ASX Announcement
16 October 2014
Notice of Annual General Meeting Dispatched
The Annual General Meeting for Resource Equipment Limited (ASX: RQL) will be held at the
Royal Freshwater Bay Yacht Club, 1 Hobbs Place, Peppermint Grove, Western Australia at
10.30am (WST) on Tuesday 18 November 2014. The attached notice of meeting has been
dispatched to all shareholders on 16 October 2014.
Further Information
Mr Michael Kenyon
Company Secretary
Resource Equipment Limited
Tel: 08 6141 6500
RESOURCEEQUIPMENTLIMITED
ACN098812492
NOTICEOFANNUALGENERALMEETING
AND
EXPLANATORYMEMORANDUM
IMPORTANTINFORMATION
Thisisanimportantdocumentthatshouldbereadinitsentirety.
Ifyoudonotunderstandityoushouldconsultyourprofessionaladviserswithoutdelay.
IfyouwishtodiscussanyaspectofthisdocumentwiththeCompanypleasecontact
MrMichaelKenyonontelephone(+618)61416500
TIMEANDPLACEOFMEETINGANDHOWTOVOTE
Venue
Notice is hereby given that the Annual General Meeting (AGM)of Shareholders of Resource
Equipment Limitedwillbeheldat:
RoyalFreshwaterBayYachtClub
AthollHobbsRoom
1HobbsPlace
PeppermintGrove,WesternAustralia
CommencingAt:10.30am(WST)onTuesday,18November2014
HowtoVote
YoumayvotebyattendingtheMeetinginperson,byproxyorbyauthorisedcorporaterepresentative.
VotinginPerson
To vote in person, attend the Meeting on the date and at the place set out above. The
Meeting willcommenceat10.30am(WST).
VotingbyCorporateRepresentative
A corporationmayelect toappointa representativetoattendandvoteattheMeetingin accordance
withthe Corporations Act in which case the Company will require a Certificate of Appointment of
CorporateRepresentative executed in accordance with the Corporations Act.Thecertificateisto be
lodged with theCompanybeforetheMeetingorattheregistrationdeskonthedayoftheMeeting.
VotingbyProxy
Tovotebyproxy,pleasecompleteandsigntheproxyformenclosedwiththisNoticeofAnnualGeneral
Meetingassoonaspossibleand:
• returntheproxyformbyposttoResourceEquipmentLimited,POBox328,Welshpool,Western
Australia6986;
• sendtheproxyformbyfacsimileto(08)92589804(International:+(618)92589804);or
• delivertheproxyformtotheCompany’sregisteredofficeat276TreasureRoadNorth,
Welshpool,WesternAustralia6106
sothatitisreceivednolaterthan10.30am(WST)onSunday,16November2014.
Yourproxyformisenclosed.
2
AGENDA
ORDINARYBUSINESS
FinancialStatements,Directors’ReportandAuditor’sReport
To receive and consider the Financial Report,Directors’ReportandAuditor’sReportoftheCompany
for the yearended30June2014.
Resolution1:AdoptionofRemunerationReport
Toconsider,andifthoughtfit,passthefollowingresolutionasanonͲbindingresolution:
“That,forthepurposesofSection250R(2)oftheCorporationsActandforallotherpurposes,theCompany
adoptstheRemunerationReportascontainedintheCompany’sannualfinancialreportfortheyearended
30June2014.”
Note:thevoteonthisresolutionisadvisoryonlyanddoesnotbindtheCompanyortheDirectors.
Voting Exclusion Statement: The Company will, in accordance with the Corporations Act,
disregard anyvotescastonthisresolution(inanycapacity)byoronbehalfofamemberofthe
KeyManagementPersonnel(beingthosepersonsdescribedassuchintheRemunerationReport)
oraCloselyRelatedParty(suchasclosefamilymembersandanycontrolledcompanies)ofsuch
amember. However,theCompanyneednotdisregardavoteif:
(a)itiscastbyapersonasproxyforapersonwhoisentitledtovote,inaccordancewiththe
directionsontheproxyform;or
(b)itiscastbythepersonchairingtheMeetingasproxyforapersonwhoisentitledtovote,in
accordancewithanexpressdirectionontheproxyformtovoteastheproxydecides,evenifthe
resolutionisconnecteddirectlyorindirectlywiththeremunerationofKeyManagement
Personnel.
Resolution2:ReͲelectionofMrKeithLucasasaDirector
Toconsider,andifthoughtfit,passthefollowingresolutionasanordinaryresolution:
“ThatMrKeithLucas,beingaDirectoroftheCompanywhoretiresbyrotationunderClause11.3ofthe
Constitution,andbeingeligible,isreͲelectedasaDirectoroftheCompany.”
InformationaboutMrLucasiscontainedintheAnnualReportwhichisavailableatwww.rel.com.au.
Resolution3:ReͲelectionofMrAnthonyRyderasaDirector
Toconsider,andifthoughtfit,passthefollowingresolutionasanordinaryresolution:
“ThatMrAnthonyRyder,beingaDirectoroftheCompanywhoretiresbyrotationunderClause11.3of
theConstitution,andbeingeligible,isreͲelectedasaDirectoroftheCompany.”
InformationaboutMrRyderiscontainedintheAnnualReportwhichisavailableatwww.rel.com.au.
3
Resolution4:ElectionofMrAndrewAitkenasaDirector
Toconsider,andifthoughtfit,passthefollowingresolutionasanordinaryresolution:
“ThatMrAndrewAitken,beingaDirectoroftheCompanywhowasappointedbytheDirectorson
18July2014underClause11.11oftheConstitutionandwhoretiresunderClause11.12ofthe
Constitution,andbeingeligible,iselectedasaDirectoroftheCompany.”
InformationaboutMrAitkeniscontainedintheAnnualReportwhichisavailableatwww.rel.com.au.
Resolution5:ElectionofMrStephenDonnelleyasaDirector Toconsider,andifthoughtfit,passthefollowingresolutionasanordinaryresolution:
“ThatMrStephenDonnelley,beingaDirectoroftheCompanywhowasappointedbytheDirectorson
9April2014underClause11.11oftheConstitutionandwhoretiresunderClause11.12ofthe
Constitution,andbeingeligible,iselectedasaDirectoroftheCompany.”
InformationaboutMrDonnelleyiscontainedintheAnnualReportwhichisavailableatwww.rel.com.au.
Resolution6:AppointmentofPricewaterhouseCoopersasAuditor
Toconsider,andifthoughtfit,passthefollowingresolutionasanordinaryresolution:
“That,subjecttotheAustralianSecuritiesandInvestmentsCommissionprovidingitsconsenttothe
resignationofBDOAudit(WA)PtyLimitedastheauditoroftheCompanyandtoPricewaterhouseCoopers
providingitswrittenconsenttoact,thatPricewaterhouseCoopers,beingqualifiedtoactasauditorofthe
Company,beappointedastheCompany’sauditoreffectivefromtheendoftheAnnualGeneralMeeting.”
Resolution7:IncreaseinnonͲexecutiveDirectors’feepool
Toconsider,andifthoughtfit,passthefollowingresolutionasanordinaryresolution:
“That,inaccordancewithClause11.15oftheConstitution,themaximumaggregatesumpayablebythe
CompanytononͲexecutiveDirectorsoftheCompanyasfeesfortheirservicesasDirectorsbeincreasedby
$200,000to$500,000.”
Voting Exclusion Statement
The Company will disregard anyvotescastonthisresolution(inanycapacity)byanyDirector
andanyassociateofthatperson.
However,theCompanyneednotdisregardavoteif:
(a)itiscastbyapersonasproxyforapersonwhoisentitledtovote,inaccordancewiththe
directionsontheproxyform;or
(b)itiscastbythepersonchairingtheMeetingasproxyforapersonwhoisentitledtovote,in
accordancewithadirectionontheproxyformtovoteastheproxydecides.
VotingProhibitionStatement:
Apersonappointedasaproxymustnotvote,onthebasisofthatappointment,onthisResolution7if:
(a) theproxyiseither:
(i)
amemberoftheKeyManagementPersonnel;or
(ii) aCloselyRelatedPartyofsuchamember;and
4
(b) theappointmentdoesnotspecifythewaytheproxyistovoteonthisResolution7.
However,theaboveprohibitiondoesnotapplyif:
(c) theproxyistheChairofthemeeting;and
(d) theappointmentexpresslyauthorisestheChairtoexercisetheproxyeveniftheResolutionis
connecteddirectlyorindirectlywithremunerationofamemberoftheKeyManagementPersonnel.
SPECIALBUSINESS
Resolution8:ApprovalofissueofCompletionShares
Toconsider,andifthoughtfit,passthefollowingresolutionasanordinaryresolution:
“ThatforthepurposeofASXListingRule7.1andforallotherpurposes,theCompanybeauthorisedtoissuea
totalof133,317,678fullypaidordinarysharesintheCompanytoshareholdersofCampbellMiningServicesPty
LtdACN100097112(CMS)(CMSVendors)andtheshareholdersofRampsAustraliaPtyLtdACN123937520
(RAMPS)(RAMPSVendors)(onthetermsandintheproportionssetoutintheExplanatoryMemorandum)
(CompletionShares),insatisfactionofpartoftheconsiderationpayablebytheCompanyfortheacquisitionby
theCompanyofalloftheissuedsharecapitalofCMS(otherthansharesinCMSheldbyRAMPS)andallofthe
issuedsharecapitalofRAMPS.”
Voting Exclusion Statement
The Company will disregard anyvotescastonthisresolution(inanycapacity)byanypersonwho
mayparticipateintheproposedissueandapersonwhomightobtainabenefit,exceptabenefit
solelyinthecapacityofaholderofordinarysecurities,iftheresolutionispassedandany
associateofthatperson,including:
x
x
theCMSVendorsoranyassociateoftheCMSVendors;and
theRAMPSVendorsoranyassociateoftheRAMPSVendors.
However,theCompanyneednotdisregardavoteif:
(a)itiscastbyapersonasproxyforapersonwhoisentitledtovote,inaccordancewiththe
directionsontheproxyform;or
(b)itiscastbythepersonchairingtheMeetingasproxyforapersonwhoisentitledtovote,in
accordancewithadirectionontheproxyformtovoteastheproxydecides.
Resolution9:ApprovalofissueofEarnͲOutShares
Toconsider,andifthoughtfit,passthefollowingresolutionasanordinaryresolution:
“ThatforthepurposeofASXListingRule7.1andforallotherpurposes,theCompanybeauthorisedtoissueup
to19,898,160fullypaidordinarysharesintheCompanytoshareholdersofCampbellMiningServicesPtyLtd
ACN100097112(CMS)(CMSVendors)andtheshareholdersofRampsAustraliaPtyLtdACN123937520
(RAMPS)(RAMPSVendors)(onthetermsandintheproportionssetoutintheExplanatoryMemorandum),
(EarnͲOutShares)insatisfactionofpartoftheconsiderationpayablebytheCompanyfortheacquisitionbythe
CompanyofalloftheissuedsharecapitalofCMS(otherthansharesinCMSheldbyRAMPS)andallofthe
issuedsharecapitalofRAMPS.TheprecisenumberEarnͲOutSharestobeissued(ifany)istobecalculatedon
thetermsandintheproportionssetoutintheExplanatoryMemorandum.”
5
Voting Exclusion Statement
The Company will disregard anyvotescastonthisresolution(inanycapacity)byanypersonwho
mayparticipateintheproposedissueandapersonwhomightobtainabenefit,exceptabenefit
solelyinthecapacityofaholderofordinarysecurities,iftheresolutionispassedandany
associateofthatperson,including:
x
x
theCMSVendorsoranyassociateoftheCMSVendors;and
theRAMPSVendorsoranyassociateoftheRAMPSVendors.
However,theCompanyneednotdisregardavoteif:
(a)itiscastbyapersonasproxyforapersonwhoisentitledtovote,inaccordancewiththe
directionsontheproxyform;or
(b)itiscastbythepersonchairingtheMeetingasproxyforapersonwhoisentitledtovote,in
accordancewithadirectionontheproxyformtovoteastheproxydecides.
Resolution10:AdoptionoftheResourceEquipmentLimitedPerformanceRightsPlan
Toconsiderand,ifthoughtfit,topass,withorwithoutamendment,thefollowingresolutionasan
ordinaryresolution:
“ThattheResourceEquipmentLimitedPerformanceRightsPlan,theprincipaltermsofwhicharesummarised
intheExplanatoryMemorandum,andtheissueofPerformanceRightsandSharesunderthatplan(insofaras
Sharesaretobeissuedonvesting),beapprovedbyShareholdersforallpurposes,includingforthepurposeof
ASXListingRule7.2Exception9(asanexceptiontoASXListingRule7.1).”
Voting Exclusion Statement
The Company will disregard anyvotescastonthisresolution(inanycapacity)byanyDirectors
(exceptaDirectorwhoisineligibletoparticipateinanyemployeeincentiveschemeinrelationto
theCompany)andanyassociateofthatperson.
However,theCompanyneednotdisregardavoteif:
(a)itiscastbyapersonasproxyforapersonwhoisentitledtovote,inaccordancewiththe
directionsontheproxyform;or
(b)itiscastbythepersonchairingtheMeetingasproxyforapersonwhoisentitledtovote,in
accordancewithadirectionontheproxyformtovoteastheproxydecides.
VotingProhibitionStatement:
Apersonappointedasaproxymustnotvote,onthebasisofthatappointment,onthisResolution10if:
(a) theproxyiseither:
(i)
amemberoftheKeyManagementPersonnel;or
(ii) aCloselyRelatedPartyofsuchamember;and
(b) theappointmentdoesnotspecifythewaytheproxyistovoteonthisResolution10.
However,theaboveprohibitiondoesnotapplyif:
(c) theproxyistheChairofthemeeting;and
6
(d) theappointmentexpresslyauthorisestheChairtoexercisetheproxyeveniftheResolutionis
connecteddirectlyorindirectlywithremunerationofamemberoftheKeyManagementPersonnel.
Resolution11:IssueofPerformanceRightstoAndrewAitken
Toconsiderand,ifthoughtfit,topass,withorwithoutamendment,thefollowingresolutionasan
ordinaryresolution:
“That,forthepurposesofASXListingRule10.14andforallotherpurposes,Shareholdersapproveand
authorisetheDirectorstogrant11,357,142PerformanceRights,andtoallotandissueShares(insofaras
Sharesaretobeissuedonvesting),toAndrewAitken(orhisnominee(s))inaccordancewiththetermsofthe
ResourceEquipmentLimitedPerformanceRightsPlan,asdetailedintheExplanatoryMemorandum.”
Voting Exclusion Statement
The Company will disregard anyvotescastonthisresolution(inanycapacity)byanyDirectors
(exceptaDirectorwhoisineligibletoparticipateinanyemployeeincentiveschemeinrelationto
theCompany)andanyassociateofthatperson.
However,theCompanyneednotdisregardavoteif:
(a)itiscastbyapersonasproxyforapersonwhoisentitledtovote,inaccordancewiththe
directionsontheproxyform;or
(b)itiscastbythepersonchairingtheMeetingasproxyforapersonwhoisentitledtovote,in
accordancewithadirectionontheproxyformtovoteastheproxydecides.
VotingProhibitionStatement:
Apersonappointedasaproxymustnotvote,onthebasisofthatappointment,onthisResolution11if:
(a) theproxyiseither:
(i)
amemberoftheKeyManagementPersonnel;or
(ii) aCloselyRelatedPartyofsuchamember;and
(b) theappointmentdoesnotspecifythewaytheproxyistovoteonthisResolution11.
However,theaboveprohibitiondoesnotapplyif:
(c) theproxyistheChairofthemeeting;and
(d)
theappointmentexpresslyauthorisestheChairtoexercisetheproxyeveniftheResolutionis
connecteddirectlyorindirectlywithremunerationofamemberoftheKeyManagementPersonnel.
GENERAL BUSINESS
Other Business
Shareholderswillbeprovidedtheopportunitytoraiseanyotherbusinessmatters.
ByOrderoftheBoard
ANDREWAITKEN
ChiefExecutiveOfficer
7
VOTINGANDPROXIES
ShareholdersentitledtoattendandvoteattheMeeting
InaccordancewiththeCompany’sConstitutionandregulation7.11.37oftheCorporationsRegulations,
theBoardhasdeterminedthatShareholdersentitledtoattendandvoteattheMeetingshallbethose
personswhoarerecordedintheCompany’sregisterofmembersat7.00pm(WST)onSunday,
16November2014.
ProxyInformation
AShareholderwhoisentitledtoattendandvoteattheMeetingmayappointaproxy.IftheShareholder
isentitledtomorethanonevote,theShareholdermayappointoneortwoproxies.
WheretheShareholderappointstwoproxies,theappointmentmayspecifytheproportionornumberof
votesthateachproxymayexercise.Iftheappointmentdoesnotspecifyaproportionornumber,each
proxymayexerciseoneͲhalfofthevotes,inwhichcaseanyfractionofvoteswillbedisregarded.
AproxyneednotbeamemberoftheCompany.Ifyourequireanadditionalproxyform,theCompany
willsupplyitonrequest.Theproxyformandthepowerofattorneyorotherauthority(ifany)under
whichitissigned(oracertifiedcopy)mustbereceivedbytheCompanyonorpriorto10.30am(WST)on
Sunday,16November2014.Anyproxyformreceivedafterthattimewillnotbevalidforthe
scheduledMeeting.
ProxiesgivenbycorporateShareholdersmustbeexecutedinaccordancewiththeirconstitutions,or
signedbyadulyauthorisedattorney.Aproxymaydecidewhethertovoteonanymotion,exceptwhere
theproxyisrequiredbylawortheCompany’sConstitutiontovote,orabstainfromvoting,intheir
capacityasproxy.Ifaproxyisdirectedhowtovoteonanitemofbusinesstheproxymayvoteonthat
itemonlyinaccordancewiththatdirection.Ifaproxyisnotdirectedhowtovoteonanitemofbusiness,
aproxymayvoteasheorshethinksfit.IfaShareholderappointstheChairmanoftheMeetingasthe
Shareholder’sproxyanddoesnotspecifyhowtheChairmanistovoteonanitemofbusiness,the
Chairmanwillvote,asproxyfortheShareholder,infavouroftheitemonapoll.
Corporate Representatives
Abodycorporatemayelecttoappointarepresentative,ratherthanappointaproxy,inaccordancewith
section250DoftheCorporationsAct.WhereabodycorporateappointsarepresentativetheCompany
requireswrittenproofoftherepresentative’sappointmenttobelodgedwithorpresentedtothe
CompanyatorbeforetheMeeting.
8
RESOURCEEQUIPMENTLIMITEDACN098812492
EXPLANATORYMEMORANDUM
ThisExplanatoryMemorandumformspartofaNoticeconveningtheAnnualGeneralMeetingof
ShareholderstobeheldattheRoyalFreshhwaterBayYachtClub,1HobbsPlace,PeppermintGrove,
WesternAustraliaonTuesday,18November2014commencingat10.30am.ThisMemorandumisto
assistShareholdersinunderstandingthebackgroundtoandthelegalandotherimplicationsofthe
NoticeandthereasonsfortheResolutions.CertaincapitalisedtermsusedintheNoticeandthis
ExplanatoryMemorandumaredefinedinSection10.
1.
FINANCIALSTATEMENTS,DIRECTORS’REPORTANDAUDITOR’SREPORT
Asrequiredbysection317oftheCorporationsAct,thefinancialreportfortheyearended
30June2014andtheaccompanyingDirectors’Report,Directors’DeclarationandAuditor’sReportwill
belaidbeforetheMeeting.
NeithertheCorporationsActnortheCompany’sConstitutionrequiresavoteonthereports.However,
ShareholderswillhaveanopportunitytoaskquestionsaboutthereportattheMeeting.Shareholders
willalsobegivenareasonableopportunitytoasktheAuditorquestionsabouttheAuditor’sReportand
auditconduct.Writtenquestionsmaybesubmittedfive(5)businessdayspriortotheMeeting
addressedtotheChairmanandsenttotheCompany’sregisteredoffice,aboutthemanagementofthe
Company,oraddressedtotheCompany’sAuditorandsenttotheCompany’sregisteredofficeabout
auditconduct,accountingpoliciesusedbytheCompanyandAuditorindependence.Generalquestions
aboutthemanagementoftheCompanywillalsobetaken.
The2014AnnualReportcanbefoundontheCompany’swebsite(www.rel.com.au).
TheRemunerationReportissetoutintheDirectors’ReportintheCompany’s2014AnnualReport.
2.
RESOLUTION1–ADOPTIONOFREMUNERATIONREPORT
Section250RoftheCorporationsActrequiresalistedcompanytoputtoshareholdersateachAGM,a
resolutionadoptingthereportontheremunerationofthecompany’sdirectors,executivesandsenior
managersincludedinthecompany’sannualreport.TheaboveResolutionisbeingproposedtocomply
withthisrequirement.ThevoteonthisResolutionisadvisoryonlyandneitherbindstheCompany’s
DirectorsnortheCompany.However,undertheCorporationsActif25%ormoreofvotesthatarecast
arevotedagainsttheadoptionoftheRemunerationReportattwoconsecutiveannualgeneral
meetings(effectively,two“strikes”),shareholderswillberequiredtovoteatthesecondofthose
annualgeneralmeetingsonaresolution(referredtoasaspillresolution)thatanothermeetingbeheld
within90daysatwhichalloftheCompany’sDirectors(otherthanaManagingDirector)mustgoupfor
reͲelection.AttheCompany’s2013AGM,lessthan25%ofvotescastwereagainsttheRemuneration
Reportandthespillresolutionisnot,therefore,relevantforthisAnnualGeneralMeeting.
TheChairmanintendstovoteallavailableproxiesinfavourofadoptingtheRemunerationReport.If
theChairmanoftheMeetingisappointedasyourproxyandyouhavenotspecifiedthewaythe
ChairmanistovoteonthisResolution,bysigningandreturningtheproxyform,theShareholderis
consideredtohaveprovidedtheChairmanwithexpressauthorisationfortheChairmantovotethe
proxyinaccordancewiththeChairman’svotingintentions.
9
ProxyVotesonResolution1
TheKeyManagementPersonneloftheCompany(whichincludeseachofthedirectorsandthe
executivesnamedintheCompany’s2014RemunerationReport)andtheirCloselyRelatedPartieswill
notbeabletovoteasyourproxyonResolution1unlessyoutellthemhowtovote,ortheChairmanof
theMeetingisyourproxy.Accordingly,ifyouintendtoappointamemberoftheKeyManagement
PersonneloroneoftheirCloselyRelatedPartiesasyourproxy,pleaseensurethatyoudirectthemhow
tovoteonResolution1,otherwisetheywillnotbeabletocastyourvoteasyourproxyon
thatresolution.
IfyouappointtheChairmanoftheMeetingasyourproxy,youcandirecthimhowtovotebymarking
oneoftheboxesforResolution1(i.e.tovote“for”,“against”or“abstain”).Ifyouappointthe
ChairmanoftheMeetingasyourproxyortheChairmanoftheMeetingisappointedasyourproxyby
default,butyoudonotmarkavotingboxforResolution1,youwillbetakentohaveexpressly
authorisedtheChairmanoftheMeetingtoexercisetheproxyinrespectofthatresolutioneventhough
itisconnectedwiththeremunerationofKeyManagementPersonnel.
3.
RESOLUTIONS2&3–REͲELECTIONOFMRKEITHLUCASANDMRANTHONYRYDER
Clause11.3oftheConstitutionrequiresthatattheCompany’sAGMoneͲthirdoftheDirectorsshall
retirefromofficeprovidedalwaysthatnoDirectorholdsofficeforaperiodinexcessof3years(with
theexceptionoftheManagingDirector).WithaboardoffiveDirectors,thisrequirestwoDirectorsto
retireatthe2014AGM.
Clause11.4oftheConstitutionalsoprovidesthataretiringDirectoriseligibleforreͲelection.Messrs
LucasandRyderhaveretiredbyrotationandnowseekreͲelectioninaccordancewithClause11.4of
theConstitution.
InformationaboutMessrsLucasandRyderiscontainedintheAnnualReportwhichisavailableat
www.rel.com.au.
TheBoard(MrLucasabstaining)recommendsthatShareholdersvoteinfavourofMrLucas’s
reͲelection.
TheBoard(MrRyderabstaining)recommendsthatShareholdersvoteinfavourofMrRyder’s
reͲelection.
4.
RESOLUTION4–REͲELECTIONOFMRANDREWAITKEN
MrAndrewAitken,ChiefExecutiveOfficer,wasappointedasanadditiontotheBoardon18July2014
(asannouncedtoASXon17July2014).AsrequiredbyASXListingRule14.4andClause11.12ofthe
Company’sConstitution,anypersonappointedtobeaDirector,eithertofillacasualvacancyorasan
additiontotheexistingDirectors,holdsofficeuntilthenextAGMoftheCompany,butiseligiblefor
reͲelectionatthatmeeting.
MrAitkeniseligibleforreͲelectionattheMeetingandoffershimselfforreͲelectionasaDirectorin
accordancewiththeCompany’sConstitution.
InformationaboutMrAitkeniscontainedintheAnnualReportwhichisavailableatwww.rel.com.au.
TheBoard(MrAitkenabstaining)recommendsthatShareholdersvoteinfavourofMrAitken’s
reͲelection.
10
5.
RESOLUTION5–REͲELECTIONOFMRSTEPHENDONNELLEY
MrStephenDonnelleywasappointedasanadditiontotheBoardon9April2014(asannouncedto
ASXon11April2014).AsrequiredbyASXListingRule14.4andclause11.12oftheCompany’s
Constitution,anypersonappointedtobeaDirector,eithertofillacasualvacancyorasanadditionto
theexistingDirectors,holdsofficeuntilthenextAGMoftheCompany,butiseligibleforreͲelectionat
thatmeeting.
MrDonnelleyiseligibleforreͲelectionattheMeetingandoffershimselfforreͲelectionasaDirector
inaccordancewiththeCompany’sConstitution.
InformationaboutMrDonnelleyiscontainedintheAnnualReportwhichisavailableat
www.rel.com.au.
TheBoard(MrDonnelleyabstaining)recommendsthatShareholdersvoteinfavourofMrDonnelley’s
reͲelection.
6.
RESOLUTION6–APPOINTMENTOFPRICEWATERHOUSECOOPERSASAUDITOR
TheCompanyhasreceivednotificationfromBDOAudit(WA)PtyLimitedofresignationasauditorof
theCompany,effectiveasatthedateoftheAnnualGeneralMeetingandsubjecttoASICconsenting
toitsresignation.TheCompanyseeksmemberapprovaltoappointPricewaterhouseCoopersasthe
replacementauditoreffectiveonandfromthedateoftheAnnualGeneralMeeting,subjecttoASIC
consentingtotheresignationofBDOAudit(WA)PtyLimitedasauditoroftheCompanyandthe
writtenconsenttoactasauditorfromPricewaterhouseCoopers.PricewaterhouseCoopershas
indicatedthatitiswillingtoaccepttheappointmentandwillprovideitsformalconsenttoactupon
ASICconsentingtotheresignationofBDOAudit(WA)PtyLimitedasauditoroftheCompany.
AcopyoftheNoticeofNominationofPricewaterhouseCoopersasauditorisattachedasAnnexure1.
TheBoardrecommendstheappointmentofPricewaterhouseCoopersastheCompany’sauditor.
7.
RESOLUTION7–INCREASEINNONͲEXECUTIVEDIRECTORS’FEEPOOL
Resolution7proposestoincreasethemaximumaggregateamountpayabletononͲexecutive
DirectorsasfeesfortheirservicesasDirectorsby$200,000to$500,000.Thecurrentlimitof$300,000
hasnotbeenincreasedsinceitwasapprovedbyShareholdersattheAGMheldon27October2005.
ThefeepoolcoversallfeesforservicesasanonͲexecutiveDirectorincludingcommitteefeesand
superannuationcontributions.TheCompanydoesnotpayanybenefitinconnectionwithanonͲ
executiveDirector’sretirementfromofficeotherthansuperannuationcontributions.The
remunerationofeachDirectoroftheCompanyfortheyearended30June2014isdetailedinthe
Company’s2014AnnualReport.
TheBoardconsidersthatitisappropriateandreasonableatthistimetoseekanincreaseinthetotal
remunerationpoolavailabletobepaidtononͲexecutiveDirectorsoftheCompany.Increasingthe
maximumaggregateamountpayabledoesnotmeanthatexistingnonͲexecutiveDirectorswillreceive
immediatefeeincreasesorthattheappointmentofanynewDirectorisimminent(apartfromthe
proposedappointmentofMrWalter(Loddie)NaymolaasanonͲexecutivedirectorasdiscussedin
Section8below).Increasingthefeepoolavailabledoesnotmeanthewholeamountwillbeused.An
increaseinthefeepoolwillprovidescopetoretainandappointadditionalsuitablyqualifiedand
experiencednonͲexecutiveDirectorsinthefutureandtopayfeeswhichareconsistentwithmarket
benchmarks.TheBoardconsidersthatafeepoolof$500,000isappropriatefortheCompanygivenits
size,operationsandthejurisdictionsinwhichitoperatesandwillhelpenabletheCompanytoattract
andretainhighcalibrenonͲexecutiveDirectors.
11
NosecuritiesintheCompanyhavebeenissuedtoanonͲexecutivedirectorunderListingRules10.11or
10.14withtheapprovaloftheshareholdersatanytimewithintheprecedingthreeyears.
ProxyVotesonResolution7
TheKeyManagementPersonneloftheCompany(whichincludeseachofthedirectorsandthe
executivesnamedintheCompany’s2014RemunerationReport)andtheirCloselyRelatedPartieswill
notbeabletovoteasyourproxyonResolution7unlessyoutellthemhowtovote,ortheChairmanof
theMeetingisyourproxy.Accordingly,ifyouintendtoappointamemberoftheKeyManagement
PersonneloroneoftheirCloselyRelatedPartiesasyourproxy,pleaseensurethatyoudirectthemhow
tovoteonResolution7,otherwisetheywillnotbeabletocastyourvoteasyourproxyon
thatresolution.
IfyouappointtheChairmanoftheMeetingasyourproxy,youcandirecthimhowtovotebymarking
oneoftheboxesforResolution7(i.e.tovote“for”,“against”or“abstain”).Ifyouappointthe
ChairmanoftheMeetingasyourproxyortheChairmanoftheMeetingisappointedasyourproxyby
default,butyoudonotmarkavotingboxforResolution7,youwillbetakentohaveexpressly
authorisedtheChairmanoftheMeetingtoexercisetheproxyinrespectofthatresolutioneventhough
itisconnectedwiththeremunerationofKeyManagementPersonnel.
GiventheirinterestinthesubjectmatterofthisResolution,theDirectorsoftheCompanymakeno
votingrecommendationtoyouinrelationtoResolution7.
8.
RESOLUTIONS8AND9–ISSUEOFSHARESASCONSIDERATIONFORTHEACQUISITIONOF
CAMPBELLMININGSERVICESPTYLTDANDRAMPSAUSTRALIAPTYLTDBACKGROUND
Asannouncedtothemarketon25September2014,theCompanyhasenteredintoasharesale
agreementwiththeownersofCampbellMiningServicesPtyLtd(ACN:100097112)(CMS)andRamps
AustraliaPtyLtd(ACN:123937520)(RAMPS)toacquirealloftheissuedsharecapitalofCMS(other
thanthesharesownedbyRAMPS)andalloftheissuedsharecapitalofRAMPS(ShareSaleAgreement).
TheCMSVendorstogetherwiththeirrespectiveshareholdingsinCMSaresummarisedbelow:
CMSVendor
Percentage ordinary
shareholdinginCMS
CFT(CMS)PtyLtd
ACN129758863as
trusteefortheCampbell FamilyTrust
33.3%
WalterEugeneNaymola
15.7%
RAMPSholdstheremaining1,785,000ordinarysharesinCMS,representingtheremaining51%ofCMS.
ThesesharesarenotbeingacquiredbytheCompanydirectly,howevertheCompanyisindirectly
acquiringtheentireissuedcapitalofCMSasaresultofacquiringallissuedsharesinRAMPSinaddition
totheabovesharesinCMSheldbytheCMSVendors.
12
TheRAMPSVendorstogetherwiththeirrespectiveshareholdingsinRAMPSaresummarisedbelow:
RAMPSVendor
Percentage ordinary
shareholding
in
RAMPS
AshskyPtyLtd
ACN128345406
65.4%
WalterEugeneNaymola
34.6%
PursuanttotheShareSaleAgreement,theconsiderationfortheacquisitionoftheissuedsharecapital
ofCMSandtheissuedsharecapitalofRAMPSiscomprisedofthefollowing:
a)
Initialconsiderationpayableatcompletionasfollows:
I.
theissueof65,325,682CompletionSharestotheCMSVendorsintheproportionsfor
theVendorsspecifiedinthetableandrelatednotesonpage15(RelevantProportions);
II.
theissueof67,991,996CompletionSharestotheRAMPSVendorsintheRelevant
Proportions;and
III.
acashamounttoreimbursetheVendorsforthecostofcertainfixedassetsacquiredby
CMSsince30June2014.Thisamountiscappedatamaximumof$2,000,000andwillbe
reducedbytheamountofanycashreceivedbyCMSforthesaleofanyfixedassets
since30June2014.
b)
Followingcompletion,acashadjustmentamountthatmaybeeitherapositiveamount(paidto
theVendorsintheirRelevantProportionsaspartofthepurchaseprice)oranegativeamount
(paidtotheCompanybytheVendorsbywayofreductionofthepurchaseprice).1
c)
EarnͲoutconsiderationpayableapproximately16monthsfromcompletionasfollows:
I.
theissueofupto9,750,101EarnͲOutSharestotheCMSVendorsintheRelevant
Proportions;and
II.
theissueofupto10,148,059EarnͲOutSharestotheRAMPSVendorsintheRelevant
Proportions.
ThetriggerfortheissuanceoftheEarnͲOutSharesisbasedonachievementofthetotal
Company,CMSandRAMPS“Normalised”earningsbeforeinterest,tax,depreciationand
amortisationforthetwelvemonthperiodfromcompletion(CombinedEBITDA)ofnotlessthan
$21million.Forthesepurposes,Normalisationwillinvolvethemakingofadjustmentsto
1
Insummary,ifCMS’workingcapitallessnetdebtexceeds$900,000atcompletion,thedifference(adjustedfor
otheritemssuchasuncollectedreceivables)willbepaidbytheCompanytotheVendors,whileifworkingcapital
lessnetdebtislessthan$900,000,thedifference(adjustedasnotedabove)willbepaidbytheVendorsto
theCompany.
13
removetheimpactofunusualornonͲrecurringitemssuchasshare,assetorbusiness
acquisitionsorchangestoaccountingpolicies.
TheprecisenumberofEarnͲOutSharestobeissuedwillthenincreaseonaproͲratabasis,
achievingthemaximumnumberofEarnͲOutSharestobeissuedataCombinedEBITDAof
$22million.Thetablebelowsummarisestheabovecalculation:
CMSVendors
EarnͲOut
Shares
RAMPS
VendorsEarnͲ
OutShares
Totalof
Vendors’
shareholdings
inthe
Company#
Combined
EBITDA
CMSVendors
Completion
Shares
RAMPS
Vendors
Completion
Shares
<$21.00mn
65,325,682
67,991,996
0
0
30.0%
$21.33mn
65,325,682
67,991,996
3,155,829
3,284,637
31.0%
$21.67mn
65,325,682
67,991,996
6,404,479
6,665,882
32.0%
ш$22.00mn
65,325,682
67,991,996
9,750,101
10,148,059
33.0%
#Onafullydilutedbasis(butexcludinganyperformancerightstobeissuedtoAndrewAitkenpursuantto
Resolution11orSharesissuedonvestingofsuchrights)followingtheissueoftheCompletionSharesandEarnͲOut
Sharesandassuming311,074,580SharesonissueatthedateofthisNoticeandnoothershareissues.
ThepartieshaveagreedtouseCombinedEBITDAasthemilestoneratheranearningsmilestonethat
relatesonlytothefinancialperformanceofCMSforanumberofreasons,includingthefollowing:
a) WhileCMSwillbeawhollyͲownedsubsidiaryoftheCompany,theintentionisthattheCompany
andCMSwillbeoperatedasasinglebusinessunit.
b) Thepartiesbelievethatthemergeroftheirrespectivebusinesseswillenablecostsavings,
earningsaccretionsandothersynergies(Synergies)tobemadewhichwillbenefitall
shareholdersoftheCompany.SomeoftheseSynergiesmightbemadeattheCompanyentity
level;othersmightbemadeattheCMSentitylevel.ThepartiesbelievethattheVendors’
entitlementtotheEarnͲOutSharesshouldnotdependonwheretheSynergyismade.
c) TheCompany’sbusinessissimple,inthesensethatitisasinglebusiness,notaconglomerateof
separatebusinesses.Accordingly,thecalculationofCombinedEBITDAwillnotbeaffectedby
earningsofotherbusinessesthatdonotrelatetotheactivitiesundertakenbythecombinedREL
andCMS.
d) IftheCompanyweretoundertakeanyfurtheracquisitions,theearningsofthosebusinesses
wouldnotbetakenintoaccountincalculatingCombinedEBITDA,asaresultof“Normalisation”
asdiscussedabove.
Inallthesecircumstances(andalsohavingregardtotheescrowarrangementsfortheCompletion
Sharesdiscussedbelow),theBoardissatisfiedthatitisappropriateandinthebestinterestsofthe
Company’sshareholdersthattheperformancemilestonefortheEarnͲOutSharesbecalculatedin
thismanner.
14
AsummaryoftheconsiderationpayabletoeachVendorinrelationtotheTransaction,includingtheir
RelevantProportions(iethepercentageoftheconsiderationeachVendorisentitledto),issetoutas
follows:
Vendor
Relevant
Proportion
Completion
Shares
Percentage
shareholding
inthe
Companyasa
resultofthe
Transaction1
EarnͲOutShares
(assuming$22
millionCombined
EBITDA)
Percentage
shareholding
inthe
Companyasa
resultofthe
Transaction2
CFT(CMS)
PtyLtd
ACN129758
863as
trusteefor
the
Campbell
FamilyTrust
33.3%
44,439,226
10%
6,632,720
11%
AshskyPty
Ltd
ACN128
345406
33.3%
44,439,226
10%
6,632,720
11%
Walter
Eugene
Naymola3
33.3%
44,439,226
10%
6,632,720
11%
1
2
3
OnafullydilutedbasisimmediatelyfollowingtheissueoftheCompletionSharesandassuming
311,074,580SharesonissueatthedateofthisNoticeandnoothershareissuesbythe
Company(butexcludinganyperformancerightstobeissuedtoAndrewAitkenpursuantto
Resolution11orSharesissuedonvestingofsuchrights).
OnafullydilutedbasisimmediatelyfollowingtheissueoftheEarnͲOutSharesandassuming
311,074,580SharesonissueatthedateofthisNoticeandnoothershareissuesbythe
Company(butexcludinganyperformancerightstobeissuedtoAndrewAitkenpursuantto
Resolution11orSharesissuedonvestingofsuchrights).
MrWalterNaymolaisbothaCMSVendorwithaRelevantProportionof15.7%andaRAMPS
VendorwithaRelevantProportionof17.7%,hencehistotalpositioninrelationtothe
Transactionasshownintheabovetablerepresentstheaggregateof20,886,456Completion
ShareshewillreceiveasaCMSVendorand23,552,770CompletionShareshewillreceiveasa
RAMPSVendor,andupto3,117,381EarnͲOutShareshemayreceiveasaCMSVendorandupto
3,515,339EarnͲOutShareshemayreceiveasaRAMPSVendor.MrNaymolaalsohasadirector
indirectbeneficialinterestin1millionSharesotherthanpursuanttotheTransaction.
Oncompletion,MrWalter(Loddie)Naymola(oneoftheVendors),willbeappointedasanonͲexecutive
directoroftheCompany.
15
TotheextentthatthefullnumberofEarnͲOutSharesarenotrequiredtobeissued,theVendorshave
anoptiontosubscribeforthatnumberofSharesrepresentingthedifferencebetweenanyEarnͲOut
Sharesissuedandthemaximumof19,898,160EarnͲOutShares.Theissuepricewillbethehigherofthe
5dayvolumeweightedaveragepriceofSharesandthenettangibleassetsperShareimpliedbythe
mostrecentCompanyauditedaccounts.IfanySharesareissuedpursuanttothisoption,andassuming
thattherearenorestrictionsatthatdatewiththeCompanyissuingnewshares,theywillbeissuedat
thesametimeasanyEarnͲOutSharesandwillnotbesubjecttoanyescrowagreements.Underthe
ShareSaleAgreement,theVendorshavewarrantedtotheCompanythattheyarenotassociates(as
definedintheCorporationsAct)ofoneanotherinrelationtotheaffairsoftheCompanyandthatthe
issueoftheCompletionSharesandtheEarnͲOutSharestotheVendorsintheRelevantProportionsset
outabovewillnotcausethevotingpoweroftheVendorsoranyoftheirassociatesintheCompanyto
increasefrombelow20%tomorethan20%orfromastartingpointabove20%andbelow90%.
TheVendorshavealsowarrantedthatnoneofthemarerelatedpartiesoftheCompanyforthe
purposesofPart2E.1oftheCorporationsAct,otherthanMrNaymolabeingarelatedpartybyreason
onlyofthisTransaction,undersection228(6)oftheCorporationsAct.
Onorbeforecompletion,eachoftheVendorswillenterintoanescrowagreementwiththeCompany
underwhichthatVendorwillbeprohibitedfromdisposingorotherwisedealingwiththeCompletion
Sharesissuedtoitforaperiodoftwoyears.Theseare“voluntary”escrowagreements,inthesense
thattheyarenotrequiredundertheASXListingRules.TheVendorswillbepermittedtoselltheir
sharesintoatakeoverbidfortheCompanyorhavetheirsharestransferredorcancelledundera
schemeofarrangementinrelationtotheCompany.TheVendorswillalsobefreetoexercisetheir
votingrightsinrelationtotheshares.TheCompanyhasappliedtoASICfor,andbeengranted,relief
undersection665A(1)oftheCorporationsActsothatitsrelevantinterestintheseshares(whicharises
asaresultoftheescrowagreements)canbedisregardedforthepurposesofthetakeoverprovisions.
PursuanttoResolutions8and9,theCompanyisseekingshareholderapprovalinaccordancewith
ListingRule7.1andforallotherpurposesfortheissueoftheCompletionSharesandtheEarnͲOut
SharestotheVendorsintheirRelevantProportions.
LISTINGRULE7.1
ListingRule7.1providesthatacompanymustnot,subjecttospecifiedexceptions,issueoragreeto
issuemoreequitysecuritiesduringany12monthperiodthanthatamountwhichrepresents15%ofthe
numberoffullypaidordinarysecuritiesonissueatthecommencementofthat12monthperiod.Equity
securitiesissuedwithshareholderapprovalunderListingRule7.1donotcounttowardsthe15%limit
underListingRule7.1orthe10%limitunderListingRule7.1A.
InaccordancewithListingRule7.1,shareholderapprovalissoughttoissuetheCompletionSharesand
theEarnͲOutShares.TheeffectofResolutions8and9willbeto:
a) allowtheCompanytoissuetheCompletionSharesduringthe3monthperiodafterthe
Meeting,withoutusingtheCompany’s15%annualplacementcapacity,pursuanttoListingRule
7.1;and
b) allowtheCompanytoissuetheEarnͲOutShareswithina24monthperiodaftertheMeeting
(notingthatASXhasgrantedtheCompanyawaivertoListingRule7.3.2asdiscussedfurther
below),withoutusingtheCompany’s15%annualplacementcapacitypursuanttoListingRule
7.1andavoidingtheneedtoseekfurtherShareholderapprovalorratificationatthetimeof
issueoftheEarnͲOutShares.
16
ForthepurposesofListingRule7.3,theCompanyprovidesthefollowinginformation:
a) Numberofsecuritiestobeissued
I.
ThetotalnumberofCompletionSharestobeissuedtotheCMSVendorsintheir
RelevantProportionsis65,325,682.
II.
ThetotalnumberofCompletionSharestobeissuedtotheRAMPSVendorsintheir
RelevantProportionsis67,991,996.
III.
ThemaximumtotalnumberofEarnͲOutSharestobeissuedtotheCMSVendorsintheir
RelevantProportionsis9,750,101andthemaximumnumberofEarnͲOutSharestobe
issuedtotheRAMPSVendorsintheirRelevantProportionsis10,148,059.Theactual
numberofEarnͲOutSharestobeissuedcannotbedetermineddefinitivelyatthedate
ofthisNoticegiventhenumberofEarnͲOutSharestobeissued(ifany)isdependent
uponwhatCombinedEBITDAisachievedasdiscussedabove.
b) DatebywhichtheCompanywillissuethesecurities
I.
SubjecttoShareholderapprovalbeingobtained,theCompanyproposestoissuethe
CompletionSharesatcompletion,whichispresentlyestimatedtooccuron
28November2014and,inanyevent,nolaterthanthreemonthsfromthedateof
theMeeting.
II.
PursuanttotheShareSaleAgreement:
1. adeterminationoftheCombinedEBITDAinaccordancewiththeprocedure
setoutintheShareSaleAgreement(includingopportunitiesforreview,
requestsforadditionalinformationandresolutionbythepartiesofdisputed
items,butnottakingaccountofanydeterminationofanunresolveddispute
referredtoanexternalexpert)ispresentlyestimatedtooccurbyaround15
March2016(assumingcompletiontakesplaceon28November2014)
(CombinedEBITDADetermination);and
2. subjecttoobtainingShareholderapproval,theCompanymustissuetheEarnͲ
OutShareswithin10businessdaysoftheCombinedEBITDADetermination.
ListingRule7.3.2providesthatanoticeofmeetingmuststatethedatebywhichan
entitywillissuethesecuritieswhichmustbenolaterthanthreemonthsafterthedate
oftheMeeting.
TheCompanyhasappliedfor,andbeengranted,awaiverofListingRule7.3.2toenable
ittoissuetheEarnͲOutSharesnotlaterthan24monthsfromthedateoftheMeeting
(ieby28November2016),beingoutsidethestipulatedthreemonthperiodfortheissue
ofsharesinListingRule7.3.2.
c) Issuepriceofthesecurities
I.
TheCompletionSharesaretobeissuedatadeemedissuepriceofthevolumeweighted
averagemarketpricefortheCompany’sSharescalculatedoverthelast5daysonwhich
salesinShareswererecordedbeforethedayonwhichtheissuewasmade.
17
II.
TheEarnͲOutSharesaretobeissuedatadeemedissuepriceofthevolumeweighted
averagemarketpricefortheCompany’sSharescalculatedoverthelast5daysonwhich
salesinShareswererecordedbeforethedayonwhichtheissuewasmade.
d) Recipientsofthesecurities
I.
Pleaserefertothetableonpage15fordetailsofthenamesoftheCMSVendorsand
RAMPSVendorsandtheconsiderationpayabletoeachofthoseVendors.
e) Termsofthesecurities
f)
I.
TheCompletionShareswillbefullypaidordinarysharesintheCompanyandrank
equallywithotherSharesonissueandwillbesubjecttoa24monthescrowperiod
(commencingatthedateoftheescrowagreement),wherebythosesharesmaynotbe
sold,transferred,disposedoforotherwisedealtwithatanytimeinthat24month
period.However,theVendorswillbepermittedtoselltheirCompletionSharesintoa
takeoverbidfortheCompanyorhavetheirCompletionSharestransferredorcancelled
underaschemeofarrangementinrelationtotheCompany,providedsuchabidor
schemeissuccessful.TheVendorswillalsobefreetoexercisetheirvotingrightsin
relationtotheCompletionShares.
II.
TheEarnͲOutShareswillnotbesubjecttoescrow,andwillbefullypaidordinaryshares
intheCompanyandrankequallywithotherSharesonissue.
Useoffunds
I.
NofundswillberaisedbytheissueoftheCompletionSharesastheywillbeissuedin
satisfactionofpartoftheconsiderationpayablebytheCompanyfortheacquisitionby
theCompanyofalloftheissuedsharecapitalofCMS(exceptthesharesheldbyRAMPS)
andalloftheissuedsharecapitalofRAMPS.
II.
NofundswillberaisedbytheissueoftheEarnͲOutSharesastheywillbeissuedin
satisfactionofpartoftheconsiderationpayablebytheCompanyfortheacquisitionby
theCompanyofalloftheissuedsharecapitalofCMS(exceptthesharesheldbyRAMPS)
andalloftheissuedsharecapitalofRAMPS.
Forcompleteness,itisalsonotedthatShareholders’approvalunderChapter2EoftheCorporationsAct
(relatedpartybenefits)andListingRule10.11(issuesofsecuritiestorelatedparties)isnotrequired
becausetheTransactionhasbeennegotiatedatarm’slengthandMrNaymolaisarelatedpartyonlyby
virtueofsection228(6)andhenceException6inListingRule10.12applies.
BOARDRECOMMENDATION
TheBoardunanimouslyapprovedtheCMStransactionandrecommendsthatShareholdersvotein
favourofResolutions8and9.ThereasonstheBoardmakesthisrecommendationarethat:
a) ItconsidersthatanacquisitionofCMSandRAMPSbytheCompanyrepresentsanattractive
opportunityfortheCompanyanditsshareholders,andisinthebestinterestsoftheCompany;
and
b) ThetermsoftheproposedacquisitionrequiretheCompanytoissuetheCompletionSharesand
theEarnͲOutShares(subjecttoconditionsoutlinedabove).
18
9.
RESOLUTION10ͲAPPROVALOFTHERESOURCEEQUIPMENTLIMITEDPERFORMANCE
RIGHTSPLAN
Resolution10seeksShareholderapprovalfortheCompanytograntPerformanceRightsandtoallotand
issueShares(insofarasSharesaretobeissuedonvesting)underanewemployeeincentivescheme
titledResourceEquipmentLimitedPerformanceRightsPlan(Plan)inaccordancewithASXListingRule
7.2(Exception9(b))andforallotherpurposes.
TheCompany’sexistingperformancerightsplan(ExistingPlan)wasapprovedbyShareholdersata
generalmeetingoftheCompanyheldon8September2010,anditwassubsequentlyamendedatthe
AGMheldon29November2012.Atotalnumberof6,105,782Shareshavebeenissuedpursuanttothe
ExistingPlansincethedateofapproval.
TheCompanyhasrevisiteditslongtermincentive(“LTI”)arrangementstoensurethatitcontinuesto
reward,retainandmotivateseniorexecutivesinamanneralignedwithShareholders.Afterexploringa
numberofequityincentivevehicles,itwasdecidedthatanewperformancerightsplanwouldbestserve
theCompany’sobjectivesmovingforward.
UnderthePlan,seniorexecutiveswillbegrantedPerformanceRights.VestingofanyPerformance
RightsgrantedunderthePlanwillbesubjecttothesatisfactionofperformancehurdlesand/orvesting
conditionswhichwillbespecifiedinthetermsoftheinvitation.
EachPerformanceRightrepresentsarighttoreceiveoneordinaryShareintheCompanyatvesting.
TheLTIquantumtobegrantedwillbedeterminedwithreferencetomarketpracticeandwillbesubject
toapprovalbytheBoard.TheLTIdollarvaluethatseniorexecutiveswillbeentitledtoreceiveissetata
fixedpercentageoftheirfixedremuneration,dependingontheparticipant’slevelandseniority.LTI
quantumissetat50%ofbasesalaryfortheCEO.ThislevelofLTIisinlinewithcurrentmarketpractice.
ThePlanwillenabletheCompanytomakegrantstoseniorexecutivessothatLTIsformakey
componentoftheirtotalremuneration.Thiswillbetteraligntheremunerationpackagesofthe
Company’sseniorexecutiveswithcurrentmarketpractice.
ThePlanwillalsoenabletheCompanytodeliverSTIawardsintheformofagrantofPerformanceRights
asopposedtoacashbonusaward.
TheBoardbelievesthatgrantsmadeunderthePlanwillserveanumberofpurposes,including:
x
toactasakeyretentiontool;and
x
tofocusonfutureShareholdervaluegeneration.
ThePlansignifiesamovetowardsastructurethatwillrewardlongͲtermsustainableShareholdervalue
generation.AstheCompanyfocusesonarestructureofthebusinesstounlocklongtermvaluethe
focuswillbeonseniorexecutivesbeingpredominantlyrewardedthroughtheallocationofequitybased
incentives.
ItisproposedthatPerformanceRightswillbeissuedtoparticipantsinaccordancewiththerulesofthe
Plan.AsummaryoftheprincipaltermsofthePlanrulesissetoutinScheduleAtothisExplanatory
Memorandum.
NoPerformanceRightshaveyetbeenissuedbytheCompanyunderthePlan.
ItiscurrentlyproposedthattheCompanywillmakegrantsofPerformanceRightstoAndrewAitkenin
November2014underthetermsofthePlan.
19
AnyfutureissuesofPerformanceRightsunderthePlantoaDirector,anassociateoftheDirector,ora
personwhoserelationshipwiththeCompany,DirectororassociateoftheDirectoris,inASX’sopinion,
suchthatapprovalshouldbeobtainedwillrequireadditionalShareholderapprovalunderASXListing
Rule10.14attherelevanttime.Forthisreason,theCompanyisalsoseekingapprovalunderResolution
11fortheissueof11,357,142PerformanceRightspursuanttothePlantoAndrewAitken,theManaging
DirectoroftheCompany.
ASXListingRulerequirements
ShareholderapprovalisbeingsoughttoapprovetheissueofPerformanceRightsandtoallotandissue
Shares(insofarasSharesaretobeissuedonvesting)underthePlanforthepurposeofASXListing
Rule7.2Exception9(asanexceptiontoASXListingRule7.1)andforallotherrelevantpurposes.
ASXListingRule7.1providesthatwithouttheapprovaloftheholdersofordinarysecurities,anentity
mustnotissueoragreetoissueequitysecuritieswhichamounttomorethan15%ofitsissuedshare
capitalinanyrolling12monthperiod.However,ASXListingRule7.2setsoutanumberofexceptionsto
ASXListingRule7.1.TheseexceptionsincludeException9whichisanissueunderanemployee
incentiveschemeifwithin3yearsbeforethedateofissuetheholdersofordinarysecuritieshave
approvedtheissueofsecuritiesundertheschemeasanexceptiontothisrule.TheeffectofResolution
10willbetoallowtheDirectorstoallotandissuePerformanceRightsandShares(insofarasSharesare
tobeissuedonvesting)duringtheperiodof3yearsaftertheMeeting,withoutusingtheCompany’s
15%annualplacementcapacity.
AsummaryofthekeytermsandconditionsofthePlanissetoutinScheduleA.Inaddition,acopyofthe
PlanisavailableforreviewbyShareholdersattheregisteredofficeoftheCompanyuntilthedateofthe
Meeting.AcopyofthePlancanalsobesenttoShareholdersuponrequesttotheCompanySecretary
(+6161416500).
ProxyVotesonResolution10
TheKeyManagementPersonneloftheCompany(whichincludeseachofthedirectorsandthe
executivesnamedintheCompany’s2014RemunerationReport)andtheirCloselyRelatedPartieswill
notbeabletovoteasyourproxyonResolution10unlessyoutellthemhowtovote,ortheChairmanof
theMeetingisyourproxy.Accordingly,ifyouintendtoappointamemberoftheKeyManagement
PersonneloroneoftheirCloselyRelatedPartiesasyourproxy,pleaseensurethatyoudirectthemhow
tovoteonResolution10,otherwisetheywillnotbeabletocastyourvoteasyourproxyonthat
resolution.
IfyouappointtheChairmanoftheMeetingasyourproxy,youcandirecthimhowtovotebymarking
oneoftheboxesforResolution10(i.e.tovote“for”,“against”or“abstain”).Ifyouappointthe
ChairmanoftheMeetingasyourproxyortheChairmanoftheMeetingisappointedasyourproxyby
default,butyoudonotmarkavotingboxforResolution10,youwillbetakentohaveexpressly
authorisedtheChairmanoftheMeetingtoexercisetheproxyinrespectofthatresolutioneventhough
itisconnectedwiththeremunerationofKeyManagementPersonnel.
Recommendation
ThenonͲexecutivedirectorsrecommendthatShareholdersvoteinfavouroftheresolutiontoapprove
thePlan.
10.
RESOLUTION11ͲISSUEOFPERFORMANCERIGHTSTOANDREWAITKEN
Resolution11seeksapprovaltoissue11,357,142PerformanceRightsandtoallotandissueShares
(insofarasSharesaretobeissuedonvesting)toAndrewAitkenunderthePlan.
AndrewAitkenistheManagingDirectoroftheCompany.
20
ThestructureofAndrewAitken’sremunerationpackageshouldbebroughtintolinewithmarket
practice,sothatLTIformsakeycomponentofthetotalannualremunerationpackage.Asignificant
portionoftotalremunerationshouldbeplacedatͲriskanddeliveredinequitytobetteralignhis
interestswiththoseofShareholders,toencouragetheproductionoflongͲtermsustainablegrowth,and
toassistwithretention.
Assuch,theBoardhasresolvedtointroducethePlan,underwhichPerformanceRightsmaybegranted
(asdescribedbelow).TheproposaltoissuePerformanceRightstoAndrewAitkenisalignedto
Resolution11.
1)Vehicle
ItisproposedthatPerformanceRightsbeissuedtoAndrewAitken.PerformanceRightsarethemost
commonsharebasedincentiveplancurrentlyusedbyASXlistedcompanies,theyaresimpleto
understandandadministerandtheirvalueistransparent,beingequaltotheunderlyingshareprice.
2)Quantum,vestingconditionsandperformanceperiod
STI
UndertheSTIplananannualbonusofupto50%offixedremunerationcouldbeawardedsubjectto
meetingthekeyperformancemeasuresfortherelevantfinancialyear.Thebonuswouldcurrently
equatetoamaximumawardof$265,000perannum.InsteadoftheSTIbeingdeliveredincashthe
BoardhasresolvedtomandatethatforFY15,FY16andFY17anybonusduemustbetakenintheform
ofPerformanceRights.ThisistoprovideagreatershareholderalignmentbyensuringthevalueofSTI
awardsisalignedtothefutureshareprice.
BasedonanassumedmaximumSTIawardof$265,000perannumandusingashareallocationpriceof
$0.14,amaximumof5,678,571PerformanceRightscouldbeawardedover3years.
Itisproposedthattheawardof5,678,571PerformanceRightswillbegrantedupfrontandsubjectto
vestingconditionsasfollows:
x
Tranche1–1,135,714PerformanceRightswillvestsubjecttoperformanceagainsttheSTIplans
FY15keyperformancemeasuresandremainingemployedfromthedateofgrantto1July2015.
x
Tranche2–1,703,571PerformanceRightswillvestsubjecttoperformanceagainsttheSTIplans
FY16keyperformancemeasuresandremainingemployedfromthedateofgrantto1July2016.
x
Tranche3–2,839,286PerformanceRightswillvestsubjecttoperformanceagainsttheSTIplans
FY17keyperformancemeasuresandremainingemployedasat1July2017.
TheSTIhasbeendesignedtoaidwithretentionandassuch,greaterweightinghasbeenplacedon
Tranche3toencourageservicewiththeCompany.
LTI
UndertheLTIplananannualawardofupto50%offixedremunerationcouldbeawardedsubjectto
meetingthekeyperformancemeasures,thiswouldcurrentlyequatetoanannualLTIawardof
$265,000.
TypicalpracticeisforLTIawardstobemadeonanannualbasis.However,inordertofocusonthelong
termrestructureofthebusinessithasbeendecidedabetterstructurewouldbeallocateallofthenext
threeyearsLTIawardsnow,withnofurtherLTIawardstooccurforthenext5years.
BasedonanassumedmaximumLTIawardof$265,000perannumandusingashareallocationpriceof
$0.14,amaximumof5,678,571PerformanceRightscouldbeawardedover3years,withthisgranttobe
awardednow.
UndertheLTIplanthe5,678,571PerformanceRightswillbesplitinto3equaltranchesasfollows:
x
Tranche1–1,892,857PerformanceRightswillvestsubjecttoachievinganEPStarget(assetby
theBoard)forFY15andremainingemployedupuntil1July2017
21
x
Tranche2–1,892,857PerformanceRightswillvestsubjecttoachievinganEPStarget(assetby
theBoard)forFY16andremainingemployedupuntil1July2017
x
Tranche3–1,892,857PerformanceRightswillvestsubjecttoachievinganEPStarget(assetby
theBoard)forFY17andremainingemployedupuntil1July2017
EPSmeasurestheportionofacompany’sprofitattributabletoShareholdersperissuedShare,and
servesasanindicatorofacompany’sprofitability.IncalculatingEPS,theBoardmayexerciseits
discretiontonormaliseearningstotakeintoaccountunusualoroneͲoffevents.TheBoardwillonly
exerciseitsdiscretionwherenecessarytolookthroughtheseabnormalvariationsinprofitabilitysothat
focusisplacedonwhatrepresentsthecompany’scoreearnings.
AchievementoftheEPShurdlewillprovidearewardwhentheCompanymeetsorexceedsthetarget
setbytheBoard.IfTranche2PerformanceRightsdonotpasstherelevantEPShurdle,theywillremain
onfootwithperformancebeingretestedattheendofthefollowingfinancialyear(FY17)againsttheEPS
targetsetforTranche3PerformanceRights.
Therewillbenoretestingofanyotherhurdles.AnyPerformanceRightsthatfailtobecomeexercisable
bytheendofthevestingperiodduetoafailuretosatisfyvestingconditionsand/orperformance
hurdleswilllapseandbeforfeited.
Duetocommercialsensitivities,theCompanywilldiscloseonalookͲbackbasisintheCompany’sannual
reportdetailsoftheProfitAfterTaxandEPStargetsthatwereset,theprocesstakenbytheBoardin
settingthosetargets,andtheperformanceachievedagainstthosetargetsthathaveresultedinvesting
orlapsingoftherelevantPerformanceRights.
AnysharesallocatedorissuedonvestingofPerformanceRightswillberestrictedfromdisposaluntil1
September2018.Thisistoensurethattheultimatevaluereceivedwillbereferencedtotheshareprice
attheendofa4yearperiod.
TheproposedstructurewillfocusongrowingtheEPSofthebusiness,retainingtheservicesoftheCEO
fortheperiodnecessarytoseetherestructurethrough,andwiththevalueultimatelyrealisedunderthe
planbeingalignedtothefuturesharepriceoverthelongterm.
Therefore,itisproposedtograntatotalof11,357,142PerformanceRightstoAndrewAitken(orhis
nominee(s))forthefinancialyearending30June2015(“FY15”)undertheSTIandLTIplans.Itis
intendedthatnofurthergrantsofPerformanceRightswillbemadepriorto1July2018.
ASXListingRulerequirements
ForthepurposesoftheapprovalsoughtunderASXListingRule10.14andforallotherpurposes,the
followinginformationisprovidedtoShareholdersinrespectofthePerformanceRights:
x
ThePerformanceRightswillbegrantedtoAndrewAitken,ManagingDirector.
x
SubjecttoShareholderapprovalbeingobtained,thenumberofPerformanceRightsgrantedto
AndrewAitkenwillbeamaximumof11,357,142PerformanceRights.
x
IfallAndrewAitken’s11,357,142PerformanceRightsvest,themaximumnumberofordinary
SharesthatmaybeissuedtoAndrewAitkenwillbe11,357,142ordinaryShares.
x
NoconsiderationispayablebyAndrewAitkenatthetimeofgrantofthePerformanceRightsor
upontheallocationofSharestowhichhemaybecomeentitledtoonthevestingofsomeorall
ofthePerformanceRights.
x
TheinitialgrantofPerformanceRightswillbesubjecttotheperformancehurdles
outlinedabove.
x
NograntshavebeenmadeunderthePlanasatthedateofthisExplanatoryMemorandum,and
itisexpectedthatnonewillbemadeuntilafterthedateofthe2014AnnualGeneralMeeting.
22
x
FulldetailsofAndrewAitken’sholdingsofSharesandOptionsaresetoutonintheCompany’s
2014AnnualReport.
x
ThenamesofallpersonsreferredtoinListingRule10.14entitledtoparticipateinthePlanare
asfollows:
AndrewAitken
AnthonyRyder
x
NoloanswillbemadebytheCompanyinconnectionwiththeacquisitionofthePerformance
Rights.
x
ItisexpectedthatthePerformanceRightswillbegrantedtoAndrewAitkenassoonas
practicableafterShareholderapprovalisreceivedandinanyeventnolaterthan12months
fromthedateoftheAnnualGeneralMeetingwithoutobtainingfurtherShareholderapproval.
ProxyVotesonResolution11
TheKeyManagementPersonneloftheCompany(whichincludeseachofthedirectorsandthe
executivesnamedintheCompany’s2014RemunerationReport)andtheirCloselyRelatedPartieswill
notbeabletovoteasyourproxyonResolution11unlessyoutellthemhowtovote,ortheChairmanof
theMeetingisyourproxy.Accordingly,ifyouintendtoappointamemberoftheKeyManagement
PersonneloroneoftheirCloselyRelatedPartiesasyourproxy,pleaseensurethatyoudirectthemhow
tovoteonResolution11,otherwisetheywillnotbeabletocastyourvoteasyourproxyonthat
resolution.
IfyouappointtheChairmanoftheMeetingasyourproxy,youcandirecthimhowtovotebymarking
oneoftheboxesforResolution11(i.e.tovote“for”,“against”or“abstain”).Ifyouappointthe
ChairmanoftheMeetingasyourproxyortheChairmanoftheMeetingisappointedasyourproxyby
default,butyoudonotmarkavotingboxforResolution11,youwillbetakentohaveexpressly
authorisedtheChairmanoftheMeetingtoexercisetheproxyinrespectofthatresolutioneventhough
itisconnectedwiththeremunerationofKeyManagementPersonnel.
Recommendation
ThenonͲexecutivedirectorsrecommendthatShareholdersvoteinfavouroftheresolutiontoapprove
thegrantsofPerformanceRightstoAndrewAitken.
23
ScheduleA–KeyTermsofResourceEquipmentLimitedPerformanceRightsPlan
ThekeytermsofthePlanareasfollows:
(a) Eligibility:Employees(whetherfullorpartͲtime)andsalarieddirectors(EligibleEmployees)of
anymemberoftheGroupareentitledtoparticipateinthePlan.
(b) Purpose:ThepurposeofthePlanisto:
(c)
(i)
assistinthereward,retentionandmotivationofEligibleEmployees;
(ii)
linktherewardofEligibleEmployeestoShareholdervaluecreation;and
(iii)
aligntheinterestsofEligibleEmployeeswithShareholdersbyprovidingan
opportunityforEligibleEmployeestoreceiveanequityinterestintheCompanyin
theformofSharePerformanceRights.
Invitation:FollowingdeterminationthatanEligibleEmployeemayparticipateinthePlan,
theBoardmayatanytime,andfromtimetotime,makeanInvitationtothatEligible
Employee.
AnInvitationtoanEligibleEmployeetoapplyforaPerformanceRightmaybemadeon
suchtermsandconditionsastheBoarddecidesfromtimetotime,includingasto:
(i)
thenumberofPerformanceRightsforwhichthatEligibleEmployeemayapply;
(ii)
theGrantDate;
(iii)
theamountpayable(ifany)forthegrantofeachPerformanceRight(suchamount
nottoexceednominalmonetaryconsideration);
(iv)
theVestingConditions;
(v)
thePerformanceHurdlesandanyotherconditions;
(vi)
disposalrestrictionsattachingtothePlanShares(ifany);and
(i)
anyothersupplementarytermsandconditions.
(d) PlanLimit:TheBoardmustnotissueanInvitation,grantaPerformanceRightorissueaPlan
Share,ifthesumof:
(a) thenumberofShareswhichwouldbeissuedwereeachoutstandingofferwith
respecttoShares,unitsofShares,andoptionstoacquireunissuedShares,underan
employeesharescheme,tobeacceptedorexercised;and
(b) thenumberofSharesissuedduringthepreviousfive(5)yearsunderthisPlanor
anyotheremployeeshareschemeextendedtoEligibleEmployees,
butexcludinganyoffermade,oroptionacquiredorSharesissuedbywayoforasaresultofan
ExcludedOffer,wouldexceedfivepercent(5%)ofthetotalnumberofSharesonissueat
thattime.
(e) PerformanceRight:meanstherightofaParticipanttobeissuedortransferredoneormore
Share(s)(whetherdirectly,ortoorbytheTrusteetobeheldforandonbehalfofthe
Participant),subjecttoanyVestingConditions,PerformanceHurdlesandotherconditionsbeing
determinedbytheBoard(actingreasonably)tobesatisfied,waivedbytheBoard,ordeemedto
havebeensatisfiedundertheseRules.
24
(f) Vesting:VestingofPerformanceRightsissubjecttoanyvestingconditionsand/orperformance
hurdlesand/oranyotherconditionsdeterminedbytheBoard.
(g) Noquotation:TheCompanywillnotapplyforofficialquotationofPerformanceRightsonthe
ASX,unlesstheBoarddeterminesotherwise.
(h) Transferabilityandrestrictions:SubjecttotheBoarddeterminingotherwiseorbyoperationof
law,PerformanceRightsarenotgenerallytransferable.
(i) Forfeiture:UnlesstheBoarddeterminesotherwise,unvestedPerformanceRightswillbe
forfeitedupontheearlierof:
(i)
aparticipantceasingtobeanEligibleEmployee;
(i)
theBoarddeterminingthattheparticipanthasactedfraudulentlyordishonestly,or
wilfullybreachedhisorherduties;
(ii)
theBoarddeterminingthatperformancehurdlesand/orvestingconditionsand/or
otherconditionshavenotbeenmetorcannotbemet;
(iii)
aninsolvencyeventoccurringinrelationtoaparticipant;
(iv)
thePerformanceRightexpiringinaccordancewithitsexpirydate;and
ForfeitedPerformanceRightswillimmediatelylapse.
(j) ChangeofControl:TheBoardinitssoleandabsolutediscretionwilldeterminethemannerin
whichanyorallofaparticipant’sPerformanceRightsaredealtwithonachangeofcontrol
event,including(withoutlimitation)inamannerthatallowstheparticipanttoparticipatein
and/orbenefitfromanytransactionarisingfromorinconnectionwiththechangeof
controlevent.
(k) Shares:AllSharesissuedortransferredtoaparticipantuponthevestingofPerformanceRights
(PlanShares)willrankparipassuinallrespectswithotherSharesofthesameclassforthetime
beingonissueexceptforanyrightsattachingtotheSharesbyreferencetoarecorddateprior
tothedateoftheallotmentortransferofthePlanShares.
(l) Adjustments:SubjecttotheListingRulesandapplicablelaw,iftheCompanymakesanynew
issueofsecuritiesoralterationstoitscapitalbywayofarightsissue,bonusissueorother
distributionofcapital,reductionofcapitalorreconstructionofcapital,theBoardmayinits
discretionmakeadjustmentstoaparticipant'sPerformanceRightsonanybasisitseesfitto
minimiseanyadvantageordisadvantageaccruingtotheparticipantasaresultofsuch
corporateactionsoralterationstocapital.
(m) AdministrationofthePlan:ThePlanwillbeadministeredbytheBoard.Anypowersor
discretionsconferredontheBoardbythePlanrulesmaybeexercisedintheBoard’ssoleand
absolutediscretion.TheBoardmaydelegateitspowersordiscretionstootherpersonsonterms
astheBoardseesfit.
(n) Trust:TheBoardmay,initsdiscretion,useanemployeesharetrustorothermechanismforthe
purposesofholdingSharesbeforeoraftertheexerciseofaPerformanceRightordeliveringany
PlanSharesarisingfromtheexerciseofaPerformanceRightundertheseRulesonsuchterms
andconditionsasdeterminedbytheBoard.
25
(o) AmendmentstoPlanrules:TheBoardmayatanytimeamendtherulesofthePlanand
determinethatanysuchamendmentsbegivenretrospectiveeffect.However,nosuch
amendmentmaybemadeiftheamendmentmateriallyreducestherightsofanyholderof
PerformanceRightsissuedtothempriortothedateoftheamendment,otherthanan
amendmentthatisintroducedprimarily:
(i)
forthepurposesofcomplyingwithorconformingtopresentorfuture
legislationgoverningorregulatingthePlanorlikeplans;
(ii)
tocorrectanymanifesterrorormistake;
(iii)
toallowtheimplementationofatrustarrangementinrelationtotheholdingof
SharesissuedunderthePlan;
(iv)
forthepurposeofcomplyingwithapplicablelaws;and/or
(v)
totakeintoconsiderationpossibleadversetaxationimplicationsin
respectofthePlanincludingchangestoapplicabletaxationlegislationorthe
interpretationofthatlegislationbyacourtofcompetentjurisdictionoranyrulings
fromtaxationauthoritiesadministeringsuchlegislation,
unlessotherwiseagreedtoinwritingbyallholdersofPerformanceRights.
26
10.
INTERPRETATION
InthisExplanatoryMemorandum:
AccountingStandards
hasthemeaninggiventothattermintheCorporationsAct.
AGM
meansannualgeneralmeeting.
Auditor
meanstheauditoroftheCompany.
ASX
means,asthecontextrequires, ASXLimited(ACN008624691)
orthesecuritiesmarketitoperatesknownastheAustralian
SecuritiesExchange.
Board
meanstheboardofDirectors.
CloselyRelatedPartyofa
memberoftheKey
ManagementPersonnel
hasthesamemeaningasdefinedinSection9ofthe
CorporationsAct,and includesaspouseorchildofthe
member;achildofthemember’sspouse;adependentofthe
memberorthemember’sspouse;anyoneelsewhoisoneof
themember’sfamilyandmaybeexpectedtoinfluencethe
member,orbeinfluencedbythemember,inthemember’s
dealingwiththeentity;acompanythemembercontrols;ora
personprescribedbytheCorporationsRegulations.
CMS
meansCampbellMiningServicesPtyLtdACN100097112.
CMSVendors
meansCFT(CMS)PtyLtdACN129758863astrusteeforthe
CampbellFamilyTrustandWalterEugeneNaymola.
CombinedEBITDA
meansthefinancialperformancemilestoneagreedunderthe
ShareSaleAgreementwhichdeterminesthenumberof
EarnͲOutShares(ifany)thataretobeissuedtotheVendors,
asmoreparticularlydescribedinSection8oftheExplanatory
Memorandum.
Company
meansResourceEquipmentLimited(ACN098812492).
CompletionShares
means133,317,678 SharesthesubjectofResolution8.
Constitution
meanstheconstitutionoftheCompany.
CorporationsAct
meanstheCorporationsAct2001 (Cth).
CorporationsRegulations
meanstheCorporationsRegulations2001(Cth).
Directors
meanstheDirectorsoftheCompany.
EarnͲOutShares
meansupto19,898,160 SharesthesubjectofResolution9.
ExplanatoryMemorandum
meansthisexplanatorymemorandum.
KeyManagementPersonnel
hasthemeaninggiventoitintheAccountingStandards and
includesallpersonshavingauthorityandresponsibilityfor
planning,directingandcontrollingtheactivitiesofthe
Company,directlyorindirectly,includingallDirectors
(whetherexecutiveorotherwise)oftheCompany.
27
ListingRules
meanstheofficiallistingrulesofASX.
Meeting
meanstheannualgeneralmeetingofShareholdersconvened
bythisNotice.
Notice
meansthenoticeofMeeting towhichthisExplanatory
Memorandumisattached.
Plan
means theResourceEquipment LimitedPerformanceRights
PlanthesubjectofResolution10.
RAMPS
meansRampsAustraliaPtyLtdACN123937520.
RAMPSVendors
meansAshskyPtyLtdACN128345406andWalterEugene
Naymola.
RelevantProportion
means theproportion(expressedasapercentage)ofthe
considerationpayablebytheCompanyundertheTransaction
toeachVendorassetoutinthesecondcolumnofthetableon
page15ofthisExplanatoryMemorandum.
Resolution
meansa resolutionassetoutintheNotice.
Share(s)
meansafullypaidordinaryshare(s)intheCompany.
ShareSaleAgreement
meansthesharesaleagreementdated25September 2014
betweentheCompany,theCMSVendorsandtheRAMPS
VendorsrelatingtotheTransaction.
Shareholder(s)
meansa holderofoneormoreShares.
Transaction
meansthetransactionsummarisedinSection8ofthe
ExplanatoryMemorandum,beingtheproposedacquisitionby
theCompanyofallissuedsharesinCMSandRAMPSfromthe
CMSVendorsandtheRAMPSVendorspursuanttotheShare
SaleAgreement.
Vendors
meanstheCMSVendorsandtheRAMPSVendors.
References in this Explanatory Memorandum to “Sections” are to Sections of this
ExplanatoryMemorandum.
28
ANNEXURE 1
7 October 2014
Michael Kenyon
Company Secretary
Resource Equipment Limited
276 Treasure Road
Welshpool WA 6106
Dear Sir,
Subject: Nomination of Auditor
In accordance with the provisions of Section 328B of the Corporations Act 2001
– I, Hannah Otene being a member of Resource Equipment Limited, hereby
nominate PricewaterhouseCoopers for appointment as auditor of that company.
Yours faithfully,
Hannah Otene
RESOURCE EQUIPMENT LIMITED
ACN 098 812 492
PROXY FORM
The Secretary
Resource Equipment Limited
276 Treasure Road
Welshpool WA 6896
Fax Number: +61 8 9258 9804
I/We
of
being a shareholder/(s) of Resource Equipment Limited hereby appoint ______________________
of
or failing him/her _______________________________________________________________
of
or failing him/her the Chairman as my/our proxy to vote for me/us and on my/our behalf at the Annual General
Meeting of the Company to be held at the Royal Freshwater Bay Yacht Club, Atholl Hobbs Room, 1 Hobbs Place,
Peppermint Grove, Western Australia at 10.30 am (WST) on Tuesday, 18 November 2014, and at any
adjournment thereof in respect of [ ]% of my/our shares or, failing any number being specified, ALL of my/our
shares in the Company. If two proxies are appointed, the proportion of voting rights this proxy is authorised to
exercise is [ ]%. (An additional proxy form will be supplied by the Company on request.)
If you wish to indicate how your proxy is to vote, please tick the appropriate places below. If no indication is
given on a Resolution, the proxy may abstain or vote at his or her discretion.
I/we direct my/our proxy to vote as indicated below:
Resolution 1
Adoption of the Remuneration Report
FOR
Ƒ
AGAINST
Ƒ
Ƒ
Resolution 2
Re-Election of Mr Keith Lucas as a Director
Ƒ
Ƒ
Ƒ
Resolution 3
Re-Election of Mr Anthony Ryder as a Director
Ƒ
Ƒ
Ƒ
Resolution 4
Election of Mr Andrew Aitken as a Director
Ƒ
Ƒ
Ƒ
Resolution 5
Election of Mr Stephen Donnelley as a Director
Ƒ
Ƒ
Ƒ
Resolution 6
Appointment of PricewaterhouseCoopers as auditor
Ƒ
Ƒ
Ƒ
Resolution 7
Increase in non-executive Directors’ fee pool
Ƒ
Ƒ
Ƒ
Resolution 8
Issue of Completion Shares
Ƒ
Ƒ
Ƒ
29
ABSTAIN*
Resolution 9
Issue of Earn-Out Shares
Ƒ
Ƒ
Ƒ
Resolution 10
Approval of the REL Performance Rights Plan
Ƒ
Ƒ
Ƒ
Resolution 11
Issue of Performance Rights to Andrew Aitken
Ƒ
Ƒ
Ƒ
* If you mark the Abstain box for a particular Item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the
required majority on a poll.
Proxies given by a natural person must be signed by each appointing shareholder or the shareholder's attorney
duly authorised in writing. Proxies given by companies must be executed in accordance with section 127 of the
Corporations Act or signed by the appointor's attorney duly authorised in writing. The Chairman intends to
vote all undirected proxies in favour of all Resolutions.
Unless you tick either the “for”, “against” or “abstain” box in relation to Resolutions 1, 7, 10 and 11, you will be
expressly authorising the Chairman of the Meeting to vote in accordance with the Chairman’s voting intentions
on these Resolutions, even if these Resolutions are connected directly or indirectly with the remuneration of a
member of Key Management Personnel.
Proxies will only be valid and accepted by the Company if they are signed and received by 10.30 am on
Sunday, 16 November 2014.
As witness my/our hand/s this day of 2014
If a natural person:
SIGNED by:
Signature
Signature (if joint holder)
If a company:
Executed in accordance with section 127 of the
Corporations Act
Signature of Director / Sole Director
and Sole Company Secretary (delete one)
Signature of Director / Secretary (delete one)
30