BT BT Group PLC

Our strong stewardship of the network continues as we stand prepared to invest in the recently increased ambition for our full fibre build to reach 20m premises by the mid-to-late 2020s, on the assumption we obtain the required critical enablers.

Financial results for the year were in line with our expectations, underpinned by the strong performance of new products and concerted management action to control costs.

Recognising the importance of dividends to our shareholders, the Board’s decision in relation to the dividend has been exceptionally difficult. BT plays a key role in sustaining critical national infrastructure – as magnified by the Covid-19 crisis – and many stakeholders trust and rely on the connectivity we provide. BT also stands ready to make the biggest communications infrastructure investment in the UK in a generation – that includes building our full fibre network to 20m premises by the mid-to-late 2020s. To maintain such trust, whilst creating capacity for value-enhancing investment and navigating the unprecedented uncertainties caused by Covid-19 without compromising our credit rating, the Board concluded that the prudent and proper decision was to suspend the 2019/20 final dividend and all dividends for 2020/21, and re-base future dividends to a more sustainable level. The Board believes that this decision is in the best long-term interests of shareholders.

We expect to resume dividend payments in 2021/22, re-based to 7.7p per share. The Board expects to continue with a progressive dividend policy from this re-based level for future years.

BT’s role goes beyond creating physical and digital connectivity. We also want to help people harness the power of technology to meet their needs or fulfil their potential. To do that, they need the right skills. Over the past year, we have worked to address this through launching the Skills for Tomorrow programme which aims to reach 10m people in the UK with help to improve their digital skills by 2025. This programme offers free resources for school children, parents, young jobseekers, small businesses and older or more vulnerable people. BT volunteers also provide

training and resources to help teachers deliver the computing curriculum.

The programme rapidly became one of the key planks of our response to the virus, helping isolated customers, children and small business owners with the digital skills required to cope with the period of lockdown. In terms of the climate change challenge, our technology and communications networks have a huge role to play in enabling the innovative solutions and exponential change needed to achieve a net zero carbon economy. BT is one of the UK’s largest private sector purchasers of electricity; 100% of our directly purchased electricity in the UK comes from renewable energy suppliers. For the UK, the switch to full fibre will bring a significant increase in energy efficiency. We are also working with others to drive innovation in electric vehicles to transform our fleet.

Our new Directors’ Remuneration Policy (the Policy) will be put to shareholders for approval at the AGM. Building sustainability into our reward and remuneration structures is a major priority. The Policy has been designed to ensure BT acts for the benefit of all our stakeholders, while keeping executive reward aligned with shareholders’ interests.

One of the highlights of the year was the establishment of our Colleague Board. With members drawn from across our customer-facing and corporate units, the Colleague Board represents the voices and views of BT’s people as an important input to our decision making. It also builds stronger engagement between the Board and our employees. Isabel Hudson, one of our non-executive directors, is the dedicated link between the Board and the Colleague Board. In many ways the Colleague Board epitomises the spirit of teamwork with which we are transforming BT and which has been evidenced in the company’s response to Covid-19. We have a long way to go and, like so many others, our task has been made tougher by recent events. But we are building strong foundations for a successful BT that continues to meet the needs of our shareholders and customers.

Changes to the Board

We continue to review and refresh the Board as part of succession planning and to make sure it has the right mix of skills and experience. Through the Nominations Committee, we focus on Board succession and composition and ensuring we have the right balance of skills, independence, experience and diversity in line with the needs of the group.

During the year, we welcomed Leena Nair and Sir Ian Cheshire as independent non-executive directors. Leena has brought a valuable understanding of the strategic and practical challenges of driving large-scale transformation. Ian brings a wealth of listed company experience, with a notable background in strategy, international retail and e-commerce. Sara Weller CBE will also join as an independent non-executive director on 16 July 2020 immediately before the 2020 AGM. She brings a broad perspective to the Board having a background in retail, fast-moving consumer goods and financial services. As announced on 1 May 2020, Adel Al-Saleh joined the Board with effect from 15 May 2020, as a non-independent, non-executive director and Deutsche Telekom’s nominated representative, replacing Tim Höttges.

Jasmine Whitbread stepped down from the Board on 6 December 2019 after almost nine years as a non-executive director. Leena succeeded Jasmine as chair of the Digital Impact & Sustainability Committee. Further to Nick Rose deciding to step down from the Board at the conclusion of the 2020 AGM, we have announced that Iain Conn will be appointed as the senior independent director, Ian Cheshire as chair of the Remuneration Committee and Matthew Key as chair of the Audit & Risk Committee. My sincere thanks go to Nick, Tim and Jasmine for their years of service.

The Board believes that each director who is being put forward for election or re-election at the 2020 AGM brings considerable knowledge, wide-ranging skills and experience to the Board, makes an effective and valuable contribution and continues to demonstrate commitment to their role.

We consider all of the independent non-executive directors to be independent in accordance with the UK Corporate Governance Code 2018.

Attendance and voting at the AGM

At this year’s AGM we are proposing 29 resolutions. We provide details of these resolutions on pages 10 to 17 of this Notice of meeting. Voting on all resolutions will be by way of a poll, except on procedural issues.

Due to the current UK Government restrictions on public gatherings and the associated social distancing measures, our AGM will be a closed meeting. A recording and transcript of the meeting will be available on our website, bt.com/agm, as soon as practicable after the AGM. To allow for shareholders to hear from both the chief executive and myself, video messages and transcripts will be available on our website on the day of the AGM and for a period of 30 days after the AGM.

Shareholders should not attempt to attend the AGM in person. Any shareholders who attempt to attend in person will be refused entry. We believe this approach is necessary and appropriate in light of the current UK Government measures and to protect the health and wellbeing of our shareholders, employees and the wider communities in which we operate.

Only a limited number of directors and personnel supporting the logistics of the meeting will attend the AGM in person to ensure that a quorum is present and to conduct the formal business of the AGM. Attendance of these individuals is considered essential and social distancing measures will be in place.

We recognise the importance of shareholders being able to ask questions. Therefore, shareholders can submit questions relating to the business of the AGM by 11:00am on Tuesday 14 July 2020 at the latest by completing the form available on our website, bt.com/agm, including your Shareholder Reference Number (as provided on your AGM proxy card). Key themes arising from the pre-registered questions will be answered by the Board and a recording and transcript will be made available on our website, bt.com/agm, as soon as practicable after the AGM and for a period of 30 days after the AGM.

As shareholders cannot attend in person, we encourage all shareholders to vote in advance by appointing a proxy. Equiniti, our Registrars, must receive your online or postal proxy appointment and voting instructions by 11:00am on Tuesday 14 July 2020 at the latest to ensure they are counted. Furthermore, we strongly recommend that you appoint the Chair of the AGM to act as your proxy to ensure your vote is counted. Details of how to submit a proxy are set out on page 28 of this Notice of meeting.

We are continuing to monitor the rapidly developing impact of Covid-19, including the latest UK Government guidance and legislation, and how this may affect the arrangements for the AGM. If there are any changes to the information set out above in relation to the current arrangements for the AGM, further information will be made available on our website bt.com/agm

Your Board believes that the proposals described in this Notice of meeting are in the best interests of the company and its shareholders as a whole and unanimously recommend that shareholders vote in favour of all of the resolutions to be proposed at the AGM. All directors who own ordinary shares intend to vote in favour of the resolutions to be proposed at the AGM.

You can find an audio version of this document at bt.com/annualreport together with our Annual Report 2020 and other shareholder information.

Jan du Plessis

Chairman

26 May 2020

		View this document online at
		bt.com/annualreport

2. Philip Jansen

Chief executive

Appointed chief executive in February 2019 and to the Board in January 2019. Age 53.

Experience

From April 2013 until joining BT, Philip was CEO of Worldpay. Before that he was CEO and then chairman at Brakes Group between 2010 and 2015. Philip spent the previous six years at Sodexo where he was group chief executive, Europe, South Africa and India. Prior to that he was chief operating officer at MyTravel Group from 2002 to 2004 and managing director of Telewest Communications (now Virgin Media) from 2000 to 2002 after initially starting his career at Procter & Gamble.

Relevant skills and contribution to the Board

Extensive experience of leading and growing large private and publicly-listed UK and international businesses, delivering transformational change and large technology programmes.

External appointments

Senior advisor at Bain Capital and trustee of Wellbeing of Women.

3. Simon Lowth

Chief financial officer

Appointed chief financial officer and to the Board in July 2016. Age 58.

Experience

Simon was CFO of BG Group before the takeover by Royal Dutch Shell in February 2016. Prior to that, he was CFO of AstraZeneca from 2007 to 2013. He was an executive director of ScottishPower from 2003 to 2007 having been appointed as the finance director in 2005. Before 2003, Simon was a director of McKinsey & Company.

Relevant skills and contribution to the Board

A strong background in finance, accounting, risk, corporate strategy and mergers and acquisitions. Simon’s experience and implementation of cost transformation and performance improvement programmes provide valuable expertise.

External appointments

None.

4. Adel Al-Saleh

Non-independent, non-executive director

Appointed to the Board in May 2020. Age 56.

Experience

Adel has been chief executive officer of T-Systems International GmbH (a subsidiary of Deutsche Telekom AG) since 2017 and is a member of the Management Board of Deutsche Telekom AG. Adel was chief executive officer of Northgate Information Solutions from 2011 to 2017, and before that held a variety of posts at both IMS Health and IBM.

Relevant skills and contribution to the Board

Significant experience in international telecoms, transformation and digitisation.

External appointments

Member of the Boston University, College of Engineering Advisory Board.

5. Sir Ian Cheshire

Independent non-executive director

Appointed to the Board in March 2020. Age 60.

Experience

Ian was previously group chief executive of Kingfisher and senior independent director and remuneration committee chair of Whitbread. Ian held a variety of posts whilst at Kingfisher from 1998 to 2014, including chief executive of B&Q from 2005 to 2008 and group chief executive from 2008 to 2014. He was also previously the chairman of Debenhams and the lead non-executive director for HM Government.

Relevant skills and contribution to the Board

A wealth of listed company experience, with a notable background in strategy, international retail and e-commerce.

External appointments

Chair of Barclays Bank UK and a non-executive director of Barclays and chair of Menhaden, a UK investment trust.

6. Iain Conn

Independent non-executive director

Appointed to the Board in June 2014. Age 57.

Experience

Iain was group chief executive of Centrica for over five years from 2015 to 2020. Prior to that, Iain spent 29 years at BP and was a board director for ten years from 2004 to 2014 including as chief executive

Board of directors continued

Downstream from 2007 to 2014, and a member of the executive committee from 2002-2014. Until May 2014, Iain was a non-executive director of Rolls-Royce for nine years and senior independent director. Iain also served as a member of Council of the Imperial College from 2010 to 2019.

Relevant skills and contribution to the Board

Deep experience in the global energy markets, industrial operations, regulated consumer markets, and in technology and engineering. Broad international experience.

External appointments

Member of the European Round Table for Industry, the CBI President’s Committee, and chairman of the advisory board of the Imperial College Business School.

7. Isabel Hudson

Independent non-executive director

Appointed to the Board in November 2014. Age 60.

Experience

Isabel was previously senior independent director of RSA Insurance, non-executive director of The Pensions Regulator, MGM Advantage, QBE Insurance, Standard Life and an executive director of Prudential Assurance Company in the UK.

Relevant skills and contribution to the Board

A wealth of experience in financial services, in the life, non-life and pensions industries as well as risk, control, governance and international business. Insight and expertise in regulatory, pensions and financial matters.

External appointments

Non-executive chair of National House Building Council (until May 2020). Isabel is also an ambassador for the disability charity, SCOPE, and an advisory council member of University College Lady Margaret Hall, Oxford. Isabel will join Axa S.A. as a non-executive director subject to shareholder approval as its annual general meeting.

8. Mike Inglis

Independent non-executive director

Appointed to the Board in September 2015. Age 60.

Experience

Mike served as non-executive chairman of Ilika until January 2019 and was on the board of ARM Holdings from 2002 to 2013. His roles at ARM included chief commercial officer, executive vice president and general manager of the processor division and executive vice president of sales and marketing. Prior to joining ARM, Mike worked in management consultancy with AT Kearney and held a number of senior operational and marketing positions at Motorola. Mike was previously a director of Pace and an independent director of Advanced Micro Devices.

Relevant skills and contribution to the Board

Significant experience in the technology industry and expertise in marketing, management and operations.

External appointments

None.

9. Matthew Key

Independent non-executive director

Appointed to the Board in October 2018. Age 57.

Experience

Matthew held various positions at Telefónica from 2007 to 2014 including as chairman and CEO of Telefónica Europe and chairman and CEO of Telefónica Digital. From 2002 to 2004 he was the CFO, strategy and regulation director of O2 UK before becoming CEO in 2004. Matthew has also served as finance director at Vodafone UK and chairman of Tesco Mobile. He has previously held positions at companies including Kingfisher, Coca-Cola and Schweppes Beverages and Grand Metropolitan.

Relevant skills and contribution to the Board

Strong strategic skills and a wealth of experience in finance and the telecoms sector.

External appointments

Non-executive director and audit committee chair of Burberry and chairman of Dallaglio Rugbyworks.

10. Allison Kirkby

Independent non-executive director

Appointed to the Board in March 2019. Age 52.

Experience

Allison was appointed President & CEO of Telia Company in May 2020. Allison was previously President & Group CEO of TDC Group until October 2019, and President & Group CEO of Tele2 AB from 2015 to 2018, having been Tele2 AB’s Group CFO from 2014. She was chair of the audit committee and a non-executive director of Greggs until May 2019. She has also held financial and operational roles within 21st Century Fox, Virgin Media, Procter

& Gamble and Guinness.

Relevant skills and contribution to the Board

Valuable and recent experience in the international telecoms sector combined with strong experience in driving performance, improving customer service and delivering shareholder value.

External appointments

President and CEO of Telia Company.

11. Leena Nair

Independent non-executive director

Appointed to the Board in July 2019. Age 50.

Experience

Since 2016, Leena has been the chief human resources officer at Unilever. She is responsible for Unilever’s global people agenda, working across 160 markets to help deliver Unilever’s business financial performance as well as its environmental and social impact objectives. Leena joined Unilever in 1992 and has held a wide variety of HR roles throughout her career, including senior vice president for leadership and organisational development and global head of diversity, executive director of Hindustan Unilever and vice president HR South Asia.

Relevant skills and contribution to the Board

A deep understanding of the strategic and practical challenges of driving large-scale cultural transformation.

External appointments

Non-executive director at the UK Department for Business, Energy and Industrial Strategy.

12. Sara Weller CBE

Independent non-executive director

Appointed to the Board in July 2020. Age 58.

Experience Sara’s previous roles include managing director of Argos and various senior positions at J Sainsburys, including deputy managing director and serving on its board between 2002 and 2004. She has also previously been non-executive director of Mitchells & Butlers and held senior management roles at Abbey National and Mars Confectionery.

Relevant skills and contribution to the Board

A broad perspective having had a background in retail, fast moving consumer goods and financial services, as well strong board experience at both executive and non-executive level.

External appointments

Non-executive director of Lloyds Banking Group and a trustee of Lloyds Bank Foundation for England & Wales, the lead non-executive director at the Department for Work and Pensions and non-executive director of United Utilities Group (until 24 July 2020).

The 2020 Annual General Meeting (AGM) of BT Group plc (the company) will be held at BT Centre, 81 Newgate Street, London, EC1A 7AJ at 11:00am on Thursday 16 July 2020 to consider the following:

Ordinary business

Resolutions 1 to 18 and 23 to 28 will be proposed as ordinary resolutions.

Resolution 1: Annual Report and Accounts

That the accounts and reports of the directors and the auditors for the year ended 31 March 2020 be received.

By law, the directors have to present these accounts and reports contained in the company’s Annual Report for the year ended 31 March 2020 (Annual Report 2020) to the meeting.

Resolution 2: Annual remuneration report

That the Annual Directors’ Remuneration Report as set out on pages 84 to 89 and 98 to 109 of the Annual Report for the year ended 31 March 2020 be received and approved.

This vote is advisory and directors’ entitlements to remuneration are not conditional on this resolution being passed.

Resolution 3: Directors’ Remuneration Policy

That the Directors’ Remuneration Policy as set out on pages 90 to 97 of the Annual Report 2020 be received and approved.

This resolution seeks approval, on a binding basis, of the Directors’ Remuneration Policy. If this resolution is approved, the Directors’ Remuneration Policy will remain in effect (unless further amended by shareholder vote) for three years commencing on the date of the 2020 AGM. Once the Directors’ Remuneration Policy is approved, the company will not be able to make a remuneration payment to a current or prospective director, or a payment for loss

of office to a current or past director, unless that payment is consistent with the Directors’ Remuneration Policy or has otherwise been approved by a resolution of the shareholders.

Resolutions 4 to 15: Directors re-election and election

The company’s Articles of Association (Articles) require any director appointed by the Board to retire at the AGM following that appointment and stand for election. This applies to Leena Nair who joined the Board on 10 July 2019; Sir Ian Cheshire who joined the Board on 16 March 2020; Adel Al-Saleh who joined the Board on 15 May 2020; and Sara Weller who will join the Board on 16 July 2020 prior to the AGM. In accordance with the UK Corporate Governance Code 2018, all other directors will stand for re-election with the exception of Nick Rose, who will retire at the conclusion of the AGM.

Biographies of the directors standing for election and re-election are set out on pages 6 to 9 of this Notice of meeting.

Resolution 4

That Jan du Plessis be re-elected as a director.

Resolution 5

That Philip Jansen be re-elected as a director.

Resolution 6

That Simon Lowth be re-elected as a director.

Resolution 7

That Iain Conn be re-elected as a director.

Resolution 8

That Isabel Hudson be re-elected as a director.

Resolution 9

That Mike Inglis be re-elected as a director.

Resolution 10

That Matthew Key be re-elected as a director.

Resolution 11

That Allison Kirkby be re-elected as a director.

Resolution 12

That Adel Al-Saleh be elected as a director.

Resolution 13

That Sir Ian Cheshire be elected as a director.

Resolution 14

That Leena Nair be elected as a director.

Resolution 15

That Sara Weller be elected as a director.

Resolution 16: Auditors’ re-appointment

That KPMG LLP be re-appointed as auditors of the company, to hold office until the conclusion of the next general meeting at which accounts are laid before the company.

At each general meeting at which the company’s accounts are presented, the company is required to appoint auditors to serve until the next general meeting at which accounts are presented.

Resolution 17 Auditors’ remuneration

That the Audit & Risk Committee of the Board of directors be authorised to decide the auditors’ remuneration.

This resolution follows standard practice.

Special business

The following resolution will be proposed as an ordinary resolution.

Resolution 18: Authority to allot shares

That:

and so that the directors may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, shares represented by depositary receipts, legal, regulatory or practical problems under the laws of, or the requirements of, any recognised regulatory body or any stock exchange in any territory or any other matter whatsoever. This authority shall hereby take effect from the date of the passing of this resolution until the conclusion of the company’s AGM in 2021, or the close of business on 30 September 2021, whichever is the earlier, provided that, in each case, the company may, before this authority expires, make offers and enter into agreements which would, or might, require shares in the company to be allotted or rights to subscribe for or convert any security into shares to be granted after this authority expires and the directors may allot shares in

The Investment Association’s (IA) guidelines state that IA members will permit, and treat as routine, (i) a request for authorisation to allot up to one-third of the current total issued share capital of the company, together with the number of shares required to be allotted in respect of share incentive schemes; and (ii) a request for authorisation to allot up to a further one-third of the company’s current total issued share capital, provided that such additional allotment is only applied to fully pre-emptive rights issues. The Board considers it appropriate that the company should follow these guidelines. Accordingly, under Resolution 18(a)(i), the directors are seeking authority to allot shares and grant rights to subscribe for, or convert securities into, shares up to an aggregate nominal amount of £163m pursuant to section 551 of the 2006 Act, which is equivalent to approximately one-third of the total issued share capital of the company (excluding treasury shares) as at 19 May 2020, the latest practicable date prior to publication of this Notice of meeting (Latest Practicable Date). Under Resolution 18(a)(ii), the directors are seeking authority to allot ordinary shares in connection with a rights issue in favour of

ordinary shareholders up to a further aggregate nominal amount of £163m, which is equivalent to approximately one-third of the total issued share capital of the company (excluding treasury shares) as at the Latest Practicable Date. Therefore, the total authorisation sought by Resolution 18 is equal to approximately two thirds of the total issued share capital of the company (excluding treasury shares) as at the Latest Practicable Date.

The directors have no present intention of exercising this authority other than in connection with the company’s share incentive schemes, but they consider it desirable to have the maximum flexibility permitted by corporate governance guidelines. If such authority is exercised, the directors intend to follow best practice with respect to its use as recommended by the IA. This authority will expire on the conclusion of the company’s AGM in 2021 or at the close of business on 30 September 2021, whichever is the earlier.

The following four resolutions will be proposed as special resolutions.

Resolution 19: Disapplication of pre-emption rights

That, subject to the passing of Resolution 18 above, and in place of the power given to them pursuant to the special resolution of the company passed on 10 July 2019, the Board be authorised to allot equity securities (as defined in the 2006 Act) for cash under the authority given by Resolution 18 and/or to sell ordinary shares held by the company as treasury shares for cash as if section 561 of the 2006 Act did not apply to any such allotment or sale, such authority to be limited:

and so that the directors may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, shares represented by depositary receipts, legal, regulatory or practical problems under the laws of, or the requirements of, any recognised regulatory body or any stock exchange in any territory or any other matter whatsoever; and

such authority to expire at the end of the next AGM of the company (or, if earlier, at the close of business on 30 September 2021), but, in each case, prior to its expiry the company may make offers, and enter into agreements, which would, or might, require equity securities to be allotted (and treasury shares to be sold) after the authority expires and the Board may allot equity securities (and sell treasury shares) under any such offer or agreement as if the authority had not expired.

Resolution 20: Further disapplication of pre-emption rights

That subject to the passing of Resolution 18, the Board be authorised, in addition to any authority granted under Resolution 19, to allot equity securities (as defined in the 2006 Act) for cash under the authority given by that resolution and/or to sell ordinary shares held by the company as treasury shares for cash as if section 561 of the 2006 Act did not apply to any such allotment or sale, such authority to be:

such authority to expire at the end of the next AGM of the company (or, if earlier, at the close of business on 30 September 2021), but, in each case, prior to its expiry the company may make offers, and enter into agreements, which would, or might, require equity securities to be allotted (and treasury shares to be sold) after the authority expires and the Board may allot equity securities (and sell treasury shares) under any such offer or agreement as if the authority had not expired.

The directors have no present intention of exercising the authority under Resolutions 19 and 20 but consider it desirable to have the maximum flexibility permitted by corporate governance guidelines to respond to market developments and to enable allotments to take place to finance business opportunities without making a pre-emptive offer to existing shareholders. This cannot be done under the 2006 Act unless the shareholders have first waived their pre-emption rights. Resolutions 19 and 20 ask shareholders to grant this limited waiver. The resolutions will be proposed as special resolutions. Resolution 19 contains a two-part waiver. The first is limited to the allotment of shares for cash in connection with a rights issue to allow the directors to make appropriate exclusions and other arrangements to resolve legal or practical problems which, for example, might arise in relation to overseas shareholders. The second is limited to the allotment of shares for cash up to an aggregate nominal value of £24.8m (which includes the sale on a non-pre-emptive basis of any shares held in treasury), which represents approximately 5% of

the total issued ordinary share capital as at the Latest Practicable Date. The waiver granted by Resolution 20 is in addition to the waiver granted by Resolution 19. It is limited to the allotment of shares for cash up to an aggregate nominal value of £24.8m (which includes the sale on a non-pre-emptive basis of any shares held in treasury), which represents a further 5% (approximately) of the total issued ordinary share capital as at the Latest Practicable Date. This further waiver may only be used for an allotment of shares for cash for the purposes of financing (or refinancing, if the waiver is used within six months of the original transaction) a transaction which the directors determine to be an acquisition or other capital investment of a kind contemplated by the Pre-Emption Group’s March 2015 Statement of Principles. This authority will expire on the conclusion of the company’s AGM meeting in 2021, or at the close of business on 30 September 2021, whichever is the earlier.

Resolution 21: Authority to purchase own shares

That the company has general and unconditional authority to make market purchases (as defined in section 693(4) of the 2006 Act) of shares of 5p each in the company, subject to the following conditions:

This resolution renews the company’s general authority to buy its own shares on similar terms to previous years’ authorities. It would be limited to 988 million ordinary shares, representing 10% of the issued share capital (excluding treasury shares) at the Latest Practicable Date. The directors would exercise this authority only after considering the effects on earnings per share and the benefits for shareholders generally. The purchase of shares by the company under this authority would be a purchase in the market.

Use of this authority should not be confused with any share dealing facilities that may be offered to shareholders by the company.

Shares purchased by the company out of distributable profits could be held as treasury shares, which could then be cancelled, sold for cash or used to meet the company’s obligations under its employee share plans.

During 2019/20, we purchased 40 million shares of 5p under this authority (0.40% of the share capital) for a consideration of £80m, at an average price of £1.96 per share.

As at the Latest Practicable Date, 131,073 treasury shares had been transferred to meet the company’s obligations under its employee share plans and at that date, the company held

85.9 million treasury shares, which is equal to approximately 0.86% of the issued share capital (excluding treasury shares) at that date.

The company’s current intention is to hold any shares purchased under this authority as treasury shares but it retains the flexibility to cancel them or sell them for cash if it considers this to be in the best interests of the company. The authority will expire at the end of the 2021 AGM although the directors intend to seek renewal of this power at each AGM.

As at the Latest Practicable Date, there were options outstanding over 231 million shares (all of which were in respect of options granted under the savings-related share option plans), representing 2% of the company’s issued share capital (excluding treasury shares). If the authority given by this resolution were to be fully used, these options would represent 2.1% of the company’s issued share capital (excluding treasury shares). There are no warrants outstanding.

Resolution 22: Authority to call a general meeting on 14 days’ notice

That the company may call a general meeting (but not an AGM) on at least 14 clear days’ notice.

The 2006 Act requires that general meetings are held on 21 days’ notice unless shareholders have approved a shorter notice period. This resolution means we would give you two weeks’ or more notice of a general meeting. It will be effective until our next AGM, when we may propose a similar resolution. We expect that the authority would be used only in exceptional circumstances.

Resolutions 23 to 28 will be proposed as ordinary resolutions.

Resolution 23: Authority for political donations

That British Telecommunications plc, a wholly- owned subsidiary of the company, be authorised to make political donations to political:

during the period beginning with the date of the 2020 AGM and ending at the end of the day on which the 2021 AGM is held.

The terms ‘political donation’, ‘political parties’, ‘independent election candidates’ and ‘political organisation’ have the meanings given by sections 363 to 365 of the 2006 Act.

Our policy is that no company in the group will make contributions in cash or kind to any political party, whether by gift or loan. However, the definition of political donations used in the 2006 Act is much broader than the sense in which these words are ordinarily used. It could cover things like making members of parliament and others in the political world aware of key industry issues and matters affecting the company, enhancing their understanding of BT.

The authority we are requesting in this resolution is not intended to change this policy, but will ensure that the group continues to act within the provisions of the 2006 Act requiring companies to obtain shareholder authority before they can make donations to EU political parties and/or political organisations as defined in the 2006 Act.

During 2019/20, the company’s wholly owned subsidiary, British Telecommunications plc, paid the costs of attending corporate days at (i) the Conservative party conference; (ii) the Liberal Democrats party conference; (iii) the Labour party conference; (iv) the Scottish National party conference; and (v) the Conservative party conference. These costs totaled £9,967 (2018/19: £4,616). No company in the BT Group made any loans to any political party.

Resolution 24: Employee Saveshare Plan rules

That the rules of the BT Group plc Saveshare Plan (the Saveshare), the principal terms of which are summarised at Appendix 1 to this Notice of meeting, be approved and the directors of the company be authorised to do all acts and things they consider necessary or expedient to implement and give effect to the Saveshare.

The company’s existing Saveshare rules are due to expire during the company’s next financial year. This resolution seeks shareholders’ approval for the Saveshare rules, which are broadly similar to the previous plan rules, but with amendments to take account of developments in market practice, and consistency of terms with the company’s other employee share plans.

Resolution 25: International Employee Saveshare Plan rules

That the rules of the BT Group plc International Saveshare Plan (the International Saveshare), the principal terms of which are summarised at Appendix 1 to this Notice of meeting, be approved and the directors of the company be authorised to do all acts and things they consider necessary or expedient to implement and give effect to the International Saveshare, and to establish further plans based on the International Saveshare but modified to take account of local tax, exchange control or securities laws in overseas territories, provided that any shares made available under any further such plans will count against any limits on individual or overall participation in the International Saveshare.

The company’s existing International Saveshare rules are due to expire during the company’s next financial year. This resolution seeks shareholders’ approval for the International Saveshare rules, which are broadly similar to the previous plan rules, but with amendments to take account of developments in market practice, and consistency of terms with the company’s other employee share plans.

Resolution 26: Employee Stock Purchase Plan rules

That the rules of the BT Group plc Employee Stock Purchase Plan (the ESPP), the principal terms of which are summarised at Appendix 1 to this Notice of meeting, be approved and the directors of the company be authorised to do all acts and

things they consider necessary or expedient to implement and give effect to the ESPP.

The company’s existing ESPP rules are due to expire during the company’s next financial year. This resolution seeks shareholders’ approval for the ESPP rules, which are broadly similar to the previous plan rules, but with amendments to take account of developments in market practice, and consistency of terms with the company’s other employee share plans.

Resolution 27: Restricted Share Plan rules

That the rules of the BT Group plc Restricted Share Plan (the RSP), the principal terms of which are summarised at Appendix 1 to this Notice of meeting, be approved and the directors of the company be authorised to do all acts and things they consider necessary or expedient to implement and give effect to the RSP, and to establish further plans based on the RSP but modified to take account of local tax, exchange control or securities laws in overseas territories, provided that any shares made available under any further such plans will count against any limits on individual or overall participation in the RSP.

The RSP is our new discretionary long-term incentive plan which is proposed to be approved by shareholders. The RSP allows for grants of awards without formal performance conditions, with vesting subject to continued employment only. Such awards will normally be granted with certain underpins, as determined by the Remuneration Committee, intended to ensure that an acceptable level of performance is achieved (further explained in the Report on Directors’ Remuneration in the Annual Report 2020).

It should be noted that we are not seeking renewal of the current BT Group plc Incentive Share Plan which expires during the company’s next financial year, as the RSP also allows for grants of awards with performance targets.

Resolution 28: Deferred Bonus Plan rules

That the rules of the BT Group plc Deferred Bonus Plan (the DBP), the principal terms of which are summarised at Appendix 1 to this Notice of meeting, be approved and the directors of the company be authorised to do all acts and things they consider necessary or expedient to implement and give effect to the DBP, and to establish further plans based on the DBP but modified to take account of local tax, exchange control or securities laws in overseas territories, provided that any shares made available under any further such plans will count against any limits on individual or overall participation in the DBP.

The company’s existing DBP rules are due to expire during the company’s next financial year. This resolution seeks shareholders’ approval for the DBP rules, which are broadly similar to the previous plan rules, but with amendments to take account of developments in market practice, and consistency of terms with the company’s other employee share plans.

The following resolution will be proposed as a special resolution.

Resolution 29: Articles of Association

That, with effect from the conclusion of the AGM, the new Articles of Association of the company, produced to the AGM and initialed by the Chair of the AGM for the purpose of identification, be adopted as the Articles of Association of the company, in substitution for, and to the exclusion of, the existing Articles of Association.

The company proposes to adopt new Articles of Association in order to amend and update the existing Articles of Association to provide more flexibility in line with emerging market practice to allow for general meetings to be held partly through electronic facilities (Hybrid General Meetings). The new Articles of Association shall provide that for general meetings held

at a physical venue, simultaneous attendance and participation will be allowed through electronic means. The ability to do this would make participation at general meetings easier for shareholders. For the avoidance of doubt, the amendments being proposed to the Articles of Association do not permit wholly virtual general meetings.

Documents relating to Resolutions 24 to 29

As at the date of this Notice of meeting, the company’s registered office is closed. Accordingly, copies of the following documents are available on our website bt.com/agm from the date of this Notice of meeting until the end of the AGM:

Important notes

The following notes explain your general rights as a shareholder and your right to vote at the 2020 AGM or to appoint someone else to vote on your behalf.

Register of members and proxies

Only shareholders on the BT Group plc Register of Members at 6:30pm on 14 July 2020 are entitled to vote at the AGM, or, if the meeting is adjourned, 6:30pm two working days prior to the time fixed for the adjourned meeting. Changes after that time will not be taken into account.

By law, you can appoint (i) another person as your proxy to exercise all or any of your rights to vote at the meeting and (ii) more than one proxy

in relation to the meeting, provided you appoint each proxy to exercise the rights attached to a different share or shares held by you. A proxy also does need not be a shareholder of the company. However, given the format of the 2020 AGM, we strongly recommend that you only appoint the Chair of the AGM to act as your proxy to ensure your vote is counted.

On a poll, the number of shares you hold as a shareholder at 6:30pm on 14 July 2020 will decide the number of votes that you may cast.

An AGM proxy card accompanies this Notice of meeting.

Nominated persons

Unless you are a shareholder, you do not have a right to appoint any proxies under the procedures set out above, or referred to under the heading ‘AGM information’ on page 27.

Any persons whose ordinary shares are held on their behalf by another person and who have been nominated to receive communications from the company in accordance with section 146 of the 2006 Act (Nominated Persons) may have a right under an agreement with the shareholder of the company (Relevant Shareholder) to be appointed, or to have someone else appointed, as a proxy for the meeting; or to give instructions to the Relevant Shareholder on the exercise of voting rights. The statement of members’ rights to appoint proxies does not apply to Nominated Persons. The rights described to appoint proxies can only be exercised by the registered shareholder.

If you are uncertain about your rights or about your investment you should contact the person or organisation that administers that investment.

Shareholders’ rights

Under section 319A of the 2006 Act, shareholders attending the AGM have the right to ask questions relating to its business. The company must answer any such question relating to the business being dealt with at the AGM but no such answer need be given if (i) to do so would interfere unduly with the preparation for the AGM or involve the disclosure of confidential information; (ii) the answer has already been given on a website in the form of an answer to a question; or (iii) it is undesirable in the interests of the company, or the good order of the AGM that the question be answered.

If enough shareholders act together to make requests under sections 527 and 528 of the 2006 Act, the company may have to publish on its website a statement setting out any matter relating to the audit of its accounts or any circumstance connected with its auditors ceasing to hold office.

The company cannot make shareholders who make a request pay its expenses in complying with these sections. It has to forward the statement to its auditors before it publishes the statement. The business which may be dealt with at the AGM includes any such statement.

Shareholders meeting the threshold and time limit set out in sections 338 and 338A of the 2006 Act can make the company give its members notice of a resolution and/or include in the business to be dealt with at the AGM any matter which may be properly included in that business.

Shares

The total number of issued and fully paid ordinary shares of 5p each at the Latest Practicable Date, was 9,968,127,681, carrying one vote each.

The total number of voting rights in the company at that date was 9,882,206,625 (excluding treasury shares).

Documents

As at the date of this Notice of meeting, the company’s registered office is closed. Accordingly copies of contracts of service or letters of appointment for each of the Directors will be available to members for inspection on request. Requests should be sent by email to agm@bt.com

Recommendation

Your directors believe that the proposals set out in Resolutions 1 to 29 are in the best interests of shareholders as a whole and unanimously recommend that you vote in favour of all these resolutions. They intend to do so in respect of their own beneficial holdings.

By order of the Board

Rachel Canham

Company Secretary &

General Counsel, Governance

81 Newgate Street

London EC1A 7AJ

26 May 2020

Shareholders are asked to approve the adoption of the following employees share plans:

The shareholder approval granted in April 2011 to operate the company’s employee share plans expires during the course of the next financial year, and therefore shareholders are asked to approve the adoption of the Plans. The main features of the Plans proposed to be adopted are summarised below.

The RSP is our new discretionary long-term incentive plan which is proposed to be approved by shareholders. The RSP allows for grants of awards without formal performance conditions, with vesting subject to continued employment only. Such awards will normally be granted with certain underpins, as determined by the Remuneration Committee, to ensure that an acceptable level of performance is achieved. The other Plans that are being updated mirror the plans that they replace, and have been updated for changes in consistency, legislation, best practice and market developments.

It should be noted that we are not seeking renewal of the existing Incentive Share Plan, which expires during the company’s next financial year, as the RSP also allows for grants of awards with performance targets.

2. SAVESHARE PLAN (SAVESHARE)