Exhibit 1.1

BT Group

Articles of Association of
BT Group plc

July 2015



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Contents



|                                                                                       |  |  |    | 
|-------------------------------------------------------------------------------------- |  |  | -- | 
|Certificate of Incorporation on Change of Name and Re-Registration as a public company |  |  | 3  | 
|                                                                                       | 
|Certificate of Incorporation                                                           |  |  | 4  | 
|                                                                                       | 
|Contents of the Articles of Association                                                |  |  | 5  | 
|                                                                                       | 
|Articles of Association                                                                |  |  | 6  | 
|                                                                                       | 
|Explanation of Terms                                                                   |  |  | 61 | 
|                                                                                       | 
|Index                                                                                  |  |  | 69 | 
|                                                                                       | 
|Resolutions of BT Group shareholders                                                   |  |  | 77 | 



2



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Certificate of Incorporation on Change of Name and Re-Registration of a Private Company as a Public Company

Company No. 4190816

The Registrar of
Companies for England and Wales hereby certifies that

Newgate Telecommunications Limited formerly registered as a private company having changed
its name and having this day been re-registered under the Companies Act 1985 as a public limited company is now incorporated under the name of

BT
Group plc

and that the company is limited.

Given at
Companies House, London, the 11th September 2001.

A SHAH

For the Registrar of Companies.



3



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Certificate of Incorporation of a Private Limited Company

Company No. 4190816

The Registrar of Companies for
England and Wales hereby certifies that

Newgate Telecommunications Limited

is this day incorporated under the Companies Act 1985 as a private company and that the company is limited.

Given at Companies House, London,

the 30th March 2001.

JENNIFER KING

For the Registrar of Companies.



4



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Contents of the Articles of Association



|              |  |                                                |  |            |    | 
|------------- |  | ---------------------------------------------- |  | ---------- | -- | 
|Article No(s) |  | Subject                                        |  | Page No(s) |   
|1             |  | Preliminary Article                            |  |            | 6  | 
|2-3           |  | General Meetings                               |  |            | 6  | 
|4-5           |  | Notice of General Meetings                     |  |            | 6  | 
|6-11          |  | Proceedings at General Meetings                |  |            | 8  | 
|12-16         |  | Voting at General Meetings                     |  |            | 11 | 
|17-21         |  | Shareholders Voting Rights                    |  |            | 12 | 
|22-26         |  | Proxies                                        |  |            | 14 | 
|27            |  | Company Representatives                        |  |            | 16 | 
|28-29         |  | Directors                                      |  |            | 16 | 
|30-34         |  | Appointment and Removal of Directors           |  |            | 17 | 
|35-37         |  | Retirement of Directors                        |  |            | 18 | 
|38            |  | Disqualification of Directors                  |  |            | 19 | 
|39-42         |  | Remuneration of Directors                      |  |            | 20 | 
|43-51         |  | Board Meetings                                 |  |            | 21 | 
|52-53         |  | Board Committees                               |  |            | 23 | 
|54-58         |  | Directors Interests                           |  |            | 24 | 
|59-67         |  | Directors Management Powers                   |  |            | 28 | 
|68-69         |  | Directors Borrowing Powers                    |  |            | 31 | 
|70            |  | Liability                                      |  |            | 32 | 
|71-75         |  | Shares                                         |  |            | 33 | 
|76-79         |  | Changing Share Capital                         |  |            | 35 | 
|80-82         |  | Share Rights                                   |  |            | 36 | 
|83-84         |  | Share Certificates                             |  |            | 38 | 
|85-86         |  | Transferring Shares                            |  |            | 39 | 
|87-91         |  | People Automatically Entitled to Shares by Law |  |            | 40 | 
|92            |  | Shareholders who Cannot be Traced              |  |            | 42 | 
|93-101        |  | Dividends                                      |  |            | 42 | 
|102           |  | Scrip Dividends                                |  |            | 45 | 
|103-111       |  | Communications with shareholders               |  |            | 47 | 
|112-113       |  | Auditor                                        |  |            | 50 | 
|114           |  | Secretary                                      |  |            | 51 | 
|115           |  | Seals                                          |  |            | 51 | 
|116-117       |  | Documents                                      |  |            | 52 | 
|118-120       |  | Indemnity, Insurance and Defence expenditure   |  |            | 53 | 
|121-123       |  | Reserves                                       |  |            | 55 | 
|124-126       |  | Accounts                                       |  |            | 56 | 
|127           |  | Winding Up                                     |  |            | 57 | 
|128           |  | Interpretation                                 |  |            | 57 | 



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Words defined within a specific article or at the end of the Articlesare printed in bold. After
the Articlesthere is an explanation of terms which explains various words and expressions used in the Articles. These are printed in italics.

Articles of Association of BT Group plc

Company
No. 4190816

(Adopted by a special resolutionpassed on 15 July 2015)

Preliminary Article



|1 | Standard regulations do not apply
|- | ---------------------------------

Any regulations made under the legislationcontaining standard
articles of association do not apply to BT.

General Meetings



|2 | Annual General Meetings
|- | -----------------------

Every year BTmust hold an Annual General Meeting, in addition
to any other General Meetingswhich are held in the year. The notice calling the meeting must say that the meeting is the Annual General Meeting. BT must hold an Annual General Meetingwithin six monthsof
BTsaccounting reference date. The Boardwill decide when and where to hold the Annual General Meeting.



|3 | General Meetings
|- | ----------------

The Boardcan decide to call a General Meetingat any time.

Notice of General Meetings



|4 | Notice of meetings
|- | ------------------



|4.1. | At least 21 clear days writtennotice must be given for every Annual General Meeting. For every other General Meeting, at least 14 clear days writtennotice must be given.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.2. | A notice of meeting must state:
|---- | -------------------------------



| |  |  | where the meeting is to be held;
| | - |  | --------------------------------



| |  |  | the date and time of the meeting;
| | - |  | ---------------------------------



| |  |  | the general nature of any special businessto be dealt with at the meeting;
| | - |  | --------------------------------------------------------------------------



| |  |  | whether a resolution will be proposed as a special resolution; and
| | - |  | ------------------------------------------------------------------



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| |  |  | that a shareholderwho can attend, speak and vote can appoint one or more proxies(who need not be shareholders) to attend, speak and vote for them.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



|4.3. | Notices of meetings must be given to the shareholders, unless the Articlesor the rightsof the shares say they are not entitled to receive them from BT. However, the Boardcan decide
that only peoplewho are entered on the Registerat the close of business on a particular day are entitled to receive the notice. The Boardcan choose that day so long as it falls not more than 21 days before the notice is sent.
Notice must also be given to the Auditorand the Board.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.4. | The Boardcan specify in the notice of meeting a time by which a personmust be entered on the Registerin order to have the right to attend or vote at the meeting. The time specified must not be
more than 48 hours before the time fixed for the meeting.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4.5. | If BTcannot call a General Meetingby sending notices by post or by using electronic means, because the postal system or electronic means of communication in the United Kingdomare
generally suspended or restricted, notice of the meeting will be treated as being given to shareholdersaffected by the suspension or restriction by advertisement in at least two United Kingdomnational newspapers. Notice given in this
way will be treated as being given to affected shareholderswho are entitled to receive it at midday on the day when the last advertisement appears in the newspapers. In any such case, BT must:
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if it is possible, make the notice available on its website from the date of the advertisement until the end of the General Meeting or any adjournment of the meeting; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if it becomes generally possible to use the postal system or electronic means again more than 14 days before the meeting send confirmation of the notice by post or electronic means.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5 | Moving or postponing meetings at short notice
|- | ---------------------------------------------

If the Boardconsider that it is impractical, or
undesirable, to hold a General Meetingon the date or at the time or place stated in the notice of meeting, they can change the place of, or postpone, the meeting, or do both of these things. Notice of the business of the meeting does not
need to be given again. The Boardmust take reasonable steps to ensure that a shareholdertrying to attend the meeting at the original date, time and place is informed of the new arrangements. If a meeting is rearranged in this way,
proxyappointments can be made, in the way required by Articles 22 to 25, until 48 hours before the rearranged meeting. The Boardcan also change the place of, or postpone, the rearranged meeting, or do both, under this Article.



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Proceedings at General Meetings



|6 | Chairman of meetings
|- | --------------------



|6.1. | The chairman of the Boardwill be the chairman at every General Meeting.
|---- | -----------------------------------------------------------------------



|6.2. | If BTdoes not have a chairman, or if the chairman is not present, willing and able to chair the meeting, the deputy chairman will chair the meeting.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------



|6.3. | If BTdoes not have a chairman or a deputy chairman, or if neither the chairman nor the deputy chairman is present, willing and able to chair the meeting, after waiting 15 minutes from the time that the meeting
is due to start, the directors who are present will choose one of the directors to act as chairman. If there is only one director present, that director, if willing, will be chairman. If no director is present and willing, the Secretary, if
present and willing, will be chairman.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.4. | If there is no director or Secretarypresent, willing and able to chair the meeting, after waiting 15 minutes from the time that the meeting is due to start, the shareholders and proxieswho are
present and entitled to vote will pass an ordinary resolution to elect a shareholderor proxy to act as chairman.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6.5. | Nothing in the Articlesis intended to restrict or exclude any of the powers or rights of a chairman of a meeting which are given by law.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------



|6.6. | The decision of the chairman on points of order, matters of procedure or arising incidentally out of the business of a General Meetingis conclusive, as is the chairmans decision, acting in good faith, on
whether a point or matter is of this nature.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7 | Security and other arrangements at meetings
|- | -------------------------------------------



|7.1. | The chairman of a meeting or the Secretarycan take any action they consider appropriate:
|---- | ----------------------------------------------------------------------------------------



| |  |  | for proper and orderly conduct at a General Meeting; or
| | - |  | -------------------------------------------------------



| |  |  | so that the meeting reflects the wishes of the majority.
| | - |  | --------------------------------------------------------



|7.2. | The Boardcan ask shareholdersor proxieswanting to attend a General Meetingto submit to searches or other security arrangements which the Boardthink are appropriate. The Boardcan, in their discretion, refuse entry to, or remove from, a General Meetinga shareholderor proxywho does not submit to those searches or comply with those security arrangements.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|8 | Meeting in different places
|- | ---------------------------



|8.1. | Subject tothe legislationand the rest of the Articles, every shareholdercan attend a General Meetingin person or by proxy. Where the General Meetingis to be held at
more than one place, a shareholderor proxyprevented from attending at one place can attend and participate at another place.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|8.2. | The Boardcan make arrangements that they, in their discretion, think appropriate to:
|---- | ------------------------------------------------------------------------------------



| |  |  | regulate the number of peopleattending at a place where a General Meeting(or adjournment) is to be held;
| | - |  | --------------------------------------------------------------------------------------------------------



| |  |  | ensure the safety of peopleattending at that place; or
| | - |  | ------------------------------------------------------



| |  |  | enable attendance at that meeting (or adjournment);
| | - |  | ---------------------------------------------------

and can change those arrangements
at any time. The arrangements can include (without limitation) the issue of tickets or the use of a random method of selection.



|8.3. | In the case of a General Meetingto which these arrangements apply, the Boardcan, when specifying the place of the meeting:
|---- | --------------------------------------------------------------------------------------------------------------------------



| |  |  | direct that the meeting will be held at a place identified in the notice at which the chairman of the meeting will attend (the Main Meeting Place); and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | make arrangements for simultaneous attendance and participation at other places (whether by electronic means or otherwise) by shareholdersand proxiesentitled to attend the meeting but excluded
from it under this Article or who want to attend at one of the other places.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The notice of meeting does not have to give
details of any arrangements under this Article.



|8.4. | Subject toArticle 8.1, arrangements for simultaneous attendance can include arrangements for regulating the number of peopleattending at any other places.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



|8.5. | In the Articles(unless the context requires otherwise) the shareholderswill be treated as meeting in the Main Meeting Place.
|---- | ----------------------------------------------------------------------------------------------------------------------------



|8.6. | The Boardspowers and discretions under this Article are delegated to the chairman at a General Meeting.
|---- | --------------------------------------------------------------------------------------------------------



|9 | Quorum
|- | ------



|9.1. | Before a General Meetingstarts any business, there must be a quorumpresent. If not, the meeting cannot carry out any business but can choose a personto chair the meeting. The quorumis two
peoplewho are entitled to vote. They can be shareholdersor proxiesor a combination of both.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|9.2. | This Article applies if a quorumis not present within 20 minutes after the time fixed for a General Meetingto start or within any longer period which the chairman decides. If the meeting was called by
shareholders, it is cancelled. Any other meeting is adjournedto any date, time and place stated in the notice of meeting. If the notice does not provide for this, the meeting is adjournedto a date, time and place decided by
the chairman.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



9



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|10 | Adjourning meetings
|-- | -------------------



|10.1. | The chairman of a meeting can adjournthe meeting, before or after it has started, if the chairman considers that:
|----- | -----------------------------------------------------------------------------------------------------------------



| |  |  | there is not enough room for the number of shareholdersand proxieswho want to attend the meeting;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | the behaviour of anyone present prevents, or is likely to prevent, the business of the meeting being carried out in an orderly way; or
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an adjournmentis necessary for any other reason, so that the business of the meeting can be properly carried out.
| | - |  | -----------------------------------------------------------------------------------------------------------------

The chairman can adjournthe meeting for any of these reasons to a date, time and place which the chairman decides, or indefinitely.
The chairman does not need the consent of the meeting to do this.



|10.2. | The chairman of a meeting can adjourna meeting which has a quorumpresent if the meeting agrees. The chairman may adjournthe meeting if the meeting directs this. The adjournmentcan be to a
date, time and place which the chairman decides, or indefinitely.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.3. | If a meeting is adjournedindefinitely, the Boardwill decide the date, time and place of the adjournedmeeting. Meetings can be adjournedmore than once.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------



|10.4. | If a meeting is adjournedfor 60 days or more, at least seven days notice must be given for the adjournedmeeting in the same way as was required for the original meeting, including notice of the
business to be considered there. If a meeting is adjournedfor less than 60 days, there is no need to give notice of the adjournedmeeting, or of the business to be considered there.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.5. | A reconvened meeting can only deal with business that could have been dealt with at the meeting which was adjourned.
|----- | --------------------------------------------------------------------------------------------------------------------



|11 | Amending resolutions
|-- | --------------------



|11.1. | The chairman can propose amendments to an ordinary or special resolutionif they are amendments to correct an obvious error in the resolution.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------



|11.2. | No other amendments can be proposed to a special resolution.
|----- | ------------------------------------------------------------



|11.3. | Amendments to an ordinary resolutionwhich are within the scope of the resolution can be proposed if writtennotice of the proposed amendment is received at the Registered Officeaddressed to the
Secretaryat least three clear business daysbefore the day fixed for the meeting or adjournedmeeting.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|11.4. | If the chairman, acting in good faith, rules an amendment out of order, an error in that ruling will not affect the validity of a vote on the original resolution.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Voting at General Meetings



|12 | How votes are taken
|-- | -------------------



|12.1. | If a resolution is put to the vote at a General Meeting, it will be decided by a show of hands, unless a pollis demanded as soon as, or before, the result of the show of handsis declared by
the chairman. A pollcan be demanded by:
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the chairman of the meeting;
| | - |  | ----------------------------



| |  |  | at least five shareholdersat the meeting who are entitled to vote (or their proxies); or
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | one or more shareholdersat the meeting who are entitled to vote (or their proxies) and who have, between them, at least 10 per cent of the total votes of all shareholderswho have the right to
vote at the meeting.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The chairman of the meeting can also demand a pollbefore all, some or any of the resolutions
are put to the vote on a show of hands.



|12.2. | A demand for a pollcan be withdrawn if the chairman agrees to this. If a pollis demanded, and this demand is then withdrawn, a declaration by the chairman of the result of a vote by a show of handson that resolution, which was made before the pollwas demanded, will stand.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|13 | How polls are taken
|-- | -------------------



|13.1. | The chairman of the meeting can decide where, when and how a pollwill be taken. The result will be treated as the decision of the meeting where the pollwas demanded, even if the pollis taken
after the meeting.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|13.2. | The chairman can:
|----- | -----------------



| |  |  | decide that a ballot, electronic voting, voting papers or tickets will be used;
| | - |  | -------------------------------------------------------------------------------



| |  |  | appoint one or more scrutineers (who need not be shareholders);
| | - |  | ---------------------------------------------------------------



| |  |  | adjournthe meeting to a date, time and place which the chairman decides for the result of the pollto be declared; or
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | declare the result of the pollor decide how it should be declared.
| | - |  | ------------------------------------------------------------------



|13.3. | A shareholdercan vote either in person or by proxyon a poll. If a shareholdervotes on a poll, they do not have to use all of their votes or cast all their votes in the same way.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|14 | Timing of polls
|-- | ---------------

A pollcan be taken either at the meeting or within three months. No
notice is required for a poll.



|15 | Meetings continue after poll demanded
|-- | -------------------------------------

A demand for a pollon a particular matter does not stop a
meeting from continuing and dealing with other matters. But once all these matters have been dealt with, the meeting is treated as having ended immediately after the pollhas been taken, even though the result of the pollis to be
worked out and announced later.



11



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|16 | Effect of declaration by chairman
|-- | ---------------------------------

The following applies when there is a vote on a show of handsand no pollis demanded or a demand for a pollis withdrawn. Any of the following declarations about a resolution by the chairman of the meeting is conclusive proof that it has been:



| |  | passed or not passed; or
|- |  | ------------------------



| |  | passed with a particular majority.
|- |  | ----------------------------------

An entry in respect of this kind of declaration in the minutes of the
meeting is also conclusive evidence of that fact. There is no need to prove the number or proportion of votes recorded for or against a resolution.

Shareholders Voting Rights



|17 | Votes of shareholders
|-- | ---------------------

Where there is a vote on a show of hands, a shareholderpresent at
a meeting in person or by proxyhas one vote. Where there is a poll, a shareholderpresent in person or by proxyhas one vote for every share which they hold or represent. This is subject toany specialrightsor restrictions which are given to a class of shares and to the Articles.



|18 | Failure to comply with notice under section 793 of the Companies Act
|-- | --------------------------------------------------------------------



|18.1. | This Article applies if a shareholder, or a personappearing to be interested in shares (within the meaning of Part 22 of the Companies Act) held by that shareholder, has:
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | been sent a notice under section 793 of the Companies Actrequiring information about interests in shares; and
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | failed to supply to BTthe required information within 14 days after delivery of that notice.
| | - |  | --------------------------------------------------------------------------------------------

Then, unless the Boarddecide otherwise, the shareholderis not entitled to:



| |  |  | attend or vote either in person or by proxyat a shareholders meeting; or
| | - |  | -------------------------------------------------------------------------



| |  |  | exerciseany other right in relation to shareholders meetingsas holder of any shares in BT.
| | - |  | -------------------------------------------------------------------------------------------

These restrictions end seven days after the earlier of the date on which:



| |  |  | the shareholdercomplies with the notice to BTssatisfaction; and
| | - |  | ----------------------------------------------------------------



| |  |  | BTreceives writtennotice that there has been an approved transferof the shares.
| | - |  | -------------------------------------------------------------------------------



|18.2. | A personwho obtains shares subject torestrictions under Article 18.1 is subject tothe same restrictions, unless the transfer was:
|----- | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | an approved transfer; or
| | - |  | ------------------------



| |  |  | made by a shareholderwho was not in default in supplying the information required by the notice under Article 18.1.
| | - |  | -------------------------------------------------------------------------------------------------------------------



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|18.3. | In this Article a personis treated as appearing to be interested in any shares if the shareholderholding those shares has been sent a notice under section 793 of the Companies Actand:
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the shareholderhas named that personas being so interested; or
| | - |  | --------------------------------------------------------------



| |  |  | (after taking into account the response of the shareholderto the notice and any other relevant information) the Boardknows or reasonably believes that the personin question is or may be
interested in the shares.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|18.4. | In this Article a transfer of shares is an approved transferif:
|----- | ---------------------------------------------------------------



| |  |  | it is a transfer of shares to an offeror under an acceptance of a takeover offer; or
| | - |  | ------------------------------------------------------------------------------------



| |  |  | the Boardare satisfied that the transfer is a genuine sale of the whole of the beneficial ownershipof the shares to a personwho is not connected with the shareholderor with a personappearing to be interested in the shares. This includes such a sale made through the London Stock Exchangeor any other stock exchange on which BTsshares are normally traded.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|19 | Votes of joint shareholders
|-- | ---------------------------

If more than one joint shareholdervotes, the only vote which will
count is the vote of the first shareholderlisted on the Registerfor the share. This also applies if the shareholdersvote by proxy.



|20 | Votes of shareholders who are unable to manage their affairs
|-- | ------------------------------------------------------------

This Article applies where a:



| |  |  | shareholderis unable to manage their affairs; and
| | - |  | -------------------------------------------------



| |  |  | court which claims jurisdiction to protect peoplewho are unable to manage their affairs has made an order about the shareholder.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------

The peopleappointed by the court to act for the shareholdercan vote for the shareholderand exerciseother
rightsat General Meetings. This includes appointing a proxy, voting on a show of handsand voting on a poll. However, it only applies if any evidence which the Boardrequires of their authority to do these things is delivered to the Registered Officeor any other place the Boardspecify for delivery of proxy formsat least 48 hours before the relevant meeting (or
adjournedmeeting).



|21 | Challenging votes
|-- | -----------------

An objection to the right of a personto vote must be made at the meeting (or
adjournedmeeting) at which the vote is cast. If a vote is not disallowed at a meeting, it is valid for all purposes. An objection must be raised with the chairman of the meeting. The chairmans decision is conclusive.



13



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Proxies



|22 | Appointment of proxies
|-- | ----------------------



|22.1. | A shareholderis entitled to appoint a proxyor (subject to Article 23) proxiesto exercise all or any of the shareholders rights to attend, speak and vote at General
Meetings.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|22.2. | A proxyis appointed by using a proxy formor in any other way, and subject toany terms and conditions, the Boarddecide. For example, the Boardcan decide that a proxycan be appointed using electronic means or by means of a website.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|22.3. | A proxyneed not be a shareholder.
|----- | ---------------------------------



|23 | Multiple proxies
|-- | ----------------

A shareholder can appoint more than one proxy. However, each proxy must be
appointed to exerciserights in respect of a different share or shares held by the shareholder.



|24 | Form of Proxy
|-- | -------------



|24.1. | A proxy form:
|----- | -------------



| |  |  | must be in writing; and
| | - |  | -----------------------



| |  |  | can be in any form which is commonly used or in any other form the Boardapprove.
| | - |  | --------------------------------------------------------------------------------



|24.2. | A proxy formgiven by:
|----- | ---------------------



| |  |  | an individual must be signed by the individual or an attorneywho is authorised to act on behalf of the individual or authenticated in accordance with Article 104; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a companymust be sealed with the companys sealor signed by an officerof the companyor an attorneywho is authorised to act on behalf of the companyor authenticated in
accordance with Article 104.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Any signature on or authentication of an appointment need not be witnessed.



|25 | Receipt of proxies
|-- | ------------------



|25.1. | A proxy formmust be received at the place or addressstated in the notice of meeting or proxy formor in any invitation contained in an electronic form to appoint a proxyor, if no place or addressis stated, at the Registered Office. If the Boarddecide that a proxycan be appointed in any other way, notice of the appointment must be received as the Board specify.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|25.2. | Notices of appointments of proxiesmust be received at least:
|----- | ------------------------------------------------------------



| |  |  | 48 hours before a meeting or adjournedmeeting;
| | - |  | ----------------------------------------------



| |  |  | 24 hours before a pollis taken, if the pollis taken more than 48 hours after it was demanded; or
| | - |  | ------------------------------------------------------------------------------------------------



14



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| |  |  | 48 hours before a meeting or adjourned meeting, if the poll is taken within 48 hours after the meeting or adjourned meeting.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------

In calculating the periods in this Article, the Board can decide to exclude any part of any day which is not a business day.



|25.3. | If a proxy form is signed or authenticated in accordance with Article 104, the power of attorneyor other authority relied on to appoint a proxy, or a copy which has been certified by a
solicitor or notary, must be registered with BT, together with any proxy formor in any other way that the Boardspecify, unless this has already been done. These documents must be received by the deadline which applies
to notices of appointments of proxiesunder Article 25.2. The Boardmay decide to disapply the requirements in this Article 25.3 in relation to a proxy formor the appointment of a proxymade under the second
sentence of Article 25.1.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|25.4. | In relation to any shares in uncertificated form, the Board can:
|----- | ----------------------------------------------------------------



| |  |  | permit a proxy to be appointed by electronic means in the form of an uncertificated proxy instruction;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | permit any supplement to, or amendment or withdrawal of this instruction by a further uncertificated proxy instruction;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | decide the method of determining the time when any uncertificated proxy instruction is to be treated as received by BT; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | treat any instruction of this kind which appears or claims to be sent on behalf of the shareholder as conclusive evidence that the person sending the instruction is authorised to send it on behalf of that
shareholder.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|25.5. | If this Article is not complied with, the proxywill not be able to act for the personwho appointed them.
|----- | --------------------------------------------------------------------------------------------------------



|25.6. | If a proxyfor several meetings has been properly appointed for a meeting or adjournedmeeting, the proxydoes not need to be appointed again for a later meeting which the appointment covers. A
proxy formwill be valid for any adjournmentof the meeting or meetings to which it relates and for any vote on a show of handsor any polldemanded at that meeting or adjournedmeeting.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|25.7. | If more than one proxy is appointed in respect of the same share to act at the same meeting, only the last appointment received will be treated as valid (regardless of when it was signed or by what means it was
submitted). If BT does not know which is the last appointment, BT can decide which appointment to treat as valid or whether any of them are valid and its decision will be conclusive.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|25.8. | A shareholdercan attend, vote and speak at a General Meetingor on a polleven if they have appointed a proxyto attend, vote and speak at that meeting or on that poll.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



15



---

|26 | Termination of proxies
|-- | ----------------------



|26.1. | A vote cast by a proxyin the way authorised by their appointment and a demand for a pollmade by a proxywill be valid even though the shareholderwho appointed the proxyhas:
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | died or is unable to manage their affairs;
| | - |  | ------------------------------------------



| |  |  | terminated the appointment; or
| | - |  | ------------------------------



| |  |  | terminated the authority of the personwho made the appointment.
| | - |  | ---------------------------------------------------------------

However, this does
not apply if writtennotice of any of these events has been received in any way specified for the appointment of proxies:



| |  |  | 48 hours before the meeting or adjournedmeeting;
| | - |  | ------------------------------------------------



| |  |  | 24 hours before the pollis taken, if the pollis taken more than 48 hours after it was demanded; or
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | 48 hours before a meeting or adjourned meeting, if the poll is taken within 48 hours after the meeting or adjourned meeting.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------

In calculating the periods in this Article, the Board can decide to exclude any part of any day which is not a business day.



|26.2. | The appointment of a proxywill cease to be valid 12 monthsafter the date the proxy formwas signed or authenticated or notice of the appointment was received. However, the appointment is
still valid at an adjournedmeeting or on a polldemanded at a meeting or adjournedmeeting, if the original meeting was first held within the 12 monthperiod.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Company Representatives



|27 | Appointment ofcompany representatives
|-- | -------------------------------------

Subject to the legislation, a
company which is a shareholder can, by resolution of its directors or other governing body, authorise a person or several people to act as its representative or representatives at a General Meeting. Each of those
peopleis called a company representative.

Directors



|28 | Number of directors
|-- | -------------------

There must be at least two directors. The shareholderscan vary this minimum
and/or decide or vary a maximum number of directors by passing an ordinary resolution.



|29 | Directors need not be shareholders
|-- | ----------------------------------

A director need not be a shareholder. A director who is not a
shareholderis still entitled to receive notice of and attend and speak at shareholders meetings.



16



---

Appointment and Removal of Directors



|30 | People who can be directors
|-- | ---------------------------

Only the following peoplecan be elected as directors at a
General Meeting:



| |  |  | a director who is retiring at the meeting;
| | - |  | ------------------------------------------



| |  |  | a personwho is recommended by the Board; and
| | - |  | --------------------------------------------



| |  |  | a personwho has been proposed in the following way. A shareholderwho is entitled to attend and vote at the meeting (other than the proposed director) must deliver to BT a notice in writing,
signed or authenticated in accordance with Article 104 by the shareholder. The notice must state that they intend to propose the personfor election and whether the personis proposed as an additional director or to replace a
director who is retiring or being removed. This notice must be delivered not less than seven nor more than 42 days before the date of the meeting. The personto be proposed must deliver to BT with the notice a confirmation in
writing, signed or authenticated in accordance with Article 104 by the person to be proposed that they are willing to be elected.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|31 | Filling vacancies and appointing or electing additional directors
|-- | -----------------------------------------------------------------



|31.1. | The Boardcan appoint a personas an additional director or as a replacement for another director. A director appointed in this way automatically retires at the first Annual General Meetingafter
their appointment in accordance with Article 35 unless elected or re-elected at that Annual General Meeting.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|31.2. | Subject toArticle 30, the shareholderscan elect a personproposed as an additional director or to replace another director by passing an ordinary resolution.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



|31.3. | Additional directors can only be appointed or elected under this Article within any maximum number of directors which applies under Article 28 (including any variation of that maximum approved by an ordinary
resolutionof shareholders).
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|32 | Removing and electing directors by ordinary resolution
|-- | ------------------------------------------------------



|32.1. | The shareholderscan pass an ordinary resolutionto remove a director, even though the directors time in office has not ended. This applies despite anything else in the Articlesor in
any agreement between BTand the director. Special noticeof the resolution must be given to BTas required by the legislation. If a director is removed in this way, it will not affect any claim which the director has for
damages for breach of any contract of service.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|32.2. | Subject toArticle 30, the shareholderscan elect a personto replace a director who has been removed in this way by passing an ordinary resolution. If no director is elected under this
Article, the vacancy can be filled under Article 31.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



17



---

|33 | Electing two or more directors
|-- | ------------------------------

A single resolution for the election of two or more directors is void
unless the shareholdersapprove the putting of the resolution in this form first by a vote taken at the General Meetingwith no votes cast against.



|34 | Directors can act if there are vacancies
|-- | ----------------------------------------



|34.1 | Even if one or more director(s) has stopped being a director, the remaining director(s) can continue to act. If the number of director(s) falls below the minimum which applies under Article 28 (including any variation
of that minimum approved by an ordinary resolutionof shareholders), the remaining director(s) can only:
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | appoint further director(s) to make up the shortfall;
| | - |  | -----------------------------------------------------



| |  |  | convene a General Meeting;and
| | - |  | -----------------------------



| |  |  | in the meantime, perform the duties that are appropriate to maintain BT as a going concern and enable it to comply with its legal and regulatory obligations.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



|34.2 | If no director(s) are willing or able to act under this Article, any two shareholderscan call a General Meetingto elect director(s), provided that, if no directors are able to act because all of the
resolutions for election or annual re-election of the directors are put to the Annual General Meetingand lost, the retiring directors who stood for election or re-election at that Annual General Meetingwill be treated as being
elected or re-elected (as the case may be) and will continue as directors. In these circumstances, the directors can only:
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | convene a General Meeting in accordance with Article 34.3; and
| | - |  | --------------------------------------------------------------



| |  |  | in the meantime, perform the duties that are appropriate to maintain BT as a going concern and enable it to comply with its legal and regulatory obligations.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



|34.3 | In the circumstances set out in Article 34.2, the directors will convene another General Meeting as soon as reasonably practicable following the Annual General Meeting referred to in Article 34.2 and
retire from office at that General Meeting. If at the end of that General Meeting the number of director(s) still falls below the minimum which applies under Article 28 (including any variation of that minimum approved by an
ordinary resolution of shareholders) the provision of this Article 34 will apply again to the General Meeting.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Retirement of Directors



|35 | Annual retirement of directors
|-- | ------------------------------

At every Annual General Meetingall directors at the date of the
notice convening the Annual General Meetingwill retire from office unless elected or re-elected at the AnnualGeneral Meeting.



18



---

|36 | Re-electing directors who retire
|-- | --------------------------------

At each Annual General Meetingat which the directors retire in
accordance with Article 35 the shareholderscan pass an ordinary resolutionto re-elect each director or, if Article 30 has been complied with, to elect some other eligible personin the directors place.

The retiring director is treated as re-elected unless:



| |  |  | the meeting expressly resolves not to elect a director to fill the vacancy;
| | - |  | ---------------------------------------------------------------------------



| |  |  | the director has told BT in writingthat the director does not want to be re-elected;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | a resolution to re-elect the director is put to the meeting and lost; or
| | - |  | ------------------------------------------------------------------------



| |  |  | any maximum number of directors which applies under Article 28 (including any variation of that maximum approved by an ordinary resolutionof shareholders) would be exceeded.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|37 | When a director retires
|-- | -----------------------

A director retiring at a General Meetingretires at the end of that
meeting or (if earlier) when a resolution is passed to elect another personin the directors place or when a resolution to re-elect the director is put to the meeting and lost. Where a retiring director is re-elected (or treated as
re-elected under Article 34 or Article 36) the retiring director continues as a director without a break.

Disqualification of Directors



|38 | When directors are disqualified
|-- | -------------------------------



|38.1. | A director automatically ceases to be a director if:
|----- | ----------------------------------------------------



| |  |  | the director ceases to be a director under the legislationor is removed from office under the Articles;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | the director is prohibited from being a director under the legislation;
| | - |  | -----------------------------------------------------------------------



| |  |  | the director becomes bankrupt;
| | - |  | ------------------------------



| |  |  | the director makes an arrangement or composition with the directors creditors or applies for an interim order under section 253 of the Insolvency Act 1986 in connection with a voluntary arrangement under that Act;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the director becomes unable to manage their affairs and a court which claims jurisdiction to protect peoplewho are unable to manage their affairs has made an order detaining the director or appointing a
personto manage the directors property or affairs;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | except where the directors contract prevents the director resigning, the director:
| | - |  | -----------------------------------------------------------------------------------



| |  |  | delivers to BTa writtennotice of resignation signed by or on behalf of the director; or
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | offers to resign and the Boardpass a resolution accepting the offer;
| | - |  | --------------------------------------------------------------------



| |  |  | the director has missed Boardmeetings for a continuous period of six months, without permission from the Boardand the Boardpass a resolution removing the director from office; or
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the directors contract expires or is terminated for any reason and is not renewed or replaced within 14 days.
| | - |  | --------------------------------------------------------------------------------------------------------------



19



---

|38.2. | If a director ceases to be a director, the director automatically ceases to be a member of any Boardcommittee or sub-committee.
|----- | -------------------------------------------------------------------------------------------------------------------------------

Remuneration of Directors



|39 | Directors fees
|-- | ---------------

The Boardcan decide on the amount, timing and method of payment of
directors fees, but the total fees paidto each director, excluding amounts payable under any other Article, must not exceed:



| |  |  | £65,000 a year(accruing daily), increasing by the percentage increase in the retail prices index (as defined in Section 833(2) Income and Corporation Taxes Act 1988) for any 12 monthperiod
beginning on 1 April 1999 or an anniversary of that date; or
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any higher sum decided on by an ordinary resolutionof shareholders. This resolution can increase the fee paidto all or any directors either permanently or for a particular period.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|40 | Directors expenses
|-- | -------------------

The Boardcan also repay to a director all expenses properly incurred
in:



| |  |  | attending and returning from shareholders meetings, Boardmeetings or Boardcommittee meetings; or
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | any other way in connection with BTsbusiness.
| | - |  | ----------------------------------------------



|41 | Extra fees
|-- | ----------



|41.1. | The Boardcan award extra fees to a director who:
|----- | ------------------------------------------------



| |  |  | holds an executive position;
| | - |  | ----------------------------



| |  |  | acts as chairman or deputy chairman;
| | - |  | ------------------------------------



| |  |  | serves on a Boardcommittee or board at the request of the Board; or
| | - |  | -------------------------------------------------------------------



| |  |  | performs any other services which the Boardconsider extends beyond the ordinary duties of a director.
| | - |  | -----------------------------------------------------------------------------------------------------



|41.2. | Extra fees can take the form of salary, commission, profit sharing or other benefits (and can be paidpartly in one way and partly in another). They can also include any kind of benefit for the directors
dependants. This is all decided by the Board.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|42 | Pensions and other benefits
|-- | ---------------------------



|42.1. | The Boardcan decide whether to provide:
|----- | ---------------------------------------



| |  |  | pensions;
| | - |  | ---------



| |  |  | annual payments; or
| | - |  | -------------------



| |  |  | other allowances or benefits,
| | - |  | -----------------------------

to any peopleincluding peoplewho are or who
were directors of BT. The Boardcan decide to extend these arrangements to relations or dependants of, or peopleconnected to, these people. The Boardcan also decide to contribute to a scheme or fund or to paypremiums to a third party for these purposes.



|42.2. | BTcan only provide pensions and other similar benefits to:
|----- | ----------------------------------------------------------



20



---

| |  |  | peoplewho are or were directors but who have not been employed by, or held an office or executive position in, BTor its subsidiary undertakings; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | relations or dependants of, or peopleconnected to, those directors or former directors,
| | - |  | ---------------------------------------------------------------------------------------

if the shareholdersapprove this by passing an ordinary resolution.



|42.3. | No director or former director is accountable to BTor the shareholdersfor a benefit of any kind given in accordance with this Article. The receipt of a benefit of any kind given in accordance with this
Article does not prevent a personfrom being or becoming a director of BT.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Board Meetings



|43 | Board meetings
|-- | --------------

The Boardcan decide when and where to have meetings, how they are conducted and
the quorum. They can also adjourntheir meetings.



|44 | Notice of Board meetings
|-- | ------------------------



|44.1. | A meeting can be called by a director or the Secretary. The Secretarymust also call a meeting if a director requests this.
|----- | --------------------------------------------------------------------------------------------------------------------------



|44.2. | The Boardcan decide how notice of Boardmeetings is to be given and on any terms and conditions (including oral notice). Subject tothis, Boardmeetings are called by delivering a writtennotice to each director personally or by sending it to their last known addressor another addressgiven to BTfor this purpose.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|44.3. | A director who is out of the United Kingdomis not entitled to be given notice of a Boardmeeting unless:
|----- | -------------------------------------------------------------------------------------------------------



| |  |  | notice of a Boardmeeting is given in writing; and
| | - |  | -------------------------------------------------



| |  |  | the director has asked the Board in writingto send notices of Boardmeetings during the directors absence to the directors last known addressor another addressgiven to BTfor this purpose.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

A director can waive notice of a meeting at any time, even if the meeting has already
taken place.



|45 | Chairman of Board meetings
|-- | --------------------------



|45.1. | The Boardcan appoint a director as chairman or deputy chairman for whichever periods the Boarddecide. If the chairman is at a meeting, the chairman will chair it. In the chairmans absence, the
chair will be taken by the deputy chairman. If there is no chairman or deputy chairman present and willing within five minutes after the time when the meeting is due to start, the chair will be taken by a director nominated by the chairman in
writing. If the chairman has not done this, the directors present can choose which one of them will be the chairman of the meeting.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



21



---

|45.2. | References in the Articlesto deputy chairman include, if no one has been appointed with that specific title, a personappointed to a position with another title which the Boarddesignate as equivalent to the position of deputy chairman.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|46 | Quorum
|-- | ------



|46.1. | If no other quorumis fixed by the Board, two directors form a quorum. A meeting at which a quorumis present can exerciseall the powers and discretions of the Board.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



|46.2. | A director who ceases to be a director at a Boardmeeting can continue to be present and act as a director and be counted in the quorumuntil the end of that Boardmeeting if no other director
objects and a quorumof the Boardwould not otherwise be present.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|47 | Voting at Board meetings
|-- | ------------------------

Matters for decision which arise at a Boardmeeting will be decided by
a majority vote. If the votes are equal, the chairman of the meeting has a second, casting vote.



|48 | Video conference and telephone meetings
|-- | ---------------------------------------

Any of the directors or members of a committee can take part in
a Boardmeeting or Boardcommittee meeting by way of a:



| |  |  | video conference or conference telephone or similar equipment designed to allow everybody to take part in the meeting; or
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | series of video conferences or telephone calls from the chairman of the meeting.
| | - |  | --------------------------------------------------------------------------------

Taking part in this way will
be treated as being present at the meeting. A meeting which takes place by a series of video conferences or telephone calls from the chairman will be treated as taking place where the chairman is. Otherwise meetings will be treated as taking place
where the largest group of the participants is or, if there is no such group, where the chairman is, unless the Boarddecide otherwise.



|49 | Minutes of meetings
|-- | -------------------



|49.1. | The Boardmust cause minutes to be made in minute books of the:
|----- | --------------------------------------------------------------



| |  |  | names of the directors present at each Boardmeeting and Boardcommittee meeting;
| | - |  | -------------------------------------------------------------------------------



| |  |  | appointments of officersmade by the Board; and
| | - |  | ----------------------------------------------



| |  |  | proceedings and resolutions at Boardmeetings, Boardcommittee meetings and shareholders meetings.
| | - |  | -------------------------------------------------------------------------------------------------



|49.2. | It is not necessary for the directors present at a Boardmeeting or Boardcommittee meeting to sign their names in the minute book or other attendance book.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



22



---

|50 | Validity of the Boards actions
|-- | -------------------------------

Everything which is done by a Boardmeeting, a Boardcommittee meeting or a personacting as a director, will be valid even though it is discovered later that a director or personacting as a director was not properly appointed or elected. This also applies if it is discovered later
that a personwas disqualified from being a director, had ceased to be a director or was not entitled to vote.



|51 | Written Resolutions
|-- | -------------------

A directorswrittenresolution is adopted when all of the directors
entitled to vote on the resolution at a Board meeting have:



| |  |  | signed one or more copies of it, or
| | - |  | -----------------------------------



| |  |  | otherwise indicated their agreement to it in writing.
| | - |  | -----------------------------------------------------

These copies can be made using electronic
means. This kind of resolution is only adopted if the number of directors who have signed it or indicated their agreement to it meet the quorum requirement for Board meetings. Once a directorswritten resolution has
been adopted, it will be treated as if it had been a resolution which was passed at a Board meeting.

Board Committees



|52 | Delegating powers to committees
|-- | -------------------------------



|52.1. | The Boardcan delegate any of their powers or discretions to committees of one or more directors or other people. This includes powers or discretions relating to directorspayor giving
benefits to directors. If the Boardhave delegated a power or discretion to a committee, any references in the Articlesto using that power or discretion include its use by the committee. A committee must comply with any regulations
made by the Board. These regulations can require or allow peoplewho are not directors to be co-opted onto the committee and can give voting rights to co-opted members.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|52.2. | Unless the Boardspecifically decide not to allow this, a committee can sub-delegate powers and discretions to sub-committees or other people.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------



|52.3. | References in the Articlesto committees include sub-committees permitted under this Article.
|----- | --------------------------------------------------------------------------------------------



|53 | Proceedings of committees
|-- | -------------------------



|53.1. | If a committee includes two or more members, the Articleswhich regulate Boardmeetings and their procedure will also apply to committee meetings (if possible), unless these are inconsistent with any
regulations for the committee which the Boardhas made under Article 52.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



23



---

|53.2. | A committee or sub-committee can be called a board or council or any other name the Board decide.
|----- | -----------------------------------------------------------------------------------------------------

Directors Interests



|54 | Authorising directors conflicts of interest
|-- | --------------------------------------------



|54.1. | For the purposes of section 175 of the Companies Act, the Board can authorise any matter which:
|----- | -----------------------------------------------------------------------------------------------



| |  |  | would or could be a breach of a directors duty under that section;
| | - |  | -------------------------------------------------------------------



| |  |  | could result in a breach of a directors duty under that section.
| | - |  | -----------------------------------------------------------------

This authorisation
will avoid a situation arising in which the director has, or could have, a direct or indirect interest that conflicts, or could conflict, with the interests of BT.



|54.2. | For authorisation of a matter under this Article to be effective:
|----- | -----------------------------------------------------------------



| |  |  | the matter in question must have been proposed in writing for consideration at a Board meeting, in accordance with the Boards normal procedures or in any other way the Board may decide;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any quorum requirement at the Board meeting when the matter is considered must be met without counting any Interested Directors; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the matter must be agreed without the Interested Directors voting, or would have been agreed if the votes of the Interested Directors had not been counted.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



|54.3. | Any matter authorised under this Article will include any existing or potential conflict of interest which it is reasonable to expect will arise out of the authorised matter.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|54.4. | Any authorisation of a matter under this Article will be subject to any conditions or limitations decided on by the Board. The Board can decide the conditions or limitations at the time
authorisation is given, or later on, and can end them at any time. A director must comply with any obligations the Board impose on the director after a matter has been authorised.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|54.5. | A director does not have to hand over to BT any benefit which the director receives (or a person connected with the director receives) as a result of anything the Board has authorised under this
Article. No contract of the type described in this Article can be cancelled because of any directors interest or benefit.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|55 | Directors may have certain interests
|-- | ------------------------------------



|55.1. | Subject to compliance with Article 55.2, a director can have the following interests:
|----- | -------------------------------------------------------------------------------------



| | a) | a director (or a person connected with the director) can be a director, officer or employee of, or have an interest in (including holding shares), any Relevant Company;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



24



---

| | b) | a director (or a person connected with the director) can have an interest in any Relevant Company BT has an interest in or be a party to a contract with that company;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) | a director (or a person connected with the director, or any firm the director is a partner, employee or shareholder of) can do professional work for any Relevant Company (other than as an Auditor)
whether or not payment is made for the work;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d) | an interest if it cannot reasonably be regarded as likely to give rise to a conflict of interest;
| | -- | -------------------------------------------------------------------------------------------------



| | e) | an interest if the director is not aware of the interest or of the transaction or arrangement giving rise to the interest (for these purposes the director will be treated as being aware of matters if it is reasonable to
expect the director to be aware of them);
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | f) | an interest in any matter authorised under Article 54.1; or
| | -- | -----------------------------------------------------------



| | g) | any other interest authorised by ordinary resolution.
| | -- | -----------------------------------------------------

No authorisation under Article
54 (other than under paragraph (f) of this Article) is required for any interests under this Article.



|55.2. | The director must declare the nature and extent of any interest allowed under Article 55.1 and not falling within Article 55.3, at a Board meeting or in the manner set out in section 184 or 185 of the Companies Act.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|55.3. | A director does not need to declare an interest:
|----- | ------------------------------------------------



| |  |  | if it cannot reasonably be regarded as likely to give rise to a conflict of interest;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | if the director is not aware of the interest or of the transaction or arrangement giving rise to the interest (for these purposes the director will be treated as being aware of matters if it is reasonable to expect the
director to be aware of them);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if the interest relates to any matter which has been authorised under Article 54.1;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | if the other directors already know about the interest (and for this purpose the other directors will be treated as knowing about the interest if it is reasonable to expect they know about it); or
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if the interest concerns the terms of the directors service contract that have been or are to be considered at a Board meeting or at a committee meeting of directors appointed for the purpose under these
Articles.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|55.4. | A director does not have to hand over to BT any benefit which the director (or a person connected with the director) receives:
|----- | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | from any contract or from any office or employment or from any interest in any Relevant Company; or
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | for any payment as referred to in Article 55.1. No contract of the type described in Article 55.1 can be cancelled because of any directors interest or benefit.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



|55.5. | In this Article each of the following is a Relevant Company:
|----- | ------------------------------------------------------------



| |  |  | BT;
| | - |  | ---



| |  |  | a subsidiary undertaking of BT;
| | - |  | -------------------------------



25



---

| |  |  | any holdingcompany of BT or a subsidiary undertaking of any such holdingcompany;
| | - |  | --------------------------------------------------------------------------------



| |  |  | any company promoted by BT; or
| | - |  | ------------------------------



| |  |  | any company in which BT is otherwise interested.
| | - |  | ------------------------------------------------



|56 | When directors can vote on things in which they are interested
|-- | --------------------------------------------------------------



|56.1. | Unless this Article says otherwise, and regardless of whether the interest is one which is authorised under Article 54 or allowed under Article 55, a director cannot vote (and if the director does vote, such vote will
not be counted) on a resolution about a contract in which the director (or a person connected with the director) is interested.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|56.2. | A director cannot be counted in the quorum for a Board meeting in relation to any resolution on which the director is not entitled to vote.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------



|56.3. | If the legislationallows, a director can (unless the director has some other interest as well as an interest allowed by this Article) vote and be counted in the quorum on a resolution concerning a
contract:
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) | in which the director has an interest of which the director is not aware;
| | -- | -------------------------------------------------------------------------



| | b) | in which the director has an interest which cannot reasonably be regarded as likely to give rise to a conflict of interest;
| | -- | ---------------------------------------------------------------------------------------------------------------------------



| | c) | 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;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d) | 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;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | e) | 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;
| | - |  | ----------------------------------------------------------------------------



| | (f) | 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;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (g) | relating to an arrangement for the benefit of BT employees or former BT employees or any of BTssubsidiary undertakings which only gives the directors the same benefits that are
generally given to the employees or former employees to whom the arrangement relates;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



26



---

| | (h) | relating to BT buying or renewing insurance for any liability for the benefit of directors or for the benefit of persons who include directors;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | relating to the giving of indemnities in favour of directors;
| | --- | -------------------------------------------------------------



| | (j) | 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;
| | - |  | ----------------------------------------------------------------------------



| | (k) | which enables any director or directors to avoid incurring expenditure as described in paragraph (j); and
| | --- | ---------------------------------------------------------------------------------------------------------



| | (l) | in which the directors interest, or the interest of directors generally, has been authorised by an ordinary resolution.
| | --- | ------------------------------------------------------------------------------------------------------------------------



|56.4. | This Article applies if the Boardare considering proposals to appoint two or more directors to positions with BTor any companyin which BThas an interest. It also applies if the Boardare considering fixing or varying the terms of the appointment. These proposals can be split up to deal with each proposed director separately. If this is done, each proposed director can vote (unless the proposed director is prevented from
voting under Article 56.1) and be counted in the quorumfor each resolution, except the one concerning that director.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|56.5. | If a question comes up at a meeting about whether a director (other than the chairman of the meeting) has a material interest or whether the director can vote or be counted in the quorum, and the director does
not agree to abstain from voting on the question or not be counted in the quorum, the question must be referred to the chairman of the meeting. The chairmans ruling about the director is conclusive, unless the nature or extent of the
directors interests have not been fairly disclosed to the Board. If the question comes up about the chairman of the meeting, the question will be decided by a resolution of the Board. The chairman cannot vote on the question but
can be counted in the quorum. The Boards resolution about the chairman is conclusive, unless the nature or extent of the chairmans interests have not been disclosed to the Board.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|57 | Confidential information
|-- | ------------------------



|57.1. | Subject to Article 57.2, if a director receives information for which the director owes a duty of confidentiality to a person other than BT, and the director did not receive the information because
of their position as a director, the director will not be required to:
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | disclose such confidential information to BT or to the Board, or to any director, officer or employee of BT; or
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | use or apply such confidential information in any other way in connection with the directors duties as a director.
| | - |  | -------------------------------------------------------------------------------------------------------------------



|57.2. | If a duty of confidentiality arises out of a situation in which the director has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of BT, Article 57.1 will
apply only if the conflict arises out of a matter which has been authorised under Article 54 or falls within Article 55.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



27



---

|57.3. | This Article does not affect any equitable principle or rule of law which may excuse or release the director from disclosing information, in circumstances where disclosure may otherwise be required under this Article.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|58 | Directors interestsgeneral
|-- | ----------------------------



|58.1. | For the purposes of Articles 54 to 58:
|----- | --------------------------------------



| |  |  | a reference to a contract includes a reference to an existing or proposed contract, transaction or arrangement;
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | a director will be treated as owning one per cent or more of a company if the director (together with those persons connected with the director) holds an interest in shares representing one per cent or
more of:
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a class of issued equity share capital; or
| | - |  | ------------------------------------------



| |  |  | the voting rights of that company;
| | - |  | ----------------------------------



| |  |  | an interest of a person who is connected with a director will be treated as an interest of the director; and
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | section 252 of the Companies Act will determine whether a person is connected with a director.
| | - |  | ----------------------------------------------------------------------------------------------



|58.2. | Where a director has an interest which it is reasonable to expect will result in a conflict of interest, the director can if asked to do so by the Board take such additional steps that are necessary or desirable
to manage the conflict of interest. These steps can include complying with any procedures laid down by the Board to manage conflicts of interest generally, or carrying out any specific procedures approved by the Board for managing the
situation or matter in question, including (without limitation) the director:
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | being absent from any Board meetings where the relevant situation or matter is to be considered; and
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | not being given access to documents or information made available to the Board generally in relation to such situation, or arranging for the documents or information to be reviewed by a professional adviser to
determine whether it is appropriate for the director to have access to such documents or information.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|58.3. | The shareholders can by passing an ordinary resolution ratify any contract not properly authorised by reason of breaching any of the provisions in Articles 54 to 58.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

Directors Management Powers



|59 | Management powers
|-- | -----------------



|59.1. | The Boardwill manage BTsbusiness. They can use all BTspowers, except where the legislationor the Articlessay that powers can only be used by the shareholdersvoting to do so at a General Meeting. The general management powers under this Article are not limited in any way by specific powers given to the Boardby other Articles.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



28



---

|59.2. | The Boardsmanagement powers are subject to:
|----- | --------------------------------------------



| |  |  | the legislation;
| | - |  | ----------------



| |  |  | the Articles; and
| | - |  | -----------------



| |  |  | any other requirements which are consistent with the legislationand the Articlesand are approved by the shareholderspassing an ordinary resolution.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



|59.3. | If a change is made to the Articlesor the shareholdersapprove a requirement relating to something which the Boardhave already done which was within their powers, that change or requirement cannot
invalidate the Boardsprevious action.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|60 | Appointing directors to executive positions
|-- | -------------------------------------------

The Boardcan appoint one or more directors to any
executive position they decide. As far as the legislationallows, they can decide how long these appointments will be for and what their terms will be. They can also vary the terms of or end these appointments. If a director ceases to be a
director, the director automatically ceases to hold any executive position in BT. If a directors appointment is varied or ends because of this Article, this does not prejudice any claim against BTfor breach of contract.



|61 | Delegation of powers
|-- | --------------------

The Boardcan give a director or the Secretaryany of the powers
which they have jointly as the Board. These powers can be given on any terms and conditions the Boarddecide either in parallel with, or in place of, the powers of the Boardacting together. These powers can include the power to
sub-delegate. The Boardcan change the basis on which these powers are given or withdraw them from the director or Secretary. No persondealing in good faith who does not know about the change or withdrawal will be affected by
it.



|62 | Power to establish local boards and agencies
|-- | --------------------------------------------



|62.1. | The Boardcan set up local boardsor agencies to manage, supervise or advise on any of BTsbusiness in the United Kingdomor elsewhere. The Boardcan also appoint a person(who need not be a director) to be a:
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | member of a local board; or
| | - |  | ---------------------------



| |  |  | manager or agent.
| | - |  | -----------------



|62.2. | The Boardcan:
|----- | -------------



| |  |  | decide the remuneration and other benefits of peopleappointed under this Article;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | delegate any of the Boardsauthority, powers or discretions to a:
| | - |  | -----------------------------------------------------------------



| |  |  | local board;
| | - |  | ------------



| |  |  | manager or agent; or
| | - |  | --------------------



| |  |  | subsidiary undertakingof BT(whether wholly-owned or not);
| | - |  | ---------------------------------------------------------



| |  |  | allow local boards, managers or agents, or subsidiary undertakingsto delegate to another person;
| | - |  | ------------------------------------------------------------------------------------------------



29



---

| |  |  | allow members of local boardsto fill any vacancies on their boards and to continue to act even though there are vacancies;
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | remove any peopleappointed under this Article (including peopleappointed by another personunder this Article); and
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | cancel or change an appointment or delegation made under this Article (including an appointment made by another personunder this Article), although this will not affect a personwho acts in good faith who
has not had notice of the cancellation or change.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|62.3. | An appointment or delegation by the Boardwhich is referred to in this Article can be on any terms and conditions the Boarddecide.
|----- | ---------------------------------------------------------------------------------------------------------------------------------



|62.4. | In this Article, local board means a special or local board, committee or council and includes a regional or area board or a board for a particular part of BTsbusiness.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|63 | Power to appoint agents
|-- | -----------------------



|63.1. | The Boardcan appoint a person(including the members of a group which changes over time) as BTsagent. The agent can either be appointed directly by the Board, or the Boardcan
give another personthe power to select an agent. The Boardcan decide the purposes, powers, authorities and discretions of an agent. But they cannot give an agent a power, authority or discretion which the Boarddo not have
under the Articles.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|63.2. | The Boardcan decide how long an appointment of an agent will last for and they can apply any terms and conditions to it. The appointment can include any provisions which the Boarddecide for the
protection and convenience of a persondealing with the agent. The appointment can also allow the agent to sub-delegate all or any of their powers, authorities or discretions to any other person.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|64 | Positions with titles including the word director
|-- | ---------------------------------------------------

The Boardcan appoint a personto a position having a title including the word director or give a title including the word director to an existing position and can end that appointment or the use of that title. The use of the word director
in the title of a position does not imply that the holder is a director of BTand the holder does not have the power to act as a director of BTand is not treated as a director of BTfor the purposes of the Articles.



|65 | Overseas branch registers
|-- | -------------------------

BTcan use all the powers that the legislationgives to keep an
overseas branch register. The Boardcan make and change any regulations they decide relating to this register, as long as the legislationallows this.



30



---

|66 | Signatures on cheques etc.
|-- | --------------------------

All cheques, promissory notes, drafts, bills of exchange and other
instruments(whether negotiableor transferable or not) and all receipts for money paidto BTcan be signed, drawn, accepted, endorsed or made effectivein any way the Boarddecide.



|67 | Power to provide for the benefit of employees and former employees
|-- | ------------------------------------------------------------------

The Boardcan, by
passing a resolution, exerciseany powers given by the legislationto provide for the benefit of employees and former employees of BTor any of its subsidiariesin connection with the ending of
the business or the transfer to a personof all or any part of the business and assetsof BT or thatsubsidiary.

Directors Borrowing Powers



|68 | Borrowing powers
|-- | ----------------

To the extent that the legislationand the Articlesallow, the Boardcan exerciseall the powers of BTto:



| |  | borrow money;
|- |  | -------------



| |  | mortgage or charge all or any part of BTsbusiness, property and assets (present and future);
|- |  | ---------------------------------------------------------------------------------------------



| |  | issue debenturesand other securities; and
|- |  | -----------------------------------------



| |  | give security either outright or as collateral security, for a debt, liabilityor obligation of BTor another person.
|- |  | -------------------------------------------------------------------------------------------------------------------



|69 | Borrowing restrictions
|-- | ----------------------



|69.1. | The Boardwill limit the borrowings of BTand exerciseall voting and other rights or powers of control exercisableby BTin relation to its subsidiary undertakingsso as to
ensure that the aggregate amount of all borrowings by the Groupoutstanding at any time is not more than £35,000,000,000. This affects subsidiary undertakingsonly to the extent the Boardcan do this by exercisingthese rights or powers of control. This limit can be exceeded if the consent of shareholdershas been given in advance by passing an ordinary resolution. The limit does not include borrowings owing by one member of the Groupto another member of the Group.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|69.2. | In this Article:
|----- | ----------------



| |  |  | Groupmeans BTand its subsidiary undertakings; and
| | - |  | -------------------------------------------------



| |  |  | minority proportionmeans the proportion of the issuedequity share capital of a partly-owned subsidiary undertakingwhich does not belong to the Group.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



|69.3. | In Article 69.1:
|----- | ----------------



| |  |  | amounts borrowed by a member of the Groupfor the purpose of repaying (with or without a premium) all or any part of other borrowings owing by another member of the Groupwhich are to be used for
this purpose within six monthsof being borrowed are not to be taken into account pending their use for that purpose;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



31



---

| |  |  | amounts borrowed by a partly-owned subsidiary undertakingwhich are not owed to another member of the Groupare to be taken into account (except that a proportion of the borrowings equal to the minority
proportionis to be excluded);
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | amounts borrowed by a member of the Groupwhich are owed to a partly-owned subsidiary undertakingare to be taken into account to the extent of a proportion of the borrowings equal to the minority
proportion;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | amounts borrowed by a subsidiary undertakingbefore it became a member of the Groupare not to be taken into account until six monthsafter the date it became a member of the Group;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | amounts secured on an assetof a member of the Groupbefore it was acquired by a member of the Groupare not to be taken into account until six monthsafter the date of the acquisition;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | amounts beneficiallyowned by a member of the Groupwhich are deposited with a personwho is not a member of the Groupand are repayable on, or within three monthsafter, a demand are
to be deducted from the borrowings of the Group(except that where the amounts are owned by a partly-owned subsidiary undertakinga proportion of the amount owned equal to the minority proportionis to be excluded from the
amount deducted); and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if the amount of the borrowings is being calculated in connection with a transaction involving a companybecoming or ceasing to be a member of the Group, the amount is to be calculated as if the
transaction had already occurred.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|69.4. | A certificate or report by a personchosen by the Boardas to the amount of the borrowings at a particular time will be conclusive evidence of that amount. However, the Boardcan rely on a genuine
estimate of the amount of the borrowings at any time and if as a result the limit stated in Article 69.1 is exceeded, an amount of borrowed money equal to the excess can be disregarded until six monthsafter the date the Boardbecame
aware that this situation had or may have arisen, whether because of a decision of the personchosen by the Boardor for any other reason.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|69.5. | No lender or other persondealing with the Groupneeds to look at or enquire whether the limit imposed by this Article is being observed. No borrowing incurred or security given in excess of this limit
will be invalid or ineffective unless the lender or the recipient of the security had express notice at the time when the borrowing was incurred or security given that the limit had been or would as a result be exceeded.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Liability



|70 | Liability of members
|-- | --------------------

The liability of each member is limited to the amount (if any) unpaid on the
shares held by that member.



32



---

Shares



|71 | Boards authority to allot shares and equity securities and to sell treasury shares
|-- | -------------------------------------------------------------------------------------



|71.1. | This Article regulates the Boardsauthority to allotshares and their power to allot equity securitiesfor cash and to sell treasury shares for cash.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------



|71.2. | For the purposes of section 549 of the Companies Act, the Boardare authorised, generally and without conditions, under section 551 of the Companies Act, to allotshares and to grant rights
to subscribe for or to convert any security into shares in BT. They are authorised to allotshares and grant rights for any prescribed period. The maximum amount of shares which the Boardcan allotand rights which
the Board can grant in each period is the Section 551 Amount.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|71.3. | The Board have the power to allot equity securities under the general authority in Article 71.2, entirely paidfor in cash, and to sell treasuryshares, entirely paid for in cash, in
each case free of the restriction in section 561(1) of the Companies Act. They have the power to allot equity securities and to sell treasury shares for any prescribed period. There is no maximum amount of equity
securitiesor treasury shares which the Boardcan allotor sell where the allotmentor the sale is in connection with a rights issue. In all other cases, the maximum amount of equity securitiesand
treasury shareswhich the Boardcan allotor sell is the Section 561 Amount.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|71.4. | During each prescribed period, the Boardcan make offers, and enter into agreements, which would, or might, need shares or equity securitiesto be allottedor sold, or rights to be granted,
after those periods.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|71.5. | In this Article:
|----- | ----------------



| |  |  | rights issuemeans an offer of equity securitieswhich is open for a period decided by the Boardto the peoplewho are registered on a particular date (chosen by the Board) as
holders of:
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Ordinary Shares, in proportion to their holdings of Ordinary Shares;
| | - |  | --------------------------------------------------------------------



| |  |  | other classes of equity securitieswhich give them the right to receive the offer or which allow BTto decide whether or not they should receive the offer (and the Boarddecide that they should
receive it).
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



33



---

However, the Boardcan do the following things (and the issuewill still be
treated as a rights issuefor the purposes of this Article if they do so):



| |  |  | sell any fractions of equity securitiesto which peoplewould be entitled and keep the net proceeds for BTsbenefit or make other appropriate arrangements to deal with such fractions;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | make the rights issuesubject toany limits or restrictions which the Boardthink are necessary or appropriate to deal with legal or practical problems under the laws of any territory, or
under the requirements of any recognised regulatory body, or stock exchange, in any territory or as a result of shares being represented by American Depositary Shares or Global Depositary Shares or other instruments;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | treat a shareholdersholdings of certificatedand uncertificated sharesas separate shareholdings; or
| | - |  | ---------------------------------------------------------------------------------------------------

| |  |  | deal in a different way with the rightsof an Ordinary Shareholder, if that shareholderasks;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | prescribed periodmeans any period fixed by the shareholdersby passing a resolution at a General Meeting. These resolutions can take the form of:
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an ordinary resolution fixing a prescribed period under Article 71.2;
| | - |  | ---------------------------------------------------------------------



| |  |  | a special resolution fixing a prescribed period under Article 71.3;
| | - |  | -------------------------------------------------------------------



| |  |  | a special resolution fixing identical prescribed periods under Articles 71.2 and 71.3; or
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | a special resolution fixing different prescribed periods under Articles 71.2 and 71.3;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | the Section 551 Amountfor any prescribed period is that stated in a relevantordinary resolution passed by the shareholdersat a General Meeting;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the Section 561 Amountfor any prescribed period is that stated in a relevantspecial resolution; and
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | in working out any maximum amounts of securities, the face valueof rights to subscribe for shares, or to convert any securitiesinto shares, will be taken as the face valueof the shares which would be allottedif the subscriptionor conversion takes place.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|72 | Uncertificated shares
|-- | ---------------------



|72.1. | Subject tothe Articlesand to the extent that the legislationallows, the Boardcan decide that a class of shares can:
|----- | -------------------------------------------------------------------------------------------------------------------



| |  |  | be held in uncertificated form and that title to those shares can be transferred using a relevant system; or
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | no longer be held and transferred in uncertificated form.
| | - |  | ---------------------------------------------------------



|72.2. | The Articlesdo not apply to shares of a class which are held in uncertificated form to the extent that they are inconsistent with the:
|----- | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | holding of shares of that class in uncertificated form;
| | - |  | -------------------------------------------------------



| |  |  | transfer of title to shares of that class using a relevant system; or
| | - |  | ---------------------------------------------------------------------



| |  |  | Regulations.
| | - |  | ------------



34



---

|73 | Renunciations of allotted but unissued shares
|-- | ---------------------------------------------

Where a share has been allottedto a personbut that personhas not yet been entered on the Register, the Boardcan recognise a transfer (called a renunciation) by that personof their right to the share in favour of some other person. The ability
to renounce allotmentsonly applies if the terms on which the share is allottedare consistent with renunciation. The Boardcan impose terms and conditions regulating renunciationrights and can allow
renunciationrights to be securitiesin uncertificated form in their own right.



|74 | Power to pay commission and brokerage
|-- | -------------------------------------



|74.1. | BTcan use all the powers given by the legislationto paycommission or brokerageto a personwho:
|----- | ---------------------------------------------------------------------------------------------



| |  |  | applies, or agrees to apply, for any new shares; or
| | - |  | ---------------------------------------------------



| |  |  | gets any other personto apply, or agree to apply for, any new shares.
| | - |  | ---------------------------------------------------------------------



|74.2. | BTcan paythe commission in cash, or by allottingshares, or by a combination of both.
|----- | ------------------------------------------------------------------------------------



|75 | No trusts or similar interests recognised
|-- | -----------------------------------------



|75.1. | BTwill only be affected by, or recognise, a current and absolute right to whole shares. The fact that all or any part of a share may not be owned outright by the registered owner is not of concern to BT,
for example, if a share is held on any kind of trust. This applies even if BTknows about the ownership of the share.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|75.2. | The only exceptions are any rights:
|----- | -----------------------------------



| |  |  | expressly given by the Articles; or
| | - |  | -----------------------------------



| |  |  | which BThas a legal duty to recognise.
| | - |  | --------------------------------------

Changing Share Capital



|76 | Power to reduce capital
|-- | -----------------------

The shareholderscan pass a special resolutionto reduce in any
way:



| |  | BTsshare capital; or
|- |  | ---------------------



| |  | a capital redemption reserveor share premium account.
|- |  | -----------------------------------------------------

This is subject toany
restrictions under the legislation.



|77 | Power to change capital
|-- | -----------------------

The shareholderscan pass ordinary resolutions to do any of the
following:



| |  | divide, all or any part of BTsshare capital into shares with a smaller face valuethan the existing shares; and
|- |  | ---------------------------------------------------------------------------------------------------------------



| |  | consolidateand divideall or any of BTsshares into shares with a larger face valuethan the existing shares.
|- |  | -----------------------------------------------------------------------------------------------------------



35



---

This is subject toany restrictions under the legislation.



|78 | Fractions of shares
|-- | -------------------



|78.1. | If any shares are consolidatedor divided, the Boardhave power to deal with any fractions of shares which result or any other problem that arises. If the Boarddecide to sell any shares
representing fractions, they must sell for the best price they can reasonably obtain and distribute the net proceeds of sale among shareholdersin proportion to their fractional entitlements. The Boardcan sell to a person(including BT, if the legislationallows) and can authorise a personto transfer those shares to the buyer or in accordance with the buyers instructions. The buyer does not need to take any action to check how any
money paidis used. The buyers ownership will not be affected if the sale was irregular or invalid in any way.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|78.2. | When the Boardconsolidateor divideshares, they can treat certificatedand uncertificated shareswhich a shareholderholds as separate shareholdings, as far as the
legislationallows this. The Boardcan also arrange for any shares which result from a consolidationor divisionand which represent rights to fractions of shares to be entered in the Registeras certificated
shareswhere this makes it easier to sell them.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|79 | Buying back shares
|-- | ------------------



|79.1. | BTcan use all the powers given by the legislationto buy back any of its own shares (including redeemableshares).
|----- | ----------------------------------------------------------------------------------------------------------------



|79.2. | BT has the right to:
|----- | --------------------



| |  |  | sell any treasury shares;
| | - |  | -------------------------



| |  |  | transfer any treasury shares for the purposes of, or to benefit, an employees share scheme;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | receive an allotment of shares as fully paid bonus shares in respect of any treasury shares; or
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | receive any amount payable on redemption of any redeemable treasury shares.
| | - |  | ---------------------------------------------------------------------------

BT cannot exercise any other right in respect of treasury sharesBT holds, including any right to attend or vote
at meetings, to participate in any offer BT makes to shareholders or to receive any distribution (including in a winding up).

Share Rights



|80 | Shares and special rights
|-- | -------------------------



|80.1. | The provisions in these Articles about allotment, transfer, automatically entitled to a share by law and all other matters relating to shares apply to new shares in the same way as if they were
existing shares.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



36



---

|80.2. | BTcan issuenew shares and attach any rightsand restrictions to them, as long as this is not restricted by special rightspreviously given to holders of any existing shares.
Subject tothis, the rightsof new shares can take priority over the rightsof existing shares, or existing sharescan take priority over them, or the new shares and the existing sharescan rank
equally. These rightsand restrictions can apply to sharing in BTsprofits or assets. Other rightsand restrictions can also apply, for example relating to the right to vote.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|80.3. | The shareholderscan decide on the rightsand restrictions to be attached to new shares by passing an ordinary resolution. The Boardcan also take these decisions if the shareholdershave not passed a resolution which covers the point.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|80.4. | If the legislationallows this, the new shares can include rightsfor the holder and/or BTto have them redeemed and the Board can decide the terms, conditions and manner of
redemption of the shares.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|81 | Changing special rights of shares
|-- | ---------------------------------



|81.1. | If BTsshare capital is split into different classes of share, and if the legislationallows this, the special rightswhich are attached to any of these classes can be varied or withdrawn if
the shareholdersapprove this by passing a special resolution. This must be passed at a separate meeting of the holders of the relevant class of shares. This is called a class meeting. Alternatively, the holders of at least 75 per
cent of the existing sharesof the class (by face value) can give their writtenconsent.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|81.2. | All the Articlesrelating to General Meetingsapply, with any necessary changes, to a class meeting, but with the following adjustments:
|----- | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | at least two peoplewho hold (or who act as proxiesfor peoplewho hold) at least one third of the total face valueof the existing sharesof the class are a quorum at a
class meeting. However, if this quorumis not present at an adjournedmeeting, one personwho holds shares of the class, or their proxy, is a quorum;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a shareholderwho is present in person or by proxycan demand a poll; and
| | - |  | -----------------------------------------------------------------------



| |  |  | on a poll, the holders of shares will have one vote for every share of the class which they hold.
| | - |  | -------------------------------------------------------------------------------------------------

This is subject toany special rightsor restrictions which are attached to a class of shares by the Articles, or any
rightsattached to shares in some other way under the Articles.



|81.3. | This Article also applies if special rightsof shares forming part of a class are varied or withdrawn. Each part of the class which is being treated differently is viewed as a separate class in applying this
Article.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



37



---

|82 | More about special rights of shares
|-- | -----------------------------------

Unless the terms of the existing sharessay something
different, the special rightsof existing sharesare not regarded as varied or withdrawn if:



| |  | new shares are created, or issued, which rankequally with or after any existing sharesin payment of dividends or sharing in profits or assetsof BT; or
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | BTbuys back or redeemsits own shares.
|- |  | -------------------------------------

Share Certificates



|83 | Certificates
|-- | ------------



|83.1. | When a shareholderis first registered as the holder of any class of certificated shares, that shareholderis entitled, free of charge, to one certificate for all the certificated sharesof
that class which the shareholderholds. If a shareholderholds certificated sharesof more than one class, that shareholderis entitled to a separate share certificate for each class. This does not apply if the
legislationallows BTnot to issue share certificates.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|83.2. | If a shareholderreceives more certificated sharesof any class, that shareholderis entitled, free of charge, to a certificate for the extra shares.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------



|83.3. | If a shareholdertransfers some of the shares covered by a certificate, that shareholderis entitled, free of charge, to a new certificate for the balance if the balance is also covered by a certificate.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|83.4. | BTdoes not have to issue more than one certificate for a certificated share, even if that share is held jointly.
|----- | ----------------------------------------------------------------------------------------------------------------



|83.5. | When BTdelivers a certificate to the first named joint holder of certificated shares, this is treated as delivery to all of the joint shareholders.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------



|83.6. | BTcan deliver a certificate to a broker or agent who is acting for a personwho is buying certificated sharesor who is having certificated sharestransferred to them.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



|83.7. | The Boardcan decide how share certificates are made effective. For example, they can be:
|----- | ----------------------------------------------------------------------------------------



| |  |  | signed by two directors or one director and the Secretary;
| | - |  | ----------------------------------------------------------



| |  |  | sealed with the Seal; or
| | - |  | ------------------------



| |  |  | printed, in any way, with a copy or representation of those signatures or the Seal. The representation can be made or produced mechanically, electronically or in any other way the Boardapprove.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|83.8. | A share certificate must state the number and class of shares to which it relates and the amount paid upon those shares. It cannot be for shares of more than one class.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



38



---

|83.9. | The time limit for BTto provide a share certificate under this Article for certificated sharesis:
|----- | -------------------------------------------------------------------------------------------------



| |  |  | two monthsafter the allotmentof a new share (or any longer period provided by its terms of issue); or
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | five business daysafter a transfer of shares is presented for registration or the instruction from the operatorof the relevant systemis received.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



|84 | Replacement certificates
|-- | ------------------------



|84.1. | A shareholdercan ask BTto cancel and replace a single share certificate with two or more certificates, for the same total number of shares. The Boardcan require the shareholderto payfor the new certificates.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|84.2. | A shareholdercan ask BTfor a new certificate if the original is:
|----- | ----------------------------------------------------------------



| |  |  | worn out, damaged or defaced; or
| | - |  | --------------------------------



| |  |  | lost, stolen or destroyed.
| | - |  | --------------------------

The Boardcan require the shareholderto pay
BTsexceptional out of pocket expenses for issuing a new certificate.



|84.3. | If a certificate has been worn out, damaged or defaced, BTcan require the certificate to be delivered to it before issuing a replacement. If a certificate is lost, stolen or destroyed, BTcan require
satisfactory evidence, and an indemnity, before issuing a replacement.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Transferring Shares



|85 | Share transfers
|-- | ---------------



|85.1. | Unless the Articlessay otherwise, a shareholdercan transfer some or all of their shares to another person.
|----- | ----------------------------------------------------------------------------------------------------------



|85.2. | Every transfer of certificated sharesmust be in writing, and either in the usual standard form, or another form approved by the Board.
|----- | --------------------------------------------------------------------------------------------------------------------------------------



|85.3. | Every transfer of uncertificated sharesmust be carried out using a relevant system.
|----- | -----------------------------------------------------------------------------------



|85.4. | The transfer form for certificated sharesmust be delivered to the Registered Officeor any other place the Boarddecide. The transfer form must have with it:
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the share certificate for the shares to be transferred;
| | - |  | -------------------------------------------------------



| |  |  | any other evidence which the Boardask for to prove that the personwanting to make the transfer is entitled to do this; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | if the transfer form is executedby another personon behalf of the personmaking the transfer, evidence of the authority of that personto do so.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



39



---

|85.5. | However, if a transfer is by a recognised clearing houseor its nominee or by a recognised investment exchange, a share certificate is only needed if a certificate has been issued for the
shares in question.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|85.6. | A transfer form must be signed, or made effectivein some other way, by or on behalf of the personmaking the transfer.
|----- | ---------------------------------------------------------------------------------------------------------------------



|85.7. | The personmaking a transfer will be treated as continuing to be the shareholderuntil the name of the personto whom a share is being transferred is entered on the Registerfor that share.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|86 | More about share transfers
|-- | --------------------------



|86.1. | If BTregisters a transfer, it can keep the transfer form. A transfer form cannot be used to transfer more than one class of shares. Each class needs a separate form.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



|86.2. | No fee is payable to BTfor transferring shares or registering changes relating to the ownership of shares.
|----- | ----------------------------------------------------------------------------------------------------------



|86.3. | Transfers cannot be in favour of more than four joint holders.
|----- | --------------------------------------------------------------



|86.4. | A transfer form must be properly stamped to show payment of any applicable stamp duty.
|----- | --------------------------------------------------------------------------------------



|86.5. | The Boardcan refuse to register a transfer of an uncertificated sharein the circumstances stated in the Regulations.
|----- | --------------------------------------------------------------------------------------------------------------------



|86.6. | If the Boarddecide not to register a transfer of a share, they must notify the personto whom that share was to be transferred giving reasons for their decision. This must be done as soon as possible and
no later than two monthsafter BTreceives the:
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | transfer (in the case of a certificated share); or
| | - |  | --------------------------------------------------



| |  |  | instruction from the operatorof the relevant system(in the case of an uncertificated share).
| | - |  | --------------------------------------------------------------------------------------------

People Automatically Entitled to Shares by Law



|87 | When shareholders die
|-- | ---------------------



|87.1. | If a shareholderwho is a joint shareholderdies, the remaining joint shareholderor shareholderswill be the only peoplewho BTwill recognise as being entitled to their
shares.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|87.2. | When a sole shareholder(or a shareholderwho is the last survivor of joint shareholders) dies, their legal personal representativeswill be the only peoplewho BTwill
recognise as being entitled to their shares.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



40



---

|88 | Registering personal representatives
|-- | ------------------------------------

A personwho becomes automatically entitled to a
share by lawcan either be registered as the shareholderor can select some other personto have the share transferred to. The automatically entitledpersonmust provide any evidence of their entitlement
which the Boardreasonably require.



|89 | People who want to be registered must give notice
|-- | -------------------------------------------------

If a personwho is automatically
entitled to a share by lawwants to be registered as a shareholder, they must deliver a writtennotice to BTsaying that they have made this decision. The notice must be in the form which the Boardrequire. This
notice will be treated as a transfer form. All the Articlesabout registering transfers of shares apply to it. The Boardhave the same power to refuse to register the automatically entitledpersonas they would
have had in deciding whether to register a transfer by the personwho was previously entitled to the shares.



|90 | Having another person registered
|-- | --------------------------------



|90.1. | If a personwho is automatically entitled to a share by lawwants the share to be transferred to another person, they must do this for:
|----- | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a certificated share, by signing a transfer form to the personthey have selected; and
| | - |  | -------------------------------------------------------------------------------------



| |  |  | an uncertificated share, by using a relevant system.
| | - |  | ----------------------------------------------------



|90.2. | The Boardhave the same power to refuse to register the personselected as they would have had in deciding whether to register a transfer by the personwho was previously entitled to the shares.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|91 | Rights of people automatically entitled to shares by law
|-- | --------------------------------------------------------



|91.1. | A personwho is automatically entitled to a share by lawis entitled to any dividends or other money relating to the share, even though they are not registered as the holder of that share, on
supplying to BTevidence the Boardreasonably require to show their title to the share. However, the Boardcan send a writtennotice to the personsaying that the personmust either be registered as the
holder of the share or transfer the share to some other person. If the automatically entitledpersondoes not do this within 90 days of the notice, the Boardcan withhold all dividends or other money relating to
the share until they do.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|91.2. | Unless registered as the holder of the share, the personautomatically entitled to a share by lawcannot:
|----- | -------------------------------------------------------------------------------------------------------



| |  |  | receive notices of shareholders meetings, or attend or vote at these meetings; or
| | - |  | ----------------------------------------------------------------------------------



| |  |  | exerciseany other right of a shareholderin relation to any of these meetings; unless the Boarddecide to allow this.
| | - |  | -------------------------------------------------------------------------------------------------------------------



41



---

Shareholders who Cannot be Traced



|92 | Untraced shareholders
|-- | ---------------------



|92.1. | BTcan sell any shares if:
|----- | -------------------------



| |  |  | for 10 years before the sale, BThas tried to payat least three dividends and no dividend has been cashed;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | during this 10 yearperiod, BTis satisfied that it has taken the steps it considers reasonable in the circumstances to trace the shareholder, engaging, if considered appropriate, a professional asset
reunification company or other tracing agent; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | during this 10 yearperiod, a communication is sent to the shareholder (as BT considers reasonable in the circumstances) or, if known, to a personwho is automatically entitled to the shares by
law stating that it intends to sell the shares; provided that if this communication is sent less than three months before the end of the 10 year period, for three months after the date of sending the communication, BT has not heard from the
person to whom the communication was sent.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|92.2. | BTcan also sell any additional share issued during this 10 year period and (if applicable) three month period, in right of any share to which Article 92.1 applies (or in right of any such additional share), if a
communication is sent to the shareholder (as BT considers reasonable in the circumstances) or, if known, to a person who is automatically entitled to the additional shares by law, stating that it intends to sell the additional
shares, provided that for three months after the date of sending the notice BT has not heard from the person to whom the communication was sent.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|92.3. | To sell any shares in this way, the Boardcan authorise a personto transfer the shares. This transfer will be just as effective as if it had been made by the registered holder of the shares, or by a
personwho is automatically entitled to the shares by law. The ownership of the personto whom the shares are transferred will not be affected even if the sale is irregular or invalid in any way.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|92.4. | BTcan keep any money which it has earned on the net sale proceeds and BTwill not be liable in any respect to the registered holder of the shares or any person who was automatically entitled
to the shares by law for the sale proceeds. BTcan use this money for any purpose that the Boardmay from time to time think fit.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|92.5. | In the case of uncertificated shares, this Article is subject toany restrictions which apply under the Regulations.
|----- | -------------------------------------------------------------------------------------------------------------------

Dividends



|93 | Final dividends
|-- | ---------------

Shareholderscan declaredividends by passing an ordinary
resolution, but no dividend can exceed the amount recommended by the Board.



42



---

|94 | Fixed and interim dividends
|-- | ---------------------------



|94.1. | If the Boardconsider that the profits of BTjustify such payments, they can pay:
|----- | -------------------------------------------------------------------------------



| |  |  | interim dividends on any class of shares of any amounts, on any dates and for any periods which they decide; and
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | fixed or other dividends on any class of shares on the dates stated for the payment of those dividends.
| | - |  | -------------------------------------------------------------------------------------------------------



|94.2. | If the Boardact in good faith, they are not liable to any shareholdersfor any loss they suffer because a lawful dividend has been paidunder this Article on other shares which rankequally
with or behind their shares.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|95 | Distributions in kind
|-- | ---------------------

If the Boardrecommend this, shareholderscan pass an ordinary
resolutionto direct all or any part of a dividend to be paidby distributing specific assets(and in particular paid-upshares or debenturesof any other company). The Boardmust give effect to
that resolution. Where a difficulty arises on the distribution, the Boardcan settle it as they decide. In particular, they can:



| |  | issue fractional certificates;
|- |  | ------------------------------



| |  | value the assetsfor distribution purposes;
|- |  | ------------------------------------------



| |  | paycash of a similar value to adjust the rights of shareholders; and/or
|- |  | -----------------------------------------------------------------------



| |  | transfer any assetsto trustees.
|- |  | -------------------------------



|96 | No dividends are payable except out of profits
|-- | ----------------------------------------------

No dividend can be paidexcept out of profits
available for distribution under the legislation.



|97 | Payments to shareholders
|-- | ------------------------



|97.1. | A dividend or other money payable in cash relating to a share can be paid:
|----- | --------------------------------------------------------------------------



| |  |  | by cheque or warrantpayable to the shareholderor personautomatically entitled to the shares by lawwho is entitled to it or to another personnamed in a writteninstruction from the shareholder(or all joint shareholdersor peoplejointly and automatically entitled to the shares by law);
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | in the case of uncertificated shares, by using a relevant system;
| | - |  | -----------------------------------------------------------------



| |  |  | by bank transfer, electronic means or by means of a website directly to an account named in a writteninstruction from the shareholder(or all joint shareholdersor peoplejointly and
automatically entitled to the shares by law); and/or
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | in any other way agreed between the shareholder(or all joint shareholdersor peoplejointly and automatically entitled to the shares by law) and BT.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



43



---

|97.2. | For joint shareholders, or peoplejointly and automatically entitled to shares by law, BTcan rely on a receipt for a dividend or other money paidon shares from any one of
them.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|97.3. | Cheques and warrantsare sent, and payment in any other way is made, at the risk of the peoplewho are entitled to the money. BTis treated as having paida dividend if a cheque or warrantis cleared or if a payment is made using a relevant system, bank transfer, electronic means or by means of a website. BTwill not be responsible for a payment which is lost or delayed.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|97.4. | BTcan send a cheque or warrantto shareholderswho are employees of BTor any of its subsidiary undertakingsthrough BTsinternal post system.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------



|97.5. | Unless the rightsattached to any shares, the terms of any shares or the Articlessay otherwise, a dividend and any other money payable in respect of a share can be paidin whatever currency the
Boarddecide using an appropriate exchange rate selected by the Boardfor any currency conversions required. The Boardcan also decide how any costs relating to the choice of currency will be met.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|97.6. | No dividend or other money payable by BTin respect of its shares carries a rightto interest from BT, unless the rightsof the shares say something different.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



|98 | Deducting amounts owing from dividends and other money
|-- | ------------------------------------------------------

If a shareholderowes any money to BTrelating in any way to BTshares, the Boardcan deduct any of this money from any:



| |  | dividend on any shares held by the shareholder; or
|- |  | --------------------------------------------------



| |  | other money payable by BTin respect of the shares.
|- |  | --------------------------------------------------

Money deducted in this way can be used to paythe amounts owed to BT.



|99 | Unclaimed dividends and other money
|-- | -----------------------------------



|99.1. | Unclaimed dividends and other money payable in respect of a share that is unclaimed can be invested or otherwise used by the Boardfor the benefit of BTuntil they are claimed. The Boardcan decide
to paythe unclaimed dividends and other unclaimed money into a separate account, but BTwill not be a trusteeof the money. If a dividend or other unclaimed money has not been claimed for 10 yearsafter it was
declaredor became due for payment, or if BT sells the share to which the dividend or other unclaimed money relates in accordance with the authority in Article 92, it will be forfeited and belong to BTagain unless the Boarddecides otherwise.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|99.2. | BTcan stop paying dividends if cheques or warrantsfor two dividends in a row are sent back or not cashed or if payment by any other means has not been able to be made twice in a row through no fault of
BT. BTmust start paying dividends in the same way again if the shareholderor a personautomatically entitled to the shares by law:
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



44



---

| |  |  | claims those dividends in writing(before they go back to BTunder Article 99.1); and
| | - |  | -----------------------------------------------------------------------------------



| |  |  | does not ask BTto start paying dividends in some other way.
| | - |  | -----------------------------------------------------------



|100 | Waiver of dividends
|--- | -------------------

All or any dividends can be waived by a document which is accepted by BTor
on which BTacts. The document must be signed or authenticated in accordance with Article 104 by the shareholder(or the personautomatically entitled to the shares by law) and delivered to BT.



|101 | Record dates
|--- | ------------

A dividend or distribution on, and an allotmentor issueof, any shares can
be paidor made to the holders of shares shown on the Registerat whatever time on whatever day is stated in the resolution declaring the dividend or providing for the distribution, allotmentor issue. If no time is
stated in the resolution, the close of business applies. This Article applies whether what is being done is the result of a resolution of the Boardor a resolution passed at a General Meeting. The date can be before the relevant
resolution was passed. This Article does not affect the rightsbetween past and present shareholdersto payments or other benefits.

Scrip Dividends



|102 | Shareholders can be offered the right to receive new shares instead of cash dividends
|--- | -------------------------------------------------------------------------------------



|102.1. | The Boardcan offer Ordinary Shareholdersthe right to choose to receive new Ordinary Shares, which are credited as fully paid, instead of some or all of their cash dividend. Before they can
do this, the shareholdersmust have passed an ordinary resolutionauthorising the Boardto make this offer.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|102.2. | The ordinary resolutioncan apply to some or all of a particular dividend or dividends. Alternatively, it can apply to some or all of the dividends which are declaredor paidin a specified period.
The specified period must not end later than the end of the Annual General Meetingwhich is held in the fifth yearafter the ordinary resolutionis passed.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|102.3. | The Boardcan offer shareholdersthe right to request new shares instead of cash for:
|------ | -----------------------------------------------------------------------------------



| |  |  | the next dividend; or
| | - |  | ---------------------



| |  |  | all future dividends (if a share alternative is made available), until they tell BTthat they no longer want to receive new shares.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------

The Boardcan also allow shareholdersto choose between these alternatives.



|102.4. | A shareholderchoosing new shares is entitled to Ordinary Shareswhose total relevant value is as near as possible to the cash dividend the shareholderwould have received (disregarding any tax
credit), but not more than it.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



45



---

The relevant valueof a share is:



| |  |  | the average value of BTs Ordinary Sharesfor the five dealing days starting from, and including, the day when the shares are first quoted ex-dividend(this average value is worked out from the
average middle market quotations for BTs Ordinary Shareson the London Stock Exchange, as published in its Daily Official List); or a value worked out in accordance with the ordinary resolution.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

A certificate or report by the Auditorstating the relevant valuefor a dividend is conclusive evidence of that value.



|102.5. | The Boardcan decide how any costs relating to making new shares available in place of a cash dividend will be met. For example, they can decide that an amount will be deducted from the entitlement of a
shareholderunder Article 102.4.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|102.6. | After the Boardhave decided to apply this Article to a dividend, they must give eligible shareholders writtennotice of their right to choose new shares. This notice should also say how, where and when
shareholdersmust notify BTif they want to receive new shares. Where shareholdershave already chosen to receive new shares in place of all future dividends, if new shares are available, BTwill not need to notify them
of a right to choose new shares.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|102.7. | No shareholderwill receive a fraction of a share. The Boardcan decide how to deal with any fractions left over. For example, they can decide that the benefit of fractions belongs to BTor that
fractions are ignored or deal with fractions in some other way.
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|102.8. | The Boardcan exclude or restrict the right of shareholdersto choose new shares or make any other arrangements where they decide that:
|------ | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | this is necessary or appropriate to deal with legal or practical problems:
| | - |  | --------------------------------------------------------------------------



| |  |  | under the laws of any territory;
| | - |  | --------------------------------



| |  |  | under the requirements of any recognised regulatory body, or stock exchange, in any territory; or
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | as a result of shares being represented by American Depositary Shares or Global Depositary Shares or other instruments; or
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | it would be impractical or unduly onerous to give the right to any shareholderor that for some other reason the right should not be given.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



|102.9. | If a shareholder chooses to receive new shares, no dividend on the corresponding elected shares
will be declaredor payable. Instead, new Ordinary Shares will be allottedon the basis stated earlier in this Article. To do this the Board will change into capital a sum equal to the total face valueof
the new Ordinary Shares to be allotted. They will use this sum to pay up in full the appropriate number of new Ordinary Shares. These will then be allottedand distributed to the holders of the elected
shares as stated above. The sum to be changed into capital can be taken from any amount which is part of BTs
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



46



---

| | reserves(including premiumsreceived when any shares were issued, capital redemption reservesor other undistributablereserves) or which BTis holding
as net profits. Article 122 applies to this process, as far as it is consistent with this Article.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|102.10. | The new Ordinary Sharesrankequally in all respects with the existing fully paid Ordinary Sharesat the time the new Ordinary Sharesare allotted. They are not entitled to share in
the dividend from which they arose and do not allow the holder to choose new shares instead of that dividend.
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|102.11. | Unless the Boarddecide otherwise or the Regulationsor the rules of a relevant systemrequire otherwise, any new Ordinary Shareswhich a shareholderhas chosen to receive instead of
some or all of their cash dividend will be:
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | uncertificated sharesif the corresponding elected shareswere uncertificated shareson the record date for that dividend; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | certificated sharesif the corresponding elected shareswere certificated shareson the record date for that dividend.
| | - |  | -------------------------------------------------------------------------------------------------------------------



|102.12. | The Boardcan decide that new shares will not be available in place of any cash dividend. They can decide this at any time before new shares are allottedin place of a dividend, whether this is before or
after shareholdershave chosen to receive new shares.
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|102.13. | In this Article, elected sharesmeans the shares in respect of which the shareholderhas chosen to receive new shares.
|------- | --------------------------------------------------------------------------------------------------------------------

Communications with shareholders



|103 | Delivering notices and other documents to shareholders
|--- | ------------------------------------------------------



|103.1. | BTcan, subject to and in accordance with the Companies Act and these Articles, send or supply all types of notice, document or information to a shareholder:
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | by delivering it by hand to the addressrecorded for the shareholderon the Register or an addressspecified for the purpose by the intended recipient;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | by sending it by post in an envelope (with postage paid) to the addressrecorded for the shareholderon the Register; or
| | - |  | ----------------------------------------------------------------------------------------------------------------------



| |  |  | by electronic means (except for share certificates) and/or by making such notices, documents or information (except for share certificates) available on a website.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



|103.2. | Subject to the provisions of Articles 103 to 111, the Company Communications Provisions govern any provision of the Companies Act or those Articles that authorises or requires notices,
documents or information to be sent or supplied by BT to its shareholders or to BT from its shareholders.
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



47



---

|104 | Signature or authentication of documents
|--- | ----------------------------------------

Where these Articles require a notice, document or
information, including a proxy form, to be signed or authenticated by a shareholderor other personthen any notice, document or information sent or supplied in electronic form is sufficiently authenticated in any
manner authorised by the Company Communications Provisionsor in any other manner approved by the Board. The Board can designate mechanisms for validating any notice or document of this kind, and any document not validated by
the use of these mechanisms can be treated by the Boardas never having been received by BTor its agent.



|105 | Joint shareholders
|--- | ------------------



|105.1. | Anything which needs to be agreed by joint shareholders will be treated as being agreed by all the joint shareholders where it has been agreed by the joint shareholder who is listed first on the
Register.
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|105.2. | When a notice, document or information is authorised or required to be sent or supplied to joint shareholdersit must be sent or supplied to the joint shareholderwho is listed first on the Registerfor the share but, subject to the legislation, ignoring a joint shareholderwithout an addressin the United Kingdomunder Article 106. A notice, document or information sent in this way is treated as delivered
to all the joint shareholders.
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|105.3. | The provisions of this Article relating to joint shareholders will have effect in place of the Company Communications Provisions.
|------ | ---------------------------------------------------------------------------------------------------------------------------------



|106 | Shareholders with foreign addresses or on branch registers
|--- | ----------------------------------------------------------



|106.1. | Subject to the legislation, BTdoes not have to send notices, documents or information to a shareholderwhose addresson the Registeris outside the United Kingdomif the
shareholder has not given BTan addressin the United Kingdomwhere notices, documents or information can be sent.
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|106.2. | For a shareholderregistered on a branch register, notices, documents or information can be posted or despatched in the United Kingdomor in the country where the branch register is kept.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|107 | Notices when shareholders have died or are bankrupt or in liquidation
|--- | ---------------------------------------------------------------------



|107.1. | This Article applies where a personis registered as a sole or first-named joint shareholderbut
another personis automatically entitled to their shares by law. The personwho proves that they are automatically entitled to the shares by lawto the reasonable satisfaction of the Boardcan give
BTan addresswhere notices, documents and information can be sent or supplied. If this is done, subject toArticle 91.2, notices, documents and information must be sent to that address. Otherwise, if a notice,
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



48



---

| | document or information is sent or supplied to the shareholdernamed on the Registerin accordance with the Articles, this will be valid even though another personis
automatically entitled to their shares by law. This applies even if BTwas aware of this. If notices, documents or information are sent in accordance with this Article, there is no need to send them in any other way to any other
peopleinvolved.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|107.2. | The provisions of this Article relating to the death, bankruptcy or liquidation of a shareholder will have effect in place of the Company Communications Provisions.
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



|108 | When notices are delivered
|--- | --------------------------



|108.1. | If a notice, document or information is delivered by hand, it is treated as being delivered at the time it is handed to or left for the shareholder.
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------



|108.2. | If a notice, document or information is sent or supplied by BT in hard copy form, or in electronic form, but not delivered by electronic meansand which is sent by pre-paid post and properly
addressed, it is treated as being received by the intended recipient:
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 24 hours after it was posted, if first class post was used; or
| | - |  | --------------------------------------------------------------



| |  |  | 72 hours after it was posted, if first class post was not used.
| | - |  | ---------------------------------------------------------------

It can be proved conclusively
that a notice, document or information was received by post by showing that the notice, document or information was properly addressed, prepaid and posted.



|108.3. | If a notice, document or information (other than a share certificate) is sent or supplied by BTby electronic means, it is treated as being received by the intended recipient at the time it was sent. It
can be proved conclusively that a notice, document or information was received by electronic means, by showing that the notice, document or information was properly addressed.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|108.4. | If a notice, document or information is sent or supplied by BT by means of a website it is treated as being received by the intended recipient when the material was first made available on the website or, if
later, when the recipient received (or is treated as having received) notice of the fact that the material was available on the website.
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|108.5. | The provisions of this Article relating to delivery of notices, documents or information will have effect in place of the Company Communications Provisions.
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------



|109 | Undelivered notices
|--- | -------------------

This Article applies where, on two consecutive occasions, notices, documents or
information sent or supplied by post have been returned undelivered. If the shareholdergives BTa new addresswhere notices, documents or information can be sent or supplied, the shareholderis entitled to have notices,
documents or information sent or supplied to them at that address. Otherwise, the shareholderis not entitled to receive any notices, documents or information from BT.



49



---

|110 | If notices are accidentally not sent
|--- | ------------------------------------



|110.1. | If a notice, proxy form, other document or information relating to a meeting or other proceeding is accidentally not sent or is not received, the meeting or other proceeding will not be invalid as a
result.
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|110.2. | A shareholderpresent in person or by proxyat a shareholders meetingis treated as having received proper notice of that meeting and, where necessary, of the purpose of that meeting.
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|111 | Delivering notices and other documents to BT
|--- | --------------------------------------------



|111.1. | Shareholderscan subject to and in accordance with the Companies Act and these Articles, send or supply a notice, document or information to BT:
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | by delivering it by hand to the Registered Office;
| | - |  | --------------------------------------------------



| |  |  | by sending it by post in an envelope (with postage paid) to the Registered Office;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | by electronic means to the addressnotified by BTin its communications to shareholdersfor this purpose.
| | - |  | ------------------------------------------------------------------------------------------------------



|111.2. | If a notice, document or information is delivered by hand, it is treated as being delivered at the time it is left at the Registered Office.
|------ | --------------------------------------------------------------------------------------------------------------------------------------------



|111.3. | If a notice, document or information is sent by post, it is treated as being delivered at the time it is received at the Registered Office.
|------ | -------------------------------------------------------------------------------------------------------------------------------------------



|111.4. | If a notice, document or information is sent by electronic means, it is treated as being delivered at the time it was received.
|------ | -------------------------------------------------------------------------------------------------------------------------------



|111.5. | A notice, document or information sent or supplied to BT by electronic meanswill not be treated as received by BTif it is rejected by computer virus protection arrangements.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|111.6. | This Article does not affect any provision of the legislationor the Articlesrequiring notices or documents to be delivered in a particular way.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------

Auditor



|112 | Attending General Meetings
|--- | --------------------------

The Auditorcan attend a General Meetingand can speak there
on any business which is relevant to them as Auditor.



|113 | Validity of the Auditors actions
|--- | ---------------------------------

As far as the legislationallows, the actions of a
personacting as an Auditorare valid in favour of a persondealing with BTin good faith, even if there was some defect in that personsappointment or that personwas at any time not qualified to act
as an auditor.



50



---

Secretary



|114 | Secretary, and deputy and temporary Secretaries
|--- | -----------------------------------------------



|114.1. | The Secretaryis appointed by the Board. The Boarddecide the terms and period of the appointment. The Boardcan also remove the Secretary. This does not affect any claim for damages
against BTfor breach of any contract of employment the Secretarymay have. The Boardcan appoint two or more peopleto be joint Secretaries.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|114.2. | The Boardcan also appoint one or more peopleto be deputy Secretariesor one personto be a temporary Secretary. The Boarddecide their terms and period of employment. The
Boardcan also remove a deputy or temporary Secretary. This does not affect any claim for damages against BTfor breach of any contract of employment they may have. Anything which the Articlesrequire or allow to be done
by the Secretarycan also be done by a deputy or temporary Secretary.
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|114.3. | Anything which the legislationor the Articlesrequire or allow to be done by or to a director and the Secretarycannot be done by or to one personacting as both a director and the
Secretary.
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Seals



|115 | Seal and Securities Seal
|--- | ------------------------



|115.1. | The Boardare responsible for arranging for the Sealand any Securities Sealto be kept safely. The Sealand any Securities Sealcan only be used with the authority of the Boardor a committee authorised by the Board. For the purposes of this Article, a committee authorised by the Boardcan consist solely of peoplewho are not directors.
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|115.2. | Every document which has the Sealstamped on it must be signed autographically by:
|------ | ---------------------------------------------------------------------------------



| |  |  | one director and the Secretary;
| | - |  | -------------------------------



| |  |  | two directors;
| | - |  | --------------



| |  |  | one director in the presence of a witness who confirms the signature of the director, or
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | a personwho is authorised to do so by the Boardeither generally or in relation to specific documents or documents of specific descriptions.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------

However, the Boardcan decide that specific documents or documents of specific descriptions can be printed, in any way, with a copy or
representation of these signatures. The representation can be made or produced mechanically, electronically or in any other way the Boardapprove.



|115.3. | The Securities Sealcan be used only for sealing securities issuedby BTand documents creating or evidencing securities issuedby BT. Securitiesand documents which have the
Securities Sealstamped on them do not need to be signed.
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



51



---

|115.4. | The Boardcan use all the powers given by the legislationrelating to official seals for use abroad.
|------ | --------------------------------------------------------------------------------------------------

Documents



|116 | Certifying copies of documents
|--- | ------------------------------



|116.1. | A director or the Secretaryhas power to decide that any of the following are genuine and to certify copies of or extracts from them as true copies or extracts:
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | documents relating to BTsconstitution;
| | - |  | ---------------------------------------



| |  |  | resolutions passed by the shareholdersor a class of shareholders, or by the Boardor a Boardcommittee; and
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | books, documents, records or accounts which relate to BTsbusiness.
| | - |  | -------------------------------------------------------------------



| |  |  | The Boardcan also give this power to other people.
| | - |  | --------------------------------------------------



|116.2. | A document which appears to be a copy of a resolution or an extract from the minutes of a meeting and which is certified as a true copy or extract as described in Article 116.1 is conclusive evidence for a personwho deals with BTon the strength of the document that the:
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | resolution has been properly passed; or
| | - |  | ---------------------------------------



| |  |  | extract is a true and accurate record of the proceedings of a valid meeting.
| | - |  | ----------------------------------------------------------------------------



|117 | Destroying documents
|--- | --------------------



|117.1. | BTcan destroy all:
|------ | ------------------



| |  |  | transfer forms for shares, documents sent to support a transfer and any other documents which were the basis for making an entry on the Register, six yearsafter the date of registration;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | dividendpayment instructions and notifications of a change of addressor name, two yearsafter the date these were recorded; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | cancelled share certificates, one yearafter the date they were cancelled.
| | - |  | -------------------------------------------------------------------------



|117.2. | A document destroyed by BTin accordance with Article 117.1 is conclusively treated as having been valid and effective in accordance with BTsrecords relating to the document. Any action of BTin dealing with the document in accordance with its terms before it was destroyed is conclusively treated as having been properly taken.
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|117.3. | Articles 117.1 and 117.2 only apply to documents which are destroyed in good faith and if BThas not been informed that keeping the documents is relevant to any claim.
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|117.4. | If the documents relate to uncertificated shares, BTmust also comply with any rules (as defined in the Regulations) which limit its ability to destroy these documents.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|117.5. | This Article does not make BTliable if it:
|------ | ------------------------------------------



| |  |  | destroys a document earlier than the time limit stated in Article 117.1;
| | - |  | ------------------------------------------------------------------------



| |  |  | does not comply with the conditions in Article 117.3; or
| | - |  | --------------------------------------------------------



52



---

| |  |  | would not be liable if this Article did not exist.
| | - |  | --------------------------------------------------



|117.6. | This Article applies whether a document is destroyed or disposed of in some other way.
|------ | --------------------------------------------------------------------------------------

Indemnity,
Insurance and Defence expenditure



|118 | Indemnity
|--- | ---------



|118.1. | Subject to, and as far as the legislationand rules made by the UK Listing Authorityallow, every director, former director and officerof BTand of each of the Associated Companiesof BTwill be indemnifiedby BTout of its own funds against the following:
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any liability incurred by or attaching to the directors or officers in connection with any negligence, default, breach of duty or breach of trust by the directors or officers in relation to BT or
any Associated Company of BT other than:
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any liability to BT or any Associated Company; and
| | - |  | --------------------------------------------------



| |  |  | any liability of the kind referred to in section 234(3) of the Companies Act; and
| | - |  | ---------------------------------------------------------------------------------



| |  |  | any other liability incurred by or attaching to the directors or officers:
| | - |  | --------------------------------------------------------------------------



| |  |  | in actually or seemingly carrying out their duties;
| | - |  | ---------------------------------------------------



| |  |  | in exercising or seemingly exercising their powers; and
| | - |  | -------------------------------------------------------



| |  |  | in any other activity connected to their duties, powers or office.
| | - |  | ------------------------------------------------------------------



|118.2. | Subject to the Companies Act and rules made by the UK Listing Authority, BT may indemnify a director and former director of BT and any Associated Company of BT if the
director is the trustee of an occupational pension scheme (within the meaning of section 235(6) of the Companies Act).
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|118.3. | Where a director or officer is indemnified against any liability in accordance with this Article 118, the indemnity will cover all costs, charges, losses, expenses and liabilities incurred by the directors
or officers.
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|118.4. | In this Article a company is an Associated Company of BT if:
|------ | ------------------------------------------------------------



| |  |  | the company is a subsidiary of BT;
| | - |  | ----------------------------------



| |  |  | BT is a subsidiary of the company;
| | - |  | ----------------------------------



| |  |  | both BT and the company are subsidiaries of the same company.
| | - |  | -------------------------------------------------------------



|119 | Insurance
|--- | ---------



|119.1. | In this Article each of the following is a Relevant Company:
|------ | ------------------------------------------------------------



| |  |  | BT;
| | - |  | ---



| |  |  | a holdingcompanyof BT;
| | - |  | ----------------------



| |  |  | a body, whether or not incorporated, in which BTor its holdingcompany, or a predecessor of BTor its holdingcompany, has or had an interest, whether direct or
indirect; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a body, whether or not incorporated, which is in any way allied to or associated with BT, or any subsidiary undertakingof BTor such other body.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



53



---

|119.2. | As far as the legislationallows and without limiting Article 118 in any way, the Boardcan arrange for BTto purchase and maintain insurance against any liabilityfor or for the benefit of:
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any peoplewho are or were at any time directors or officers of a Relevant Company; or
| | - |  | -------------------------------------------------------------------------------------



| |  |  | any people who are or were at any time a trustee of any pension fund or employees share scheme in which employees of any Relevant Company are interested.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

This includes insurance against any liability incurred by or attaching to those people through any act or omission:



| |  |  | in actually or seemingly carrying out their duties;
| | - |  | ---------------------------------------------------



| |  |  | in exercising or seemingly exercising their powers; and
| | - |  | -------------------------------------------------------



| |  |  | in any other activity connected to their duties, powers or office;
| | - |  | ------------------------------------------------------------------

in relation to:



| |  |  | any Relevant Company;
| | - |  | ---------------------



| |  |  | any pension fund; or
| | - |  | --------------------



| |  |  | any employees share scheme;
| | - |  | ----------------------------

and all costs, charges, losses, expenses and
liabilities incurred by those people in relation to any act or omission.



|120 | Defence expenditure
|--- | -------------------



|120.1. | Subject to and as far as the legislation and rules made by the UK Listing Authority allow, BT may:
|------ | --------------------------------------------------------------------------------------------------



| |  |  | provide a director, former director or officer of BT or any Associated Company of BT with funds to meet expenditure incurred or which a director or officer may incur in defending any
criminal or civil proceedings in connection with any negligence, default, breach of duty or breach of trust by the director or officer in relation to BT or an Associated Company of BT or in connection with any application
for relief under the provisions mentioned in section 205(5) of the Companies Act; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | do anything to enable any of these directors or officers to avoid incurring that expenditure.
| | - |  | ---------------------------------------------------------------------------------------------



|120.2. | The terms set out in section 205(2) of the Companies Act will apply to any provision of funds or other things done under Article 120.1.
|------ | ---------------------------------------------------------------------------------------------------------------------------------------



|120.3. | Subject to and as far as the legislation and rules made by the UK Listing Authority allow, BT may:
|------ | --------------------------------------------------------------------------------------------------



| |  |  | provide a director, former director or officer of BT or any Associated Company of BT with funds to meet expenditure incurred or which a director or officer may incur in defending an
investigation by a regulatory authority or against action proposed to be taken by a regulatory authority in connection with any alleged negligence, default, breach of duty or breach of trust by the director or officer in relation to BT
or any Associated Company of BT; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



54



---

| |  |  | do anything to enable any of these directors or officers to avoid incurring that expenditure.
| | - |  | ---------------------------------------------------------------------------------------------



|120.4. | In this Article a company is an Associated Company of BT if:
|------ | ------------------------------------------------------------



| |  |  | the company is a subsidiary of BT;
| | - |  | ----------------------------------



| |  |  | BT is a subsidiary of the company;
| | - |  | ----------------------------------



| |  |  | both BT and the company are subsidiaries of the same company.
| | - |  | -------------------------------------------------------------

Reserves



|121 | Setting up reserves
|--- | -------------------

The Boardcan set aside any profits of BTand hold them in a
reserve. The Boardcan decide to use these sums for any purpose for which the profits of BTcan lawfully be used. Pending their use, sums held in a reservecan either be used in the business of BTor invested in
any way the Boarddecide. The Boardcan divide the reserveinto separate funds for special purposes and change the funds into which the reserveis divided. The Boardcan also carry forward any profits without
holding them in a reserve. The Boardmust comply with the restrictions in the legislationwhich relate to reserve funds.



|122 | Changing reserves into capital
|--- | ------------------------------



|122.1. | If the Boardrecommend this, shareholderscan pass an ordinary resolutionto allow the Boardto change into capital an amount which:
|------ | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | is part of BTsreserves(including premiumsreceived when any shares were issued, capital redemption reservesor other undistributablereserves); or
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | BTis holding as net profits.
| | - |  | ----------------------------



|122.2. | The Boardwill use the sum which is changed into capital by setting it aside for the Ordinary Shareholderson the Registerat the stated time on the day the resolution is passed (or whatever day is
stated in the resolution or fixed as stated in the resolution). If no time is stated in the resolution, the close of business applies. The sum set aside must be used to payup in full shares of BTand to allotsuch shares and
distribute them to shareholdersas bonus shares in proportion to their holdings of Ordinary Sharesat the time. The shares can be Ordinary Sharesor, if the rightsof other existing sharesallow this, shares of
some other class.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|122.3. | If a difficulty arises in operating this Article, the Boardcan resolve it in any way which they decide. For example, they can decide that the benefit of fractions of shares belongs to BTor that fractions
are ignored or deal with fractions in some other way.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|122.4. | The Board can appoint a person to sign a contract with BT on behalf of those who are entitled to shares under the resolution. Such a contract is binding on all concerned.
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



55



---

|123 | Assets treated as revenue
|--- | -------------------------

If the legislationallows:



| |  | where an asset, business or property is bought by BTas from a past date, the Boardcan decide that any of the related profits and losses as from that date can be added to BTsrevenue
account and treated for all purposes as profits or losses of BT; and
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | where any securitiesare bought by BTwith any dividend or interest, the Boardcan decide that the dividend or interest can be treated as revenue rather than capital.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

Accounts



|124 | Accounting records
|--- | ------------------

The Boardmust make sure that accounting records which comply with the
legislationare kept.



|125 | Location and inspection of records
|--- | ----------------------------------



|125.1. | The accounting records must be kept at:
|------ | ---------------------------------------



| |  |  | the Registered Office; or
| | - |  | -------------------------



| |  |  | any other place which the legislationallows and the Boarddecides.
| | - |  | -----------------------------------------------------------------



|125.2. | BTs officersalways have the right to inspect the accounting records.
|------ | ---------------------------------------------------------------------



|125.3. | No other person(including a shareholder) has a right to inspect any accounting records or other books or papers of BTunless the:
|------ | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | legislationor a Court order gives that personthe right;
| | - |  | -------------------------------------------------------



| |  |  | Boardauthorise that personto do so; or
| | - |  | --------------------------------------



| |  |  | shareholderspass an ordinary resolutionauthorising that personto do so.
| | - |  | -----------------------------------------------------------------------



|126 | Sending copies of accounts and other documents
|--- | ----------------------------------------------



|126.1. | This Article applies to BTs annual accounts and report to be put to the shareholdersat a General Meeting and any other documents which the legislationrequires to be attached to them.
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|126.2. | Copies of these documents must be sent to the shareholdersand debentureholdersand all other peopleto whom the legislationor the Articlesrequire BTto send
them. This must be done at least 21 days before the relevant General Meeting.
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|126.3. | But BTneed not send these documents to:
|------ | ---------------------------------------



| |  |  | shareholderswho are sent summary financial statements in accordance with the legislation;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | more than one joint shareholderor debentureholder; or
| | - |  | -----------------------------------------------------



| |  |  | a personfor whom BTdoes not have a current address.
| | - |  | ---------------------------------------------------



56



---

Shareholdersand debentureholderswho are not sent copies can
receive a copy free of charge by applying to BTat the Registered Office or an address that the Board has specified for that purpose.

Winding Up



|127 | Distribution in kind
|--- | --------------------

If BTis wound up (whether the liquidation is voluntary, under supervision
of the Court or by the Court) the liquidator can, with the authority of aspecial resolutionpassed by the shareholders, divide among the shareholdersall or any part of the assetsof BT. This applies whether the
assetsconsist of property of one kind or different kinds. For this purpose, the liquidator can place whatever value the liquidator considers fair on any property and decide how the division is carried out between shareholdersor
different groups of shareholders. The liquidator can also, with the same authority, transfer any assetsto trusteesupon any trusts for the benefit of shareholderswhich the liquidator decides. The liquidation of BTcan then be finalised and BTdissolved. No past or present shareholdercan be compelled to accept any shares or other property under this Article which could give them a liability.

Interpretation



|128 | Meaning of certain words and phrases used in the Articles
|--- | ---------------------------------------------------------



|128.1. | The following table gives the meaning of certain words and phrases as they are used in the Articles. However, the meaning given in the table does not apply if that is inconsistent with the context in which a word
or phrase appears.
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|              |  |                                                                                                                    
|------------- |  | -------------------------------------------------------------------------------------------------------------------
|Words         |  | Meanings                                                                                                           
|              | 
|Articles      |  | BTs articles of association, including any changes made to them                                                   
|              | 
|Auditor       |  | The auditor of BTand, where two or more peopleare appointed to act jointly, any one of them                        
|              | 
|Board         |  | All or any of the directors of BTacting as a board                                                                 
|              | 
|BT            |  | BT Group plc                                                                                                       
|              | 
|business day  |  | A day (excluding Saturdays, Sundays and public holidays) on which banks are open for business in the City of London
|              | 
|Companies Act |  | The Companies Act 2006                                                                                             
|              | 
|company       |  | A corporate body                                                                                                   



57



---

|                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Company Communications
Provisions |  | The meaning of this term is given in theCompanies Act. These provisions have effect for the purposes of anything in the Companies Act or these Articles that authorises or requires notices, documents or
information to be sent or supplied by or to BT                                                                                                                                                                                                                                                            
|                                  | 
|electronic form                   |  | This is a term used in the Companies Act. It covers a document or information sent or supplied by electronic means or by any other means while in an electronic form (such as by email, text message, fax or
sending a disk by post)                                                                                                                                                                                                                                                                                
|                                  | 
|existing shares                   |  | Shares which are in issueat the relevant time                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                  | 
|face value(of a share)            |  | The nominal valueof the share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                  | 
|General Meeting                   |  | A meeting of shareholders held in accordance with the Articles. This includes any General Meeting which is held as BTs Annual General Meeting                                                                                                                                                                                                                                                                                                                                                                      
|                                  | 
|hard copy form                    |  | This is a term used in the Companies Act. It covers documents or information sent or supplied in paper copy or a similar form which can be read                                                                                                                                                                                                                                                                                                                                                                     
|                                  | 
|Interested Directors              |  | Directors who have or could have a direct or indirect interest in a matter which conflicts, or could conflict, with the interests of BT                                                                                                                                                                                                                                                                                                                                                                             
|                                  | 
|legislation                       |  | The Companies Act, the Regulationsand all other laws and regulations applying to BT                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                  | 
|London Stock Exchange             |  | London Stock Exchange plc or the principal stock exchange in the United Kingdom                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                  | 
|month                             |  | Calendar month                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                  | 
|officer                           |  | Includes a director, manager and company secretary but does not include an Auditor                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                  | 
|ordinary business                 |  | All the following business (if it takes place at an Annual General Meeting):                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                  | 
|                                  |  |     declaring and approving dividends;
     considering the
accounts, reports of the Board and Auditor and any other documents which the legislation requires to be attached to them; 
    electing directors in place of those retiring for any reason; and
     appointing the
Auditor (when special notice of the resolution for the appointment is not required by the legislation) and deciding either the remuneration that the Auditor will be paid or the way in which this remuneration will
be decided



58



---

|                                  |  |                                                                                                                                                                                                                                                                                      
|--------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Ordinary Shareholders             |  | Holders of Ordinary Shares                                                                                                                                                                                                                                                           
|                                  | 
|Ordinary Shares                   |  | BTsordinary shares of 5p each                                                                                                                                                                                                                                                       
|                                  | 
|paid-up (share or other security) |  | Includes a share or other securitywhich is treated (credited) as paid-up                                                                                                                                                                                                             
|                                  | 
|pay                               |  | Includes any kind of reward or payment for services                                                                                                                                                                                                                                  
|                                  | 
|person or people                  |  | Includes companiesand unincorporated associations                                                                                                                                                                                                                                    
|                                  | 
|proxy form                        |  | Includes any document (including in an electronic form) which appoints a proxy                                                                                                                                                                                                       
|                                  | 
|recognised clearing house         |  | A clearing house recognised under the Financial Services and Markets Act 2000                                                                                                                                                                                                        
|                                  | 
|recognised investment exchange    |  | An investment exchange recognised under the Financial Services and Markets Act 2000                                                                                                                                                                                                  
|                                  | 
|Register                          |  | BTs register of shareholders                                                                                                                                                                                                                                                        
|                                  | 
|Registered Office                 |  | BTsregistered office                                                                                                                                                                                                                                                                
|                                  | 
|Regulations                       |  | The Uncertificated Securities Regulations 2001                                                                                                                                                                                                                                       
|                                  | 
|rights (of a share)               |  | The rights attached to the share when it is issued, or afterwards                                                                                                                                                                                                                    
|                                  | 
|Seal                              |  | BTs common seal or Securities Seal                                                                                                                                                                                                                                                  
|                                  | 
|Secretary                         |  | A personappointed by the Boardto do work as the company secretary, including an assistant (who does not need to be appointed by the Boardunder Article 114), deputy or temporary company secretary. Where two or
more peopleare appointed to act jointly, it includes any one of them
|                                  | 
|Securities Seal                   |  | An official seal kept by BT under section 50 of the Companies Act                                                                                                                                                                                                                    
|                                  | 
|shareholders                      |  | Holders of BTsshares                                                                                                                                                                                                                                                                
|                                  | 
|shareholders meeting             |  | A General Meetingof BTor a meeting of a class of holders of BTsshares                                                                                                                                                                                                               



59



---

|                     |  |                                                                                                                                                                        
|-------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     | 
|special business     |  | All business at General Meetings except for ordinary business                                                                                                          
|                     | 
|UK Listing Authority |  | The Financial Services Authority acting in its capacity as the competent authority for the purposes of the Financial Services and Markets Act 2000                     
|                     | 
|United Kingdom       |  | Great Britain and Northern Ireland                                                                                                                                     
|                     | 
|writtenor in writing |  | In writing or any way of representing or copying words legibly so that they are permanent (including anything in electronic form) or partly one form and partly another
|                     | 
|year                 |  | Calendar year                                                                                                                                                          



|128.2. | The singular includes the plural, and the other way around.
|------ | -----------------------------------------------------------



|128.3. | When an Act is referred to, this includes an amendment to the Act (before or after the adoption of these Articles) as well as its inclusion in a later Act. This principle of interpretation
also applies to other kinds of legislation, and to any section, paragraph or similar in any legislation.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|128.4. | A word which is defined in the legislation means the same in the Articles, unless the Articles define it differently, or the way in which the word is used is inconsistent with the definition in the
legislation.
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|128.5. | Where the legislation or the Articles say that something can be done by passing an ordinary resolution, this can also be done by passing a special resolution.
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------



|128.6. | A person who is automatically entitled to a share by law includes a person who is entitled to the share as a result of the death or bankruptcy of a shareholder.
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



|128.7. | Where the Articles refer to certificated shares, this means that ownership of the shares can be transferred using a written transfer document (rather than in accordance with the Regulations) and
that a share certificate is usually issued to the owner.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|128.8. | Where the Articles refer to clear days the number of days does not include the two days between which the interval is measured. For example, if notice is required to be given a number of clear days
before a meeting, neither the date notice is delivered, or treated as being delivered, nor the date of the meeting is taken into account.
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|128.9. | A debenture includes debenture stock and a debenture holder includes a debenture stockholder.
|------ | ---------------------------------------------------------------------------------------------



|128.10. | Where the Articles refer to a document being made effective this means being signed, sealed or executed in some other legally valid way.
|------- | ----------------------------------------------------------------------------------------------------------------------------------------



60



---

|128.11. | Where the Articles refer to a show of hands, a shareholder may vote in person at a meeting (including by electronic means or any other method which the Board approves).
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|128.12. | Where the Articles refer to uncertificated shares, this means that ownership of the shares can be transferred in accordance with the Regulations without using a written transfer document and that no
share certificate is issued to the owner.
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Explanation of Terms

The aim of this explanation of terms is to help readers understand BTs Articles. It explains words used in the Articles the words
might mean different things in other documents. This explanation of terms is not legally part of the Articlesand it does not affect their meaning. The explanations are intended to be a general guide  they are not precise. Words which
are printed in italics have their own heading in the explanation. The Secretarywelcomes any suggestions for extra words to include, or improvements. Shareholderscan write to the Secretaryat BT Centre, 81 Newgate Street,
London EC1A 7AJ.

accounting reference date

This is
the date on which BTs financial year ends, which is 31 March.

Act

An Act of Parliament, including the Companies Act, any statute, statutory instrument, order, rule, regulation or directive.

address

This includes any number or address (including
in the case of a proxy appointment, an identification number of a participant in the relevant system) used for the purposes of sending or receiving notices, documents or information by electronic means and/or by means of a
website.

adjourn

Where a meeting has a break, to be
continued at a later time or day, at the same or a different place.

allot

When new shares are set aside for the personthey are intended for, they are allotted. This will normally be after the personhas agreed
to payfor new shares, or has become entitled to new shares for any other reason. As soon as a share is allotted, that persongets the right to have their name put on the register of shareholders. When the personhas been registered, the share has also been issued.

asset

Anything which is of any value to its owner.



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attorney

An
attorneyis a personwho has been appointed to act for another person. The attorneyis appointed by a formal document, called a power of attorney.

automatically entitled to a share by law

In some
situations, a personwill be entitled to have shares which are registered in somebody elses name registered in their own name. Or the personcan require the shares to be transferred to another person. When a shareholderdies, or the sole survivor of joint shareholdersdies, their personal representativeshave this right. If a shareholderis made bankrupt, their trusteein bankruptcy has the right.

beneficial interestor beneficial ownership

The
personto whom something really belongs has the beneficialinterest in it.

This personmay not be the registered (or legal) owner of
the thing. For example, if a parent holds shares for their child, the child is the beneficialowner, and the parent is the legal owner. See also trustees.

bond

A promise to pay issued by a borrower to a lender.

brokerage

Commission which is paid to a broker by a
companyissuing shares, where the brokers clients have applied for shares.

capitalise

To convert some or all of the reservesof a companyinto capital (such as shares).

capital redemption reserve

A reserveof funds
which a companymay have to set up to maintain its capital base when shares are redeemedor bought back.

company representative

If a companyowns shares, it can appoint a company representativeto attend a shareholders meeting to act as its representative.
BTs Articlespermit a companyto appoint several people as its representatives.

consolidate

When shares are consolidated, they are combined with other shares. For example, every three £1 shares might be consolidated into one new £3 share.

debenture

A typical debenture is a type of
long-term borrowing by a company. The loan usually has to be repaid at a fixed date in the future, and carries a fixed rate of interest.

declare

Generally, when a dividend is declared,
it becomes due to be paid.

divide

When shares are
divided they are split into shares which have a smaller face value. For example, a £1 share might be divided into two 50p shares.



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electronic means

Any notice, document or information sent or supplied by means of a system where it is in electronic form (such as by email, text message, telephone
recording or fax). This is defined in more detail in the Companies Act.

equity securities

In section 560 of the Companies Act, this means:



| |  |  | ordinary shares of a companyexcept shares which only have a limited right to share in the companysincome or assets, for example, preference shares; or
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | securitieswhich can be converted into ordinary shares, or which allow their holder to subscribefor ordinary shares.
| | - |  | -------------------------------------------------------------------------------------------------------------------

ex-dividend

Once a share has gone ex-dividend, a
personwho buys the share in the market will not be entitled to the dividend which has been declaredshortly before it was bought. The seller remains entitled to this dividend, even though it will be paidafter they have sold
their share.

executed

A document is executed when
it is signed, or sealed or made valid in some other way.

exercise

When a power is exercised, it is put to use.

face
value

The face valueof one Ordinary Shareis 5p. This value is shown on the share certificate for a share, if there is one.
When BTissuesnew shares this can be for a price which is at a premiumto the face value. When shares are bought and sold on the stock market this can be different from the face value. The face
valueis sometimes also called the nominal valueor par value.

holding company

A companywhich controls another company(for example, by owning a majority of its shares) is called the holding companyof that other
company. The other companyis the subsidiaryof the holding company.

indemnity

If a persongives another personan indemnity, they promise to make good any losses or damage which the other might suffer in particular
circumstances. The personwho gives the indemnityis said to indemnify the other person.

in issue

See issue.

instrument

A formal legal document.



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issue

When
a share has been issued, everything has been done to make the shareholderthe owner of the share. In particular, the shareholdersname has been put on the register of shareholders. Existing shares which have been issuedare in issue.

liability

A debt or other
financial obligation.

negotiable instrument

A
document such as a cheque, which can be freely transferred from one personto another.

nominal valueor par value

See face value.

operator

CRESTCo Limited or any other operator of a relevant systemunder the Regulations.

ordinary resolution

A decision reached by a simple
majority of votes  that is by more than 50 per cent of the votes cast.

personal representative

A personwho is entitled to deal with the property (the estate) of a person who has died. If the person who has died left a valid will, the will
appoints executors who are personal representatives. If the person died without a will, the courts will appoint one or more administrators to be the personal representatives.

poll

A pollvote is usually a card vote but could
be an electronic vote, for example, where peoplepresent at a meeting press a keypad. On a pollvote, the number of votes which a shareholderhas will depend on the number of shares they own. An Ordinary Shareholderhas
one vote for each share they own. A pollvote is different to a show of handsvote, where each shareholder, proxyor company representativewho is entitled to vote has just one vote, however many shares they own or
represent.

power of attorney

A formal document
which legally appoints one or more peopleto act on behalf of another person.

premium

If BTissuesa new share for more than its face value(for example, because the market value is more than the face
value), the amount above the face valueis the premium.

proxy

A proxyis a person who is appointed by a shareholderto attend a meeting and vote for that shareholder. A proxyis appointed by
using a proxy formor in any other way the Boarddecide.



64



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A proxydoes not have to be a shareholder. A proxycan vote on a polland on a show of handsunder BTs Articles. A proxycan speak at a
General Meeting.

proxy form

A form
which a shareholderuses to appoint a proxyto attend a meeting and vote for them. BTs Articlespermit this form to be sent by electronic means or a shareholderto appoint a proxyby telephone. The
proxy formor appointment must be received by BTat least 48 hours before the meeting to which it relates.

quorum

The minimum number of shareholdersor directors who must be present before a meeting can begin. When this number is reached, the meeting is said to be
quorate.

rankor ranking

When either capital
or income is distributed to shareholders, it is paid out according to the rank(or ranking) of the shares. For example, a share which ranksbefore another share in sharing in BTsincome is entitled to have
its dividends paid first, before any dividends are paid on shares which rankafter it. If there is not enough income to pay dividends on all shares, the available income must be used first to pay dividends on shares which rankfirst,
then on shares which ranknext. The same applies for repayments of capital. Capital must be paid first on shares which rankfirst in sharing in BTscapital, then on shares which ranknext.

recognised clearing house

A clearing house which
has been authorised to carry on business by the UK authorities. A clearing house is a central computer system for settling transactions between members of the clearing house.

recognised investment exchange

An investment
exchange which has been officially recognised by the UK authorities. An investment exchange is a place where investments, such as shares, are traded. The London Stock Exchangeis a recognised investment exchange.

redeemand redemption

When a share is
redeemed, it goes back to BTin return for a sum of money (the redemption price) which was fixed before the share was issued. This process is called redemption. A share which can be redeemedis called a
redeemableshare.

relevant system

This is a
term used in the legislationfor a computer-based system which allows shares without share certificates to be transferred without using transfer forms. The CREST system for paperless share dealing is a relevant system.

renunciation

Where a share has been allotted, but
nobody has been entered on the share register for the share, it can be renounced in favour of another person. This transfers the right to have the share registered to another person. This process is called renunciation.



65



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remainder

The interest in property that is left after another interest in the property ends, such as full title after a life estate (the right to use the property until
death). A remainderis different from a reversionwhich gives title back to the grantor of the property or to the grantors descendants.

reserve fundor reserve

A fund which has been set
aside in a companysaccounts  profits which are not paid out to shareholdersas dividends, or used up in some other way, are held in a reservefund by the company.

reversion

The return to the grantor or their heirs of
property after all interests in the property given to others have terminated.

rights issue

A way in which companiesraise extra share capital. Usually the existing shareholderswill be offered the chance to buy a certain number of new
shares, depending on how many they already have. For example, shareholderscan be offered the chance to buy one new share from the companyfor every four they already have.

securities

Financial instrumentssuch as shares,
bonds, and debentures.

share premium account

If a new share is issuedby BTfor more than its face value(because the market value is more than the face value)
then the amount above the face valueis the premium, and the total of these premiumsis held in a reserve fund(which cannot be used to pay dividends) called the share premium account.

show of hands

A shareholder, proxyor
company representativeraises their hand to vote at a meeting. Each shareholder, proxyor company representativewho is entitled to vote has just one vote, no matter how many shares they hold or represent.

special notice

If special noticeof a resolution
is required by the legislation, the resolution is not valid unless BThas been told about the intention to propose it at least 28 days before the meeting at which it is proposed.

special resolution

A decision reached by a majority of
at least 75 per cent of votes cast. Shareholdersmust be given at least 14 days notice of a proposal to consider a special resolution.

special rights

These are the rightsof a
particular class of shares, as distinct from rightswhich apply to all shares generally. Examples of special rightsare rights to income or assetsand voting rights.



66



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subject to

Means that something else has priority, or prevails, or must be taken into account. When a statement is subject toanother statement, this means that
the first statement must be read with the other statement, which will prevail if there is a conflict.

subscriptionor subscribe for shares

To agree to take new shares in a company(usually for a cash payment).

subsidiary

A companywhich is controlled by
another company(for example, because the other companyowns a majority of its shares) is called a subsidiary of that company. This is defined in more detail in the Companies Act.

subsidiary undertaking

This is also a term used in the
Companies Act. It has a wider definition than subsidiary. Generally speaking it is a companywhich is controlled by another companybecause the other company:



| |  | has a majority of the votes in the company, either alone or acting with others;
|- |  | -------------------------------------------------------------------------------



| |  | is a shareholderwho can appoint or remove a majority of the directors; or
|- |  | -------------------------------------------------------------------------



| |  | can exercisedominant influence over the companybecause of anything in the companysarticles or because of a certain kind of contract.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------

takeover offer

An offer to acquire all the shares, or
all the shares of any class, in a company(except shares already held by the personmaking the offer). The terms of the offer must be the same for all the shares to which the offer relates. This is defined in more detail in the
Companies Act.

tenant in common

Where two or
more peoplehold title to property in which each has an undivided interest and an equal right to use the property, even if the percentages of interests are not equal. If one of the tenants in common dies, the remaining tenant(s)
do not automatically become entitled to the property. Each interest can be separately sold, mortgaged or willed to another.

treasury shares

Shares which are held by a company as treasury shares in accordance with sections 724 to 726 of the Companies Act.

trustee

A personwho holds property of any kind
for the benefit of one or more other peopleunder a kind of arrangement which the law treats as a trust. The peoplewhose property is held by the trustee are called the beneficialowners.

uncertificated proxy instruction

A properly
authenticated instruction sent by means of a relevant system, in line with the rules of the relevant system, to a person acting on BTs behalf, on terms decided by the Board.



67



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underwriteor underwriter

A personwho agrees to buy new shares if they are not bought by other peopleunderwritesthe share offer.

unincorporated associations

Associations, partnerships,
societies and other bodies which the law does not treat as legal personsseparate from their members.

warrantor dividend warrant

Similar to a cheque for a dividend.

wind up

The formal process to put an end to a company. When a companyis wound up its assetsare distributed. The assetsgo first
to creditors who have supplied property and services and then to shareholders. Shares which rankfirst in sharing in BTsassetswill receive any funds which are left over before any shares which rankafter
them.



68



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Index



|                                                       |  |         |  |     
|------------------------------------------------------ |  | ------- |  | ----
|Subject                                                |  | Article |  | Page
|Accounts                                               |  | 123-125 |  | 56  
|Appointment and Removal of Directors                   |  | 30-34   |  | 17  
|Directors can act if there are vacancies               |  | 34      |  | 18  
|Electing two or more directors                         |  | 33      |  | 18  
|Filling vacancies and appointing or electing directors |  | 31      |  | 17  
|People who can be directors                            |  | 30      |  | 17  
|Removing and electing directors by ordinary resolution |  | 32      |  | 17  
|                                                       |  |        
|Auditor                                                |  | 112-113 |  | 50  
|Attending General Meetings                             |  | 112     |  | 50  
|Validity of Auditors actions                          |  | 113     |  | 50  
|                                                       |  |        
|Board Committees                                       |  | 52-53   |  | 23  
|                                                       |  |        
|Board Meetings                                         |  | 43-51   |  | 21  
|Chairman of                                            |  | 45      |  | 21  
|Minutes of meetings                                    |  | 49      |  | 22  
|Notice of                                              |  | 44      |  | 21  
|Quorum                                                 |  | 46      |  | 22  
|Validity of Boards actions                            |  | 50      |  | 23  
|Video conference and telephone meetings                |  | 48      |  | 22  
|Voting at                                              |  | 47      |  | 22  
|Written Resolutions                                    |  | 51      |  | 23  
|                                                       |  |        
|Borrowing Powers (of Directors)                        |  | 68-69   |  | 31  
|                                                       |  |        
|Changing Share Capital                                 |  | 76-79   |  | 35  
|Buying back shares                                     |  | 79      |  | 36  
|Fractions of shares                                    |  | 78      |  | 36  
|Power to change capital                                |  | 77      |  | 35  
|Power to reduce capital                                |  | 76      |  | 35  
|                                                       |  |        
|Communications with shareholders                       |  | 103-111 |  | 47  
|                                                       |  |        
|Company Representatives                                |  | 27      |  | 16  
|                                                       |  |        
|Directors                                              |  | 28-69   |  | 16  
|Appointment and Removal                                |  | 30-34   |  | 17  
|Borrowing powers and restrictions                      |  | 68-69   |  | 31  
|Disqualification                                       |  | 38      |  | 19  
|Expenses                                               |  | 40      |  | 20  
|Interests                                              |  | 54-58   |  | 24  
|Management powers                                      |  | 59-67   |  | 28  
|Number of directors                                    |  | 28      |  | 16  
|Pensions                                               |  | 42      |  | 20  
|Remuneration                                           |  | 39-42   |  | 20  



69



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|                                                    |  |         |  |   
|--------------------------------------------------- |  | ------- |  | --
|Rotation                                            |  | 35-37   |  | 18
|as Shareholders (directors need not be)             |  | 29      |  | 16
|                                                    |  |        
|Dividends                                           |  | 93-102  |  | 42
|Deducting amounts owing from dividends and          |  | 98      |  | 44
|other money                                         |  |         |  |   
|Distributions in kind                               |  | 95      |  | 43
|Final Dividends                                     |  | 93      |  | 42
|Fixed and interim dividends                         |  | 94      |  | 43
|No dividends are payable except out of profits      |  | 96      |  | 43
|Payments to shareholders                            |  | 97      |  | 43
|Record dates                                        |  | 101     |  | 45
|Scrip dividends                                     |  | 102     |  | 45
|Unclaimed dividends and other money                 |  | 99      |  | 44
|Waiver of dividends                                 |  | 100     |  | 45
|                                                    |  |        
|Documents                                           |  | 116-117 |  | 52
|                                                    |  |        
|General Meetings                                    |  | 2-3     |  | 6 
|Adjourning meetings                                 |  | 10      |  | 10
|Amending resolutions                                |  | 11      |  | 10
|Annual                                              |  | 2       |  | 6 
|Chairman of meetings                                |  | 6       |  | 8 
|General meetings                                    |  | 3       |  | 6 
|Meeting in different places                         |  | 8       |  | 8 
|Notices                                             |  | 4-5     |  | 6 
|Proceedings at                                      |  | 6-11    |  | 8 
|Polls                                               |  | 13-15   |  | 11
|Quorum                                              |  | 9       |  | 9 
|Security and other arrangements                     |  | 7       |  | 8 
|Voting at                                           |  | 12-16   |  | 11
|                                                    |  |        
|Indemnity, Insurance and Defence expenditure        |  | 118-120 |  | 53
|                                                    |  |        
|Interpretation                                      |  | 128     |  | 57
|                                                    |  |        
|Liability                                           |  | 70      |  | 32
|                                                    |  |        
|Management powers (of directors)                    |  | 59-67   |  | 28
|Appointing directors to executive positions         |  | 60      |  | 29
|Delegation of powers                                |  | 61      |  | 29
|Management powers                                   |  | 59      |  | 28
|Overseas branch registers                           |  | 65      |  | 30
|Positions with titles including the word director |  | 64      |  | 30
|Power to appoint agents                             |  | 63      |  | 30
|Power to establish local boards and agencies        |  | 62      |  | 29
|Power to provide for the benefit of employees       |  | 67      |  | 31
|and former employees                                |  |         |  |   
|Signatures on cheques etc.                          |  | 66      |  | 31
|                                                    |  |        
|Meetings (see General Meetings)                     |  |         |  |   



70



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|                                                |  |         |  |   
|----------------------------------------------- |  | ------- |  | --
|Notice of General Meetings                      |  | 4 6     |  |   
|Moving or postponing at short notice            |  | 5       |  | 7 
|                                                |  |        
|People automatically entitled to shares by law  |  | 87-91   |  | 40
|                                                |  |        
|Proceedings at General Meetings                 |  | 6-11    |  | 8 
|                                                |  |        
|Proxies                                         |  | 22-26   |  | 14
|                                                |  |        
|Quorums:                                        |  |         |  |   
|for General Meetings                            |  | 9       |  | 9 
|for Board Meetings                              |  | 46      |  | 22
|                                                |  |        
|Record dates                                    |  | 101     |  | 45
|                                                |  |        
|Removal of Directors                            |  | 32      |  | 17
|                                                |  |        
|Reserves                                        |  | 121-123 |  | 55
|Assets treated as revenue                       |  | 123     |  | 56
|Changing reserves into capital                  |  | 122     |  | 55
|Setting up reserves                             |  | 121     |  | 55
|                                                |  |        
|Remuneration of Directors                       |  | 39-42   |  | 20
|Directors expenses                             |  | 40      |  | 20
|Directors fees                                 |  | 39      |  | 20
|Extra fees                                      |  | 41      |  | 20
|Pensions and other benefits                     |  | 42      |  | 20
|                                                |  |        
|Representatives (see Company Representatives)   |  |         |  |   
|                                                |  |        
|Retirement of Directors                         |  | 35-38   |  | 18
|When a director retires                         |  | 37      |  | 19
|                                                |  |        
|Seals                                           |  | 115     |  | 51
|                                                |  |        
|Secretary                                       |  | 114     |  | 51
|                                                |  |        
|Scrip Dividends                                 |  | 102     |  | 45
|                                                |  |        
|Shares                                          |  | 71-75   |  | 33
|Boards authority to allot shares and           |  | 71      |  | 33
|equity securities and to sell treasury shares |  |         |  |   
|Buying back shares                              |  | 79      |  | 36
|Changing share capital                          |  | 76-80   |  | 35
|No trusts or similar interests recognised       |  | 75      |  | 35
|Power to pay commission and brokerage           |  | 74      |  | 35
|Renunciations of allotted but unissued shares   |  | 73      |  | 35
|Uncertificated shares                           |  | 72      |  | 34
|                                                |  |        
|Share Certificates                              |  | 83-84   |  | 38



71



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|                                         |  |       |  |   
|---------------------------------------- |  | ----- |  | --
|Share Rights                             |  | 80-82 |  | 36
|                                         |  |      
|Shareholders Voting Rights              |  | 17-21 |  | 12
|                                         |  |      
|Shareholders who cannot be traced        |  | 92    |  | 42
|                                         |  |      
|Signature or authentication of documents |  | 104   |  | 48
|                                         |  |      
|Transferring Shares                      |  | 85-86 |  | 39
|                                         |  |      
|Voting at General Meetings               |  | 12-16 |  | 11
|Effect of declaration by Chairman        |  | 16    |  | 12
|How votes are taken                      |  | 12    |  | 11
|Polls                                    |  | 13-15 |  | 11
|                                         |  |      
|Winding up                               |  | 127   |  | 57

BT Group plc

Registered
Office: 81 Newgate Street, London EC1A 7AJ

Registered in England No: 4190816



72



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Public Company Limited by Shares

THE COMPANIES ACT 2006

BT GROUP public limited company

Ordinary Resolution

Company No. 4190816

At the Annual General Meeting (AGM) of BT GROUP public limited company duly convened and held at Old Billingsgate, 1 Old Billingsgate Walk, London EC3R 6DX, on
Wednesday 15 July 2015 the following resolution was duly passed as an Ordinary Resolution:-

These authorities replace and supersede the authorities
sought and granted under section 551 of the 2006 Act at the last AGM but are in addition to the specific authority sought and granted under that section at the general meeting of the Company held on 30 April 2015.

That:



|(a) | the authority and power conferred on the directors in relation to the section 551 Amount by Article 71 of the Companys articles of association (Articles) be renewed until the end of the next Annual General Meeting
(AGM) and for that period the section 551 Amount will be £138 million; and
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | the directors be authorised generally and without conditions under section 551 of the Companies Act 2006 (2006 Act) to allot shares and to grant rights to subscribe for or to convert any security into shares in the
Company up to a further nominal amount of £138 million in connection with a rights issue.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

This authority expires at the end of
the next AGM. The Board can make offers and enter into agreements which would, or might, need shares to be allotted and rights to be granted after that expiry.

DAN FITZ

Secretary



73



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Public Company Limited by Shares

THE COMPANIES ACT 2006

BT GROUP public limited company

Special Resolution

Company No. 4190816

At the Annual General Meeting of BT GROUP public limited company duly convened and held at Old Billingsgate, 1 Old Billingsgate Walk, London EC3R 6DX, on
Wednesday 15 July 2015 the following resolution was duly passed as a Special Resolution:-

That subject to the passing of Resolution 16:



|(a) | the authority and power conferred on the directors by Article 71 of the Companys Articles be renewed for the period referred to in Resolution16 and for that period the section 561 Amount will be £20 million;
and
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | the directors have power to allot equity securities (within the meaning of section 560(1) of the 2006 Act) entirely paid for in cash under the authority given by paragraph (b) of Resolution 16 in connection with a
rights issue as if section 561(1) of the 2006 Act did not apply to such allotment. This power expires at the end of the next AGM but the Company can make offers and enter into agreements which would, or might, need equity securities to be allotted
after that expiry.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In this resolution words defined in Resolution 16 have the same meaning, and references to an allotment of equity
securities include a sale of treasury shares.

DAN FITZ

Secretary



74



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Public Company Limited by Shares

THE COMPANIES ACT 2006

BT GROUP public limited company

Special Resolution

Company No. 4190816

At the Annual General Meeting of BT GROUP public limited company duly convened and held at Old Billingsgate, 1 Old Billingsgate Walk, London EC3R 6DX, on
Wednesday 15 July 2015 the following resolution was duly passed as a Special Resolution:-

That the Company has general and unconditional authority
to make market purchases (as defined in section 693(4) of the Companies Act 2006) of shares of 5p each in the Company, subject to the following conditions:



|(a) | the maximum number of shares which may be purchased is 837 million shares;
|--- | --------------------------------------------------------------------------



|(b) | the minimum price (excluding expenses) which may be paid for each share is 5p;
|--- | ------------------------------------------------------------------------------



|(c) | the maximum price (excluding expenses) which the Company may pay for each share cannot be more than the higher of:
|--- | ------------------------------------------------------------------------------------------------------------------



| | (i) | 105% of the average market value of a share in the Company for the five business days prior to the day the purchase is made; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------



| | (ii) | the value of a share in the Company calculated on the basis of the higher of the price quoted for: (a) the last independent trade of; or (b) the highest current independent bid for any number of shares in the
Company on the trading venues where the purchase is carried out; and
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(d) this authority expires at the end of the next AGM, 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 expiry.

DAN FITZ

Secretary

Public Company
Limited by Shares



75



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THE COMPANIES ACT 2006

BT GROUP public limited company

Special Resolution

Company No. 4190816

At the Annual General Meeting of BT
GROUP public limited company duly convened and held at Old Billingsgate, 1 Old Billingsgate Walk, London EC3R 6DX, on Wednesday 15 July 2015 the following resolution was duly passed as a Special Resolution:-

That the Company adopts new articles of association (New Articles).

DAN FITZ

Secretary

Public Company
Limited by Shares

THE COMPANIES ACT 2006

BT GROUP
public limited company



76



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Special Resolution

Company No. 4190816

At the Annual General Meeting of BT
GROUP public limited company duly convened and held at Old Billingsgate, 1 Old Billingsgate Walk, London EC3R 6DX, on Wednesday 15 July 2015 the following resolution was duly passed as a Special Resolution:-

That the Company may call a general meeting (but not an AGM) on at least 14 clear days notice.

DAN FITZ

Secretary



77