BT 2010 Annual Report Download - page 165

ADDITIONAL INFORMATION INFORMATION FOR SHAREHOLDERS
163BT GROUP PLC ANNUAL REPORT & FORM 20-F
ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS REVIEW OF THE YEAR OVERVIEW
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 an interest (this will
also apply to interests of a person connected with the director).
If the legislation allows, a director can vote and be counted in the quorum on a resolution concerning a contract:
(i) in which the director has an interest of which the director is not aware; or which cannot reasonably be regarded as likely to give rise to
a conflict of interest;
(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 benefit of BT or the benefit 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 offering 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
one per cent or more of that company or of the voting rights in that company;
(vi) relating to an arrangement for the benefit of BT employees or former BT employees or any of BT’s subsidiary undertakings which only
gives the directors the same benefits 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 benefit of directors or for the benefit 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 fill 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 office 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.