Document:

EX-4.2

 Exhibit 4.2 

DATED 1 October 2013 
 (1) BT GROUP
plc 
 (2) ANTHONY EVERARD ASHIANTHA CHANMUGAM 
  

 
 DIRECTOR’S SERVICE
CONTRACT 
  
  

							
	1.	  	INTERPRETATION	  	 	3	  
			
	2.	  	PERIOD	  	 	4	  
			
	3.	  	DUTIES	  	 	4	  
			
	4.	  	SHARE DEALING AND OTHER RULES	  	 	5	  
			
	5.	  	CONFLICTS	  	 	5	  
			
	6.	  	SALARY	  	 	6	  
			
	7.	  	PENSION	  	 	6	  
			
	8.	  	INSURANCE	  	 	7	  
			
	9.	  	HOLIDAY	  	 	7	  
			
	10.	  	CAR	  	 	7	  
			
	11.	  	TELECOMMUNICATIONS FACILITIES	  	 	7	  
			
	12.	  	SICK PAY	  	 	7	  
			
	13.	  	MEDICAL EXAMINATION	  	 	8	  
			
	14.	  	EXPENSES	  	 	8	  
			
	15.	  	PROFESSIONAL SUBSCRIPTIONS AND ADVICE	  	 	8	  
			
	16.	  	INTELLECTUAL PROPERTY	  	 	8	  
			
	17.	  	DISCIPLINARY AND GRIEVANCE PROCEDURE	  	 	9	  
			
	18.	  	OBLIGATION TO PROVIDE WORK	  	 	9	  
			
	19.	  	TERMINATION	  	 	10	  
			
	20.	  	CONFIDENTIALITY	  	 	11	  
			
	21.	  	RESTRICTIONS	  	 	11	  
			
	22.	  	DATA PROTECTION	  	 	12	  
			
	23.	  	CONTINUATION	  	 	12	  
			
	24.	  	VARIATION	  	 	12	  
			
	25.	  	NOTICES	  	 	12	  
			
	26.	  	COUNTERPARTS	  	 	12	  
			
	27.	  	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999	  	 	13	  
			
	28.	  	MISCELLANEOUS	  	 	13	  

  
 2 

 DATED 1 October 2013 

PARTIES 
  

	1)	BT GROUP plc (registered number 4190816) whose registered office is at 81 Newgate Street, London EC1A 7AJ (BT) 

  

	2)	ANTHONY EVERARD ASHIANTHA CHANMUGAM whose address is 81 Newgate Street, London, EC1A 7AJ (the Director) 

  

	1.	INTERPRETATION 

 1.1 In this Agreement the following expressions shall mean: 

 

			
	Associated Company	  	any company or venture in which BT or a Subsidiary has a shareholding or equity participation;
		
	Benefits	  	pension benefits (including life cover), health cover, dental cover, the car currently provided on termination together with the cost of maintenance, insurance and motor vehicle tax (but not petrol);
		
	Board	  	the board of directors of BT, or a committee of the board;
		
	BT Group	  	BT and all its Subsidiaries from time to time;
		
	Chairman	  	the chairman of BT or his designated nominee;
		
	Chief Executive	  	the Chief Executive of BT or his delegated nominee;
		
	Commencement Date	  	1 October 2013;
		
	Confidential Information	  	any information (whether or not recorded in documentary form, or stored on any magnetic or optical disk or memory) including, but not limited to, any

  
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		  	information relating to the business, products, affairs and finances of the BT Group or its Associated Companies, which is treated as confidential to the BT Group or its Associated Companies or which you are told or ought
reasonably to know is confidential or which has been given to the BT Group or its Associated Companies in confidence by customers, suppliers or other persons, and any trade secrets including, without limitation, technical data and know-how relating
to the business of the BT Group or its Associated Companies or any of its business contacts;
		
	Employment	  	the Director’s employment in accordance with the terms and conditions of this Agreement;
		
	Group Company	  	any company in the BT Group;
		
	Salary	  	£600,000 a year or such higher salary as may be determined by the Board;
		
	Subsidiary	  	any subsidiary which for the time being is a subsidiary company (as defined in Section 1159 of the Companies Act 2006) of BT.

 1.2 A reference to something being determined, specified or required by BT includes a determination, specification or requirement from
time to time. 
 1.3 This Agreement supersedes any previous agreement between BT and the Director. 

 

	2.	PERIOD 

 Subject to Paragraph 19, this Agreement will last for an initial period of one year from
and including the Commencement Date. It will continue until either BT has given to the Director previous written notice of not less than twelve months or the Director has given to BT previous written notice of not less than six months, ending in
either case at any time after the initial period. 
 The Director’s period of continuous employment for statutory purposes began on 3 July 1978. 

 

	3.	DUTIES 

 3.1 BT will employ the Director as a full-time executive director. 

  
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 3.2 During the Employment, the Director will: 
  

	(a)	diligently perform all such duties and exercise all such powers as are lawfully and properly assigned to him from time to time by the Board, whether such duties or powers relate to BT or the BT Group and Associated
Companies, at such locations in the United Kingdom or overseas, as the Board or the Chief Executive may specify; 

  

	(b)	comply with all BT rules, regulations, policies and procedures (including codes of conduct) and those of any applicable Group Company or Associated Company from time to time in force; 

 

	(c)	comply with all directions lawfully and properly given to him by the Board; 

  

	(d)	unless prevented by sickness, injury or other incapacity, and other than any time reasonably spent on any external non-executive directorship which has been approved by the Remuneration Committee, devote the whole of
his time, attention and abilities during his working hours to the business of BT or any other Group Company or Associated Company for which he is required to perform duties; 

 

	(e)	promptly provide the Board with all such information as it may require in connection with the business or affairs of BT and of any other Group Company or Associated Company for which he is required to perform duties;
and 

  

	(f)	report to BT and any applicable Group Company or Associated Company any matters of concern that come to his attention, or of which he is aware, in particular any acts of misconduct, dishonesty, breach of any policies of
the BT Group or Associated Companies, including but not limited to the codes of conduct or breach of any relevant regulatory rules committed, contemplated or discussed by any member of staff, contractor or other third party. 

3.3 The Director’s working hours will be such hours as are required for the proper performance of his duties. 

3.4 The Director agrees, in accordance with Regulation 5 of the Working Time Regulations 1998 (the Regulations), that the provisions of
Regulation 4(1) do not apply to the Director, and that the Director will give BT three months’ notice in writing if he wishes Regulation 4(1) to apply to him. 
  

	4.	SHARE DEALING AND OTHER RULES 

 The
Director will comply with the BT share dealing rules, BT’s Articles of Association and with all applicable rules and regulations of the UK Listing Authority and any other relevant regulatory bodies, including the Model Code on dealings in
securities. 
  

	5.	CONFLICTS 

 5.1 The Director will promote, and not do anything which is harmful or conflicts with,
the interests and reputation of the BT Group. 

  
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 5.2 The Director will not without obtaining prior written consent of the Chairman: 

 

	(a)	work for any other person, business, organisation or company; or 

  

	(b)	hold any shares or interests in any business or company that is likely to compete with the business of the BT Group. 

5.3 The Director will pay to BT any fees received from any directorship of another company, unless BT otherwise agrees. 

5.4 In the event that the Director becomes aware of any conflicts of interest that may arise, he must disclose these to the Board. 

 

	6.	SALARY 

 6.1 The Director will be paid the Salary in twelve equal monthly instalments, payable on
the last business day of each month. 
 6.2 The Director’s salary will be inclusive of all fees and other remuneration to which he may be or become entitled as
an officer of any Group Company or Associated Company. 
 6.3 The Director may be paid a bonus at the discretion of the Board. 

6.4 The Director may, at the discretion of the Board, participate in any scheme established for BT employees to acquire shares in BT subject to the applicable rules of
the scheme, but participation under such schemes will not form part of this Agreement. 
 6.5 The Director agrees that, pursuant to Part II of the Employment Rights
Act 1996, BT has the right to deduct from his salary and/or bonus any amount owed to the BT Group by the Director. 
 6.6 Following the enactment of sections 79 to 82
of the Enterprise and Regulatory Reform Act 2013: 
  

	(a)	any obligation of BT or any Group Company or Associated Company under this Agreement and any other arrangement relating to remuneration from which the Director benefits or enters into since he became a director of BT
shall be subject to and conditional on approval by BT shareholders in a general meeting of a policy on directors’ remuneration in accordance with the terms of such legislation; and 

 

	(b)	in the event such approval is not obtained at any such general meeting, the Director will have no entitlement to compensation or damages in respect of any loss suffered in consequence thereof. 

 

	7.	PENSION 

 7.1 The Director will be entitled to continue participation in the BT Pension Scheme.

 7.2 BT will pay an amount of thirty per cent of the Salary in each year as a contribution to the Director’s personal pension by twelve monthly instalments,
payable on the last day of each month. 

  
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 7.3 BT will comply with its automatic enrolment obligations under legislation in relation to the Director. If the Director
is automatically enrolled to an automatic enrolment scheme nominated by BT in accordance with its automatic enrolment obligations and does not opt out, or if the Director opts in to such a scheme, the pension allowance described in Paragraph 7.2
will be reduced by an amount equal to the aggregate of any employer and employee contributions (including tax relief in respect of such contributions, if any) payable to or in respect of the Director to such scheme. 

 

	8.	INSURANCE 

 8.1 During the Employment, subject to the Director’s age or health (or, where
relevant, that of his spouse or children) not being such as to prevent cover being obtained without exceptional conditions or unusually high premiums, and to the terms of the relevant policy from time to time, BT will: 

 

	(a)	arrange for the benefit of the Director life insurance cover equal to four times the Salary; and 

  

	(b)	arrange private health cover for the Director, the Director’s spouse and children under the age of 18 (or 21 if in full-time education) and dental cover for the Director and the Director’s spouse.

  

	9.	HOLIDAY 

 The Director will be entitled to paid statutory holidays and to 32.5 days’ paid
holiday in each year which accrues rateably each month in arrears, to be taken at times agreed with the Chief Executive. 
  

	10.	CAR 

 BT will provide the Director with a car and a driver both appropriate to his status and
responsibilities in accordance with BT’s company car policy from time to time. BT will bear the cost of taxing, insuring, repairing and maintaining the car as well as the cost of petrol for business and private mileage. 

 

	11.	TELECOMMUNICATIONS FACILITIES 

 BT will provide telecommunications facilities (which
currently include one residential exchange line and a fixed number of extension sockets and BT telephones) and home security at the Director’s main residence and a free call allowance all as determined by BT. 

 

	12.	SICK PAY 

 12.1 During the Employment, the Director will be entitled to receive sick
pay (inclusive of any statutory sick pay and any benefits payable under any permanent health insurance effected by BT) of: 
  

	(a)	one twelfth of the Salary for each month in the first six months; and 

  

	(b)	one twenty-fourth of the Salary for each month in the next six months in total in any period of two years, subject to production of medical certificates and to such other requirements as BT may reasonably request.

  
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	13.	MEDICAL EXAMINATION 

 BT may, at its expense, require the Director to be examined by
a medical practitioner of BT’s choice. BT’s Chief Medical Officer will be entitled to receive a copy of any report produced in connection with all such examinations, on a confidential basis, and to discuss the contents of the report with
the doctor who produced it. 
  

	14.	EXPENSES 

 BT will reimburse authorised expenses properly incurred in the course of the
Director’s duties against receipts or other proof of expenditure. 
  

	15.	PROFESSIONAL SUBSCRIPTIONS AND ADVICE 

 15.1 The
Director will be reimbursed subscriptions to professional bodies where the Chairman considers it to be in the interests of BT. 
 15.2 BT will pay the cost of
personal tax and financial planning advice up to a maximum of £5,000 (excluding VAT) a year. 
  

	16.	INTELLECTUAL PROPERTY 

 16.1 Subject to the Patents Act 1977 and the Copyright,
Designs and Patents Act 1988, any invention, design, or copyright work, including without limitation all documents, data, drawings, specifications, articles, computer programmes, object codes, source codes, network designs, business logic, notes,
sketches, drawings, reports, modifications, tools, scripts or other items (Works), made by the Director during the course of employment with BT (whether or not in the course of his duties) shall immediately upon creation or
performance vest in and shall be and remain the sole and exclusive property of BT, and the Director hereby irrevocably and unconditionally assigns to BT, all right, title and interest in and to the same. 

16.2 The Director must promptly notify BT of any Works which he creates, which shall become the absolute property of BT and hereby unconditionally waives in favour of
BT all rights (if any) he may have under Chapter IV (moral rights) of the Copyright, Designs and Patents Act 1988 (or any foreign corresponding rights) in connection with the authorship of any Works, wherever in the world enforceable, including
without limitation the right to be identified as the author of such Works and the right not to have such Works altered or subjected to derogatory treatment. 
 16.3
The Director agrees to execute any formal and additional assignment required by BT to vest or confirm the vesting in it of all rights in any Works as set out in this Paragraph 16 at the expense of BT. 

16.4 The Director hereby authorises BT to appoint someone to be his lawyer and in his name and on his behalf, to sign, execute and do all such things as BT thinks
necessary or desirable to fully vest or confirm the vesting in it of all rights in any works as set out in this Paragraph 16. 

  
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 16.5 The terms and obligations of this Paragraph 16 survive the expiry or termination of the Employment for any reason.

  

	17.	DISCIPLINARY AND GRIEVANCE PROCEDURE 

 17.1 If the
Director is dissatisfied with any disciplinary decision taken in relation to him he may appeal in writing to the Board within 7 days of that decision. The Board’s decision shall be final. 

17.2 If the Director has any grievance he may apply in writing to the Chairman who personally will either propose a solution or refer the matter to the Board. 

 

	18.	OBLIGATION TO PROVIDE WORK 

 18.1 BT is under no
obligation to provide the Director with work and may: 
  

	(a)	suspend the Director, if the Board considers this appropriate, for up to three months; or 

  

	(b)	if notice to terminate this Agreement has been given, vary the Director’s duties or require the Director to cease performing all duties during all or part of the notice period, 

in which case BT may continue to pay the Salary in accordance with Paragraph 6.1 and provide the Benefits under this Agreement until this Agreement terminates. 

18.2 Where Paragraph 18.1 applies, BT may require the Director: 
  

	(a)	not to attend any BT Group premises; 

  

	(b)	to refrain from business contact with any customers, clients or employees of the BT Group; 

  

	(c)	to take any holiday which has accrued under Paragraph 9 during any period of suspension under this Paragraph 18.2; 

  

	(d)	not to compete with BT or any Group Company; and/or 

  

	(e)	not to do any act or thing or make or cause to be made any statement reasonably likely to damage the business or reputation of BT or any Group Company. 

18.3 Where Paragraph 18.1(b) applies, the Director will at BT’s request promptly resign in writing as a director of BT (and as a member of any committee of the
Board) and of any company of which BT is a shareholder (if necessary, in accordance with Paragraph 19.7) but this Agreement will not terminate on the Director resigning under this sub-paragraph. 

  
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	19.	TERMINATION 

 19.1 This Agreement will terminate immediately, without compensation: 

 

	(a)	subject to Paragraphs 18.3 and 19.3, if the Director ceases to be a Director under the provisions of BT’s Articles of Association as altered from time to time; or 

 

	(b)	if the Director fails in the reasonable opinion of the Board satisfactorily to perform his duties after receiving a written warning. 

19.2 BT may terminate this Agreement without notice, and without compensation, if the Board believes that the Director: 

 

	(c)	is incapacitated for any reason from performing the Director’s duties for a period of one year or periods totalling 365 days in any period of two years; or 

 

	(d)	is guilty of any dishonesty or disreputable conduct; or 

  

	(e)	is guilty of any misconduct or neglect of duty after receiving a warning; or 

  

	(f)	is repeatedly failing to follow BT’s policies and procedures. 

 19.3 If the Director ceases to be a director of BT
because he is not re-elected or deemed to be re-elected at a general meeting, BT may either: 
  

	(g)	terminate this Agreement subject to paying compensation in lieu of notice; or 

  

	(h)	require the Director to perform such duties for the BT Group (other than as a director of BT) as the Board, the Chairman or the Chief Executive may specify. 

19.4 In lieu of giving the Director the twelve months’ notice referred to in Paragraph 2 or at any time during any notice period, BT may (but shall not be obliged
to) terminate this Agreement immediately and make a payment in lieu of notice equal to: 
  

	(i)	the Salary which the Director would have been entitled to receive in accordance with Paragraph 6.1 during the notice period referred to in Paragraph 2.1 if notice had been given or (if notice has already been given)
during the remainder of the notice period, and 

  

	(j)	the cost to BT of continuing to provide the Benefits during that period. Alternatively BT may in its absolute discretion continue to provide such Benefits during that period, 

(the Payment in Lieu). 
 19.5 The Payment in Lieu will be payable in
equal monthly instalments on the normal payroll dates. These instalments will continue until the date on which the relevant notice period would have expired or (if earlier) the date on which the Director secures alternative employment or alternative
engagements with the same or a higher basic salary or fee, subject to the conditions set out in sub-Paragraphs 19.5(a) to 19.5(c) below: 
  

	(a)	the Director will provide to the Board such evidence as it may reasonably require on a monthly basis to show that he is making all reasonable efforts to secure alternative employment or engagements and full details of
his remuneration package in any such employment or engagements; 

  
 10 

	(b)	in the event that the Director secures alternative employment or engagement(s) above a basic annual salary or fee of £30,000 but at a lower basic salary or fee than the Salary, then subsequent instalments of the
Payment in Lieu shall be reduced by an amount equal to such lower salary or fee (expressed on a monthly basis) in calculating the Payment in Lieu. The Payment in Lieu will be further reduced as the Board deems appropriate if the remuneration
arrangements agreed between the Director and his new employer, in the reasonable opinion of the Board, are not appropriately balanced between basic salary and other incentives and benefits in accordance with market practice; and 

 

	(c)	in the absence of such evidence or if the Board is not satisfied (on reasonable grounds) that the evidence provided shows that the Director is making reasonable efforts to secure alternative employment or engagement(s),
BT may cease making any further payments. In these circumstances, the Director shall have no right to any compensation whatsoever in respect of the loss of any further instalments of the Payment in Lieu that would otherwise have been due to him.

 19.6 Upon termination of this Agreement, the Director will at BT’s request promptly resign in writing as a Director of BT (and as a member of
any committee of the Board) and of any company of which BT is a shareholder, and will promptly return to BT any property of the BT Group. 
 19.7 The Company
Secretary of BT is irrevocably authorised to sign a letter of resignation on behalf of the Director if he fails to do so. 
  

	20.	CONFIDENTIALITY 

 20.1 The Director will keep secret and will not at any time (whether during the
Employment or thereafter) use for his own or another’s advantage, or reveal to any person, firm, company or organisation and shall use his best endeavours to prevent the publication or disclosure of, any Confidential Information relating to the
BT Group, any Associated Company or any third party which may have been obtained in the course of this Employment. 
 20.2 This prohibition does not apply to
Confidential Information that comes into the public domain through no act or neglect of the Director, to any disclosure or use authorised by the Board or so as to prevent the Director making a protected disclosure within the meaning of section 43A
of the Employment Rights Act 1996. 
  

	21.	RESTRICTIONS 

 21.1 The Director will be bound by the provisions of the Schedule to this Agreement.

 21.2 The 12 month periods referred to in the Schedule will be reduced by any time during which the Director has been suspended or excluded from the premises of the
BT Group under Paragraph 18. 
 21.3 The Director will not at any time after termination of the Employment represent himself as being in any way concerned with or
interested in the business of, or employed by, the BT Group or any Associated Company. 

  
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	22.	DATA PROTECTION 

 22.1 The Director consents to any Group Company processing data
relating to the Director for legal, personnel, administrative and management purposes and in particular to the processing of any sensitive personal data (as defined in the Data Protection Act 1998) relating to the Director, including, as
appropriate: 
  

	(a)	information about the Director’s physical or mental health or condition in order to monitor sick leave and take decisions as to the Director’s fitness for work and health cover; 

 

	(b)	the Director’s racial or ethnic origin or religious or similar information in order to monitor compliance with equal opportunities legislation; and 

 

	(c)	information relating to any criminal proceedings in which the Director has been involved for insurance purposes and in order to comply with legal requirements and obligations to third parties. 

22.2 BT may make such information available to any Group Company, those who provide products or services to any Group Company (such as advisers and payroll
administrators), regulatory authorities, potential or future employers, governmental or quasi-governmental organisations and potential purchasers of BT or the business in which the Director works. 

22.3 The Director consents to the transfer of such information to any Group Company and any Group Company’s business contacts outside the European Economic Area in
order to further their business interests even where the country or territory in question does not maintain adequate data protection standards. 
  

	23.	CONTINUATION 

 Paragraphs 16, 19.6, 19.7, 20 and 21 inclusive will continue in force after the
termination of this Agreement. 
  

	24.	VARIATION 

 BT may vary Paragraphs 8 to 12 inclusive, 15 and 17 but only after first consulting the
Director. 
  

	25.	NOTICES 

 Any notice or document may be served on the Director personally or by posting it to his
last known address, or on BT addressed to the Secretary at its registered office, and if sent by first class post will be deemed to have been received within 24 hours of posting. 

 

	26.	COUNTERPARTS 

 This Agreement may be executed in any number of counterparts, and by each party on
separate counterparts. Each counterpart is an original, but all counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart signature page of this agreement by e-mail or fax shall be as effective as
delivery of a manually executed counterpart of this agreement. In relation to each counterpart, upon 

  
 12 

 
confirmation by or on behalf of the signatory that the signatory authorises the attachment of such counterpart signature page to the final text of this agreement, such counterpart signature page
shall take effect together with such final text as a complete authoritative counterpart. 
  

	27.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 

A person who is not a party to this Agreement shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms. 

 

	28.	MISCELLANEOUS 

 28.1 This Agreement, together with any other documents referred to in this
Agreement, constitutes the entire agreement and understanding between the parties, and supersedes all other agreements both oral and in writing between BT and the Director (other than those expressly referred to herein). The Director acknowledges
that he has not entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set out in this Agreement or expressly referred to in it as forming part of the Director’s contract of employment. 

28.2 The Director represents and warrants to BT that he will not by reason of entering into the Employment, or by performing any duties under this Agreement, be in
breach of any terms of employment with a third party whether express or implied or of any other obligation binding on him. 
 28.3 Any reference in this Agreement to
an Act of Parliament shall be deemed to include any statutory modification or re-enactment thereof. 
 28.4 This Agreement is
governed by, and shall be construed in accordance with, the laws of England. The Courts of England shall have exclusive jurisdiction in relation to all disputes arising out of or in connection with this Agreement. 

Signed by the parties on the date written on the first page of this Agreement. 
  

			
	SIGNED as a DEED and	  	)
	DELIVERED by	  	)     /s/ Tony Chanmugam
	ANTHONY EVERARD ASHIANTHA CHANMUGAM
		
	in the presence of:	  	)     /s/ Dawn Gregory
		
	SIGNED for and on behalf of	  	)     /s/ Dan Fitz
	BT GROUP PLC

  
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 SCHEDULE 
 1. In this
Schedule: 
  

	(a)	“Expiry Date” means the date of termination or expiry of this Agreement for any reason. 

  

	(b)	“in any capacity” means on the Director’s own behalf or jointly with or on behalf of any person, firm or company. 

  

	(c)	“Confidential Information” means confidential information of the BT Group which would be of value to a competitor or could reasonably enable a competitor to obtain an unfair advantage in trading in competition
with the BT Group. 

  

	(d)	“Business” means the communications business (including TV and sports content) of the BT Group in the United Kingdom or any other country of the European Union in which the BT Group conducts its business.

 2. Since the Director is likely to obtain in the course of his employment with the BT Group, trade secrets and Confidential Information and personal
knowledge of customers and employees of the BT Group, the Director agrees with BT that he will be bound by the following covenants for 12 months immediately following the Expiry Date: 

 

	 	(i)	The Director will not in any capacity solicit or endeavour to entice away or offer engagement or employment to, or engage or employ or procure any Designated Person, who was an employee of BT at the Expiry Date, to be
engaged or employed in any business which competes or is about to compete with the Business. 

 A Designated Person is an employee of BT
which whom the Director has had personal dealings in the 12 months immediately preceding the Expiry Date and who had at the Expiry Date knowledge of trade secrets or Confidential Information or knowledge of and connections or influence with
customers of BT. 
  

	 	(ii)	The Director will not in any capacity for the purposes of any business which competes or is about to compete with the Business, solicit or entice away or endeavour to solicit or entice away business or custom from any
person, firm or company: 

  

	 	(a)	that was a customer of BT during the 12 months immediately preceding the Expiry Date (“the 12 month period”); and 

  

	 	(b)	with whom or with which the Director personally had had dealings during the 12 month period in the course of the Employment. 

  

	 	(iii)	The Director will not in any capacity for the purposes of any business which competes or is about to compete with the Business, have business dealings with any person, firm or company: 

 

	 	(a)	that was a customer of BT during the 12 month period; and 

  

	 	(b)	with whom or with which the Director personally has had dealings during the 12 month period in the course of the Employment. 

  
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	 	(iv)	The Director will not in any capacity carry on, be engaged or employed or be concerned or interested in any business, or take steps to set up, promote or facilitate the establishment of any business which competes or is
about to compete with the Business. 

 For the purposes of this Clause 2, any reference to “engagement or employment” means
engagement or employment whether under a contract or otherwise and if under a contract includes a contract of employment, or a contract for services or any other form of contract and the terms “engage” and “employ” and their
derivatives shall be construed in accordance with this definition. 
 3. Clause 2 shall apply mutatis mutandis in relation to Subsidiaries as if the provisions in
sub-clauses (i) - (iii) inclusive and the definitions were repeated with the substitution of the words “any of the Company’s Subsidiaries” for “BT”, and the Company contracts with the Director in this sub-clause on its
own behalf and on behalf of each of its Subsidiaries. 
 4. For the avoidance of doubt it is expressly agreed that each of the sub-clauses (i)-(iii) in Clause 2
is intended to contain separate and severable restraints and if any one or more of such sub-clauses are for any reason unenforceable in whole or in part, then the other sub-clauses shall nonetheless be and remain effective. 

5. The Director acknowledges that the restraints contained in this Schedule and each of them are necessary to protect the legitimate interests of the BT Group, are no
wider than reasonably necessary for that purpose, and are reasonable as between the parties to this Agreement. 
 6. If any of the restrictions contained in this
Schedule shall be adjudged to be void or ineffective or unenforceable for whatever reason but would be adjudged to be valid and effective if part of the wording were deleted or the periods reduced or the area reduced in scope, they shall apply with
such modifications as may be necessary to make them valid and effective. 

  
 15EX-4.3

 Exhibit 4.3 

22 October 2013 
 Warren East 

c/o A9C, BT Centre 
 81 Newgate Street 

London EC1A 7AJ 
 Upon the recommendation of the Nominating & Governance
Committee, the Board of BT Group plc (the Company) has agreed your appointment as a non-executive director. You will also be appointed to such Board Committees as may from time to time be agreed with you. This letter sets out the terms of your
appointment. 
 Appointment 
 Your appointment is for an initial period of
three years from 1 February 2014. During that period either you or the Board can give the other at least three months’ written notice to terminate the appointment at any time. 

In accordance with the relevant corporate governance provisions, you will be required to stand for election at the Company’s next Annual General Meeting (AGM) and
then for re-election at the Company’s AGM each year. In the event that you are not re-elected by the shareholders at the AGM the appointment will terminate automatically and with immediate effect. 

Subject to your annual re-election as a director and satisfactory performance by you of your duties as a non-executive director, the appointment may be continued at the
end of the initial three year period if you and the Board agree. 
 Time commitment 

You are expected to attend all meetings of the Board including a minimum of six meetings in person, and those Board Committees to which you are appointed, the AGM (in
person) and any Board away days. If you cannot attend any meeting you should advise the Secretary in advance. In addition, you will be expected to devote appropriate preparation time ahead of each Board and Board Committee meeting and to take part
in at least one visit each year to one of BT’s offices or other sites. 

 Exhibit 4.3 
  

 It is difficult to be precise about the amount of time you should expect to spend on this work, but we estimate that
you should allow a minimum of 22 days each year, subject to Committee commitments. You should allow a slightly higher commitment in the first year of your appointment whilst you familiarise yourself with the BT group and go through our induction
programme for new directors. Additional time commitment may also be required if the Company is undergoing a period of particularly increased activity (such as a major acquisition or capital transaction). 

By accepting this appointment, you have confirmed that you are able to allocate sufficient time to meet what is expected of you in your role as a non-executive
director. The agreement of the Chairman should be sought before accepting additional commitments that might affect the time you are able to devote to your role as a non-executive director of the Company. 

Role 
 Non-executive directors have the same general legal responsibilities to
the Company as any other director. The Board’s principal focus is the strategic direction, development and control of the group, while maintaining sound risk management and internal control systems. In support of this it approves the
group’s values, ethics, business practices and policies, strategic plans, annual budgets and the group’s overall system of internal controls, governance and compliance authorities. It also has oversight and control of the group’s
operating and financial performance. Board members are expected to constructively challenge and help develop proposals on strategy. These responsibilities are set out in the formal statement of the Board’s role, included in your directors’
briefing pack and are in accordance with the UK Corporate Governance Code. 
 Fees and expenses 

You will receive fees for your services as a director of £62,000 a year. In addition, Committee fees for those of which you are a member will be payable against
standard fee levels from time to time agreed by the Board. 
 The Company will either pay or reimburse you for all travelling, hotel and other expenses incurred on
the Company’s business. 

 Exhibit 4.3 
  

 Outside interests 
 It is
accepted and acknowledged that you have business interests other than those of the Company. You are required to disclose to the Board, via the Secretary, any interests you have at the date of your appointment. Advice on notifiable interests is
enclosed in your briefing pack. You will be asked to review the interests notified, on an annual basis. However, any new interests which arise during your period of appointment should be notified to the Secretary as soon as possible. 

Confidentiality and share dealings 
 All information acquired during your
appointment is confidential to the Company and should not be released (by whatever means), either during your appointment or following termination, to third parties without prior clearance from the Secretary. You also undertake to keep secure any
information and material sent to you. 
 Your attention is also drawn to the requirements under both legislation and regulation as to the handling and disclosure of
price sensitive information. You should avoid making any statements that might breach these requirements without prior clearance from the Secretary. 
 You will be
bound by the Company’s Articles of Association, and by the Company’s share dealing code. 
 Induction and Briefings 

The Company has in place arrangements to complement the briefing material you have already received about the BT group through an on-going programme to keep you informed
about the Company’s businesses, activities and developments, the communications industry and the regulatory environment. This can include meetings with the Company’s executive management, major shareholders and other stakeholders and the
external auditors. We will also arrange a tailored package of visits to business locations so you can see BT and its people at work. 
 Review 

The performance of the Board and its Committees is evaluated annually. If, in the interim, there are any matters which cause you concern about your role you should
discuss them with the Chairman or the Secretary as soon as is appropriate. 

 Exhibit 4.3 
  

 Individual training and development needs will be regularly reviewed and agreed with each director as part of the Board
evaluation process. 
 Insurance 
 You are covered by the Company’s
directors’ and officers’ liability insurance. The current limit in respect of any one claim or all claims in aggregate during the period of the insurance policy is £195 million. 

Independent professional advice 
 The Company has a procedure for its
directors, in furtherance of their duties, to take independent advice if necessary, at the Company’s expense. If you feel it necessary to seek such advice, please contact the Secretary first. A copy of the procedure is included in your briefing
pack. 
 Termination 
 Upon termination of your appointment you will, at the
Company’s request, promptly resign in writing as a director of BT Group plc. The Secretary is irrevocably authorised to sign a letter of resignation on your behalf if you fail to do so. 

Acceptance 
 Please confirm your acceptance of these terms by signing and
returning the attached copy of this letter. 
 Yours sincerely 
 DAN
FITZ             /s/ Dan Fitz 
  

	To:	Dan Fitz 

 Company Secretary 

I confirm acceptance of my appointment on the above terms. 
  

									
	Name	 	 /s/ Warren East
	 		  	Date	 	 23 October 2013

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