Notice of Tesco PLC Annual General Meeting 2008 - Investisfiles.investis.com/tesco/ar/pdfs/20080501_FINAL_printers_212587... · Notice of Tesco PLC Annual General Meeting 2008 11.00

Notice of Tesco PLC

Annual General Meeting 2008

11.00 a.m. on 27 June 2008

National Motorcycle Museum,

Coventry Road, Bickenhill, Solihull, West Midlands B92 0EJ

THIS DOCUMENT IS IMPORTANT and requires your immediate attention. If you are in any doubt as towhat action to take in relation to the AGM, you should consult appropriate independent advisers. If youhave already sold or otherwise transferred all of your shares in Tesco PLC, you should immediately send thisdocument together with the accompanying form of proxy to the stockbroker, bank or other agent throughwhom the sale or transfer was effected for transmission to the purchaser or transferee.

Tesco PLC Company Number 445790 Registered in England and WalesRegistered Office: Tesco House, Delamare Road, Cheshunt, Hertfordshire EN8 9SL VAT Registration Number GB 220 4302 31

212587_TESCO_NOM:212587_TESCO_NOM 1/5/08 12:48 Page 1

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Contents

Letter from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2

What happens at the AGM? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3

Voting ahead of the AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 5

Notice of meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 7

Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pages 7 – 11

1. To receive the Directors’ Report and Accounts . . . . . . . . . . . . . . . . . . . . . . . . .

2. To approve the Directors’ Remuneration Report . . . . . . . . . . . . . . . . . . . . . .

3. To declare a final dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. To re-elect Mr Charles Allen as a director . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. To re-elect Dr Harald Einsmann as a director . . . . . . . . . . . . . . . . . . . . . . . . . .

6. To re-elect Mr Rodney Chase as a director . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. To re-elect Ms Karen Cook as a director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8. To re-elect Sir Terry Leahy as a director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9. To re-elect Mr Tim Mason as a director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10. To re-appoint the auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11. To set the auditors’ remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12. To authorise the directors to allot relevant securities . . . . . . . . . . . . . . . . . . .

13. To disapply pre-emption rights * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14. To authorise the Company to purchase its own shares * . . . . . . . . . . . . . . . .

15. To authorise political donations by the Company and its subsidiaries . . . . .

16. To authorise the adoption and amendment of new articles of association *

* Special resolution – requires the support of not less than 75% of the votes cast for the resolution to be carried

Shareholder Information

Our website (www.tesco.com) contains copies of all corporate reports and other information whichyou can view or download at any time.

If you have a specific question you can write to us at our registered address and we will be pleasedto respond.

Equiniti Limited maintains the Company’s share register. If you have any enquiries about the AGM,or about your shareholding, you can contact Equiniti Limited:

Tesco Shareholder Helpline: 0871 384 2977 From outside the UK: +44 121 415 7053For enquiries or to request copies of the Annual Review and Summary Financial Statement 2008 orthe Annual Report and Financial Statements 2008 only.


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Dear Shareholder

I take pleasure in sending you the Notice of this year’s Annual General Meeting for shareholders of Tesco PLC(the “AGM”), which will be held at the National Motorcycle Museum, Coventry Road, Bickenhill, Solihull, WestMidlands, B92 0EJ at 11.00 a.m. on Friday 27 June 2008.

The AGM is an important opportunity for all shareholders to express their views by raising questions and voting.The change in venue for the meeting from London to Birmingham is in recognition of the fact that ourshareholders, like our customers, are based throughout the UK and overseas. We are keen for the venue to beeasily accessible for as many of our shareholders as possible and have listened to the views of a number ofshareholders in choosing the location of this year’s AGM.

We recognise nonetheless that many shareholders are unable to attend the meeting in person, so, as in previousyears, all resolutions will be decided on a poll. We will be using an electronic polling system. Details of theprocedure can be found on page 4 of this notice.

Final dividend

Shareholders are being asked to approve a final dividend of 7.7 pence per Ordinary Share for the year ended23 February 2008. If you approve the recommended final dividend, this will be paid on 4 July 2008 to allshareholders who were on the register of members on 25 April 2008.

New Articles of Association

We are also asking shareholders to approve a number of amendments to our articles of association primarily toreflect the provisions of the Companies Act 2006 (the “New Act”). An explanation of the main changes betweenthe proposed and the existing articles of association is set out in Appendix 1.

Electronic Communications

Last year we consulted shareholders on how you would like to receive communications from Tesco. A significantnumber of shareholders accepted web or email communication and we have been able to reduce the amountof printed documentation we produce. With this mailing we have saved over 100 tonnes of paper which hashelped us to reduce our impact on the environment and save money.

All information contained in the Annual Report and Financial Statements 2008, along with the Annual Reviewand Summary Financial Statement 2008, is available on our website. For those shareholders who have acceptedweb communication, we have included a short summary of the Annual Review with this mailing, which alsoexplains which documents are available on our new investor website.

If at any time you would like to change your preference on how you receive documents, please contact Equiniti.Equiniti’s contact details are set out on page 1 of this document.

The AGM

To help you with questions that you have about Tesco, customer and shareholder enquiries desks will be openbefore and after the meeting. Please make full use of these services. We are keen to hear and discuss ourshareholders’ views and there will also be an opportunity for you to ask questions in the meeting itself. However,I would ask you to keep your questions brief to allow everyone who wishes to speak the chance to do so.

Your participation in this annual event is important to us. There is a map on page 3 of this notice to help youfind your way to the venue. Even if you are not able to come to the meeting in person, you can still vote and Iwould urge you, regardless of the number of shares you own, to complete, sign and return your proxy form.Alternatively, shareholders may register their proxy appointment and voting instructions electronically via theinternet - please see page 5 of this notice and your proxy form for details.

I look forward to seeing you at the AGM and thank you for your continued support.

Yours sincerely

David ReidChairman

13 May 2008


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This notice is being sent to all members and to any person nominated by a member of the Company undersection 146 of the New Act to enjoy information rights. Members will find an admission card and a proxy formenclosed with this notice. If you are attending the meeting you should bring your admission card with you.

Only holders of Ordinary Shares, or their duly appointed representatives, are entitled to attend, vote and speakat the meeting. A proxy does not need to be a member of the Company but must attend the meeting torepresent you. Your proxy could be the Chairman, another director of the Company or another person who hasagreed to attend to represent you. Your proxy will vote as you instruct and must attend the meeting for yourvote to be counted. You can appoint more than one proxy in relation to the meeting, provided that each proxyis appointed to exercise the rights attaching to different shares held by you. Details of how to appoint theChairman or another person as your proxy using the proxy form are set out in the notes to the proxy form.Appointing a proxy does not preclude you from attending the meeting and voting in person. If you attend themeeting in person, your proxy appointment will be automatically terminated.

Nominated persons

The right to appoint a proxy does not apply to persons whose Ordinary Shares are held on their behalf by anotherperson and who have been nominated to receive communications from the Company in accordance with section146 of the New Act (‘nominated persons’). Nominated persons may have a right under an agreement with theregistered shareholder who holds Ordinary Shares on their behalf to be appointed (or to have someone elseappointed) as a proxy. Alternatively, if nominated persons do not have such a right, or do not wish to exerciseit, they may have a right under such an agreement to give instructions to the person holding the OrdinaryShares as to the exercise of voting rights.

What happens at the AGM?

The 2008 Tesco AGM will be held on Friday 27 June 2008 at the National Motorcycle Museum, Coventry Road,Bickenhill, Solihull, West Midlands B92 0EJ. You have the right to attend, speak and vote at the AGM if you areon the share register of the Company at 6.00 p.m. on 25 June 2008.

AGM Schedule

How do I get to the AGM?

10.00 am Registration desks open

10.30 am Refreshments available

11.00 am The AGM starts in the Britannia Suite- Chairman’s introduction- Review of results for the 2007/8 financial year- Questions and answers- Poll vote on all resolutions

1.00 pm AGM closes. Refreshments available

By Car:The National Motorcycle Museum is located at thecentre of the national motorway network. Themuseum is just 8 miles east of Birmingham CityCentre and is located directly on the J6 island of theM42, opposite the NEC and just five minutes fromBirmingham International Airport and Railway Station.The M42 has direct connections to the M1, M5, M6,M6 Toll and M40.

By Rail:Birmingham International Station – approximately 5minutes bus/taxi ride away. A complimentary busservice will be available between the station and theNational Motorcycle Museum from 10am to 2pm.

By Air:Birmingham International Airport – approximately 5minutes taxi ride away.

BirminghamInternational

Airport

To Birmingham

To M5 and M40

To Solihull

To Baisall Commonand Kenilworth

To Coventry

To Nuneaton

M6 South

M6 North

Meriden

N

B4102

B4102

A446A452

A452

B4104

A45 A45

A45

M42

M6

M6

6

4

NationalNationalMotorcycleMotorcycle

MuseumMuseum The ManorThe ManorHotelHotel

Windmill VillageWindmill VillageHotelHotel

NationalExhibition

Centre


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What happens when I arrive at the AGM?

Registration

If you attend the AGM, please bring your Admission Card (which accompanies this document) with you. It willauthenticate your right to attend, speak and vote and will speed your admission. You may also find it helpful tobring this Notice with you so that you can refer to it at the AGM.

Accessibility

Special arrangements have been made to help shareholders with disabilities. Sound amplification facilitieswill be provided for people with hearing difficulties, together with sign language interpretation. There will befacilities for shareholders who are in wheelchairs. Anyone accompanying a shareholder in need of assistancewill be admitted to the meeting.

Guests

The AGM is a meeting of shareholders and requires an admission card to gain entry to the meeting. At thediscretion of the Company, and subject to sufficient seating capacity, a shareholder may bring one guest,provided that the shareholder and guest register to enter the meeting together. Guests may not vote or speakat the meeting.

Security

We thank you in advance for your co-operation with our security staff and the security staff of the NationalMotorcycle Museum. You will be asked to pass through our security systems before entering the meeting.

We do not permit cameras or recording equipment at the meeting and we would be grateful if you wouldensure you switch off your mobile telephone before the start of the meeting.

We will not permit behaviour that may interfere with anyone’s safety or the orderly conduct of the meeting.

How is the business of the meeting conducted?

The business of the meeting

The AGM is held to conduct certain formal business. The formal resolutions that must be put to the meetingare detailed on pages 7 to 11. There will also be an opportunity for you to ask questions relating to Tesco.

Asking questions

Please keep your questions and statements short and relevant to the resolution being discussed. There aremany shareholders who wish to ask questions and we would like to be able to answer as many as possible.Please be considerate to others who may have waited for some time to ask their question and do not makespeeches or ask multiple or repetitive questions. You can also write to us at our registered address and we willbe pleased to respond to any questions you may have, or our customer services and shareholder enquiries teamsat the meeting will be pleased to help you.

Voting

Voting on all resolutions will be by way of a poll. Your vote counts whether you are able to attend the meetingor not and we think poll voting is the fairest approach. If you come to the AGM you will be given a hand heldvoting machine which will contain details of your shareholding. After each resolution is read you will be askedto cast your vote by pressing a button on your machine. All of the votes of the shareholders present will becounted and added to those received by proxy and the provisional final votes shown on the screen at the frontof the meeting room. If you have already voted by proxy you will still be able to vote using the electronic pollvoting system and your vote on the day will replace your previously lodged proxy vote.

Designated Corporate Representatives

In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at themeeting so that (i) if a corporate shareholder has appointed the Chairman of the meeting as its corporaterepresentative with instructions to vote on a poll in accordance with the directions of all of the other corporaterepresentatives for that shareholder at the meeting, then on a poll those corporate representatives will givevoting directions to the Chairman and the Chairman will vote (or withhold a vote) as corporate representativein accordance with those directions; and (ii) if more than one corporate representative for the same corporateshareholder attends the meeting but the corporate shareholder has not appointed the Chairman of the meeting


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as its corporate representative, a designated corporate representative will be nominated, from those corporaterepresentatives who attend, who will vote on a poll and the other corporate representatives will give votingdirections to that designated corporate representative. Corporate shareholders are referred to the guidanceissued by the Institute of Chartered Secretaries and Administrators on proxies and corporate representatives –www.icsa.org.uk for further details on this procedure. The guidance includes a sample form of representationletter if the Chairman is being appointed as described in (i) above.

Documents

The current and proposed articles of association of the Company, together with the amendments to theproposed articles of association referred to in Resolution 16(b), are available for inspection at the offices ofBerwin Leighton Paisner LLP, Adelaide House, London Bridge, London EC4R 9HA during usual business hourson any weekday (Saturdays, Sundays and public holidays excluded) from the date of this Notice, and will beavailable for inspection at the place of the AGM from 10.30 a.m. on the day of the AGM until its conclusion.Copies of the directors’ service contracts with the Company and the terms of appointment of the Non-executiveDirectors are available for inspection at the registered office of the Company during usual business hours on anyweekday (Saturdays, Sundays and public holidays excepted) and will be available for inspection at the place ofthe AGM from 10.30 a.m. on the day of the AGM until its conclusion.

Voting ahead of the AGM

Even if you cannot attend the AGM, you can still vote by proxy.

Proxy Voting

If you wish to vote by proxy on any of the resolutions or if you wish to appoint a person other than the Chairmanof the AGM to attend the meeting on your behalf and vote, you should complete and return your proxy form toEquiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6TU to arrive at least 48 hours beforethe appointed time of the meeting, that is to say, no later than 11.00 a.m. on 25 June 2008. If you areappointing a person other than the Chairman of the meeting as your proxy, this person should sign theAttendance Card and bring it to the meeting. Your proxy need not also be a member, but must attend themeeting for their vote to count. The number of shares you hold as at 6.00 p.m. on 25 June 2008 will determinehow many votes you or your proxy will have. You can appoint more than one proxy in relation to the meeting,provided that each proxy is appointed to exercise the rights attaching to different shares held by you.

Details of how to appoint the Chairman or another person as your proxy using the proxy form are set out in thenotes to the proxy form. Appointing a proxy does not preclude you from attending the meeting and voting inperson. If you attend the meeting in person, your proxy appointment will be automatically terminated.

Electronic Proxy Voting

You may, if you wish, register the appointment of a proxy or proxies, or voting instructions for the meetingelectronically by logging on to www.sharevote.co.uk. You will need to use a 24-digit number made up of yourReference Number, Card ID and Account Number printed on your proxy form. Full details of the procedure aregiven on the website. The proxy appointment and/or voting instructions must be received by Equiniti Limited atleast 48 hours before the appointed time of the meeting, that is to say, no later than 11.00 a.m. on 25 June2008. Please note that any electronic communication sent to the Company or the Registrars that is found tocontain a computer virus will not be accepted. The use of the internet service in connection with the AGM isgoverned by Equiniti Limited’s conditions of use set out on the website, www.sharevote.co.uk, and may be readby logging on to that site.

CREST Voting

CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment servicemay do so for the AGM to be held on 27 June 2008 and any adjournment(s) thereof by using the proceduresdescribed in the CREST Manual. CREST personal members or other CREST sponsored members, and thoseCREST members who have appointed voting service providers, should refer to their CREST sponsors or votingservice providers, who will be able to take the appropriate action on their behalf.

In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CRESTmessage (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear’sspecifications and must contain the information required for such instructions, as described in the CRESTManual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment tothe instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be


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received by the issuer's agent (ID 7RA01) by 11.00 a.m. on 25 June 2008. For this purpose, the time of receiptwill be taken to be the time (as determined by the timestamp applied to the message by the CREST ApplicationsHost) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribedby CREST. After this time any change of instructions to proxies appointed through CREST should becommunicated to the appointee through other means.

CREST members and, where applicable, their CREST sponsors or voting service providers should note thatEuroclear does not make available special procedures in CREST for any particular messages. Normal systemtimings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is theresponsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal memberor sponsored member or has appointed a voting service provider, to procure that his CREST sponsor or votingservice provider takes) such action as shall be necessary to ensure that a message is transmitted by means ofthe CREST system by any particular time. CREST members and, where applicable, their CREST sponsors or votingservice providers are referred, in particular, to those sections of the CREST Manual concerning practicallimitations 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, as amended.

Voting rights

As at 28 April 2008 (being the latest practicable date prior to the publication of this notice), the Company’sissued share capital consists of 7,847,617,137 Ordinary Shares, carrying one vote each. The Company does nothold any Ordinary Shares in the capital of the Company in treasury. Therefore the total voting rights in theCompany are 7,847,617,137.


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Notice of Meeting

The 2008 Annual General Meeting (the “AGM”) of Tesco PLC (the “Company”) will be held at the NationalMotorcycle Museum, Coventry Road, Bickenhill, Solihull, West Midlands B92 0EJ on Friday 27 June 2008 at11.00 a.m. to consider the following, which in the case of resolutions 13, 14 and 16 will be proposed as specialresolutions with the remainder being proposed as ordinary resolutions:

Resolution 1

That the accounts and reports of the directors and the auditors for the financial year ended 23 February2008 be received.

The directors are required to present to the AGM the accounts, and the reports of the directors and auditors,for the year ended 23 February 2008. These are contained in the Company’s Annual Report and FinancialStatements 2008.

Resolution 2

That the directors’ remuneration report for the financial year ended 23 February 2008 be approved.

The Company is required to ask shareholders to approve the report on directors’ remuneration. A summary ofthe report is included in the Annual Review and Summary Financial Statement 2008, and the full report isincluded in the Annual Report and Financial Statements 2008. These can be viewed on the Company’s websiteand are available to shareholders on request.

Resolution 3

That the final dividend of 7.7 pence per share recommended by the directors be declared.

The final dividend cannot exceed the amount recommended by the directors. The proposed final dividend willbe payable on 4 July 2008 to holders of Ordinary Shares registered at the close of business on 25 April 2008and will bring the total dividend for the year to 10.9 pence per share. Last year the total dividend was 9.64pence per share.

Resolutions 4 to 9: re-election of directors

Six directors will retire at this year’s AGM and submit themselves for re-election. The Board believes that eachof them continues to perform effectively and with commitment to their roles. Information about the six directorswho are submitting themselves for re-election is given below each resolution.

Resolution 4

That Charles Allen be re-elected as a director.

Charles Allen was appointed a Non-executive Director on 19 February 1999. He was ChiefExecutive of ITV Plc from 2004 to 2007. He is a Non-executive Director of the LondonOrganising Committee of the Olympics and Paralympics. Mr Allen is the Chairman of theRemuneration Committee and a member of the Nominations Committee. As Mr Allen had,as at February 2008, served on the Board for nine years, the Chairman has, in line with theCombined Code, conducted a rigorous assessment of the effectiveness of his performanceand independence as well as a review of his contribution to the Board and confirmed that he

continues to be an effective Non-executive Director and to demonstrate commitment to the role. If he isconsidered by the Board to be eligible, Mr Allen may submit himself for re-election at the 2009 AGM and annuallythereafter.


Resolution 5

That Harald Einsmann be re-elected as a director.

Harald Einsmann was appointed a Non-executive Director in 1999. He is on the Board ofCarlson Group of Companies, Checkpoint Systems Inc., Stora Enso Oy (part of the WallenbergGroup) and Rezidor AB in Sweden. Dr Einsmann is a member of the RemunerationCommittee and the Nominations Committee. As Dr Einsmann had, as at April 2008, servedon the Board for nine years, the Chairman has, in line with the Combined Code, conducted arigorous assessment of the effectiveness of his performance and independence as well as areview of his contribution to the Board and confirmed that he continues to be an effective

Non-executive Director and to demonstrate commitment to the role. If he is considered by the Board to beeligible, Dr Einsmann may submit himself for re-election at the 2009 AGM and annually thereafter.

Resolution 6

That Rodney Chase be re-elected as a director.

Rodney Chase was appointed a Non-executive Director on 1 July 2002. He is Non-executiveChairman of Petrofac Limited and a Non-executive Director of Computer Sciences Corporationin Los Angeles, Nalco Company in Chicago and Tesoro Corporation in San Antonio. He alsoserves as Senior Advisor to Lehman Brothers both in the USA and Europe.

Resolution 7

That Karen Cook be re-elected as a director.

Karen Cook was appointed a Non-executive Director on 1 October 2004. She is a ManagingDirector of Goldman Sachs International and President of Goldman Sachs, Europe. She is alsoa member of the European Management Committee and of the Partnership Committee.

Resolution 8

That Sir Terry Leahy be re-elected as a director.

Sir Terry Leahy became Chief Executive in 1997. Joining Tesco in 1979, he held a number ofmarketing and commercial positions prior to being appointed to the Board of Tesco PLC on5 October 1992.

Resolution 9

That Tim Mason be re-elected as a director. Tim Mason has been President and ChiefExecutive Officer of Fresh and Easy Neighborhood Market since January 2006. He wasappointed to the Board on 16 February 1995. He joined Tesco in 1982.

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Resolution 10

That PricewaterhouseCoopers LLP be reappointed auditors of the Company, to hold office until theconclusion of the next general meeting at which accounts are laid before the Company. This resolutionproposes the reappointment of PricewaterhouseCoopers LLP as auditors.

Resolution 11

That the remuneration of PricewaterhouseCoopers LLP be determined by the directors. This resolutiongives authority to the directors to determine the auditors’ remuneration.

Resolution 12

That in place of the equivalent authority given to the directors at the last AGM (but without prejudice tothe continuing authority of the directors to allot relevant securities pursuant to an offer or agreementmade by the Company before the expiry of the authority pursuant to which such offer or agreement wasmade), the directors be generally and unconditionally authorised in accordance with section 80 of theCompanies Act 1985 (the “Act”) to allot relevant securities (as defined in Section 80(2) of the Act) of theCompany up to a maximum aggregate nominal amount of £130.8 million. This authority will expire on 27June 2013 but will permit the Company to make an offer or agreement before expiry of the authoritywhich would or might require relevant securities to be allotted after 27 June 2013 and the directors mayallot such securities pursuant to such offer or agreement as if this authority had not expired.

Under Section 80 of the Act, the directors of a company may allot unissued shares only if authorised to do so.This resolution will give the directors authority to issue new shares up to a nominal value of £130.8 million,which is equal to approximately 33% of the issued share capital of the Company as at 28 April 2008, being thelatest practicable date prior to the publication of this Notice. There are no current plans to allot shares exceptin connection with the Company’s employee share schemes.

Resolution 13

That:

(a) subject to and conditional on the passing of resolution 12, the directors be empowered pursuant tosection 95 of the Act to allot equity securities for cash, pursuant to the authority given to the directorsfor the purposes of section 80 of the Act, as if subsection 89(1) of the Act did not apply to any suchallotment, provided that this power shall be limited to the allotment of equity securities:(i) in connection with an offer of such securities by way of rights issue; and(ii) otherwise than under sub-paragraph (a)(i) above up to an aggregate nominal amount of £19.6million, and shall expire at the conclusion of the Company’s next AGM following the date of the passing of this resolution, or, if earlier, on the expiry of 15 months from the date of the passing of thisresolution, save that the Company may, before such expiry, make an offer or agreement whichwould or might require equity securities to be allotted after such expiry and the directors may allotequity securities in pursuance of any such offer or agreement as if the power had not expired;

(b) subsections 94(2) to 94(7) of the Act apply for the interpretation of this resolution and in thisresolution “rights issue” means an offer of equity securities open for acceptance for a period fixedby the directors to holders on the register on a fixed record date in proportion as nearly as may be totheir respective holdings, but subject to such exclusions or other arrangements as the directors maydeem necessary or expedient to deal with fractional entitlements and/or legal or practical difficultiesunder the laws of, or the requirement of any recognised regulatory body or any stock exchange in, anyterritory; and

(c) this power applies in relation to a sale of shares which is included as an allotment of equity securitiesby virtue of subsection 94(3A) of the Act as if all references in this resolution to any such allotmentincluded any such sale and as if in the first paragraph of the resolution the words “pursuant to theauthority conferred on the directors for the purposes of section 80 of the Act” were omitted in relationto such sale.

If shares are to be allotted for cash, section 89 of the Act requires that, except to the extent disapplied byshareholders, those shares be offered first to existing shareholders in proportion to their shareholdings.However, it may sometimes be in the interests of the Company for the directors to have greater flexibility.


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This resolution would allow the directors to allot shares for cash only:• up to a nominal value of £19.6 million, which is approximately 5% of the Company’s issued share capitalas at 28 April 2008, being the latest practicable date prior to the publication of this Notice; or• in connection with a rights issue as defined in this resolution.This means that the proportionate interests of existing shareholders could not, without their agreement, bereduced by more than 5% by the issue of new shares for cash to new shareholders. There are no current plansto allot shares except in connection with the Company’s employee share schemes.

The authority sought and limits set by this resolution will also apply to any sale or transfer of treasury shares.Your directors consider it prudent to have the flexibility to buy back shares into treasury and subsequently sellor transfer them, if appropriate. This will enable them to act on short notice in appropriate circumstances shouldthat be in the best interests of the Company.

The directors intend to seek renewal of the authority and powers set out in resolutions 12 and 13 at each AGM.

Resolution 14

That the Company be generally and unconditionally authorised to make market purchases (within themeaning of section 163(3) of the Act) of Ordinary Shares of 5p each in the capital of the Company(“Shares”) on such terms as the directors think fit, subject to the following conditions:

a) the maximum number of Shares which may be purchased is 784.8 million Shares;

b) the minimum price which may be paid for each Share is 5p;

c) the maximum price which may be paid for each Share is the higher of:

(i) an amount equal to 105% of the average of the middle market quotations of a Share as derived fromthe London Stock Exchange Daily Official List for the five business days immediately preceding the dayon which the share is contracted to be purchased; and

(ii) the amount stipulated by Article 5(1) of the Buy-back and Stabilisation Regulation 2003; and

d) this authority will expire at the close of the next AGM of the Company or, if earlier, 15 months fromthe date this resolution is passed (except in relation to the purchase of Shares, the contract for which wasconcluded before the expiry of this authority).

This resolution seeks authority for the Company to buy its own shares. This resolution will renew the authoritygiven at the last AGM, and would be limited to 784.8 million shares, representing approximately 10% of theCompany’s issued share capital as at 28 April 2008, being the latest practicable date prior to the publication ofthis Notice. As at 28 April 2008, the total number of options to subscribe for shares in the Company was 289.1million (approximately 3.7% of the Company’s issued share capital and approximately 4.1% of the Company’sissued share capital if the full authority proposed by resolution 14 was used and the shares purchased werecancelled). The minimum and maximum prices to be paid for the shares are stated in the resolution. Any sharespurchased in this way may be cancelled and the number of shares in issue would be reduced accordingly, or theymay be held as treasury shares, which may then be cancelled, sold for cash or used to meet the Company’sobligations under its employee share schemes. No purchases will be made unless the expected effect will be toincrease earnings per share. The purchase of shares by the Company under this authority would be effected bya purchase in the market. It should not be confused with any share dealing facilities that may be offered toshareholders by the Company from time to time.

Resolution 15

That in accordance with section 366 of the New Act, the Company and all companies that are itssubsidiaries at any time during the period for which this resolution has effect be authorised to:

(a) make donations to political parties and/or independent election candidates, not exceeding £100,000in total;

(b) make political donations to political organisations, other than political parties, not exceeding£100,000 in total;

(c) incur political expenditure not exceeding £100,000 in total,during the period beginning with the date of the passing of this resolution and ending on the dateof the Company’s next annual general meeting.


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For the purpose of this resolution, the terms “political donations”, “political expenditure”,“independent election candidates”, “political parties” and “political organisations” shall have themeaning given by Part 14 of the New Act.

The New Act requires companies to obtain shareholders’ authority before they can make donations to EUpolitical organisations or incur EU political expenditure. The definition of political donations used in the Act isvery broad and, as a result, it covers activities that form part of normal relationships that are an accepted partof engaging with stakeholders and opinion-formers to ensure that companies’ issues and concerns areconsidered and addressed. Activities of this nature undertaken by the Company and its subsidiaries are notdesigned to support any political party or to influence public support for a particular party and would not bethought of as political donations in the ordinary sense of those words. They are entirely non-political in natureand are designed so that the Company can make MPs and others aware of key industry issues and mattersaffecting the Company. In the financial year ended on 23 February 2008, the Company and its subsidiariesspent £45,023 pursuant to equivalent authorities.

The Company’s policy is that it does not, directly or through any subsidiary, make what are commonly regardedas donations to any political party. The authorities we are requesting from you are not designed to change thatpolicy. They will, however, ensure that the Company and its subsidiaries act within the provisions of current UKcompany law and best practice when carrying out activities of the type covered by the Act.

Resolution 16

That: (a) with immediate effect, the articles of association of the Company contained in the document

produced to the meeting (and signed by the Chairman for the purposes of identification) be adoptedas the articles of association of the Company in substitution for, and to the exclusion of, the existingarticles of association of the Company;

(b) subject to the passing of Resolution 16(a) and with effect from 00.01am on 1 October 2008 or suchlater time at which s175 of the New Act shall be brought into force, the new articles of association ofthe Company adopted pursuant to Resolution 16(a) be amended by the deletion of Article 91 andthe insertion of new Articles 91 and 92, produced to the meeting (and signed by the Chairman of themeeting for purpose of identification) and the remaining articles be renumbered and the deletion ofArticle 99 and the insertion of new Article 100 produced to the meeting (and signed by the Chairmanof the meeting for purpose of identification).

Resolution 16(a) seeks approval for the adoption of new articles of association to reflect the provisions of theNew Act which have come into effect to-date. Resolution 16(b) seeks approval to make further amendmentsto the new articles of association in respect of the provisions of the New Act that become effective in October2008. A summary of the material changes proposed are provided in Appendix 1.

Your directors believe that the proposals in Resolutions 1 to 16 are in the best interests of both theCompany and its shareholders as a whole. Accordingly, the directors unanimously recommend that youvote FOR of all these resolutions, as they intend to do in respect of their own beneficial holdings.

By order of the BoardJonathan LloydCompany SecretaryTesco PLCTesco House, Delamare Road, Cheshunt, Herts, EN8 9SL13 May 2008


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Appendix 1

Explanatory notes of Principal Changes to the Company’s Articles of Association

1. Approach Provisions in the Company’s current articles of association (the “Current Articles”) which replicate provisionscontained in the New Act are in the main either removed in the Company’s new articles of association to beadopted pursuant to resolution 16(a) (the “New Articles”) or amended to bring them in line with the New Act.

In addition, the opportunity has also been taken to bring clearer language into the New Articles and to updatethe Current Articles to reflect current practice. Provisions in the Current Articles which are no longer relevant tothe Company have not been included in the New Articles.

2. Form of resolution The Current Articles contain a provision that, where for any purpose an ordinary resolution is required, a specialresolution is also effective. This provision is being removed as it is reflected in the New Act. In addition, theconcept of extraordinary resolutions has been abolished under the New Act and any requirement for anextraordinary resolution in the Current Articles has been replaced by one for a special resolution in the NewArticles.

3. Convening extraordinary and annual general meetings The provisions in the Current Articles dealing with the convening of general meetings and the length of noticerequired to convene general meetings are being amended to conform to the new provisions in the New Act. TheNew Act reduces the minimum notice period for all general meetings (other than annual general meetings) to14 clear days and the amendments to the Current Articles allow the Company to take advantage of suchprovision. The New Articles reflect the fact that the concept of extraordinary general meetings has beenabolished in the New Act and all meetings (other than annual general meetings) are referred to as generalmeetings.

4. Orderly Conduct of General Meetings The New Articles provide a wider discretion for the Board to ensure the orderly conduct of general meetings.

5. Votes of members Under the New Act proxies are entitled to vote on a show of hands whereas under the Current Articles proxiesare only permitted to vote on a poll. Multiple proxies may be appointed provided that each proxy is appointedto exercise the rights attached to a different share held by the member. The time limits for the appointment ofa proxy have been altered by the New Act so that the articles of association cannot provide that they shouldbe received more than 48 hours before the meeting, excluding days that are not working days. The New Articlesreflect these new provisions, as appropriate.

Multiple corporate representatives may be appointed (but if they purport to exercise their rights in differentways, then the power is treated as not being exercised). There is currently uncertainty and differing views on thelegal interpretation of section 323 of the New Act. For this reason the provisions in the Current Articles dealingwith the rights of corporate representatives are not included in the New Articles.

6. Maximum number of directors In order to give the Company more flexibility, the New Articles do not contain a maximum cap on the numberof directors who may be appointed to the board of the Company. There is currently no intention to increase thenumber of directors on the board of the Company to more than 16 (the cap contained in the Current Articles).

7. Conflicts of interest The New Act sets out directors’ general duties which largely codify the existing law but with some changes.Under the New Act, from 1 October 2008, a director must avoid a situation where he has, or can have, a director indirect interest that conflicts, or possibly may conflict with the company’s interests. The requirement is verybroad and could apply, for example, if a director becomes a director of another company or a trustee of anotherorganisation. The New Act allows directors of public companies to authorise conflicts and potential conflicts,where appropriate, where the articles of association contain a provision to this effect. The New Act also allowsthe articles of association to contain other provisions for dealing with directors’ conflicts of interest to avoid abreach of duty. Once amended pursuant to resolution 16(b), the New Articles give the directors authority toapprove such situations and include other provisions to allow conflicts of interest to be dealt with in a similarway to that under the Current Articles.


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There are safeguards which will apply when directors are deciding whether to authorise a conflict or potentialconflict. Firstly, only directors who have no interest in the matter being considered will be able to take therelevant decision, and secondly, in taking the decision the directors must act in a way they consider, in good faith,will be most likely to promote the company’s success. The directors will be able to impose limits or conditionswhen giving authorisation if they think this is appropriate.

It is also proposed that the New Articles, once amended pursuant to resolution 16(b), should contain provisionsrelating to confidential information, attendance at board meetings and availability of board papers to protecta director from being in breach of duty if a conflict of interest or potential conflict of interest arises. Theseprovisions will only apply where the position giving rise to the potential conflict has previously been authorisedby the directors. It is the Board’s intention to report annually on the Company’s procedures for ensuring that theBoard’s powers to authorise conflicts are operated effectively.

8. Directors’ indemnities and loans to fund expenditure The New Act has in some areas widened the scope of the powers of a company to indemnify directors and tofund expenditure in connection with certain actions against directors. In particular, a company can nowindemnify a director of a company that is a trustee of an occupational pension scheme against liability incurredin connection with the company’s activities as trustee of that scheme. This is reflected in the New Articles.

9. Disclosure of interests The provisions relating to the disclosure of interests in shares contained in the Companies Act 1985, includingsection 212 on company investigation powers, were repealed in January 2007. Section 793 of the New Act andrelated sections in Part 22 of the New Act, which contain the corresponding company investigation powerspreviously contained in section 212 of the Companies Act 1985 were brought into force simultaneously. Article82 has been amended to reflect the replacement of section 212 of the Companies Act 1985 with section 793of the New Act.

10. Non-executive directors’ fees The Current Articles contain an individual cap on the fees of the Non-executive Directors. In order to give theCompany more flexibility when setting the fees of the Non-executive Directors, the New Articles provide for anaggregate cap of £2 million, (the aggregate of the current individual caps being £1.75 million). There is currentlyno intention to increase the aggregate fees of the Non-executive Directors to the level of the new cap.

11. Borrowing Powers The New Articles mirror the provisions in respect of the borrowing powers of the Company in the Current Articles.In order to restore the headroom in respect of the Company’s borrowings, the maximum amount which theCompany may borrow under the New Articles has been increased from 11/2 times to 2 times the Company’sshare capital and reserves. There is currently no intention to increase the Companys borrowings up to the newlimit.

12. General Consequential amendments have been made across the New Articles to reflect new definitions in the New Actand other amendments which are of minor, technical or clarifying nature.


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Notes


The use of the FSC logo identifiesproducts which contain wood fromwell-managed forests certified inaccordance with the rules of theForest Stewardship Council.

Printed on 100% recycled paper with FSC certification. All pulps areElemental Chlorine Free (ECF) andthe manufacturing mill is accreditedwith the ISO 14001 standard for environmental management.

Printed by CTD using an alcohol-free process. The printing inks are made with non-hazardous vegetable oil from renewablesources. Over 90% of solvents anddevelopers are recycled for furtheruse and recycling initiatives are inplace for all other waste associatedwith this production. CTD are FSCand ISO 14001 certified with strictprocedures in place to safeguard theenvironment through all processes.
