INVESTSMART GROUP LIMITED — Proxy Solicitation & Information Statement 2019

Jan 3, 2019

Notice of Extraordinary General Meeting

InvestSMART Group Limited ACN 111 772 359 (ASX: INV)

Notice of Extraordinary General Meeting

InvestSMART Group Limited ACN 111 772 359

Notice is given that the Extraordinary General Meeting of InvestSMART Group Limited ACN 111 772 359 ( Company ) will be held at:

Location	Australian Institute Of Company Directors, NSW Business Centre and Member Lounge, Level 2, 18 Jamison St, Sydney, NSW 2000
Date	Wednesday, 6 February 2019
Time	10.00am (AEDT)

Special Business

Approval of terms of Loans for Shares issued to Mr Ron Hodge under the LTIP and ESOP

To consider and, if in favour, to pass the following resolutions as ordinary resolutions:

• 1 ‘That for the purpose of Listing Rule 10.14 and for all other purposes, Shareholders approve:

• (a) the extension of the maturity dates for the Loans relating to the vested and unvested Shares issued under the LTIP; and

• (b) the extension of the maturity dates for the Loans relating to the vested and unvested Shares issued under the ESOP,

to Mr Ron Hodge on the terms set out in the Explanatory Memorandum.’

The Directors (with Mr Hodge abstaining) unanimously recommend that shareholders vote in favour of resolutions 1(a) and 1(b).

Approval of terms of Loans for Shares issued to Mr Paul Clitheroe under the LTIP

To consider and, if in favour, to pass the following resolution as an ordinary resolution:

• 2 ‘That for the purpose of Listing Rule 10.14 and for all other purposes, Shareholders approve the extension of the maturity dates for the Loans relating to the vested and unvested Shares issued under the LTIP to Mr Paul Clitheroe on the terms set out in the Explanatory Memorandum.’

The Directors (with Mr Clitheroe abstaining) unanimously recommend that shareholders vote in favour of resolution 2.

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Amendment of Long Term Incentive Plan (LTIP)

To consider and, if in favour, to pass the following resolution as an ordinary resolution:

3 ‘That, for the purposes of Section 260C of the Corporations Act and Listing Rule 7.2 Exception 9 and for all other purposes, approval be given to amend the Long Term Incentive Plan Rules on the terms summarised in the Explanatory Memorandum to this Notice of Meeting.’

The Directors unanimously recommend that shareholders vote in favour of resolution 3 .

Issue of Shares under LTIP to Mr Alan Kohler

To consider and, if in favour, to pass the following resolution as an ordinary resolution:

4 ‘That, for the purposes of Listing Rule 7.1 and for all other purposes, approval be given to issue Shares in the Company to Mr Alan Kohler on the terms summarised in the Explanatory Memorandum to this Notice of Meeting.’

The Directors unanimously recommend that shareholders vote in favour of resolution 4 .

Dated: 4 January 2019

By order of the Board

Grant C Winberg Company Secretary

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VOTING EXCLUSIONS

Corporations Act

The Company will disregard votes cast by a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report, or a closely related party of such a member, in contravention of section 250R or 250BD Corporations Act. Restrictions also apply to votes cast as proxy unless exceptions apply.

Listing Rules

In accordance with the Listing Rule 14.11, the Company will disregard votes cast in favour of the resolution by or on behalf of:

Resolutions 1– Approval of terms of Loans for Shares issued to Mr Ron Hodge under the LTIP and ESOP	any director of the Company who is eligible to participate in the LTIP or ESOP in respect of which approval is sought or any associates of those persons.
Resolution 2 – Approval of terms of Loans for Shares issued to Mr Paul Clitheroe under the LTIP	any director of the Company who is eligible to participate in the LTIP in respect of which approval is sought or any associates of those persons.
Resolution 3 – Amendment of Long Term Incentive Plan	any director of the Company (except one who is ineligible to participate in any employee incentive scheme in relation to the Company) or any of their associates.
Resolution 4 – Issue of Shares to Mr Alan Kohler	a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the entity), or any of their associates

However, for the purposes of Listing Rule 14.11, the Company will not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

DETERMINATION OF ENTITLEMENT TO VOTE

The Company has determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders on Monday, 4 February 2019 at 7.00pm (AEDT) (being 48 hours before the Meeting).

NOTES

• (a) Terms used in this Notice of Meeting which are defined in the Explanatory Memorandum have the meaning given to them in the Explanatory Memorandum.

• (b) Subject to the Corporations Act, including sections 250R and 250BD, a Shareholder who is entitled to attend and cast a vote at the meeting is entitled to appoint a proxy.

• (c) The proxy need not be a Shareholder of the Company. A Shareholder who is entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise.

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• (d) If you wish to appoint a proxy and are entitled to do so, then complete and return the attached proxy form to the Company’s share registry Boardroom Pty Ltd, GPO Box 3993, Sydney, NSW 2001.

• (e) To be effective, proxy forms must be received by the Company at its registered office or deposited at or faxed to the share registry no later than 48 hours prior to the Meeting.

• (f) If you have any queries, including how to cast your votes, please contact 02 9223 3866 (within Australia) or +61 2 9223 3866 (outside Australia) during business hours.

VOTING INTENTIONS OF THE CHAIRMAN

The Chairman intends to vote undirected proxies on, and in favour of, all the proposed resolutions.

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Explanatory Memorandum

InvestSMART Group Limited ACN 111 772 359 ( Company )

This Explanatory Memorandum accompanies the notice of Extraordinary General Meeting of the Company to be held at 10.00am (AEDT) on 6 February 2019 at the Australian Institute of Company Directors, NSW Business Centre and Member Lounge, Level 2, 18 Jamison St, Sydney, NSW 2000.

The Explanatory Memorandum has been prepared to assist Shareholders in determining how to vote on the resolutions set out in the Notice of Meeting and is intended to be read in conjunction with the Notice of Meeting.

Special Business

Resolution 1: Approval of terms of Loans for Shares issued to Mr Ron Hodge

under the LTIP and ESOP

Background

• 1 In accordance with Listing Rule 10.14, resolution 1 seeks Shareholder approval to extend the current maturity dates on the Loans for the Shares (both vested and unvested) issued under the LTIP and ESOP to Mr Ron Hodge. In each case, the extension is proposed for two additional years for the previous loan maturity date in respect of each applicable tranche of Shares.

• 2 The Shares issued to Mr Hodge under the LTIP were approved at an Extraordinary General Meeting on 17 June 2015 and the Shares issued under the ESOP were approved at the Annual General Meeting held on 29 November 2016. The Shares were issued on the dates in the table below.

• 3 Since the last shareholder approval, no further securities have been issued under the LTIP or ESOP to persons (or their associates) referred to in ASX Listing Rule 10.14. The persons entitled to participate in the LTIP under ASX Listing Rule 10.14 are Mr Hodge and Mr Clitheroe. Mr Hodge is entitled to participate in the ESOP.

• 4 The LTIP Shares were issued at 25 cents per share. The number of shares issued, and vesting dates are noted in the table below.

• 5 The ESOP Shares were issued at 31 cents per share. The number of shares issued, and vesting dates are noted in the table below.

• 6 The terms of the proposed changes to the maturity dates are set out in the table below:

	Tranches	Shares per Tranche	Issue date	Vesting Date	Current Loan maturity date	Revised Loan maturity date
Loan issued under LTIP
Ron Hodge	Tranche 1	1,388,888	08-09-15	08-09-16	08-09-19	08-09-21
	Tranche 2	1,388,888	08-09-15	08-09-17	08-09-20	08-09-22
	Tranche 3	1,388,889	08-09-15	08-09-18	08-09-21	08-09-23
Loan issued under ESOP

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	Ron Hodge	Tranche 1	133,333	28-12-16	28-12-17	28-12-20	28-12-22
		Tranche 2	133,333	28-12-16	28-12-18	28-12-21	28-12-23
		Tranche 3	133,334	28-12-16	28-12-19	28-12-22	28-12-24

• 7 The LTIP Shares issued to Mr Hodge on the date outlined above, were issued in relation to the termination of a management contract with one of the Group subsidiaries, and the Directors believed this compensation best aligned with the executives to the interest of the Shareholders.

• 8 The ESOP Shares issued to Mr Hodge as part of the ESOP on 28 December 2016 are dependent on Mr Hodge not resigning, or being dismissed for cause, before each tranche vests.

• 9 The Board believes that an additional two years will allow the Share price sufficient time to reflect the results of transitioning the business to a digital wealth platform over the past two years and reward the hard work of the key executives. It is intended that if resolutions 1(a) and 1(b) are approved by Shareholders, that the maturity dates for the Loans to executives and employees under the LTIP and ESOP will also be extended in the same manner. If, however, these resolutions are not approved by Shareholders, the terms of the Loans to executives and employees under the LTIP and ESOP will not change.

Listing Rules and Corporations Act

• 10 Listing Rule 10.14 provides that a company must not issue securities to its directors under an employee incentive scheme without shareholder approval. Listing Rule 10.15 provides that approval obtained in accordance with a notice of meeting under Listing Rule 10.14 is only available if there has been no material change to the circumstances set out in the relevant notice of meeting for which approval was obtained (including in relation to the terms of any loans that related to the issue of Shares). Accordingly, the Board is seeking Shareholder approval under Listing Rule 10.14 for the change to the maturity dates to the Loans.

• 11 The Board has also considered Chapter 2E Corporations Act. The Board has determined that the reasonable remuneration exemption under section 211 Corporations Act applies to resolutions 1(a) and 1(b) on the basis that the same amendment to the maturity date will be made for other executives and employees (which does not require separate shareholder approval) and the extension is otherwise reasonable in the circumstances and for the reasons stated in this Explanatory Memorandum.

Directors recommendation

The Directors (with Mr Hodge abstaining) unanimously recommend that shareholders vote in favour of resolutions 1(a) and 1(b).

Resolution 2: Approval of terms of Loans for Shares issued to Mr Paul Clitheroe under the LTIP

Background

• 12 In accordance with Listing Rule 10.14, resolution 2 seeks Shareholder approval to extend the current maturity dates on the Loans for the Shares (both vested and unvested) issued under the LTIP to Mr Paul Clitheroe. In each case, the extension is proposed for two additional years for the previous loan maturity date in respect of each applicable tranche of Shares.

• 13 The Shares issued to Mr Clitheroe under the LTIP were approved at an Annual General Meeting on 26 November 2014. The Shares were issued on the dates in the table below.

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• 14 Since the last shareholder approval, no further securities have been issued under the LTIP to persons (or their associates) referred to in ASX Listing Rule 10.14. The persons entitled to participate in the LTIP under ASX Listing Rule 10.14 are Mr Hodge and Mr Clitheroe.

• 15 The LTIP shares were issued at 25 cents per share and were subject to vesting conditions, based on the Group’s share price trading above certain share price levels.

• 16 The terms of the proposed changes to the maturity dates are set out in the table below:

	Tranches	Shares per Tranche	Issue date	Vesting Date	Current Loan maturity date	Revised Loan maturity date
Paul Clitheroe	Tranche 1	1,333,333	26-11-14	30-05-16	30-05-19	30-05-21
	Tranche 2	1,333,333	26-11-14	unvested	n/a	n/a
	Tranche 3	1,333,334	26-11-14	unvested	n/a	n/a

• 17 The remaining LTIP shares issued to Mr Clitheroe will vest in two equal tranches on the later of the second and third anniversary of the grant date, or the date the Share price is at or above $0.42 or $0.50 respectively for each tranche. The performance of the Share price was selected as the performance criteria as this closely aligns the rewards for performance to Shareholder returns.

• 18 The Board believes that an additional two years will allow the Share price sufficient time to reflect the results of transitioning the business to a digital wealth platform over the past two years and reward the hard work of the key executives.

Listing Rules and Corporations Act

• 19 The Listing Rule and Corporations Act considerations set out in paragraphs 6 and 7 of this Explanatory Memorandum apply equally to this resolution 2.

Directors recommendation

The Directors (with Mr Clitheroe abstaining) unanimously recommend that shareholders vote in favour of this resolution 2.

Resolution 3: Amendment of Long Term Incentive Plan (LTIP)

Background

• 20 The shareholders have approved the issued of LTIP shares at Annual General Meetings in 2013 and 2014 and at an Extraordinary General Meeting in 2015. The LTIP is designed to facilitate share ownership by senior executives, thereby aligning their interests with those of shareholders, and linking a significant portion of executive remuneration to the Company’s share price and returns generated for shareholders. Under the LTIP, eligible participants are provided with a nonrecourse loan for the sole purpose of acquiring shares in the Company. The LTIP does not produce any new capital for the Company, therefore no use of funds statement is required.

• 21 Currently, the maximum number of shares that can be issued under the LTIP is 16,499,998 and there are only four eligible participants in the LTIP, being the Managing Director, Mr Ron Hodge, Mr Alastair Davidson, Mr Nigel Poole and the Chairman, Mr Paul Clitheroe.

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• 22 The proposed amendment will increase the maximum number of shares that can be issued under the LTIP to 20,499,998 and to increase the number of eligible participants to five, being the Managing Director, Mr Ron Hodge, Mr Alastair Davidson, Mr Nigel Poole, the Chairman, Mr Paul Clitheroe, and Mr Alan Kohler. It is proposed to issue 4,000,000 shares to Mr Alan Kohler.

• 23 In accordance with Listing Rule 7.2 Exception 9, a summary of the rules of the LTIP is included in Schedule 2 to this Explanatory Memorandum. No securities have been issued under the LTIP since the date of the last shareholder approval.

Directors recommendation

The Directors unanimously recommend that shareholders vote in favour of this 3.

Resolution 4 – Issue of Shares under LTIP to Mr Alan Kohler

Background

• 24 As announced on 4 December 2018, the Company merged with the Constant Investor Pty Ltd. As part of the arrangements, the Company agreed to employ Mr Alan Kohler and to issue him Shares in the Company under the Long Term Incentive Plan available to senior executives. The LTIP does not produce any new capital for the Company, therefore no use of funds statement is required.

• 25 The Company proposes to issue 4,000,000 Shares to Mr Alan Kohler or his nominee as part of his employment contract. Mr Kohler is an Australian financial journalist and newspaper editor. He currently writes for The Constant Investor which was merged with the Eureka Report, which is owned by the Group, on 4 December 2018. Mr Kohler is also business editor at large of The Australian, finance presenter on ABC News, presenter of the Talking Business channel on Qantas inflight radio and adjunct professor at Victoria University Business School.

Proposed Terms

• 26 It is proposed that the Shares will be issued to Mr Kohler as soon as practicable following this meeting, but in any event, no later than 3 months after the date of the meeting.

• 27 An overview of the terms applying to Mr Kohler’s participation in the LTIP are set out below.

• 28 Subject to shareholder approval of the issue of securities, Mr Kohler will be granted an allotment of 4,000,000 shares in the Company. Mr Kohler will be granted a loan of up to $1,000,000 for the sole purpose of subscribing for these Shares at a deemed issue price of 25 cents per share. If the issue of these Shares is approved, allotment is expected by 28 February 2019.

Vesting period

• 29 The Shares will vest in three equal tranches as follows:

a) The first tranche will vest on the later of the first anniversary of the date of the allotment of the Shares and the date at which the Company’s share price is at or above 33 cents (a 33% share price appreciation from the issue price);

b) The second tranche will vest on the later of the second anniversary of the date of the allotment of the Shares and the date at which the Company’s share price is at or above 42 cents (a 66% share price appreciation from the issue price);

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c) The third tranche will vest on the later of the third anniversary of the date allotment of the Shares and the date at which the Company’s share price is at or above 50 cents (a 100% share price appreciation from the issue price).

Key terms of the Loan

• 30 The Loan is from the Company is for $1,000,000 and is for the sole purpose of acquiring shares in the Company. There will be an interest charge to Mr Kohler on the Loan equal to the Reserve Bank of Australia official cash rate plus 0.50%. Mr Kohler may either pay this interest or capitalise it thereby increasing the principal sum owning.

• 31 As this is a non-recourse loan, any unvested Shares surrendered are forfeited in full settlement of the loan balance and no benefit accrues to Mr Kohler.

• 32 Mr Kohler will be required to repay the Loan relating to a specific tranche of Shares within three or five years (depending on the outcome of Resolution 1 above) of the vesting of each tranche of Shares.

• 33 Mr Kohler will be entitled to any dividends paid on the Shares (whether the Shares have vested to Mr Kohler or remain unvested).

Trading restrictions

• 34 The Shares are restricted until the end of the vesting period and while the Loan remains outstanding. Mr Kohler may not sell any of the Shares unless they have vested, and sales of the Shares will be governed by the Company’s Share Trading Policy in operation at the time.

Cessation as an employee

• 35 If Mr Kohler ceases to be an employee of the Company any unvested Shares will be forfeited, in full repayment of the component of the Loan with respect to those unvested Shares, and he will have no further interest in those Shares. Outstanding components of the Loan with respect to vested Shares must be repaid within twelve months.

Resolution not approved

• 36 If resolution 4 is not approved by Shareholders, the Company has agreed to offer Mr Kohler an alternative cash-based arrangement designed to put Mr Kohler in no worse position on a pre-tax basis than would be the case if Shareholder approval had been given for the issue of LTIP Shares.

Directors recommendation

The Directors unanimously recommend that shareholders vote in favour of this resolution 4.

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Glossary

InvestSMART Group Limited ACN 111 772 359

Capitalised terms in this Notice of Meeting and Explanatory Memorandum have the meaning set out below:

Definition	Meaning
Acquisition Date	has the meaning given to the term in the ESOP or LTIP.
ASX	means ASX Limited ACN 008 624 691 or the securities exchange operated by it (as the case requires).
Board	means the board of directors of the Company.
Closely Related Parties	has the meaning given to the term in the Corporations Act.
CompanyorInvestSMART Group Limited	means InvestSMART Group Limited ACN 111 772 359.
Constitution	means the constitution of the Company.
Corporations Act	means the Corporations Act 2001 (Cth).
Directors	means the directors of the Company.
Eligible Participantor Eligible Employees	has the meaning given to the term in the ESOP Rules or LTIP Rules.
Employee Share Ownership PlanorESOP	means the plan outlined in resolutionError! Reference source not found.of this Explanatory Memorandum with and its Rules outlined in Schedule 1.
ESOP Rules	means the rules of the ESOP summarised in Schedule 1 of this Explanatory Memorandum.
Explanatory Memorandum	means the explanatory memorandum attached to the Notice of Meeting.
Extraordinary General MeetingorMeeting	means the Company’s Extraordinary general meeting the subject of this Notice of Meeting.
Financial Assistance	has the meaning given to the term in the LTIP or ESOP Rules (as applicable).
Group	means the Company and any subsidiary of the Company.
Holding Lock	has the same meaning as the Listing Rules.
Invitation	has the meaning given to the term in the ESOP.
Key Management Personnel	means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any Director (whether executive or otherwise).
Listing Rules	means the listing rules of ASX.

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Definition	Meaning
Loan	has the same meaning given to the term set out in the LTIP or ESOP (as applicable).
Loan Agreement	has the same meaning give to the term set out in the LTIP or ESOP Rules.
Long Term Incentive Plan orLTIP	means the Company’s employee share scheme introduced in 2013.
Notice of Meeting	means this notice of meeting and includes the Explanatory Memorandum.
Participating Employee	means an employee of the Company who is participating in the LTIP or ESOP (as applicable).
Shareholder	means a person who is the registered holder of Shares.
Shares	means the existing fully paid ordinary shares in the Company.
Tranche	takes its meaning from the LTIP or ESOP (as applicable).

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Schedule 1

Key terms of the ESOP Rules

Rule	Summary
Operation of the ESOP	The ESOPmust be operatedinaccordance with these Rules. The Board has power (and absolute discretion) to exercise and delegate this power, which must be exercised in the best interest of the Company and the Group. The Board may rely on independent advice in relation to its powers under the ESOP Rules, and the Board may delegate its power at any time. A decision by the Board is final and binding.
Eligibility	The Board may decide that Invitations will be issued on different terms to different employees. In making this decision the Board may have regard to: • the employee's length of service with the Company; • the employee's position and remuneration; • whether the participation would be unlawful; • anyother matters the Board considers relevant.
Invitations	The Board has discretion, from time to time, to invite employees to participate the ESOP (to be given in writing). Shares will be offered at Market Value, or at a higher price as determined by the Board in their absolute discretion, on the date specified in the Invitation as the Acquisition Date. The Invitation must specify: • the number of Shares being offered; • the acquisition price of the Shares or method of determining the price at which Shares should be offered; • the applicable Holding Lock period; • the time, if any, to accept the Invitation; • financial assistance offered by way of Loan agreement; • the proposed Acquisition Date; • any instructions in relation to making an application to participate in the ESOP; and • any other information specific to the Invitation or required under applicable law. If the Board exercises its discretion to offer shares at a higher price, it will notify the affected Eligible Employees as soon as possible.
Applications	An Eligible Employee must accept an Invitation by delivering an application form and accompanying documents to the Company and any instructions under the Invitation. Acceptance of an Invitation by the Company amounts to Employee Participation. The Board has discretion: • to accept or reject an application form;

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Rule	Summary
	• not to allow Shares to be acquired by any or all of Eligible Employees; or • to vary the number of dollar value of Shares that can be acquired by each Eligible Employee relative to the number of dollar value stated in the Invitation. If any of Board exercises the above discretion, it must notify the affected Eligible Employees as soon as practicable.
Entitlements	Share entitlements are set out in the Invitation, and such Shares are to be registered in the name of the Participating Employee.
Method of acquisition and quotation of Shares	Shares are issued in accordance with the ESOP, and rank equally with all other issued Shares of the Company.
Disposal restrictions and forfeiture conditions	Shares issued to Participating Employees are subject to a Holding Lock. During this time Shares cannot be dealt with or transferred. Upon completion of the Holding Lock period, the Board must cause release of those Shares from the Holding Lock. While the Shares are subject to a Holding Lock, the Board may exercise its discretion to determine whether the Participating Employee forfeits their interest in the Shares if the Participating Employee: • is dismissed from employment or resigns; or • commits misappropriation or fraud in relation to the affairs of the Group. If this is the case, Shares will be bought back by the Company pursuant to an employee share buy back. Sale proceeds will be used to offset Financial Assistance owing on the Shares. The Board may in the event of a takeover, and in any other circumstance at its absolute discretion, determine that, subject to early repayment of the Financial Assistance under Rule 9.9, the Holding Lock be releasedprior to the end of the HoldingLockperiod.
Financial Assistance	Financial Assistance may be offered to Participating Employees. Where an offer of Financial Assistance is made, a Loan Agreement must be provided. No interest is payable on Financial Assistance. Repayment of Financial Assistance will occur as follows: • FinancialAssistanceisrepayable bythe Participantattheend of theterm ofthe LoanAgreement asdetermined bytheBoard, unlessitisrequired to berepaidat an earlier date owingto the operation ofthese ESOP Rules;and • FinancialAssistance willbecomeimmediately due and payable on total andpermanent disability of the Participating Employee or upon the death, or if the Participating Employee is dismissed has resigned or is subject to a disentitling event. By accepting Financial Assistance, theParticipating Employees authorises the Company:

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Rule	Summary
	• in its absolute discretion to sell any rights other than dividends which the Participating Employee may otherwise receive in respect of the Shares and to apply all proceeds thereof in reduction of the Financial Assistance; and • in its absolute discretion to direct any capital return which the Participant Employee may otherwise receive in respect of the Shares and to apply all proceeds thereof in reduction of the Financial Assistance. TheCompany shall acceptinfull and complete satisfaction of the Participating Employee’s indebtednessin relationto the Financial Assistance: • the total amount of all moneys owing by the Participating Employee to the Company under the Loan Agreement; or • the transfer of the Shares held by the Participating Employee to the Company. Where the value of the Shares is less than the total amount of Financial Assistance owing, no further amount is payable by the Participating Employee or recoverable by the Company. Where the Participating Employee sells Shares in order to pay any money owing to the Company, where the proceeds of sale exceed the amount owed to the Company, the Participating Employee shall retain proceeds. The Boardmay,at its absolute discretion, determinethata Participating Employeemayrepay theFinancialAssistance other than aspermitted underthe Invitation and Loan Agreement.
Security for financial assistance	Participating Employee must deliver, with the application form, an executed but undated share transfer form in respect of the Shares.
Cessation of employment	The Company will appoint the Company secretary or the Participating Employee’s nominee to execute all the required documents in relation to the Shares (with some exceptions) in the event the Participating Employee is dismissed, has resigned or a disentitling event applies to the Participating Employee.
Liquidity event	If a liquidity event occurs then, if the Board decides that the ESOP will not continue, the ESOP may be terminated in accordance with Rule 16 of the ESOP and, subject to repayment of all Financial Assistance owing in respect of them, Shares may be dealt with in accordance with the Company’s Constitution.
Transfer	Participating Employees cannot transfer their Shares or dispose of their Shares (except to the extent the ESOP Rules permit).
Limit on capital	Capital issued under the ESOP must comply with Listing Rule 7.1 requirements and relevant provisions under the Corporations Act.
Amendment of the ESOP	The Board may amend the ESOP by resolution to the extent it does not adversely affect the rights of one or more Participating Employees.

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Rule	Summary
Termination of suspension of the ESOP	The ESOP may be terminated or suspended by the Board at any time. Participating Employees may not claim compensation as a result of termination or suspension of the ESOP.
Rights of Participating Employees	The ESOP Rules: • do not confer the right to continue as an employee; • do not confer the right of an employee to be an Eligible Participant or Participating Employee; • affects any rights the Group Company may have to terminate the employment of an Eligible Participant or Participating Employee; • may be used to increase damages in any action brought against any Group Company in respect of any such termination of employment, including, without limitation, for unfair or constructive dismissal. In particular, Participating Employees have no rights to claim compensation or damages in respect of any loss of entitlements resulting from any such termination that may affect the Participating Employee’s interests in respect of Shares; or • confers any responsibility or liability on any Group Company or its directors, officers, employees, representatives or agents in respect of any taxation liabilities of the Eligible Participants or Participating Employees.
Connection with other plans	Participation in the ESOP does not impact participation in other incentive or operative schemes operated by the Group Company unless the terms of that other scheme provide otherwise.
Costs	Costs in relation to the administration of the Plan will be paid by the Company unless the Board decides otherwise. Where the Board decides that Participating Employees should pay these costs, the Board must inform the Participating Employees prior to allocation of these expenses. Participating Employees will be liable for brokerage and tax associated with their participation in the ESOP.

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Schedule 2

Key terms of the LTIP Rules

Rule	Summary
Operation of the LTIP	The LTIP must be operated in accordance with these Rules. The Board has power (and absolute discretion) to exercise and delegate this power, which must be exercised in the best interest of the Company and the Group. The Board may rely on independent advice in relation to its powers under the LTIP Rules, and the Board may delegate its power at any time. A decision by the Board is final and binding.
Eligibility	At any time and from time to time, the Board may approve a Participant, having regard to: • the contribution to the Company which has been made by the Participant; • the potential contribution of the Participant to the Company; and • any other matters which the Board considers in its absolute discretion to be relevant.
Offer of LTIP Shares	Shares will be offered at a price as determined by the Board in their absolute discretion, on the date specified in the Invitation as the Acquisition Date. The Invitation must specify: • the number of Shares being offered; • the acquisition price of the Shares or method of determining the price at which Shares should be offered; • the vesting terms, if any; • the applicable Holding Lock period; • the time, if any, to accept the Invitation; • financial assistance offered by way of Loan agreement; • the proposed Acquisition Date; and • any other information specific to the Invitation or required under applicable law.
Entitlements	Share entitlements are set out in the Invitation, and such Shares are to be registered in the name of the Participant or their nominee. LTIP Shares will rank pari passu with all existing Shares in the Company from the date of issue of those LTIP Shares.

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Rule	Summary
Disposal restrictions and forfeiture conditions	Shares issued to each Participant are subject to a Holding Lock. During this time Shares cannot be dealt with or transferred. Upon completion of the Holding Lock period, the Board must cause release of those Shares from the Holding Lock. While the Shares are subject to a Holding Lock, the Board may exercise its discretion to determine whether the Participant forfeits their interest in the Shares if the Participant: • is dismissed from employment or resigns; or • commits misappropriation or fraud in relation to the affairs of the Group. If this is the case, Shares will be bought back by the Company pursuant to a share buyback. Sale proceeds will be used to offset Financial Assistance owing on the Shares. The Board may in the event of a takeover, and in any other circumstance at its absolute discretion, determine that, subject to early repayment of the Financial Assistance under Rule 9.9, the Holding Lock be released prior to the end of the Holding Lock period.
Financial Assistance	Financial Assistance may be offered to Participants. Where an offer of Financial Assistance is made, a Loan Agreement must be provided. No interest is payable on Financial Assistance. Repayment of Financial Assistance will occur as follows: • Financial Assistance is repayable by the Participant at the end of the term of the Loan Agreement as determined by the Board, unless it is required to be repaid at an earlier date owing to the operation of these LTIP Rules; and • Financial Assistance will become immediately due and payable on total and permanent disability of the Participant or upon the death, or if the Participant is dismissed has resigned or is subject to a disentitling event. By accepting Financial Assistance, the Participant authorises the Company: • in its absolute discretion to sell any rights other than dividends which the Participating Employee may otherwise receive in respect of the Shares and to apply all proceeds thereof in reduction of the Financial Assistance; and • in its absolute discretion to direct any capital return which the Participant may otherwise receive in respect of the Shares and to apply all proceeds thereof in reduction of the Financial Assistance. The Company shall accept in full and complete satisfaction of the Participant’s indebtedness in relation to the Financial Assistance:

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Rule	Summary
	• the total amount of all moneys owing by the Participant to the Company under the Loan Agreement; or • the transfer of the Shares held by the Participant to the Company. Where the value of the Shares is less than the total amount of Financial Assistance owing, no further amount is payable by the Participant or recoverable by the Company. Where the Participant sells Shares in order to pay any money owing to the Company, where the proceeds of sale exceed the amount owed to the Company, the Participant shall retain proceeds. The Board may, at its absolute discretion, determine that a Participant may repay the Financial Assistance other than as permitted under the Invitation and Loan Agreement.
Security for financial assistance	Participant must deliver, with the application form, an executed but undated share transfer form in respect of the Shares.
Cessation of employment	The Company will appoint the Company Secretary or the Participant’s nominee to execute all the required documents in relation to the Shares (with some exceptions) in the event the Participant is dismissed, has resigned or a disentitling event applies to the Participant.
Liquidity event	If a liquidity event occurs then, if the Board decides that the LTIP will not continue, the LTIP may be terminated and, subject to repayment of all Financial Assistance owing in respect of them, Shares may be dealt with in accordance with the Company’s Constitution.
Transfer	Participant s cannot transfer their Shares or dispose of their Shares (except to the extent the LTIP Rules permit).
Termination of suspension of the LTIP	The LTIP may be terminated or suspended by the Board at any time. in which case the Company will not issue further LTIP Shares.
Rights of Participants	The LTIP Rules: • do not confer the right to continue as an employee; • do not confer the right of an employee to be an Eligible Participant or Participant; • affects any rights the Group Company may have to terminate the employment of an Eligible Participant or Participant; • may be used to increase damages in any action brought against any Group Company in respect of any such termination of employment, including, without limitation, for unfair or constructive dismissal. In particular, Participant s have no rights to claim compensation or damages in respect of any loss of entitlements

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Rule	Summary
	resulting from any such termination that may affect the Participant’s interests in respect of Shares; or • confers any responsibility or liability on any Group Company or its directors, officers, employees, representatives or agents in respect of any taxation liabilities of the Eligible Participants or Participant.
Connection with other plans	Participation in the LTIP does not impact participation in other incentive or operative schemes operated by the Group Company unless the terms of that other scheme Participant’s employment agreement provide otherwise.
Costs	Costs in relation to the administration of the LTIP will be paid by the Company unless the Board decides otherwise. Where the Board decides that Participants should pay these costs, the Board must inform the Participants prior to allocation of these expenses. Participants will be liable for brokerage and tax associated with their participation in the LTIP.

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All Correspondence to:

 By Mail Boardroom Pty Limited GPO Box 3993 Sydney NSW 2001 Australia

 By Fax: +61 2 9290 9655  Online: www.boardroomlimited.com.au  By Phone: (within Australia) 1300 737 760 (outside Australia) +61 2 9290 9600

YOUR VOTE IS IMPORTANT

For your vote to be effective it must be recorded before 10:00am (AEDT) on Monday 4 February 2019.

 TO VOTE ONLINE

STEP 1: VISIT https://www.votingonline.com.au/invegm2019 STEP 2: Enter your Postcode OR Country of Residence (if outside Australia) STEP 3: Enter your Voting Access Code (VAC):

.

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BY SMARTPHONE

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Scan QR Code using smartphone QR Reader App

TO VOTE BY COMPLETING THE PROXY FORM

STEP 1 APPOINTMENT OF PROXY

Indicate who you want to appoint as your Proxy.

If you wish to appoint the Chair of the Meeting as your proxy, mark the box. If you wish to appoint someone other than the Chair of the Meeting as your proxy please write the full name of that individual or body corporate. If you leave this section blank, or your named proxy does not attend the meeting, the Chair of the Meeting will be your proxy. A proxy need not be a securityholder of the company. Do not write the name of the issuer company or the registered securityholder in the space.

Appointment of a Second Proxy

You are entitled to appoint up to two proxies to attend the meeting and vote. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by contacting the company’s securities registry or you may copy this form.

STEP 3 SIGN THE FORM

The form must be signed as follows: Individual: This form is to be signed by the securityholder.

Joint Holding : where the holding is in more than one name, all the securityholders should sign.

Power of Attorney: to sign under a Power of Attorney, you must have already lodged it with the registry. Alternatively, attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: this form must be signed by a Director jointly with either another Director or a Company Secretary. Where the company has a Sole Director who is also the Sole Company Secretary, this form should be signed by that person. Please indicate the office held by signing in the appropriate place.

STEP 4 LODGEMENT

To appoint a second proxy you must:

(a) complete two Proxy Forms. On each Proxy Form state the percentage of your voting rights or the number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded. (b) return both forms together in the same envelope.

STEP 2 VOTING DIRECTIONS TO YOUR PROXY

To direct your proxy how to vote, mark one of the boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of securities are to be voted on any item by inserting the percentage or number that you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item for all your securities your vote on that item will be invalid.

Proxy which is a Body Corporate

Where a body corporate is appointed as your proxy, the representative of that body corporate attending the meeting must have provided an “Appointment of Corporate Representative” prior to admission. An Appointment of Corporate Representative form can be obtained from the company’s securities registry.

Proxy forms (and any Power of Attorney under which it is signed) must be received no later than 48 hours before the commencement of the meeting, therefore by 10:00am (AEDT) on Monday 4 February 2019. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxy forms may be lodged using the enclosed Reply Paid Envelope or:

 Online https://www.votingonline.com.au/invegm2019  By Fax + 61 2 9290 9655  By Mail Boardroom Pty Limited GPO Box 3993, Sydney NSW 2001 Australia  In Person Boardroom Pty Limited Level 12, 225 George Street, Sydney NSW 2000 Australia

Attending the Meeting

If you wish to attend the meeting please bring this form with you to assist registration .

InvestSMART Group Limited ACN 111 772 359

Your Address

This is your address as it appears on the company’s share register. If this is incorrect, please mark the box with an “X” and make the correction in the space to the left. Securityholders sponsored by a broker should advise their broker of any changes. Please note, you cannot change ownership of your securities using this form.

PROXY FORM

STEP 1 APPOINT A PROXY

I/We being a member/s of InvestSMART Group Limited (Company) and entitled to attend and vote hereby appoint:

the Chair of the Meeting (mark box)

OR if you are NOT appointing the Chair of the Meeting as your proxy, please write the name of the person or body corporate (excluding the registered securityholder) you are appointing as your proxy below

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chair of the Meeting as my/our proxy at the Extraordinary General Meeting of the Company to be held at the Australian Institute of Company Directors, NSW Business Centre and Member Lounge, Level 2, 18 Jamison St, Sydney NSW 2000 on Wednesday, 6 February 2019 at 10:00am (AEDT) and at any adjournment of that meeting, to act on my/our behalf and to vote in accordance with the following directions or if no directions have been given, as the proxy sees fit.

Chair of the Meeting authorised to exercise undirected proxies on remuneration related matters: If I/we have appointed the Chair of the Meeting as my/our proxy or the Chair of the Meeting becomes my/our proxy by default and I/we have not directed my/our proxy how to vote in respect of Resolutions 1a, 1b, 2, 3 and 4, I/we expressly authorise the Chair of the Meeting to exercise my/our proxy in respect of these Resolutions even though Resolutions 1a, 1b, 2, 3 and 4 are connected with the remuneration of a member of the key management personnel for the Company.

The Chair of the Meeting will vote all undirected proxies in favour of all Items of business (including Resolutions 1a, 1b, 2, 3 and 4). If you wish to appoint the Chair of the Meeting as your proxy with a direction to vote against, or to abstain from voting on an item, you must provide a direction by marking the 'Against' or 'Abstain' box opposite that resolution.

STEP 2

VOTING DIRECTIONS

• 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 vote will not be counted in calculating the required majority if a poll is called.

For Against Abstain*

Resolution 1a Approval of terms of Loans for Shares issued to Mr Ron Hodge under the LTIP

Resolution 1b Approval of terms of Loans for Shares issued to Mr Ron Hodge under the ESOP Resolution 2 Approval of terms of Loans for Shares issued to Mr Paul Clitheroe under the LTIP Resolution 3 Amendment of Long Term Incentive Plan (LTIP)

Resolution 4 Issue of Shares under LTIP to Mr Alan Kohler

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STEP 3 SIGNATURE OF SECURITYHOLDERS

This form must be signed to enable your directions to be implemented.

Individual or Securityholder 1 Securityholder 2 Securityholder 3 Sole Director and Sole Company Secretary Director Director / Company Secretary Contact Name…………………………………………….... Contact Daytime Telephone………………………................................ Date / /