BT 2014 Annual Report Download - page 202

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Additional information
Additional information
(ii) in which the director has an interest only because the director is a
holder of shares, debentures or other securities of BT, or by reason
of any other interest in or through BT
(iii) which involves the giving of any security, guarantee or indemnity
to the director or any other person for money lent or obligations
incurred by the director or by any other person at the request
of or for the benet of BT or the benet of any of its subsidiary
undertakings or a debt or other obligation which is owed by BT
or any of its subsidiary undertakings to that other person if the
director has taken responsibility for all or any part of that debt or
obligation by giving a guarantee, security or indemnity
(iv) where BT or any of its subsidiary undertakings is oering any
shares, debentures or other securities for subscription or purchase
to which the director is or may be entitled to participate as a holder
of BT securities or where the director will be involved in
the underwriting or sub-underwriting
(v) relating to any other company in which the director has an interest,
directly or indirectly (including holding a position in that company)
or is a shareholder, creditor, employee or otherwise involved in that
company—these rights do not apply if the director owns 1% or
more of that company or of the voting rights in that company
(vi) relating to an arrangement for the benet of BT employees or
former BT employees or any of BT’s subsidiary undertakings which
only gives the directors the same benets that are generally given
to the employees or former employees to whom the arrangement
relates
(vii) relating to BT buying or renewing insurance for any liability for
the benet of directors or for the benet of persons who include
directors
(viii) relating to the giving of indemnities in favour of directors
(ix) relating to the funding of expenditure by any director or directors
on defending criminal, civil or regulatory proceedings or actions
against the director or the directors in connection with an
application to the court for relief or on defending the director or
the directors in any regulatory investigations or which enables any
director or directors to avoid incurring expenditure as described in
this paragraph and
(x) in which the director’s interest, or the interest of directors generally,
has been authorised by an ordinary resolution.
Subject to the relevant legislation, the shareholders can by passing an
ordinary resolution ratify any particular contract carried out in breach
of those provisions.
Directors’ appointment and retirement
Under BT’s Articles there must be at least two directors, who manage
the business of the company. The shareholders can vary this minimum
and/or decide a maximum by ordinary resolution. The Board and
the shareholders (by ordinary resolution) may appoint a person who
is willing to be elected as a director, either to ll a vacancy or as an
additional director.
At every annual general meeting, any director who was elected or last
re-elected a director at or before the annual general meeting held in the
third year before the current year, must retire by rotation. Any director
appointed by the directors automatically retires at the next following
annual general meeting. A retiring director is eligible for re-election.
In addition to any power of removal under the 2006 Act, the
shareholders can pass an ordinary resolution to remove a director,
even though his or her time in oce has not ended. They can elect a
person to replace that director subject to the Articles, by passing an
ordinary resolution. A person so appointed is subject to retirement by
rotation when the director replaced would have been due to retire.
Directors’ borrowing powers
To the extent that the legislation and the Articles allow, the Board can
exercise all the powers of the company to borrow money, to mortgage
or charge its business, property and assets (present and future) and
to issue debentures and other securities, and give security either
outright or as collateral security for any debt, liability or obligation of
the company or another person. The Board must limit the borrowings
of the company and exercise all the company’s voting and other rights
or powers of control exercisable by the company in relation to its
subsidiary undertakings so as to ensure that the aggregate amount of all
borrowings by the group outstanding, net of amounts borrowed intra-
group among other things, at any time does not exceed £35bn. These
borrowing powers may only be varied by amending the Articles.
(k) Sinking fund, liability to further calls and change of control
BT’s shares are not subject to any sinking fund provision under the
Articles or as a matter of the laws of England and Wales. No shareholder
is currently liable to make additional contributions of capital in respect of
BT’s ordinary shares in the future. There are no provisions in the Articles
or of corporate legislation in England and Wales that would delay,
defer or prevent a change of control.
(l) Disclosure of interests in shares
Under the Financial Services and Markets Act 2000 and the UK
Disclosure and Transparency Rules there is a statutory obligation on a
person who acquires or ceases to have a notiable interest in the relevant
share capital of a public company like BT to notify the company of that
fact. The disclosure threshold is 3%. These Rules also deal with the
disclosure by persons of interests in shares or debentures of companies
in which they are directors and certain associated companies. Under
section 793 of the 2006 Act (referred to in (a) above), BT may ascertain
the persons who are or have within the last three years been interested
in its shares and the nature of those interests. The UK City Code on
Takeovers and Mergers also imposes strict disclosure requirements with
regard to dealings in the securities of an oeror or oeree company on
all parties to a takeover and also on their respective associates during
the course of an oer period.
Material contracts
Excluding contracts entered into in the ordinary course of business, no
contracts have been entered into in the two years preceding the date of
this document by BT or another member of the group which are, or may
be, material to the group or contain a provision under which a member
of the group has an obligation or entitlement which is, or may be,
material to BT or such other member of the group.
Taxation (US Holders)
This is a summary only of the principal US federal income tax and UK tax
consequences of the ownership and disposition of ordinary shares or
ADSs by US Holders (as dened below) who hold their ordinary shares
or ADSs as capital assets. It does not address all aspects of US federal
income taxation and does not address aspects that may be relevant
to persons who are subject to special provisions of US federal income
tax law, including US expatriates insurance companies tax-exempt
organisations banks regulated investment companies nancial
institutions securities broker-dealers traders in securities who elect a
mark-to-market method of accounting persons subject to alternative
minimum tax investors that directly, indirectly or by attribution own
10% or more of the outstanding share capital or voting power of BT
persons holding their ordinary shares or ADSs as part of a straddle,
hedging transaction or conversion transaction persons who acquired
their ordinary shares or ADSs pursuant to the exercise of options or
otherwise as compensation or persons whose functional currency is
not the US Dollar, amongst others. Those holders may be subject to US
federal income tax consequences dierent from those set forth below.
For the purposes of this summary, a US Holder is a benecial owner of
ordinary shares or ADSs that, for US federal income tax purposes, is
a citien or individual resident of the United States a corporation (or
other entity taxable as a corporation for US federal income tax purposes)
created or organised in or under the laws of the United States or any
political subdivision thereof an estate the income of which is subject