Lead Manager

SECTION 8
ADDITIONAL INFORMATION
8.4.3 Issue of further BBIPL shares
In order to maintain the one-for-one conversion ratio between B Class shares and Babcock & Brown Shares, it
will be necessary to maintain the number of issued Shares and Options in Babcock & Brown at exactly the same
number as the A Class Shares which Babcock & Brown holds in BBIPL. In this way, both a Share in Babcock &
Brown and a B Class share will have the same per share dividend entitlement, and this should ensure that (all else
being equal) both shares have a comparable value so as to make the one-for-one conversion ratio fair to both
BClass shareholders and Babcock & Brown’s Shareholders.
Accordingly, whenever Babcock & Brown issues further Shares and Options (for example, under a placement,
dividend reinvestment plan, employee incentive plan, etc.) it will be obliged to subscribe for an equal number of
new A Class Shares in BBIPL.The issue price for those new A Class Shares will be the amount (net of issue costs)
that Babcock & Brown receives for the issue of its own Shares.
The only scope for the issue of further B Class shares in BBIPL is if there is a rights issue at Babcock & Brown
level, in which case BBIPL may be obliged to offer rights to its own shareholders in the same ratio. B Class
shareholders also have the right to “cash out” their BBIPL rights at the applicable market price of Babcock &
Brown’s rights.
8.4.4 Voting rights and election of directors to the BBIPL board
Generally, A Class and B Class shares have equal voting rights at a general meeting of BBIPL.
There are some cases, however, where the A Class Shares “flow through” the votes taken at a general meeting of
Babcock & Brown. In these cases, a “proportional voting requirement” applies under which Babcock & Brown is
obliged to vote and abstain from voting its A Class Shares in the same proportions as “for” and “against” votes
were cast and Shares were not voted (respectively) by shareholders at the Babcock & Brown level.
One of the key matters to which the proportional voting requirement applies is the election of directors at the
BBIPL level. It is intended that the boards of Babcock & Brown and BBIPL should closely mirror one another,
subject to BBIPL B Class shareholders having a vote at the BBIPL level. For instance, whenever a BBIPL director
who is also a director of Babcock & Brown retires and stands for re-election at the Babcock & Brown level, the
director must also retire and stand for re-election at the BBIPL level. Even if a BBIPL director is not a director of
Babcock & Brown, the person must retire and stand for re-election on the same rotational basis as if he or she
was a director of a listed company.The right of the BBIPL board to appoint a new director as a casual vacancy is
also limited to people who are also directors of Babcock & Brown.
Further, the Constitution provides that after the date on which BBIPL is entitled to compulsorily redeem B Class
shares (see above) Babcock & Brown will essentially be able to exercise complete control over the composition of
the BBIPL board.
8.4.5 Election of directors to Babcock & Brown’s board
B Class shareholders do not have any voting rights at a general meeting of Babcock & Brown, including in
relation to the appointment of directors to Babcock & Brown’s board.
However, Babcock & Brown is obliged to accept a nomination from the board of BBIPL where an election is to
be held to fill a board vacancy at Babcock & Brown level. However, such nominations do not displace the right
of Babcock & Brown’s board to put its own nominees to a vote of shareholders.
8.4.6 Sale of substantial assets by BBIPL
Upon listing, all of Babcock & Brown’s business interests, investments and assets will be held through BBIPL and
BBIPL’s subsidiaries.The BBIPL Constitution maintains this position going forward.
If Babcock & Brown’s shareholders are to vote on a significant acquisition, disposal or related party transaction to
which Chapter 10 or 11 of the ASX Listing Rules applies and which affects BBIPL (which will usually be the
case), any such decision must also be approved by BBIPL’s shareholders to the extent that it affects BBIPL’s assets.
Babcock & Brown can vote its A Class Shares on that resolution, and the proportional voting requirement
referred to above applies to this resolution.
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