BT 2005 Annual Report Download - page 136

Additional information for shareholders BT Group plc Annual Report and Form 20-F 2005 135
Directors’ votes
A director need not be a shareholder, but a director who is not a shareholder can still attend and speak at shareholders’
meetings.
Unless the Articles say otherwise, a director cannot vote on a resolution about a contract in which the director has a
material interest (this will also apply to interests of a person connected with the director). The director can vote if the
interest is only an interest in BT shares, debentures or other securities. A director can, however, vote and be counted in
a quorum in respect of certain matters in which he is interested as set out in the Articles.
Subject to the relevant legislation, the shareholders can by passing an ordinary resolution suspend or relax, among
other things, the provisions relating to the interest of a director in any contract or arrangement or relating to a
director’s right to vote and be counted in a quorum on resolutions in which he is interested to any extent or ratify any
particular contract carried out in breach of those provisions.
Directors’ interests
If the legislation allows and the director has disclosed the nature and extent of the interest to the Board, the director
can:
(i) have any kind of interest in a contract with or involving BT (or in which BT has an interest or with or involving
another company in which BT has an interest);
(ii) have any kind of interest in a company in which BT has an interest (including holding a position in that company or
being a shareholder of that company);
(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 firm 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 benefit received or profit 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
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 defined 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, financial 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 different from those set forth below.
For purposes of this summary, a ‘US Holder’ is a beneficial owner of ordinary shares or ADSs that, for US federal
income tax purposes, is: a citizen 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
state thereof, an estate the income of which is subject to US federal income taxation regardless of its source, or a trust
if a US court can exercise primary supervision over the administration of the trust and one or more US persons are