WH Smith PLC — Proxy Solicitation & Information Statement 2019

Nov 26, 2019

WHSmith

WH SMITH PLC

Notice of WH Smith PLC Annual General Meeting

Herbert Smith Freehills LLP

Exchange House, Primrose Street, London EC2A 2EG

on Wednesday 22 January 2020 at 11.30am

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of the contents of this document or as to the action you should take in relation to the Annual General Meeting, you should consult your stockbroker, bank manager, solicitor, accountant or other professional independent adviser authorised pursuant to the Financial Services and Markets Act 2000. If you have sold or transferred all your shares in WH Smith PLC you should pass this notice and other enclosures to the person through whom the sale or transfer was effected for transmission to the purchaser or transferee.

WH Smith PLC

Company Number: 5202036

Registered in England and Wales

Registered Office: Greenbridge Road, Swindon, Wiltshire SN3 3RX

VAT Registration Number: 238554836

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WH Smith PLC Notice of Annual General Meeting 2020

Notice of WH Smith PLC Annual General Meeting

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WH Smith PLC Notice of Annual General Meeting 2020

Notice of WH Smith PLC Annual General Meeting

DEAR SHAREHOLDER

I have pleasure in sending you the Notice of our Annual General Meeting ('AGM') for shareholders which will be held at the offices of Herbert Smith Freehills LLP, Exchange House, Primrose Street, London EC2A 2EG on Wednesday 22 January 2020 at 11.30am. The formal Notice of Annual General Meeting is set out on pages 3 and 4 of this document.

The AGM is an important opportunity for all shareholders to express their views by raising questions and voting.

If you would like to vote on the resolutions but cannot come to the AGM, please fill in the Form of Proxy and return it to our registrars as soon as possible. Alternatively, you can register your proxy vote electronically by logging on to www.investorcentre.co.uk/eproxy or, if you are a member of CREST, via Computershare Investor Services PLC (ID 3RA50). The registrars must receive your proxy appointment by 11.30am on Monday 20 January 2020.

FINAL DIVIDEND

Shareholders are being asked to approve a final dividend of 41p per ordinary share for the year, giving a total dividend of 58.2p per share for the year ended 31 August 2019. If approved, the dividend will be paid on 30 January 2020 to shareholders on the register at the close of business on 10 January 2020.

If you have not already done so, may I take this opportunity to encourage you to arrange to have your dividends paid directly into your bank or building society account. Mandating your dividends is more secure than receiving a cheque by post and means that you will receive cleared funds automatically on the payment date. To receive future dividends directly into your bank or building society account, please register at www.investorcentre.co.uk using your Shareholder Reference Number which is printed on your Form of Proxy or contact our registrars, Computershare Investor Services PLC, on 0371 495 0100 for more information.

NOTICE OF PUBLICATION OF ANNUAL REPORT

The WH Smith PLC Annual report 2019 has been published on the Company's website www.whsmithplc.co.uk. It can be accessed at www.whsmithplc.co.uk/investors/company_reports or by going to the Company's home page, clicking on the Investors section of the website and then clicking on Company reports. If you have elected to receive shareholder correspondence in hard copy, then the Annual report will accompany this Notice of Meeting. Should you wish to change your election at any time, or if you wish to request a hard copy of the Annual report, you can do so by contacting our registrars.

EXPLANATORY NOTES

Explanatory notes on each of the resolutions being proposed at the AGM appear on pages 5 to 8 of this document.

BOARD SUCCESSION PLANNING

As set out in the Annual report, board and senior executive succession planning has been carefully considered by the Board and Nominations Committee this year.

In February 2019, we welcomed Carl Cowling, Simon Emeny and Maurice Thompson onto the Board. They bring a combined wealth of retail and financial expertise which will ensure we continue to be well positioned to invest in new opportunities and create long-term value for shareholders.

In May 2019 we announced that after 15 years with the Company, including six highly successful years as Group Chief Executive, Stephen Clarke had decided to step down from the Board with effect from 31 October 2019. As part of our long-term succession planning, Carl Cowling was appointed as Group Chief Executive with effect from 1 November 2019. The Board is grateful to Stephen for his dedication and leadership which has delivered exceptional shareholder value over the last six years, and we wish him well for the future. We are delighted that Carl is Stephen's successor as he has the qualities and experience to lead the Company and continue to deliver superior shareholder returns over the years to come.

As announced last year, Drummond Hall has decided not to stand for re-election as a non-executive director at the 2020 AGM. I would like to thank Drummond for his valuable contribution and commitment to the Company.

Following Drummond stepping down as a non-executive director, I am pleased to confirm that Simon Emeny will be appointed as Senior Independent Director with effect from the conclusion of the 2020 AGM.

I will have served as a director for just over nine years and as Chairman for six years at the time of the 2020 AGM. In the coming year, the Nominations Committee will be focused on succession planning for the position of Chairman and will have close regard to the requirements of the new Corporate Governance Code.

ARTICLES OF ASSOCIATION - POWER TO BORROW MONEY

We are asking shareholders to approve an increase in the borrowing limit from £600m to £1bn in our Articles of Association. An explanation of the proposed increase is set out on page 8 of this document.

RECOMMENDATION

The Board considers that each of the proposals detailed in this Notice of Meeting will be of benefit to and in the best interests of the Company and the shareholders as a whole. The directors intend to vote in favour of all resolutions in respect of their own beneficial holdings of ordinary shares in the Company and unanimously recommend other shareholders to do likewise.

Yours sincerely

HENRY STAUNTON
CHAIRMAN

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WH Smith PLC Notice of Annual General Meeting 2020

Notice of WH Smith PLC Annual General Meeting

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the fourteenth Annual General Meeting of WH Smith PLC (the 'Company') will be held at the offices of Herbert Smith Freehills LLP, Exchange House, Primrose Street, London EC2A 2EG, on Wednesday 22 January 2020 at 11.30am to consider and, if thought fit, to pass Resolutions 1 to 14 inclusive as ordinary resolutions and Resolutions 15 to 19 inclusive as special resolutions.

REPORT AND ACCOUNTS

Resolution 1: to receive the reports and accounts of the directors and auditors for the year ended 31 August 2019.

REMUNERATION REPORT

Resolution 2: to approve the directors' remuneration report for the year ended 31 August 2019, as set out on pages 44 to 58 of the 2019 Annual report.

FINAL DIVIDEND

Resolution 3: to declare a final dividend of 41p per share, to be paid on 30 January 2020 to shareholders on the register at the close of business on 10 January 2020.

DIRECTORS

Resolution 4: to re-elect Suzanne Baxter as a director of the Company.

Resolution 5: to elect Carl Cowling as a director of the Company.

Resolution 6: to re-elect Annemarie Durbin as a director of the Company.

Resolution 7: to elect Simon Emeny as a director of the Company.

Resolution 8: to re-elect Robert Moorhead as a director of the Company.

Resolution 9: to re-elect Henry Staunton as a director of the Company.

Resolution 10: to elect Maurice Thompson as a director of the Company.

AUDITORS

Resolution 11: to re-appoint PricewaterhouseCoopers LLP as Auditors until the conclusion of the next Annual General Meeting at which accounts are laid before the Company.

Resolution 12: to authorise the Audit Committee of the Board to determine the Auditors' remuneration.

AUTHORITY TO MAKE POLITICAL DONATIONS

Resolution 13: to resolve that, in accordance with Section 366 of the Companies Act 2006, the Company and all companies that are subsidiaries of the Company at any time during the period for which this resolution has effect be and are hereby authorised to:

• [a] make political donations to political parties or independent election candidates not exceeding £50,000 in total;
• [b] make political donations to political organisations other than political parties not exceeding £50,000 in total; and
• [c] incur political expenditure not exceeding £50,000 in total, during the period from the date of passing this resolution up to and including the conclusion of the next Annual General Meeting of the Company or up to and including 28 February 2021, whichever is the earlier.

For the purpose of this resolution the terms 'political donations', 'political parties', 'independent election candidates', 'political organisations' and 'political expenditure' have the meanings set out in Sections 363 to 365 of the Companies Act 2006.

AUTHORITY TO ALLOT SHARES

Resolution 14: to resolve that:

• [a] in accordance with Article 7 of the Company's Articles of Association, the directors be authorised to allot shares in the Company or grant rights to subscribe for, or convert any security into, shares in the Company:

• [i] up to an aggregate nominal amount of £8,471,154; and

• [ii] up to a further aggregate nominal amount of £8,471,154 provided that they comprise equity securities (as defined in Article 8 of the Company's Articles of Association) and they are offered in connection with an offer by way of a rights issue (as defined in Article 8 of the Company's Articles of Association) by means of a renounceable letter (or other negotiable document or rights) which may be traded for a period before payment for the securities is due to holders of ordinary shares on such record date as the directors may determine; and

• [b] this authority shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or, if earlier, at the close of business on 28 February 2021.

GENERAL DISAPPLICATION OF PRE-EMPTION RIGHTS

Resolution 15: to resolve that, if Resolution 14 above is passed:

• [a] in accordance with Article 8 of the Company's Articles of Association, the directors be given power to allot equity securities (as defined in Article 8 of the Company's Articles of Association) for cash;

• [b] the power under paragraph (a) above shall be limited to:

• [i] the allotment of equity securities in connection with an offer of securities in connection with a rights issue (as defined in Article 8 of the Company's Articles of Association); and

• [ii] the allotment of equity securities to any person or persons (other than in connection with a rights issue, as defined in Article 8 of the Company's Articles of Association) having a nominal amount not exceeding in aggregate £1,270,800; and

• [c] this authority shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or, if earlier, at the close of business on 28 February 2021.

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WH Smith PLC Notice of Annual General Meeting 2020

Notice of WH Smith PLC Annual General Meeting

NOTICE OF ANNUAL GENERAL MEETING

ADDITIONAL DISAPPLICATION OF PRE-EMPTION RIGHTS

Resolution 16: to resolve that, if Resolution 14 above is passed and in addition to any authority granted under Resolution 15:

[a] in accordance with Article 8 of the Company's Articles of Association, the directors be given power to allot equity securities (as defined in Article 8 of the Company's Articles of Association) for cash;

[b] the power under paragraph (a) above shall:

(i) be limited to the allotment of equity securities up to a maximum nominal amount of £1,270,800; and

(ii) be 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 of the Company 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; and

[c] this power shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or, if earlier, at the close of business on 28 February 2021.

MARKET PURCHASES OF ORDINARY SHARES

Resolution 17: to resolve that, pursuant to Section 701 of the Companies Act 2006, the Company be and is hereby generally and unconditionally authorised to make market purchases (as defined in Section 693(4) of the Companies Act 2006) of any of its own ordinary shares in such manner and on such terms as the directors may from time to time determine provided that:

[a] the maximum aggregate number of ordinary shares that may be purchased under this authority is 11,505,894 shares;

[b] the minimum price which may be paid for each ordinary share is 22% p (exclusive of all expenses);

[c] the maximum price which may be paid for each ordinary share is an amount (exclusive of all expenses) equal to the higher of:

(i) 105 per cent of the average of the middle market quotations for an ordinary share as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the ordinary share is purchased; and

(ii) the amount being the higher of the price of the last independent trade and the highest current independent bid for an ordinary share in the Company on the trading venues where the market purchases by the Company pursuant to the authority conferred by this Resolution 17 will be carried out; and

[d] the authority shall, unless previously varied, revoked or renewed, expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or at close of business on 28 February 2021, whichever is the earlier, save that the Company shall be entitled under such authority to make at any time before such expiry any contract or contracts to purchase its own shares which will or might be executed wholly or partly after such expiry and make a purchase of shares in pursuance of any such contract or contracts.

AMENDMENT OF THE ARTICLES OF ASSOCIATION

Resolution 18: to resolve that, with effect from the conclusion of the Annual General Meeting, the Articles of Association produced to the meeting and initialled by the chairman of the meeting 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.

NOTICE OF GENERAL MEETINGS

Resolution 19: to resolve that a general meeting (other than an Annual General Meeting) may be called on not less than 14 clear days' notice.

By Order of the Board

IAN HOUGHTON

COMPANY SECRETARY

13 November 2019

Registered Office: Greenbridge Road, Swindon, Wiltshire SN3 3RX

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WH Smith PLC Notice of Annual General Meeting 2020

Notice of WH Smith PLC Annual General Meeting

EXPLANATORY NOTES

RESOLUTION 1

REPORT AND ACCOUNTS

The Chairman will present the reports and accounts of the directors and auditors for the year ended 31 August 2019 to the AGM.

RESOLUTION 2

REMUNERATION REPORT

In accordance with Section 439 of the Companies Act 2006 [CA 2006], shareholders are asked to approve the directors' remuneration report that appears on pages 44 to 58 of the 2019 Annual report. The report gives details of the directors' remuneration for the year ended 31 August 2019. This vote is advisory, and the directors' entitlement to any remuneration or loss of office payment is not conditional on it.

At the 2019 AGM, the directors' remuneration policy was approved by shareholders. The directors' remuneration policy is not therefore required to be approved at the AGM this year. The policy will be put to shareholders again no later than the company's AGM in 2022.

RESOLUTION 3

FINAL DIVIDEND

A final dividend of 41p per share for the year ended 31 August 2019 is recommended for payment by the directors. If approved, the recommended final dividend will be paid on 30 January 2020 to all ordinary shareholders who were on the register of members at the close of business on 10 January 2020.

RESOLUTIONS 4 TO 10

ELECTION AND RE-ELECTION OF DIRECTORS

Carl Cowling, Simon Emeny and Maurice Thompson will stand for election at the AGM following their appointments to the Board on 26 February 2019. In accordance with the UK Corporate Governance Code, all the other directors will retire and those wishing to serve again shall submit themselves for re-election by the shareholders. The Board has confirmed, following a performance review, that all directors standing for election or re-election continue to perform effectively and demonstrate commitment to their roles. Biographies of all the directors are below including the specific reasons why their contribution is, and continues to be, important to the Company's long-term sustainable success:

RESOLUTION 4: SUZANNE BAXTER

Non-Executive Director

Date of appointment: 4 February 2013.

Committee membership: Chair of the Audit Committee and a member of the Nominations Committee and Remuneration Committee.

Skills and experience: Suzanne is a non-executive Board member and Nominations Committee Chair for Pinsent Masons International LLP, and a Commissioner on the Board of the Equality and Human Rights Commission where she is also a member of its Audit and Risk Assurance Committee and UN Treaty Monitoring Group. She was formerly the Group Finance Director of Mitie Group Plc and has 30 years of experience gained in the services industry. She was also previously the Chair of the Business in the Community South West Strategic Advisory Board, Deputy Chair of Opportunity Now and Chair of the Business Services Association.

Contributions and reasons for re-election: Suzanne has extensive finance, commercial and operational experience gained from working internationally with large workforces and complex contracts across multi-site locations. She is a Chartered Accountant having trained at Price Waterhouse, and is Chair of the Audit Committee. She has extensive executive and non-executive Board experience that enables her to provide substantial insight into the Company's reporting and risk management processes.

RESOLUTION 5: CARL COWLING

Group Chief Executive

Date of appointment: 26 February 2019. Carl was appointed as Group Chief Executive on 1 November 2019.

Committee membership: Nominations Committee.

Skills and experience: Carl joined WH Smith in November 2014 as Managing Director, Travel. In 2017, he was appointed Managing Director, High Street. Prior to joining WH Smith, Carl was Managing Director of Global partnerships at Carphone Warehouse and previously spent over a decade at Dixons where he held the roles of Ecommerce director, Commercial director and Managing director of the airport retailing business, Dixons Travel.

Contributions and reasons for election: Carl has considerable retail experience and has made a significant contribution to both the Travel and High Street businesses since joining the Company. He has been instrumental in the development and execution of the Company's strategy and has the qualities and experience to lead the Group and deliver superior shareholder returns.

RESOLUTION 6: ANNEMARIE DURBIN

Non-Executive Director

Date of appointment: 3 December 2012.

Committee membership: Chair of the Remuneration Committee and a member of the Audit Committee and Nominations Committee.

Skills and experience: She is a non-executive director and Chair of the Remuneration Committee of Santander UK plc, Chair of Cater Allen Limited and Head of Faculty of Merryck & Co. Limited. Previously, she was a non-executive director of Ladbrokes Coral Group plc and was Chair of the Listing Authority Advisory Panel. She has 25 years' international banking experience, particularly across Asia, Africa and the Middle East, operating at Board and Executive Committee level. In addition to her directorships, Annemarie is an executive coach, a conflict mediator and provides Board governance consultancy services.

Contributions and reasons for re-election: Annemarie's international background and her legal experience and knowledge of regulatory and compliance matters provides a valuable contribution to the operation of WH Smith. She has considerable Board experience that enables her to provide valuable insights and understanding as Chair of the Remuneration Committee.

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WH Smith PLC Notice of Annual General Meeting 2020

Notice of WH Smith PLC Annual General Meeting

EXPLANATORY NOTES

RESOLUTION 7: SIMON EMENY

Non-Executive Director

Date of appointment: 26 February 2019.

Committee membership: Audit Committee, Remuneration Committee and Nominations Committee. Simon will become the Senior Independent Director following the Company's AGM on 22 January 2020.

Skills and experience: Simon is Group Chief Executive of Fuller, Smith & Turner PLC, a role he has held since 2013. Simon was previously the Senior Independent Director of Dunelm Group PLC.

Contributions and reasons for election: Simon has a wealth of consumer facing experience, including transport hub sites. He brings a broad range of skills and commercial expertise to the Board and its Committees.

RESOLUTION 8: ROBERT MOORHEAD

Chief Financial Officer and Chief Operating Officer

Date of appointment: 1 December 2008.

Skills and experience: Robert is a Chartered Accountant and joined WH Smith in 2004 as Retail Finance Director. He is a non-executive director and Chair of the Audit Committee of The Watches of Switzerland Group PLC. Previously, he was Group Finance Director at Specsavers Optical Group and Finance and IT Director of World Duty Free Europe. He also held a number of roles at B&Q and Kingfisher Group. He started his career at Price Waterhouse.

Contributions and reasons for re-election: Robert has over 25 years of retail and financial management experience, which has proved invaluable in his role as Chief Financial Officer and Chief Operating Officer. He has a deep understanding of the Group's businesses and strategy and has a strong track record of creating shareholder value.

RESOLUTION 9: HENRY STAUNTON

Chairman

Date of appointment: 1 September 2010. Henry was appointed as Chairman on 1 September 2013.

Committee membership: Chair of the Nominations Committee and a member of the Remuneration Committee.

Skills and experience: Henry has extensive finance, media and retail expertise. He is Chairman of Capital and Counties Properties plc. He was previously the Finance Director of Granada and ITV, Chairman of Ashtead Group, Phoenix Group Holdings and Vice Chairman of Legal and General PLC.

Contributions and reasons for re-election: Henry brings a breadth of experience and leadership in both executive and non-executive roles. Since being appointed as Chairman of WH Smith, Henry has successfully navigated the Board through change and encouraged the development of the Company's strategy to create shareholder value. He is able to draw upon his extensive knowledge and experience to run the Board and assist its Committees.

RESOLUTION 10: MAURICE THOMPSON

Non-Executive Director

Date of appointment: 26 February 2019.

Committee membership: Audit Committee, Remuneration Committee and Nominations Committee.

Skills and experience: Maurice has substantial Board and financial expertise, with over thirty years of experience in the international banking industry. He is Chairman of Greensill Capital and previously held the position of Chief Executive of Citibank in the UK.

Contributions and reasons for election: Maurice's deep understanding of global finance brings valuable experience to WH Smith. He is able to draw upon his extensive knowledge of financial and strategic experience to assist the Board and its Committees as the Company continues to expand its international business.

RESOLUTIONS 11 AND 12

AUDITORS

Resolution 11 relates to the reappointment of PricewaterhouseCoopers LLP as the Company's auditor to hold office until the next AGM of the Company at which accounts are laid. Resolution 12 authorises the Audit Committee of the Board to set their remuneration.

RESOLUTION 13

AUTHORITY TO MAKE POLITICAL DONATIONS

Part 14 of the CA 2006, amongst other things, prohibits the Company and its subsidiaries from making political donations or from incurring political expenditure in respect of a political party or other political organisation or an independent election candidate unless authorised by the Company's shareholders. Aggregate donations made by the Group of £5,000 or less in any 12-month period will not be caught.

Neither the Company nor any of its subsidiaries has any intention of making any political donations or incurring any political expenditure. However, the CA 2006 defines 'political party', 'political organisation', 'political donation' and 'political expenditure' widely. For example, bodies, such as those concerned with policy review and law reform or with the representation of the business community or sections of it, which the Company and/or its subsidiaries may see benefit in supporting, may be caught.

Accordingly, the Company wishes to ensure that neither it nor its subsidiaries inadvertently commits any breaches of the CA 2006 through the undertaking of routine activities, which would not normally be considered to result in the making of political donations and political expenditure being incurred.

As permitted under the CA 2006, the resolution extends not only to the Company but also covers all companies which are subsidiaries of the Company at any time the authority is in place. The resolution reflects the three categories covered by the rules and authorises the Company and its subsidiaries to:

(a) make political donations to political parties or independent election candidates not exceeding £50,000 in total;
(b) make political donations to political organisations other than political parties not exceeding £50,000 in total; and
(c) incur political expenditure not exceeding £50,000 in total, in the period up to the Company's next Annual General Meeting or up to and including 28 February 2021 whichever is the earlier.

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WH Smith PLC Notice of Annual General Meeting 2020

Notice of WH Smith PLC Annual General Meeting

EXPLANATORY NOTES

As required by the CA 2006, the resolution is in general terms and does not purport to authorise particular donations.

RESOLUTION 14

AUTHORITY TO ALLOT SHARES

At the Annual General Meeting held on 23 January 2019, the shareholders authorised the directors to allot shares in the Company or grant rights to subscribe for, or convert any security into, shares in the Company. This authority is due to expire at the end of the AGM. The directors propose to renew this authority.

The Investment Association ('IA') guidelines on directors' authority to allot shares state that IA members will regard as routine resolutions seeking authority to allot shares representing up to two-thirds of the Company's issued share capital, provided that any amount in excess of one-third of the Company's issued share capital is only used to allot shares pursuant to a fully pre-emptive rights issue.

In light of these guidelines, paragraph (a)(i) of Resolution 14 would allow the directors to allot shares up to a maximum nominal amount of £8,471,154, representing approximately one-third (33.33 per cent) of the Company's issued share capital, calculated as at 7 November 2019 (being the latest practicable date prior to publication of this Notice). Paragraph (a)(ii) of Resolution 14 would allow the directors to allot shares up to a maximum nominal amount of £8,471,154 representing a further one-third (33.33 per cent) of the Company's issued share capital calculated as at 7 November 2019 (being the latest practicable date prior to publication of this Notice) which may only be allotted pursuant to a fully pre-emptive rights issue.

The authority would expire at the conclusion of the next Annual General Meeting of the Company or at close of business on 28 February 2021, whichever is the earlier. Although the directors have no present intention of exercising this authority, it is considered prudent to maintain the flexibility it provides.

As at the date of this Notice, the Company does not hold any ordinary shares in the capital of the Company in treasury.

RESOLUTIONS 15 AND 16

DISAPPLICATION OF PRE-EMPTION RIGHTS

Resolutions 15 and 16 would allow the directors authority to allot ordinary shares in the capital of the Company pursuant to the authority granted under Resolution 14 above for cash without complying with the pre-emption rights in the CA 2006 in certain circumstances.

At the Annual General Meeting held on 23 January 2019, two special resolutions were passed empowering the directors to allot equity securities for cash without first being required to offer such shares to existing shareholders. It is proposed to renew these authorities at the AGM.

The disapplication authorities being sought are in line with institutional shareholder guidance, and in particular with the Pre-Emption Group's Statement of Principles (the 'Pre-Emption Principles'). The Pre-Emption Principles allow the authority for an issue of shares for cash otherwise than in connection with a pre-emptive offer to include: (i) an authority over five per cent of a company's issued share capital for use on an unrestricted basis; and (ii) an additional authority over a further five per cent of a company's issued share capital for use in connection with an acquisition or specified capital investment announced contemporaneously with the issue, or has taken place in the six month period preceding the announcement of the issue.

Resolution 15 will permit the directors to allot:

(a) equity securities for cash and sell treasury shares up to a nominal amount of £16,944,850, representing two-thirds of the company's issued share capital as at 7 November 2019 (being the latest practicable date prior to publication of this Notice) on an offer to existing shareholders on a pre-emptive basis (that is including a rights issue or an open offer), with one-third being available only in connection with a rights issue (in each case subject to any adjustments, such as for fractional entitlements and overseas shareholders, as the directors see fit); and

(b) equity securities for cash and sell treasury shares up to a maximum nominal value of £1,270,800, representing approximately 5 per cent of the issued ordinary share capital of the Company as at 7 November 2019 (being the latest practicable date prior to publication of this Notice) otherwise than in connection with a pre-emptive offer to existing shareholders.

Resolution 16 will permit the directors to allot additional equity securities for cash and sell treasury shares up to a maximum nominal value of £1,270,800, representing approximately a further 5 per cent of the issued ordinary share capital of the Company as at 7 November 2019 (being the latest practicable date prior to publication of this Notice), otherwise than in connection with a pre-emptive offer to existing shareholders for the purposes of financing or refinancing a transaction as contemplated by the Pre-Emption Principles described above.

The Board considers that it is in the best interests of the Company and its shareholders generally that the Company should seek the maximum authority permitted by the pre-emption guidelines and have the flexibility conferred by Resolutions 15 and 16 to conduct a pre-emptive offering without complying with the strict requirements of the statutory pre-emption provisions and to finance business opportunities quickly and efficiently when they arise.

The Board confirms that, in accordance with the Pre-Emption Principles, it does not intend to issue shares for cash representing more than 7.5 per cent of the company's issued ordinary share capital in any rolling three-year period to those who are not existing shareholders (save in accordance with Resolution 16) without prior consultation with shareholders.

As noted in relation to Resolution 14 above, the directors have no current intention of issuing ordinary shares.

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WH Smith PLC Notice of Annual General Meeting 2020

Notice of WH Smith PLC Annual General Meeting

EXPLANATORY NOTES

RESOLUTION 17

MARKET PURCHASES OF ORDINARY SHARES

With the authority of shareholders in general meeting, the Company may purchase its own ordinary shares in the market subject to the provisions of the CA 2006. Although the directors do not currently envisage utilising this authority, they believe that having the flexibility that this resolution provides to be in the best interests of the Company. The directors will only exercise the authority when satisfied that it is in the best interests of shareholders generally and that it would result in an increase in earnings per share.

The proposed authority would be limited to purchases up to 11,505,894 ordinary shares representing approximately 10 per cent of the issued ordinary shares in the Company as at 7 November 2019 (being the latest practicable date prior to publication of this Notice). The proposed authority would expire at the next Annual General Meeting of the Company or at close of business on 28 February 2021, whichever is the earlier. This resolution specifies that the minimum price which may be paid for each ordinary share is 22%p (exclusive of all expenses) and the maximum price which may be paid (exclusive of all expenses) is the higher of:

(a) 105 per cent of the average of the middle market quotations for an ordinary share as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the ordinary share is purchased; and
(b) the amount being the higher of the price of the last independent trade and the highest current independent bid for an ordinary share in the Company on the trading venues where the market purchases by the Company pursuant to the authority conferred by this Resolution 17 will be carried out.

As at 7 November 2019, (being the latest practicable date prior to publication of this Notice), there were outstanding 2,210,172 options to subscribe for ordinary shares, representing 1.9 per cent of the Company's issued ordinary share capital. If the Company's authority to purchase shares (existing and being sought) was exercised in full, the options would represent 2.1 per cent of the Company's issued ordinary share capital.

Under Part 17, Chapter 6 of the CA 2006, the Company is allowed to hold its own shares in treasury following a buyback as an alternative to cancelling them. Shares held in treasury may be subsequently cancelled, sold for cash or used to satisfy share options and share awards under employees' share schemes. However, all rights attaching to them, including voting rights and the right to receive dividends, are suspended while they are held in treasury. It is the Company's present intention to cancel any shares it buys back rather than hold them in treasury.

RESOLUTION 18

AMENDMENT OF THE ARTICLES OF ASSOCIATION - POWER TO BORROW MONEY

The Company's Articles of Association ('Current Articles') specify a fixed limit for borrowing of £600 million. It is proposed that this be increased to £1 billion in the new Articles of Association ('the New Articles'). This change is purely to reflect the increase in scale of the Company. The Board considers that it is prudent and timely to refresh the limit on borrowing to create additional flexibility for the future development of the business in line with the Company's strategy to create value for shareholders. The Company's external borrowing is limited by internal controls, the limits contained in its committed borrowing facility and the principles of sound corporate governance. Adopting this higher limit will not change the Company's borrowing policy and the Board considers it to be in the best commercial interests of the Group. The Board is fully committed to returning to below its target leverage of 1.25x by the end of the financial year ending 31 August 2021.

A copy of the New Articles and a copy of the Current Articles, marked to show the changes proposed, are available for inspection as noted on page 10 of this document.

RESOLUTION 19

NOTICE OF GENERAL MEETINGS

The notice period required by the CA 2006 for general meetings of the Company is 21 days, unless shareholders approve a shorter notice period, which cannot however be less than 14 clear days. AGMs must always be held on at least 21 clear days' notice. At the Annual General Meeting held on 23 January 2019, shareholders authorised the calling of general meetings other than an AGM on not less than 14 clear days' notice, and it is proposed that this authority be renewed. The authority granted by Resolution 19, if passed, will be effective until the Company's next AGM, when it is intended that a similar resolution will be proposed. In order to be able to call a general meeting on less than 21 clear days' notice, the Company must make a means of electronic voting available to all shareholders for that meeting. The flexibility offered by Resolution 19 will be used where, taking into account the circumstances, the directors consider this appropriate in relation to the business of the meeting and in the interests of the Company and shareholders as a whole.

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WH Smith PLC Notice of Annual General Meeting 2020

Notice of WH Smith PLC Annual General Meeting

NOTES

1. Shareholders are entitled to appoint one or more proxies (who need not be shareholders) to exercise all or any of their rights to attend and to speak and vote on their behalf at the meeting provided that if more than one proxy is appointed, each proxy is appointed to exercise the rights attached to a different share or shares.

2. Shareholders should use the Form of Proxy to make the appointment referred to in Note 1 above. Before completing the Form shareholders should read the guidance notes on the Form.

3. As an alternative to completing and returning the printed Form of Proxy, you may submit your proxy electronically by accessing www.investorcentre.co.uk/eproxy. For security purposes, you will be asked to enter the control number, your shareholder reference number (SRN) and personal identification number (PIN) to validate the submission of your proxy online. The control number and members' individual SRN and PIN numbers are shown on the printed Form of Proxy or email notification.

4. To be valid any Form of Proxy and power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or authority or other instrument appointing a proxy must be received by post or (during normal business hours only) by hand at Computershare Investor Services PLC (at the address shown on the Form of Proxy) or at the electronic address provided on the Form of Proxy, in each case no later than 11.30am on 20 January 2020. Completion and return of a Form of Proxy, or electronic proxy appointment, or any CREST Proxy Instruction (as described in Note 5) will not prevent you attending and voting at the meeting, if you wish. A member must inform the Company in writing of any termination of the authority of a proxy.

5. 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 to CREST members via www.euroclear.com). CREST personal members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.

6. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a 'CREST Proxy Instruction') must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by Computershare (CREST participant ID 3RA50) by 11.30am on 20 January 2020. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

7. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. 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(s) take(s)) 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.

8. 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.

9. The Company specifies that only those ordinary shareholders registered in the register of members of the Company as at 8.00pm on 20 January 2020 (or 8.00pm on the day that is two days before any adjourned meeting) shall be entitled to attend (either in person or by proxy) and vote at the meeting, or any adjourned meeting, in respect of the number of shares registered in their names at that time. Changes to the register of members after 8.00pm on 20 January 2020 (or 8.00pm on the day that is two days before any adjourned meeting) shall be disregarded in determining the right of any person to attend and vote at the AGM.

10. Copies of directors' service contracts and non-executive directors' letters of appointment with the Company and any of its subsidiaries are available for inspection at the registered office of the Company during normal business hours on any day, except Saturdays, Sundays and public holidays, and at the offices of Herbert Smith Freehills LLP, Exchange House, Primrose Street, London EC2A 2EG on the date of the meeting for at least 15 minutes prior to and during the meeting.

11. Any person to whom this Notice is sent who is a person nominated under Section 146 of the Companies Act 2006 ('CA 2006') to enjoy information rights (a 'Nominated Person') may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the AGM. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.

12. The statement of the rights of shareholders in relation to the appointment of proxies in Notes 1 to 3 above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised by shareholders of the Company.

13. Nominated Persons are reminded that they should contact the registered holder of their shares (and not the Company) on matters relating to their investments in the Company.

14. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares.

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WH Smith PLC Notice of Annual General Meeting 2020

Notice of WH Smith PLC Annual General Meeting

NOTES

1. Under Section 527 of the CA 2006 members meeting the threshold requirements set out in that section have the right to require the Company 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 CA 2006. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with Sections 527 or 528 of the CA 2006. Where the Company is required to place a statement on a website under Section 527 of the CA 2006, 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 that the Company has been required under Section 527 of the CA 2006 to publish on a website.

2. As at 7 November 2019 (being the latest practicable date prior to the publication of this Notice) the Company's issued share capital consists of 115,058,942 ordinary shares, carrying one vote each and no shares are held in treasury. Therefore, the total voting rights in the Company as at 7 November 2019 are 115,058,942.

3. You may not use any electronic address provided either in this Notice of Meeting or any related documents (including the Form of Proxy) to communicate with the Company for any purposes other than those expressly stated.

4. Any member attending the meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the meeting but no such answer need be given if (a) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information, (b) the answer has already been given on a website in the form of an answer to a question, or (c) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.

5. A copy of this Notice, and other information required by Section 311A of the CA 2006, can be found at www.whsmithplc.co.uk.

6. Under Section 338 and Section 338A of the CA 2006, members meeting the threshold requirements in those sections 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 the business. A resolution may properly be moved or a matter may properly be included in the business 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, must be authenticated by the person or persons making it, must be received by the Company not later than 11 December 2019, being the date six clear weeks before the meeting, and (in the case of a matter to be included in the business only) must be accompanied by a statement setting out the grounds for the request.

7. The New Articles of Association of the Company proposed to be adopted by resolution 18 are available for inspection at the offices of Herbert Smith Freehills LLP, Exchange House, Primrose Street, London EC2A 2EG during normal business hours on any day, except Saturdays, Sundays and public holidays, and on the date of the meeting for at least 15 minutes prior to and during the meeting.

8. Resolutions 1 to 19 at the 2020 AGM will be taken on a poll vote. This will result in a more accurate reflection of the views of shareholders by ensuring that every vote is recognised, including the votes of all shareholders who are unable to attend the meeting but who appoint a proxy for the meeting. On a poll, each shareholder has one vote for every share held.

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