Notice of tenth Annual General Meeting of BG Group plc

The tenth Annual General Meeting (‘AGM’ or ‘Meeting’) of BG Group plc (the ‘Company’) will be held in the Princess Suite of the Royal Berkshire Conference Centre, Madejski Stadium, Reading, Berkshire RG2 0FL on Monday, 18 May 2009 at 2.00 pm for the transaction of the business set out below.

This Notice contains the resolutions to be voted on at the Company’s AGM. Resolutions 1 to 14 below are ordinary resolutions that will be passed if more than 50% of the votes cast are in favour of the resolutions. Resolutions 15 to 19 are special resolutions that will be passed if not less than 75% of the votes cast are in favour of the resolutions. A poll will be called on each of the resolutions set out below. Further details are set out in the explanatory notes.

ORDINARY RESOLUTIONS

Resolution 1

To receive the Accounts and Reports of the Directors and the Auditors for the year ended 31 December 2008.

Resolution 2

To approve the Remuneration report as set in the 2008 Annual Report for the year ended 31 December 2008.

Resolution 3

To declare a final dividend in respect of the year ended 31 December 2008 of 6.55 pence per ordinary share payable on 22 May 2009 to holders of ordinary shares on the register of shareholders of the Company at the close of business on 14 April 2009.

Resolution 4

To elect Sir David Manning as a Director of the Company.

Resolution 5

To elect Martin Houston as a Director of the Company.

Resolution 6

To re-elect Sir Robert Wilson as a Director of the Company.

Resolution 7

To re-elect Frank Chapman as a Director of the Company.

Resolution 8

To re-elect Ashley Almanza as a Director of the Company.

Resolution 9

To re-elect Jürgen Dormann as a Director of the Company.

Resolution 10

To re-appoint PricewaterhouseCoopers LLP as Auditors of the Company, to hold office until the conclusion of the next general meeting at which accounts are laid before the Company.

Resolution 11

To authorise the Audit Committee to determine the remuneration of the Auditors.

Resolution 12

That, in accordance with sections 366 and 367 of the Companies Act 2006 (the ‘2006 Act’), the Company and all companies which are subsidiaries of the Company during the period when this resolution has effect be and are hereby authorised to:

1. (a) make political donations to political parties or independent election candidates up to a total aggregate amount of £15 000;
2. (b) make political donations to political organisations other than political parties up to a total aggregate amount of £15 000; and
3. (c) incur political expenditure up to a total aggregate amount of £20 000;

during the period beginning with the date of the passing of this Resolution and ending at the conclusion of the AGM of the Company in 2010, provided that, in any event, the total aggregate amount of all political donations and political expenditure incurred by the Company and its subsidiaries in such period shall not exceed £50 000.

For the purpose of this Resolution, ‘political donations’, ‘political organisations’, ‘political parties’ and ‘political expenditure’ have the meanings given to them in sections 363 to 365 of the 2006 Act.

Resolution 13

That the authorised share capital of the Company be and is hereby increased from £500 000 001 to £600 000 001 by the creation of an additional 1 000 000 000 ordinary shares of 10p each.

Resolution 14

That the Directors be and they are hereby generally and unconditionally authorised in accordance with section 80 of the Companies Act 1985 (the ‘1985 Act’) to exercise all the powers of the Company to allot:

1. (a) relevant securities (as defined in section 80(2) of the 1985 Act) up to an aggregate nominal amount of £116 481 140; and
2. (b) relevant securities comprising equity securities within the meaning of section 94 of the 1985 Act up to a further aggregate nominal amount of £111 926 886 provided that they are offered by way of a rights issue to holders of ordinary shares on the register of members at such record dates as the Directors may determine where the equity securities respectively attributable to the interests of the ordinary shareholders are proportionate (as nearly as may be practicable) to the respective numbers of ordinary shares held or deemed to be held by them on any such record dates and to other holders of equity securities entitled to participate therein, subject to such exclusions or other arrangements as the Directors may deem necessary or expedient to deal with treasury shares, fractional entitlements or legal or practical problems arising under the laws of any overseas territory or the requirements of any regulatory body or stock exchange or by virtue of shares being represented by depositary receipts or any other matter,

provided that this authority shall expire at the conclusion of the AGM of the Company in 2010 save that the Company shall be entitled to make offers or agreements before the expiry of such authority which would or might require relevant securities to be allotted after such expiry and the Directors shall be entitled to allot relevant securities pursuant to any such offer or agreement as if this authority had not expired; and all unexercised authorities previously granted to the Directors to allot relevant securities be and are hereby revoked.

Back to top

SPECIAL RESOLUTIONS

Resolution 15

That the Directors be and they are hereby empowered pursuant to section 95 of the Companies Act 1985 (the ‘1985 Act’) to allot equity securities (within the meaning of section 94 of the 1985 Act) for cash either pursuant to the authority conferred by Resolution 14 above or by way of a sale of treasury shares as if section 89(1) of the 1985 Act did not apply to any such allotment provided that this power shall be limited to:

1. (a) the allotment of equity securities in connection with an offer of securities (but in the case of the authority granted under paragraph (b) of Resolution 14 by way of a rights issue only) in favour of the holders of ordinary shares on the register of members at such record dates as the Directors may determine and other persons entitled to participate therein where the equity securities respectively attributable to the interests of the ordinary shareholders are proportionate (as nearly as may be practicable) to the respective numbers of ordinary shares held or deemed to be held by them on any such record dates, subject to such exclusions or other arrangements as the Directors may deem necessary or expedient to deal with treasury shares, fractional entitlements or legal or practical problems arising under the laws of any overseas territory or the requirements of any regulatory body or stock exchange or by virtue of shares being represented by depositary receipts or any other matter; and
2. (b) the allotment (otherwise than pursuant to sub-paragraph (a) above) to any person or persons of equity securities up to an aggregate nominal amount of £16 789 033,

and shall expire upon the expiry of the general authority conferred by Resolution 14 above, save that the Company shall be entitled to make offers or agreements before the expiry of such power which would or might require equity securities to be allotted after such expiry and the Directors shall be entitled to allot equity securities pursuant to any such offer or agreement as if the power conferred hereby had not expired.

Resolution 16

That the Company be generally and unconditionally authorised to make market purchases (within the meaning of section 163(3) of the Companies Act 1985) of ordinary shares of 10 pence each of the Company (‘ordinary shares’) provided that:

1. (a) the maximum number of ordinary shares hereby authorised to be acquired is 335 780 660;
2. (b) the minimum price that may be paid for any such ordinary share is 10 pence, the nominal value of that share;
3. (c) the maximum price that may be paid for any such ordinary share is an amount equal to 105% 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 share is contracted to be purchased; and
4. (d) the authority hereby conferred shall expire at the conclusion of the AGM of the Company in 2010 but a contract for purchase may be made before such expiry that will or may be executed wholly or partly thereafter, and a purchase of ordinary shares may be made in pursuance of any such contract.

Resolution 17

That the existing Articles of Association of the Company be amended by:

1. (a) deleting Article 3 in its entirety and replacing it with the following:
   
   “3. Form of the Company’s share capital
   
   The Company’s share capital at the date when these Articles were last amended was £600 000 001, made up of 6 000 000 010 Ordinary Shares”; and
2. (b) deleting Article 12 in its entirety;

with effect from the conclusion of the AGM.

Resolution 18

That with effect from 00.01 am on 1 October 2009:

1. (a) the Articles of Association of the Company be amended by deleting all the provisions of the Company’s Memorandum of Association which, by virtue of section 28 of the Companies Act 2006, are to be treated as provisions of the Company’s Articles of Association; and
2. (b) the Articles of Association contained in the document produced to the Meeting and signed by the Chairman for the purposes of identification be adopted and approved as the new Articles of Association of the Company in substitution for, and to the exclusion of, the Articles of Association of the Company in effect immediately prior to that time.

Resolution 19

That a General Meeting, other than an Annual General Meeting, may be called on not less than 14 clear days’ notice.

A shareholder entitled to attend and vote is entitled to appoint a proxy or proxies to attend, vote and speak instead of him/her. A proxy need not be a shareholder of the Company. Further details on how to appoint a proxy are contained below.

Back to top

Explanatory notes

Voting at the Meeting will be by poll rather than by show of hands. This is a more transparent method of voting as member votes are to be counted according to the number of shares held. The Chairman will invite each shareholder and proxy present at the Meeting to complete a poll card indicating how they wish to cast their votes in respect of each resolution. In addition, the Chairman will cast the votes for which he has been appointed as proxy. Poll cards will be collected at the end of the Meeting. Once the results have been verified by the Company’s Registrar, they will be notified to the UK Listing Authority and published on the Company’s website.

Annual Report and Accounts (Resolution 1)

The Directors are required to lay before the Meeting the Accounts of the Company for the financial year ended 31 December 2008, the Directors’ Report, the Remuneration report and the Auditors’ report on the accounts and the auditable part of the Remuneration report.

Remuneration report (Resolution 2)

UK listed companies must put an ordinary resolution to shareholders at the AGM seeking approval of the Remuneration report. The vote is advisory in nature, in that payments made or promised to Directors will not have to be repaid, reduced or withheld in the event that the Resolution is not passed.

Declaration of a dividend (Resolution 3)

A final dividend for the year ended 31 December 2008 of 6.55 pence per ordinary share is recommended by the Directors. A final dividend can be paid only after it has been declared by the shareholders at a general meeting. It is proposed that shareholders declare this dividend by passing Resolution 3. If so declared, the final dividend will be paid on 22 May 2009 to ordinary shareholders who were on the register of the Company at the close of business on 14 April 2009. American Depositary Share (‘ADS’) holders will be entitled to receive the US Dollar equivalent of £0.3275 per ADS on 1 June 2009. An interim dividend for the year ended 31 December 2008 of 4.68 pence per ordinary share was paid on 12 September 2008.

Election of Directors (Resolutions 4 and 5)

The Company’s Articles of Association require any Director newly appointed by the Board to retire at the first AGM following their appointment. Sir David Manning was appointed to the Board as a non-executive Director on 1 July 2008 and Martin Houston was appointed to the Board as an Executive Director on 3 February 2009. Biographical details of Sir David Manning and Martin Houston are contained with the Board biographical details of this Report. In reviewing the recommendations of the Nominations Committee concerning these elections, the Board concluded that Sir David Manning is independent in character and judgment, and that both Sir David and Martin Houston make effective and valuable contributions to the Board and demonstrate commitment to their roles. Accordingly, the Board unanimously recommends their election.

Re-election of Directors (Resolutions 6 to 9)

Directors are normally subject to re-election by shareholders every three years. Biographical details of the Directors proposed for re-election, namely Sir Robert Wilson, Frank Chapman, Ashley Almanza and Jürgen Dormann are contained with the Board biographical details of this Report. In reviewing the recommendations of the Nominations Committee concerning these re-elections, the Board has concluded that Jürgen Dormann is independent in character and judgment. In addition and, following the annual evaluation exercise conducted during the year, the Board considers that each of the Directors proposed for re-election continues to make an effective and valuable contribution and demonstrates commitment to the role. Accordingly, the Board unanimously recommends their re-election.

Re-appointment and remuneration of Auditors (Resolutions 10 and 11)

The Company is required to appoint auditors at each general meeting at which accounts are laid before the Company, to hold office until the next such meeting. Following the recommendation of the Audit Committee, the Directors propose that PricewaterhouseCoopers LLP be re-appointed as Auditors of the Company. Resolution 11 proposes that the Audit Committee be authorised to determine the level of the Auditors’ remuneration.

Political donations (Resolution 12)

Resolution 12 is designed to deal with rules on political donations and expenditure contained in Part 14 of the 2006 Act (sections 362 to 379). Under section 378 of the 2006 Act, a company may not make donations to an EU political party, or other EU political organisation, or to an independent election candidate in the EU of more than £5 000 in total, or incur any EU political expenditure, without first obtaining shareholder approval.

It is the Company’s policy not to make contributions to political parties. There is no intention to change that policy. What constitutes a ‘political donation’, a ‘political party’, a ‘political organisation’ or ‘political expenditure’ under the 2006 Act is not clear, as the legislation is capable of wide interpretation and may have the effect of covering a number of normal business activities that would not be thought to be political donations in the usual sense. To avoid any possibility of inadvertently contravening the 2006 Act, the Board considers that it would be prudent to follow the procedure specified in the 2006 Act to obtain shareholder approval for the Company and its subsidiaries to make political donations or incur political expenditure in the forthcoming year until the conclusion of the AGM of the Company in 2010. This authority will not be used to make any political donations as that expression would normally be understood.

Increase in authorised share capital (Resolution 13)

Resolution 13 proposes that the authorised share capital of the Company be increased from £500 000 001 to £600 000 001, representing an increase of approximately 19.9%. As discussed in connection with Resolution 17 below, it is proposed that the Directors be given authority to allot shares up to a nominal amount of £228 408 026, in line with the revised guidelines of the Association of British Insurers (‘ABI’) on the number of shares directors be authorised to allot. It is therefore proposed that the Company’s authorised share capital be increased so that the Company’s unissued share capital is then in line with the new authority to allot.

Authority to allot shares (Resolution 14)

At the last AGM of the Company held on 14 May 2008, the Directors were given authority to allot ordinary shares in the capital of the Company up to a maximum nominal amount of £117 078 772 representing approximately 1/3 of the Company’s issued ordinary share capital (excluding treasury shares) in issue at 4 March 2008, together with shares outstanding under BG Group’s option schemes. This authority expires at the end of this year’s AGM.

On 31 December 2008, the ABI revised its guidelines on directors’ authority to allot shares. The ABI’s guidelines previously stated that directors’ general authority to allot shares should be limited to an amount equal to 1/3 of the Company’s issued share capital (excluding treasury shares) together with the number of shares required to allot shares in respect of deferred consideration or options. The ABI’s new guidelines state that ABI members will continue to permit, and treat as routine, a request for authorisation to allot new shares in an amount of up to 1/3 of the existing issued share capital of the Company together with the number of shares required to allot shares in respect of deferred consideration or options. The new guidelines also state that the ABI will now regard as routine requests to authorise the allotment of a further 1/3 of the Company’s issued share capital provided that such additional headroom is only applied to fully pre-emptive rights issues and that the authorisation is valid for one year only. The Board has resolved that the Company should follow the ABI’s revised guidelines in order to comply with what the ABI now regards as routine.

Accordingly, the Board considers it appropriate that the Directors be granted authority to allot ordinary shares in the capital of the Company up to a maximum nominal amount of £228 408 026 representing approximately 2/3 of the Company’s issued ordinary share capital (excluding treasury shares) together with the number of shares required to satisfy the options outstanding under the Company’s employee share plans as at 3 March 2009 (the latest practicable date prior to publication of this Notice), of which 1 119 268 860 shares (representing approximately 1/3 of the Company’s issued ordinary share capital (excluding treasury shares)) can only be allotted pursuant to a fully pre-emptive rights issue. The power will last until the conclusion of the next AGM in 2010.

The Directors have no present intention of exercising this authority other than pursuant to employee share plans.

As at the date of this Notice, the Company is holding 225 289 873 shares in treasury representing 6.71% of the Company’s issued ordinary share capital (excluding treasury shares).

Back to top

Disapplication of pre-emption rights (Resolution 15)

Resolution 15 will empower the Directors to allot ordinary shares in the capital of the Company, pursuant to the authority granted under Resolution 14 above, for cash, and to sell shares held in treasury, without complying with the pre-emption rights in the 1985 Act in certain circumstances. In line with the ABI’s new guidelines described above, they will be able to allot:

1. (a) in connection with an open offer or other offer to existing shareholders in proportion to their existing holdings up to 1 119 268 860 shares (representing 1/3 of the Company’s issued ordinary share capital) or in the case of a fully pre-emptive rights issue only up to 2 238 537 720 shares (representing 2/3 of the Company’s issued ordinary share capital); and
2. (b) up to a maximum nominal value of £16 789 033, representing approximately 5% of the issued ordinary share capital of the Company as at 3 March 2009 (the latest practicable date prior to publication of this Notice) otherwise than in connection with an offer to existing shareholders.

The Directors have no present intention of exercising this authority.

The Directors confirm their intention to follow the provisions of the Pre-emption Group’s Statement of Principles regarding cumulative usage of authorities within a rolling three year period. These principles provide that companies should not issue for cash shares representing in excess of 7.5% of the Company’s issued share capital in any rolling three year period, other than to existing shareholders, without prior consultation with shareholders.

Authority to make market purchases of own ordinary shares (Resolution 16)

In certain circumstances, it may be advantageous for the Company to purchase its own ordinary shares and Resolution 16 seeks authority from shareholders to do so. The Resolution specifies the maximum number of shares that may be acquired (10% of the Company’s issued ordinary share capital (excluding treasury shares)) and the maximum and minimum prices at which they may be bought.

Any shares purchased in this way will, unless the Directors determine that they are to be held as treasury shares, be cancelled and the number of shares in issue will be reduced accordingly. Shares held in treasury will not automatically be cancelled and will not be taken into account in future calculations of earnings per share (unless they are subsequently resold or transferred out of treasury).

Shares are held in treasury in accordance with section 162(A) of the 1985 Act and may be used to satisfy awards under the Company’s share schemes pursuant to section 162(D) of the 1985 Act. No dividends are paid on and no voting rights attach to treasury shares. Any treasury shares sold by the Company will count towards the number of shares that, if Resolution 15 is passed, may be issued without offering them first to existing shareholders.

As the existing shareholder approval to purchase shares expires at the 2009 AGM, purchases after that date are subject to renewed shareholder approval at the AGM. The Directors have no present intention of exercising the authority to purchase the Company’s ordinary shares. The Directors will use the authority to purchase shares only after careful consideration, taking into account market conditions, other investment opportunities, appropriate gearing levels and the overall financial position of the Company. The Directors will only purchase such shares after taking into account the effects on earnings per share and the benefit for shareholders.

At 3 March 2009, the total number of options to subscribe for ordinary shares outstanding was 45 542 536. This represents 1.36% of the issued share capital at that date (excluding treasury shares). If the Company bought back the maximum number of shares permitted pursuant to the existing authority as well as the authority being sought by the passing of this Resolution and cancelled them, then the total number of options to subscribe for ordinary shares outstanding at that date would represent 1.69% of the issued share capital (excluding treasury shares) as reduced following those repurchases. At 3 March 2009, there were no warrants to subscribe for ordinary shares outstanding.

Amendment of existing Articles of Association (Resolution 17)

The Company proposes to amend its existing Articles of Association to delete Article 12 in its entirety and to reflect the increase in the authorised share capital from £500 000 001 to £600 000 001 proposed by Resolution 13. These amendments are necessary for the Company to comply with the ABI’s new guidelines on directors’ general authority to allot shares in the period between the conclusion of the AGM and 1 October 2009 on which date, subject to the passing of Resolution 17, the Company will adopt new Articles of Association. The Directors consider that it is no longer appropriate for their general authority to allot shares to be governed by a combination of Article 12 of the existing Articles of Association and a short form resolution proposed at each AGM, as has previously been the case. Accordingly, the Directors consider that Article 12 should be deleted and the authority sought at each AGM by way of resolutions substantially in the same form as Resolutions 14 and 15. This change will enable the Company to follow the ABI’s new guidelines this year and, in the future, any other guidelines on such authorities without the need to amend the Company’s Articles of Association. The increase in the Company’s authorised share capital is necessary should the Company choose to allot shares up to a further 1/3 of the Company’s issued share capital pursuant to Resolution 14(b), in the period from the conclusion of the AGM until 1 October 2009, in line with the ABI’s new guidelines.

Adoption of new Articles of Association (Resolution 18)

The 2006 Act, which is replacing the 1985 Act, is being implemented in stages and will be fully in force on 1 October 2009. Under Resolution 18, the Company is proposing to adopt new Articles of Association (‘the New Articles’) which will reflect the changes in company law brought about by the provisions of the 2006 Act which are already in effect or which are to come into effect on 1 October 2009, as well as some minor technical or clarifying changes. As well as those changes, the New Articles include some other modernising and clarificatory amendments, including, where appropriate, tracking the wording of the new model form articles for public companies (‘the model form articles’) published by the Department for Business Enterprise and Regulatory Reform, which are replacing the Table A articles under the 1985 Act on which many of the Company’s current Articles are based. The principal changes in the New Articles proposed to be adopted at the 2009 AGM relate to the Company’s constitution and share capital.

Under the 2006 Act, all provisions of the Company’s Memorandum, but most significantly the objects clause, will be deemed to form part of the Company’s Articles from 1 October 2009. It is possible for the objects clause to be removed or amended by amending the Articles by special resolution. It is not necessary under the 2006 Act for a company to set out its objects. The 2006 Act provides that, unless the articles state otherwise, a company’s objects will be unrestricted. One of the other key provisions of the Memorandum which will be deemed to form part of the Company’s Articles from 1 October 2009 is the restriction created by the existing authorised share capital statement. The 2006 Act removes the requirement for a company to place limits on its authorised share capital.

By adopting the New Articles which do not contain the objects clause or the authorised share capital statement, the Company will remove these provisions from its Articles, which would otherwise be deemed to form part of the Company’s Articles under section 28 of the 2006 Act. A more detailed explanation of these and other amendments is set out below. This summary has been prepared to assist shareholders in understanding the rationale for and substance of the proposed amendments. Although the New Articles are in many respects largely unchanged from the current Articles of Association, the Directors recommend that shareholders pass a resolution to adopt the New Articles rather than to pass resolutions detailing each individual amendment.

The references to article numbers in the below paragraphs are to provisions of the New Articles.

Back to top

1.   The Company’s objects
The 2006 Act significantly reduces the significance of a company’s memorandum. The provisions governing the operations of the Company are currently set out in both its Memorandum of Association and its Articles of Association. Under the 2006 Act, the Memorandum will no longer contain an objects clause and will simply record the names of the subscribers and the number of shares which each subscriber agreed to take in the Company. Under section 28 of the 2006 Act, the objects clause and all other provisions in the Memorandum will be treated as part of the Articles with effect from 1 October 2009. Unless the Articles provide otherwise, the Company’s objects will be unrestricted. By adopting the New Articles which do not contain the objects clause, the Company will remove the objects clause, which would otherwise be deemed to form part of its Articles under section 28. As the objects clause in the Company’s existing Memorandum of Association is intentionally very widely drafted and is designed to ensure that no restrictions are imposed on the Company’s operations, the removal of the objects clause in this way is not intended nor expected to have any practical impact on the Company’s powers or operations.

2.   Articles which duplicate statutory provisions
Provisions in the Company’s existing Articles of Association which replicate provisions which were contained in the 1985 Act but are now contained in the 2006 Act are either removed in the New Articles or amended to bring them into line with the 2006 Act.

3.   Limited liability (Article 3)
Under the 2006 Act, the memorandum of association will no longer contain a clause stating that the liability of the members of a company is limited. For existing companies, this statement will automatically be treated as having moved into the articles on 1 October 2009. An explicit statement of the members’ limited liability is therefore included in the New Articles.

4.   Authorised share capital and unissued shares
The 2006 Act abolishes the concept of authorised share capital and therefore, the memorandum of association will no longer contain a statement of a company’s authorised share capital. For existing companies, this statement will be deemed to be a provision of their articles of association setting out the maximum number of shares that may be allotted.

References to authorised share capital and to unissued shares have been removed from the New Articles and therefore the adoption of the New Articles by the Company will have the effect of removing the maximum number of shares that may be allotted. Directors will still need to obtain the usual shareholders’ authorisation in order to allot shares.

5.   Redeemable shares (Article 10)
Under the 2006 Act, articles of association need not include the terms on which redeemable shares may be redeemed. The directors may determine the terms, conditions and manner of redemption of redeemable shares provided they are authorised to do so by the articles. The New Articles contain such authorisation. The Company currently has no plans to issue redeemable shares but if it did so the Directors would need shareholders’ authority to issue new shares in the usual way.

6.   Transfer of shares (Article 41)
Under the 2006 Act, a company must either register a transfer or give the transferee notice of, and reasons for, its refusal to register a transfer. Any registration of a transfer or notice of refusal must be made or given as soon as practicable and in any event within two months from the date that the transfer is lodged with a company. The New Articles reflect these requirements. The Company cannot in any event refuse to transfer a fully paid share except in very limited circumstances (such as a transfer to more than four persons). The provision which gave the ability to suspend the registration of transfers of shares for periods not exceeding 30 days in any one year has been removed from the New Articles as there is no ability under the 2006 Act to close the register.

7.   Authority to purchase own shares, consolidate and sub-divide shares, and reduce share capital (Articles 6, 8 and 9)
At present, a company requires specific authorisations in its articles of association to purchase its own shares, to consolidate or sub-divide its shares and to reduce its share capital. Under the 2006 Act, public companies do not require specific authorisations in their articles of association to undertake these actions; but shareholder authority will still be required. Amendments have been made to the New Articles to reflect these changes.

8.   Provisions for employees on cessation or transfer of business (Article 111A)
The 2006 Act provides that the powers of the directors to make provisions for a person employed or formerly employed by a company or any of its subsidiaries in connection with the cessation or transfer of the whole or part of the undertaking of the company or that subsidiary may only be exercised by the directors if they are so authorised by the company’s articles or by the company in general meeting. Article 111A of the New Articles provides that the Directors may exercise this power.

9.   Recording and retention of minutes (Article 108) Article 108 of the New Articles contains a new provision to the effect that minutes must be retained for at least ten years, reflecting the relevant provision of the 2006 Act. (No minimum retention time was previously specified.)

Back to top

Notice of general meetings other than Annual General Meetings (Resolution 19)

Resolution 19 is a resolution to allow the Company to hold general meetings (other than AGMs) on 14 clear days’ notice.

At last year’s AGM, new Articles of Association were adopted which include a provision allowing general meetings of the Company to be called on the minimum notice period provided for in the 2006 Act. For general meetings other than AGMs the minimum notice period permitted by the 2006 Act is currently 14 days. However, the 2006 Act provisions relating to meetings are due to be amended with effect from 3 August 2009, as a result of the UK implementation of the EU Shareholders’ Rights Directive. The Government is still consulting on the detail of the amendments that are to be made and will not publish the final form regulations making the amendments until later in 2009. One of the amendments to be made will, in accordance with the EU Shareholders’ Rights Directive, increase the minimum notice period for listed company general meetings to 21 days, but with an ability for companies to reduce this period back to 14 days (other than for AGMs) provided that two conditions are met. The first condition is that a company offers facilities for shareholders to vote by electronic means. It is not yet clear what this will require and the details will be set out in the final regulations when published by the Government. The second condition is that there is an annual resolution of shareholders approving the reduction in the minimum notice period from 21 days to 14 days. The Board is therefore proposing Resolution 18 as a special resolution to approve 14 days as the minimum period of notice for all general meetings of the Company other than AGMs. The approval will be effective until the Company’s next AGM, when it is intended that the approval be renewed.

Recommendation

The Board considers the above Resolutions will promote the success of the Company and are in the best interests of the Company and its shareholders as a whole. The Directors unanimously recommend that you vote in favour of all the above Resolutions as they intend to do so themselves in respect of their own beneficial holdings.

Appointing a proxy

Shareholders are entitled to appoint a proxy or proxies to exercise all or any of their rights to attend, speak and vote at the AGM, provided that each proxy is appointed to exercise the rights attached to a different share or shares. A proxy does not need to be a shareholder of the Company but must attend the AGM to represent the relevant shareholder. A proxy form is enclosed with this Notice and instructions for its use are shown on the form. Appointing a proxy does not preclude a shareholder from attending the AGM and voting in person. Proxy forms must be submitted by 2.00 pm on 16 May 2009 (or, if the Meeting is adjourned, by not less than 48 hours before the time of the adjourned meeting) to Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6UT. Details of how to appoint your proxy electronically are given below.

Electronic proxy voting

Shareholders may register the appointment of a proxy or proxies for the AGM electronically at www.sharevote.co.uk⁽⁵⁾, a website operated by the Company’s Registrar, Equiniti. Shareholders are advised to read the terms and conditions, shown on the website, relating to the use of this facility before appointing a proxy. Any electronic communication sent by a shareholder that is found to contain a computer virus will not be accepted. Electronic communication facilities are available to all shareholders and those who use them will not be disadvantaged in any way.

Corporate representatives

Corporate shareholders are encouraged to appoint a proxy or multiple proxies in preference to appointing corporate representatives given the uncertainty arising from the provisions in the 2006 Act regarding the validity of votes cast by multiple corporate representatives. However, where corporate shareholders have appointed multiple corporate representatives, the Company intends to follow the guidance issued by the Institute of Chartered Secretaries and Administrators (‘ICSA’), as described below.

In order to facilitate voting by corporate representatives at the Meeting, arrangements will be in place at the Meeting so that:

1. (i) if a corporate shareholder has appointed the Chairman of the Meeting as its corporate representative with instructions to vote on a poll in accordance with the directions of all of the other corporate representatives for that shareholder at the Meeting, then on a poll those corporate representatives will give voting directions to the Chairman and the Chairman will vote (or withhold a vote) as corporate representative in accordance with those directions. Voting cards will be made available to corporate representatives at the Meeting; and
2. (ii) if more than one corporate representative for the same corporate shareholder attends the Meeting but the corporate shareholder has not appointed the Chairman of the Meeting as its corporate representative, a designated corporate representative will be nominated from those corporate representatives who attend the Meeting, and will vote on a poll. The other corporate representatives will give voting directions to that designated corporate representative. In accordance with the ICSA’s guidance, the designated corporate representative shall be the first of the corporate representatives to have registered his/her attendance at the Meeting. Voting cards will be made available to corporate representatives at the Meeting.

Corporate shareholders are recommended to read the guidance issued by the ICSA on proxies and corporate representatives at www.icsa.org.uk for further details of this procedure. The guidance includes a sample form of representation letter for those corporate shareholders wishing to appoint the Chairman as its designated corporate representative as described in (i) above. Should you have any queries in relation to proxy appointments or corporate representatives, please contact the Company’s Registrar, Equiniti, on 0871 384 2064.

Back to top

Electronic proxy appointment through CREST

CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the AGM to be held on 18 May 2009 and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting 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.

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 (‘Euroclear’) specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or proxies, or 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 the issuer’s agent (ID RA19) by 2.00 pm on 16 May 2009 (or, if the Meeting is adjourned, by not less than 48 hours before the time of the adjourned meeting). For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications 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.

CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. 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(s), 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 provider(s) are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

Persons nominated by shareholders

A copy of this Notice has been sent for information only to persons who have been nominated by a shareholder to enjoy information rights under section 146 of the 2006 Act (a ‘Nominated Person’). The rights to appoint a proxy set out in this Notice do not apply to Nominated Persons; they can only be exercised by the shareholder. However, a Nominated Person may have a right under an agreement between him/her and the shareholder by whom he/she was nominated to be appointed as a proxy for the Meeting or to have someone else so appointed. If a Nominated Person does not have such a right or does not wish to exercise it, he/she may have a right under such an agreement to give instructions to the shareholder as to the exercise of voting rights.

Total shares and voting rights

As at 3 March 2009, the Company’s capital consisted of 3 583 096 474 ordinary shares in issue of which 225 289 873 were held in treasury. Therefore, the total number of voting rights in BG Group plc as at 3 March 2009 was 3 357 806 601.

Summary of AGM business

A summary of the business carried out at the Meeting will be published on the Group’s website.

1. 1 This document is important. If you are in any doubt about its content, you should consult an appropriate independent adviser.

   If you have sold or transferred all of your shares in BG Group plc, please send this document and all accompanying documents to the purchaser or transferee, or to the stockbroker, bank or other agent through or to whom the sale or transfer was effected so that they can be passed on to the person who now owns the shares.

2. 2 The Memorandum and Articles of Association of the Company and the Articles of Association amended to reflect the changes proposed by resolutions 17 and 18 are available for inspection during normal business hours at the registered office of the Company and at the offices of Herbert Smith LLP, Exchange House, Primrose Street, London EC2A 2HS on any weekday (Saturdays, Sundays and public holidays excluded) and will also be available for inspection at the place of the AGM from 1.00 pm on the day of the Meeting until its conclusion.
3. 3 In accordance with provision A.4.4. of the Combined Code, copies of the service contracts and letters of appointment of all non-executive Directors of the Company are available for inspection during normal business hours at the registered office of the Company and at the offices of Herbert Smith LLP, Exchange House, Primrose Street, London EC2A 2HS on any weekday (Saturdays, Sundays and public holidays excluded) and will also be available for inspection at the place of the AGM from 1.00 pm on the day of the Meeting until its conclusion.
4. 4 The Company, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only those holders of ordinary shares registered in the register of members of the Company as at 6.00 pm on 16 May 2009 (or, if the Meeting is adjourned, at 6.00 pm on the date which is two days prior to the adjourned meeting) or their duly appointed proxies shall be entitled to attend or vote at the Meeting (or the adjourned meeting) in respect of the number of ordinary shares registered in their name at that time. Changes to entries on the register of members after 6.00 pm on 16 May 2009 (or, if the Meeting is adjourned, at 6.00 pm on the date which is two days prior to the adjourned meeting) shall be disregarded in determining the rights of any person to attend or vote at the Meeting (or the adjourned meeting).
5. 5 This electronic address is provided solely for the purposes of enabling shareholders to register their appointment of a proxy or proxies for the AGM electronically. The Company will not accept any other document or information relating to proceedings of the Meeting which may be sent by electronic means to that address.

Back to top