Document:

EX-4.2

 Exhibit 4.2 

RULES OF THE 
 BT GROUP
PLC US EMPLOYEE STOCK PURCHASE PLAN 
 Authorised by shareholders on 16 July 2020 

Adopted by the Remuneration Committee on 28 July 2020 

 CONTENTS 
  

							
	Clause	  	Page	 
			
	 1.
	 	Definitions and Interpretation	  	 	1	 
	 2.
	 	Purpose of the Plan	  	 	1	 
	 3.
	 	Eligible Employees	  	 	1	 
	 4.
	 	Eligible Compensation	  	 	2	 
	 5.
	 	Offers under the Plan	  	 	2	 
	 6.
	 	Participation in the Plan	  	 	2	 
	 7.
	 	Plan Limits	  	 	3	 
	 8.
	 	Individual Limits	  	 	4	 
	 9.
	 	Option Price	  	 	4	 
	 10.
	 	Deduction of Pay and Exercise of Options	  	 	4	 
	 11.
	 	Administration of the Plan	  	 	5	 
	 12.
	 	Amendment of the Plan	  	 	5	 
	 13.
	 	Withdrawal from Participation (Recommencement of Participation)	  	 	6	 
	 14.
	 	Rights not Transferable	  	 	6	 
	 15.
	 	Termination of Employment	  	 	6	 
	 16.
	 	Reorganization	  	 	7	 
	 17.
	 	Approval of Shareholders	  	 	7	 
	 18.
	 	Termination of the Plan	  	 	7	 
	 19.
	 	Required Approvals; Restrictions	  	 	7	 
	 20.
	 	Expenses	  	 	7	 
	 21.
	 	Rights of Participants and Eligible Employees	  	 	8	 
	 22.
	 	Governing Law	  	 	8	 
		
	 Appendix
	  			
	 1.
	 	Definitions	  	 	9	 

	1.	 DEFINITIONS AND INTERPRETATION 

 

	1.1	 Definitions 

The words and expressions used in the Rules which have initial capital letters have the meanings set out in Appendix 1. 

 

	1.2	 Interpretation 

The headings in the Rules are for convenience and should be ignored when construing the Rules. Unless the context otherwise requires, words in
the singular include the plural and vice versa and words implying either gender include both genders. 
 Reference in the Rules to any
statutory provisions are to those provisions as amended or re-enacted from time to time, and include any regulations or other subordinate legislation made under them. 

 

	2.	 PURPOSE OF THE PLAN 

The purpose of the Plan is to provide employees of the Participating Companies with an opportunity to purchase Shares. The Plan is intended to
qualify as an Employee Stock Purchase Plan. The Rules will, accordingly, be construed so as to extend and limit participation in the Plan a manner consistent with Section 423. 

Participation in the Plan will provide eligible employees of the Participating Companies who wish to acquire an interest in the Parent with a
method of doing so which is both convenient and on a basis more favourable than would otherwise be available. It is believed that employee participation in ownership of the Parent on this basis will be to the mutual benefit of the employees, the
Parent and the Participating Companies. 
  

	3.	 ELIGIBLE EMPLOYEES 

Except as otherwise provided in this Rule 3, any employee who is employed by an Employing Corporation is eligible to participate in the Plan.
An eligible employee will commence participation in the Plan on the first trading day of the calendar quarter next following the date on which the employee provides a payroll deduction authorisation form in accordance with Rule 5 or, if the employee
does so on the first trading day of a calendar quarter, on that day. 
 Upon re-employment, a former
Participant whose employment with a Participating Company was terminated will become eligible to participate in the Plan as if the former Participant were employed by a Participating Company for the first time. 

The term “employee” will not include a non-employee member of the board of directors of an
Employing Corporation. 
 The Parent may establish minimum service or other eligibility requirements for an Offer consistent with
Section 423(b)(4) of the Code. Any exclusions established with respect to a particular Offer must be applied to all employees of every Employing Corporation whose employees are granted options under that Offer; provided, however, that the terms
of different Offers may provide for different exclusions as permitted by Section 423 of the Code. 

	4.	 ELIGIBLE COMPENSATION 

Compensation eligible for payroll deductions will be base salary and commissions (if any) paid in each payroll period. Eligible compensation
does not include overtime, bonuses, severance pay, incentive pay, shift premium differentials, pay in lieu of vacation, imputed income for income tax purposes, patent and award fees, awards and prizes, back pay awards, reimbursement of expenses and
living allowances, educational allowances, expense allowances, disability benefits under any insurance program, fringe benefits, deferred compensation, compensation under the Parent’s stock plans, amounts paid for services as an independent
contractor, or any other compensation excluded in the discretion of the Parent. 
 Compensation eligible for payroll deductions will be
determined before giving effect to any salary reduction agreement pursuant to a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code or to any similar reduction agreement pursuant to any cafeteria plan (within
the meaning of Section 125 of the Code) and, as determined in the discretion of the Parent, any other salary reduction agreement such as pursuant to a dependent care plan (within the meaning of Section 129 of the Code) or a qualified
transportation fringe plan (within the meaning of Section 132(f) of the Code). 
  

	5.	 OFFERS UNDER THE PLAN 

The Parent may make one or more Offers under the Plan on any date within 42 days after the date on which it releases to the public its
quarterly, semi-annual or annual results for any financial period or on any other date, if the Parent determines that exceptional circumstances exist which justify making an Offer. 

If the Parent cannot make an Offer because of restrictions imposed by statute, order, regulation or government directive, or by any code
adopted by the Parent based on the London Stock Exchange’s model code for securities transactions by directors of listed companies, the Parent may make an Offer within 42 days after the lifting of such restrictions. 

No Option granted pursuant to an Offer will have a term of more than twenty-seven (27) months measured from the Date of Grant of the
Option. 
 Offers may be consecutive or may overlap. The terms of each Offer need not be identical. Separate Offers may be established for
different Employing Corporations. 
  

	6.	 PARTICIPATION IN THE PLAN 

To participate in an Offer, an eligible employee must sign and forward to the Employing Corporation a duly completed payroll deduction
authorization form authorizing regular payroll deductions, which may not exceed the Maximum Percentage, to be applied toward the acquisition of Shares pursuant to the Offer. 

Participants can submit a new payroll deduction authorization form at any time to amend the percentage of their eligible compensation to be
deducted, provided that the Maximum Percentage is not exceeded. Any change to the percentage of a participant’s payroll deduction will take effect from the next practicable calendar quarter. 

Subject to the limitations set out in the Plan, on the Effective Date of an Offer, each then eligible employee will be granted an Option to
acquire, through payroll deductions, as many Shares as the employee may acquire with up to the Maximum Percentage of the eligible compensation to be received by the employee during the term of the Offer. Every eligible

 
employee who does not complete a payroll deduction authorization form in accordance with Rule 5 during the initial enrolment period applicable to that Offer will be deemed not to have accepted
the Option, and the Option will lapse at the end of the initial enrolment period. 
 On the first Trading Day of the calendar quarter
following submission of an employee’s payroll deduction authorisation form in accordance with Rule 5, each Late Joiner will be granted an Option to acquire, through payroll deductions, as many Shares as the employee may acquire with up to the
Maximum Percentage of eligible compensation to be received by the employee during the remainder of the term of the Offer. 
 Each Participant
in an Offer will agree to provide written notification to the Employing Corporation at its principal office of any disposition of Shares acquired under the Plan before the expiry of the holding periods set out in Section 423(a) of the Code.
Each Participant granted an Option as part of the same Offer under the Plan (whether or not employed by the same Employing Corporation) will have the same rights and privileges under the Plan, except that the number of Shares each Participant may
acquire will depend upon the Participant’s eligible compensation and the percentage payroll deduction the Participant authorizes. 
  

	7.	 PLAN LIMITS 

  

	(a)	 Subject to Rule 7(d) below the number of Shares which may be allocated under the Plan on any day will not
exceed: 

  

	 	(i)	 10 per cent of the ordinary share capital of the Parent in issue immediately before that day, when added
to the total number of Shares which have been allocated in the previous 10 years under the Plan and any other Employees’ Share Plan operated or adopted by the Parent; and 

 

	 	(ii)	 5 per cent of the ordinary share capital of the Parent in issue immediately prior to that day, when added
to the total number of Shares which have been allocated in the previous five years under the Plan and any other Discretionary Share Plan operated or adopted by the Parent. 

For the purpose of this Rule 7(a), “allocate” means in relation to any share option plan, placing unissued Shares or treasury
Shares under option and, in relation to other types of employee share plans, the issue and allotment of Shares or transfer of treasury Shares. 
  

	(b)	 Where the right to acquire Shares was released or lapsed without being exercised or deemed to be exercised, the
Shares concerned will be ignored when calculating the limits in Rule 7(a) above. 

  

	(c)	 Where treasury Shares transferred or Shares issued under the Plan are to be taken into account for the purposes
of the limit in Rule 7(a) above and a Variation of the equity share capital of the Parent has taken place between the date of transfer or issue of any such Shares and the date on which the limit is to be calculated, the number of such Shares which
will be taken into account for the purposes of the limit will be adjusted in the manner the Parent considers appropriate to take account of the Variation. 

  

	(d)	 Notwithstanding Rules 7(a), (b) and (c) above, the maximum number of Shares that may be acquired under the
Plan may not exceed [20] million [plus that number of Shares that were authorized but unissued under the BT Group plc (Qualified) Plan as of the date of shareholder approval of this Plan]. 

	8.	 INDIVIDUAL LIMITS 

Except to the extent that a lesser number of Shares is established by the Parent in advance of any Offer, the maximum number of Shares which an
employee will be permitted to acquire pursuant to any one Offer will be that number of Shares determined by multiplying: 
  

	 	(a)	 the amount of the employee’s monthly eligible compensation on the Date of Grant of an Option pursuant to
that Offer; by 

  

	 	(b)	 the number of months from the Date of Grant to the end of the term of the Offer and by dividing the product of
that multiplication by the Fair Market Value of a Share on the Date of Grant. When the participation limit is reached, payroll deductions will cease, and any amount of excess funds as of the date that the participation limit has been reached will be
returned to the employee. 

 Notwithstanding anything to the contrary in the Rules, no employee will be permitted to
acquire any Shares under the Plan if the employee, immediately after the acquisition, owns or would own Shares or other shares (including all Shares which may be acquired under outstanding options under the Plan) possessing 5% or more of the total
combined voting power or value of all classes of shares of capital stock of the Employing Corporation or of its parent or subsidiary corporation (as those terms are defined in Section 424 of the Code). For the purposes of the foregoing limit,
the rules of Section 424(d) (relating to attribution of stock ownership) of the Code will apply in determining share ownership, and shares which an employee may acquire under outstanding options will be treated as shares owned by the employee.

 If, pursuant to the Plan, an employee would be granted an Option that violates Section 423(b)(8) of the Code, the Option will not be
granted and the employee will instead be granted an option to acquire Shares which permits the employee’s rights to acquire Shares or other shares under all stock purchase plans of the Employing Corporation and its parent and subsidiary
corporations (as such terms are defined in Section 424 of the Code) to accrue at a rate which does not exceed $25,000 of the Fair Market Value of such Shares (determined at the time the right to acquire is granted) for each calendar year in
which the Option is outstanding at any time. 
  

	9.	 OPTION PRICE 

The Option Price of an Option will be 85% of the Fair Market Value of a Share on the last Trading Day of the relevant Option Period for each
Offer. 
  

	10.	 DEDUCTION OF PAY AND EXERCISE OF OPTIONS 

 

	(a)	 Subject to Rule 10(b) below, each Participant will have the amount of their authorized deduction deducted from
their pay at the end of each payroll period. The deducted amount will be held for the credit of the Participant by their Employing Corporation as part of its general funds and may, at the sole discretion of the Parent, accrue interest. Subject to
Rule 10(b) below, on the last Trading Day of Option Period for the Offer during the term of the Offer a Participant will be deemed to have exercised the Participant’s option to acquire, at the Option Price, the number of Shares which may be
acquired with the amount deducted from the Participant’s compensation during that Option Period. During a Participant’s lifetime, the Participant’s options will be exercisable only by the Participant. The Custodian will purchase or
subscribe at the applicable Option Price, as many Shares as may be acquired with the funds received from each Participant for that Option Period. On receipt of the Shares so acquired, the Custodian will allocate to the account of, and hold for, each
Participant the number of Shares to which that Participant is entitled. 

	(b)	 The Parent may, at its discretion, at any time during the term of an Offer suspend for any period that it
determines to be appropriate (the Suspension Period) both the deduction of any amounts from Participants’ pay and the exercise of Participants’ Options under Rule 10(a) above, so that no deductions from Participants’ pay and no
Options will be exercised during the Suspension Period. Participants will be advised, in the form the Parent determines, of the operation of a Suspension Period and the period for which the Suspension Period will apply. 

 

	(c)	 Subject to limitations imposed and rules adopted by the Parent from time to time, a certificate representing
the number of whole Shares to which a participant is entitled will be issued to the Participant on written request. Unless otherwise permitted by the Parent and requested by the Participant, Shares acquired under the Plan will be held by and in the
name of, or in the name of a nominee of, the Custodian, for the benefit of each Participant, who will from that time be a beneficial stockholder of the Parent. A Participant’s rights as a stockholder of record of the Parent begin when a
certificate, evidencing the Shares registered in the Participant’s name, is issued. The Parent may, in its sole discretion, cause to be made, as a condition precedent to any acquisition of Shares under the Plan, appropriate arrangements with
the Participant for the withholding of any applicable federal, state, local or foreign withholding or other taxes. 

  

	11.	 ADMINISTRATION OF THE PLAN 

The Parent may designate the Board as responsible for the administration of the Plan, or a committee of the Board consisting of one or more
individuals, or one or more designated individuals, to whom the Board has delegated its authority to administer the Plan in accordance with the Parent’s Articles of Association and may, in its sole discretion, make different designations for
different purposes. 
 Subject to this Rule 11, the Parent may, in its sole discretion, prescribe rules and regulations from time to time for
the administration of the Plan and may make decisions relating to questions which may arise with respect to its interpretation or application, or remedy any ambiguity or inconsistency in the Rules. Any interpretation, determination (including,
without limitation, a determination of fact) or other action made or taken by the Parent will be final and binding. 
 The Parent may
determine the terms and conditions of Offers under the Plan. 
  

	12.	 AMENDMENT OF THE PLAN 

The Parent may modify, amend, or terminate the Plan at any time, provided that the Parent may not make any alterations which would materially
and adversely affect an Option previously granted without the consent of the affected Participant. 
 The Parent may not, without the prior
approval of shareholders in a general meeting, make amendments or modifications that would: 
  

	 	(a)	 reduce the applicable Option Price per Share; 

 

	 	(b)	 require shareholder approval under Section 423 of the Code or any applicable stock exchange listing
requirements; 

	 	(c)	 increase the maximum number of Shares which may be acquired under the Plan either in the aggregate or by an
individual employee; or 

  

	 	(d)	 be to the advantage of participants and affect the provisions (if any) relating to: (i) the persons to
whom, or for whom, securities, cash or other benefits are provided under the Plan; or (ii) the basis for determining an employee’s entitlement to, and the terms of, securities, cash or other benefits to be provided and for the adjustment
thereof (if any) in the event of a Variation, 

 provided that, except for clause (b) above, this Rule will not
prevent minor amendments to benefit the administration of the Plan, to take account of any change in applicable law or to obtain or maintain favourable tax, exchange control or regulatory treatment for Participants, the Parent or any Participating
Company. 
 The Parent may establish further schemes or plans based on the Plan but modified to take account of local tax, exchange control
or securities laws in territories other than the United States of America, provided that: 
  

	 	(i)	 any Shares made available under such further schemes or plans are treated as counting against any limits on
individual or overall participation in the Plan; and 

  

	 	(ii)	 any such scheme or plan is not inconsistent with the requirements of Section 423 of the Code.

  

	13.	 WITHDRAWAL FROM PARTICIPATION (RECOMMENCEMENT OF PARTICIPATION) 

A participant may, at any time and for any reason, by giving written notice to the Parent or its designee, elect to withdraw from any further
participation in an Offer. Subject to limitations imposed and rules adopted by the Parent from time to time, the Participant withdrawing will, as soon as practicable, receive a certificate representing any Shares credited to the Participant’s
account as of the date of withdrawal and a check for any funds credited to the Participant’s account and not applied toward the acquisition of Shares as of that date. During the remainder of the term of any Offer, but only once, an eligible
employee may recommence participation in that Offer by executing and delivering to the Employing Corporation a new payroll deduction authorization form. Recommencement will begin in accordance with Rules 3 and 6 as if the eligible employee was
commencing participation in the Plan for the first time. 
  

	14.	 RIGHTS NOT TRANSFERABLE 

Except for transfers by will or under the laws of descent and distribution, no employee can sell, assign, transfer, pledge or otherwise dispose
of or encumber either the employee’s right to participate in the Plan or the employee’s interest in the Shares held by the Custodian, and such right and interest will not be liable for or subject to the debts, contracts or liabilities of
the employee. If any action is taken by an employee contrary to the provisions of this Rule 14, or any claim asserted by another party in respect of such right and interest, that action or claim will be treated as notice of withdrawal, and, except
as may otherwise be required by law, the provisions of Rule 13 will apply. 
  

	15.	 TERMINATION OF EMPLOYMENT 

If a Participant ceases employment for any reason, no further payroll deductions will be made from any compensation then due and owing to the
Participant at the date of cessation, and, if the Participant (or, if the Participant dies, the Participant’s personal representatives) 

 
requests, subject to limitations imposed and rules adopted by the Parent from time to time, a certificate representing the number of Shares then credited to the Participant’s account, and a
check for any excess funds contributed as of that date (and not eligible for the acquisition of Shares) will be issued and delivered to the Participant (or the Participant’s personal representatives). 

Nothing in the Plan will confer any greater employment rights to any employee of any Participating Company, and each Employing Corporation
hereby reserves the right to terminate any employee’s employment with or without notice or cause. 
  

	16.	 REORGANIZATION 

In the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, consolidation, offering of
rights or any other change in the structure of the equity share capital of the Parent, the Parent may make any adjustments (including retrospective adjustments) it deems appropriate, in its sole discretion, in the number, kind and price of Shares
available for acquisition under the Plan, and in the minimum and maximum number of Shares which a Participant is entitled to acquire. 
  

	17.	 APPROVAL OF SHAREHOLDERS 

The Plan was adopted by the Board on [●] 2020, and approved by an ordinary resolution of the shareholders, in accordance with the
requirements of Section 423(b)(2) of the Code. 
  

	18.	 TERMINATION OF THE PLAN 

The Plan and all rights of Participants will terminate on the earliest of the: 

 

	 	(a)	 date on which Participants have exercised Options to acquire the maximum number of Shares that may be acquired
under the Plan pursuant to Rule 7(d); 

  

	 	(b)	 date on which the Parent terminates the Plan; or 

 

	 	(c)	 expiry of the Plan Period. 

On termination of the Plan, all payroll deductions will cease and all amounts credited to Participants’ accounts will be equitably applied
to the acquisition of the Shares then available under the Plan and all funds accumulated under the Plan not applied to acquire Shares will be refunded to the applicable Participants. 

 

	19.	 REQUIRED APPROVALS; RESTRICTIONS 

The Plan, and all Options granted under it and other rights inherent in the Plan, are subject to receipt by the Parent of all necessary
approvals or consents of governmental agencies which the Parent, in its sole discretion, deems necessary or advisable. Subject to Rule 11, all Options granted under the Plan and all other rights inherent in the Plan are subject to any termination
and/or modification required or advisable to obtain or maintain any approval or consent or which, as a result of consequences attaching to any approval or consent, may be required or advisable in the judgment of the Parent to avoid adverse impact on
the Parent’s and the Participating Companies overall wage and salary policy. 
 The Plan, grant and exercise of Options under the Plan,
and the obligation to sell and deliver Shares on the exercise of Options, will be subject to all applicable federal and state laws, rules, and regulations and to any approvals required by any government or regulatory

 
agency. Shares will not be required to be issued or delivered before (i) the listing or quotation of the Shares on any stock exchange or regulated over-the-counter market; and (ii) the completion of any registration or qualification of the Shares under any federal or state law, or any ruling or regulation of any government body which the Parent, in
its sole discretion, determines to be necessary or advisable. 
  

	20.	 EXPENSES 

The expenses of administering the Plan will be borne by the Parent, provided that the Parent may, in its sole discretion, require any Employing
Corporation to enter into any arrangement to reimburse the Parent for any costs borne by the Parent directly or indirectly in respect of the Employing Corporation’s officers or employees. 

 

	21.	 RIGHTS OF PARTICIPANTS AND ELIGIBLE EMPLOYEES 

Participation in the Plan is outside the terms of any contract of employment. Options under the Plan are not pensionable. The rights and
obligations of a Participant under the terms and conditions of the Participant’s employment by any Participating Company will not be affected by the Participant’s participation in the Plan or any right the Participant may have to
participate in the Plan. An eligible employee who participates under the Plan waives all and any rights to compensation or damages in consequence of the termination of the employee’s office or employment with a Participating Company for any
reason whatsoever insofar as those rights arise or may arise from the employee ceasing to have rights under the Plan as a result of such termination or from the loss or diminution in value of such rights or expectation under the Plan in any
circumstances. 
  

	22.	 GOVERNING LAW 

All rights and obligations under the Plan will be construed and interpreted in accordance with the laws of the State of New York, without
giving effect to principles of conflict of laws. 

 APPENDIX 1 

DEFINITIONS 
  

	 Board 
	the board of directors for the time being of the Company or a duly constituted committee of the board; 

  

	 Code 
	the U.S. Internal Revenue Code of 1986, as amended; 

  

	 Company 
	BT Group plc, registered in England and Wales under no. 4190816; 

  

	 Custodian 
	the independent custodian designated by the Parent to acquire Shares under the Plan as agent for the Participants; 

  

	 Date of Grant 
	with respect to an Option, the date on which it is granted; 

  

	 Discretionary Share Plan 
	any Employees’ Share Plan in which participation is solely at the discretion of the Board or the Company under the plan; 

  

	 Effective Date 
	with respect to an Offer the date on which [options will be granted]; 

  

	 Employees’ Share Plan 
	has the meaning given to it in section 1166 of the Companies Act 2006; 

  

	 Employee Stock Purchase Plan 
	an Employee Stock Purchase Plan under Section 423 of the Code; 

  

	 Employing Corporation 
	a Participating Company that adopts the Plan with the consent of the Parent; 

  

	 Fair Market Value 
	on any date, an amount equal to the closing price of a Share on the London Stock Exchange. If no reported sales take place on the applicable date, the fair market value will be determined based on the average of the high bid and low offer price
of the Shares on that date, or if no such quotation is made on that date, on the next preceding day on which there were quotations, provided that the quotations were made within the ten (10) trading days preceding the applicable date;

  

	 Late Joiner 
	 any employee who: (i) although eligible to participate, does not elect to participate within the period for initial enrolment determined by the
Parent; or (ii) elected to participate within 

	 	 
the initial enrolment period, withdrew from participation, and subsequently elected to recommence participation; or (iii) becomes eligible to participate in the Plan during the term of the
Offer; 

  

	 Maximum Percentage 
	the percentage of eligible compensation available for payroll deductions which will be specified by the Parent at the beginning of the term of any Offer, and which will not exceed 15%; 

 

	 Offer 
	an offer to participate in the Plan made under Rule 5; 

  

	 Option 
	an option to acquire Shares granted under the Plan; 

  

	 Option Period 
	the period for any Offer determined by the Parent, in its sole discretion, before the commencement of the Offer which may be a month, a quarter, six months, or any other interval; 

 

	 Option Price 
	the price at which Shares may be acquired under any Option granted under the Plan; 

  

	 Parent 
	BT Group plc, registered in England and Wales under no. 4190816; 

  

	 Participant 
	any eligible employee who has been granted an Option including, if relevant, the Participant’s personal representatives; 

  

	 Participating Company 
	each corporation: 

  

	 	(a)	 as to which the Parent, directly or indirectly through an unbroken chain of corporations, owns more than
50 per cent of the total combined voting power of all classes of stock issued by such corporation; and 

  

	 	(b)	 which is designated by the Parent as a Participating Company for the purposes of the Plan;

  

	 Plan 
	the BT Group plc US Employee Stock Share Plan, as amended from time to time in accordance with the Rules; 

  

	 Plan Period 
	the period starting on the date the Plan is approved by the Company in general meeting ending on the tenth anniversary of that date; 

	 Rules 
	the rules of the Plan as amended from time to time; 

  

	 Section 423 
	Section 423 of the Code; 

  

	 Share 
	a fully paid ordinary share in the capital of the Parent; 

  

	 Trading Day 
	any day on which Shares are traded on the London Stock Exchange; and 

  

	 Variation 
	in relation to the equity share capital of the Company, a capitalisation issue, an offer or invitation made by way of rights, a subdivision, consolidation, reduction, demerger, or distribution in specie or any other variation in share capital.EX-4.3

 Exhibit 4.3 

RULES OF THE 
 BT GROUP
PLC DEFERRED BONUS PLAN 
 Authorised by shareholders on 16 July 2020 

Adopted by the Remuneration Committee on 28 July 2020 

Allen & Overy LLP 

 CONTENTS 
  

							
	Clause	  	Page	 
			
	1.	  	Definitions and interpretation	  	 	1	 
	2.	  	Grant of Awards	  	 	1	 
	3.	  	Plan limits	  	 	3	 
	4.	  	Individual limit	  	 	3	 
	5.	  	Rights in relation to Shares before Vesting or exercise of an Award	  	 	4	 
	6.	  	Vesting of Awards	  	 	4	 
	7.	  	Exercise and lapse of Awards	  	 	8	 
	8.	  	Vesting and exercise of Awards and delivery of Shares	  	 	9	 
	9.	  	Adjustment of Awards	  	 	10	 
	10.	  	Administration	  	 	11	 
	11.	  	Amendment	  	 	122	 
	12.	  	General	  	 	13	 
	13.	  	Governing law	  	 	155	 
		
	 Appendix
	  			
			
	1.	  	Definitions	  	 	166	 
	2.	  	U.S.	  	 	211	 

	1.	 DEFINITIONS AND INTERPRETATION 

 

	1.1	 Definitions 

The words and expressions used in the Rules which have initial capital letters have the meanings set out in Appendix 1. 

 

	1.2	 Interpretation 

The headings in the Rules are for convenience and should be ignored when construing the Rules. Unless the context otherwise requires, words in
the singular include the plural and vice versa and words implying either gender include both genders. 
 Reference in the Rules to any
statutory provisions are to those provisions as amended or re-enacted from time to time, and include any regulations or other subordinate legislation made under them. 

 

	2.	 GRANT OF AWARDS 

 

	2.1	 Operation of the Plan 

The Remuneration Committee may, from time to time, set the policies for the Company’s operation and administration of the Plan within the
terms of the Rules. The policies may include the determination of: 
  

	 	(a)	 the Eligible Employees who may be granted Awards; 

 

	 	(b)	 the extent of Eligible Employees’ participation; 

 

	 	(c)	 the Deferred Period(s) of an Award; 

 

	 	(d)	 whether any dividend equivalents will be payable under Rule 6.14, and, if so, on what basis;

  

	 	(e)	 whether an Award will be granted as a Conditional Award or a Nil-Cost
Option; and 

  

	 	(f)	 how Awards are granted. 

 

	2.2	 How Awards are granted 

The Remuneration Committee may, at its discretion, grant to any Eligible Employee who has been awarded a Bonus an Award over the whole number
of Shares it determines in accordance with the Rules. An Award can be granted on the basis that it will Vest in one tranche at the end of a Deferred Period or in tranches over more than one Deferred Period. 

The grant of an Award to an Eligible Employee on a particular basis does not create the right or expectation of the grant of an Award on the
same basis, or at all, in the future. 
 An Award will be granted so that it constitutes a binding agreement between the Company and the
Participant. A single deed of grant may be executed in favour of any number of Participants. There will be no payment for the grant of an Award. 

  
 1 

	2.3	 When Awards can be granted 

Awards may usually only be granted during the period of 42 days commencing on the day: 

 

	 	(a)	 after the date on which the Company releases its results for any financial period; 

 

	 	(b)	 after the determination of any Bonus in respect of which an Award is to be made; 

 

	 	(c)	 immediately following any general meeting of the Company; or 

 

	 	(d)	 following the lifting of any restrictions imposed by statute, order, regulation or the provisions of the Market
Abuse Regulation. 

 No Awards may be granted during a Closed Period or after the Plan Period. 

 

	2.4	 Other terms and conditions 

The Vesting of an Award may be subject to any terms and conditions determined by the Remuneration Committee which will normally have to be met
before the Award can Vest. Different conditions can apply to different Participants. Any term or condition must be stated in writing at the Date of Grant. The Remuneration Committee will decide whether and to what extent a term or condition to which
an Award is subject has been met. 
  

	2.5	 Approvals and consents 

The grant of an Award will be subject to obtaining any approval or consent required under any applicable regulations or enactments. 

 

	2.6	 Notification of grant 

A Participant will be notified of the grant of an Award and will be issued with a document (which may be in electronic form) specifying: 

 

	 	(a)	 the Date of Grant; 

  

	 	(b)	 the number of Shares under the Award; 

 

	 	(c)	 whether dividend equivalents will be payable under Rule 6.14, and, if so, on what basis; 

 

	 	(d)	 any term or condition to which the Award is subject; and 

 

	 	(e)	 the Deferred Period of the Award. 

 

	2.7	 Awards personal to Participants and not pensionable 

An Award cannot, nor can any rights in respect of it, be transferred, assigned, charged or otherwise disposed of to any person except that, on
the death of a Participant, an Award may be transmitted to the Participant’s personal representatives. No pension benefits will accrue on the value of Awards. 
  

	2.8	 National Insurance elections and agreements 

The Company may require a Participant resident for tax purposes in the UK to enter into an agreement under paragraph 3A of Schedule 1 to the
Social Security Contributions and 

  
 2 

 
Benefits Act 1992 (the SSCBA) or to make an election under paragraph 3B of Schedule 1 to the SSCBA in relation to any secondary Class 1 National Insurance contributions arising on the
vesting of the Award. 
  

	3.	 PLAN LIMITS 

  

	3.1	 The 10 per cent. limit over 10 years 

The number of Shares that may be allocated under the Plan on any day cannot, when added to the number of Shares allocated in the previous 10
years under the Plan and any other Employees’ Share Plan adopted by the Company, exceed the number of Shares that is equal to 10 per cent. of the ordinary share capital of the Company in issue on the last Dealing Day before that day. 

 

	3.2	 The 5 per cent. limit over 10 years 

The number of Shares that may be allocated under the Plan on any day cannot, when added to the aggregate of the number of Shares allocated in
the previous 10 years under the Plan and any other Discretionary Share Plan adopted by the Company, exceed the number of Shares that is equal to 5 per cent. of the ordinary share capital of the Company in issue on the last Dealing Day
before that day. 
  

	3.3	 Exclusions from the limits in this Rule 3 

In calculating the limits in this Rule 3, any Shares where the right to acquire them was released, cancelled or lapsed without Vesting or being
exercised, as appropriate, will be disregarded. 
  

	3.4	 Meaning of allocation 

References in this Rule 3 to the allocation of Shares mean, in the case of a share award or option plan, the placing of unissued Shares
or Shares held in treasury under award or option and, in relation to other types of Employees’ Share Plan, mean the issue and allotment of Shares or the transfer of Shares out of treasury. The placing of Shares held in treasury under award or
option or the transfer of Shares out of treasury may be disregarded if the share incentive scheme guidelines of the Investment Association are amended to permit the use of Shares held in treasury to be disregarded. 

 

	3.5	 Adjustment to Shares to be taken into account 

Where Shares transferred out of treasury or Shares issued under the Plan or any other Employees’ Share Plan of the Company are to be taken
into account for the purposes of the limits in this Rule 3 and a Variation has taken place between the date of transfer or issue of those Shares and the date on which the limit is to be calculated, then the number of Shares taken into account for
the purposes of the limit will be adjusted in the manner the Board considers appropriate to take account of the Variation. 
  

	4.	 INDIVIDUAL LIMIT 

The number of Shares subject to an Award will be calculated by reference to the amount of the Bonus awarded to a Participant and so that the
Market Value of the Shares at the Date of Grant of the Award is not greater than a maximum percentage of the Bonus determined by the Remuneration Committee from time to time. Any Award granted to an executive director of the Company will be granted
so that it complies with the directors’ remuneration policy of the Company as approved by shareholders of the Company from time to time. 

  
 3 

	5.	 RIGHTS IN RELATION TO SHARES BEFORE VESTING OR EXERCISE OF AN AWARD 

A Participant has no voting rights, rights to any dividends or any other rights attaching to the Shares the subject of an Award before the
Vesting of a Conditional Award or the exercise of a Nil-Cost Option. 
  

	6.	 VESTING OF AWARDS 

 

	6.1	 General rule for Vesting 

Subject to Rule 6.12, and except as otherwise provided in this Rule 6 and in Rule 7, an Award will Vest at the end of the Deferred Period(s)
provided that the Participant is then in Employment. 
  

	6.2	 Vesting in a Closed Period 

Unless the Vesting of a Conditional Award and the subsequent delivery of Shares is permitted under the Dealing Code, a Conditional Award will
not Vest on a day which is in a Closed Period. If a Conditional Award would, but for this Rule 6.2, have Vested on a day which is in a Closed Period, the Conditional Award will Vest on the first Dealing Day following the end of the Closed Period.

  

	6.3	 Vesting following ceasing to be in Employment (Good Leaver) 

Subject to Rules 6.12, 6.13 and 7, if a Participant ceases to be in Employment before the end of the Deferred Period(s) due to: 

 

	 	(a)	 their injury, ill-health, disability (each as evidenced to the
satisfaction of the Remuneration Committee) or Redundancy; 

  

	 	(b)	 the company which employs the Participant ceasing to be under the Control of the Company;

  

	 	(c)	 the transfer or sale of the undertaking or part-undertaking in which the Participant is employed to a person
who is not a Group Company; or 

  

	 	(d)	 any other reason (except for dishonesty, fraud, misconduct or any other circumstances justifying summary
dismissal) the Remuneration Committee determines appropriate in a particular case, 

 then, unless the Remuneration
Committee determines otherwise, a Participant’s Award(s) will continue to be held by the Participant and will Vest at the end of the Deferred Period(s) or, if the Remuneration Committee so determines, will Vest as soon as possible following the
cessation of the Participant’s employment. 
  

	6.4	 Lapse following cessation of Employment in other circumstances 

If a Participant ceases to be in Employment before the end of any Deferred Period(s) in any circumstances other than those referred to in Rule
6.3 or 6.7, the Participant’s Award(s) will lapse immediately on the date the Participant gives or is given notice of cessation of Employment or ceases to be in Employment without any notice being given. 

  
 4 

	6.5	 Disciplinary procedures 

Unless the Remuneration Committee determines otherwise, a Participant’s Award will not Vest and a
Nil-Cost Option cannot be exercised under this Rule 6 if, at the time it would otherwise have Vested or been exercised, as appropriate, the Participant is under investigation under the disciplinary procedures
applicable to the Participant. The Award may Vest and Nil-Cost Option be exercised, subject to the Rules, following the resolution and dependent on the outcome of the disciplinary procedures. 

 

	6.6	 Approved leave of absence 

For the purposes of this Rule 6 and Rule 7, a Participant who leaves Employment while on an approved leave of absence will cease Employment on
the date on which the Participant indicates either that the Participant does not intend to return to work or will not be returning to work. If the Participant gives no indication, the Participant will cease Employment on the day after the date on
which the Participant was due to return to work. 
  

	6.7	 Death 

Any Award held by a Participant who dies will Vest on the date of death and will be transferred to the Participant’s personal
representatives as soon as practicable. The value of the Award may be delivered in cash in accordance with Rule 8.5. 
  

	6.8	 Transfer overseas 

If a Participant transfers from one jurisdiction to another and continues or will continue to hold an office or employment with a Group Company
as a result of that transfer and will either: 
  

	 	(a)	 become subject to tax in the country to which the Participant is transferred so that the Participant will
suffer a tax disadvantage on the Vesting or exercise of an Award following the transfer; or 

  

	 	(b)	 become subject to restrictions on acquiring Shares on the Vesting or exercise of an Award or dealing in the
Shares that may be acquired on the Vesting or exercise of an Award because of the laws of the country to which the Participant is transferred, 

the Remuneration Committee may, at its discretion and subject to Rules 6.12 and 6.13, allow any Award held by that Participant to Vest during
the period beginning three months before and ending three months after the transfer of the Participant. The Remuneration Committee will determine the period during which any Nil-Cost Option can be exercised in
these circumstances. 
  

	6.9	 Corporate transactions 

Subject to Rule 7, and provided the Award is not to be exchanged under Rule 6.10, an Award will Vest on the date on which: 

 

	 	(a)	 Takeover: an offeror (either alone or together with others, if any, acting in concert with the offeror)
obtains Control of the Company as a result of making a general offer to acquire all of the issued ordinary shares of the Company or all of the shares of the Company which are of the same class as the Shares and which, in either case, are not at the
time owned by the offeror or any company Controlled by the offeror and/or persons acting in concert with the offeror; 

  
 5 

	 	(b)	 Section 979 notice: a person first becomes bound or entitled to acquire Shares under
sections 979 to 982 of the Companies Act 2006, or would be so entitled but for the fact that there were no dissenting shareholders; and 

  

	 	(c)	 Compromise or arrangement under section 899: the court sanctions a compromise or arrangement between the
Company and its shareholders under section 899 of the Companies Act 2006. 

  

	6.10	 Reorganisation 

If a company (the Successor Company) has obtained Control of the Company, and either: (a) the shareholders of the Successor Company
immediately after it has obtained Control are substantially the same as the shareholders of the Company immediately before that event; or (b) the Remuneration Committee (as constituted before the relevant event) decides and the Successor
Company consents to the exchange of Awards under this Rule 6.10, Awards will not Vest pursuant to Rule 6.9 but will be exchanged for equivalent Awards (as determined by the Remuneration Committee as constituted before the relevant event) in respect
of shares in the Successor Company or another company within the Successor Company’s group. 
  

	6.11	 Winding up 

Subject to Rule 7, an Award will Vest: 
  

	 	(a)	 immediately before the passing of a resolution for the voluntary
winding-up of the Company; or 

  

	 	(b)	 on the Court making an order for the winding-up of the Company.

 This Rule 6.11 will not apply where the winding-up in either case is for the
purpose of a reorganisation within Rule 6.10. 
  

	6.12	 Terms and conditions 

An Award will only Vest under Rule 6.1, 6.3 or 6.8 if, and to the extent that, any conditions imposed under Rule 2.4 have been satisfied at the
date of the relevant event, or any other date determined by the Remuneration Committee. Where the Remuneration Committee is required to determine the extent of Vesting of an Award following the occurrence of an event under which the Award Vests
before the end of the Deferred Period(s), the Remuneration Committee will be as constituted before the occurrence of the relevant event. 
  

	6.13	 Pro rata reduction 

The number of Shares in respect of which an Award will Vest pursuant to Rule 6.3 or 6.8 will be reduced on a pro rata basis to take account of
the time that has elapsed between the Date of Grant and the date of the relevant event as a proportion of the period between the Date of Grant and the end of the Deferred Period. However, the Remuneration Committee will have discretion to determine
that an Award will Vest as to either a greater or lesser number of Shares than it would otherwise have done pursuant to this Rule 6.13 if it believes that there are circumstances that warrant such a determination. 

  
 6 

	6.14	 Dividend equivalents 

A Participant may, at the discretion of the Remuneration Committee, receive cash or further Shares equal in value, so far as possible, to any
dividends paid or payable on the Shares in relation to which a Conditional Award Vests or a Nil-Cost Option is exercised, by reference to record dates from the Date of Grant until the date of Vesting or date
of exercise, as appropriate. The dividend equivalent entitlement may be operated on any basis the Remuneration Committee determines is appropriate. Any payment due under this Rule 6.14 will be made net of any Tax Liability due in respect of it. 

 

	6.15	 Reduction of number of Shares subject to an Award–Malus 

If a Relevant Event occurs before the Vesting of an Award or part of an Award or the exercise of a
Nil-Cost Option, the Remuneration Committee may, in its absolute discretion, determine that a reduction in the number of Shares subject to the Award is justified and/or that the Vesting or exercise of the
Award is made subject to further conditions. In such circumstances, the Remuneration Committee may reduce (including to zero) the number of Shares subject to the Award to take account of the relevant circumstances. If the Remuneration Committee
exercises its discretion under this Rule 6.15, it will confirm this in writing to the affected Participant as soon as is reasonably practicable, the Award will be deemed to have been granted over the lower number of Shares and the Vesting of the
Award or the exercise of the Nil-Cost Option in accordance with the Rules will be by reference to the reduced number of Shares and any further conditions imposed by the Remuneration Committee. 

 

	6.16	 Clawback 

If a Relevant Event occurs at any time within the Clawback Period the Remuneration Committee may, in its absolute discretion, require a
Participant to repay, in the manner it determines, such number of Shares (or cash amount) received in respect of the Award (or such cash amount representing the value of the Shares) as the Remuneration Committee considers appropriate. The
Remuneration Committee will determine whether the Clawback is to be net or gross of any Tax Liability met by the Participant in respect of the Award. 

To satisfy any clawback, the Remuneration Committee may reduce (including, if appropriate, to zero) any of the following elements of the
remuneration of the Participant: 
  

	 	(a)	 the amount of any future bonus which would, but for the operation of clawback, be payable to the Participant
under any bonus plan operated by any Group Company; and/or 

  

	 	(b)	 the number of Shares subject to any subsisting award held by the Participant under any deferred bonus plan
operated by any Group Company; and/or 

  

	 	(c)	 the number of Shares subject to any subsisting Award and/or other award held by the relevant individual under
the Plan or any other employees’ share plan or share award arrangement (except for any award which is tax-advantaged pursuant to Schedules 2 to 5 inclusive of the Income Tax (Earnings and Pensions) Act
2003) notwithstanding the extent to which any performance condition and/or any other condition imposed on any such Award and/or other award (as relevant) has been satisfied; and/or 

 

	 	(d)	 require the Participant to pay to the Group Company the Remuneration Committee directs, and on the terms the
Remuneration Committee directs (including, without limitation, on terms that the amount is to be deducted or withheld from the Participant’s salary or from any other payment to be made to the Participant by any Group Company), the amount
required for the clawback to be satisfied in full. 

  
 7 

 Any reduction made pursuant to this Rule 6.16 will be made at the time or times the
Remuneration Committee determines appropriate and which, in the case of unvested awards, will be at the time they would otherwise ordinarily vest, unless the Remuneration Committee decides otherwise. 

The Remuneration Committee may decide at any time that an Award will lapse in respect of a number of Shares to give effect to a clawback
provision of any form contained in any other employees’ share or incentive plan (other than this Plan) or bonus plan operated by any Group Company. The extent to which an Award will lapse will be in accordance with the terms of the clawback
provision in the relevant plan or, in the absence of any such term, on the basis the Remuneration Committee considers appropriate. 
  

	7.	 EXERCISE AND LAPSE OF AWARDS 

 

	7.1	 Period of exercise 

Subject to Rule 7.2, a Vested Nil-Cost Option may be exercised until the tenth anniversary of its Date
of Grant. However, if an event referred to in Rule 6 occurs, a Nil-Cost Option will be exercisable, to the extent permitted by the Dealing Code, during the period of: 

 

	 	(a)	 twelve months from the date of Vesting under Rule 6.3; 

 

	 	(b)	 twelve months from the date on which the Participant ceased to be in Employment under Rule 6.3 and the
cessation occurred after Vesting of the Nil-Cost Option; 

  

	 	(c)	 twelve months from the death of a Participant; 

 

	 	(d)	 six months from the occurrence of any of the circumstances permitting the vesting of Nil-Cost Options under Rule 6.9(a) or (c); 

  

	 	(e)	 six weeks from the date referred to in Rule 6.9(b); 

 

	 	(f)	 one month following the making of an order by the court for the
winding-up of the Company (except where the winding-up is for the purpose of a reconstruction or amalgamation). 

 

	7.2	 Lapse of Awards 

An Award will lapse on the earliest of: 
  

	 	(a)	 in the case of Nil-Cost Options, the expiry of any of the periods
referred to in Rule 7.1; 

  

	 	(b)	 the date on which a Participant ceases to be in Employment before the end of the Deferred Period in any
circumstances other than those referred to in Rule 6.3 or Rule 6.7 and to the extent that the Remuneration Committee determined to preserve all or part of an Award under those Rules; 

 

	 	(c)	 the Participant being deprived of the legal or beneficial ownership of the Award by operation of law, or doing
or omitting to do anything which causes the Participant to be so deprived or being declared bankrupt; 

  
 8 

	 	(d)	 the Participant attempting to breach Rule 2.7; and 

 

	 	(e)	 as soon as any condition imposed under Rule 2.4 can, in the opinion of the Remuneration Committee, no longer be
met. 

  

	7.3	 Lapse where no or partial Vesting 

Where, as a result of the application of Rule 6.12 or 6.13, an Award has not Vested or has only Vested in part, the part of the Award that has
not Vested will lapse immediately. 
  

	8.	 VESTING AND EXERCISE OF AWARDS AND DELIVERY OF SHARES 

 

	8.1	 Consequences of Vesting of Conditional Awards 

The Shares subject to a Conditional Award in respect of which it has Vested will, subject to the other provisions of this Rule 8 and Rule 12.7,
be delivered to the Participant (or the Participant’s nominee) within 30 days following the date of Vesting of the Award. 
  

	8.2	 Consequences of exercise of Nil-Cost Options

 A Nil-Cost Option may be exercised over the number of Shares in respect of
which it has Vested. The Shares in respect of which a Nil-Cost Option is exercised will, subject to the other provisions of this Rule 8 and Rule 12.7, be delivered to the Participant (or the Participant’s
nominee) within 30 days of the Option Exercise Date. 
  

	8.3	 Procedure for exercise of Nil-Cost Options

 To exercise a Nil-Cost Option, a Participant must complete and deliver a
notice of exercise in the form prescribed by the Remuneration Committee properly completed by the Participant (or by the Participant’s duly authorised agent). 
  

	8.4	 Nominal value of Shares 

The Remuneration Committee may require as a condition of Vesting of a Conditional Award or exercise of a
Nil-Cost Option that the Participant pay up the nominal value of the Shares subject to the Award in the manner the Remuneration Committee determines. 

 

	8.5	 Satisfaction of Awards in cash 

Subject to Rule 12.7, the Company may, in lieu of the Participant’s right to receive Shares pursuant to Rule 8.1 or 8.2 following the
Vesting of a Conditional Award or part of a Conditional Award or exercise of a Nil-Cost Option make a cash payment equal to the Market Value of the Shares in respect of which the Conditional Award had Vested
or Nil-Cost Option been exercised. This Rule 8.2 will not apply to Awards made in any jurisdiction where it would cause: 
  

	 	(a)	 the grant of the Award to be unlawful or for it to fall outside any applicable securities law exemption; or

  

	 	(b)	 adverse tax or accounting consequences for the Participant and/or any Group Company. 

  
 9 

	8.6	 Delivery of net number of Shares 

 

	 	(a)	 The Company may, in lieu of the Participant’s right to receive the full number of Shares pursuant to Rule
8.1 determine, either: 

  

	 	(i)	 to reduce the number of Shares in respect of which that Award will Vest by a number of Shares that have a value
at least (in its estimation) equal to the Tax Liability of the Participant that would have arisen in connection with the Vesting of the Award, so that the Award becomes an entitlement to receive both the reduced number of Shares and a cash amount
(the Cash Amount) equal to the value of the number of shares by which the Award is reduced (the Adjusted Award) and procure that the relevant Group Company applies such of the Cash Amount as is necessary in making a payment directly to
the relevant tax authority to discharge the Tax Liability of the Participant that arises as a result of the Vesting of the Adjusted Award (with any surplus cash being returned to the Participant); or 

 

	 	(ii)	 that the Award will only Vest in respect of the number of Shares subject to it in respect of which the
Participant has provided to the relevant Group Company the funds sufficient to meet the Tax Liability arising, with the remainder of the Shares subject to the Award Vesting subsequently when Vesting would not occur in a Closed Period.

  

	 	(b)	 This Rule 8.6 will not apply to Awards made in any jurisdiction where it would cause: 

 

	 	(i)	 the grant of the Award to be unlawful or for it to fall outside any applicable securities law exemption; or

  

	 	(ii)	 adverse tax or accounting consequences for the Participant and/or any Group Company. 

 

	8.7	 Consents 

The delivery of any Shares or cash under the Plan will be subject to obtaining any necessary approval or consent required under any applicable
regulations or enactment. 
  

	8.8	 Ranking of Shares 

Shares acquired by a Participant under the Plan will rank equally in all respects with the Shares then in issue, except that they will not be
entitled to any rights attaching to Shares by reference to a record date falling before the day on which the Participant is entered on the Company’s register of shareholders in respect of those Shares. 

 

	8.9	 Listing 

While the Shares are Listed, the Company will apply for the Listing of any Shares issued pursuant to the Plan as soon as practicable after
their allotment. 
  

	9.	 ADJUSTMENT OF AWARDS 

 

	9.1	 Variation in equity share capital 

If there is a Variation, or any other corporate event which in the reasonable opinion of the Remuneration Committee justifies an adjustment,
the number and/or type of Shares over which an Award is granted may be adjusted in the manner the Remuneration Committee determines but so that the underlying economic value of the Award remains unchanged. 

  
 10 

	9.2	 Notifying Participants 

The Remuneration Committee will take any steps it considers necessary to notify Participants of any adjustments made under this Rule 9. 

 

	10.	 ADMINISTRATION 

 

	10.1	 Administration of the Plan 

The Plan will be administered by the Remuneration Committee. The Remuneration Committee has full authority, consistent with the Rules, to
administer the Plan, including authority to interpret and construe any provision of the Plan and to adopt any regulations for administering the Plan and any documents it thinks necessary or appropriate. The Remuneration Committee’s decision on
any matter concerning the Plan will be final and binding. The Remuneration Committee may delegate its authority under this Rule 10.1. 
  

	10.2	 Costs 

The Company will bear the costs of introducing and operating the Plan (including, but not limited to, stamp duty, stamp duty reserve tax and
any other costs relating to the issue or transfer of Shares on the Vesting or exercise of Awards). The Company may require any Group Company to enter into an agreement which obliges that company to reimburse the Company for any costs borne by the
Company, directly or indirectly, in respect of the Group Company’s officers or employees. 
  

	10.3	 Shares to cover Awards 

The Company will ensure that sufficient Shares are available to satisfy all outstanding Awards. 

 

	10.4	 Notices 

Any notice or other communication in connection with the Plan will be in writing and may be given: 

 

	 	(a)	 by personal delivery; or 

 

	 	(b)	 by sending it by post: 

 

	 	(i)	 in the case of a company, to its registered office or other address that it notifies in writing; and

  

	 	(ii)	 in the case of an individual, to the individual’s last known address or, where the individual is a
director or employee of a Group Company, either to the individual’s last known address or to the address of the place of business at which the individual performs the whole or substantially the whole of the duties of the individual’s
office or employment; or 

  

	 	(c)	 by sending it by email or any form of electronic transfer acceptable to the Remuneration Committee:

  

	 	(i)	 in the case of a company, to the email address or other address that the company notifies; and

  
 11 

	 	(ii)	 in the case of an individual, to the individual’s last known email address or, where the individual is a
director or employee of a Group Company, to the individual’s email address. 

  

	10.5	 Time of service of notice 

Any notice under Rule 10.4 will be given: 
  

	 	(a)	 if delivered, at the time of delivery; 

 

	 	(b)	 if posted, at 10.00am on the second business day after it was put into the post; or 

 

	 	(c)	 if sent by email or any other form of electronic transfer, at the time of despatch. 

In proving service of notice, it will be sufficient to prove that delivery was made or that the envelope containing it was properly addressed,
prepaid and posted or that the email or other form of electronic transfer was properly addressed and despatched, as appropriate. 
  

	10.6	 Documents sent to shareholders 

Participants may, but are not entitled to, receive copies of any notice or document sent by the Company to the holders of Shares. 

 

	10.7	 Local currency equivalent 

The Remuneration Committee may determine, for any relevant jurisdiction, the exchange rate between pounds sterling and the relevant currency to
be applied where it is necessary to convert from pounds sterling to that currency or vice versa for the purposes of the Plan. 
  

	11.	 AMENDMENT 

  

	11.1	 Remuneration Committee’s power to amend the Plan 

Subject to the provisions of this Rule 11, the Remuneration Committee can at any time amend any of the Rules of the Plan in any respect. 

 

	11.2	 Shareholder approval 

Subject to Rule 11.4, no amendment can be made to the advantage of Participants or Eligible Employees to the: 

 

	 	(a)	 persons to whom Awards may be granted; 

 

	 	(b)	 limit on the number of Shares which may be allocated under the Plan; 

 

	 	(c)	 maximum entitlement for individual Participants; 

 

	 	(d)	 rights attaching to Awards and Shares; 

 

	 	(e)	 rights of Participants in the event of a Variation; or 

 

	 	(f)	 terms of this Rule 11.2, 

without prior approval by ordinary resolution of the members of the Company in general meeting. 

  
 12 

	11.3	 Participants’ approval 

No amendment will be made under Rule 11.1 which would abrogate or materially affect adversely the subsisting rights of a Participant unless it
is made: 
  

	 	(a)	 with the written consent of Participants who hold Awards under the Plan to acquire 75 per cent. of the
Shares which would be delivered if all of the Awards granted and subsisting under the Plan Vested and in the case of Nil-Cost options were exercised in full; or 

 

	 	(b)	 by a resolution of a meeting of Participants passed by not less than 75 per cent. of the Participants who
attend and vote either in person or by proxy, 

 and, for the purposes of this Rule 11.3, the provisions of the articles of
association of the Company and of the Companies Act 2006 relating to shareholder meetings will apply with the necessary changes. 
  

	11.4	 Permitted amendments 

Rule 11.2 will not apply to any amendment which is: 
  

	 	(a)	 minor and to benefit the administration of the Plan; 

 

	 	(b)	 to take account of any changes in legislation; or 

 

	 	(c)	 to obtain or maintain favourable tax, exchange control or regulatory treatment for the Company, any Group
Company or any present or future Participant. 

  

	11.5	 Additional schedules 

The Board may adopt additional schedules to the Plan applicable in any jurisdiction, under which Awards may be subject to additional and/or
modified terms and conditions, having regard to any securities, exchange control or taxation laws, regulations or practice which may apply to the Participant, the Company or any Group Company. Any additional schedule must conform to the basic
principles of the Plan and must not enlarge to the benefit of Participants the limits in Rule 3 or 4. Any additional schedule and all Awards granted under that schedule will be governed by and construed in accordance with the laws of England. 

 

	11.6	 Notice of amendments 

Participants will be given written notice of any material amendments to the Plan made under this Rule 11 which affect them as soon as
reasonably practicable after they have been made. 
  

	11.7	 Prohibited amendment 

No amendment will be made to the Plan if, as a result of the amendment, it would cease to be an Employees’ Share Plan. 

 

	12.	 GENERAL 

  

	12.1	 Termination of the Plan 

The Plan will terminate at the end of the Plan Period or at any earlier time determined by the Board. Termination of the Plan will not affect
Awards granted before termination. 

  
 13 

	12.2	 Funding the Plan 

The Company and any Group Company may provide money to the Trustees or any other person to enable them to acquire Shares to be held for the
purposes of the Plan, or enter into any guarantee or indemnity for those purposes, to the extent permitted by any applicable law. 
  

	12.3	 Rights of Participants and Eligible Employees 

Nothing in the Plan will give any officer or employee of any Group Company any right to participate in the Plan. Participation in one grant
does not imply a right to participate or be considered for participation in a later grant. The rights and obligations of any individual under the terms of the individual’s office or employment with a Group Company will not be affected by the
individual’s participation in the Plan nor any right which the individual may have to participate under it. A Participant holding an Award will not have any rights of a shareholder of the Company with respect to that Award or the Shares subject
to it. 
  

	12.4	 No rights to compensation or damages 

A Participant waives all and any rights to compensation or damages for the termination of the Participant’s office or employment with a
Group Company for any reason whatsoever (including unlawful termination of employment) insofar as those rights arise or may arise from the Participant ceasing to have rights under the Plan as a result of that termination or from the loss or
diminution in value of such rights or entitlements. Nothing in the Plan or in any document executed under it will give any person any right to continue in employment or will affect the right of any Group Company to terminate the employment of any
Participant or Eligible Employee or any other person without liability at any time, with or without cause, or will impose on the Company, any Group Company, the Board or the Trustees or their respective agents and employees any liability in
connection with the loss of a Participant’s benefits or rights under the Plan or as a result of the exercise of a discretion under the Plan for any reason as a result of the termination of the Participant’s employment. 

 

	12.5	 The benefits of Rules 12.3 and 12.4 

The benefit of Rules 12.3 and 12.4 is given for the Company, for itself and as trustee and agent of all the Group Companies. The Company will
hold the benefit of these Rules on trust and as agent for each of them and may assign the benefit of this Rule 12.5 to any of them. 
  

	12.6	 Articles of association 

Any Shares acquired on the Vesting or exercise of Awards will be subject to the articles of association of the Company from time to time. 

 

	12.7	 Withholding for Tax Liability 

Any Group Company, former Group Company or Trustee may withhold such amounts and/or make such arrangements as it considers necessary to meet
any Tax Liability for which it or any other Group Company or former Group Company is liable to account in connection with the Vesting or exercise of Awards, including the delivery of a reduced number of Shares pursuant to Rule 8.6 or the sale of
Shares on behalf of a Participant, unless the Participant discharges the Tax Liability. 

  
 14 

	12.8	 Severability 

The invalidity or non-enforceability of one or more provisions of the Plan will not affect the validity
or enforceability of the other provisions of the Plan. 
  

	12.9	 Third parties 

The Plan confers no benefit, right or expectation on an individual who is not a Participant. No third party has any rights under the Contracts
(Rights of Third Parties) Act 1999 to enforce any term of this Plan. Any other right or remedy which a third party may have is unaffected by this Rule 12.9. 
  

	12.10	 Data protection 

Eligible Employees acknowledge that personal data in relation to them may be collected, held and processed by the Company, a Group Company
and/or the Trustees, and may be passed on to a third party broker, registrar, administrator and/or future purchaser of the Company for the operation or administration of the Plan. 

Further information about how the Company processes personal data of Eligible Employees is set out in the Company’s BT Shareplan and
Shareholder Privacy Notice and Employee Privacy Notice, available on the Company’s intranet on the BT’s Privacy Policies webpage at: https://intra.bt.com/bt/lgc/compliance/data/dg_what/dp/Pages/policies.aspx 

As a condition of their participation in the Plan, Eligible Employees acknowledge and agree that the processing of personal data as described
in this Rule 12.10 is necessary for the operation and administration of the Plan, including where such processing may fall outside the scope of EU data protection laws (e.g. in respect of Eligible Employees who are not citizens, or applicable
residents, of the European Union). 
  

	13.	 GOVERNING LAW 

These Rules will be governed by and construed in accordance with the laws of England. All Participants, the Company and any other Group Company
will submit to the jurisdiction of the English courts in relation to any dispute (including non-contractual disputes) arising under the Plan. 

  
 15 

 APPENDIX 1 

DEFINITIONS 
  

	 Appendix 1 
	this Appendix 1 which forms part of the Rules; 

  

	 Award 
	a Conditional Award or a Nil-Cost Option; 

  

	 Board 
	the board of directors for the time being of the Company or a duly authorised committee of the board, which may include the Remuneration Committee; 

  

	 Bonus 
	the cash amount payable to an Eligible Employee pursuant to any bonus plan operated by any Group Company; 

  

	 Clawback Period 
	the period commencing on the Vesting of an Award determined by the Remuneration Committee at the Date of Grant and which will normally be a period of two years; 

 

	 Closed Period 
	a period when a Participant is prohibited from dealing in Shares under the Criminal Justice Act 1993, the Market Abuse Regulation or the Dealing Code, or under any other statute, regulation or similar code to which the Company is subject;

  

	 Company 
	BT Group plc, registered in England and Wales under no. 4190816; 

  

	 Conditional Award 
	a conditional right to acquire Shares granted or proposed to be granted under the Plan; 

  

	 Control 
	in relation to a body corporate, the power of a person to secure: 

  

	 	(a)	 by means of the holding of shares or the possession of voting power in or in relation to that or any other body
corporate; or 

  

	 	(b)	 by virtue of any power conferred by the articles of association or other document regulating that or any other
body corporate, 

  

	 	that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person, and Controlled will be construed accordingly; 

  
 16 

	 Date of Grant 
	with respect to an Award, the date on which it is granted; 

  

	 Dealing Code 
	the share dealing code adopted by the Company, as amended from time to time; 

  

	 Dealing Day 
	any day on which the London Stock Exchange is open for the transaction of business; 

  

	 Deferred Period 
	in relation to an Award, the period or periods specified at the Date of Grant and at the end of which all or part of an Award may Vest, which will normally be a period of three years but may be more or less, at the discretion of the Remuneration
Committee; 

  

	 Discretionary Share Plan 
	any Employees’ Share Plan in which participation is solely at the discretion of the Board or the Company; 

  

	 Eligible Employee 
	any person who, at the Date of Grant is an employee of a Group Company; 

  

	 Employees’ Share Plan 
	has the meaning given to it in section 1166 of the Companies Act 2006; 

  

	 Employment 
	employment as an employee of a Group Company; 

  

	 Group Company 
	the Company, and any company which is either a subsidiary of the Company or a subsidiary of the Company’s holding company (subsidiary and holding company having the meanings given to them in section 1159 Companies Act 2006);

  

	 Listed 
	admitted to trading on the London Stock Exchange or any other recognised stock exchange, and Listing will be construed accordingly; 

  

	 London Stock Exchange 
	the London Stock Exchange plc or any successor body carrying on the business of the London Stock Exchange plc; 

  

	 Market Abuse Regulation 
	Regulation (EU) No 596/2014 of the European Parliament and the Council of 16 April 2014 on market abuse; 

  
 17 

	 Market Value 
	in relation to a Share on any day: 

  

	 	(a)	 if the Shares are Listed, an amount equal to its middle market quotation as derived from the Daily Official
List of the London Stock Exchange on the Dealing Day immediately before that day or on any other day or days agreed by the Remuneration Committee; or 

  

	 	(b)	 if the Shares are not Listed, an amount equal to its market value, determined in accordance with Part VIII of
the Taxation of Chargeable Gains Act 1992; 

  

	 Nil-Cost Option 
	a conditional right to acquire Shares for no or a nominal payment granted or proposed to be granted under the Plan; 

  

	 Option Exercise Date 
	the date when the exercise of a Nil-Cost Option is effective because it complies with Rule 8.3; 

  

	 Participant 
	any individual who holds an Award including, if relevant, the Participant’s personal representatives; 

  

	 Plan 
	the BT Group plc Deferred Share Plan, as amended from time to time in accordance with the Rules; 

  

	 Plan Period 
	the period starting on the date the Plan is approved by the Company in general meeting and ending on the tenth anniversary of that date; 

  

	 Redundancy 
	the termination of a Participant’s Employment attributable wholly or mainly to the fact that: 

  

	 	(a)	 the employer has ceased or intends to cease: 

 

	 	(i)	 to carry on the business for the purpose of which the employee was employed; or 

 

	 	(ii)	 to carry out that business on the place the employee was employed; or 

 

	 	(b)	 the requirements of that business: 

 

	 	(i)	 for employees to carry out work of a particular kind; or 

 

	 	(ii)	 to carry out that work in the place where the employee was employed, 

 

	 	have ceased or diminished or are expected to cease or diminish; 

	 	

  
 18 

	 Relevant Event 
	a circumstance including (without limitation): 

  

	 	(a)	 behaviour by a Participant which fails to reflect the Company’s governance and business values;

  

	 	(b)	 the extent to which the determination of the amount of any Bonus was based on an error, or on inaccurate or
misleading information or assumptions which resulted either directly or indirectly in the Bonus being granted to a greater extent than would have been the case had that error not been made; 

 

	 	(c)	 material adverse change in the financial performance of the Company or any division in which the Participant
works and/or worked; 

  

	 	(d)	 a material financial misstatement of the Company’s audited financial accounts (other than as a result of a
change in accounting practice); 

  

	 	(e)	 any action which results in or is reasonably likely to result in reputational damage to the Company;

  

	 	(f)	 a material failure in risk management; 

 

	 	(g)	 corporate failure; 

  

	 	(h)	 negligence or gross misconduct of a Participant; and/or 

 

	 	(i)	 fraud effected by or with the knowledge of a Participant; 

 

	 Remuneration Committee 
	the remuneration committee of the Board or a duly authorised committee of the Remuneration Committee; 

  

	 Rules 
	the rules of the Plan as amended from time to time; 

  

	 Share 
	a fully paid ordinary share in the capital of the Company; 

  
 19 

	 Tax Liability 
	any amount of tax or social security contributions for which a Participant would or may be liable and for which any Group Company or former Group Company would or may be obliged to (or would or may suffer a disadvantage if it were not to)
account to any relevant authority; 

  

	 Trustees 
	the trustee or trustees of any employee benefit trust which operates in conjunction with the Plan; 

  

	 Variation 
	in relation to the equity share capital of the Company, a capitalisation issue, an offer or invitation made by way of rights, a subdivision, consolidation, reduction, demerger, or distribution in specie or any other variation in share capital;
and 

  

	 Vest 
	in relation to: 

  

	 	(a) a Conditional Award, the point at which a Participant becomes absolutely entitled to all or some of the Shares the subject of that Conditional Award; or 

 

	 	(b)_a Nil-Cost Option, the point at which the Nil-Cost Option may be exercised in respect of all or some of the Shares the subject of that Nil-Cost Option, 

  

	 	and Vested and Vesting will be construed accordingly. 

  
 20 

 APPENDIX 2 

U.S. 
 The provisions of paragraphs 1 and
2 of this Appendix 2 modify the Rules of the Plan in respect of any Awards granted under it to Eligible Employees who are resident in the United States. 
  

	1.	 The following will be inserted as new Rule 6.17: 

“A Participant may be required, as a condition of the Vesting of the Participant’s Award, to represent and agree that, in relation to
Shares the Participant acquires under the Plan: 
  

	 	(a)	 the Participant understands that the Shares are deemed to be restricted securities within the meaning of Rule
144 under the United States Securities Act of 1933 (the Securities Act), which may not be resold in the United States or to a U.S. person except pursuant to an effective registration statement under the Securities Act or an exemption from the
registration requirements of the Securities Act; 

  

	 	(b)	 the Participant is acquiring the Shares for investment and not with a view to distribution; and

  

	 	(c)	 the Participant will not resell the Shares at any time, except to
non-U.S. persons in transactions effected in accordance with Rule 904 of Regulation S under the Securities Act (or any successor section thereto) and only after the expiration of any holding period the
Remuneration Committee may require. 

 The Company may endorse on certificates representing Shares issued or transferred on
the Vesting of an Award such legend referring to the above representations or restrictions or any other applicable restrictions on resale that the Company, in its discretion, deems appropriate.” 

 

	2.	 Where the term “subsidiary” is used in the definition of “Group Company”, subsidiary will
be defined as follows: 

 “Subsidiary means a company in which the Company owns, directly or indirectly, a majority of
the voting rights.” 
 The provisions of paragraphs 3, 4 and 5 of this Appendix 2 modify the Rules of the Plan in respect of any Awards
granted under it to Eligible Employees who are US taxpayers (whether or not they are also resident in the United States). 
  

	3.	 The following shall be inserted at the end of Rule 6.1: 

“In any event, the latest day by which an Award will be paid is 15 March after the calendar year in which the Award becomes Vested
and the Company may adjust how the Award is paid out to ensure this. Notwithstanding any provision of the Plan to the contrary, no Award which becomes subject to accelerated Vesting at the discretion of the Remuneration Committee (as provided in
Rule 5 of the Plan) shall be paid earlier than the end of the Retention Period if the Remuneration Committee then determines that the payment on such earlier date would subject the Award to the penalty tax imposed under Section 409A of the U.S.
Internal Revenue Code of 1986, as amended (Section 409A).” 
  

	4.	 The Remuneration Committee will endeavour not to take any action that would cause an Award that is otherwise
exempt from taxation under Section 409A to become subject to taxation under Section 409A, or that would cause an Award that is subject to taxation under Section 409A to fail to satisfy the requirements of Section 409A.

  
 21 

	5.	 Although the Remuneration Committee intends to administer the Plan so that Awards granted under this Schedule
will be exempt from taxation under Section 409A, or will comply with Section 409A, neither the Remuneration Committee nor the Company warrants that any Award under the Plan will qualify for favourable tax treatment under Section 409A
or any other provision of federal, state, local, or non-US law. The Company will not be liable to any Participant for any tax, interest, or penalties the Participant might owe as a result of the grant,
holding, Vesting or payment of any Award under the Plan. 

  
 22

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