National Grid PLC — AGM Information 2018

Jun 4, 2018

Notice of 2018 Annual General Meeting

The 2018 Annual General Meeting of National Grid plc (the 'Company') will be held at 11.30am on Monday 30 July 2018 at The ICC, 8 Centenary Square, Birmingham B1 2EA.

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.

Resolutions

The Annual General Meeting ('AGM') will consider the following resolutions, which in the case of resolutions 18 to 21 will be proposed as special resolutions with the remainder being proposed as ordinary resolutions.

• 1. To receive the Company's accounts for the year ended 31 March 2018, the Directors' Reports and the Auditors' Report on the accounts (the 'Annual Report').
• 2. To declare a final dividend of 30.44 pence per Ordinary Share (US\$2.0606 per American Depositary Share ('ADS')) for the year ended 31 March 2018.
• 3. To re-elect Sir Peter Gershon as a Director.
• 4. To re-elect John Pettigrew as a Director.
• 5. To re-elect Dean Seavers as a Director.
• 6. To re-elect Nicola Shaw as a Director.
• 7. To re-elect Nora Mead Brownell as a Director.
• 8. To re-elect Jonathan Dawson as a Director.
• 9. To re-elect Therese Esperdy as a Director.
• 10. To re-elect Paul Golby as a Director.
• 11. To re-elect Mark Williamson as a Director.
• 12. To elect Amanda Mesler as a Director.
• 13. To re-appoint Deloitte LLP as the Company's auditors until the conclusion of the next general meeting at which accounts are laid before the Company.
• 14. To authorise the Directors to set the auditors' remuneration.

• 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 63 to 79 in the Annual Report.

• 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'):

• (i) to make political donations to political parties, and/or independent election candidates not exceeding £125,000 in aggregate;
• (ii) to make political donations to political organisations other than political parties, not exceeding £125,000 in aggregate; and
• (iii) 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 and 30 October 2019.

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

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 £139,079,240.

This authority shall expire at the earlier of the close of the next AGM and 30 October 2019 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.

• 18. Subject to the passing of resolution 17 set out above, 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:
• (i) any such allotment or sale in connection with a pre-emptive offer; and
• (ii) any such allotment or sale, otherwise than pursuant to a pre-emptive offer, of equity securities up to an aggregate nominal value of £20,861,886.

This authority shall expire at the earlier of the close of the next AGM and 30 October 2019 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.

• 19. Subject to the passing of resolution 17 set out above and in addition to any authority granted under resolution 18, 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:
• (i) limited to the allotment of equity securities or sale of treasury shares up to an aggregate nominal amount of £20,861,886; and
• (ii) 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 Board determines 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 and 30 October 2019 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.

• 20. 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:
• (i) the maximum number of Ordinary Shares that may be acquired is 335,635,105 being 10% of the Company's issued share capital (excluding treasury shares) as at 16 May 2018;
• (ii) the minimum price per Ordinary Share that may be paid for any such shares is 12 204/473 pence; and

(iii) the maximum price per share that may be paid for any such shares is not more than the higher of: (a) 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 (b) 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 as stipulated by Commission-adopted Regulatory Technical Standards pursuant to article 5(6) of the Market Abuse Regulation.

This authority shall expire at the earlier of the close of the next AGM and 30 October 2019 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.

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

The Directors believe the proposals set out in resolutions 1 to 21 are in the best interests of shareholders as a whole and they unanimously recommend that shareholders vote in favour of each of the resolutions as they intend to do in respect of their own holdings.

On behalf of the Board

Alison Kay

Group General Counsel & Company Secretary 16 May 2018 National Grid plc

Registered Office: 1–3 Strand, London WC2N 5EH Registered in England and Wales No. 4031152

Explanation of resolutions

Resolutions 18 to 21 will be proposed as special resolutions and will be passed if at least 75% of the votes cast (not counting votes withheld) are in favour.

The remaining resolutions are being proposed as ordinary resolutions and will be passed if more than 50% of the votes cast (not counting votes withheld) are in favour.

Resolution 1: To receive the Annual Report

The Company is required to present its report and accounts to shareholders at its AGM.

Copies of the full Annual Report will be available at the AGM. This document is also available on the Company's website at www.nationalgrid.com. Paper copies can be obtained from Link Asset Services, see the back page for contact details.

Resolution 2: To declare a final dividend

The Company requires shareholder approval to pay a final dividend. The dividend cannot exceed the amount recommended by the Directors. If approved, the final dividend of 30.44 pence per Ordinary Share (US\$2.0606 per ADS) will be paid on 15 August 2018 to shareholders on the register of members at the close of business on 1 June 2018. The dividend is to be paid in respect of each Ordinary Share other than those Ordinary Shares in respect of which a valid election has been made, pursuant to the Company's scrip dividend scheme, to receive new Ordinary Shares instead of the final dividend in cash. Dividends are declared in both pence and US\$ to ensure that holders of both Ordinary Shares and ADSs are paid the declared dividend on the same day.

Resolutions 3-12:

Election and re-election of Directors

The Company's Articles require that any Director appointed to the Board retire and seek election by shareholders at their first AGM following appointment and subsequent re-election at least once every three years. Accordingly, following the appointment of Amanda Mesler with effect from 17 May 2018, Amanda will seek election at this AGM. Additionally, in accordance with the UK Corporate Governance Code 2016 (the 'Code'), it is proposed that all other Directors seek re-election at the AGM this year, with the exception of Andrew Bonfield and Pierre Dufour, both of whom will be stepping down from the Board following the conclusion of the 2018 AGM, as announced on 4 May 2018 and 15 May 2018 respectively.

When making its recommendation to the Board in respect of the election or re-election of the Directors, the Nominations Committee considers the balance of skills, experience, independence and knowledge on the Board and reviews the commitment and effectiveness of each Director. Each Director proposed for re-election has also been subject to a formal performance evaluation which had regard to that Director's ability to promote the success of the Company, whilst having due regard to other stakeholders. At the time of the AGM, three Non-executive Directors will have served on the Board for more than six years: Sir Peter Gershon, Nora Mead Brownell and Paul Golby. For each of these Directors the Nominations Committee performed a more rigorous performance evaluation, taking into account the need for progressive refreshing of the Board and was satisfied that they continued to make a significant contribution to the Board.

Accordingly, the Board has resolved that the Directors continue to be effective, committed to their roles and have sufficient time available to perform their duties to the Company. Additionally, the Board has determined that, other than the Chairman, each of the Non-executive Directors at year-end continues to be independent.

The Board considers that the independent character and judgement of the Non-executive Directors and varied and relevant experience of all the Directors combine to provide an appropriate balance of skills and knowledge which is of great benefit to the Company and, therefore, the Board recommends the election of Amanda Mesler and the re-election of all other Directors, with the exception of Andrew Bonfield and Pierre Dufour.

Resolution 3:

To re-elect Sir Peter Gershon CBE FREng, Chairman

Appointed: 1 August 2011 as Deputy Chairman and became Chairman with effect from 1 January 2012

Tenure: 6 years

Career and experience: Sir Peter has held senior positions spanning both public and private sectors in the healthcare, technology and telecommunications industries. His previous senior board level appointments include Chairman of Tate and Lyle plc, Chief Executive of the Office of Government Commerce, Managing Director of Marconi Electronic Systems and a member of the UK Defence Academy Advisory Board.

Skills and competencies: In this role he draws on his broad business and governance experience from the executive and non-executive senior positions he has held. His leadership as Chairman is pivotal in creating an effective Board by encouraging robust debate. Sir Peter has a commitment to strong corporate governance and has regular constructive engagement with investors through the Company's shareholder networking programme. Sir Peter actively engages with employees across our operational sites.

External appointments: Sir Peter currently holds external appointments as a Non-executive Chairman of the Aircraft Carrier Alliance Management Board, Trustee of The Sutton Trust, Trustee of the Education Endowment Foundation and Chairman of Join Dementia Research (JDR) Partnership Board. He is also a board member of the Investor Forum.

Committees: Chairman of the Nominations Committee.

Resolution 4: To re-elect John Pettigrew FEI FIET, Chief Executive

Appointed: 1 April 2014 and became Chief Executive with effect from 1 April 2016

Tenure: 4 years

Career and experience: John is a Fellow of the Energy Institute and of the Institution of Energy and Technology. He joined the Group in 1991 and has progressed through a variety of senior management roles. These include Director of Engineering in the UK, Chief Operating Officer and Executive Vice President for the US Electricity Distribution & Generation business, Chief Operating Officer for UK Gas Distribution and UK Chief Operating Officer from 2012 to 2014.

Skills and competencies: With his extensive operational experience of the Group and in depth understanding of both the US and UK energy and utility industries, John brings significant know-how and commerciality to his leadership of the executive team. John is responsible for the implementation of strategy and the continued growth of our businesses. He maintains a productive dialogue with institutional investors on Group strategy and performance.

External appointments: John is a member of the Government's Inclusive Economy Partnership and the CBI's Presidents Committee and Non-executive Director of Rentokil Initial plc.

Committees: Member of the Finance Committee.

Resolution 5: To re-elect Dean Seavers, Executive Director, US

Appointed: 1 April 2015

Tenure: 3 years

Career and experience: Dean began his career at the Ford Motor Company. From there he held a series of leadership roles before moving to Tyco International Ltd, where he held various senior management positions before joining General Electric Company and United Technologies Corporation. He was President and Chief Executive Officer of General Electric Security and then President, Global Services of United Technologies Fire & Security. Dean was also a member of the Board of Directors of the National Fire Protection Association.

Skills and competencies: Dean brings to the Board a broad range of financial and customer experience along with significant general management experience with a particular focus on change and performance improvement programmes.

External appointments: Advisor to the board at City Light Capital, Board member of Red Hawk Fire & Security, LLC and Non-executive Director of Albermarle Corporation.

Resolution 6: To re-elect Nicola Shaw CBE, Executive Director, UK

Appointed: 1 July 2016

Tenure: 1 year

Career and experience: Nicola has served in senior management roles, as Chief Executive Officer of HS1 and Managing Director of UK Business Division at FirstGroup plc. She was also an independent Non-executive Director of Ellevio AB and Aer Lingus Group plc. Nicola's career, both in the UK and overseas, has included roles at the Strategic Rail Authority, Office of the Rail Regulator, Bechtel Ltd, Halcrow Fox, the World Bank and London Transport.

Skills and competencies: Nicola has a broad range of experience and strong track-record working with the UK Government, the European Commission and Parliament and industry regulators, as well as leading large regulated businesses. This enables her to draw on her diverse experience and knowledge to assist the Board and, in particular, the Executive Committee.

External appointments: Non-executive Director of International Consolidated Airlines Group, S.A., Director of Major Projects Association and member of the Audit Committee of English Heritage.

Explanation of resolutions continued

Resolution 7:

To re-elect Nora Mead Brownell, Non-executive Director; Independent

Appointed: 1 June 2012

Tenure: 5 years

Career and experience: Nora has substantial senior management experience gained in a variety of roles, including Commissioner of the Pennsylvania Public Utility Commission, the Federal Energy Regulatory Commission (FERC) and former President of the National Association of Regulatory Utility Commissioners. Most recently, Nora sat on the Boards of ONCOR Electric Delivery Holding Company LLC and Comverge, Inc.

Skills and competencies: Nora brings to the Board significant expertise in the US utilities industry, in particular from her role as a Commissioner with FERC. Her first-hand regulatory experience, combined with her non-executive directorships, provides the Board with valuable strategic insights into regulation and US government relations. This allows her to scrutinise performance and provide an additional perspective for the Board's discussions.

External appointments: Board member of Spectra Energy Partners LP, the Strategic Advisory Council of the NewWorld Capital Group, LLC, the Advisory Board of Morgan Stanley Infrastructure Partners as well as a partner in ESPY Energy Solutions, LLC.

Committees: Member of the Nominations, Remuneration and Safety, Environment and Health Committees.

Resolution 8:

To re-elect Jonathan Dawson, Non-executive Director; Independent

Appointed: 4 March 2013

Tenure: 5 years

Career and experience: Jonathan started his career in the Ministry of Defence before moving to Lazard where he spent more than 20 years. He was a Non-executive Director of Galliford Try plc, National Australia Group Europe Limited and Standard Life Investments (Holdings) Limited. Most recently, Jonathan was Chairman of the Remuneration Committee and Senior Independent Director of Next plc and Senior Independent Director and Chairman of the Audit & Risk Committee of Jardine Lloyd Thompson Group plc.

Skills and competencies: Jonathan has wide-ranging financial services, pensions and non-executive director experience, and he brings significant and in-depth understanding in remuneration and financial matters to his role as Chairman of the Remuneration Committee. As a Non-executive Director his contribution is essential to the successful operation of the Board and through his specialisms he delivers scrutiny, additional challenge and independent oversight to the Board.

External appointments: Chairman of River and Mercantile Group PLC, Chairman of Trustees of the Royal Albert Hall pension scheme and Chairman and a founding partner of Penfida Limited.

Committees: Chairman of the Remuneration Committee, member of the Finance and Nominations Committees.

Resolution 9: To re-elect Therese Esperdy, Non-executive Director; Independent

Appointed: 18 March 2014, and appointed to the Board of National Grid USA from 1 May 2015

Tenure: 4 years

Career and experience: Therese started her banking career at Lehman Brothers, then moved to Chase Securities in 1997. She subsequently held a variety of senior roles at JPMorgan Chase & Co. including Head of US Debt Capital Markets and Global Head of Debt Capital Markets, co-head of Banking, Asia Pacific at JPMorgan and Global Chairman of the Financial Institutions Group, JPMorgan Chase & Co.

Skills and competencies: With a distinguished career in the investment banking sector, Therese brings significant banking, strategic and international financial management expertise and knowledge of financial markets to the Board and to her role as Chairman of the Finance Committee. This enables her to contribute a constructive viewpoint to Board debates with her sharp and incisive thinking.

External appointments: Non-executive Director of Imperial Brands PLC.

Committees: Chairman of the Finance Committee and member of the Audit and Nominations Committees.

Resolution 10: To re-elect Paul Golby CBE FREng, FIET, FIMechE, FEI, FCGI Non-executive Director; Independent

Appointed: 1 February 2012

Tenure: 6 years

Career and experience: Paul is a Chartered Engineer with a doctorate in Mechanical Engineering, Fellow of the Royal Academy of Engineering, the Institution of Engineering and Technology, the Institution of Mechanical Engineers, the Energy Institute and City of Guilds. He was awarded honorary degrees from Aston University and Cranfield University. Paul was an Executive Director of Clayhithe plc, before going on to join E.ON UK plc where he was Chief Executive and later Chairman. Paul also held previous appointments as Non-executive Chairman of AEA Technology Group plc and Chairman of EngineeringUK.

Skills and competencies: Paul has a lifelong passion for engineering and innovation, and has spent his career in the energy, governmental and regulatory sectors. He brings the skills of an experienced Chairman and Chief Executive to his role as a Non-executive Director. He adds a valuable perspective to debates on UK regulatory and strategic issues. His deep understanding and specific experience in safety and risk management is crucial to his role as Chairman of the Safety, Environment and Health Committee.

External appointments: Chairman of Costain Group plc, the UK National Air Traffic Services, the Engineering and Physical Sciences Research Council and a member of the Prime Minister's Council for Science and Technology.

Committees: Chairman of the Safety, Environment and Health Committee, member of the Audit and Nominations Committees.

Resolution 11:

To re-elect Mark Williamson, Non-executive Director and Senior Independent Director

Appointed: 3 September 2012

Tenure: 5 years

Career and experience: Mark is a chartered accountant with considerable financial and managerial experience. He has a deep knowledge of operating within highly regulated industries from his time as the Group Financial Controller of Simon Group plc, Chief Financial Officer of International Power plc and Non-executive and Senior Independent Director of Alent plc.

Skills and competencies: Mark's role as Senior Independent Director is essential to the successful operation of the Board. He has an excellent understanding of investor expectations and significant experience in managing relationships with investor and financial communities. During the course of his career, Mark has gained a broad knowledge within the utilities sector as well as extensive city, international and accounting experience; this makes him ideally suited to his role as Chairman of the Audit Committee. Mark also brings the skills of an experienced Chairman to his role as a Non-executive Director.

External appointments: Chairman of Imperial Brands PLC and Chairman of Spectris plc.

Committees: Chairman of the Audit Committee, member of the Nominations and Remuneration Committees.

Resolution 12:

To elect Amanda Mesler, Non-executive Director; Independent

Appointed: 17 May 2018

Career and experience: Amanda has held various senior roles most recently as a General Manager at Microsoft, where she managed the Enterprise Business in Central and Eastern Europe across 33 countries. Before this she was Chief Operating Officer of Misys, and on the Executive Committee of Logica plc. Amanda also spent nine years with KPMG Consulting and BearingPoint before moving to Electronic Data Services where she led a \$1 billion global practice. As well as executive roles, Amanda spent several years on the Board of Pace PLC, a FTSE 250 provider of technology solutions to the PayTV and Broadband industries where she served on the Audit and Risk, Remuneration and Nominations Committees.

Skills and competencies: Amanda has extensive international leadership and general management experience at board level. Through her numerous leadership roles, Amanda has gained significant experience of UK Corporate Governance.

External appointments: Amanda is also currently appointed as a Non-executive Director of Ensygnia Limited.

Committees: Member of the Audit, Finance and Nominations Committees.

Explanation of resolutions continued

Resolutions 13 and 14:

Auditors' re-appointment and remuneration

The Audit Committee oversees the relationship with the external auditors. During the year, the Audit Committee considered the auditors' terms of engagement (including remuneration), as well as their independence and objectivity. The Audit Committee is also responsible for the external auditor selection procedure and making recommendations regarding the appointment and re-appointment of the external auditors to the Board for shareholder approval.

The Audit Committee considered the effectiveness and performance of the auditors and the audit process, and concluded that it was satisfied with the auditors' performance. The Audit Committee unanimously recommended to the Board the re-appointment of Deloitte LLP. Further details of the work carried out by the Audit Committee are set out on pages 49 to 55 of the Annual Report.

Resolution 13: To re-appoint the auditors Deloitte LLP

It is a requirement that the Company's auditors must be re-appointed annually at each general meeting at which accounts are laid before the Company, which will normally be at each AGM. This resolution proposes the re-appointment of Deloitte LLP as the Company's auditors for the year ending 31 March 2019.

Resolution 14: To authorise the Directors to set the auditors' remuneration

This resolution proposes the Directors be authorised to set the auditors' remuneration.

The Audit Committee will consider and approve the audit fees on behalf of the Board in accordance with the Competition and Markets Authority Audit Order 2014.

Resolution 15: Directors' Remuneration Report

This resolution deals with the remuneration of the Directors and seeks approval for the remuneration paid to the Directors during the year under review.

The Company is required to ask shareholders to approve the remuneration policy section of the Directors' Remuneration Report at least every three years or if changes have been made to the policy. The remuneration policy was approved by shareholders at the 2017 AGM, and as no changes are proposed to the policy this year, the remuneration policy is not being presented for approval this year. However the Company is required to propose the remainder of the Directors' Remuneration Report as an advisory resolution each year.

This means that, should shareholders vote against the Directors' Remuneration Report, the Directors can still be paid but the Remuneration Committee will reconsider the Directors' remuneration policy going forward. The Directors' Remuneration Report is set out on pages 63 to 79 of the Annual Report.

Resolution 16: To authorise Directors to make political donations

As in previous years and as a precautionary measure only, the Directors are seeking shareholders' authority for the Company to make political donations and to incur European Union ('EU') political expenditure, as defined by the 2006 Act.

The 2006 Act requires companies to obtain shareholders' approval for donations to registered political parties within the EU and other political organisations totalling more than £5,000 in any twelve-month period, and for any EU political expenditure, subject to limited exceptions. However, the definitions of these terms in the 2006 Act are very wide and as a result this can cover bodies such as those concerned with policy review, law reform and the representation of the business community (for example trade organisations). It could include special interest groups, such as those involved with the environment, which the Company and its subsidiaries might wish to support, even though these activities are not designed to support or influence support for a particular party.

The 2006 Act states that all-party parliamentary groups are not political organisations for these purposes, meaning the authority proposed in this resolution is not relevant to interactions with such groups.

The Company has no intention of changing its current practice of not making political donations or incurring EU political expenditure within the ordinary meaning of those words. The Directors consider, however, that it is in the best interests of shareholders for the Company to participate in public debate and opinion-forming on matters which affect its business. To avoid inadvertent infringement of the 2006 Act, the Directors are seeking shareholders' authority, on a precautionary basis only, for the Company and its UK subsidiaries to make political donations and to incur EU political expenditure for the period from the date of the AGM to the close of the next AGM or 30 October 2019, or whichever is earliest.

Resolution 17: To authorise the Directors to allot Ordinary Shares

The purpose of resolution 17 is to renew the Directors' power to allot shares. The authority will allow the Directors to allot new shares, or to grant rights to subscribe for or convert any security into shares, up to a nominal value of £139,079,240 (representing approximately 1,118,783,684 ordinary shares of 12 204/473 pence each), which is equivalent to approximately 33% of the issued share capital of the Company, exclusive of treasury shares, as at 16 May 2018.

The Directors consider that the Company will have sufficient flexibility with this lower level of authority to respond to market developments. This authority is in line with investor guidelines.

The Directors currently have no intention of issuing new shares, or of granting rights to subscribe for or to convert any security into shares, except in relation to, or in connection with, the operation and management of the Company's scrip dividend scheme and the exercise of options under the Company's share plans.

The Company expects to actively manage the dilutive effect of share issuance arising from the operation of the scrip dividend scheme. In some circumstances, additional shares may be allotted to the market for this purpose under the authority provided by this resolution. If required for this purpose, it is expected that the associated allotment of new shares (or rights to subscribe for or convert any security into shares) will not exceed 1% of the issued share capital (excluding treasury shares) per annum.

This authority will be subject to renewal annually. If the resolution is passed, the authority will expire at the earlier of the close of the next AGM and 30 October 2019.

As at 16 May 2018, the number of ordinary shares in issue was 3,637,747,827 and the Company held 281,396,774 treasury shares, representing 8.38% of the issued share capital excluding treasury shares.

Resolutions 18 to 21 are special resolutions and will be passed if at least 75% of the votes cast (not counting votes withheld) are in favour.

Resolutions 18 and 19: To disapply pre-emption rights

If the Directors allot new shares or other equity securities, or sell treasury shares, for cash (other than in connection with an employee share plan), they must first offer them to existing shareholders in proportion to their existing holdings (known as pre-emption rights).

For the purposes of these resolutions:

• (a) "pre-emptive offer" means an offer of equity securities open for acceptance for a period fixed by the Directors to (i) holders (other than the Company) on the register on a record date fixed by the Directors of Ordinary Shares in proportion to their respective holdings and (ii) other persons so entitled by virtue of the rights attaching to any other securities held by them, but subject in both cases to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to treasury shares, fractional entitlements, record dates or legal, regulatory or practical problems in, or under the laws of, any territory;
• (b) references to an allotment of equity securities shall include a sale of treasury shares; and
• (c) the nominal amount of any securities shall be taken to be, in the case of rights to subscribe for or convert any securities into shares of the Company, the nominal amount of such shares which may be allotted pursuant to such rights.

In accordance with the Pre-Emption Group's Monitoring Report published in May 2016, the Company has split the authority into two resolutions for the purposes of this AGM. The authorities will expire at the earlier of the close of the next AGM and 30 October 2019. A renewal of these authorities is intended to be proposed at each subsequent AGM.

Explanation of resolutions continued

Resolution 18: Limited disapplication of pre-emption rights

Part (i) of resolution 18 seeks shareholders' approval to allot a limited number of new Ordinary Shares or other equity securities, or sell treasury shares, for cash on a pre-emptive basis but subject to such exclusions or arrangements as the Directors may deem appropriate to deal with certain legal, regulatory or practical difficulties. For example, in a pre-emptive rights issue, there may be difficulties in relation to fractional entitlements or the issue of new shares to certain shareholders, particularly those resident in certain overseas jurisdictions. The Board has no current intention of exercising the authority under part (i) of resolution 18 but considers the authority to be appropriate in order to allow the Company flexibility to finance business opportunities or to conduct a pre-emptive offer or rights issue having made appropriate exclusions or arrangements to address such difficulties.

In addition, there may be circumstances when the Directors consider it in the best interests of the Company to allot a limited number of Ordinary Shares or other equity securities, or sell treasury shares for cash on a non pre-emptive basis. The Statement of Principles published by the Pre-Emption Group supports the annual disapplication of pre-emption rights in respect of allotments of shares and other equity securities and sales of treasury shares for cash representing no more than 5% of issued ordinary share capital (exclusive of treasury shares), without restriction as to the use of proceeds of those allotments.

Accordingly, the purpose of part (ii) of resolution 18 is to authorise the Directors to allot new Ordinary Shares and other equity securities pursuant to the allotment authority given by resolution 17, or sell treasury shares, for cash up to a nominal value of £20,861,886, equivalent to 5% of the total issued ordinary share capital of the Company excluding treasury shares and 4.61% of the total issued ordinary share capital of the Company including treasury shares, as at 16 May 2018, without the shares first being offered to existing shareholders in proportion to their existing holdings.

Resolution 19: Limited disapplication of pre-emption rights in the event of financing an acquisition transaction or other capital investment

The Statement of Principles also supports the annual disapplication of pre-emption rights in respect of allotments of shares and other equity securities and sales of treasury shares for cash representing no more than an additional 5% of issued ordinary share capital (exclusive of treasury shares), to be used only in connection with an acquisition or specified capital investment. The Statement of Principles defines "specified capital investment" as meaning one or more specific capital investment related uses for the proceeds of an issue of equity securities, in respect of which sufficient information regarding the effect of the transaction on the Company, the assets the subject of the transaction and (where appropriate) the profits attributable to them is made available to shareholders to enable them to reach an assessment of the potential return.

Accordingly, and in line with the template resolutions of the Pre-Emption Group, the purpose of resolution 19 is to authorise the Directors to allot new Ordinary Shares and other equity securities pursuant to the allotment authority given by resolution 17, or sell treasury shares, for cash up to a further nominal amount of £20,861,886, equivalent to 5% of the total issued ordinary share capital of the Company excluding treasury shares and 4.61% of the total issued ordinary share capital of the Company including treasury shares, as at 16 May 2018, only in connection with an acquisition or specified capital investment which is announced contemporaneously with the allotment, or which has taken place in the preceding six-month period and is disclosed in the announcement of the issue. If the authority given in resolution 19 is used, the Company will publish details of the placing in its next annual report.

The Directors intend to continue to adhere to the provisions of the Statement of Principles and not to allot shares or other equity securities or sell treasury shares for cash on a non pre-emptive basis pursuant to the authority in resolution 19 in excess of an amount equal to 7.5% of the total issued ordinary share capital of the Company, excluding treasury shares, within a rolling three-year period, other than:

• (i) with prior consultation with shareholders; or
• (ii) in connection with an acquisition or specified capital investment which is announced contemporaneously with the allotment or which has taken place in the preceding six-month period and is disclosed in the announcement of the allotment.

The Directors consider the authorities in resolutions 18 and 19 to be appropriate in order to allow the Company flexibility to finance business opportunities or to conduct a pre-emptive offer or rights issue without the need to comply with the strict requirements of the statutory pre-emption provisions.

Resolution 20: To authorise the Company to purchase its own Ordinary Shares

In some circumstances, the Company may find it advantageous to have the authority to purchase its own shares in the market. The Directors believe that it is an important part of the financial management of the Company to have the flexibility to repurchase issued shares in order to manage its capital base.

The Company will seek to purchase shares where the Directors believe this would be in the best interests of shareholders generally, for example, to manage share dilution created by take-up of the scrip dividend option that is above the level required to maintain appropriate balance sheet strength. The authority will only be used after careful consideration, taking into account market conditions prevailing at the time, other investment and financing opportunities and the overall financial position of the Company.

Further to the explanatory note to resolution 17, share issuance arising from the operation of the scrip dividend scheme may be actively managed through the repurchase of the Company's shares. It is expected that such issuance under the scrip dividend scheme, or any such associated repurchases, will not exceed 2.5% of the issued share capital (excluding treasury shares) per annum. It is intended that, in line with recent practice, repurchased shares will be held as treasury shares.

Repurchased shares may be held as treasury shares by the Company, and resold for cash, cancelled, either immediately or at some point in the future, or used for the purposes of employee share schemes.

During the year ended 31 March 2018, the Company purchased 113,871,660 ordinary shares of 12 204/473 pence each in the capital of the Company, representing approximately 3.4% of the called up share capital of the Company as at 31 March 2018 (excluding treasury shares) at a total cost of £1,016,862,703. This resolution complies with investor guidelines, which limit share purchases to 10% of the issued share capital (excluding treasury shares) per annum.

As at 16 May 2018, options were outstanding over 20,580,376 Ordinary Shares, representing approximately 1% of the issued share capital (excluding treasury shares). If the proposed market purchase authority were used in full, shares over which these options were outstanding would represent approximately 1% of the adjusted share capital (excluding treasury shares).

Resolution 21:

To authorise the Directors to hold general meetings on 14 clear days' notice

The Company's Articles allow the Directors to call general meetings of the Company, other than AGMs, on a minimum of 14 clear days' notice. Under Section 307A of the 2006 Act, annual shareholder approval is required to call such meetings on such notice (rather than on 21 days' notice). Accordingly, to retain flexibility, the Directors are seeking authority this year to be able to call general meetings, other than AGMs, on not less than 14 clear days' notice. The approval will be effective until the Company's next AGM when it is intended that a similar resolution will be proposed. The shorter notice period would not be used as a matter of routine for such meetings, but only where flexibility is merited by the business of the meeting and it is thought to be to the advantage of shareholders as a whole. The Company will make available to all shareholders an electronic voting facility for any meeting held on 14 clear days' notice.

Notes

• 1. To be entitled to attend and vote at the AGM, shareholders must be included in the register of members of the Company as at 6pm on Saturday 28 July 2018 or, in the event that this AGM is adjourned, in the register of members 48 hours before the time of any adjourned AGM. They shall be entitled to vote at the AGM in respect of the number of shares registered in their name at that time. Changes to entries in the register of members after 6pm on Saturday 28 July 2018 or, in the event that this AGM is adjourned, in the register of members 48 hours before the time of any adjourned AGM, shall be disregarded in determining the rights of any person to attend or vote at the AGM.
• 2. As at 16 May 2018 (being the latest practicable date before publication of this Notice of AGM), there were 3,637,747,827 Ordinary Shares in issue, carrying one vote each, and 281,396,774 shares in treasury. Shares held in treasury do not have voting rights. Therefore, the total number of voting rights exercisable as at 16 May 2018 is 3,356,351,053.
• 3. Registered holders of Ordinary Shares are entitled to attend, speak and vote, either in person or by proxy, at general meetings of the Company.
• 4. Each of the resolutions to be put to the meeting will be voted on by a poll and not by a show of hands. A poll reflects the number of voting rights exercisable by each shareholder and so the Directors consider it a more democratic method of voting. The results will be published on the Company's website and notified to the UK Listing Authority once the votes have been verified.

• 5. A shareholder of the Company who is entitled to attend, speak and vote at the AGM but is unable or does not wish to attend is entitled to appoint a proxy or proxies to attend, speak and vote on his/her behalf. A proxy does not need to be a shareholder of the Company. A shareholder may appoint more than one proxy in relation to the AGM provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. Unless specified otherwise, the Chairman of the Company will act as proxy and vote on a poll as directed by the appointing shareholder. Shareholders will, as applicable, have been sent a personalised Proxy Card or alternatively will be able to complete a proxy form online at www.nationalgridshareholders.com.

• 6. To be valid, Proxy Cards must be received by no later than 11.30am on Saturday 28 July 2018, using the pre-paid envelope provided or delivered by post or (during normal business hours) by hand to: Link Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU. Alternatively, shareholders can complete the proxy form online at www.nationalgridshareholders.com by no later than 11.30am on Saturday 28 July 2018. The appointment of a proxy will not prevent a shareholder from subsequently attending and voting at the meeting in person. However if you vote in person on a resolution, the appointment of your proxy/proxies will not be valid on that resolution.

• 7. For further details relating to the voting and participation rights of shareholders, please refer to the Company's Articles, copies of which are available on the Company's website at www.nationalgrid.com/group/ about-us/corporate-governance.
• 8. If this Notice of AGM is sent to you as a person nominated to receive copies of Company communications, the proxy rights described above do not apply. The rights described in these paragraphs only apply to shareholders. You may have a right under an agreement with the registered member to be appointed (or have someone else appointed) as a proxy for the AGM, and you are advised to contact them. Alternatively, if you do not have such a right, or do not wish to exercise it, you may have a right under such agreement to give instructions to the registered member holding the shares as to the exercise of voting rights.
• 9. A corporate shareholder may appoint one or more corporate representatives on its behalf who may exercise all of its powers as a shareholder provided they do not do so in relation to the same shares.

• 10. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual available via www.euroclear.com. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider, should refer to their CREST sponsor or voting service provider, who will be able to take the appropriate action on their behalf.

• 11. Any message, regardless of whether it relates to the appointment of a proxy or to an amendment to an instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer's agent (CREST ID RA10) by 8.00pm on Friday 27 July 2018. After this time, any change to instructions to proxies appointed through CREST should be communicated to the agent by other means. It is the responsibility of the CREST member concerned to take (or if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider takes) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members (and, where applicable, their CREST sponsors or voting service providers) are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5) (a) of the Uncertificated Securities Regulations 2001.

• 12. Shareholders have the right to ask questions at the AGM which the Company must cause to have answered if they relate to the business being dealt with at the meeting unless (a) answering such questions would unduly interfere with the preparation for the meeting or involve the disclosure of confidential information, (b) the answer has already been given on the Company's website in the form of an answer to a question, or (c) answering the questions would be undesirable in the interests of the Company or the good order of the meeting.
• 13. Shareholders meeting the threshold requirements in Section 338 and Section 338A of the 2006 Act have the right to require the Company (i) to give, to members of the Company entitled to receive notice of the meeting, notice of a resolution which may properly be moved and is intended to be moved at the meeting; and/or (ii) to include in the business to be dealt with at the meeting any matter (other than a proposed resolution) which may be properly included in such business. A resolution may properly be moved or a matter may properly be included in the business of the meeting unless (a) (in the case of a resolution only) it would, if passed, be ineffective (whether by reason of inconsistency with any enactment or the Company's constitution or otherwise), (b) it is defamatory of any person, or (c) it is frivolous or vexatious.

Such a request may be in hard copy form or in electronic form, must identify the resolution of which notice is to be given or the matter to be included in the business of the meeting, must be authorised by the person or persons making it, must be received by the Company not later than 15 June 2018, being the date six clear weeks before the meeting, and (in the case of a matter to be included in the business of the meeting only) must be accompanied by a statement setting out the grounds for the request.

• 14. Copies of the Directors' service contracts or letters of appointment and the Company's Articles will be available for inspection at the registered office of the Company at 1–3 Strand, London WC2N 5EH during normal business hours until the time of the AGM and at The ICC, 8 Centenary Square, Birmingham B1 2EA from 15 minutes before the AGM until it ends.
• 15. Copies of this Notice of AGM, the Annual Report and information required by Section 311A of the 2006 Act are available on the Company's website at www.nationalgrid.com. Shareholders should note it is possible that, pursuant to requests made by shareholders of the Company under Section 527 of the 2006 Act, the Company may be required to publish on a website a statement setting out any matter relating to: (i) the audit of the Company's accounts (including the auditors' report and the conduct of the audit) that are to be laid before the AGM; or (ii) any circumstance connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with Section 437 of the 2006 Act. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with Section 527 or Section 528 of the 2006 Act. Where the Company is required to place a statement on a website under Section 527 of the 2006 Act, it must forward the statement to the Company's auditors not later than the time when it makes the statement available on the website. The business which may be dealt with at the AGM includes any statement the Company has been required under Section 527 of the 2006 Act to publish on a website.

Shareholder information

The AGM

The AGM will take place at 11.30am on Monday 30 July 2018 at The ICC, 8 Centenary Square, Birmingham B1 2EA (see map below). Registration for the AGM will open at 10.00am on Monday 30 July 2018.

Venue

For location and travel details to The ICC, please visit www.theicc.co.uk/find-us. For walking route details, please visit www.walkit.com. Limited free car parking will be available adjacent to the venue (Arena North Car Park) on a 'first come, first served' basis. In order to register for free car parking, shareholders will need to visit the ParkJockey website (www.parkjockey.com/icc-parking), choose the date of the AGM, select 'Arena Birmingham North Car Park' and register using the code NATIONALGRID30. If you do not enter this code you will be charged the full price for parking. If you have any questions in relation to the parking please contact ParkJockey on +44 (0) 2078 428508 or info@parkjockey.com. Car parking for shareholders with special access requirements is also available. Please call The ICC on +44 (0) 121 644 7178 (calls will be charged at your standard network rate). Shareholders walking to the AGM from Birmingham New Street Station should leave the station via the New Street/Victoria Square exit.

Map correct at the time of going to press

If you can attend the meeting

Please bring your notification card (Shareholder information and Attendance Card) if received in hard copy or a copy of the email notification if we communicate with you electronically, as this will help with registration.

Tea and coffee will be available before the meeting and a light lunch will be provided after the meeting in the main hall. Please note that food and drink are not permitted in the auditorium.

You will be asked to pass through our security systems before entering the meeting. For your personal safety and security there may be checks and searches conducted. Please do not

bring suitcases, large bags or rucksacks. If you do we may ask you to leave the item in the cloakroom.

Recording equipment, cameras and other items that might interfere with the good order of the meeting will not be permitted into the main hall or auditorium. Mobile phones must be turned off or on silent during the meeting.

If there is a question that you wish to ask at the meeting, we would encourage you to pre-register your question with a member of the team at the Question Registration area in the main hall.

Link Asset Services will be available before and after the meeting to answer any questions you may have regarding your shareholding. National Grid staff will also be available to answer any questions you may have on the Company's activities.

The meeting will be filmed for webcast purposes. If you attend the meeting in person, you may be included in the webcast. Please note that the webcast footage may be transferred outside the European Economic Area. By attending the meeting, you consent to being filmed.

Accessibility

The ICC is easily accessible by wheelchair users and has lift access inside. An induction loop is available for shareholders with hearing difficulties.

If you cannot attend the meeting

Watch our webcast

If you cannot attend you can follow the meeting by watching our webcast online at www.nationalgrid.com.

Appoint a Proxy

If you cannot attend the meeting, in order to vote on the resolutions being proposed at the AGM, you will need to appoint a proxy using one of the following methods (as applicable):

• Complete the proxy form online at www.nationalgridshareholders.com
• Complete, date and sign the paper Proxy Card enclosed with this Notice and return it using the pre-paid envelope provided or deliver it by hand during normal business hours to:

Link Asset Services PXS 34 Beckenham Road Beckenham Kent BR3 4TU

• If you are a CREST member you can submit a message via CREST, please see notes 10 and 11 on pages 12 and 13 for details.

To be valid, Proxy Cards must be received by 11.30am on Saturday 28 July 2018 and CREST Proxy Instructions by 8.00pm on Friday 27 July 2018.

Please note that proxy votes can only be submitted via paper Proxy Cards returned to the address stated, electronically via www.nationalgridshareholders.com or via CREST. Proxy votes cannot be submitted via any other means of communication.

The return of a completed Proxy Card or CREST Proxy Instruction will not prevent you from attending the AGM and voting in person if you wish to do so.

Voting

Each of the resolutions to be put to the meeting will be voted on by a poll and not by a show of hands. A poll reflects the number of voting rights exercisable by each shareholder and so the Directors consider it a more democratic method of voting. The results will be published on the Company's website and notified to the UK Listing Authority once the votes have been verified.

For further details relating to the voting and participation rights of shareholders, please refer to the Company's Articles, copies of which are available on the Company's website at www.nationalgrid.com/group/about-us/corporate-governance.

Beware of Share Fraud

Fraudsters use persuasive and high pressure tactics to lure investors into scams. Shareholders are advised to be wary of any unsolicited advice or offers, whether over the telephone, through the post, by email or visits at home. If you receive any such unsolicited contact, please check the company or person contacting you is properly authorised by the Financial Conduct Authority ('FCA') before getting involved.

You can check at www.fca.org.uk/consumers/protect-yourself and can report calls from unauthorised firms to the FCA by calling 0800 111 6768.

Want more information or help?

Link Asset Services can help with shareholding queries and can provide you with a copy of the Annual Report. Their contact details are overleaf. Alternatively, the Annual Report and this Notice of Meeting are available at www.nationalgrid.com in the Investors section.

Glossary

Annual Report the Company's Annual Report and Accounts for the year ended 31 March 2018

ADS American Depository Shares

Articles the Articles of Association of the Company

Link Asset Services is a trading name of Link Market Services Limited

Code the UK Corporate Governance Code was published in 2016

CREST the relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI/3755)) in respect of which Euroclear UK & Ireland Limited is the operator

Directors the directors of National Grid plc

EU the European Union, being the economic and political union of 28 member states located in Europe

London Stock Exchange the London Stock Exchange plc

National Grid or Company National Grid plc

Ordinary Shares ordinary shares of 12 204/473 pence each in the capital of the Company

Scrip Dividend Scheme the National Grid plc Scrip Dividend Scheme subject to the terms and conditions approved by shareholders at the AGM held on 28 July 2014, as amended from time to time

Shareholder a holder of Ordinary Shares in the capital of the Company

Share portal the National Grid share portal, www.nationalgridshareholders.com

2006 Act the Companies Act 2006

National Grid share portal

Manage your shareholding wherever and whenever

• Register your AGM vote
• Sign up for electronic communications to receive email communications and electronic dividend confirmations instead of paper
• Have your dividends paid directly to your bank or building society account instead of receiving cheques
• Choose to receive your dividends in shares, via our Scrip Dividend Scheme
• Update your address details

It only takes a few minutes to register, just visit www.nationalgridshareholders.com and have your 11 digit investor code (IVC) to hand.

Your dividend options

Have your dividends paid directly into your bank or building society account

• Your dividend reaches your account on the payment date
• It is more secure cheques sometimes get lost in the post
• No more trips to the bank

Receive your dividends as additional shares

• Join our Scrip Dividend Scheme
• No stamp duty or commission to pay

Local currency dividend payments

• If you live outside the UK, you may be able to request that your dividend payments are converted into your local currency

For more information about your dividend options or for terms and conditions of any of the services offered, please contact Link Asset Services or, if you are attending the AGM, please speak to a representative from Link Asset Services.

Want more information or help?

Link Asset Services can help with shareholding queries and can provide you with a copy of the Notice of Meeting, Annual Report and Accounts or a paper Proxy Card.

Alternatively all these documents (except the Proxy Card) are available at www.nationalgrid.com.

Link Asset Services 0371 402 3344

Calls are charged at the standard geographic rate and will vary by provider. Lines are open 8.30am to 5.30pm, Monday to Friday, excluding public holidays. If calling from outside the UK: +44 (0)371 402 3344. Calls outside the UK will be charged at the applicable international rate.

Visit the National Grid share portal www.nationalgridshareholders.com Email: nationalgrid@linkgroup.co.uk

National Grid Share Register, Link Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU