BT 2002 Annual Report Download - page 149

(iii) hold a position (other than auditor) in BT or another company in which BT has an interest on terms and conditions
decided by the Board; and
(iv) alone (or through some ®rm with which the director is associated) do paid professional work (other than as auditor) for
BT or another company in which BT has an interest on terms and conditions decided by the Board.
A director does not have to hand over to BT any bene®t received or pro®t made as a result of anything permitted to be
done under the Articles.
When a director knows that they are interested in a contract with BT they must tell the other directors.
Retirement of directors
Provisions of the legislation which, read with the Articles, would prevent a person from being or becoming a director
because that person has reached the age of 70 do not apply to the company.
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, shall 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.
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 £35 billion.
Material contracts
The following contracts (not being contracts entered into in the ordinary course of business) have been entered into in the
two years preceding the date of this document by BT or another member of the group and are, or may be, material to the
group or have been entered into by BT or another member of the group and 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.
Viag Interkom
On 16 August 2000, the company, through its wholly-owned subsidiary BT Interkom Verwaltungs GmbH, entered into
option agreements with each of its partners in the Viag Interkom joint venture, E.ON AG and Telenor AS, giving BT the
option to purchase, and the other partners the right to sell, their interests in Viag Interkom which holds a third-generation
mobile telecommunications licence in Germany.
On 29 December 2000, Telenor group exercised its option pursuant to which BT Interkom Verwaltungs GmbH
purchased Telenor AS's 10% share of the venture on 18 January 2001. On 15 January 2001, E.ON AG exercised its option
pursuant to which BT Interkom Verwaltungs GmbH purchased E.ON AG's 45% share of the venture on 19 February 2001.
The purchase prices for E.ON's 45% share and Telenor AS's 10% share of the venture were e7.25 billion and
e1.61 billion, respectively.
The agreement with E.ON includes the right for BT to continue to use the name ``VIAG'' or ``Viag Interkom'' for three
years, following which they may enter into good faith negotiations for its continued use. It also contained covenants
restricting E.ON's rights to compete with Viag Interkom for 12 months.
The agreement with Telenor contains certain indemnities granted by BT to Telenor.
Japan Telecom
A sale and purchase agreement dated 2 May 2001 among BT, a subsidiary of BT, Vodafone Group plc (``Vodafone'') and a
subsidiary of Vodafone, under which the subsidiary of BT agreed to sell three subsidiaries which held BT's interests in
Japan Telecom Co., Ltd. (``JT''), J-Phone Communications Co., Ltd. (``JPC''), J-Phone Central Co., Ltd (``JC''), J-Phone
East Co., Ltd. (``JEC'') and J-Phone West Co., Ltd. (``JWC''). JT is one of Japan's leading telecommunications companies
and parent of JPC, which in turn had controlling interests in the three regional J-Phone wireless operating companies, JC,
JEC and JWC. The consideration for the transaction comprised a cash payment of £3.7 billion, and the assumption by
Vodafone of £782 million of BT debt guarantees in favour of JT.
The sale of the subsidiaries which held BT's interests in JT and JPC (for £3.07 billion) was completed on 1 June 2001.
The sale of BT's interests in JEC and JWC for the Euro equivalent of £650 million was completed on 12 July 2001,
following the exercise of certain options over shares in JC, JEC and JWC, with the exercise price of approximately
£380 million having been paid by BT.
Additional information for shareholders
148 BT Group Annual Report and Form 20-F 2002