National Grid : Notice of 2021 Annual General Meeting - PDF

Notice of 2021

Annual General

Meeting

The 2021 Annual General Meeting of National Grid plc (the 'Company') will be held at 11.30am on Monday 26 July 2021 at Royal Lancaster London, Lancaster Terrace, London W2 2TY.

This document is important and requires your immediate attention.

If you are in any doubt as to any aspect of the proposals referred to in this document or as to the action you should take, you should seek your own advice from an independent professional advisor. If you have sold or otherwise transferred all your shares, please pass this document together with the accompanying documents to the person who arranged the sale or transfer so they can pass these to the person who now holds the shares.

National Grid plc Notice of 2021 Annual General Meeting

Letter from the Chair

Dear shareholder,

This is my first letter to you as Chair, which took effect from 31 May 2021. The purpose of this letter is to enclose the Notice of Meeting for the Company's 2021 Annual General Meeting ('AGM'). At the time

of writing, it is not clear whether there will be travel, social distancing or other restrictions in place for gatherings due to COVID-19 at the time of the AGM. This has made planning for the customary in-person AGM challenging. Venues that plan to be open, the spacing requirements we would need depending on attendance levels and capacity limitations that each venue might present are all still question marks. Your Board recognises the ongoing importance of engaging with our stakeholders, especially through the unprecedented times in which we find ourselves. This year's AGM will be held on Monday 26 July 2021 at 11.30am at Royal Lancaster London, Lancaster Terrace, London W2 2TY. There will be a time and place for us to meet in person and discuss the future of your Company, and I will very much look forward to greeting you in person. But until then, I would strongly recommend that you instead view our AGM live via the webcast at nationalgrid.com/investors/shareholder-information/agm on Monday

26 July 2021.

Attendance and the impact of COVID-19 on the 2021 AGM

In accordance with the UK government's roadmap to ease COVID-19 restrictions across England, at the time of writing, it is expected that it will be possible for us to offer an in-person meeting. However, given the importance of the health and safety of all our colleagues and shareholders, please do strongly consider viewing our AGM live via the webcast this year instead. If you find that the live webcast option will not work for you and you do wish to be admitted to the meeting, you will need to register your intention to attend in advance of the meeting at nationalgrid.com/investors/shareholder-information/agm. In order to be able to facilitate the attendance of shareholders, please note that additional guests (other than carers attending with shareholders) will not be permitted to attend. Further, the AGM will be for the formal business of the meeting only; there will be no business exhibitions, and no catering will be available. For information on the latest safety measures in place should you wish to attend, please visit nationalgrid.com/investors/shareholder-information/agm.

There is also the possibility that we will be required to adapt these arrangements to respond to the UK government guidelines on short notice. Should the situation change such that we consider that it is no longer possible for any shareholders to attend the meeting in person, or in the event that the venue is no longer appropriate, we will notify shareholders via the issuance of a Regulatory News Service announcement to the London Stock Exchange and on our website. Please monitor our website

for any updates to the arrangements of the AGM at nationalgrid.com/investors/shareholder-information/agm.

Again, I apologise for these awkward logistics. We look forward to restoring the customs associated with an in-person National Grid AGM when we are clearly out of any pandemic risk or other limitations on large meetings. We also hope to hold institutional shareholder engagement sessions around the UK and in the respective states in the US to update you on the Company's journey to net zero.

Appointing a Proxy

To ensure the AGM can be held in the most COVID-19-secure way possible and given the meeting will be shown via the live webcast, shareholders are urged to register their votes in advance by appointing the Chair of the AGM as their proxy rather than by a third party. To appoint a proxy you will need to complete your proxy form. Information about how to submit your proxy instructions is set out on page 16. Notice of your appointment of a proxy should reach the Company's Registrar, Equiniti, by 11.30am on Thursday 22 July 2021. Further details can also be found in the 'Shareholder information' section on pages 18 and 19.

If the Chair of the AGM is appointed as proxy, I will vote in accordance with any instructions you have given to me. If the Chair of the AGM is given discretion as to how to vote, I will vote in favour of each of the resolutions to be proposed at the AGM.

Shareholder engagement and Q&A

Shareholders will be able to watch a live stream of the meeting which will commence at 11.30am consisting of a presentation during which they will hear from me, as Chair, and John Pettigrew, our Chief Executive. You will be able to watch the live webcast here nationalgrid.com/investors/shareholder-information/agm. Please note that the webcast is intended for shareholders only and does not constitute formal attendance at the AGM.

We will appreciate you taking time to pre-register your questions relating to the business of the AGM in advance of the meeting by completing the form at nationalgrid.com/investors/shareholder-information/agm. You will be able to register questions from 8 June 2021 until 11.30am on Thursday 22 July 2021 and will be asked to supply your Shareholder Reference Number for verification. Further information can also be found in the 'Shareholder information' section on pages 18 and 19. We will endeavour to answer as many questions as possible during the meeting, and will make the answers, which may be grouped in themes, available on our website.

Business of the meeting

The official business of the AGM is set out on pages 4 and 5.

Employee share plans

Share plans at National Grid are well established and we are proud of how they have encouraged employee share ownership and supported the creation of shareholder value. Resolutions 18 and 19 relate to the reapproval of two employee share plans: the Long Term Performance Plan (the 'LTPP') and the US Employee Stock Purchase Plan (the 'ESPP'), collectively the 'Plans'. The rules of the Plans which were approved by shareholders in 2011 are due to expire in July 2021, and therefore to ensure the effective running of the Plans we are seeking shareholder reapproval. The rules of the Plans are substantially the same and a continuation of the existing Plans. Following shareholder approval this will extend the life of the Plans for a further 10 years to 2031.

New Articles of Association

Resolution 25 seeks shareholder approval to amend the Company's Articles of Association ('Existing Articles'). This is in order to amend the Existing Articles, which were last approved at the 2009 AGM and subsequently amended at the 2012 AGM. The Company proposes to update its Existing Articles to take account of changes as described in resolution 25, including providing the ability to hold our AGM or general meetings in a hybrid format (meaning a physical AGM and general meeting held online at the same time, which provides shareholders with the ability to choose to attend and vote either

in person or remotely). The proposed amendments to the Existing Articles are available for inspection, as described in note 16. A draft of the proposed New Articles is available on the Company's website at nationalgrid.com/about-us/corporate-governance.

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Letter from the Chair

Dividend

After careful consideration, the Board announced on 2 March 2021 that going forward from 2021/22, our dividend policy will aim to grow the annual ordinary dividend per share at least in line with the rate of UK Consumer Price Index including owner occupiers' housing costs ('CPIH'). The amendment to our dividend policy reflects the move from RPI to CPIH in our UK-regulated businesses and will maintain the dividend per share in real terms. As is usual practice, the Board reviews this policy regularly, taking into account a range of factors including expected business performance and regulatory developments. Following stress testing of the finances of the Company against a number of potential COVID-19 scenarios, the Board has decided to recommend a final dividend in line with this policy. Accordingly, the Board has decided to recommend an increase in the final dividend to 32.16 pence per Ordinary Share (US$2.2812 per American Depositary Share ('ADS')). If approved, this will be paid on 18 August 2021. Resolution 2 seeks shareholder approval of the final dividend.

Climate change commitments and targets

The Company has been working towards an ambitious plan to reach net zero by 2050, and we are proud of the commitment the Company has made in its Responsible Business Charter and the challenging interim targets that have been set. As a Principal Partner to the UK government for COP26, and as a responsible company, we recognise the importance of being transparent with our shareholders on our role in tackling climate change. As a result, on 15 March 2021, the Company announced its intention to seek a non-binding advisory shareholder approval for our climate transition action plan at the 2022 AGM and for progress against the plan to be reported annually thereafter. The climate transition action plan will set out the Company's commitment to becoming a net zero business in its Scope 1 and 2 greenhouse gas emissions by 2050 or sooner, its Scope 3 reduction target and to transition the Company to align with the goals of the Paris Agreement. On 8 June 2021 we also published our Responsible Business Report and you can read more on our commitments and targets at nationalgrid.com/responsibility.

Directors

On 30 January 2020, following nearly nine years at the Company,

Sir Peter Gershon announced his intention to step down as Chairman in 2021. After a thorough succession planning process by the Nominations Committee, led by Mark Williamson, Senior Independent Director, I was welcomed to the Board as Chair Designate on 1 January 2021 and as Chair of the Nominations Committee with effect from the same date. I look forward to leading the Board through the next exciting phase in the Company's evolution as we continue the transition to a clean, fair and affordable energy future.

In line with the UK Corporate Governance Code 2018 (the 'Code'), the Board believes that Non-executive Directors should generally stay in role no longer than nine years; however, the Nominations Committee may determine that on occasion it is in the Company's best interest for a Director with particular skills, knowledge and experience to stay beyond the nine-year term.

National Grid website

COVID-19 updates and communications

Please monitor our website at nationalgrid.com/investors/shareholder-information/agm for updates to the 2021 AGM arrangements. Our corporate website, nationalgrid.com, is an important way in which we communicate with our shareholders. There is a wealth of information online, including information relating to the AGM.

As a Board, and following conversations with investors last year, it has been proposed that it is in the best interests of the Company for Jonathan Dawson to stay for a limited period beyond the expiry of his nine-year tenure in March 2022. This is to ensure a smooth transition in developing our Directors' remuneration policy for shareholder approval in 2022. To ensure a suitable new Senior Independent Director is appointed and an effective handover has taken place, Mark Williamson may be required to stay for a limited period beyond the expiry of his nine-year tenure in September 2021. I value the wisdom of these Non-executive Directors and their flexibility in remaining available for Board service. The Board is actively recruiting for their replacements, and I look forward to making announcements shortly as individuals are fully vetted and their diaries are cleared to devote time to National Grid.

I am pleased to announce that Liz Hewitt succeeded Mark Williamson as Chair of the Audit Committee on 10 November 2020. Liz is an experienced member and chair of audit committees and brings extensive financial knowledge to her role. Earl Shipp also succeeded Paul Golby as Chair of the Safety, Environment and Health Committee with effect from 1 April 2021. Earl's in-depth experience working in safety critical process environments will be essential in his new role.

The biographies, skills and competencies of all Directors seeking election or re-election are set out in the explanations to resolutions 3 to 12 on pages 7 to 11. Also included is a statement for each Director setting out their contribution and reasons for the recommendation for election or re-election this year. In accordance with the Code, all Directors will stand for election or re-election to the Board at the AGM.

Recommendation

Your Board believes that the resolutions contained in this Notice of AGM promote the success of the Company and are in the best interests of the Company and its stakeholders as a whole. Accordingly, the Directors unanimously recommend that you vote in favour of all resolutions, as they intend to do so in respect of their own holdings.

I would like to thank you, on behalf of the Board, for your continued support of National Grid. I very much look forward to the times ahead when we will meet in person and exchange views about the future of energy and the Company.

Yours sincerely,

Paula Rosput Reynolds

Chair

Contents
Letter from the Chair	2
Notice of AGM
Resolutions	4
Explanation of resolutions	6
Notes	16
Shareholder information
Attendance/ live webcast	18
Voting	18
Glossary	19
Annex
Long Term Performance Plan (the 'LTPP')	20
US Employee Stock Purchase Plan (the 'ESPP')	21

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National Grid plc Notice of 2021 Annual General Meeting

Resolutions

The Annual General Meeting ('AGM') will consider the following resolutions, which in the case of resolutions 21 to 25 (inclusive) will be proposed as special resolutions, with the remainder being proposed as ordinary resolutions.

Report and accounts

1. To receive the Company's accounts for the year ended

31 March 2021, the Directors' Reports and the Auditor's Report on the accounts (the 'Annual Report').

Final dividend

2. To declare a final dividend of 32.16 pence per Ordinary Share (US$2.2812 per American Depositary Share ('ADS')) for the year ended 31 March 2021.

Election and re-election of Directors

1. To elect Paula Rosput Reynolds as a Director.
2. To re-elect John Pettigrew as a Director.
3. To re-elect Andy Agg as a Director.
4. To re-elect Mark Williamson as a Director.
5. To re-elect Jonathan Dawson as a Director.
6. To re-elect Therese Esperdy as a Director.
7. To re-elect Liz Hewitt as a Director.
8. To re-elect Amanda Mesler as a Director.
9. To re-elect Earl Shipp as a Director.
10. To re-elect Jonathan Silver as a Director.

Auditor re-appointment and remuneration

1. To re-appoint Deloitte LLP as the Company's auditor until the conclusion of the next general meeting at which accounts are laid before the Company.
2. To authorise the Audit Committee of the Board to set the auditor's remuneration.

Directors' Remuneration Report

15. To approve the Directors' Remuneration Report (excluding the excerpts from the Directors' remuneration policy set out within the Directors' Remuneration Report) set out on pages 92 - 113 in the Annual Report.

Political donations

16. To authorise the Company and those companies which are subsidiaries of the Company at any time during the period for which this resolution has effect for the purposes of Part 14 of the Companies Act 2006 (the '2006 Act'):

1. to make political donations to political parties, and/or independent election candidates not exceeding £125,000 in aggregate;
2. to make political donations to political organisations other than political parties, not exceeding £125,000 in aggregate; and
3. to incur political expenditure, not exceeding £125,000 in aggregate provided that the aggregate amount of any such donations and expenditure shall not exceed £125,000 during the period commencing on the date of passing of this resolution and ending at the earlier of the close of the next AGM or
   30 September 2022.

Words and expressions defined for the purpose of the 2006 Act shall have the same meaning in this resolution.

Renewal of authority to allot shares

17. To authorise the Directors generally and unconditionally, in accordance with Section 551 of the 2006 Act, to allot shares in the Company or to grant rights to subscribe for or convert any security into shares in the Company up to an aggregate nominal amount of 147,324,478.

This authority shall expire at the earlier of the close of the next AGM or 30 September 2022 except that the Directors shall be entitled, at any time prior to the expiry of this authority, to make an offer or enter into an agreement which would, or might, require shares to be allotted or subscription or conversion rights to be granted after such expiry, and the Directors may allot shares or grant rights in accordance with such offer or agreement as if the authority conferred had not expired.

Reapproval of the Long Term Performance Plan

18. To reapprove the rules of the National Grid plc Long Term Performance Plan (the 'LTPP') the principal features of which are summarised in the Annex of this Notice, and that the Directors be and are hereby authorised to:

1. make such modifications to the LTPP as they may consider necessary or desirable to maintain or obtain any approval of a relevant tax authority or to take account of the requirements of the Financial Conduct Authority (or its successor(s)) or the London Stock Exchange or otherwise; 
2. do all acts and things which they may consider necessary or expedient to continue to operate the LTPP; and
3. establish schedules to, or further plans based on the LTPP but modified to take account of local tax, exchange control or securities laws in overseas territories, provided that any shares made available under such schedules or further plans are treated as counting against the limits on individual and overall participation in the LTPP.

Reapproval of the US Employee Stock Purchase Plan

19. To reapprove the rules of the National Grid plc US Employee Stock Purchase Plan (the 'ESPP'), the principal features of which are summarised in the Annex of this Notice, and that the Directors be and are hereby authorised to:

1. make such modifications to the ESPP as they may consider necessary or desirable to maintain or obtain any approval of a relevant tax authority or to take account of the requirements of the Financial Conduct Authority (or its successor(s)) or the London Stock Exchange or otherwise; 
2. do all acts and things which they may consider necessary or expedient to continue to operate the ESPP; and
3. subject to such modification as the Directors may consider appropriate to make any technical changes they consider necessary or desirable to the rules of the ESPP to take account of the requirements of section 423 of the US Internal Revenue Code and to address any applicable US securities laws requirements.

Climate change commitments and targets

20. That, in order to promote the long-term success of the Company, given the risks and opportunities associated with climate change, resolution 20 is proposed as a non-binding vote for shareholders to approve the Company's climate change-related 'net zero' commitment1 and associated targets2.

1. Reduce Scope 1 and 2 greenhouse gas ('GHG') emissions by 80% by 2030, 90% by 2040, and to net zero by 2050 from a 1990 baseline.
2. Reduce Scope 3 GHG emissions for the electricity and gas the Company sells to its customers (making up 80% of the Company's Scope 3 emissions) by 20% by 2030 from a 2016 baseline.

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Resolutions

Disapplication of pre-emption rights

21. Subject to the passing of resolution 17, to authorise the Directors, in accordance with Section 570 of the 2006 Act, to allot equity securities wholly for cash, including a sale of treasury shares, as if Section 561 of the 2006 Act did not apply to any such allotment or sale, provided that this authority shall be limited to:

1. any such allotment or sale in connection with a pre-emptive offer; and
2. any such allotment or sale, otherwise than pursuant to a pre‑emptive offer, of equity securities up to an aggregate nominal value of 22,098,671.

This authority shall expire at the earlier of the close of the next AGM or 30 September 2022 except that the Directors shall be entitled, at any time prior to the expiry of this authority, to make an offer or enter into an agreement which would, or might, require equity securities to be allotted wholly or partly and treasury shares to be sold after such expiry and the Directors may allot equity securities and sell treasury shares in accordance with such offer or agreement as if the authority conferred had not expired.

22. Subject to the passing of resolution 17, and in addition to any authority granted under resolution 21, to authorise the Directors, in accordance with Section 570 of the 2006 Act, to allot equity securities wholly for cash, including a sale of treasury shares, as if Section 561 of the 2006 Act did not apply to any such allotment or sale, provided that this authority shall be:

1. limited to the allotment of equity securities or sale of treasury shares up to an aggregate nominal amount of 22,098,671; and
2. used only for the purposes of financing (or refinancing, if the authority is to be used within six months after the original transaction) a transaction which the Directors determine to be an acquisition or other capital investment of a kind contemplated by the Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-Emption Group prior to the date of this notice.

This authority shall expire at the earlier of the close of the next AGM or 30 September 2022 except that the Directors shall be entitled, at any time prior to the expiry of this authority, to make an offer or enter into an agreement which would, or might, require equity securities to be allotted wholly or partly and treasury shares to be sold after such expiry, and the Directors may allot equity securities and sell treasury shares in accordance with such offer or agreement as if the authority conferred had not expired.

Purchase of own shares

23. To authorise the Company generally and unconditionally, for the purpose of Section 701 of the 2006 Act, to make market purchases of its Ordinary Shares provided that:

1. the maximum number of Ordinary Shares that may be acquired is 355,533,053 being 10% of the Company's issued share capital (excluding treasury shares) as at 19 May 2021;
2. the minimum price per Ordinary Share that may be paid for any such shares is 12 204/473 pence; and
3. the maximum price per share that may be paid for any such shares is not more than the higher of:
4. 1. an amount equal to 105% of the average closing price for an Ordinary Share, as derived from the London Stock Exchange Official List, for the five business days immediately prior to the day on which the purchase is made; and
   2. an amount equal to the higher of the price of the last independent trade of an Ordinary Share and the highest current independent bid for an Ordinary Share on the trading venue where the market purchase pursuant to the authority conferred by this resolution 23 will be carried out.

This authority shall expire at the earlier of the close of the next AGM or 30 September 2022 except that the Company shall be entitled, at any time prior to the expiry of this authority, to make a contract of purchase which would, or might, be executed wholly or partly after such expiry and to purchase Ordinary Shares in accordance with such contract as if the authority conferred had not expired.

General meetings

24. To authorise the Directors, in accordance with the Articles, to call a general meeting of the Company, other than an AGM, on not less than 14 clear days' notice.

New Articles of Association

25. To adopt the New Articles of Association (as produced to the meeting and initialled by the Chair for the purposes of identification) as the articles of the Company in substitution for, and to the exclusion of, the Company's Existing Articles of Association, with effect from the conclusion of this AGM.

On behalf of the Board

Justine Campbell

Group General Counsel and Company Secretary

19 May 2021 National Grid plc

Registered Office: 1-3 Strand, London WC2N 5EH

Registered in England and Wales No. 4031152

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