BT 2008 Annual Report Download - page 162

BT Group plc Annual Report & Form 20-F 161
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 or she 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
No one is prevented from being or becoming a director because they have reached the age of 70.
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.
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 the 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 political subdivision 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 United States persons are authorised to control all
substantial decisions of the trust. If a partnership holds ordinary shares or ADSs, the US tax treatment of a partner generally will
depend upon the status of the partner and the activities of the partnership. A partner in a partnership that holds ordinary shares or
ADSs is urged to consult its own tax advisor regarding the specific tax consequences of owning and disposing of the ordinary shares
or ADSs.
In particular, this summary is based on (i) current UK tax law and the practice of Her Majesty’s Revenue & Customs (HMRC) and
US law and US Internal Revenue Service (IRS) practice, including the Internal Revenue Code of 1986, as amended, existing and
proposed Treasury regulations, rulings, judicial decisions and administrative practice, all as currently in effect and available, (ii) the
United Kingdom–United States Convention relating to estate and gift taxes, and (iii) the United Kingdom–United States Tax
Convention that entered into force on 31 March 2003 and the protocol thereto (the Convention), all as in effect on the date of this
annual report, all of which are subject to change or changes in interpretation, possibly with retroactive effect.
Additional information