A bounded Hilbert space operator for which the closure of the annulus is a spectral set is called an -contraction. A celebrated theorem due to Douglas, Muhly and Pearcy gives a necessary and sufficient condition such that a block matrix of operators is a contraction. We seek an answer to the same question in the setting of annulus, i.e., under what conditions becomes an -contraction. For a pair of -contractions and an operator that commutes with , here we find a necessary and sufficient condition such that each of the block matrices becomes an -contraction. Thus, the general block matrix is an -contraction if (as in ) is invertible.

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