prejudice to clause 10.4, while (a) TW Holdings holds or owns
50.1 per cent. or more of the Ordinary Shares in issue for the time
being and from time to time, or (b) the MediaOne Group and the TINTA
Group together hold or own 50.1 per cent. or more of the Ordinary
Shares in issue for the time being and from time to time the MediaOne
Shareholders and the TINTA Shareholders (the "MediaOne/TINTA
Shareholders") shall have the option to subscribe for that number of
Ordinary Shares necessary to permit TW Holdings (in the case of (a)
above) and the MediaOne/TINTA Shareholders (in the case of (b) above)
to maintain ownership of sufficient issued Ordinary Shares in aggregate
as will represent 50.1 per cent. of the Fully Diluted Ordinary Shares
immediately following a Dilutive Issue assuming that the Qualifying
Shareholders exercise their options under clause 10.4 in full. Each
MediaOne/TINTA Shareholder shall, within 15 days after receipt of a
notice from the Company to the effect that all conditions to such
issuance have been satisfied, notify the Company whether, and to what
extent, it wishes to exercise such option and whether it would like to
subscribe any surplus Ordinary Shares under option but not taken up in
accordance with this clause. If any Ordinary Shares under option under
this clause in respect of a particular Dilutive Issue are not taken up
in accordance with this clause the Company shall allocate such excess
shares to those MediaOne/TINTA Shareholders who requested additional
Ordinary Shares and in case of competition for such shares, pro rata to
their existing holdings of Ordinary Shares.
10.4 The Qualifying Shareholders within each Qualifying Group shall have the
option to subscribe for that number of new Ordinary Shares (in such
proportions as they may agree and otherwise among them pro rata
according to their respective shareholdings) necessary to permit their
Qualifying Group to maintain ownership of sufficient Ordinary Shares to
maintain its Percentage Ownership immediately following a Dilutive
Issue assuming and provided that such Qualifying Shareholder exercised
its option (if any) under clause 10.3 in full. Each Qualifying
Shareholder shall, within 15 days after receipt of notice from the
Company to the effect that all conditions to such issuance have been
satisfied, notify the Company whether, and to what extent, it wishes to
exercise such option, which may be exercised in full or in part.
10.5 Prior to exercising their rights under clause 10.4 the MediaOne Group
and the TINTA Group agree with each other to consult each other and, if
the exercise of their rights to the desired extent may have
implications under Rule 9 of the City Code on Takeovers and Mergers, to
consult the Panel. If within 10 days of receipt of notice from the
Company to the effect that all conditions to the proposed issuance have
been satisfied the Panel has not granted or has denied a waiver of all
requirements under Rule 9 for the TINTA Group or the MediaOne Group to
make a mandatory offer as a result of the exercise of their rights
under clause 10.4 or any shareholder approval required by the Panel has
not been granted or has been denied and both the MediaOne Group and
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the TINTA Group wish to exercise their rights under clause 10.4 to an
extent which in aggregate would trigger the requirement for a mandatory
offer under Rule 9, unless TINTA and MediaOne Holdings otherwise agree,
the TINTA Group and the MediaOne Group shall exercise their rights
under clause 10.4 only to the maximum extent practicable without
triggering any requirement under Rule 9 for a mandatory offer and, in
case of competition, pro rata to their then existing holdings of
Ordinary Shares.
10.6 Any shares subscribed for by a Qualifying Shareholder pursuant to
clause 10.3 or 10.4 shall be subscribed for in cash at a price per
share equal to the average Closing Price for the 10 consecutive Trading
Days ending on the Trading Day immediately preceding the date of the
Dilutive Issue. Such Ordinary Shares shall be issued immediately before
the Dilutive Issue which gave rise to the option described in this
clause 10.
10.7 The Company will seek statutory authority to allot Ordinary Shares
(pursuant to section 80 of the Act) and for the disapplication of the
statutory pre-emption rights (pursuant to section 95 of the Act) for a
period of five years and hereby agrees to use its reasonable endeavours
to renew any and every such statutory authority to allot and for the
disapplication of the pre-emption rights thereafter for so long as the
Company is obligated by the anti-dilution provision of this clause 10.
The Company further undertakes that it shall only increase the Fully
Diluted Ordinary Shares if thereafter there is sufficient authorised
but unissued share capital for the Company to comply with its
obligations pursuant to this clause 10 and also only if there are
outstanding and valid a statutory authority to allot (pursuant to
section 80 of the Act) and a disapplication of the statutory preemption
rights (pursuant to section 95 of the Act) in respect of sufficient
Ordinary Shares for the Company to comply with its obligations under
this clause. The Shareholders undertake to each other and to the
Company to vote in favour of any such proposed resolutions.
10.8 The Company shall use all reasonable efforts to ensure that all
Ordinary Shares issued pursuant to this clause 10 are admitted to the
Official List by the London Stock Exchange.
11. GENERAL RIGHTS OF SHAREHOLDER GROUPS TO MAINTAIN OWNERSHIP LEVEL
The Company agrees to use its best efforts, consistent with the
interests of shareholders generally, to ensure that any issuance of
Shares is done in a manner that provides each Shareholder Group with an
opportunity to acquire additional Shares in amounts necessary from time
to time to enable them to maintain their percentage Ordinary Share
ownership in the Company. The Company shall apply for all such Ordinary
Shares to be admitted to the Official List by the London Stock
Exchange.
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12. NON-COMPETITION
12.1 Subject to clauses 12.5 and 12.6, MediaOne Holdings undertakes to the
Company that (unless the Company, by a vote of directors other than
those appointed by the MediaOne Shareholders consents) it will procure
that neither MediaOne nor any of its Controlled Affiliates shall, so
long as the MediaOne Shareholders have the right to appoint two
directors to the Board and for a period of one year after the MediaOne
Shareholders cease to have such right:
12.1.1 own directly assets comprising Cable Telephony and Cable Television
systems in the United Kingdom (excluding in respect of terrestrial TV)
other than through its relationship with the Company and the Company's
Affiliates; or
12.1.2 acquire an equity interest in any Person (other than the Company, TWE,
Flextech plc, MPC or their Controlled Affiliates) if (a) at the time
of such acquisition such Person directly or indirectly through one or
more Controlled Affiliates owns any Cable Telephony or Cable
Television systems in the UK (excluding in respect of terrestrial TV),
unless immediately prior to such acquisition the acquiror and its
Controlled Affiliates owned more than 10 per cent. of the outstanding
equity interests in such Person, or (b) such acquisition of equity
interests is being made pursuant to an agreement or arrangement in
which the proceeds of the issuance of such equity interest would be
used to acquire or invest in a Cable Telephony or Cable Television
system in the UK (excluding in respect of terrestrial TV).
12.2 Subject to clauses 12.5 and 12.6, TINTA undertakes to the Company that
(unless the Company, by a vote of directors other than those appointed
by the TINTA Shareholders consents) it will procure that neither TCI
nor any of its Controlled Affiliates shall, so long as the TINTA
Shareholders have the right to appoint two directors to the Board and
for a period of one year after the TINTA Shareholders cease to have
such right:
12.2.1 own directly assets comprising Cable Telephony and Cable Television
systems in the United Kingdom (excluding in respect of terrestrial TV)
other than through its relationship with the Company and the Company's
Affiliates; or
12.2.2 acquire an equity interest in any Person (other than the Company,
Flextech plc, MPC, At Home Corporation, Princes Holdings Limited or
their Controlled Affiliates) if (a) at the time of such acquisition
such Person directly or indirectly through one or more Controlled
Affiliates owns any Cable Telephony or Cable Television systems in the
UK (excluding in respect of terrestrial TV), unless immediately prior
to such acquisition the acquiror and its Controlled Affiliates owned
more than 10 per cent. of the outstanding equity interests in such
Person, or (b) such acquisition of equity interests is being made
pursuant to an agreement or arrangement in which the proceeds of the
issuance of such equity interest would be used to acquire or invest in
a Cable Telephony or Cable Television system in the UK (excluding in
respect of terrestrial TV).
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12.3 Subject to clauses 12.5 and 12.6, Cox undertakes to the Company that
(unless the Company, by a vote of directors other than those appointed
by Cox consents) neither Cox nor any of its Controlled Affiliates
shall, so long as the Cox Group has the right to appoint a director to
the Board and for a period of one year after the Cox Group ceases to
have such right:
12.3.1 own directly assets comprising Cable Telephony and Cable Television
systems in the United Kingdom (excluding in respect of terrestrial TV)
other than through its relationship with the Company and the Company's
Affiliates; or
12.3.2 acquire an equity interest in any Person (other than the Company,
Flextech plc, At Home Corporation, or their Controlled Affiliates) if
(a) at the time of such acquisition such Person directly or indirectly
through one or more Controlled Affiliates owns any Cable Telephony or
Cable Television systems in the UK (excluding in respect of terrestrial
TV), unless immediately prior to such acquisition the acquiror and its
Controlled Affiliates owned more than 10 per cent. of the outstanding
equity interests in such Person or (b) such acquisition of equity
interests is being made pursuant to an agreement or arrangement in
which the proceeds of the issuance of such equity interest would be
used to acquire or invest in a Cable Telephony or Cable Television
system in the UK (excluding in respect of terrestrial TV).
12.4 Subject to clauses 12.5 and 12.6, SBCI undertakes to the Company that
(unless the Company, by a vote of directors other than those appointed
by SBCI consents) neither SBCI nor any of its Controlled Affiliates
shall, so long as the SBC Group has the right to appoint a director to
the Board and for a period of one year after the SBC Group ceases to
have such right:
12.4.1 own directly assets comprising Cable Telephony and Cable Television
systems in the United Kingdom (excluding in respect of terrestrial TV)
other than through its relationship with the Company and the Company's
Affiliates; or
12.4.2 acquire an equity interest in any Person (other than the Company or
its Controlled Affiliates) if (a) at the time of such acquisition such
Person directly or indirectly through one or more Controlled Affiliates
owns any Cable Telephony or Cable Television systems in the UK
(excluding in respect of terrestrial TV), unless immediately prior to
such acquisition the acquiror and its Controlled Affiliates owned more
than 10 per cent. of the outstanding equity interests in such Person,
or (b) such acquisition of equity interests is being made pursuant to
an agreement or arrangement in which the proceeds of the issuance of
such equity interest would be used to acquire or invest in a Cable
Telephony or Cable Television system in the UK (excluding in respect
of terrestrial TV).
12.5 Notwithstanding the restrictions set forth in clauses 12.1, 12.2, 12.3
and 12.4 MediaOne Holdings, MediaOne, TCI, TINTA, SBCI, Cox and their
respective Controlled Affiliates (each a "Relevant Investor") may
acquire and subsequently own assets comprising Cable Television or
Cable Telephony systems in the UK if, prior to the Relevant Investor
acquiring such assets, it first offers the opportunity to
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the Company, stating the terms on which the opportunity is available.
The Company shall within 30 days after receipt of such notice give
notice to the Relevant Investor stating whether it wishes to undertake
such opportunity and failure to do so shall be deemed rejection of the
right to undertake the opportunity. The directors appointed by the
Shareholder Group of which the Relevant Investor is a member ("Relevant
Investor Group") shall not vote with respect to any decision by the
Company whether to pursue an opportunity offered by the Relevant
Investor Group, and if the Relevant Investor Group votes as a
shareholder against any means of funding the pursuit of such
opportunity which requires shareholder approval (other than a guarantee
or similar agreement that would impose an obligation on the Relevant
Investor Group), the Relevant Investor Group shall not pursue the
opportunity independently. In the event that the Company notifies the
Relevant Investor that it does not wish to undertake such opportunity
then within a further 180 days of such notification the Relevant
Investor may take all necessary actions to enter into agreements
relating to such opportunity (on terms no more favourable than those
offered to the Company) and to the extent the Relevant Investor does
not do so then before entering into such agreements after the expiry of
such 180 day period it must first re-offer the opportunity to the
Company on the terms set out herein. Except as stated herein, MediaOne,
MediaOne Holdings, TCI, TINTA, SBCI, Cox and their Controlled
Affiliates shall be free to pursue any other business opportunity
anywhere in the world.
12.6 Nothing contained in this clause 12 shall prohibit or otherwise
restrict MediaOne, MediaOne Holdings, TCI, TINTA, SBCI or Cox or their
respective Affiliates from:
12.6.1 owning or acquiring 10 per cent. or less of the outstanding equity of a
Person that engages in Cable Television or Cable Telephony in the
United Kingdom;
12.6.2 owning or acquiring an interest in any Person engaged in (a) Wireless
Telephony, (b) billing, validation or call authorisation service and
related or ancillary services for use by any provider of
telecommunications services, or (c) any subscriber voice or data
telecommunications transmission service that interconnects a Group
System with any other telecommunications networks outside the licensed
territory of any Group System, but does not compete with a Group
System for Cable Telephony customers;
12.6.3 directly or indirectly providing any subscriber voice or data
telecommunications transmission service (including but not limited to
Wireless Telephony) that operates only in part by cable links to
subscribers' premises (except in respect of the interconnection of such
service to cable links which serve customers in the licensed territory
of any Group System, but the ability to engage in such service outside
of such interconnection shall not be restricted);
12.6.4 owning or acquiring, directly or indirectly, an interest in any Person
that provides, or is providing, programming or content services in the
United Kingdom; or
12.6.5 acquiring an interest in any Person whose annual gross revenues from
Cable Television and Cable Telephony in the United Kingdom in its most
recently
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completed fiscal year prior to the acquisition constituted 20 per cent.
or less of its total annual gross revenues; provided that if any of
MediaOne Holdings, TINTA, SBCI, Cox or their respective Controlled
Affiliates acquires in accordance with this clause 12.6.5 after the
date hereof a Controlling interest in any Person (other than Flextech
plc, TWE or MPC or their Controlled Affiliates) which owns Cable
Television or Cable Telephony assets in the United Kingdom, the Company
shall have the option (subject to third party rights and any
contractual restrictions) so long as clause 12.1, 12.2, 12.3 or 12.4,
as the case may be, is applicable to the acquiror's Shareholder Group,
to acquire the interest in the Cable Television and Cable Telephony
assets in the United Kingdom of that Person for the Fair Market Value
thereof payable in cash, provided that (a) the option must be
exercised, if at all, by the Company by giving written notice to the
Relevant Investor within 30 days after the Relevant Investor gives
notice to the Company of the existence of such opportunity and closed
within 120 days after the date of the notice of exercise and (b) the
Relevant Investor acquiring such interest shall not vote on any
decision whether to exercise the option granted in this clause 12.6.5.
12.7 Each of the exceptions set forth in clauses 12.6.1 through 12.6.5 is
separately applicable and independent of any of the other exceptions.
12.8 Whenever the Fair Market Value of any transaction or interest is
required to be determined hereunder, the Relevant Investor and the
Company may upon notice require that Fair Market Value determination be
made by an appraiser jointly appointed by the Relevant Investor and the
Company. If the Relevant Investor and the Company fail to agree on an
appraiser within 20 days after receipt of the notice requiring an
appraisal of Fair Market Value, they shall each appoint one appraiser,
which shall be an investment banking firm of national repute in the UK.
The two appraisers so selected shall each make an appraisal of Fair
Market Value within 30 days after their selection. If such
determinations vary by 20 per cent. or more of the higher
determination, the two appraisers shall select a third appraiser with
similar qualifications which shall make its determination of such Fair
Market Value within 30 days after its selection. Such third appraiser
shall not be informed of or otherwise consider the appraisals of the
other two in reaching its determination. The Fair Market Value shall be
the average of the two closest values if three appraisals are made or,
if the determinations of the first two appraisers vary by less than 20
per cent. of the higher of such two determinations, the average of
those two determinations. If any party fails to appoint an appraiser as
required hereunder, the other party may refer the matter to the
American Arbitration Association, which shall promptly appoint an
appraiser hereunder on behalf of the party failing to make such
appointment. The 30-day period specified in clause 12.6.5 above shall
be suspended pending final determination of Fair Market Value.
Appraisers appointed under this clause shall act as experts and not as
arbitrators and, absent fraud or manifest error, the determination of
an appraiser hereunder shall be binding on the parties.
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13. SCOPE OF COMPANY BUSINESS
Subject to clause 14, the Company agrees with each of the MediaOne
Group and the TINTA Group, for so long as it is a Qualifying Group that
the business of the Company and its Controlled Affiliates shall be
limited to providing Cable Television, Cable Telephony services and
Wireless Telephony services in the United Kingdom and all matters
incidental thereto, including television programming in the United
Kingdom incidental to the Company's Cable Television business in the
United Kingdom (collectively, "Company Business"), and such other
businesses as such Shareholder Group shall approve by written consent.
The Company shall not own or acquire an equity interest in any Person
that engages in a business other than those in which the Company is
permitted to engage pursuant to this clause 13. Neither the Company nor
any of its Affiliates shall use the "Telewest" mark (or any mark
confusingly similar to it) outside of the UK and the TINTA
Shareholders, the MediaOne Shareholders and their respective Affiliates
shall not use the "Telewest" mark (or any mark confusingly similar to
it) within the UK.
14. CONTRACTUAL RESTRICTIONS
14.1 The Company undertakes to the MediaOne Group that so long as the
MediaOne Shareholders own more than 5 per cent. of the Company's issued
Ordinary Shares and so long as the contractual restrictions described
in Part I of Schedule 1 remain in effect, the Company will not
knowingly take or omit to take (and will not permit its Controlled
Affiliates to take or omit to take) any action that could cause a
breach or violation of the contractual restrictions (as such exist on
the date hereof) described in Part I of Schedule 1, and also undertakes
to the TINTA Group that for so long as the TINTA Shareholders own more
than 5 per cent. of the Company's issued Ordinary Shares and so long as
the contractual restrictions described in Part II of Schedule 1 remain
in effect, that the Company will not knowingly take or omit to take
(and will not permit its Controlled Affiliates to take or omit to take)
any action that could cause a breach or violation of the contractual
restrictions (as such exist on the date hereof) described in Part II of
Schedule 1.
14.2 Notwithstanding anything in this Agreement to the contrary, the Company
may (i) engage in the business of Fixed Wireless Telephony services,
(ii) sell Wireless Telephony services solely as a distributor or
retailer of such services through a contractual relationship with one
or more owners of any Wireless Telephony business, including but not
limited to MPC, provided that the Company does not have any ownership
interest in and does not operate such Wireless Telephony business, and
(iii) the Company may jointly invest with MPC in mobile radio voice
telephony networks to be constructed by MPC or its Affiliates.
15. INDEMNIFICATIONS
15.1 The Company shall indemnify and hold harmless each of TINTA, MediaOne
Holdings, SBCI and Cox for themselves and as trustees for their
respective Affiliates and each Relevant Person from and against any
costs, damages, liabilities and
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obligations (including but not limited to attorneys' fees and payment
of any settlement or judgment) arising out of any claim, action or
proceeding relating to the Offer Documents, except those matters as to
which such Person or one of its Affiliates has specifically agreed to
indemnify the Company pursuant to this clause 15. If the
indemnification in this clause 15 is at any time legally or
procedurally unavailable to any Person, the Company shall contribute to
the amount paid or payable by such Person on account of such claim,
action or proceeding an amount equal to the amount the Company
otherwise would be required to pay that Person as indemnification under
this clause 15.
15.2 The TINTA Shareholders shall indemnify and hold harmless the Company
and its directors, officers and employees for the time being and from
time to time from and against any costs, damages, liabilities and
obligations (including but not limited to attorneys' fees and payment
of any settlement or judgment) arising out of any claim, action or
proceeding (including any claim by any other Shareholder pursuant to
this clause 15) relating to any portion of the Offer Documents provided
by the TINTA Group in writing for use in the Offer Documents and/or
arising from any failure by the TINTA Group to provide all the
information required to be disclosed in relation to the TINTA Group in
the Offer Documents. If the indemnification provided in this clause
15.2 is at any time legally or procedurally unavailable to any person,
the TINTA Shareholders shall contribute to the amount paid or payable
by such Person on account of such claim, action or proceedings an
amount equal to amount they otherwise would be required to pay that
Person as indemnification under this clause 15.2.
15.3 The MediaOne Shareholders shall indemnify and hold harmless the Company
and its directors, officers and employees for the time being and from
time to time from and against any costs, damages, liabilities and
obligations (including but not limited to attorneys' fees and payment
of any settlement or judgment) arising out of any claim, action or
proceeding (including any claim by any other Shareholder pursuant to
this clause 15) relating to any portion of the Offer Documents provided
by the MediaOne Group in writing for use in the Offer Documents and/or
arising from any failure by the MediaOne Group to provide all the
information required to be disclosed in relation to the MediaOne Group
in the Offer Documents. If the indemnification provided in this clause
15.3 is at any time legally or procedurally unavailable to any Person,
the MediaOne Shareholders shall contribute to the amount paid or
payable by such Person on account of such claim, action or proceeding
an amount equal to that amount they otherwise would be required to pay
that Person as indemnification under this clause 15.3.
15.4 The SBC Shareholders shall indemnify and hold harmless the Company and
its directors, officers and employees for the time being and from time
to time from and against any costs, damages, liabilities and
obligations (including but not limited to attorneys' fees and payment
of any settlement or judgment) arising out of any claim, action or
proceeding (including any claim by any other Shareholder pursuant to
this clause 15) relating to any portion of the Offer Documents provided
by the SBC
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Group in writing for use in the Offer Documents and/or arising from any
failure by the SBC Group to provide all the information required to be
disclosed in relation to the SBC Group in the Offer Documents. If the
indemnification provided in this clause 15.4 is at any time legally or
procedurally unavailable to any Person, the SBC Shareholders shall
contribute to the amount paid or payable by such Person on account of
such claim, action or proceeding an amount equal to that amount they
otherwise would be required to pay that Person as indemnification under
this clause 15.4.
15.5 The Cox Shareholders shall indemnify and hold harmless the Company and
its directors, officers and employees for the time being and from time
to time from and against any costs, damages, liabilities and
obligations (including but not limited to attorneys' fees and payment
of any settlement or judgment) arising out of any claim, action or
proceeding (including any claim by any other Shareholder pursuant to
this clause 15) relating to any portion of the Offer Documents provided
by the Cox Group in writing for use in the Offer Documents and/or
arising from any failure by the Cox Group to provide all the
information required to be disclosed in relation to the Cox Group in
the Offer Documents. If the indemnification provided in this clause
15.5 is at any time legally or procedurally unavailable to any Person,
the Cox Shareholders shall contribute to the amount paid or payable by
such Person on account of such claim, action or proceeding an amount
equal to that amount they otherwise would be required to pay that
Person as indemnification under this clause 15.5.
15.6 The Company covenants with and undertakes to each of Cox and CUK that
it will indemnify and keep each of them indemnified from and against
all stamp duty, stamp duty reserve tax and related interest, penalties
and costs arising out of or in connection with the transfer from TW
Holdings to CUK of any Ordinary Shares transferred to TW Holdings from
CUK ("Tax"). The Company shall pay to CUK in cleared funds an amount
equal to any Tax paid by CUK within 5 working days of CUK's demand for
the same.
15.7 Each Shareholder Group and the Company shall act reasonably to mitigate
any loss or liability in respect of which it claims indemnity under
this Clause 15.
16. GAIN RECOGNITION CONSENT REQUIREMENTS
The Company covenants to each of the MediaOne Group, the TINTA Group,
the Cox Group and the SBC Group that for so long as (i) they each own
or (ii) the SBC Group and the Cox Group in aggregate own or (ii) the
MediaOne Group and the TINTA Group in aggregate own at least 7.5 per
cent. of the Ordinary Shares in issue the Company will not and will
procure that no member of the Telewest Group will, (i) without the
written consent of such Shareholder Group, dispose of assets (including
securities of an Affiliate of the Company) in one transaction or a
series of related transactions within any 18 month period having a Fair
Market Value of (pound)20,000,000 or more if, in the judgment of such
Shareholder Group, the disposition could require it to recognise gain
under the Gain Recognition Agreements between it and the US Internal
Revenue Service or (ii) in the case of MediaOne and the TINTA Group,
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dispose of or reorganise any interest in or Control of any member of
the Telewest Group intra-group or acquire any equity interest in a
Person not Affiliated with the Company immediately prior to such
acquisition if the effect of any such disposition, reorganisation or
acquisition would be to create an intermediate holding Person within
the Telewest Group. The Company shall be entitled to conclusively rely
on notice from any of MediaOne Holdings, TINTA, Cox or SBCI (as the
case may be) as to any consent given by their respective Shareholder
Groups.
17. CITY CODE ON TAKEOVERS AND MERGERS
If any Shareholder Group takes any action which causes another
Shareholder Group or Groups to be under an obligation pursuant to Rule
9 of the City Code on Takeovers and Mergers (the "Code"), the
Shareholder Group which takes such action shall fulfil all the
obligations of such other Shareholder Group or Groups (but not the
Company) thereunder and shall pay all consideration and expenses
attributable to such Shareholder Group or Groups in connection
therewith.
18. CONFIDENTIALITY
Save as required by law or any regulatory authority, each Shareholder
shall keep confidential, and shall procure that all members of its
Shareholder Group will keep confidential, any confidential information
of the Telewest Group which is or has been given to it by or on behalf
of the Telewest Group unless the information is already in the public
domain other than through the default of the Shareholder or a member of
its Shareholder Group in complying with this clause.
19. JOINT AND SEVERAL LIABILITY FOR CONTROLLED AFFILIATES
MediaOne Holdings, TINTA, SBCI and Cox shall each be jointly and
severally liable with their respective Controlled Affiliates for any
and all of the obligations and liabilities of their respective
Controlled Affiliates under this Agreement.
20. TERM
This Agreement shall continue whilst any party hereto retains any
rights and/or obligations hereunder and shall terminate forthwith (in
relation to a party no longer having any rights and/or obligations)
upon that ceasing to be the case.
21. TERMINATION OF 1994 AND 1995 AGREEMENTS
21.1 This Agreement supersedes the 1994 Agreements and the 1995 Agreements
and each parties' further rights and obligations thereunder shall cease
upon this Agreement becoming unconditional provided that (a) the
parties' rights and obligations accrued thereunder prior to such time
shall not be affected, and (b) if pursuant to clause 2.4 (having become
unconditional) this Agreement is terminated, the 1994 Agreements and
the 1995 Agreements shall revive as if no termination of those
agreements had occurred pursuant to this clause.
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21.2 The Company, the MediaOne Group and the TINTA Group shall comply with
the provisions of Schedule 3 in place of clauses 16(b) and (c) and 17
of the Old Relationship Agreement.
21.3 Clause 3.6 of the Old Shareholders Agreement, clause 18 of the Old
Relationship Agreement and clause 6 of the Co-operation Agreement shall
not apply in relation to the issue or conversion of any Shares pursuant
to the Offer, the Telewest Open Offer, this Agreement or the
Subscription Agreement.
22. COMPETITION
No provision of this Agreement, or of an agreement or arrangement of
which it forms part, by virtue of which this Agreement, or an agreement
or arrangement of which it forms part, is subject to registration under
the Restrictive Trade Practices Acts 1976 and 1977, takes effect until
the day after the date on which particulars have been furnished to the
Director General of Fair Trading in accordance with those Acts.
23. COSTS
Each party shall pay its own costs relating to the negotiation,
preparation, execution and performance by it of this Agreement and of
each document referred to in it.
24. FURTHER ASSURANCE
The parties agree that they shall execute and deliver any other
documents and instruments, and take any other actions reasonably
requested by another party necessary or appropriate to give effect to
this Agreement.
25. GENERAL
25.1 Whenever in this Agreement action by a Shareholder Group is required or
permitted, that action shall be deemed taken if approved by members of
that Shareholder Group owning a majority of the total number of Shares
owned by all the members of that Shareholder Group.
25.2 A variation of this Agreement is valid only if it is in writing and
signed by or on behalf of each party.
25.3 The parties agree that each party would be irreparably damaged if any
party failed to perform any obligation under this Agreement, and that
such party would not have an adequate remedy at law for money damages
in such event. Accordingly, each party hereto will be entitled to
specific performance and injunctive and other equitable relief to
enforce the performance of this Agreement. This provision is without
prejudice to any other rights that such party may have under this
Agreement, at law or in equity.
25.4 The failure to exercise or delay in exercising a right or remedy
provided by this Agreement or by law does not constitute a waiver of
the right or remedy or a waiver of
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other rights or remedies. No single or partial exercise of a right or
remedy provided by this Agreement or by law prevents further exercise
of the right or remedy or the exercise of another right or remedy.
25.5 The rights and remedies contained in this Agreement are cumulative and
not exclusive of rights or remedies provided by law.
25.6 The invalidity or unenforceability of any provision of this Agreement
in any jurisdiction shall not affect the validity or enforceability of
the remainder of this Agreement in that jurisdiction or the validity
on enforceability of this Agreement, including such provision, in any
other jurisdiction.
25.7 Each date, time or period referred to in this Agreement is of the
essence. If the parties agree in writing to vary a date, time or
period, the varied date, time or period is of the essence.
26. ASSIGNMENT
26.1 A party may not assign or transfer or purport to assign a right or
obligation under this Agreement without having first obtained the
written consent of the other parties.
26.2 The benefit of the rights of a Shareholder (subject to the burden of
the obligations of a Shareholder) under this Agreement shall be
afforded to a transferee who is or becomes a member of the same
Shareholders Group as the transferor provided that the transferee duly
completes, executes and delivers to the Company a deed of adherence in
the form set out in Schedule 2.
27. NOTICES
27.1 Any notice under this Agreement shall be in writing and signed by or on
behalf of the party giving it and may be served by leaving it or
sending it by fax, prepaid recorded delivery or registered post (and
air mail if overseas) to the address and for the attention of the party
receiving it set out in clause 27.2 or as otherwise notified under this
Agreement. In the absence of evidence of earlier receipt, any notice so
served shall be deemed to have been received:
(a) if delivered personally, when left at the relevant address;
(b) if sent by mail other than air mail, 48 hours after posting it;
(c) if sent by air mail, 96 hours after posting it;
(d) if sent by fax, on receipt of confirmation of its transmission.
27.2 The current addresses of the parties for the purpose of clause 27.1 are
set out below. These may be altered by the parties by notice to the
other parties at any time:
MediaOne Holdings 7800 E. Orchard Road Suite 480
MediaOne UK Englewood
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MediaOne Cable: Colorado 80111 USA
For the attention of: General Counsel
Fax: 1 303 793 6707
TINTA 5619 DTC Parkway
UAP-E: Englewood
Colorado 80111 USA
For the attention of: Stephen Brett
FAX: 1 303 488 3245
Company: Genesis Business Park
Albert Drive
Woking
Surrey GU21 5RW
For the attention of: Victoria Hull
Fax: 01483 295165
SBCI #2 Reed's Way
SBIHUK-1: Suite 222 Corporate Commons
Newcastle
Delaware 19720 USA
For the attention of: Michael Thompson,
Vice President and Secretary
Fax: 1 302 322 2838
Cox 1400 Lake Hearn Drive
CUK: Atlanta Georgia 30319
USA
For the attention of: Dallas Clement
Fax: 1 404 847 6336
In the case of
Cox and CUK, with
copy (which shall
not constitute service
of notice) to: Olswang
90 Long Acre
London WC2E 9TT
For the attention of: Simon Morgan
Fax: 0171 208 8888
In the case of SBCI
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and SBIHUK-1, with
copy (which shall not
constitute service of
notice) to: Bird & Bird
90 Fetter Lane
London EC4A 1JP
For the attention of: Neil Blundell
Fax: 0171 415 6111
28. GOVERNING LAW AND JURISDICTION
28.1 This Agreement is governed by and shall be construed in accordance with
English law.
28.2 The courts of England have exclusive jurisdiction to hear and decide
any suit, action or proceedings, and to settle any disputes, which may
arise out of or in connection with this Agreement (respectively,
"Proceedings" and "Disputes") and, for these purposes, each party
irrevocably submits to the jurisdiction of the courts of England.
28.3 Each party irrevocably waives any objection which it might at any time
have to the courts of England being nominated as the forum to hear and
decide any Proceedings and to settle any Disputes and agrees not to
claim that the courts of England are not a convenient or appropriate
forum.
28.4 Process by which any Proceedings are begun in England may be served on
any party by being delivered in accordance with clause 27 or may be
served on the parties without addresses in England (as set out in
clause 27.2 above) by being delivered to the agents at the addresses
indicated below (or such other agent or address as the party in
question may notify to the other parties):
MediaOne Holdings, Clifford Chance Secretaries Limited
MediaOne UK, 200 Aldersgate Street
MediaOne Cable: London EC1A 4JJ
For the attention of: Chantal Brackenbury/
Angela Orban
Fax: 0171 600 5555
TINTA Grays Inn Secretaries Limited
UAP-E: 5 Chancery Lane
London EC4 1BU
For the attention of: Philip Goodwin/Simon
Brown
Fax: 0171 404 0087
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SBCI, Bird & Bird
SBIHUK-1: 90 Fetter Lane
London EC4A 1JP
For the attention of: Neil Blundell
Fax: 0171 415 6111
Cox Olswang
CUK: 90 Long Acre
London WC2E 9TT
For the attention of: Simon Morgan
Fax: 0171 208 8888
Nothing contained in this clause 28.4 affects the right to serve
process in another manner permitted by law.
29. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which when executed and delivered is an original, but all the
counterparts together constitute the same document.
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SCHEDULE 1
CONTRACTUAL RESTRICTIONS
Part I
(a) In certain agreements that established a partnership to
operate the One 2 One mobile radio voice network, MediaOne
has agreed to certain contractual restrictions which provide
that neither MediaOne nor its Affiliates (including the
Company) will directly or indirectly carry on or have a
shareholding or other economic interest in a person which
carries on or has applied for a license to carry on, as all
or part of its business the activity of running a mobile
radio voice telephony network for the provision of
telecommunication services to the general public within any
part of the UK. So long as MediaOne owns an equity interest in
the One 2 One partnership or any successor to the One 2 One
partnership (including the current partnership after admission
of one or more new partners) in excess of the minimum interest
specified in the One 2 One agreement as of the date of this
Agreement, such contractual restrictions contained in any
agreements governing the business of a successor to the One 2
One partnership (including the current partnership after
admission of one or more new partners) shall become part of
this Schedule 1 provided that such restrictions are not
broader in scope than those in effect on the date of this
Agreement. (b) MediaOne has agreed that MediaOne and certain
of its affiliates will not compete with Time Warner
Entertainment Company, L.P. ("TWE") in certain businesses, and
that they will offer TWE a right of first refusal in certain
circumstances, as disclosed in the IPO Documents.
Part II
(a) Flextech plc has a right of first refusal with respect to
participation in English-language programming business in the
United Kingdom and Europe under certain circumstances
described in the IPO Documents.
(b) In an agreement relating to the establishment of a joint
venture between BBC Worldwide and Flextech plc for the
establishment and broadcast of television programme services
in the United Kingdom, TINTA has agreed that it will not
itself, and that it will procure that no company of which it
has voting control will, acquire an interest in excess of 20
per cent. of the issued share capital of a company which owns
a commercial broadcast television channel which competes with
one or more of the channels to be established under such joint
venture.
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SCHEDULE 2
DEED OF ADHERENCE
THIS DEED OF ADHERENCE is made on [ ] 199[ ] BY [ ] of [ ] ("the Covenantor")
in favour of the persons whose names are set out in the schedule to this Deed
and is supplemental to the Relationship Agreement dated 15 1998 made by (1)
MediaOne International Holdings, Inc., (2) MediaOne UK Cable, Inc and MediaOne
Cable Partnership Holdings, Inc., (3) TeleCommunications International, Inc.,
(4) United Artists Programming-Europe, Inc., (5) Cox Communications, Inc., (6)
Cox U.K. Communications, LP, (7) SBC International, Inc., (8) Southwestern Bell
International Holdings (UK-1) Corporation and (9) Telewest Communications plc
(the "Relationship Agreement").
THIS DEED WITNESSES as follows:
1. The Covenantor confirms that it has been given and read a copy of the
Relationship Agreement and covenants with each person named in the
schedule to this Deed to perform and be bound by all the terms of the
Relationship Agreement as if the Covenantor were a party to the
Relationship Agreement as a Shareholder.
2. This Deed is governed by English law.
IN WITNESS WHEREOF this Deed has been executed by the Covenantor and is intended
to be and is hereby delivered on the date first above written.
SCHEDULE
[Parties to Relationship Agreement including those who have executed earlier
deeds of adherence].
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SCHEDULE 3
PROVISIONS PRESERVED FROM THE OLD RELATIONSHIP AGREEMENT
1. Costs Relating to Telewest Interests
The Company undertakes to reimburse TINTA (for itself and on behalf of
TCI and its Affiliates) and MediaOne Holdings (for itself and on behalf
of MediaOne and its Affiliates) for all losses, damages, costs,
liabilities, deficiencies, claims, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties, costs and expenses
(including, without limitation, settlement costs and legal, accounting,
experts' and other fees, costs and expenses) (but excluding taxes)
based upon, arising out of or associated with (i) the ownership of the
Telewest Interests prior to, on or following the Public Offering, (ii)
the dissolution and liquidation of the UCs and obligations and
liabilities of the UCs arising prior to, upon or subsequent to their
dissolution relating to the ownership and operation of the Telewest
Interests and (iii) the TCI Investors and the MediaOne Investors having
been members of the UCs.
2. Taxation Costs Relating to Telewest Interests.
The Company undertakes to reimburse TINTA (for itself and on behalf of
TCI and its Affiliates) and MediaOne Holdings (for itself and on behalf
of MediaOne and its Affiliates) for all liabilities for taxes which
they incur and which arise in respect of the operation of the
businesses carried on by the Telewest Interests prior to or following
the Public Offering including (but not limited to) Value Added Tax,
income tax levied pursuant to the Pay as You Earn Regulations and
income tax levied pursuant to the Income Tax (Sub-Contractors in the
Construction Industry) Regulations and excluding (for the avoidance of
doubt) any tax liabilities in respect of which TINTA or MediaOne
Holdings have agreed to indemnify Old Telewest under the Tax Deed.
3. Limitations on Reimbursement and Payment Obligations. No reimbursement
or payment due pursuant to clauses 1, 2 or 4 or arising out of any
breach or violation of the Old Relationship Agreement or the Related
Agreements shall be made unless the aggregate amount payable by that
party on account of all such matters exceeds (pound)10,000, and if such
amount is exceeded all payments and reimbursements shall be paid by
that party in full.
4. Indemnifications
(a) The Company undertakes to indemnify and hold harmless TINTA
(for itself and on behalf of TCI and its Affiliates) and
MediaOne Holdings (for itself and on behalf of MediaOne and
its Affiliates) from and against any costs, damages,
liabilities and obligations (including but not limited to
attorneys' fees and payment of any settlement or judgment)
arising out of any claim, action or proceeding relating to
the IPO Documents and the Contemplated Transactions, except
those matters as to which the Investors specifically
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made a representation or warranty to Old Telewest or agreed
specifically to reimburse Old Telewest. If the indemnification
provided in this clause 4(a) is at any time legally or
procedurally unavailable to any Person, the Company shall
contribute to the amount paid or payable by such Person on
account of such claim, action or proceeding an amount equal to
the amount the Company otherwise would be required to pay that
Person as indemnification under this clause 4(a). (b) TINTA
and UAP-E undertake to indemnify and hold harmless the Company
from and against any costs, damages, liabilities and
obligations (including but not limited to attorneys' fees and
payment of any settlement or judgment) arising out of any
claim, action or proceeding relating to any portion of the IPO
Documents provided by the TCI Investors in writing for use in
the IPO Documents. If the indemnification provided in this
clause 4(b) is at any time legally or procedurally unavailable
to any Person, TINTA and UAP-E shall contribute to the amount
paid or payable by such Person on account of such claim,
action or proceeding an amount equal to the amount TINTA and
UAP-E otherwise would be required to pay that Person as
indemnification under this clause 4(b).
(c) MediaOne Holdings and the MediaOne Investors undertake to
indemnify and hold harmless the Company from and against any
costs, damages, liabilities and obligations (including but
not limited to attorneys' fees and payment of any settlement
or judgment) arising out of any claim, action or proceeding
relating to any portion of the IPO Documents provided by the
MediaOne Investors in writing for use in the IPO Documents. If
the indemnification provided in this clause 4(c) is at any
time legally or procedurally unavailable to any Person, the
MediaOne Investors shall contribute to the amount paid or
payable by such Person on account of such claim, action or
proceeding an amount equal to the amount the MediaOne
Investors otherwise would be required to pay that Person as
indemnification under this clause 4(c).
5. Definitions
Set out below are the definitions of the defined terms which are only
used in this Agreement in Schedule 3 above (which are accurate as at 22
November 1994 being the date of the Old Relationship Agreement):
"Contemplated Transactions" means the transactions contemplated by the
Old Relationship Agreement and the Related Agreements, including the
transfer by the MediaOne Investors and the TCI Investors of the
Telewest Interests to the UCs;
"MediaOne Investors" means MediaOne UK and MediaOne Cable.
"Public Offering" means the public offering in 1994 of Ordinary Shares
for sale to the public;
-47-
<PAGE>
"Related Agreements" means the following agreements entered into on
the date of the Old Relationship Agreement (22 November 1994):
(a) Technology Licensing Agreements between (i) Old Telewest
and TINTA, and (ii) Old Telewest and MediaOne Holdings;
(b) Trademark Licensing Agreements between (i) Old Telewest and
MediaOne, and (ii) Old Telewest and TCI;
(c) Secondment Agreements between (i) Old Telewest and TCI, and
(ii) Old Telewest and an Affiliate of the MediaOne Investors;
(d) Tax Deed between Old Telewest, TINTA and MediaOne Holdings;
and
(e) Registration Rights Agreements between (i) Old Telewest and
the TCI Investors and (ii) Old Telewest and the MediaOne
Investors.
"Tax Deed" means deed of indemnity against taxation entered into by Old
Telewest, TINTA and MediaOne Holdings dated 22 November 1994; "TCI
Investors" means UAP-E and United Artists Cable Television UK Holdings,
Inc.;
"Telewest Interests" means the interests owned by the TCI Investors and
the MediaOne Investors in the following partnerships, which were
engaged in the Cable Television and Cable Telephony businesses in the
UK on the date of the Old Relationship Agreement:
(a) TCI/MediaOne Cable Communications Group;
(b) Avon Cable Limited Partnership;
(c) Edinburgh Cable Limited Partnership;
(d) Estuaries Cable Limited Partnership;
(e) United Cable (London South) Limited Partnership;
(f) Tyneside Cable Limited Partnership; and
(g) Cotswolds Cable Limited Partnership.
"UCs" means Theseus No.1 (to whom the TCI Investors contributed their
Telewest Interests on 21 November 1994) and Theseus No.2 (to whom the
MediaOne Investors contributed their Telewest Interests on 21 November
1994).
AS WITNESS this Agreement has been executed by the duly authorised
representatives of the parties the day and year first before written.
-48-
<PAGE>
SIGNED by )
for and on behalf of MEDIAONE )
INTERNATIONAL HOLDINGS, INC. )
SIGNED by )
for and on behalf of MEDIAONE )
UK CABLE, INC. )
SIGNED by )
for and on behalf of MEDIAONE CABLE )
PARTNERSHIP HOLDINGS, INC. )
SIGNED by )
for and on behalf of )
TELE-COMMUNICATIONS )
INTERNATIONAL, INC. )
SIGNED by )
for and on behalf of UNITED ARTISTS)
PROGRAMMING-EUROPE, INC )
SIGNED by )
for and on behalf of )
COX COMMUNICATIONS, INC. )
SIGNED by )
for and on behalf of )
COX U.K. COMMUNICATIONS L.P. )
by COX CABLE INTERNATIONAL, INC., )
its general partner )
-49-
<PAGE>
SIGNED by )
for and on behalf of )
SBC INTERNATIONAL, INC. )
SIGNED by )
for and on behalf of )
SOUTHWESTERN BELL INTERNATIONAL )
HOLDINGS (UK-1) CORPORATION )
SIGNED by )
for and on behalf of )
TELEWEST COMMUNICATIONS plc)
-50-
EXHIBIT H
AGREED FORM
--------------------------------------------
ARTICLES OF ASSOCIATION
of
TELEWEST COMMUNICATIONS plc/1/
(Adopted by special resolution
passed on [_____] 1998)
--------------------------------------------
Preliminary
Interpretation
1.1 In the articles:
Act means, unless the context otherwise requires, the Companies Act 1985,
including any statutory modification or re-enactment for the time being in
force;
Acts means the Companies Acts 1985 and 1989 and all statutes and subordinate
legislation for the time being in force concerning companies so far as they
apply to the Company;
Approved Depositary means a custodian or other person (or a nominee for such
custodian or other person) appointed under contractual arrangements with the
Company or other arrangements approved by the board whereby such custodian or
other person or nominee holds or is interested in shares of the Company or
rights or interests in shares of the Company and issues securities or other
documents of title or otherwise evidencing the entitlement of the holder thereof
to or to receive such shares, rights or interests, provided and to the extent
that such arrangements have been approved by the board for the purposes of the
articles and shall include, where approved by the board, the trustees (acting in
their capacity as such) of any employees' share scheme established by the
Company or any other scheme or arrangements principally for the benefit of
employees of the Company and/or its subsidiaries which have been approved by the
Company in general meeting;
articles means these articles of association as amended from time to time; -----
- ---------------------------------------------------------------------------
/1/ The Company was incorporated as a public company limited by shares with the
name Amberfrost plc on 20 January 1994. Its name was changed to TeleWest
plc on 7 June 1995 pursuant to a special resolution passed on 7 June 1995,
and to Telewest Communications plc on 16 May 1996 pursuant to a special
resolution passed on 16 May 1996.
<PAGE>
auditors means the auditors of the Company;
board means the board of directors of the Company or the directors present or
deemed to be present at a duly convened meeting of the directors at which a
quorum is present;
business day means a day (not being a Saturday or Sunday) on which clearing
banks are open for business in London;
clear days means, in relation to a period of notice, that period excluding the
day when the notice is given or deemed to be given and the day for which it is
given or on which it is to take effect;
company includes any body corporate (not being a corporation sole) or
association of persons, whether or not a company within the meaning of the Act;
Cox means Cox Communications, Inc., a corporation incorporated under the laws of
the state of Delaware, U.S.A.
convertible preference shares means convertible preference shares in the capital
of the Company;
Cox Designated Director means the director who may be appointed from time to
time by a member of the Cox Group pursuant to article 72.4 provided that a Cox
Designated Director shall automatically cease so to be upon the Cox Group
ceasing to have the power to appoint a director pursuant to article 72.4: Cox
Group means at any time Cox, its holding companies, and/or its subsidiary
undertakings and/or any subsidiary undertakings of its holding companies for the
time being and a member of the Cox Group shall mean any registered holder of
shares beneficially owned by a person within such group. TW Holdings shall be
deemed to be a member of the Cox Group but only to the extent of the Pro Rata
Shares of the Cox Group. Wherever the articles require or permit the calculation
of a number or percentage of Shares held by the Cox Group such number or
percentage shall include the Pro Rata Shares of the Cox Group; Dilutive Issue
means any issue of Shares or other securities (including securities convertible
into or exchangeable for Shares or other securities carrying the right to vote
at general meetings of the Company's Shareholders) in the capital of the Company
in respect of which the TINTA Group or the MediaOne Group or the SBC Group or
the Cox Group or the Vivendi Group (as relevant) was not entitled by the terms
of such issue to participate on a pro-rata basis; director means, unless the
context otherwise requires, a director of the Company;
dividend includes bonus;
Page 2
<PAGE>
entitled by transmission means, in relation to a share, entitled as a
consequence of the death or bankruptcy of a member or of another event giving
rise to a transmission of entitlement by operation of law;
executed includes, in relation to a document, execution under hand or under seal
or by another method permitted by law;
holder means, in relation to a share, the member whose name is entered in the
register as the holder of that share;
Independent Director means any director who is not designated by the MediaOne
Group or the TINTA Group in accordance with article 72 and is not a partner,
officer, employee of, or an individual having a material consultancy with, the
TINTA Group or the MediaOne Group;
Lesser Qualifying Interest means:
(a) 7.5% or more of the ordinary shares in issue for the time being; or (b)
following any Dilutive Issue, 5% or more of the ordinary shares in issue
for the time being provided immediately prior to such Dilutive Issue the
TINTA Group or the MediaOne Group or the SBC Group or the Cox Group or the
Vivendi Group (as relevant) held 7.5% or more of the ordinary shares in
issue for the time being;
For the foregoing purposes the percentage of ordinary shares held shall be
calculated on the assumption that all convertible preference shares then in
issue have been converted into ordinary shares and all ordinary shares issued
after the date of adoption of these articles pursuant or for the purposes of
share options shall be ignored;
London Stock Exchange means the International Stock Exchange of the United
Kingdom and the Republic of Ireland Limited;
MediaOne means MediaOne Group, Inc., formerly US WEST Inc., a corporation
incorporated under the laws of the State of Colorado, USA;
MediaOne Designated Director means any director who may be appointed from time
to time by a member of the MediaOne Group pursuant to article 72.2 provided that
a MediaOne Designated Director shall automatically cease so to be in the
following circumstances:
(a) upon members of the MediaOne Group ceasing to hold a Qualifying Interest
and to have the right to appoint two directors pursuant to article 72, but
retaining a Lesser Qualifying Interest and the right to appoint one
director, the MediaOne Designated Director last appointed to the board
shall cease so to be; and
Page 3
<PAGE>
(b) upon members of the MediaOne Group ceasing to hold a Qualifying Interest or
a Lesser Qualifying Interest and to have the right to appoint a director or
two directors pursuant to article 72, all MediaOne Designated Directors
shall cease so to be;
MediaOne Group means at any time MediaOne and/or MediaOne International and/or
either of their holding companies, and/or either of their subsidiary
undertakings and/or any subsidiary undertakings of either of their holding
companies for the time being, and a member of the MediaOne Group shall mean any
registered holder of shares beneficially owned by a person within such group,
provided always that (save in respect of TW Holdings) no person or group of
undertakings within the MediaOne Group shall also be within the TINTA Group. TW
Holdings shall be deemed to be a member of the MediaOne Group but only to the
extent of the number of Pro Rata Shares of the MediaOne Group. Wherever the
articles require or permit the calculation of a number or percentage of Shares
held by the MediaOne Group such number or percentage shall include the Pro Rata
Shares of the MediaOne Group;
MediaOne International means MediaOne International Holdings, Inc., formerly US
WEST International Holdings, Inc., a corporation incorporated under the laws of
the State of Delaware;
member means, unless the context otherwise requires, a member of the Company;
office means the registered office of the Company;
ordinary shares means ordinary shares in the capital of the Company; paid, paid
up and paid-up include credited as paid or paid up; Pro Rata Shares means, with
respect to any Shareholder Group at any time, the number of ordinary shares held
by TW Holdings attributable to such Shareholder Group being (a) in the case of
the MediaOne Group and the TINTA Group, the product rounded to the nearest whole
number of (x) the sum of the number of ordinary shares held by TW Holdings less
the number of such shares in which the Cox Group have a beneficial interest as
of such time, multiplied by (y) the aggregate percentage ownership interest in
TW Holdings, expressed as a decimal, held by members of such Shareholder Group
as of such date and (b) in the case of the Cox Group, the ordinary shares held
by TW Holdings in which it has a beneficial interest;
Qualifying Interest means:
(a) 15% or more of the ordinary shares in issue for the time being; or (b)
following any Dilutive Issue, 12.5% or more of the ordinary shares in issue
for the time being provided that immediately prior to such Dilutive Issue
the TINTA Group or the MediaOne Group (as relevant) held 15% or more of the
ordinary shares in issue for the time being;
Page 4
<PAGE>
For the foregoing purposes the percentage of ordinary shares held shall be
calculated on the assumption that all convertible preference shares then in
issue have been converted into ordinary shares and all ordinary shares issued
after the date of adoption of these articles pursuant to or for the purposes of
share options shall be ignored;
recognised person means a recognised clearing house or a nominee of a recognised
clearing house or of a recognised investment exchange which is designated for
the purposes of section 185(4) of the Act;
register means, unless the context otherwise requires, the register of members
kept pursuant to section 352 of the Act;
Relationship Agreement means the amended and restated agreement between the
Company and members of the MediaOne Group, the TINTA Group, the Cox Group and
the SBC Group dated as of 15 April 1998 which affects, inter alia, the rights of
the holders of convertible preference shares to convert such shares; SBC means
SBC Communications Inc., a corporation incorporated under the laws of Delaware;
SBC Designated Director means the director who may be appointed from time to
time by a member of the SBC Group pursuant to article 72.3 provided that a SBC
Designated Director shall automatically cease so to be upon the SBC Group
ceasing to have the power to appoint a director pursuant to article 72.3; SBC
Group means at any time SBC, its holding companies, and/or its subsidiary
undertakings and/or any subsidiary undertakings of its holding companies for the
time being and a member of the SBC Group shall mean any registered holder of
shares beneficially owned by a person within such group;
seal means, unless the context otherwise requires, the common seal of the
Company or any official or securities seal that the Company may have or may be
permitted to have under the Acts;
secretary means the secretary of the Company and includes any assistant or
deputy secretary and a person appointed by the board to perform the duties of
the secretary;
Shareholder Group means any of the Vivendi Group, the Cox Group, the SBC Group,
the TINTA Group or the MediaOne Group;
Shares means ordinary shares and/or convertible preference shares; TCI means
Tele-Communications, Inc., a corporation incorporated under the laws of the
State of Colorado, USA;
TINTA means Tele-Communications International, Inc., a corporation incorporated
under the laws of the State of Delaware, USA;
Page 5
<PAGE>
TINTA Designated Director means any director who may be appointed from time to
time by a member of the TINTA Group pursuant to article 72.1 provided that a
TINTA Designated Director shall automatically cease so to be in the following
circumstances:
(a) upon members of the TINTA Group ceasing to hold a Qualifying Interest and
the right to appoint two directors pursuant to article 72, but retaining a
Lesser Qualifying Interest and the right to appoint one director, the TINTA
Designated Director last appointed to the board shall cease so to be;
(b) upon members of the TINTA Group ceasing to hold a Qualifying Interest or a
Lesser Qualifying Interest and to have the right to appoint a director or
two directors pursuant to article 72, all TINTA Designated Directors shall
cease so to be;
TINTA Group means at any time TCI and/or TINTA and/or either of their holding
companies, and/or either of their subsidiary undertakings and/or any subsidiary
undertakings of either of their holding companies for the time being, and a
member of the TINTA Group shall mean any registered holder of shares
beneficially owned by a person within such group, provided always that (save in
respect of TW Holdings) no person or group of undertakings within the TINTA
Group shall also be within the MediaOne Group. TW Holdings shall be deemed to be
a member of the TINTA Group but only to the extent of the number of Pro Rata
Shares of TINTA Group. Wherever the articles require or permit the calculation
of a number or percentage of Shares held by the TINTA Group such number or
percentage shall include the Pro Rata Shares of the TINTA Group; TW Holdings
means TW Holdings, L.L.C., a Colorado limited liability company; Vivendi means
Vivendi S.A. formerly Compagnie Generale des Eaux, a company incorporated in
France whose principal office is at 52 rue d'Anjou, Paris 75008, France;
Vivendi Designated Director means the director who may be appointed from time to
time by a member of the Vivendi Group pursuant to article 72.5 provided that a
Vivendi Designated Director shall automatically cease so to be upon the Vivendi
Group ceasing to have the power to appoint a director pursuant to article 72.5;
and
Vivendi Group means at any time Vivendi, its holding companies, and/or its
subsidiary undertakings and/or any subsidiary undertakings of its holding
companies for the time being and a member of the Vivendi Group shall mean any
registered holder of shares beneficially owned by a person within such group.
1.2 Words and expressions contained in the articles which are not defined in
article 1.1 have, unless the contrary is indicated, the same meaning as in the
Act,
Page 6
<PAGE>
but excluding any statutory modification to the Act not in force at the date of
adoption of the articles.
1.3 Where an ordinary resolution of the Company is expressed to be required for
any purpose, a special or extraordinary resolution is also effective for that
purpose, and where an extraordinary resolution is expressed to be required for
any purpose, a special resolution is also effective for that purpose. 1.4 The
headings in the articles do not affect the interpretation of the articles.
Table A not to apply
2. No regulations contained in any statute or subordinate legislation, including
the regulations contained in Table A in the schedule to the Companies (Tables A
to F) Regulations 1985 (as amended), apply as the regulations or articles of
association of the Company.
Authorised Capital
3. The authorised share capital of the Company at the date of adoption of the
articles is (Pounds)[_____ ] divided into [_____ ] ordinary shares of 10p each
and [_____ ] convertible preference shares of 10p each.
Convertible preference shares
Income
4.1 The convertible preference shares shall confer upon the holders thereof the
right, subject to the provisions of the Act and of the articles, to receive out
of the profits of the Company available for distribution and resolved to be
distributed a dividend (the convertible dividend) of such amount per share as is
declared and paid from time to time in relation to each ordinary share, subject
to the convertible dividend to be paid at any one time not exceeding 20p per
share (net of any associated tax credit). Subject thereto, the rights of the
holders of the convertible preference shares to receive the convertible dividend
shall rank pari passu in all respects with the rights of the holders of the
ordinary shares in relation to dividends. The convertible dividend shall be paid
according to the amounts paid up or credited as paid up on the convertible
preference shares in respect of which the convertible dividend is to be paid.
The convertible dividend shall be payable at the same time as the corresponding
dividend payable in relation to the ordinary shares and it shall be paid to the
holders of the convertible preference shares on the same date by reference to
which the corresponding dividend on the ordinary shares is payable. Subject to
the foregoing, the convertible preference shares shall not confer upon the
holders any further right to participate in the profits of the Company available
for distribution.
Page 7
<PAGE>
Capital
4.2 In the event of a winding up of the Company or other return of capital
(except on conversion or purchase of the convertible preference shares) the
assets of the Company available for distribution among the members shall be
applied in the following manner and order of priority:
(a) firstly, in paying to the holders of the convertible preference shares
(other than any convertible preference shares in respect of which the right
of election referred to in article 4.15(b) shall have been duly exercised
(liquidation elected shares)) a sum equal to the capital paid up or
credited as paid up on the convertible preference shares held by them
respectively; and
(b) secondly, in paying any surplus to the holders of the ordinary shares and
the liquidation elected shares pari passu and rateably the amount paid up
or credited as paid up on such shares held by them respectively.
4.3 Subject to the foregoing, the convertible preference shares shall not confer
upon the holders any further right to participate in the assets of the Company
available for distribution among the members.
Purchase
4.4 Subject to the provisions of the Act and of the articles, the Company may at
any time purchase convertible preference shares (a) in the market, (b) by tender
(available to all holders of convertible preference shares alike) or (c) by
private treaty, in each case at a price (exclusive of expenses) which shall not
exceed, if the convertible preference shares are then listed on the London Stock
Exchange:
(a) the average of the middle market quotations for the convertible preference
shares (based on the Daily Official List of the London Stock Exchange)
during the period of ten business days immediately prior to the date of
such purchase; or
(b) in the case of a purchase on the London Stock Exchange, at the market price
thereof (provided that such market price is not more than 5 per cent. above
such average);
and, if not then listed on the London Stock Exchange, 110 per cent. of the
nominal amount of the convertible preference shares.
Conversion
4.5 The provisions of articles 4.6 to 4.16 and 4.25 below are subject to the
terms of the Relationship Agreement which governs and overrides in a number of
respects the terms on which the convertible preference shares shall be
converted. The Company shall have the discretion to agree with the parties to
the Relationship Agreement for the time being to any revision, amendment,
Page 8
<PAGE>
modification or termination of the provisions of the Relationship Agreement and
as regards the parties to the Relationship Agreement from time to time the
provisions of articles 4.6 to 4.16 and 4.25 shall be subject to the terms of the
Relationship Agreement as so revised, amended or modified.
4.6 Subject as hereinafter provided, each holder of convertible preference
shares shall be entitled at the time and in the manner set out in this article 4
to convert all or any of his convertible preference shares into fully paid
ordinary shares on the basis (subject to adjustment under article 4.13) of one
ordinary share for every one convertible preference share (the conversion rate).
4.7 Subject to the terms of the Relationship Agreement, for so long as the
ordinary shares are listed on the London Stock Exchange, a holder of any
convertible preference shares shall not be entitled to convert any of his
convertible preference shares into ordinary shares pursuant to this article 4 to
the extent that, immediately following such conversion, the percentage of the
issued ordinary share capital of the Company held by members of the public (as
defined by the Listing Rules of the London Stock Exchange) would fall below 25
per cent. Subject to the terms of the Relationship Agreement, where two or more
holders of convertible preference shares wish to effect such a conversion on the
same conversion date (as defined in article 4.8 below), the number of such
convertible preference shares to be converted shall be aggregated for the
purposes of determining whether the percentage of the issued ordinary share
capital held by members of the public (as defined by the Listing Rules of the
London Stock Exchange) would fall below 25 per cent. following the conversion of
all such shares, and if it would, the shares which may be so converted shall be
allocated pro rata according to the number of the shares originally sought to be
converted amongst the holders of such convertible preference shares. Subject to
the terms of the Relationship Agreement, the directors shall have absolute
discretion to determine whether ordinary shares are held by members of the
public (as defined by the Listing Rules of the London Stock Exchange) for the
purposes of this article 4.7 having due regard to the Listing Rules of the
London Stock Exchange.
4.8 Subject to the terms of the Relationship Agreement, the right to convert
shall be exercisable at any time by completing a notice of conversion in such
form as may from time to time be prescribed by the directors (a conversion
notice) and delivering the same to the registrars for the time being of the
Company (the registrars) together with such other evidence, if any, as the
directors may reasonably require to prove the title of the person exercising
such right. Subject to the terms of the Relationship Agreement, the date on
which the conversion notice is received by the registrars shall be the
conversion date. A conversion notice, once given, may not be withdrawn without
the consent in writing of the Company.
4.9 The ordinary shares arising on such conversion shall be credited as fully
paid and rank pari passu in all respects with the ordinary shares then in issue
and shall entitle the holder to all dividends and (unless any adjustment shall
have been made under article 4.14 in respect thereof) other distributions
payable on the ordinary shares after the conversion date. Any convertible
dividend due but not
Page 9
<PAGE>
paid on the relevant conversion date shall continue to be payable to the holder
of the relevant convertible preference shares converted.
4.10 Within 28 days after the relevant conversion date, the Company shall
forward to each holder, free of charge, the definitive certificate for the
appropriate amount of fully paid ordinary shares and a new certificate for any
unconverted convertible preference shares comprised in the certificate
surrendered by him and, if appropriate, a cheque in respect of any fractional
entitlement. In the meantime, transfers will be certified against the register.
4.11 The Company shall use all reasonable efforts to ensure that all the
ordinary shares arising from conversion are admitted to the Official List by the
London Stock Exchange.
4.12 Conversion of such convertible preference shares from time to time may be
effected in such manner as the directors shall from time to time determine
(subject to the provisions of the Act and of the articles) and, without
prejudice to the generality of the foregoing, may be effected by means of
consolidation and sub-division, in which case the requisite consolidation and
sub-division shall be effected pursuant to the authority given by the passing of
the resolution to create the convertible preference shares by consolidating into
one share all the convertible preference shares at the relevant conversion date
held by any holder or joint holders which are the subject of the relevant
conversion notice and sub-dividing such consolidated shares into shares of 10p
each (or such other nominal amount as may be appropriate as a result of any
consolidation and sub-division of ordinary shares), of which one share for each
10p nominal amount of the consolidated shares (or such other number of shares as
may be appropriate as a result of any adjustment pursuant to article 4.14) shall
be ordinary shares (and so in proportion for any other nominal amount of the
consolidated shares, fractional entitlements being disregarded) and the balance
of such shares (including any fractions) shall be non-voting deferred shares
having the rights set out in article 4.13.
4.13 In the case of a conversion effected by means of consolidation and
subdivision as provided in article 4.12, the non-voting deferred shares arising
as a result thereof shall, on a return of assets in a winding up, entitle the
holder only to the repayment of 1p in respect of his entire holding thereof and
shall not entitle the holder to the payment of any dividend nor to receive
notice of or attend or vote at any general meeting of the Company. Such
conversion shall be deemed to confer irrevocable authority on the Company, at
any time thereafter, to appoint any person to execute on behalf of the holders
of such shares a transfer thereof, and/or an agreement to transfer the same, to
such person as the Company may determine as custodian thereof and/or purchase
the same (in accordance with the provisions of English law and the articles) in
any such case for not more than 1p for all the said shares without obtaining the
sanction of the holder or holders thereof and, pending such transfer and/or
purchase, to retain the certificate for such shares. Subject to the terms of the
Relationship Agreement, any allotment of ordinary shares pursuant to this
article 4 shall be made not later than 14 days after the relevant conversion
date.
Page 10
<PAGE>
4.14 Upon any consolidation and/or sub-division of ordinary shares, the
conversion rate shall be adjusted by an amount which in the opinion of the
Company's auditors is fair and reasonable to maintain the rights to convert.
Holders of convertible preference shares shall be notified within 28 days of any
change in the basis of conversion.
4.15 So long as any convertible preference shares remain capable of being
converted into ordinary shares then:
(a) if the Company makes any pre-emptive offer to holders of its ordinary
shares, or of any other shares or securities, or if any other offer or
invitation (not being an offer falling within article 4.15(c)) is made or
extended to the holders of the ordinary shares, the Company shall, so far
as it is able, procure that a like offer or invitation is made or extended
(which could be a like offer of further convertible preference shares as
opposed to further ordinary shares) at the same time to each holder of
convertible preference shares as if his conversion rights had (subject to
article 4.7) been exercisable and exercised in full and as if the
conversion date for such conversion had been immediately prior to the
record date for such offer or invitation at the conversion rate then
applicable;
(b) if a resolution for voluntary winding-up of the Company is passed or a
winding-up order is made by the court in relation to the Company, the
Company shall forthwith give notice thereof in writing to all holders of
convertible preference shares, and each such holder of convertible
preference shares shall be entitled within 42 days after the date of the
resolution for voluntary winding-up of the Company or (as the case may be)
after the date of the winding-up order, by notice in writing to the Company
to elect to be treated as if his conversion rights had been exercisable and
had been exercised in full prior to such date (for which purposes the
provisions of article 4.7 will not apply) and as if the conversion date for
such conversion had been immediately prior to such date, and, in that
event, he shall be entitled to be paid in satisfaction of the amount due in
respect of such of his convertible preference shares as are to be treated
as converted a sum equal to the amount to which he would have become
entitled in such liquidation if he had been the holder of the ordinary
shares to which he would have become entitled by virtue of such conversion.
At the expiration of the said period of 42 days, any outstanding
convertible preference shares shall cease to be capable of conversion; and
(c) if an offer is made to the holders of ordinary shares or all such
shareholders other than the offeror and/or any associate of the offeror (as
defined in section 430E of the Act) to acquire the whole or any part of the
issued ordinary shares or if any person proposes a scheme of arrangement
with regard to such acquisition and the Company becomes aware (in either
case) that the right to cast more than 50 per cent. of the votes which may
ordinarily be cast on a poll at a general meeting of the
Page 11
<PAGE>
Company has or will become vested in the offeror and/or such associates as
aforesaid, the Company shall give written notice thereof (which shall
include notice of all or any prior adjustments to the rate of conversion
made pursuant hereto) to all holders of convertible preference shares
within 28 days of it becoming so aware and each such holder shall be
entitled within the period of 42 days from the date of such notice to
convert any or all of his convertible preference shares into fully paid
ordinary shares on the basis and in the manner specified above except that
the conversion date in respect of any particular convertible preference
share shall be the day on which the Company shall have received a duly
completed conversion notice in relation to that share as adjusted, if
appropriate, hereunder and that the provisions of article 4.7 will not
apply.
4.16 If any fractions of ordinary shares shall arise on conversion of
convertible preference shares, the shares representing fractions may be dealt
with by the directors, on behalf of the holders thereof, as they think fit, but,
in particular, the shares representing fractions may (if arrangements can be so
made) be sold at the best price reasonably obtainable and the net proceeds of
sale distributed pro rata among the persons entitled thereto unless such net
proceeds amount to less than (Pounds)3 in respect of any one holding in which
case they will not be so distributed but will be retained for the benefit of the
Company. For the purpose of implementing the provisions of this article 4.16,
the directors may appoint a person to execute transfers or renunciations on
behalf of persons entitled to any such fractions and generally may make all
arrangements which appear to the directors necessary or appropriate for the
settlement and disposal of fractional entitlements.
Voting
4.17 The convertible preference shares shall confer on the holders the right to
receive notice of and to attend all general meetings of the Company but shall
only confer the right to speak or vote at any such meeting if the business of
the meeting includes the consideration of a resolution for winding up the
Company or any resolution modifying, varying or abrogating any of the rights or
privileges attaching to the convertible preference shares (in either of which
cases such holders shall be entitled to vote only on such resolution). 4.18 Upon
any resolution upon which the holders of the convertible preference shares are
entitled to vote, each such holder present in person shall, on a show of hands,
have one vote and, on a poll, each such holder present in person or by its duly
appointed representative or by proxy shall have one vote in respect of each
ordinary share which the convertible preference share(s) registered in the name
of such holder would have been converted into had conversion taken place at the
conversion rate prevailing immediately prior to the date of the notice convening
the general meeting at which the resolution is proposed and subject to the
provisions of article 4.7 not applying to any such deemed conversions.
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Restrictions
4.19.1 So long as any convertible preference shares remain capable of being
converted into ordinary shares the following provisions shall apply, unless the
Company shall have obtained the consent (the right to give or withhold such
consent being a class right attaching to the convertible preference shares) in
writing of the holder or holders of three-fourths in nominal value of the
convertible preference shares then in issue or the sanction of an extraordinary
resolution passed at a separate meeting of the holders of the convertible
preference shares then in issue validly held in accordance with the provisions
of the articles:
4.19.2 The Company shall not:
(a) capitalise profits or reserves except by way of capitalisation issue made
available only to the holders of ordinary shares in the form of fully paid
ordinary shares and to the holders of convertible preference shares in the
form of fully paid convertible preference shares (and, if there shall be
outstanding pursuant to article 4.19.3 any equity share capital of a class
other than ordinary shares, to holders of share capital of that class in
the form of fully paid equity share capital of that class or of fully paid
ordinary shares); or
(b) make an offer or extend an invitation to the holders of ordinary shares or
allot any shares in pursuance of a capitalisation issue without also making
the offer or extending the invitation to the holders of any convertible
preference shares who have, on or prior to the date of the making of the
offer or extension of the invitation, delivered a conversion notice to the
registrars (provided such notice is not then withdrawn); or
(c) modify, vary or abrogate the rights attaching to the ordinary shares or any
other class of shares.
4.19.3 The Company shall not permit any equity share capital (as defined in the
Act) to be in issue which is not in all respects uniform with a class of shares
of the Company in issue or authorised to be issued on the date of adoption of
the articles save:
(a) as to the date from which the equity share capital shall rank for dividend;
or
(b) for equity share capital issued in connection with or pursuant to any
employees' share scheme (as defined in the Act); or
(c) for equity share capital which has attached thereto rights as to dividend,
capital and voting which are in no respect more favourable than those
attached to a class of shares of the Company in issue or authorised to be
issued on the date of adoption of the articles; or
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(d) for equity share capital issued pursuant to an offer or invitation which
is made or extended to the holders of convertible preference shares
(pursuant to article 4.15(a)); or
(e) for shares which are only comprised in the Company's equity share
capital because as regards capital such shares carry a right to
participate beyond a specified amount in a distribution made while such
shares remain capable of conversion into ordinary shares by the holders
thereof as if the same had been converted.
4.19.4 No resolution shall be passed for reducing the share capital of the
Company (without its replacement by similar issued share capital of the Company)
or any uncalled liability thereon or the amount, if any, for the time being
standing to the credit of any share premium account or capital redemption
reserve in any manner for which the confirmation of the court would be required
pursuant to the Act.
4.19.5 The Company shall not do any act or thing resulting in an adjustment of
the conversion rate if in consequence such rate would involve the issue of
ordinary shares at a discount.
4.19.6 The Company shall not change its accounting reference date unless it
shall also make such consequential changes (if any) in the dividend and
conversion rights attaching to the convertible preference shares as the
directors, in their absolute discretion, may think fair and reasonable to avoid
prejudicing such rights; the Company shall forthwith give written notice of any
such changes to the holders of the convertible preference shares.
Obligations
4.209 The Company shall procure that at all times there shall be sufficient
unissued ordinary share capital available for the purposes of effecting
conversion of all outstanding convertible preference shares.
4.210 The Company shall send to each holder of convertible preference shares a
copy of every document despatched to the holders of ordinary shares
contemporaneously with such despatch.
Issue of further shares
4.22 No further share capital of the Company ranking as regards participation in
the profits or assets of the Company in priority to the convertible preference
shares shall be created or issued without the consent in writing of the holder
or holders of three-fourths in nominal value of the convertible preference
shares then in issue or the sanction of an extraordinary resolution passed at a
separate meeting of the holders of the convertible preference shares then in
issue validly held in accordance with the provisions of the articles.
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4.23 Subject to the provisions of article 4.18, the Company may from time to
time create and issue further shares ranking as regards participation in the
profits and assets of the Company pari passu with the convertible preference
shares and so that any such further shares may either carry as regards
participation in the profits and assets of the Company, rights and restrictions
identical in all respects with the convertible preference shares or rights and
restrictions differing therefrom (provided they are not more favourable) in any
respect including, but without prejudice to the generality of the foregoing, (a)
as to the rate or amount of dividend payable thereon, (b) as to the date from
which they shall rank for dividend and/or the dates for payment of dividend
thereon, (c) as to the amount of any premium on a return of assets (whether on a
winding-up of the Company or otherwise), (d) as to redemption or (e) as to the
rate of conversion into ordinary shares.
Fully paid shares
4.24 No convertible preference shares shall be issued otherwise than fully paid
or credited as fully paid.
General
4.25 Subject to the terms of the Relationship Agreement, if any date specified
for the conversion of any convertible preference shares pursuant to this article
4 would otherwise fall on a day which is not a business day, such date shall be
the next following business day.
4.26 The quorum for any meeting of the holders of the convertible preference
shares shall be two holders of convertible preference shares present in person
or by proxy.
Share Capital
Allotment
5.1 Subject to the Acts and relevant authority of the Company in general meeting
required by the Acts, the board has general and unconditional authority to allot
(with or without conferring rights of renunciation), grant options over, offer
or otherwise deal with or dispose of unissued shares (whether forming part of
the original or any increased capital), or rights to subscribe for or convert
any security into shares, to such persons, at such times and on such terms and
conditions as the board may decide but no share may be issued at a discount.
5.2 The board may at any time after the allotment of a share but before a person
has been entered in the register as the holder of the share recognise a
renunciation of the share by the allottee in favour of another person and may
grant to an allottee a right to effect a renunciation on the terms and
conditions the board thinks fit.
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Power to attach rights
6. Subject to the Acts and to the rights attached to existing shares, new shares
may be allotted or issued with or have attached to them such special rights or
restrictions as the Company may by ordinary resolution decide, or, if no
resolution is passed, as the board may decide.
Redeemable shares
7. Subject to the Acts and to the rights attached to existing shares, shares may
be issued on terms that they are to be redeemed or, at the option of the Company
or the holder, are liable to be redeemed.
Variation of rights
8.1 Subject to the Acts, the rights attached to a class of shares may be varied
whether or not the Company is being wound up (i) in such manner (if any) as may
be provided by those rights, or (ii) in the absence of any such provision,
either with the consent in writing of the holders of at least three-fourths of
the nominal amount of the issued shares of that class or with the sanction of an
extraordinary resolution passed at a separate meeting of the holders of the
issued shares of that class validly held in accordance with the articles, but
not otherwise.
8.2 The rights attached to a class of shares are not, unless otherwise expressly
provided in the rights attaching to those shares, deemed to be varied by the
creation or issue of further shares ranking pari passu with or subsequent to
them or by the purchase or redemption by the Company of its own shares in
accordance with the Acts and article 39.
Commission
9. The Company may exercise all powers conferred or permitted by the Acts of
paying commission or brokerage. Subject to the Acts, commission or brokerage may
be satisfied by the payment of cash or the allotment of fully- or partly- paid
shares or the grant of an option to call for an allotment of shares or by any
combination of these methods.
Trusts not recognised
10. Except as ordered by a court of competent jurisdiction or as required by
law, the Company shall not recognise a person as holding a share on trust and is
not bound by or otherwise compelled to recognise (even if it has notice of it)
an equitable, contingent, future, partial or other claim to or interest in a
share other than an absolute right in the holder to the whole of the share.
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Share Certificates
Right to certificate
11.1 Subject to the Acts and the requirements of the London Stock Exchange, a
person (except a recognised person in respect of whom the Company is not
required by law to complete and have ready for delivery a certificate) on
becoming the holder of a share is entitled, unless the terms of issue of the
shares provide otherwise, without charge, to one certificate for all the shares
of a class registered in his name or, in the case of shares of more than one
class being registered in his name, to a separate certificate for each class of
shares.
11.2 Where a member (other than a recognised person) transfers part of his
shares comprised in a certificate he is entitled, without charge, to one
certificate for the balance of shares retained by him.
11.3 The Company is not bound to issue more than one certificate for shares held
jointly by two or more persons and delivery of a certificate to one joint holder
is sufficient delivery to all joint holders.
11.4 A certificate shall specify the number and class and the distinguishing
numbers (if any) of the shares in respect of which it is issued and the amount
paid up on the shares. It shall be issued under a seal, which may be affixed to
or printed on it, or in such other manner as the board may approve, having
regard to the terms of issue and the requirements of the London Stock Exchange.
Replacement certificates
12.1 Where a member holds two or more certificates for shares of one class, the
board may at his request, on surrender of the original certificates and without
charge, cancel the certificates and issue a single replacement certificate. 12.2
At the request of a member, the board may cancel a certificate and issue two or
more in its place (representing shares in such proportions as the member may
specify), on surrender of the original certificate and on payment of such
reasonable sum as the board may decide.
12.3 Where a certificate is worn out, defaced, lost or destroyed, the board may
cancel it and issue a replacement certificate on such terms as to provision of
evidence and indemnity (with or without security) and to payment of any
exceptional out-of-pocket expenses incurred by the Company in the investigation
of that evidence and the preparation of that indemnity and security as the board
may decide, and on surrender of the original certificate (where it is worn out
or defaced).
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Lien
Company's lien on shares not fully paid
13.1 The Company has a first and paramount lien on every share (other than a
fully-paid share) registered in the name of a member (whether solely or jointly
with another person) for an amount payable in respect of the share, whether the
due date for payment has arrived or not. The lien applies to all dividends from
time to time declared or other amounts payable in respect of the share.
13.2 The board may either generally or in a particular case declare a share to
be wholly or partly exempt from the provisions of this article 13. Unless
otherwise agreed with the transferee, the registration of a transfer of a share
operates as a waiver of the Company's lien (if any) on that share. Enforcement
of lien by sale
14.1 For the purpose of enforcing the lien, the board may sell shares subject to
the lien in such manner as it may decide, if the due date for payment of the
relevant amounts has arrived and payment is not made within 14 clear days after
the service of a notice in writing (stating, and demanding payment of, the
amounts and giving notice of the intention to sell in default of payment) on the
member concerned (or to a person entitled by transmission to the shares).
14.2 To give effect to a sale, the board may authorise a person to execute an
instrument of transfer of shares in the name and on behalf of the holder of or
the person entitled by transmission to the shares to the purchaser or his
nominee. The purchaser is not bound to see to the application of the purchase
money and the title of the transferee is not affected by an irregularity in or
invalidity of the proceedings connected with the sale.
Application of proceeds of sale
15. The net proceeds of a sale effected under article 14, after payment of the
costs of the sale, shall be applied by the Company in or towards satisfaction of
the amount in respect of which the lien exists. Any residue shall (on surrender
to the Company for cancellation of the certificate for the shares sold, or the
provision of an indemnity (with or without security) as to any lost or destroyed
certificate required by the board and subject to a like lien for amounts not
presently payable as existed on the shares before the sale) be paid to the
member or a person entitled by transmission to the shares immediately before the
sale.
Calls on Shares
Calls
16. Subject to the terms of issue, the board may make calls on members in
respect of amounts unpaid on the shares or a class of shares held by them
respectively (whether in respect of nominal value or a premium) and not payable
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on a date fixed by or in accordance with the terms of issue. Each member shall
(on receiving at least 14 clear days' notice specifying when and where payment
is to be made) pay to the Company the amount called as required by the notice. A
call may be made payable by instalments and may, at any time before receipt by
the Company of an amount due, be revoked or postponed in whole or in part as the
board may decide. A call is deemed made at the time when the resolution of the
board authorising it is passed. A person on whom a call is made remains liable
to pay the amount called despite the subsequent transfer of the share in respect
of which the call is made. The joint holders of a share are jointly and
severally liable for payment of a call in respect of that share.
Power to differentiate
17. The board may make arrangements on the allotment or issue of shares for a
difference between the allottees or holders in the amounts and times of payment
of a call on their shares.
Interest on calls
18. If the whole of the amount called is not paid on or before the date fixed
for payment, the person by whom it is payable shall pay interest on the unpaid
amount at such rate as may be fixed by the terms of allotment of the share or,
if no rate is fixed, at such rate (not exceeding, without the sanction of the
Company given by ordinary resolution, 20 per cent. per annum) as the board may
decide, from and including the date fixed for payment until but excluding the
date of actual payment and all costs, charges and expenses incurred by the
Company by reason of the non-payment. The board may waive payment of the
interest in whole or in part.
Payment in advance
19. The board may, if it thinks fit, receive from a member all or part of the
amounts uncalled and unpaid on shares held by him. A payment in advance of calls
extinguishes to the extent of the payment the liability of the member on the
shares in respect of which it is made. The Company may pay interest on the
amount paid in advance, or on so much of it as from time to time exceeds the
amount called on the shares in respect of which the payment in advance has been
made, at such rate (not exceeding, without the sanction of the Company given by
ordinary resolution, 20 per cent. per annum) as the board may decide.
Amounts due on allotment treated as calls
20. An amount which becomes payable in respect of a share on allotment or on a
date fixed pursuant to the terms of allotment (whether in respect of nominal
value or a premium) or as an instalment of a call is deemed to be a call. In
case of non-payment, the provisions of the articles as to payment of interest
and costs, charges and expenses, forfeiture or otherwise apply as if that amount
has become payable by virtue of a call.
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Forfeiture
Notice if call not paid
21. If a member fails to pay the whole of a call or an instalment of a call on
or before the date fixed for payment, the board may serve notice on the member
or on a person entitled by transmission to the share in respect of which the
call was made demanding payment, on a date not less than 14 clear days from the
date of the notice, of the amount of the call outstanding and any interest that
may have accrued on it and all costs, charges and expenses incurred by the
Company by reason of the non-payment. The notice shall state (i) the place where
payment is to be made, and (ii) that if the notice is not complied with the
share in respect of which the call was made will be liable to be forfeited.
Forfeiture for non-compliance
22. If the notice referred to in article 21 is not complied with, a share in
respect of which it is given may, at any time before payment required by the
notice has been made, be forfeited by a resolution of the board. The forfeiture
includes all dividends declared or other amounts payable in respect of the
forfeited share and not paid before the forfeiture.
Notice after forfeiture
23. When a share has been forfeited, the Company shall serve notice of the
forfeiture on the person who was before forfeiture the holder of the share or
the person entitled by transmission to the share but no forfeiture is
invalidated by an omission to give notice. An entry of the fact and date of
forfeiture shall be made in the register.
Disposal of forfeited shares
24.1 Until cancelled in accordance with the Acts, a forfeited share and all
rights attaching to it are deemed to be the property of the Company and may be
sold, re-allotted or otherwise disposed of either to the person who was before
the forfeiture the holder or to another person, on such terms and in such manner
as the board may decide. Where for this purpose a forfeited share is to be
transferred, the board may authorise a person to execute an instrument of
transfer of the share to the transferee. The Company may receive the
consideration (if any) for the share on its disposal and may register the
transferee as the holder of the share.
24.2 The board may before a forfeited share has been cancelled, sold, re-
allotted or otherwise disposed of annul the forfeiture on such conditions as it
thinks fit.
24.3 A statutory declaration by a director or the secretary that a share has
been forfeited on the date stated in the declaration is conclusive evidence of
the facts stated in the declaration against all persons claiming to be entitled
to the share. The declaration (subject if necessary to the execution of an
instrument of transfer) constitutes good title to the share and the person to
whom the share is disposed of
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is not bound to see to the application of the consideration (if any). His title
to the share is not affected by an irregularity in or invalidity of the
proceedings connected with the forfeiture or disposal.
Arrears to be paid notwithstanding forfeiture
25. A person whose share has been forfeited ceases on forfeiture to be a member
in respect of it and shall surrender to the Company for cancellation the
certificate for the forfeited share or shares. He remains liable to pay, and
shall immediately pay to the Company, all calls, interest, costs, charges and
expenses owing in respect of the share at the time of forfeiture, with interest,
from the time of forfeiture until payment, at such rate as may be fixed by the
terms of allotment of the share or, if no rate is fixed, at the rate (not
exceeding, without the sanction of the Company given by ordinary resolution, 20
per cent. per annum) as the board may decide. The board may if it thinks fit
enforce payment without allowance for the value of the share at the time of
forfeiture or for consideration received on disposal.
Surrender
26. The board may accept the surrender of a share liable to be forfeited and in
that case references in the articles to forfeiture include surrender.
Untraced Shareholders
Power of sale
27.1 The Company is entitled to sell a share if:
(a) during a period of not less than 12 years before the date of publication
of the advertisements referred to in article 27.1(c) (or, if published on
two different dates, the first date) (the relevant period) the Company has
paid at least three cash dividends (whether interim or final);
(b) throughout the relevant period no cheque, order or warrant sent by the
Company by post in a pre-paid envelope addressed to the holder of the
share, or to the person entitled by transmission to the share, at his
address on the register or other last-known address given by the member or
other person has been cashed, and no communication has been received by
the Company from the member or person entitled by transmission (in his
capacity as member or person entitled by transmission);
(c) on expiry of the relevant period the Company has given notice of its
intention to sell the share by advertisement in a leading daily newspaper
and in a newspaper circulating in the area of the address referred to in
article 27.1(b);
(d) the Company has not during a further period of three months after the date
of the advertisements referred to in article 27.1(c) (or the later
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advertisement if the advertisements are published on different dates) and
before the exercise of the power of sale received a communication from the
member or person entitled by transmission (in his capacity as member or
person entitled by transmission); and
(e) the Company has first given notice in writing to the London Stock Exchange
of its intention to sell the share.
27.2 In addition to the power of sale conferred by article 27.1, if during the
relevant period or a further period ending on the date when all the requirements
of article 27.1(a) to (e) have been satisfied an additional share has been
issued in right of that held at the beginning of, or previously so issued
during, those periods and all the requirements of article 27.1(a) to (e) have
been satisfied in respect of the additional share, the Company is entitled to
sell the additional share.
27.3 To give effect to a sale pursuant to article 27.1 or 27.2, the board may
authorise a person to execute an instrument of transfer of the share in the name
and on behalf of the holder of, or the person entitled by transmission to, the
share to the purchaser or his nominee. The purchaser is not bound to see to the
application of the purchase money and the title of the transferee is not
affected by an irregularity or invalidity in the proceedings connected with the
sale of the share.
Application of proceeds of sale
28. The Company shall account to the member or other person entitled by
transmission to the share for the net proceeds of sale by carrying all amounts
received on sale to a separate account. The Company is deemed to be a debtor and
not a trustee in respect of those amounts for the member or other person.
Amounts carried to the separate account may either be employed in the business
of the Company or invested as the board may think fit. No interest is payable on
those amounts and the Company is not required to account for money earned on
them.
Transfer of Shares
Form of transfer
29. A member may transfer all or any of his shares by instrument of transfer in
writing in any usual form or in another form approved by the board, and the
instrument shall be executed by or on behalf of the transferor and (in the case
of a transfer of a share which is not fully paid) by or on behalf of the
transferee. The transferor is deemed to remain the holder of the share until the
name of the transferee is entered in the register in respect of it. Right to
refuse registration
30.1 Subject to articles 68 and 69, the board may, in its absolute discretion
and (except where the reason (or one of the reasons) for refusal is that the
transfer will
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give rise to a Notifiable Situation within the meaning of article 69.1, in which
circumstances notice shall be given to the transferor containing a statement of
the kind described in article 69.4) without giving a reason, refuse to register
the transfer of a share or renunciation of a renounceable letter of allotment
unless all of the following conditions are satisfied:
(a) it is in respect of a share on which the Company has no lien;
(b) it is in respect of only one class of shares;
(c) it is in favour of a single transferee or renouncee or not more than four
joint transferees or renouncees;
(d) it is duly stamped (if required);
(e) it is delivered for registration to the office or such other place as the
board may decide, accompanied by the certificate for the shares to which it
relates (except in the case of a transfer by a recognised person where a
certificate has not been issued, or in the case of a renunciation) and such
other evidence as the board may reasonably require to prove the title of
the transferor or person renouncing and the due execution by him of the
transfer or renunciation or, if the transfer or renunciation is executed by
some other person on his behalf, the authority of that person to do so;
(f) it is not a transfer which is not to be registered pursuant to article
68.1(b)(ii)(B);
(g) it will not give rise to a Notifiable Situation within the meaning of
article 69.1; and
(h) a Disposal Notice within the meaning of article 69.6 has not been served in
respect of that share or has been served but has been withdrawn (unless the
transfer in question is to complete a Required Disposal of that share
within the meaning of article 69.1).
30.2 The board may, in its absolute discretion and without giving any reason,
refuse to register the transfer of a share which is not fully paid, provided
that the refusal does not prevent dealings in shares in the Company from taking
place on an open and proper basis.
30.3 If the board refuses to register the transfer of a share it shall, within
two months after the date on which the transfer was lodged with the Company,
send notice of the refusal to the transferee. An instrument of transfer which
the board refuses to register shall (except in the case of suspected fraud) be
returned to the person depositing it. All instruments of transfer which are
registered may, subject to article 142, be retained by the Company.
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Fees on registration
31. No fee may be charged by the Company for registering the transfer of a share
or the renunciation of a renounceable letter of allotment or other document
relating to or affecting the title to a share or the right to transfer it or for
making any other entry in the register.
Suspension of registration and closing of register
32. The registration of transfers may be suspended at such times and for such
period (not exceeding 30 days in any year) as the board may decide and either
generally or in respect of a particular class of shares.
Transmission of Shares
On death
33.1 The Company may recognise only the personal representatives of a deceased
member as having title to a share held by that member alone or to which he alone
was entitled. In the case of a share held jointly by more than one person, the
Company may recognise only the survivor or survivors as being entitled to it.
33.2 Nothing in the articles releases the estate of a deceased member from
liability in respect of a share which has been solely or jointly held by him.
Election of person entitled by transmission
34.1 A person becoming entitled by transmission to a share may, on production of
any evidence the board may require, elect either to be registered as a member or
to have a person nominated by him registered as a member.
34.2 If he elects to be registered himself, he shall give notice to the Company
to that effect. If he elects to have another person registered, he shall execute
an instrument of transfer of the share to that person. All the provisions of the
articles relating to the transfer of shares apply to the notice or instrument of
transfer (as the case may be) as if it were an instrument of transfer executed
by the member and his death, bankruptcy or other event giving rise to a
transmission of entitlement had not occurred.
34.3 The board may give notice requiring a person to make the election referred
to in article 34.1. If that notice is not complied with within 60 days, the
board may withhold payment of all dividends and other amounts payable in respect
of the share until notice of election has been made.
Rights on transmission
35. Where a person becomes entitled by transmission to a share, the rights of
the holder in relation to that share cease. The person entitled by transmission
may, however, give a good discharge for dividends and other amounts payable in
respect of the share and, subject to articles 34 and 125, has the rights to
which he would
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be entitled if he were the holder of the share. The person entitled by
transmission is not, however, before he is registered as the holder of the
share, entitled in respect of it to receive notice of or exercise rights
conferred by membership in relation to meetings of the Company or a separate
meeting of the holders of a class of shares.
Alteration of Share Capital
Increase, consolidation, sub-division and cancellation
36. The Company may by ordinary resolution:
(a) increase its share capital by a sum to be divided into shares of an amount
prescribed by the resolution;
(b) consolidate and divide all or any of its share capital into shares of a
larger amount than its existing shares;
(c) subject to the Acts, sub-divide all or any of its shares into shares of a
smaller amount and may by the resolution decide that the shares resulting
from the sub-division have amongst themselves a preference or other
advantage or be subject to a restriction; and
(d) cancel shares which, at the date of the passing of the resolution, have not
been taken or agreed to be taken by a person and diminish the amount of its
share capital by the amount of the shares so cancelled.
Fractions
37. If, as the result of consolidation and division or sub-division of shares,
members become entitled to fractions of a share, the board may on behalf of the
members deal with the fractions as it thinks fit. In particular, the board may:
(a) sell fractions of a share to a person (including, subject to the Acts, to
the Company) for the best price reasonably obtainable and distribute the
net proceeds of sale in due proportion amongst the persons entitled (except
that if the amount due to a person is less than (Pounds)3, or such other
sum as the board may decide, the sum may be retained for the benefit of the
Company). To give effect to a sale the board may authorise a person to
execute an instrument of transfer of shares to the purchaser or his nominee
and may cause the name of the purchaser or his nominee to be entered in the
register as the holder of the shares. The purchaser is not bound to see to
the application of the purchase money and the title of the transferee to
the shares is not affected by an irregularity or invalidity in the
proceedings connected with the sale; or
(b) subject to the Acts, issue to a member credited as fully paid by way of
capitalisation the minimum number of shares required to round up his
holding of shares to a number which, following consolidation and division
or sub-division, leaves a whole number of shares (such issue
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being deemed to have been effected immediately before consolidation or
subdivision, as the case may be). The amount required to pay up those
shares may be capitalised as the board thinks fit out of amounts standing
to the credit of reserves (including a share premium account, capital
redemption reserve and profit and loss account), whether or not available
for distribution, and applied in paying up in full the appropriate number
of shares. A resolution of the board capitalising part of the reserves has
the same effect as if the capitalisation had been declared by ordinary
resolution of the Company pursuant to article 132. In relation to the
capitalisation the board may exercise all the powers conferred on it by
article 132 without an ordinary resolution of the Company.
Reduction of capital
38. Subject to the Acts and to the rights attached to existing shares, the
Company may by special resolution reduce its share capital, capital redemption
reserve, share premium account or other undistributable reserve in any way.
Purchase of own shares
39. Subject to the Acts, the Company may purchase shares of any class (including
redeemable shares) in its own capital in any way. If at the date proposed for
approval of the proposed purchase there are in issue shares of a class entitling
the holders to convert into shares of another class, no purchase may take place
unless either:
(a) it has been sanctioned by an extraordinary resolution passed at a separate
meeting (or meetings if there are two or more classes) of the holders of
that class of convertible shares; or
(b) the terms of issue of such convertible shares include provisions permitting
the Company to purchase its own shares.
General Meetings
Annual general meeting
40. The Company shall hold annual general meetings, which shall be convened by
the board, in accordance with the Acts.
Extraordinary general meeting
41. All general meetings of the Company other than annual general meetings are
called extraordinary general meetings.
Convening of extraordinary general meetings
42. The board may convene an extraordinary general meeting whenever it thinks
fit. The board must convene an extraordinary general meeting immediately on
receipt of a requisition from members in accordance with the Acts and in
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default a meeting may be convened by requisitionists as provided in the Acts. At
a meeting convened on a requisition or by requisitionists no business may be
transacted except that stated by the requisition or proposed by the board. An
extraordinary general meeting may also be convened in accordance with article
95.
Length and form of notice
43.1 An annual general meeting and an extraordinary general meeting called for
the passing of a special resolution shall be called by not less than 21 clear
days' notice. All other extraordinary general meetings shall be called by not
less than 14 clear days' notice.
43.2 Subject to the Acts, and although called by shorter notice than that
specified in article 43.1, a general meeting is deemed to have been duly called
if it is so agreed:
(a) in the case of an annual general meeting, by all the members entitled to
attend and vote at the meeting; and
(b) in the case of another meeting, by a majority in number of the members
having a right to attend and vote at the meeting, being a majority together
holding not less than 95 per cent. in nominal value of the shares giving
that right.
43.3 The notice of meeting shall specify:
(a) whether the meeting is an annual general meeting or an extraordinary
general meeting;
(b) the place, the date and the time of the meeting;
(c) in the case of special business, the general nature of that business;
(d) if the meeting is convened to consider a special or an extraordinary
resolution, the intention to propose the resolution as such; and
(e) with reasonable prominence, that a member entitled to attend and vote may
appoint one or more proxies to attend and, on a poll, vote instead of him
and that a proxy need not also be a member.
43.4 The notice of meeting shall be given to the members (other than any who,
under the provisions of the articles or the terms of issue of shares, are not
entitled to receive notice), to the directors and to the auditors.
Omission to send notice
44. The accidental omission to send a notice of meeting or, in cases where it is
sent out with the notice, an instrument of proxy to, or the non-receipt of
either by,
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a person entitled to receive it does not invalidate the proceedings at a general
meeting.
Special business
45. All business transacted at a general meeting is deemed special except the
following business at an annual general meeting:
(a) the receipt and consideration of the annual accounts, the directors' report
and auditors' report on those accounts;
(b) the appointment of directors and other officers in place of those retiring
by rotation or otherwise ceasing to hold office;
(c) the declaration of dividends;
(d) the appointment of the auditors (when special notice of the resolution for
appointment is not required by the Acts) and the fixing, or determination
of the manner of the fixing, of their remuneration; and
(e) the renewal of the authorities of the Company in general meeting required
by the Acts and the articles in relation to the allotment of shares.
Proceedings at General Meetings
Quorum
46.1 No business may be transacted at a general meeting unless a quorum is
present at the start of the meeting. The absence of a quorum does not prevent
the appointment of a chairman in accordance with the articles, which is not
treated as part of the business of the meeting.
46.2 The quorum for a general meeting is for all purposes two members present in
person or by proxy and entitled to vote.
Procedure if quorum not present
47.1 If a quorum is not present within five minutes (or such longer period as
the chairman in his absolute discretion may decide) from the time fixed for the
start of the meeting or if during the meeting a quorum ceases to be present, the
meeting, if convened by or on the requisition of members, is dissolved. In any
other case it stands adjourned to such time (being not less than 14 days nor
more than 28 days later) and place as the chairman (or, in default, the board)
decides.
47.2 At an adjourned meeting the quorum is two members present in person or by
proxy and entitled to vote. If a quorum is not present within five minutes (or
such longer period as the chairman in his absolute discretion may decide) from
the time fixed for the start of the meeting or if during the meeting a quorum
ceases to be present, the adjourned meeting is dissolved.
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47.3 The Company shall give not less than seven clear days' notice of any
meeting adjourned for the lack of a quorum and the notice shall state the quorum
requirement.
Chairman
48. The chairman (if any) of the board or, in his absence, the deputy chairman
(if any) shall preside as chairman at a general meeting. If there is no chairman
or deputy chairman, or if at a meeting neither is present within five minutes
after the time fixed for the start of the meeting, or neither is willing to act,
the directors present shall select one of their number to be chairman. If only
one director is present and willing to act, he shall be chairman. In default,
the members present in person and entitled to vote shall choose one of their
number to be chairman.
Director's right to attend and speak
49. A director is entitled to attend and speak at a general meeting and at a
separate meeting of the holders of a class of shares or debentures whether or
not he is a member.
Power to adjourn
50.1 The chairman may, with the consent of a meeting at which a quorum is
present (and shall, if so directed by the meeting) adjourn a meeting from time
to time and from place to place or for an indefinite period. 50.2 Without
prejudice to any other power which he may have under the provisions of the
articles or at common law, the chairman may, without the consent of the meeting,
interrupt or adjourn a meeting from time to time and from place to place or for
an indefinite period if he decides that it has become necessary to do so in
order to (i) secure the proper and orderly conduct of the meeting, or (ii) give
all persons entitled to do so a reasonable opportunity of speaking and voting at
the meeting, or (iii) ensure that the business of the meeting is properly
disposed of.
Notice of adjourned meeting
51. Without prejudice to article 47.3, whenever a meeting is adjourned for 28
days or more or for an indefinite period, at least seven clear days' notice
specifying the place, date and time of the adjourned meeting and the general
nature of the business to be transacted shall be given to the members (other
than any who, under the provisions of the articles or the terms of issue of the
shares, are not entitled to receive notice), the directors and the auditors.
Except in these circumstances, and subject to article 47.3, it is not necessary
to give notice of an adjourned meeting or of the business to be transacted at
the adjourned meeting.
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Business at adjourned meeting
52. No business may be transacted at an adjourned meeting other than the
business which might properly have been transacted at the meeting from which the
adjournment took place.
Accommodation of members at meeting
53. If it appears to the chairman that the meeting place specified in the notice
convening the meeting is inadequate to accommodate all members entitled and
wishing to attend, the meeting is duly constituted and its proceedings valid if
the chairman is satisfied that adequate facilities are available to ensure that
a member who is unable to be accommodated is able to (i) participate in the
business for which the meeting has been convened, and (ii) hear and see all
persons present who speak (whether by the use of microphones, loud-speakers,
audio-visual communications equipment or otherwise), whether in the meeting
place or elsewhere, and (iii) be heard and seen by all other persons present in
the same way.
Security
54. The board may make any arrangement and impose any restriction it considers
appropriate to ensure the security of a meeting including, without limitation,
the searching of a person attending the meeting and the restriction of the items
of personal property that may be taken into the meeting place. The board is
entitled to refuse entry to a meeting to a person who refuses to comply with
these arrangements or restrictions.
Voting
Method of voting
55.1 At a general meeting, a resolution put to the vote of the meeting is
decided by a show of hands unless (before or on the declaration of the result of
the show of hands) a poll is duly demanded.
55.2 Subject to the Acts, a poll may be demanded on any question by:
(a) the chairman of the meeting;
(b) not less than five members present in person or by proxy and entitled to
vote;
(c) a member or members present in person or by proxy representing in aggregate
not less than one-tenth of the total voting rights of all the members
having the right to vote at the meeting; or
(d) a member or members present in person or by proxy holding shares conferring
a right to vote at the meeting, being shares on which an aggregate sum has
been paid up equal to not less than one-tenth of the total sum paid up on
all the shares conferring that right.
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55.3 A demand by a proxy is deemed to be a demand by the member appointing the
proxy.
55.4 Unless a poll is demanded and the demand is not withdrawn, a declaration by
the chairman that the resolution has been carried, or carried by a particular
majority, or lost or not carried by a particular majority, and an entry to that
effect in the book containing the minutes of proceedings, is conclusive evidence
of the fact without proof of the number or proportion of the votes recorded in
favour of or against the resolution.
Procedure on a poll
56.1 If a poll is properly demanded, it shall be taken in such manner as the
chairman directs. He may appoint scrutineers, who need not be members, and may
fix a time and place for declaring the result of the poll. The result of the
poll is deemed to be the resolution of the meeting at which the poll is
demanded.
56.2 A poll demanded on the election of a chairman or on any question of
adjournment shall be taken at the meeting and without adjournment. A poll
demanded on another question shall be taken at such time and place as the
chairman decides, either at once or after an interval or adjournment (but not
more than 30 clear days after the date of the demand).
56.3 No notice need be given of a poll not taken immediately if the time and
place at which it is to be taken are announced at the meeting at which it is
demanded. In any other case at least seven clear days' notice shall be given
specifying the time and place at which the poll is to be taken.
56.4 The demand for a poll may be withdrawn but only with the consent of the
chairman. A demand withdrawn in this way validates the result of a show of hands
declared before the demand is made. In the case of a poll demanded before the
declaration of the result of a show of hands, the meeting shall continue as if
the demand has not been made.
56.5 The demand for a poll (other than on the election of the chairman or on a
question of adjournment) does not prevent the meeting continuing for the
transaction of business other than the question on which a poll has been
demanded.
56.6 On a poll, votes may be given in person or by proxy and a member entitled
to more than one vote need not, if he votes, use all his votes or cast all the
votes he uses in the same way.
Votes of members
57.1 Subject to article 72 and to special terms as to voting on which shares
have been issued, or a suspension or abrogation of voting rights pursuant to the
articles, at a general meeting every member present in person has on a show of
hands one
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vote and every member present in person or by proxy has on a poll one vote for
every ordinary share of which he is the holder.
57.2 In the case of joint holders of a share, the vote of the senior who tenders
a vote, whether in person or by proxy, shall be accepted to the exclusion of the
votes of the other joint holders, and seniority is determined by the order in
which the names of the holders stand in the register.
57.3 A member in respect of whom an order has been made by a court or official
having jurisdiction (whether in the United Kingdom or elsewhere) that he is or
may be suffering from mental disorder or is otherwise incapable of running his
affairs may vote, whether on a show of hands or on a poll, by his guardian,
receiver, curator bonis or other person authorised for that purpose and
appointed by the court. A guardian, receiver, curator bonis or other person may,
on a poll, vote by proxy if evidence (to the satisfaction of the board) of the
authority of the person claiming to exercise the right to vote is deposited at
the office (or at another place specified in accordance with the articles for
the deposit of instruments of proxy) within the time limits prescribed by the
articles for the deposit of instruments of proxy for use at the meeting,
adjourned meeting or poll at which the right to vote is to be exercised.
No casting vote
58. In the case of an equality of votes the chairman shall not have, whether on
a show of hands or on a poll, a casting vote in addition to a vote to which he
is entitled as a member.
Restriction on voting rights for unpaid calls etc.
59. Unless the board otherwise decides, no member is entitled in respect of a
share held by him to be present or to vote, either in person or by proxy, at a
general meeting or at a separate meeting of the holders of a class of shares or
on a poll, or to exercise other rights conferred by membership in relation to
the meeting or poll, if a call or other amount due and payable in respect of the
share is unpaid. This restriction ceases on payment of the amount outstanding
and all costs, charges and expenses incurred by the Company by reason of the
non-payment.
Voting by proxy
60.1 An instrument appointing a proxy shall be in writing in any usual form (or
in another form approved by the board) executed by the appointor or his duly
constituted attorney or, if the appointor is a company, under its seal or under
the hand of its duly authorised officer or attorney or other person authorised
to sign.
60.2 An instrument of proxy is deemed (unless the contrary is stated in it) to
confer authority to demand or join in demanding a poll and to vote on a
resolution or amendment of a resolution put to, or other business which may
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properly come before, the meeting or meetings for which it is given, as the
proxy thinks fit.
60.3 A proxy need not be a member.
60.4 A member may appoint more than one proxy to attend on the same occasion.
When two or more valid but differing instruments of proxy are delivered for the
same share for use at the same meeting, the one which is last validly delivered
(regardless of its date or the date of its execution) shall be treated as
replacing and revoking the other or others as regards that share.
60.5 Deposit of an instrument of proxy does not prevent a member attending and
voting in person at the meeting or an adjournment of the meeting or on a poll.
60.6 An instrument of proxy is (unless the contrary is stated in it) valid for
an adjournment of the meeting as well as for the meeting or meetings to which it
relates. An instrument of proxy is valid for 12 months from the date of
execution.
60.7 Subject to the Acts, the Company may send an instrument of proxy to all or
none of the persons entitled to receive notice of and to vote at a meeting. If
sent the instrument shall provide for two-way voting (without prejudice to a
right to abstain) on all resolutions set out in the notice of meeting.
Deposit of proxy
61.1 An instrument of proxy, and (if required by the board) a power of attorney
or other authority under which it is executed or a copy of it notarially
certified or certified in some other way approved by the board, shall be:
(a) deposited at the office, or another place in the United Kingdom specified
in the notice convening the meeting or in an instrument of proxy or other
accompanying document sent by the Company in relation to the meeting, not
less than 48 hours before the time for holding the meeting or adjourned
meeting or the taking of a poll at which the person named in the
instrument proposes to vote;
(b) in the case of a meeting adjourned for less than 28 days but more than 48
hours or in the case of a poll taken more than 48 hours after it is
demanded, deposited as required by article 61.1(a) not less than 24 hours
before the time appointed for the holding of the adjourned meeting or the
taking of the poll; or
(c) in the case of a meeting adjourned for less than 48 hours or in the case
of a poll not taken immediately but taken not more than 48 hours after it
was demanded, delivered at the adjourned meeting or at the meeting at
which the poll was demanded to the chairman or to the secretary or to a
director.
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61.2 An instrument of proxy not deposited or delivered in accordance with
article 61.1 is invalid.
When votes by proxy valid though authority revoked
62. A vote given or poll demanded by a proxy or authorised representative of a
company is valid despite termination of his authority unless notice of
termination is received by the Company at the office (or other place specified
for depositing the instrument of proxy) at least one hour before the time for
holding the meeting or adjourned meeting at which the vote is given or (in the
case of a poll taken otherwise than at or on the same day as the meeting or
adjourned meeting) the time appointed for the taking of the poll at which the
vote is cast.
Miscellaneous
Corporate Representative
63. A company which is a member may, by resolution of its directors or other
governing body, authorise a person (or, if such company is an Approved
Depositary acting in its capacity as such, persons) to act as its representative
(or, as the case may be, representatives) at a meeting or at a separate meeting,
or at all meetings or separate meetings, of the holders of a class of shares
(each a representative). A representative is entitled to exercise on behalf of
the company (in respect of that part of the company's holding of shares to which
the authorisation relates) those powers that the company could exercise if it
were an individual member. The company is for the purposes of the articles
deemed to be present in person at a meeting if a representative is present. All
references to attendance and voting in person shall be construed accordingly. A
director, the secretary or other person authorised for the purpose by the
secretary may require a representative to produce a certified copy of the
resolution of authorisation before permitting him to exercise his powers.
Objections to and error in voting
64. No objection may be made to the qualification of a voter or to the counting
of, or failure to count, a vote, except at the meeting or adjourned meeting at
which the vote objected to is tendered or at which the error occurs. An
objection properly made shall be referred to the chairman and only invalidates
the result of the voting if, in the opinion of the chairman, it is of sufficient
magnitude to affect the decision of the meeting. The decision of the chairman is
conclusive and binding on all concerned.
Amendments to resolutions
65. If an amendment proposed to a resolution under consideration is ruled out of
order by the chairman the proceedings on the substantive resolution are not
invalidated by an error in his ruling.
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Members' written resolutions
66. A resolution in writing executed by or on behalf of each member who would
have been entitled to vote upon it if it had been proposed at a general meeting
at which he was present is as effective as if it had been passed at a general
meeting duly convened and held. The resolution in writing may consist of several
instruments in the same form each duly executed by or on behalf of one or more
members. If the resolution in writing is described as a special resolution or as
an extraordinary resolution, it has effect accordingly.
Class meetings
67. A separate meeting for the holders of a class of shares shall be convened
and conducted as nearly as possible in the same way as an extraordinary general
meeting, except that:
(a) no member, other than a director, is entitled to notice of it or to
attend unless he is a holder of shares of that class;
(b) no vote may be given except in respect of a share of that class;
(c) the quorum at the meeting is two persons present in person holding or
representing by proxy at least one-third in nominal value of the issued
shares of that class;
(d) the quorum at an adjourned meeting is two persons holding shares of that
class who are present in person or by proxy; and
(e) a poll may be demanded in writing by a member present in person or by
proxy and entitled to vote at the meeting and on a poll each member has
one vote for every share of that class of which he is the holder.
Failure to disclose interests in shares
68.1 Subject to article 68.5, where notice is served by the Company under
section 212 of the Act (a section 212 notice) on a member, or another person
appearing to be interested in shares held by that member, and the member or
other person has failed in relation to any shares (the default shares, which
expression includes any shares issued after the date of the section 212 notice
in right of those shares) to give the Company the information required within
the prescribed period from the date of the section 212 notice, the following
sanctions apply, unless the board otherwise decides:
(a) the member is not entitled in respect of the default shares to be present
or to vote (either in person or by proxy) at a general meeting or at a
separate meeting of the holders of a class of shares or on a poll, or to
exercise other rights conferred by membership in relation to the meeting
or poll; and
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(b) where the default shares represent at least 0.25 per cent. in nominal
value of the issued shares of their class:
(i) a dividend (or any part of a dividend) or other amount payable
in respect of the default shares shall be withheld by the
Company, which has no obligation to pay interest on it, and the
member is not entitled to elect, pursuant to article 132, to
receive shares instead of a dividend; and
(ii) no transfer of any of the default shares shall be registered
unless the transfer is an excepted transfer or:
(A) the member is not himself in default in supplying the
information required; and
(B) the member proves to the satisfaction of the board that
no person in default in supplying the information
required is interested in any of the shares the subject
of the transfer.
68.2 The sanctions under article 68.1 shall cease to apply seven days after the
earlier of:
(a) receipt by the Company of notice of an excepted transfer, but only in
relation to the shares transferred; and
(b) receipt by the Company, in a form satisfactory to the board, of all the
information required by the section 212 notice.
68.3 Where, on the basis of information obtained from a member in respect of a
share held by him, the Company issues a section 212 notice to another person, it
shall at the same time send a copy of the section 212 notice to the member, but
the accidental omission to do so, or the non-receipt by the member of the copy,
does not invalidate or otherwise affect the application of article 68.1.
68.4 For the purposes of this article 68:
(a) a person, other than the member holding a share, is treated as appearing
to be interested in that share if the member has informed the Company
that the person is or may be interested, or if the Company (after taking
account of information obtained from the member or, pursuant to a section
212 notice, from anyone else) knows or has reasonable cause to believe
that the person is or may be so interested;
(b) interested is construed as it is for the purpose of section 212 of the
Act;
(c) reference to a person having failed to give the Company the information
required by a section 212 notice, or being in default in supplying such
information, includes (a) reference to his having failed or refused to
give all or any part of it, and (b) reference to his having given
information
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which he knows to be false in a material particular or having recklessly
given information which is false in a material particular;
(d) the prescribed period means 14 days;
(e) an excepted transfer means, in relation to shares held by a member:
(i) a transfer pursuant to acceptance of a takeover offer for the
Company (within the meaning of section 428(1) of the Act); or
(ii) a transfer in consequence of a sale made through a recognised
investment exchange (as defined in the Financial Services Act
1986) or another stock exchange outside the United Kingdom on
which shares in the capital of the Company are normally traded;
or
(iii) a transfer which is shown to the satisfaction of the board to
be made in consequence of a sale of the whole of the beneficial
interest in the shares to a person who is unconnected with the
member and with any other person appearing to be interested in
the shares.
68.5(a)Where any person appearing to be interested in shares has been duly
served with a section 212 notice and the shares in which he appears to be
interested are held by an Approved Depositary, the provisions of article
68.1 shall be treated as applying only to those shares held by the
Approved Depositary in which such person appears to be interested and not
(insofar as such person's apparent interest is concerned) to any other
shares held by the Approved Depositary.
(b) Subject to article 68.5(a), where the member on which a section 212
notice is duly served is an Approved Depositary acting in its capacity as
such, the obligations of the Approved Depositary as a member shall be
limited to disclosing to the Company such information relating to any
person appearing to be interested in the shares held by it as has been
recorded by it pursuant to the arrangements entered into by the Company
or approved by the board pursuant to which it was appointed as an
Approved Depositary.
68.6 The provisions of this article are in addition and without prejudice to the
provisions of the Acts.
Protection of licences under the Broadcasting Act 1990 and the
Telecommunications Act 1984
69.1 In this article 69:
(a) Licence means any licence under the Broadcasting Act 1990 and/or the
Telecommunications Act 1984 (and any statutory modifications or re-
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enactments of the same together with all orders made thereunder for the
time being in force) awarded or granted to the Company or any of its
subsidiary undertakings (as the case may be) and any other licence or
permit used or intended to be used which in any case is material to its
business, granted by any other authority or body or any governmental
department under any other legislation or regulations in force for the
time being in any jurisdiction;
(b) Notifiable Situation means circumstances in which the holding of shares
of any class of any member when either taken alone or when taken together
with the holding of shares by one or more other members is or may be, in
the reasonable opinion of the board, prejudicial to:
(i) the grant of any Licence or the renewal or extension of any
Licence for which an application is or is intended to be made;
or
(ii) the continued holding of any Licence;
(c) Relevant Person means any member whose holding of shares in the Company
when either taken alone or when taken together with the holding of shares
by one or more other members gives rise to a Notifiable Situation;
(d) Relevant Shares means the shares of a Relevant Person which are, or which
in the reasonable opinion of the board may be, causing a Notifiable
Situation to occur in relation to that Relevant Person; and
(e) Required Disposal means a disposal or disposals of such a number of
Relevant Shares as will cause, or which in the reasonable opinion of the
board will cause, a Relevant Person to cease to be a Relevant Person and
will not cause any other person to be a Relevant Person and/or the
holding of shares by a Relevant Person to cease to give rise to a
Notifiable Situation, not being a disposal to another Relevant Person.
69.2 The board may at any time by notice require from a member such information
(to the extent that information is required in relation to a person other than
such member, so far as such information lies within the knowledge of such
member) supported by a declaration and by such other evidence (if any) in
support as the board may require, for the purposes of determining whether such
member or any person who has an interest in shares held by such member or an
associate of any such member or person or any person in which any such member or
person is a participant with more than a five per cent. interest has an interest
in any shares of the Company which, in the reasonable opinion of the board, may
be relevant to the determination of whether a Notifiable Situation exists in
relation to such member or person and the member or person shall supply the
information and evidence so specified to the board as soon as reasonably
practicable but, in any event, within seven days of receipt of such notice. If
such information and evidence is not furnished within the time prescribed by the
notice or the
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information and evidence provided is, in the opinion of the board,
unsatisfactory for the purposes of so determining, the board may serve on such
member a further notice calling upon him, within seven days after the service of
such further notice, to furnish the board with such information and evidence or
further information and evidence as shall (in their opinion) enable them to so
determine.
69.3 The board may, following such consultation with and the provision of such
information to the Independent Television Commission, the Department of Trade
and Industry, the Office of Telecommunications and/or such other authorities as
the board considers appropriate, notify any member that his holding of Relevant
Shares gives rise to a Notifiable Situation.
69.4 Any notice served pursuant to article 69.3 shall contain a statement by the
board of the reasons for the giving of such notice and include any communication
from the relevant authorities in support of those reasons. The notice shall set
out the restrictions that may apply in relation to the Relevant Shares of the
member on whom such notice is served as referred to in article 69.5.
69.5 If on the expiry of 14 days after service of notice pursuant to articles
69.2 or 69.3, the member upon whom the notice has been served shall have failed
to supply the required information or the Notifiable Situation still remains, as
the case may be, the board may treat such number of the Relevant Shares held by
such member as may be necessary to end the Notifiable Situation as non-voting
shares, by removal of the right to vote, but all other rights attaching to the
Relevant Shares (in particular the right to receive dividends and receive notice
of and attend all general meetings of the Company) shall not be affected.
69.6 If, following action taken by the board pursuant to article 69.5, a
Notifiable Situation nevertheless still remains, the board may serve a written
notice (a Disposal Notice) on the member concerned calling for a Required
Disposal of the Relevant Shares of such member or of such lesser number of
Relevant Shares as shall be specified in the said notice, to be made within such
period as the board considers reasonable. Where the member concerned is a member
of the TINTA Group or the MediaOne Group or the SBC Group or the Cox Group or
the Vivendi Group, a copy of the Disposal Notice shall be served also on a
member of each of the other groups. The board may extend the period in which a
Disposal Notice is required to be complied with and may withdraw a Disposal
Notice (whether before or after the expiration of the period referred to) in
their absolute discretion if it appears to it that a Notifiable Situation has
ceased to exist in relation to the Relevant Shares concerned. After the giving
of a Disposal Notice, and save for the purpose of a Required Disposal under this
article 69.6 or article 69.7, no transfer of any of the Relevant Shares
concerned may be registered until either the Disposal Notice is withdrawn or a
Required Disposal has been made to the satisfaction of the board and registered.
Where more than one holder (treating joint holders as a single holder) is
required to dispose of shares pursuant to a Disposal Notice, the said Notice
shall specify the number of shares to be disposed of by each such holder (which
shall be in the discretion of the directors and need not be pro rata amongst the
members being called upon to dispose of shares).
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69.7 If a Disposal Notice given under article 69.6 has not been complied with in
all respects to the satisfaction of the board by the end of the period (as
extended if applicable) specified in the Disposal Notice and has not been
withdrawn, the board shall, so far as it is able, within thirty days, make a
Required Disposal (or procure that a Required Disposal is made) of the Relevant
Shares concerned and shall give notice of the disposal to those persons on whom
the Disposal Notice is served. The holder(s) of the shares duly disposed of
shall be deemed irrevocably and unconditionally to have authorised the board to
make such Required Disposal. The manner, timing and terms of any such Required
Disposal made or sought to be made by the board (including, but not limited to
the price or prices at which the same is made and the extent to which assurance
is obtained that no transferee would become a Relevant Person) shall be such as
the board determine (provided that the board shall use its reasonable efforts to
obtain the best price reasonably obtainable in the circumstances), based on
advice from bankers, brokers, or other persons as the board considers
appropriate consulted by it for the purpose, to be reasonably practicable having
regard to all the circumstances, including, but not limited to, the number of
shares to be disposed of and the requirement that the disposal be made within
thirty days from expiry of the Disposal Notice; and the board shall not be
liable, and any such persons giving any such advice to the board shall not be
liable, to any person (whether or not a Relevant Person) for any of the
consequences of reliance on such advice (including, without limitation, for
failing to obtain the best price reasonably obtainable in the circumstances
provided the board acted in good faith throughout the relevant period), provided
always that, where the registered holder(s) of the Relevant Shares concerned is
a member of the TINTA Group or the MediaOne Group or the SBC Group or the Cox
Group or the Vivendi Group, the board shall use its reasonable endeavours to
give the members of each of the other such groups the first right to purchase
such Relevant Shares (subject to such member itself not being a Relevant Person
or to such purchase itself not giving rise to a Notifiable Situation) in
accordance with such arrangements as may then be in place between the members of
the TINTA Group and the MediaOne Group or the SBC Group or the Cox Group or the
Vivendi Group in relation to their holdings of shares of the Company and as may
have been notified to the Company by any member of the TINTA Group and/or the
MediaOne Group or the SBC Group or the Cox Group or the Vivendi Group and the
preceding provisions of this article 69.7 shall be amended accordingly to take
account of such arrangements but so that the board shall not be liable to any
member of the TINTA Group or of the MediaOne Group or the SBC Group or the Cox
Group or the Vivendi Group for failing to ensure that any such arrangements are
complied with fully or at all.
69.8 For the purpose of effecting any Required Disposal, the board may authorise
in writing any officer or employee of the Company to execute any necessary
transfer on behalf of any holder and may enter the name of the transferee in the
register in respect of the transferred shares notwithstanding the absence of any
share certificate and may issue a new certificate to the transferee and an
instrument of transfer executed by such person shall be as effective as if it
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had been executed by the holder of the transferred shares and the title of the
transferee shall not be affected by any irregularity or invalidity in the
proceedings relating thereto. The net proceeds of the disposal shall be received
by the Company whose receipt shall be a good discharge for the purchase money,
and shall be paid (without any interest being payable in respect of it and after
deduction of any expenses incurred by the Company in the sale) to the former
holder (or in the case of joint holders, the first of them named in the
register) together with, if appropriate a new certificate in respect of the
balance of the Relevant Shares to which he is entitled upon surrender by him or
on his behalf of any certificate in respect of the Relevant Shares sold and
formerly held by him.
69.9 A holder of a Relevant Share on whom a Disposal Notice has been given under
(and complying with) article 69.6 shall not in respect of that share be
entitled, until such time as the Disposal Notice has been complied with to the
satisfaction of the board or withdrawn, to receive notice of or to attend or
vote at any general meeting of the Company or meeting of the holders of any
class of share capital, or to exercise any other right conferred by membership
in relation to any such meeting; and the rights to attend (whether in person or
by representative or proxy), to speak and to demand and vote on a poll which
would have attached to the Relevant Share had it not been a Relevant Share shall
vest in the chairman of any such meeting. The manner in which the chairman
exercises or refrains from exercising any such rights shall be entirely at his
discretion. The chairman of any such meeting shall be informed by the board of
any share becoming or being deemed to be a Relevant Share.
69.10 Save as otherwise provided in this article 69.10, the provisions of the
articles applying to the giving of notice of meetings to members shall apply to
the giving to a member of any notice required by this article 69. Any notice
required by this article 69 to be given to a member (or in the case of joint
holders, who is the person first named in the register) whose registered address
is not within the United Kingdom and who has not given to the Company an address
within the United Kingdom at which notices may be given to him, shall be deemed
validly served if it is sent through the post in a prepaid envelope addressed to
that person at the address (or if more than one, at one of the addresses) if
any, at which the board believes him to be resident or carrying on business or
to his last known address as shown on the register. The notice shall in such a
case be deemed to have been given on the day following that on which the
envelope containing the same is posted, unless it was sent by second class post
or there is only one class of post, in which case it shall be deemed to have
been given on the day next but one after it was posted, Proof that the envelope
was properly addressed prepaid and posted shall be conclusive evidence that the
notice was given.
69.11 Any resolution or determination of, or decision or exercise of any
discretion or power by, the board or any director or by the chairman of any
meeting under or pursuant to the provisions of this article 69 (including,
without prejudice to the generality of the foregoing, as to what constitutes
reasonable enquiry or as to the manner, timing and terms of any Required
Disposal made by the board under article 69.7) shall be final and conclusive;
and any disposal or
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transfer made, or other thing done, by or on behalf of, or on the authority of,
the board or any director pursuant to the foregoing provisions of this article
69 shall be conclusive and binding on all persons concerned and shall not be
open to challenge, whether as to its validity or otherwise on any ground
whatsoever. The board shall not be required to give any reasons for any
decision, determination or declaration taken or made in accordance with this
article 69. The fact that the board has assumed that a Notifiable Situation does
not exist in relation to any member shall not affect their discretion to
subsequently determine that a Notifiable Situation does exist in relation to
such member.
Appointment, Retirement and Removal of Directors
Number of directors
70. Unless and until otherwise decided by the Company by ordinary resolution the
number of directors shall be not less than two, and shall not be subject to any
maximum.
Power of the Company to appoint directors
71. Subject to the articles and to the power of members of the TINTA Group and
the MediaOne Group and the SBC Group and the Cox Group and the Vivendi Group to
appoint directors pursuant to article 72, the Company may by ordinary resolution
appoint a person who is willing to act to be a director, either to fill a
vacancy or as an addition to the board, but the total number of directors may
not exceed any maximum number which may be fixed in accordance with the
articles.
Power of members of the TINTA Group and the MediaOne Group and the SBC Group and
the Cox Group and the Vivendi Group to appoint, remove and replace directors
72.1 For so long as members of the TINTA Group hold not less than a Qualifying
Interest the members of the TINTA Group shall have the right to appoint two
persons, who are willing so to act, as directors and to remove and replace any
director so appointed by them. For so long as the members of the TINTA Group
hold not less than a Lesser Qualifying Interest the members of the TINTA Group
shall have the right to appoint one person, who is willing so to act, as a
director and to remove and replace any director so appointed by them.
72.2 For so long as members of the MediaOne Group hold not less than a
Qualifying Interest, the members of the MediaOne Group shall have the right to
appoint two persons, who are willing so to act, as directors and to remove and
replace any director so appointed by them. For so long as the members of the
MediaOne Group hold not less than a Lesser Qualifying Interest the members of
the MediaOne Group shall have the right to appoint one person, who is willing so
to act, as a director and to remove and replace any director so appointed by
them.
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72.3 For so long as members of the SBC Group together hold not less than a
Lesser Qualifying Interest the members of the SBC Group shall have the right to
appoint one person, who is willing so to act, as a director and to remove and
replace any director so appointed by them.
72.4 For so long as members of the Cox Group together hold not less than a
Lesser Qualifying Interest the members of the Cox Group shall have the right to
appoint one person, who is willing so to act, as a director and to remove and
replace any director so appointed by them.
72.5 For so long as members of the Vivendi Group together hold not less than a
Lesser Qualifying Interest the members of the Vivendi Group shall have the right
to appoint one person, who is willing to act, as a director and to remove and
replace any director so appointed by them.
72.6 Any appointment, removal and/or replacement of a director pursuant to
article 72.1 or 72.2 or 72.3 or 72.4 or 72.5 shall be effected by notice to the
Company signed by or on behalf of a member of the TINTA Group or the MediaOne
Group or the SBC Group or the Cox Group or the Vivendi Group, as the case may
be. The notice shall be left at or sent by post or facsimile transmission to the
office or such other place designated by the board for the purpose. The
appointment or removal and/or replacement shall take effect immediately on
deposit of the notice in accordance with the articles or on such later date (if
any) specified in the notice.
72.7 On any vote or resolution of the Company to remove any director appointed
pursuant to or to amend article 72.1 or 72.2 or 72.3 or 72.4 or 72.5, the
members of the TINTA Group or the MediaOne Group or the SBC Group or the Cox
Group or the Vivendi Group (as appropriate) entitled to appoint, remove and/or
replace him or any director pursuant to article 72.1 or 72.2 or 72.3 or 72.4 or
72.5 as the case may be shall have in aggregate twice the number of votes cast
(on a show of hands or by proxy) in favour of such vote or resolution by or on
behalf of all the other members.
Power of the board to appoint directors
73. Without prejudice to the power of the Company to appoint a person to be a
director pursuant to the articles and to the power of members of the TINTA Group
and the MediaOne Group and the SBC Group and the Cox Group and the Vivendi Group
to appoint directors pursuant to article 72, the board may appoint a person who
is willing to act as a director, either to fill a vacancy or as an addition to
the board. A director appointed in this way may hold office only until the
dissolution of the next annual general meeting after his appointment unless he
is reappointed during the meeting. He is not required, and is not taken into
account in determining the number of directors who are, to retire by rotation at
the meeting.
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Appointment of executive directors
74. Subject to the Acts and to article 70, the board may appoint one or more of
its body to hold employment or executive office (including that of chief
executive officer or managing director) with the Company for such term (subject
to the Acts) and on any other conditions the board thinks fit. The board may
revoke or terminate an appointment, without prejudice to a claim for damages for
breach of contract.
Independence of directors
75. For so long as members of the TINTA Group together hold in aggregate 15 per
cent. or more in nominal value of the shares giving the right to attend and vote
at general meetings of the Company or for so long as members of the MediaOne
Group together hold in aggregate 15 per cent. or more in nominal value of the
shares giving the right to attend and vote at general meetings of the Company,
such members of the TINTA Group or of the MediaOne Group, as the case may be,
shall each exercise their voting rights as members of the Company, and shall
each request that the TINTA Designated Directors or, as the case may be, the
MediaOne Designated Directors appointed by them exercise their voting rights as
members of the board (subject always to such Designated Director's fiduciary and
other duties as a director) to ensure that, to the extent that they are able to
do so through the exercise of their votes, the majority of the directors are
Independent Directors.
Eligibility of new directors
76.1 Subject to article 71 no person other than a director retiring (by rotation
or otherwise) may be appointed or reappointed a director at a general meeting
unless:
(a) he is recommended by the board; or
(b) not less than seven nor more than 42 days before the date fixed for the
meeting, notice has been given to the Company by a member (other than the
person to be proposed) qualified to vote at the meeting of the intention
to propose that person for appointment or reappointment. The notice shall
(a) state the particulars which would, if the proposed director were
appointed or reappointed, be required to be included in the Company's
register of directors, (b) be accompanied by notice given by the proposed
director of his willingness to be appointed or reappointed, and (c) be
lodged at the office.
76.2 A director need not be a member.
Voting on resolution for appointment
77. A resolution for the appointment of two or more persons as directors by a
single resolution is void unless an ordinary resolution that the resolution for
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appointment is proposed in this way has first been agreed to by the meeting
without a vote being given against it.
Retirement at annual general meeting
78. At each annual general meeting all of the directors shall retire from
office.
Position of retiring director
79. A director who retires at an annual general meeting may, if willing to act,
be reappointed. If he is not reappointed or deemed reappointed, he may retain
office until the meeting (or, in the case of a TINTA Designated Director, a
member of the TINTA Group or, in the case of a MediaOne Designated Director, a
member of the MediaOne Group or, in the case of an Cox Designated Director, a
member of the Cox Group or in the case of an SBC Designated Director, a member
of the SBC Group or, in the case of a Vivendi Designated Director, a member of
the Vivendi Group) appoints someone in his place or, if it does not do so, until
the end of the meeting.
Deemed reappointment
80. At an annual general meeting at which a director retires (other than in the
case of a TINTA Designated Director, a MediaOne Designated Director, a Cox
Designated Director, an SBC Designated Director or a Vivendi Designated
Director) the Company or (in the case of a TINTA Designated Director) a member
of the TINTA Group or (in the case of a MediaOne Designated Director) a member
of the MediaOne Group or (in the case of an SBC Designated Director) a member of
the SBC Group or (in the case of a Cox Designated Director) a member of the Cox
Group or (in the case of a Vivendi Designated Director) a member of the Vivendi
Group may fill the vacancy and, if it does not do so, the retiring director is,
if willing, deemed reappointed unless (other than in the case of a TINTA
Designated Director, a MediaOne Designated Director, an SBC Designated Director,
a Cox Designated Director or a Vivendi Designated Director) it is expressly
resolved not to fill the vacancy or (in the case of a TINTA Designated Director)
a member of the TINTA Group notifies the Company of the removal of such director
as a TINTA Designated Director pursuant to article 72.1 or (in the case of a
MediaOne Designated Director) a member of the MediaOne Group notifies the
Company of the removal of such director as a MediaOne Designated Director
pursuant to article 72.2 or (in the case of a Cox Designated Director) a member
of the Cox Group notifies the Company of the removal of such director as a Cox
Designated Director pursuant to article 72.4 or (in the case of an SBC
Designated Director) a member of the SBC Group notifies the Company of the
removal of such director as an SBC Designated Director pursuant to article 72.3
or (in the case of a Vivendi Designated Director) a member of the Vivendi Group
notifies the Company of the removal of such director as a Vivendi Designated
Director pursuant to article 72.5 or (other than in the case of a TINTA
Designated Director or a MediaOne Designated Director or a Cox Designated
Director or an SBC
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Designated Director or a Vivendi Designated Director) a resolution for the
reappointment of the director is put to the meeting and lost.
No retirement on account of age
81. No person is incapable of being appointed a director by reason of his having
reached the age of 70 or another age. Special notice is not required in
connection with the appointment or the approval of the appointment of such
person. No director is required to vacate his office because he has reached the
age of 70 or another age and section 293 of the Act does not apply to the
Company. Where a general meeting is convened at which, to the knowledge of the
board, a director is to be proposed for appointment or reappointment who is at
the date of the meeting 70 or more, the board shall give notice of his age in
the notice convening the meeting or in a document accompanying the notice, but
the accidental omission to do so does not invalidate proceedings or an
appointment or reappointment of that director at that meeting.
Removal by ordinary resolution
82. Subject to article 72, in addition to any power of removal conferred by the
Acts, the Company may by ordinary resolution remove a director before the
expiration of his period of office (without prejudice to a claim for damages for
breach of contract) and may (subject to the articles) by ordinary resolution
appoint another person who is willing to act to be a director in his place. A
person appointed in this way is treated, for the purposes of determining the
time at which he or another director is to retire, as if he had become a
director on the date on which the person in whose place he is appointed was last
appointed or reappointed a director.
Vacation of office by director
83.1 Without prejudice to the provisions for retirement contained in the
articles, the office of a director is vacated if:
(a) he resigns by notice delivered to the secretary at the office or tendered
at a board meeting;
(b) he ceases to be a director by virtue of a provision of the Acts, is
removed from office pursuant to the articles or becomes prohibited by law
from being a director;
(c) he becomes bankrupt, has an interim receiving order made against him,
makes an arrangement or compounds with his creditors generally or applies
to the court for an interim order under section 253 of the Insolvency Act
1986 in connection with a voluntary arrangement under that Act;
(d) an order is made by a court of competent jurisdiction on the ground
(however formulated) of mental disorder for his detention or for the
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appointment of a guardian, receiver, curator bonis or other person to
exercise powers with respect to his affairs or he is admitted to hospital
in pursuance of an application for admission for treatment under the
Mental Health Act 1983 or, in Scotland, under the Mental Health (Scotland)
Act 1984 and the board resolves that his office be vacated;
(e) both he and his alternate director appointed pursuant to the provisions of
the articles (if any) are absent, without the permission of the board,
from board meetings for six consecutive months and the board resolves that
his office be vacated;
(f) (other than in the case of a TINTA Designated Director or a MediaOne
Designated Director or an SBC Designated Director or a Cox Designated
Director or a Vivendi Designated Director) he is removed from office by
notice addressed to him at his last-known address and signed by all his
co-directors (without prejudice to a claim for damages for breach of
contract); or
(g) (in the case of a TINTA Designated Director or a MediaOne Designated
Director or an SBC Designated Director or a Cox Designated Director or a
Vivendi Designated Director) he is removed as a director pursuant to
article 72.1 or 72.2 or 72.3 or 72.4 or 72.5 as the case may be.
83.2 A resolution of the board declaring a director to have vacated office under
the terms of article 83.1 is conclusive as to the fact and grounds of vacation
stated in the resolution.
Alternate Directors
Appointment
84.1 A director (other than an alternate director) may by notice delivered to
the secretary at the office, or in any other manner approved by the board,
appoint as his alternate director:
(a) another director, or
(b) another person approved by the board (or, in the case of a TINTA
Designated Director, nominated by a member of the TINTA Group or, in the
case of the MediaOne Designated Director, nominated by a member of the
MediaOne Group or in the case of the SBC Designated Director nominated by
any member of the SBC Group or in the case of the Cox Designated Director
nominated by any member of the Cox Group or in the case of a Vivendi
Designated Director, nominated by any member of the Vivendi Group) and
willing to act.
84.2 No appointment of an alternate director who is not already a director is
effective until his consent to act as a director in the form prescribed by the
Acts has been received at the office.
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84.3 An alternate director need not be a member and is not counted in reckoning
the number of directors for the purpose of article 70.
Revocation of appointment
85. A director may by notice delivered to the secretary at the office revoke the
appointment of his alternate director and, subject to the provisions of article
84, appoint another person in his place. If a director ceases to hold the office
of director or if he dies, the appointment of his alternate director
automatically ceases. If a director retires but is reappointed at the meeting at
which his retirement takes effect, a valid appointment of an alternate director
which was in force immediately before his retirement continues to operate after
his reappointment as if he has not retired. The appointment of an alternate
director ceases on the happening of an event which, if he were a director
otherwise appointed, would cause him to vacate office.
Participation in board meetings
86. An alternate director is, if he gives the Company an address in the United
Kingdom or the United States of America at which notices may be served on him,
entitled to receive notice of all meetings of the board and all committees of
the board of which his appointor is a member and, in the absence from those
meetings of his appointor, to attend and vote at the meetings and to exercise
all the powers, rights, duties and authorities of his appointor. A director
acting as alternate director has a separate vote at meetings of the board and
committees of the board for each director for whom he acts as alternate director
but he counts as only one for the purpose of determining whether a quorum is
present.
Responsibility
87. A person acting as an alternate director is an officer of the Company, is
alone responsible to the Company for his acts and defaults, and is not deemed to
be the agent of his appointor.
Remuneration, Expenses and Pensions
Directors' fees
88. Unless otherwise decided by the Company by ordinary resolution, the Company
shall pay to the directors (but not alternate directors) for their services as
directors such amount of aggregate fees as the board decides (not exceeding
(Pounds)500,000 per annum or such larger amount as the Company may by ordinary
resolution decide). The aggregate fees shall be divided among the directors in
such proportions as the board decides or, if no decision is made, equally. A fee
payable to a director pursuant to this article is distinct from any salary,
remuneration or other amount payable to him pursuant to other provisions of the
articles and accrues from day to day.
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Additional remuneration
89. A director who, at the request of the board, goes or resides abroad, makes a
special journey or performs a special service on behalf of the Company may be
paid such reasonable additional remuneration (whether by way of salary,
percentage of profits or otherwise) and expenses as the board may decide.
Expenses
90. A director is entitled to be repaid all reasonable travelling, hotel and
other expenses properly incurred by him in the performance of his duties as
director, including expenses incurred in attending meetings of the board or of
committees of the board or general meetings or separate meetings of the holders
of a class of shares or debentures.
Remuneration and expenses of alternate directors
91. An alternate director is not entitled to a fee from the Company for his
services as an alternate director. The fee payable to an alternate director is
payable out of the fee payable to his appointor and consists of such portion (if
any) of the fee as he agrees with his appointor. The Company shall, however,
repay to an alternate director expenses incurred by him in the performance of
his duties if the Company would have been required to repay the expenses to him
under article 90 had he been a director.
Directors' pensions and other benefits
92.1 The board may exercise all the powers of the Company to provide pensions or
other retirement or superannuation benefits and to provide death or disability
benefits or other allowances or gratuities (by insurance or otherwise) for a
person who is or has at any time been a director of (i) the Company, or (ii) a
company which is or was a subsidiary undertaking of the Company, or (iii) a
company which is or was allied to or associated with the Company or a subsidiary
undertaking of the Company, or (iv) a predecessor in business of the Company or
of a subsidiary undertaking of the Company (and for any member of his family,
including a spouse or former spouse, or a person who is or was dependent on
him). For this purpose the board may establish, maintain, subscribe and
contribute to any scheme, trust or fund and pay premiums. The board may arrange
for this to be done by the Company alone or in conjunction with another person.
92.2 A director or former director is entitled to receive and retain for his own
benefit a pension or other benefit provided under article 92.1 and is not
obliged to account for it to the Company.
Remuneration of executive director
93. The salary or remuneration of a director appointed to hold employment or
executive office in accordance with the articles may be a fixed sum of money, or
wholly or in part governed by business done or profits made, or as otherwise
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decided by the board, and may be in addition to or instead of a fee payable to
him for his services as director pursuant to the articles.
Powers and Duties of the Board
Powers of the board
94. Subject to the Acts, the memorandum of association of the Company and the
articles and to directions given by special resolution of the Company, the
business of the Company is managed by the board which may exercise all the
powers of the Company whether relating to the management of the business or not.
No alteration of the memorandum of association or of the articles and no
direction given by the Company shall invalidate a prior act of the board which
would have been valid if the alteration had not been made or the direction had
not been given. The provisions of the articles giving specific powers to the
board do not limit the general powers given by this article.
Powers of directors being less than minimum required number
95. Subject to article 72, if the number of directors is less than the minimum
prescribed by the articles or decided by the Company by ordinary resolution, the
remaining director or directors may act only for the purposes of appointing an
additional director or directors to make up that minimum or convening a general
meeting of the Company for the purpose of making such appointment. If no
director or directors is or are able or willing to act, two members may convene
a general meeting for the purpose of appointing directors. An additional
director appointed in this way holds office (subject to the articles) only until
the dissolution of the next annual general meeting after his appointment unless
he is reappointed during the meeting.
Powers of executive directors
96. The board may delegate to a director holding executive office (including a
chief executive officer or managing director) any of its powers, authorities and
discretions for such time and on such terms and conditions as it thinks fit. In
particular, the board may grant the power to sub-delegate, and may retain or
exclude the right of the board to exercise the delegated powers, authorities or
discretions collaterally with the director. The board may at any time revoke the
delegation or alter its terms and conditions.
Delegation to committees
97. The board may delegate any of its powers, authorities and discretions for
such time and on such terms and conditions as it thinks fit to a committee
consisting of one or more directors (save that in relation to any committee, at
least one member must be a TINTA Designated Director, provided there is at the
relevant time such a director holding office as such, and one member must be a
MediaOne Designated Director, provided there is at the relevant time such a
director holding office as such), and (if thought fit) one or more other
persons, but
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only if a majority of the members of the committee are directors or alternate
directors. Any such committee shall be chaired by an Independent Director and
shall comprise a majority of members independent of TINTA and MediaOne. For so
long as the Cox Group and the SBC Group have the right to appoint a director in
accordance with article 72, the Cox Group and the SBC Group shall jointly have
the right to appoint a director as a member of the Audit Committee. No
resolution of a committee is effective unless a majority of those present when
it is passed are directors or alternate directors. In particular, the board may
grant the power to sub-delegate, and may retain or exclude the right of the
board to exercise the delegated powers, authorities or discretions collaterally
with the committee. The board may at any time revoke the delegation or alter its
terms and conditions or discharge the committee in whole or in part. Where a
provision of the articles refers to the exercise of a power, authority or
discretion by the board and that power, authority or discretion has been
delegated by the board to a committee, the provision shall be construed as
permitting the exercise of the power, authority or discretion by the committee.
For as long as there is an SBC Designated Director and/or a Cox Designated
Director and/or a Vivendi Designated Director, the SBC Designated Director
and/or the Cox Designated Director and/or the Vivendi Designated Director (as
the case may be) shall be entitled to be appointed as an observer to any
committee constituted pursuant to this article 97 to receive notice of and
attend and observe at its meetings but not to be a member of such committee or
to vote at such meetings.
Local management
98. The board may establish local or divisional boards or agencies for managing
the affairs of the Company in a specified locality, either in the United Kingdom
or elsewhere, and may appoint persons to be members of a local or divisional
board or agency, and may fix their remuneration. The board may delegate to a
local or divisional board or agency any of its powers, authorities and
discretions for such time and on such terms and conditions as it thinks fit. In
particular, the board may grant the power to sub-delegate, may retain or exclude
the right of the board to exercise the delegated powers, authorities or
discretions collaterally with the local or divisional board or agency and may
authorise the members of a local or divisional board or agency (or any of them)
to fill a vacancy or to act despite a vacancy. The board may at any time revoke
or alter the terms and conditions of the appointment or delegation. Subject to
terms and conditions imposed by the board, the proceedings of a local or
divisional board or agency with two or more members are governed by those
articles that regulate the proceedings of the board, so far as applicable.
Power of attorney
99. The board may by power of attorney or otherwise appoint a person to be the
agent of the Company and may delegate to that person any of its powers,
authorities and discretions for such purposes, for such time and on such terms
and conditions (including as to remuneration) as it thinks fit. In particular,
the board may grant the power to sub-delegate and may retain or exclude the
right of the
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board to exercise the delegated powers, authorities or discretions collaterally
with the agent. The board may at any time revoke or alter the terms and
conditions of the appointment or delegation.
Associate directors
100. The board may appoint a person (not being a director) to an office or
employment having a designation or title including the word director or attach
to an existing office or employment that designation or title and may terminate
the appointment or use of that designation or title. The inclusion of the word
director in the designation or title of an office or employment does not imply
that the person is, or is deemed to be, or is empowered to act as, a director
for any of the purposes of the Acts or the articles.
Exercise of voting powers
101. Subject to article 104, the board may exercise or cause to be exercised the
voting powers conferred by shares in the capital of another company held or
owned by the Company, or a power of appointment to be exercised by the Company,
in any manner it thinks fit (including the exercise of the voting power or power
of appointment in favour of the appointment of a director as an officer or
employee of that company or in favour of the payment of remuneration to the
officers or employees of that company).
Provision for employees
102. The board may exercise the powers conferred on the Company by the Acts to
make provision for the benefit of a person employed or formerly employed by the
Company or any of its subsidiary undertakings (or any member of his family,
including a spouse or former spouse, or any person who is or was dependent on
him) in connection with the cessation or the transfer to a person of the whole
or part of the undertaking of the Company or the subsidiary undertaking.
Registers
103. Subject to the Acts, the board may exercise the powers conferred on the
Company with regard to the keeping of an overseas, local or other register and
may make and vary regulations as it thinks fit concerning the keeping of a
register.
Borrowing powers
104.1 Subject to the following provisions of this article 104, the board may
exercise all the powers of the Company to borrow money and to mortgage or charge
all or part of the undertaking, property and assets (present or future) and
uncalled capital of the Company and, subject to the Acts, to issue debentures
and other securities, whether outright or as collateral security for a debt,
liability or obligation of the Company or of a third party.
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104.2 The board shall restrict the borrowings of the Company and shall exercise
all voting and other rights or powers of control exercisable by the Company in
relation to its subsidiary undertakings so as to procure (as regards subsidiary
undertakings, to the extent that it can procure by such exercise) that the
aggregate principal amount outstanding in respect of moneys borrowed by the
group does not at any time, without the previous sanction of an ordinary
resolution of the Company, exceed a sum equal to the greater of:
(a) (Pounds)4,000,000,000; and
(b) five times the adjusted capital and reserves.
104.3 In this article 104:
(a) adjusted capital and reserves means a sum equal to the aggregate of:
(i) the amount paid up on the allotted or issued share capital of the
Company; and
(ii) the amount standing to the credit or debit of the consolidated
reserves;
all as shown in the relevant balance sheet but after:
(aa) making appropriate adjustments in respect of:
(1) a variation in the amounts referred to in article 103.3(a) and
(b) since the date of the relevant balance sheet; for this
purpose (aa) if a proposed allotment of shares by the Company
for cash has been underwritten, those shares are deemed to
have been allotted and the amount (including a premium) of the
subscription moneys payable in respect of those shares (not
being moneys payable later than six months after the date of
allotment) are deemed to have been paid up to the extent so
underwritten on the date on which the issue of those shares
was underwritten (or, if the underwriting was conditional, the
date on which it became unconditional), and (bb) where the
Company is under an obligation (whether immediately or at a
future date) to issue shares on conversion (however effected)
of other securities of a group undertaking and the obligation
to effect conversion is not conditional on any act, omission
or event (other than lapse of time), the share capital of the
Company and the consolidated reserves shall be calculated as
if the securities had been converted;
(2) an undertaking which has become a group undertaking since the
date of the relevant balance sheet;
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(3) an undertaking which has ceased to be a group undertaking
since the date of the relevant balance sheet;
(bb) excluding (so far as not already excluded) amounts attributable to
minority interests;
(cc) deducting (so far as not already deducted):
(A) sums equivalent to the book values of goodwill and other
intangible assets shown in the relevant balance sheet (as
adjusted pursuant to the preceding provisions of this article
103) but adding back the amount of goodwill that would have
remained on the relevant balance sheet (as adjusted) if all
goodwill arising on acquisitions of group undertakings after
22 November 1994 and which has been written off against
reserves in accordance with generally accepted accounting
practice in the United Kingdom had been carried on the balance
sheet as an asset and amortised on a straight-line basis over
20 years (or such longer period, as decided by the Company, as
may be in accordance with generally accepted accounting
practice in the United Kingdom), this amount to be certified
by the auditors; and
(B) the amount of a distribution declared, recommended, paid or
made by a group undertaking to a person other than a group
undertaking out of profits accrued up to and including the
date of, but not provided for in, the relevant balance sheet;
and
(C) making such other adjustments (if any) as the auditors
consider appropriate or necessary to reflect changes in
circumstances since the date of the relevant balance sheet;
(b) external interest means, in relation to a group undertaking that is not
wholly owned, that part of the issued and paid-up equity share capital of
the group undertaking that is not beneficially owned, directly or
indirectly, by another group undertaking;
(c) external interest percentage means, in relation to a group undertaking that
is not wholly owned, the percentage that the external interest forms of the
whole of the issued and paid-up equity share capital of the group
undertaking;
(d) group means (aa) the Company, and (bb) all undertakings which are included
in the group accounts in which the relevant balance sheet is comprised and
which would be so included if group accounts were prepared at the relevant
time (and as if that time were the end of the Company's financial year),
and (cc) all undertakings which are not included in the group accounts in
which the relevant balance sheet is comprised but which would be so
included if group accounts were
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prepared at the relevant time (and as if that time were the end of the
Company's financial year);
(e) group undertaking means the Company or another undertaking in the group;
(f) moneys borrowed include the following:
(i) the nominal amount of and the amount of any premium paid in
respect of any allotted or issued share capital (not being
equity share capital) of a group undertaking not beneficially
owned, directly or indirectly, by another group undertaking;
(ii) the principal amount of any loan capital (whether secured or
unsecured) of a group undertaking not beneficially owned,
directly or indirectly, by another group undertaking;
(iii) the principal amount of any borrowings by a person other than a
group undertaking, the repayment of which is the subject of a
guarantee or indemnity by a group undertaking or is secured on
the assets of a group undertaking;
(iv) the outstanding amount raised by acceptances under an acceptance
credit opened on behalf of and in favour of a group undertaking
by a bank or accepting house (except for acceptances of, or
acceptance credits in relation to, trade bills for purchases of
goods or services in the ordinary course of business and
outstanding for six months or less);
(v) a fixed or minimum premium payable on repayment or redemption of
borrowings that constitute moneys borrowed for the purposes of
this article 104; and
(vi) amounts raised under a transaction (including, without
limitation, forward sale or purchase agreements and outstanding
obligations under finance leases and hire purchase contracts
classified as finance leases, but excluding operating leases
(within the meanings given to those terms by Statement of
Standard Accounting Practice 21)) having the commercial effect
of borrowings entered into to enable the finance of operations
or capital requirements;
but exclude:
(vii) borrowings by one group undertaking from another, including the
principal amount of any loan capital (whether secured or
unsecured) and the nominal amount of any allotted or issued
share capital (not being equity share capital) of a group
undertaking beneficially owned, directly or indirectly, by
another group undertaking, except that, where the group
undertaking from
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which such borrowings are made is not wholly owned, a percentage
of the borrowings equal to the external interest percentage are
not excluded;
(viii) borrowings made for the purpose of, and applied within six
months of being made in, repaying the whole or part of
borrowings that constitute moneys borrowed for the purposes of
this article 104;
(ix) borrowings for the purpose of financing a contract to the extent
that part of the price receivable under the contract is
guaranteed or insured by the Export Credit Guarantee Department
of the Department of Trade and Industry or by another
institution fulfilling a similar function;
(x) where a group undertaking is not wholly owned, a percentage of
its borrowings that constitute moneys borrowed for the purposes
of this article 104 equal to the external interest percentage;
(xi) an amount equal to the borrowings of an undertaking outstanding
immediately before and repaid within 90 days after it becomes a
group undertaking;
(xii) the amount of moneys borrowed which are for the time being
deposited with a governmental authority in any part of the world
in connection with import deposits or a similar governmental
scheme to the extent that the group undertaking making the
deposit retains its interest in the deposit;
(xiii) a sum advanced or paid to a group undertaking (or its agents or
nominees) by a customer of a group undertaking as an unexpended
customer receipt or progress payment pursuant to a contract
between the customer and a group undertaking; and
(xiv) amounts treated as amounts due to trade creditors in the
consolidated group accounts of the Company in which the relevant
balance sheet is comprised;
and deducting:
(xv) an amount equal to the aggregate outstanding of:
(1) all cash deposits or credit balances on a current account
of a group undertaking with a bank (not itself being a
group undertaking) except for those held by banks as
collateral for borrowings;
(2) the realisable value of certificates of deposit and
securities of governments and companies; and
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(3) other readily realisable deposits or credit balances
(whether made with a bank or otherwise);
in each case beneficially owned, directly or indirectly, by a
group undertaking, but excluding (aa) in the case of any such
items beneficially owned, directly or indirectly, by a group
undertaking that is not wholly owned, a percentage of those
items equal to the external interest percentage and (bb) any sum
advanced or paid to a group undertaking (or its agents or
nominees) by a customer of a group undertaking as an unexpended
customer receipt or progress payment pursuant to a contract
between the customer and a group undertaking;
(g) relevant balance sheet means the consolidated balance sheet dealing with
the state of affairs of the Company and its subsidiary undertakings
comprised in the latest group accounts prepared and approved by the board
and on which the auditors have made their report pursuant to the Acts; and
(h) wholly owned means, in relation to a group undertaking, that it has no
member that is not itself a group undertaking or a person acting on behalf
of a group undertaking.
104.4 When the amount of moneys borrowed to be taken into account for the
purposes of this article 104 on a particular day is being ascertained, moneys
denominated or repayable in a currency other than sterling shall be converted
for the purpose of calculating the sterling equivalent either:
(a) at the rate of exchange specified in a forward purchase contract, currency
option, back-to-back loan, swap or other arrangement taken out or entered
into to reduce the risk associated with fluctuations in rates of exchange
in respect of repayment of those moneys (a hedging agreement); or
(b) if repayment of those moneys has not been covered by a hedging agreement,
at the more favourable to the Company of:
(i) the rate of exchange used for the conversion of that currency in
the relevant balance sheet, or
(ii) if no rate was used, the middle-market rate of exchange quoted
by Barclays Bank PLC at the close of business in London on the
date of the relevant balance sheet, or
(iii) the middle-market rate of exchange quoted by Barclays Bank PLC
at the close of business in London on the business day
immediately preceding the day on which the calculation falls to
be made.
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104.5 A report or certificate of the auditors as to the amount of the adjusted
total of capital and reserves or the aggregate amount of moneys borrowed for the
purposes of this article 104 is conclusive and binding on all concerned.
Nevertheless the board may at any time act in reliance on a bona fide estimate
of the amount of the adjusted total of capital and reserves or the aggregate
amount of moneys borrowed and if in consequence the limit on moneys borrowed set
out in this article 104 is inadvertently exceeded, the amount of moneys borrowed
equal to the excess may be disregarded for 90 days after the date on which by
reason of a determination of the auditors or otherwise the board becomes aware
that this situation has or may have arisen.
104.6 No debt incurred or security given in respect of moneys borrowed in excess
of the limit imposed by this article 104 is invalid or ineffectual except where
express notice that the limit has been or will be exceeded has been given to the
lender or recipient of the security at the time when the debt is incurred or
security given. No lender or other person dealing with the Company is concerned
to see or enquire whether the limit is observed.
Register of charges
105. The Company shall keep a register of charges in accordance with the Acts
and the fee to be paid by a person other than a creditor or member for each
inspection of the register of charges is the maximum sum prescribed by the Acts
or, failing which, decided by the board.
Directors' interests
106.1 Subject to the Acts and article 106.2, a director, notwithstanding his
office:
(a) may enter into or otherwise be interested in a contract, arrangement,
transaction or proposal with the Company or in which the Company is
otherwise interested either in connection with his tenure of an office or
place of profit or as seller, buyer or otherwise;
(b) may hold another office or place of profit with the Company (except that
of auditor or auditor of a subsidiary of the Company) in conjunction with
the office of director and may act by himself or through his firm in a
professional capacity to the Company, and in that case on such terms as
to remuneration and otherwise as the board may decide either in addition
to or instead of remuneration provided for by another article;
(c) may be a director or other officer of, or employed by, or a party to a
contract, transaction, arrangement or proposal with or otherwise
interested in, a company promoted by the Company or in which the Company
is otherwise interested or as regards which the Company has a power of
appointment; and
(d) is not liable to account to the Company for a profit, remuneration or
other benefit realised by such office, employment, contract, arrangement,
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transaction or proposal and no such contract, arrangement, transaction or
proposal is avoided on the grounds of any such interest or benefit.
106.2 A director who, to his knowledge, is in any way (directly or indirectly)
interested in a contract, arrangement, transaction or proposal with the Company
shall declare the nature of his interest at the meeting of the board at which
the question of entering into the contract, arrangement, transaction or proposal
is first considered, if he knows his interest then exists or, in any other case,
at the first meeting of the board after he knows that he is or has become
interested. For the purposes of this article 106:
(a) a general notice given to the board by a director that he is to be
regarded as having an interest (of the nature and extent specified in the
notice) in a contract, transaction, arrangement or proposal in which a
specified person or class of persons is interested is a sufficient
disclosure under this article 105 in relation to that contract,
transaction, arrangement or proposal; and
(b) an interest of which a director has no knowledge and of which it is
unreasonable to expect him to have knowledge is not treated as his
interest.
106.3 Except as provided in this article 106, a director may not vote on a
resolution of the board or of a committee of the board concerning a contract,
arrangement, transaction or proposal to which the Company is or is to be a party
and in which he is or is to be, to his knowledge, materially interested directly
or indirectly (otherwise than by virtue of his interest in shares or debentures
or other securities of or otherwise in or through the Company), but this
prohibition does not apply to a resolution concerning any of the following
matters:
(a) the giving to him of a guarantee, security or indemnity in respect of
money lent or obligations incurred by him or any other person at the
request of or for the benefit of the Company or any of its subsidiary
undertakings;
(b) the giving to a third party of a guarantee, security or indemnity in
respect of a debt or obligation of the Company or any of its subsidiary
undertakings for which he himself has assumed responsibility in whole or
in part, either alone or jointly with others, under a guarantee or
indemnity or by the giving of security;
(c) a contract, arrangement, transaction or proposal concerning an offer of
shares, debentures or other securities of the Company or any of its
subsidiary undertakings for subscription or purchase, in which offer he
is or may be entitled to participate as a holder of securities or in the
underwriting or sub-underwriting of which he is to participate;
(d) a contract, arrangement, transaction or proposal to which the Company is
or is to be a party concerning another company (including a subsidiary
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undertaking of the Company) in which he is interested (directly or
indirectly) (a relevant company) and whether as an officer, shareholder,
creditor or otherwise, if he is not the holder of or beneficially
interested in one per cent. or more of the capital of the relevant
company. For the purposes of this paragraph (d):
(i) a director is deemed to have an interest in one per cent. or
more of the capital of a relevant company if (directly or
indirectly) he is the holder of or beneficially interested in
one per cent. or more of a class of equity share capital of the
relevant company or of the voting rights available to members of
the relevant company or if he can cause one per cent. or more of
those voting rights to be cast at his direction;
(ii) shares held by a director as bare or custodian trustee and in
which he has no beneficial interest, shares comprised in a trust
in which the director's interest is in reversion or is in
remainder (if and so long as another person is entitled to
receive the income from the trust) and shares comprised in an
authorised unit trust scheme in which the director is interested
only as a unit holder are disregarded;
(iii) where a director is deemed for the purposes of this paragraph
(d) to be interested in one per cent. or more in the capital of
a relevant company and that relevant company is materially
interested in a contract, the director is also deemed to be
materially interested in that contract;
(e) a contract, arrangement, transaction or proposal concerning the adoption,
modification or operation of a pension, superannuation or similar scheme
or retirement, death or disability benefits scheme or personal pension
plan or employees' share scheme under which he may benefit and which
either (a) has been approved by or is subject to and conditional on
approval by the Inland Revenue for taxation purposes, or (b) relates to
both employees and directors of the Company (or any of its subsidiary
undertakings) and does not accord to a director as such a privilege or
advantage not accorded to the employees to whom the scheme or fund
relates;
(f) a contract, arrangement, transaction or proposal for the benefit of
employees of the Company or any of its subsidiary undertakings under
which the director benefits in a similar manner to employees and which
does not accord to a director as such a privilege or advantage not
accorded to the employees to whom it relates; and
(g) a contract, arrangement, transaction or proposal concerning the purchase
or maintenance of any insurance policy under which he may benefit.
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106.4 A director may not vote or be counted in the quorum on a resolution of the
board or committee of the board concerning his own appointment (including fixing
or varying the terms of his appointment or its termination) as the holder of an
office or place of profit with the Company or any company in which the Company
is interested. Where proposals are under consideration concerning the
appointment (including fixing or varying the terms of appointment or its
termination) of two or more directors to offices or places of profit with the
Company or a company in which the Company is interested, such proposals shall be
divided and a separate resolution considered in relation to each director. In
such case each of the directors concerned (if not otherwise debarred from voting
under this article 106) is entitled to vote (and be counted in the quorum) in
respect of each resolution except that concerning his own appointment.
106.5 If a question arises at a meeting as to the materiality of a director's
interest (other than the interest of the chairman of the meeting) or as to the
entitlement of a director (other than the chairman) to vote or be counted in a
quorum and the question is not resolved by his voluntarily agreeing to abstain
from voting or being counted in the quorum, the question shall be referred to
the chairman and his ruling in relation to the director concerned is conclusive
and binding on all concerned.
106.6 If a question arises at a meeting as to the materiality of the interest of
the chairman of the meeting or as to the entitlement of the chairman to vote or
be counted in a quorum and the question is not resolved by his voluntarily
agreeing to abstain from voting or being counted in the quorum, the question
shall be decided by resolution of the directors or committee members present at
the meeting (excluding the chairman) whose majority vote is conclusive and
binding on all concerned.
106.7 For the purposes of this article 106, the interest of a person who is for
the purposes of the Acts connected with (within the meaning of section 346 of
the Act) a director is treated as the interest of the director and, in relation
to an alternate director, the interest of his appointor shall be treated as the
interest of the alternate director in addition to an interest which the
alternate director otherwise has. This article 106 applies to an alternate
director as if he were a director otherwise appointed.
106.8 For the avoidance of doubt, any TINTA Designated Director or MediaOne
Designated Director or SBC Designated Director or Cox Designated Director or
Vivendi Designated Director shall be deemed, for all purposes (and not only for
the purposes of the articles), not to have an interest in any contract,
arrangement, transaction or proposal in which TINTA or MediaOne or SBC or Cox or
Vivendi respectively and the members of their respective groups or associates
have an interest.
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Proceedings of Directors and Committees
Board meetings
107. Subject to the articles, the board may meet for the despatch of business,
adjourn and otherwise regulate its proceedings as it thinks fit.
Notice of board meetings
108. A director may, and the secretary at the request of a director shall,
summon a board meeting at any time. Notice of a board meeting is deemed to be
duly given to a director if it is given to him personally or by word of mouth or
sent in writing to him at his last-known address or another address given by him
to the Company for that purpose at least 24 hours in advance of a meeting. A
director may waive the requirement that notice be given to him of a board
meeting, either prospectively or retrospectively. A director absent or intending
to be absent from the United Kingdom or the United States of America may request
that notices of board meetings during his absence be sent in writing to him at
an address given by him to the Company for that purpose. If no request is made
it is not necessary to give notice of a board meeting to a director who is
absent from the United Kingdom or the United States of America.
Quorum
109. The quorum necessary for the transaction of business is a majority of the
directors present in person or by alternate director. A duly convened meeting of
the board at which a quorum is present is competent to exercise all or any of
the authorities, powers and discretions vested in or exercisable by the board.
Chairman of board
110. The board may appoint one of its body as chairman to preside at every board
meeting at which he is present and one or more deputy chairmen and decide the
period for which he is or they are to hold office (and may at any time remove
him or them from office). If no chairman or deputy chairman is elected, or if at
a meeting neither the chairman nor a deputy chairman is present within five
minutes of the time fixed for the start of the meeting, the directors and
alternate directors (in the absence of their appointors) present shall choose
one of their number to be chairman. If two or more deputy chairmen are present,
the senior of them shall act as chairman, seniority being determined by length
of office since their last appointment or reappointment. As between two or more
who have held office for an equal length of time, the deputy chairman to act as
chairman shall be decided by those directors and alternate directors (in the
absence of their appointors) present. A chairman or deputy chairman may hold
executive office or employment with the Company.
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Voting
111. Questions arising at a meeting of the board are determined by a majority of
votes. In case of an equality of votes the chairman shall not have a second or
casting vote.
Participation by telephone
112. A director or his alternate director may participate in a meeting of the
board or a committee of the board through the medium of conference telephone or
similar form of communication equipment if all persons participating in the
meeting are able to hear and speak to each other throughout the meeting. A
person participating in this way is deemed to be present in person at the
meeting and is counted in a quorum and entitled to vote. Subject to the Acts,
all business transacted in this way by the board or a committee of the board is
for the purposes of the articles deemed to be validly and effectively transacted
at a meeting of the board or a committee of the board although fewer than two
directors or alternate directors are physically present at the same place. The
meeting is deemed to take place where the largest group of those participating
is assembled or, if there is no such group, where the chairman of the meeting
then is.
Resolution in writing
113. A resolution in writing executed by all directors for the time being
entitled to receive notice of a board meeting and not being less than a quorum
or by all members of a committee of the board is as valid and effective for all
purposes as a resolution passed at a meeting of the board (or committee, as the
case may be). The resolution in writing may consist of several documents in the
same form each executed by one or more of the directors or members of the
relevant committee. The resolution in writing need not be signed by an alternate
director if it is signed by his appointor and a resolution signed by an
alternate director need not be signed by his appointor.
Proceedings of committees
114.1 Proceedings of committees of the board shall be conducted in accordance
with regulations prescribed by the board (if any). Subject to those regulations
and articles 114.2 and 114.3, proceedings shall be conducted in accordance with
applicable provisions of the articles regulating the proceedings of the board.
114.2 Where the board resolves to delegate any of its powers, authorities and
discretions to a committee and that resolution states that the committee shall
consist of any one or more unnamed directors, it is not necessary to give notice
of a meeting of that committee to directors other than the director or directors
who form the committee.
114.3 The quorum necessary for the transaction of business of any committee
shall be a majority of the members of such committee who are directors present
in person or by an alternate director.
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Minutes of proceedings
115.1 The board shall cause minutes to be made in books kept for the purpose of:
(a) all appointments of officers and committees made by the board and of any
remuneration fixed by the board; and
(b) the names of directors present at every meeting of the board, committees of
the board, the Company or the holders of a class of shares or debentures,
and all orders, resolutions and proceedings of such meetings.
115.2 If purporting to be signed by the chairman of the meeting at which the
proceedings were held or by the chairman of the next succeeding meeting, minutes
are receivable as prima facie evidence of the matters stated in them.
Validity of proceedings of board or committee
116. All acts done by a meeting of the board, or of a committee of the board, or
by a person acting as a director, alternate director or member of a committee
are, notwithstanding that it is afterwards discovered that there was a defect in
the appointment of a person or persons acting, or that they or any of them were
or was disqualified from holding office or not entitled to vote, or had in any
way vacated their or his office, as valid as if every such person had been duly
appointed, and was duly qualified and had continued to be a director, alternate
director or member of a committee and entitled to vote.
Secretary and Authentication of Documents
Secretary
117.1 Subject to the Acts, the board shall appoint a secretary or joint
secretaries and may appoint one or more persons to be an assistant or deputy
secretary on such terms and conditions (including remuneration) as it thinks
fit. The board may remove a person appointed pursuant to this article from
office and appoint another or others in his place.
117.2 Any provision of the Acts or of the articles requiring or authorising a
thing to be done by or to a director and the secretary is not satisfied by its
being done by or to the same person acting both as director and as, or in the
place of, the secretary.
Authentication of documents
118. A director or the secretary or another person appointed by the board for
the purpose may authenticate documents affecting the constitution of the Company
(including the memorandum of association and the articles) and resolutions
passed by the Company or holders of a class of shares or the board or a
committee of the board and books, records, documents and accounts relating to
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the business of the Company, and to certify copies or extracts as true copies or
extracts.
Seals
Safe custody
119. The board shall provide for the safe custody of every seal.
Application of seals
120. A seal may be used only by the authority of a resolution of the board or of
a committee of the board. The board may decide who will sign an instrument to
which a seal is affixed (or, in the case of a share certificate, on which the
seal may be printed) either generally or in relation to a particular instrument
or type of instrument. The board may also decide, either generally or in a
particular case, that a signature may be dispensed with or affixed by mechanical
means. Unless otherwise decided by the board:
(a) share certificates and certificates issued in respect of debentures or
other securities (subject to the provisions of the relevant instrument)
need not be signed or, if signed, a signature may be applied by mechanical
or other means or may be printed; and
(b) every other instrument to which a seal is affixed shall be signed by one
director and by the secretary or a second director.
Official seal for use abroad
121. The Company may exercise the powers conferred by the Acts with regard to
having an official seal for use abroad, and those powers shall be vested in the
board.
Dividends and other payments
Declaration of dividends
122. Subject to the Acts and the articles, the Company may by ordinary
resolution declare a dividend to be paid to the members according to their
respective rights and interests, but no dividend may exceed the amount
recommended by the board.
Interim dividends
123. Subject to the Acts, the board may declare and pay such interim dividends
(including a dividend payable at a fixed rate) as appear to it to be justified
by the profits of the Company available for distribution. If the share capital
is divided into different classes, the board may pay interim dividends on shares
which rank after shares conferring preferred rights with regard to dividend as
well as on shares with preferred rights, unless at the time of payment a
preferential dividend is in
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arrear. If the board acts in good faith, it does not incur any liability to the
holders of shares conferring preferred rights for a loss they may suffer by the
lawful payment of an interim dividend on shares ranking after those with
preferred rights.
Entitlement to dividends
124. Except as otherwise provided by the rights attached to shares, a dividend
shall be declared and paid according to the amounts paid up on the shares in
respect of which the dividend is declared and paid, but no amount paid up on a
share in advance of a call may be treated for the purpose of this article as
paid up on the share. Dividends shall be apportioned and paid proportionately to
the amounts paid up on the shares during any portion or portions of the period
in respect of which the dividend is paid.
Method of payment
125.1 The Company may pay a dividend, interest or another amount payable in
respect of a share in cash or by cheque, dividend warrant or money order, or by
a bank or other funds transfer system, or by such other method as the holder or
joint holders of the share in respect of which the payment is made (or the
person or persons entitled by transmission to the share) may in writing direct.
Any joint holder or other person jointly entitled to a share may give an
effective receipt for a dividend, interest or other amount paid in respect of
the share.
125.2 The Company may send a cheque, warrant or order by post (i) in the case of
a sole holder, to his registered address, or (ii) in the case of joint holders,
to the registered address of the person whose name stands first in the register,
or (iii) in the case of a person or persons entitled by transmission to a share,
as if it were a notice given in accordance with article 140, or (iv) in any
case, to a person and address that the person or persons entitled to the payment
may in writing direct.
125.3 Every cheque, warrant or order is sent at the risk of the person entitled
to the payment and shall be made payable to the order of the person or persons
entitled. The payment of the cheque, warrant or order is a good discharge to the
Company. If payment is made by a bank or other funds transfer, or by another
method at the direction of the holder or holders or other person or persons
entitled, the Company is not responsible for amounts lost or delayed in the
course of the transfer or in carrying out these directions.
125.4 Without prejudice to article 68, the board may withhold payment of a
dividend (or part of a dividend) payable to a person entitled by transmission to
a share until he has provided any evidence of his right that the board may
reasonably require.
125.5 Where an Approved Depositary (approved by the board for the purposes of
this article 125.5) has requested to receive dividends in a currency other than
pounds sterling, the board may in its absolute discretion approve the entering
into of arrangements with such Approved Depositary to enable payment of any
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dividend to be made to such Approved Depositary in such other currency for value
on the date on which the relevant dividend is paid, or such later date as the
board may determine.
Dividends not to bear interest
126. No dividend or other amount payable by the Company in respect of a share
bears interest as against the Company unless otherwise provided by the rights
attached to the share.
Calls or debts may be deducted from dividends etc.
127. The board may deduct from a dividend or other amounts payable to a person
in respect of a share amounts due from him to the Company on account of a call
or otherwise in relation to a share.
Unclaimed dividends etc.
128. All unclaimed dividends, interest or other amounts payable by the Company
in respect of a share may be invested or otherwise made use of by the board for
the benefit of the Company until claimed. Dividends unclaimed for a period of 12
years from the date they became due for payment are forfeited and cease to
remain owing by the Company. The payment of an unclaimed dividend, interest or
other amount payable by the Company in respect of a share into a separate
account does not constitute the Company a trustee in respect of it.
Uncashed dividends
129. If, in respect of a dividend or other amount payable in respect of a share,
on any one occasion:
(a) a cheque, warrant or order is returned undelivered or left uncashed, or (b)
a transfer made by a bank or other funds transfer system is not accepted, and
reasonable enquiries have failed to establish another address or account of the
person entitled to the payment, the Company is not obliged to send or transfer a
dividend or other amount payable in respect of that share to that person until
he notifies the Company of an address or account to be used for that purpose. If
the cheque, warrant or order is returned undelivered or left uncashed or
transfer not accepted on two consecutive occasions, the Company may exercise
this power without making any such enquiries.
Payment of dividends in specie
130. Without prejudice to article 124, the board may, with the prior authority
of an ordinary resolution of the Company, direct that payment of a dividend may
be satisfied wholly or in part by the distribution of specific assets and in
particular of paid-up shares or debentures of another company. Where a
difficulty arises in connection with the distribution, the board may settle it
as it thinks fit and in
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particular may issue fractional certificates (or ignore fractions), may fix the
value for distribution of the specific assets (or any part of them), may decide
that a cash payment be made to a member on the basis of the value so fixed, in
order to secure equality of distribution, and may vest assets in trustees on
trust for the persons entitled to the dividend as may seem expedient to the
board.
Payment of scrip dividends
131.1 Subject to the Acts, but without prejudice to article 124, the board may,
with the prior authority of an ordinary resolution of the Company, allot to
those holders of a particular class of shares who have elected to receive them
further shares of that class or ordinary shares, in either case credited as
fully paid, (new shares) instead of cash in respect of all or part of a dividend
or dividends specified by the resolution, subject to any exclusions,
restrictions or other arrangements the board may in its absolute discretion deem
necessary or expedient to deal with legal or practical problems under the laws
of, or the requirements of a recognised regulatory body or a stock exchange in,
any territory.
131.2 Where a resolution under article 131.1 is to be proposed at a general
meeting and the resolution relates in whole or in part to a dividend to be
declared at that meeting, then the resolution declaring the dividend is deemed
to take effect at the end of that meeting.
131.3 A resolution under article 131.1 may relate to a particular dividend or to
all or any dividends declared or paid within a specified period, but that period
may not end later than the beginning of the fifth annual general meeting
following the date of the meeting at which the resolution is passed.
131.4 The board shall determine the basis of allotment of new shares so that, as
nearly as may be considered convenient without involving rounding up of
fractions, the value of the new shares (including a fractional entitlement) to
be allotted (calculated by reference to the average quotation, or the nominal
value of the new shares, if greater) equals (disregarding an associated tax
credit) the amount of the dividend which would otherwise have been received by
the holder (the relevant dividend). For this purpose the average quotation of
each of the new shares is the average of the middle-market quotations for a
fully-paid share of the Company of that class derived from the Daily Official
List of the London Stock Exchange on the business day on which the relevant
class of shares is first quoted ex the relevant dividend (or such other date as
the board may deem appropriate to take account of any subsequent issue of shares
by the Company) and the four subsequent business days or shall be as determined
by or in accordance with the ordinary resolution.
131.5 The board may make any provision it considers appropriate in relation to
an allotment made pursuant to this article, including but not limited to: (a)
the giving of notice to holders of the right of election offered to them;
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(b) the provision of forms of election (whether in respect of a particular
dividend or dividends generally);
(c) determination of the procedure for making and revoking elections;
(d) the place at which, and the latest time by which, forms of election and
other relevant documents must be lodged in order to be effective; and
(e) the disregarding or rounding up or down or carrying forward of fractional
entitlements, in whole or in part, or the accrual of the benefit of
fractional entitlements to the Company (rather than to the holders
concerned).
131.6 The dividend (or that part of the dividend in respect of which a right of
election has been offered) is not declared or payable on shares in respect of
which an election has been duly made (the elected shares); instead new shares
are allotted to the holders of the elected shares on the basis of allotment
calculated as in article 131.4. For that purpose, the board may resolve to
capitalise out of amounts standing to the credit of reserves (including a share
premium account, capital redemption reserve and profit and loss account),
whether or not available for distribution, a sum equal to the aggregate nominal
amount of the new shares to be allotted and apply it in paying up in full the
appropriate number of new shares for allotment and distribution to the holders
of the elected shares. A resolution of the board capitalising part of the
reserves has the same effect as if the capitalisation had been declared by
ordinary resolution of the Company pursuant to article 132. In relation to the
capitalisation the board may exercise all the powers conferred on it by article
132 without an ordinary resolution of the Company.
131.7 The new shares rank pari passu in all respects with each other and with
the fully-paid shares of the same class in issue on the record date for the
dividend in respect of which the right of election has been offered, but they
will not rank for a dividend or other distribution or entitlement which has been
declared or paid by reference to that record date.
Capitalisation of profits
132. Subject to the Acts, the board may, with the authority of an ordinary
resolution of the Company:
(a) resolve to capitalise an amount standing to the credit of reserves
(including a share premium account, capital redemption reserve and profit
and loss account), whether or not available for distribution;
(b) appropriate the sum resolved to be capitalised to the members in proportion
to the nominal amount of ordinary shares (whether or not fully paid) held
by them respectively and apply that sum on their behalf in or towards:
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(i) paying up the amounts (if any) for the time being unpaid on shares
held by them respectively, or
(i) paying up in full unissued shares or debentures of a nominal amount
equal to that sum,
and allot the shares or debentures, credited as fully paid, to the members
(or as they may direct) in those proportions, or partly in one way and
partly in the other, but the share premium account, the capital redemption
reserve and profits which are not available for distribution may, for the
purposes of this article 132, only be applied in paying up unissued shares
to be allotted to members credited as fully paid;
(c) make any arrangements it thinks fit to resolve a difficulty arising in the
distribution of a capitalised reserve and in particular, where shares or
debentures become distributable in fractions, the board may deal with the
fractions as it thinks fit, including issuing fractional certificates,
disregarding fractions or selling shares or debentures representing the
fractions to a person for the best price reasonably obtainable and
distributing the net proceeds of the sale in due proportion amongst the
members (except that if the amount due to a member is less than (Pounds)3,
or such other sum as the board may decide, the sum may be retained for the
benefit of the Company);
(d) authorise a person to enter (on behalf of all the members concerned) into
an agreement with the Company providing for either:
(i) the allotment to the members respectively, credited as fully
paid, of shares or debentures to which they may be entitled on
the capitalisation, or
(ii) the payment by the Company on behalf of the members (by the
application of their respective proportions of the reserves
resolved to be capitalised) of the amounts or part of the
amounts remaining unpaid on their existing shares,
an agreement made under such authority being effective and binding on all
those members; and
(e) generally do all acts and things required to give effect to the resolution.
Record dates
133. Notwithstanding any other provision of the articles, but subject to the
Acts and rights attached to shares, the Company or the board may fix any date as
the record date for a dividend, distribution, allotment or issue. The record
date may be on or at any time before or after a date on which the dividend,
distribution, allotment or issue is declared, made or paid.
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Accounts
Inspection of accounts
134.1 The board shall ensure that accounting records are kept in accordance with
the Acts.
134.2 The accounting records shall be kept at the office or, subject to the
Acts, at another place decided by the board and shall be available during
business hours for the inspection of the directors and other officers. No member
(other than a director or other officer) has the right to inspect an accounting
record or other document except if a right is conferred by the Acts or he is
authorised by the board.
Accounts to be sent to members etc.
135.1 In respect of each financial year, a copy of the Company's annual
accounts, directors' report and auditors' report on those accounts shall be sent
by post or delivered to:
(a) every member (whether or not entitled to receive notices of general
meetings),
(b) every holder of debentures (whether or not entitled to receive notices of
general meetings), and
(c) every other person who is entitled to receive notices of general meetings,
not less than 21 clear days before the date of the meeting at which copies of
those documents are to be laid in accordance with the Acts. This article 135
does not require copies of the documents to which it applies to be sent or
delivered to:
(i) a member or holder of debentures of whose address the Company is unaware,
or
(ii) more than one of the joint holders of shares or debentures.
135.2 Where permitted by the Acts, a summary financial statement derived from
the Company's annual accounts and the directors' report in the form and
containing the information prescribed by the Acts may be sent or delivered to a
person in place of the documents required to be sent or delivered by article
135.1.
Notices
136. A notice to be given to or by a person pursuant to the articles shall be in
writing except that a notice convening a meeting of the board or of a committee
of the board need not be in writing.
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Service of Notices and Other Documents on Members
137.1 A notice or other document may be given to a member by the Company either
personally or by sending it by post in a pre-paid envelope addressed to the
member at his registered address, or by leaving it at that address (or at
another address notified for the purpose) in an envelope addressed to the
member.
137.2 In the case of joint holders of a share, a notice or other document shall
be given to whichever of them is named first in the register in respect of the
joint holding and notice given in this way is sufficient notice to all joint
holders.
137.3 If a member (or, in the case of joint holders, the person first named in
the register) has a registered address outside the United Kingdom or the United
States of America but has notified the Company of an address in the United
Kingdom or the United States of America at which notices or other documents may
be given to him, he is entitled to have notices given to him at that address,
but otherwise no such member or person is entitled to receive a notice or other
document from the Company.
Notice by Advertisement
138. If by reason of the suspension or curtailment of postal services in the
United Kingdom or the United States of America the Company is unable effectively
to convene a general meeting by notices sent by post, the board may, in its
absolute discretion and as an alternative to any other method of service
permitted by the articles, resolve to convene a general meeting by a notice
advertised in at least, in the case of the suspension or curtailment of postal
services in the United Kingdom, one leading United Kingdom national daily
newspaper and, in the case of the suspension or curtailment of postal services
in the United States of America, the Wall Street Journal and the New York Times,
(but, if any such newspaper shall by reason of industrial action or otherwise
not be published on the date on which the advertisement is due to appear,
publication in such other newspaper(s) as the board shall consider appropriate
shall be sufficient). In this case the Company shall send confirmatory copies of
the notice by post if at least seven clear days before the meeting the posting
of notices to addresses throughout the United Kingdom and/or the United States
of America again becomes practicable.
Evidence of Service
139.1 A notice or other document addressed to a member at his registered address
or address for service in the United Kingdom or the United States of America is,
if sent by post (by airmail if posted from outside the United Kingdom to an
address within the United Kingdom or from outside the United States of America
to an address within the United States of America), deemed to be given within 24
hours if pre-paid as first class post and within 48 hours if pre-paid as second
class post after it has been posted, and in proving service it is
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sufficient to prove that the envelope containing the notice or document was
properly addressed, pre-paid and posted.
139.2 A notice or document not sent by post but left at a registered address or
address for service in the United Kingdom or the United States of America is
deemed to be given on the day it is left.
139.3 Where notice is given by newspaper advertisements, the notice is deemed to
be given to all members and other persons entitled to receive it at noon on the
day when the advertisements appear or, if they appear on different days, at noon
on the last of the days when the advertisements appear.
139.4 A member present in person or by proxy at a meeting or of the holders of a
class of shares is deemed to have received due notice of the meeting and, where
required, of the purposes for which it was called.
Notice Binding on Transferees etc.
140. A person who becomes entitled to a share by transmission, transfer or
otherwise is bound by a notice in respect of that share (other than a notice
served by the Company under section 212 of the Act) which, before his name is
entered in the register, has been properly served on a person from whom he
derives his title.
Notice in case of Entitlement by Transmission
141. Where a person is entitled by transmission to a share, the Company may give
a notice or other document to that person as if he were the holder of a share by
addressing it to him by name or by the title of representative of the deceased
or trustee of the bankrupt member (or by similar designation) at an address in
the United Kingdom or the United States of America supplied for that purpose by
the person claiming to be entitled by transmission. Until an address has been
supplied, a notice or other document may be given in any manner in which it
might have been given if the death or bankruptcy or other event had not
occurred. The giving of notice in accordance with this article is sufficient
notice to all other persons interested in the share.
Miscellaneous
Destruction of Documents
142.1 The Company may destroy:
(a) a share certificate which has been cancelled at any time after one year
from the date of cancellation;
(b) a mandate for the payment of dividends or other amounts or a variation or
cancellation of a mandate or a notification of change of name or
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address at any time after two years from the date the mandate, variation,
cancellation or notification was recorded by the Company;
(c) an instrument of transfer of shares (including a document constituting
the renunciation of an allotment of shares) which has been registered at
any time after six years from the date of registration; and
(d) any other document on the basis of which any entry in the register is
made at any time after six years from the date an entry in the register
was first made in respect of it.
142.2 It is presumed conclusively in favour of the Company that every share
certificate destroyed was a valid certificate validly cancelled, that every
instrument of transfer destroyed was a valid and effective instrument duly and
properly registered and that every other document destroyed was a valid and
effective document in accordance with the recorded particulars in the books or
records of the Company, but:
(a) the provisions of this article 142 apply only to the destruction of a
document in good faith and without express notice to the Company that the
preservation of the document is relevant to a claim;
(b) nothing contained in this article 142 imposes on the Company liability in
respect of the destruction of a document earlier than provided for in this
article 142 or in any case where the conditions of this article are not
fulfilled; and
(c) references in this article 142 to the destruction of a document include
reference to its disposal in any manner.
Winding up
143. On a voluntary winding up of the Company the liquidator may, on obtaining
any sanction required by law, divide among the members in kind the whole or any
part of the assets of the Company, whether or not the assets consist of property
of one kind or of different kinds. For this purpose the liquidator may set the
value he deems fair on a class or classes of property, and may determine on the
basis of that valuation and in accordance with the then existing rights of
members how the division is to be carried out between members or classes of
members. The liquidator may not, however, distribute to a member without his
consent an asset to which there is attached a liability or potential liability
for the owner.
Indemnity
144.1 Subject to the Acts, but without prejudice to an indemnity to which he may
otherwise be entitled, every officer of the Company shall be indemnified out of
the assets of the Company against all costs, charges, losses and liabilities
incurred by him in the execution of his duties or the exercise of his powers,
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authorities and discretions including (without prejudice to the generality of
the foregoing) a liability incurred:
(a) defending proceedings (whether civil or criminal) in which judgment is
given in his favour or in which he is acquitted, or which are otherwise
disposed of without a finding or admission of material breach of duty on
his part, or
(b) in connection with any application in which relief is granted to him by
the court from liability for negligence, default, breach of duty or breach
of trust in relation to the affairs of the Company.
144.2 The board may exercise all the powers of the Company to purchase and
maintain insurance for the benefit of a person who is an officer or employee, or
former officer or employee, of the Company or of a company which is a subsidiary
undertaking of the Company or in which the Company has an interest (whether
direct or indirect), or who is or was trustee of a retirement benefits scheme or
another trust in which an officer or employee or former officer or employee is
or has been interested, indemnifying him against liability for negligence,
default, breach of duty or breach of trust or another liability which may
lawfully be insured against by the Company.
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Exhibit I
FILING AGREEMENT
Pursuant to Rule 13d-1(f) promulgated under the Securities Exchange Act
of 1934, the undersigned hereby agree to the filing of this amendment to the
Statement on Schedule 13D on behalf of SBC Communications Inc., a Delaware
corporation and Southwestern Bell International Holdings (UK-1) Corporation, a
Delaware corporation.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument.
Dated: September 14, 1998
SBC COMMUNICATIONS INC.
By: /s/ Donald E. Kiernan
-----------------------------------
Name: Donald E. Kiernan
Title: Senior Vice President,
Treasurer and Chief
Financial Officer
SOUTHWESTERN BELL INTERNATIONAL
HOLDINGS (UK-1) CORPORATION
By: /s/ Roger W. Wohlert
-----------------------------------
Name: Roger W. Wohlert
Title: Treasurer
