Review & Notice of
The 2007 Annual General
Meeting of BT Group plc will be held at The Sage Gateshead, St Mary’s Square,
Gateshead Quays, Gateshead NE8 2JR, at 10.30 am on Thursday 19 July 2007 to
consider the following:
accounts and reports of the directors and the auditors for the year ended 31
March 2007 be received.
Legislation requires the
directors to present to the meeting these accounts and reports contained in the
Company’s Annual Report.
That the directors’ remuneration report for the
year ended 31 March 2007 be approved.
The directors have to ask shareholders to vote
on this report on directors’ remuneration. It
is summarised on the
'Summary report of directors' renumeration' section of this document.
The full report, in the Annual Report, is on
the Company’s website at www.bt.com/annualreport
or is sent to shareholders if requested.
That the final dividend of 10 pence per share
recommended by the directors be declared payable on 17 September 2007 to holders
of ordinary shares registered at the close of business on 24 August
dividend declared cannot exceed the amount recommended by the directors.
re-election of directors
Under the Company’s articles of association (‘articles’),
in compliance with the Combined Code on Corporate Governance, all directors have
to retire every three years at an Annual General Meeting. As a result, four
directors must retire at this year’s Annual General Meeting and are proposed by
the Board for re-election.
That Sir Christopher Bland be
re-elected as a director.
Sir Christopher Bland was appointed to the Board
of British Telecommunications plc as Chairman on 1 May 2001. He became Chairman
of the Company at the time of the demerger of O2 in November 2001. He chairs the
Nominating and Community Support committees and is a member of the Pension
Scheme Performance Review Group.
chairman of the BBC Board of Governors from 1 April 1996 until 30 September
2001. From 1972 to 1979, Sir Christopher was deputy chairman of the Independent
Broadcasting Authority and chairman of its Complaints Review Board. In 1982, he
became a non-executive director of LWT Holdings and was chairman from 1983 to
1994, when LWT was acquired by Granada Group. From December 1994 to May 2000, he
was chairman of NFC. From 1977 to 1985, he was chairman of Sir Joseph Causton
Sir Christopher, who was chairman
of the Hammersmith and Queen Charlotte’s Hospitals Special Health Authority from
1982 to 1994 and of Hammersmith Hospital’s NHS Trust from 1994 to February 1997,
was knighted for his work in the NHS in 1993. He was chairman of the Private
Finance Panel from 1995 to 1996 and a member of the Prime Minister’s Advisory
Panel on the Citizen’s Charter. He is senior advisor at Warburg Pincus and
chairman of the Royal Shakespeare Company. Aged 68.
That Andy Green be re-elected as a
Andy Green was
appointed to the Board on 19 November 2001. He is a member of the Operating
Committee. In October 2001 Andy was appointed as Chief Executive of BT Global
Services, BT’s managed services and solutions provider, serving multi-site
organisations worldwide. On 24 April 2007, he was appointed Chief Executive,
Group Strategy and Operations. Since joining the Company in 1986, he has held a
number of positions, including Chief Executive of BT Openworld and Group
Director of Strategy and Development. Andy was a member of the former Executive
Committee from February 1995. He is a board member of e-skills UK and ABESU, a
charity with the objective of ‘making poverty history’, and a non-executive
director of NAVTEQ Corporation (a US corporation). Aged 51.
That Ian Livingston be
re-elected as a director.
Ian Livingston was appointed Group Finance
Director in April 2002 and became Chief Executive of BT Retail in February 2005.
He is a member of the Operating Committee. Before joining the Company he was
group finance director of Dixons Group, a position he held from 1997. He joined
Dixons in 1991 after working for 3i Group and Bank of America International. His
experience at Dixons spanned a number of operational and financial roles, both
in the UK and overseas. He was also a non-executive director of Ladbrokes
(formerly Hilton Group) and a director of Freeserve from its inception. Ian is a
Chartered Accountant. Aged 42.
That John Nelson be re-elected as a
John Nelson was
appointed to the Board on 14 January 2002. He is a member of the Audit and
Nominating committees and the Pension Scheme Performance Review Group. A
Chartered Accountant, he retired as chairman of Credit Suisse First Boston
Europe (CSFB) on 31 January 2002. He was a member of the executive board and
chairman of the European executive committee of
Prior to joining CSFB in January 1999, John spent 13 years with Lazard
Brothers. He was appointed vice chairman of Lazard Brothers in 1990. He was also
chairman of Lazard S.p.A. in Italy and a managing director of Lazard Freres, New
York. He is chairman of Hammerson, deputy chairman of Kingfisher, a member of
the Board of English National Opera and a senior advisor to Charterhouse Capital
Partners. Aged 59.
election of directors
The articles require any director appointed by the Board to retire at the
Annual General Meeting following appointment.
That Deborah Lathen be elected
as a director.
was appointed to the Board on 1 February 2007. She is a member of the
Remuneration Committee. She is a US attorney and is president of Lathen
Consulting, which provides strategic, legal and management advice and counsel to
senior executives of major US companies on policy and regulatory
Deborah was formerly chief of the
Cable Services Bureau at the Federal Communications Commission from 1998 to
2001. She was responsible for policy and regulation covering the cable,
satellite TV and broadcast industries.
previously director of national consumer affairs and managing counsel at Nissan
Motor Corporation USA, and prior to that, held legal positions at TRW Financial
Systems and at the Quaker Oats Company.
national, she is aged 54.
That François Barrault be elected as a
was appointed to the Board and became Chief Executive of BT Global Services on
24 April 2007. He is a member of the Operating Committee. He joined BT in April
2004 as President BT International, BT Global Services. François was formerly
president, Lucent Technologies Inc and held other roles within Lucent including
president and CEO Mobility International, and president and CEOEMEA (Europe,
Middle East and Africa). Before this, François worked for Ascend Communications,
where he held the position of senior vice president, EMEA and International
until its acquisition by Lucent. He previously held executive positions with
IBM, Computervision/ Prime and Stratus. He is a non-executive director of
eServGlobal (an Australian corporation).
French national, he is aged 46.
PricewaterhouseCoopers LLP be reappointed auditors of the Company, to hold
office until the conclusion of the next general meeting at which accounts are
laid before the Company.
The resolution proposes the reappointment of
PricewaterhouseCoopers LLP as the Company’s auditors.
That the directors be
authorised to decide the auditors’ remuneration.
This resolution follows standard practice. If
passed, the directors will decide how much the auditors should be
following resolution will be proposed as an ordinary resolution.
That the authority and
power conferred on the directors in relation to the Section 80 Amount by Article
74 of the Company’s articles of association be renewed until 18 October 2008 and
for that period the Section 80 Amount shall be £136 million.
The articles give a general authority to the
directors to allot unissued shares, which is subject to renewal by
The directors will be able to
issue new shares up to a nominal value of £136 million (the Section 80 Amount),
which is equal to approximately 33% of the issued share capital (excluding
treasury shares) of the Company as at the date of this
notes to Resolution 14 for more
information on treasury shares.
The following three resolutions will
be proposed as special resolutions.
That the authority and power
conferred on the directors by Article 74 of the Company’s articles of
||extended to any sale of shares which
the Company may hold as
treasury shares; and|
||renewed until 18 October 2008; and
for that period the Section
89 Amount shall be £21
|This resolution renews the
authority given to directors to allot equity securities without needing to offer
these shares to existing shareholders first:|
||for cash, up to an amount
representing approximately 5% of the
issued share capital (including
treasury shares) as at the date of this Notice, approximately 420 million shares; or|
||in connection with a rights issue –
defined in summary as an offer of
equity securities to shareholders
which is open for a period decided
by the Board – subject to any limits or restrictions that the Board thinks are necessary or appropriate.|
There are no current plans to allot
shares except in connection with the Company’s employee share plans and over a
three year rolling period this disapplication will not exceed 7.5% of issued
share capital. References to ‘allot’ in this note include the sale of treasury
shares. The authorities sought by Resolutions 12 and 13 will last for 15 months
until 18 October 2008, although the directors intend to seek renewal of these
powers at each Annual General Meeting.
will ensure that the directors continue to have the flexibility to act in the
best interests of shareholders, when opportunities arise, by allotting
That the Company be
generally and unconditionally authorised to make market purchases (within the
meaning of Section 163(3) of the Companies Act 1985) of shares of 5p each in the
Company, subject to the following conditions:
||the maximum number of
shares which may be purchased is 827 million shares; |
||the minimum price which
may be paid for each share is 5p;|
||the maximum price which
may be paid for each share is an amount equal to 105% of the average of the
middle market quotations of a share in the Company as derived from the London
Stock Exchange Daily Official List for the five business days immediately
preceding the day on which the share is contracted to be purchased;
||this authority will
expire at the close of the Annual General Meeting of the Company held in 2008,
or if earlier, 18 October 2008 (except in relation to the purchase of shares,
the contract for which was concluded before the expiry of this authority and
which might be executed wholly or partly after that
would like the Company to continue to have the flexibility to buy its own
shares. This resolution renews the Company’s authority to buy its own shares in
similar terms to previous years’ authorities. It would be limited to 827 million
ordinary shares, representing 10% of the issued share capital (excluding
treasury shares) at the date of this Notice. The directors would exercise this
authority only after considering the effects on earnings per share and the
benefits for shareholders generally.
purchased by the Company out of distributable profits may be held as treasury
shares, which may then be cancelled, sold for cash or used to meet the Company’s
obligations under its employee share
During the 2007 financial year, 148
million shares were purchased (1.7% of the share capital) for a total
consideration of £401 million, at an average price of £2.72 per share. As at 16
May 2007, 91 million treasury shares had been transferred to meet the Company’s
obligations under its employee share plans and as at that date, the Company
still held 368 million treasury shares which is equal to 4.4% of the issued
share capital (excluding treasury shares) in issue as at that
The Company’s current intention is to
hold any shares purchased as treasury shares but it retains the flexibility to
cancel them or sell them for cash if it considers this to be in the best
interests of the Company.
The authority sought
by this resolution will end by 18 October 2008, although the directors intend to
seek renewal of this power at each Annual General
As at 16 May 2007, there were options
outstanding over 373 million shares (of which options over 271 million shares
were in respect of options granted under the savings related share option
plans), representing 4.5% of the Company’s issued share capital (excluding
treasury shares). If the authority given by this resolution were to be fully
used, these would represent 5.0% of the Company’s issued share capital
(excluding treasury shares). There are no warrants
That the Company may use electronic communications
and in particular may send or supply any document
or information to members by making them available
on a website to members who do not elect to
receive them electronically or in hard copy,
and this resolution will supersede any provision
in the Company’s articles of association to
the extent that it is inconsistent with this
This resolution will extend the powers BT currently
has set out in its articles for communicating
with shareholders electronically, by taking
advantage (if it decides to do so) of provisions
in the Companies Act 2006. It will allow BT
to use website communication as the default
position, without sending documents to the shareholder.
BT will be able to ask shareholders for their
consent to receive communications from the Company
via its website, or to elect to receive communications
either electronically or in hard copy, as is
currently the case. If the shareholder has not
responded within 28 days of a request by BT,
the Company may take that as consent to receive
communications via its website. Where a shareholder
receives communications via BT’s website, in
this way, he or she will be sent a letter notifying
them of the documents on the website, and of
the right to receive a hard copy of the documents
free of charge.
BT will continue to communicate with shareholders
by e-mail, where they have agreed to this, notifying
them of the documents on the website, and of
the right to receive a hard copy of the documents
free of charge.
BT expects to save considerable printing and
postage costs if it decides to use the powers
granted by this resolution.
following resolution will be proposed as an
British Telecommunications plc, a wholly-owned
subsidiary of the Company, be authorised to
make donations to EU (European Union) political
organisations, not exceeding £100,000 in total,
during the period beginning with the date of
the 2007 Annual General Meeting and ending at
the conclusion of the day on which the 2008
Annual General Meeting is held.
Company’s continuing policy is that no company
in the group shall make contributions in cash
or kind (including loans) to any political party.
Arrangements are in place to implement this
policy. However, the definition of political
donations used in the Companies Act 1985 is
very much broader than the sense in which these
words are ordinarily used. It covers activities
such as making MPs and others in the political
world aware of key industry issues and matters
affecting the Company, which make an important
contribution to their understanding of BT. These
activities are carried out on an even-handed
basis related broadly to the major political
parties’ electoral strength. The authority we
are requesting in this resolution is not designed
to change the above policy. It will, however,
ensure that the group acts within the provisions
of the Companies Act 1985 requiring companies
to obtain shareholder authority before they
can make donations to EU political organisations
(which includes UK political parties) as defined
in the Companies Act 1985. During the 2007 financial
year, the Company’s wholly-owned subsidiary,
British Telecommunications plc, spent £18,392.
shareholders on the Register of Members at 6.00
pm on 17 July 2007 are entitled to attend and
vote. A shareholder entitled to attend and vote
is entitled to appoint a proxy or proxies to
vote on his or her behalf. A proxy need not
be a shareholder of the Company. On a poll,
the number of shares held by each shareholder
at 6.00 pm on 17 July 2007 will decide the number
of votes that the shareholder may cast.
The total number of issued and fully paid ordinary
shares of 5p each as at 16 May 2007 (the latest
practicable date prior to the publication of
this document) was 8,640,654,852. The total
number of voting rights in the Company as at
that date was 8,272,726,496 (excluding treasury
of all service contracts and contracts of appointment
between the directors and the Company are available
for inspection during business hours at the registered
office of the Company on any weekday (public holidays
excluded), and will also be available for inspection
at the place of the Annual General Meeting from
9.30 am on the day of the meeting until the conclusion
of the meeting.
believe that the proposals in Resolutions 1
to 16 are in the best interests of both the
Company and its shareholders and unanimously
recommend that you vote in favour of all these
resolutions. The directors intend to do so in
respect of their own beneficial holdings.
of the Board
81 Newgate Street
If you are not coming to the meeting
The speeches by the Chairman, Sir Christopher Bland,
and the Chief Executive, Ben Verwaayen, will
be broadcast live on the internet at www.bt.com/btagm2007
Questions and voting on the business of
the meeting will not be broadcast. If you intend
to view the webcast, you should visit this site
before the meeting to check that you will be
able to view it on your computer, and also whether
you need any additional software.
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