MAGONTEC LIMITED — AGM Information 2019

Apr 7, 2019

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NO TI C E OF A NN UAL G EN ER A L M E E TI NG Limited

This document constitutes the Notice of Meeting for the 2019 Annual General Meeting of Magontec Limited (ACN 010 441 666).

The thirty-sixth Annual General Meeting (AGM) of Magontec Limited (ACN 010 441 666) (the “Company”, “Magontec” or “MGL”) will be held in the meeting room of Boardroom Pty Limited, Level 12, Grosvenor Place, 225 George Street, Sydney NSW on Friday 10 May 2019 at 11.00 am (Sydney time). The Annual Report is available for viewing on the Company’s web site at the tab “2018 Annual Report” at the following web address: - - - http://magontec.com/investor centre/reports presentations page/

The business to be dealt with at the Meeting is: O R D I N A R Y B U S I N E S S

ITEM 1: Financial Report, Directors’ Report and Auditor’s Report (Refer “Explanatory Notes” at the foot of this Notice)

Resolution 1 “To receive and consider the Financial Report, including the Directors’ Declaration for the twelve-month reporting period ended 31 December 2018 and the related Directors’ Report and Auditor’s Report thereon.”

ITEM 2: Adoption of the Remuneration Report (advisory only resolution) (Refer to “Explanatory Notes” at the foot of this Notice)

To consider, and if thought fit, pass the following resolution as an advisory only resolution (i.e. non-binding upon Directors):

Resolution 2 “To adopt the Remuneration Report as set out in the Annual Report for the twelve-month reporting period ended 31 December 2018.”

Voting Exclusion Statement: The Company will disregard any votes cast on this resolution by Mr Nicholas Andrews and Dewberri Pty Limited as trustee for Andrews Superannuation Fund or any of their associates, Mr John Talbot, Mr Derryn Chin, Mr Christoph Klein-Schmeink, and Mr Xunyou Tong and any of their associates. However, the Company need not disregard a vote if –

• 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

• 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.

ITEM 3: Election of Director (ordinary resolution) (Refer to “Explanatory Notes” at the foot of this Notice)

• Resolution 3 “That in accordance with Article 12.7 (b) of the Company’s Constitution Mr Atul Malhotra be confirmed as a Director of the Company.”

Voting Exclusion Statement: The Company will disregard any votes cast in favour of this resolution by Mr Atul Malhotra. However, the Company need not disregard a vote if –

• 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

• 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.

ITEM 4: Re-election of Director (ordinary resolution) (Refer to “Explanatory Notes” at the foot of this Notice)

Resolution 4 “That Mr Willie Andre Labuschagne, who is retiring and standing for re-election in accordance with clause 12.3(a) of the Constitution of the Company, and being eligible, is re-elected as a Non-Executive Director of the Company, effective from the close of the Annual General Meeting.”

Voting Exclusion Statement: The Company will disregard any votes cast in favour of this resolution by Straits Mine Management Pty Ltd. However, the Company need not disregard a vote if –

• 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

• it is cast by a 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.

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NO TI C E OF A NN UAL G EN ER A L M E E TI NG Limited

ITEM 5: Issue of Performance Rights to the Executive Chairman Mr Nicholas Andrews (ordinary resolution) (Refer to “Explanatory Notes” at the foot of this Notice)

Resolution 5 "In line with the terms of the approval by shareholders of Resolution 7 of the 2017 Notice of Annual General Meeting and pursuant to ASX Listing Rule 10.14, confirm the issue of 3,272,727 Performance Rights to the Executive Chairman Mr Nicholas Andrews on the basis detailed in the relevant explanatory note."

Voting Exclusion Statement: The Company will disregard any votes cast in favour of this resolution by Mr Nicholas Andrews and Dewberri Pty Limited as trustee for Andrews Superannuation Fund or any of their associates.

However, the Company need not disregard a vote if –

• 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

• 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.

• ITEM 6: Change of Rules to the Incentive plan for the Magontec global management group (ordinary resolution) in relation to ‘Eligible executives’ (Refer to “Explanatory Notes” at the foot of this Notice)

Resolution 6 "To approve a change to the rules governing the Company’s short term incentive (STI) and long term incentive (LTI) remuneration plan to expand the definition of ‘Eligible executives’ with effect from 1 January 2019."

Voting Exclusion Statement: The Company will disregard any votes cast in favour of this resolution by Mr Nicholas Andrews and Dewberri Pty Limited as trustee for Andrews Superannuation Fund or any of their associates, Mr John Talbot, Mr Derryn Chin, Mr Christoph Klein-Schmeink, and Mr Xunyou Tong and any of their associates.

However, the Company need not disregard a vote if –

• 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

• 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.

D E T E R M I N A T I O N O F V O T I N G E N T I T L E M E N T

For the purposes of this meeting, all persons who are registered holders of shares in the Company at 7:00pm Sydney time on Wednesday 8 May 2019 will be entitled to vote.

A P P O I N T I N G A P R O X Y

A member entitled to vote may appoint a proxy to attend and vote on behalf of the member. If the member is entitled to cast more than two votes, the member may appoint two proxies to attend and vote instead of the member. Where more than one proxy is appointed, each proxy may be appointed to represent a specified portion of the member’s voting rights. If no such specification is given and two proxies are appointed, each may exercise half the votes to which the member is entitled. A proxy need not be a member. Proxies must be executed in accordance with the instructions in the notes accompanying the proxy form.

To be valid, the signed proxy form (together with an original or certified copy of the power of attorney if applicable) must be:

• Lodged with Boardroom Pty Limited at Level 12, Grosvenor Place, 225 George St Sydney NSW 2000;

• Delivered by post to Boardroom Pty Limited GPO Box 3993, Sydney NSW 2001; or

• Sent by facsimile to Boardroom Pty Limited on +61 2 9290 9655.

so as to be received by Boardroom Pty Limited by 11:00 am Sydney time on Wednesday 8 May 2019 being not less than 48 hours before the time for holding the meeting.

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NO TI C E OF A NN UAL G EN ER A L M E E TI NG Limited E X P L A N A T O R Y N O T E S

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ITEM 1: Financial Report and Directors’ Report and Auditor’s Report for the twelve-month reporting period ended 31 December 2018.

The Corporations Act 2001 (Cth) (Corporations Act) requires that the Financial Report, including the Directors’ Declaration for the twelve-month reporting period ended 31 December 2018 and the related Directors’ Report and Auditors’ Report, be laid before the Annual General Meeting. In addition, the Company’s Constitution provides for such reports and statements to be received and considered at the meeting. None of the Corporations Act 2001 (Cth), the ASX Listing Rules or the Company’s Constitution requires a vote of shareholders at the Annual General Meeting on such reports or statements. However, shareholders will be given ample opportunity to raise questions with respect to these reports and statements at the meeting.

ITEM 2: Adoption of Remuneration Report for the twelve-month reporting period ended 31 December 2018 (advisory only resolution)

Shareholders (other than excluded shareholders) are entitled to vote on the question whether the Remuneration Report as contained in the Annual Report for the twelve-month reporting period ended 31 December 2018 is to be adopted. Shareholders should note, however, that this is an "advisory only" resolution, which does not bind the Directors of the Company.

Mr Nicholas Andrews and Dewberri Pty Limited as trustee for Andrews Superannuation Fund or any of their associates , Mr John Talbot, Mr Derryn Chin, Mr Christoph Klein-Schmeink, and Mr Xunyou Tong and any of their associates are not entitled to cast a vote on this resolution. The Board recommends that shareholders vote in favour of Resolution 2.

ITEM 3: Election of Director – Mr Atul Malhotra (ordinary resolution)

At its meeting on 4 December 2018 and in terms of Article 12.7 (a) of the Company’s constitution, the Board appointed Mr Atul Malhotra as an Independent Non-Executive director with such duties commencing on and from 1 January 2019. (Refer Company announcements dated 5 December 2018 and 3 January 2019 to Australian Securities Exchange.) In terms of Article 12.7 (b) such Board appointment extends until the conclusion of the next annual general meeting of the Company but is eligible for election at that meeting.

Under Article 12.6 (a) of the Company’s constitution it is not required that this resolution be supported by Mr Malhotra lodging a signed “consent to nomination” with the Company. However, prior to his appointment on 4 December 2018, he did lodge such consent with the Company.

In the period from September 2003 to October 2013, Mr Malhotra was the Head of Purchasing and a member of the Group Management team at Georg Fischer Automotive Group, Schaffhausen, Switzerland, a leading global supplier of cast metal (including magnesium) parts with an annual turnover of about €1,200m and 11 production units located in Europe and China.

As Head of Purchasing, his main responsibilities included establishing procurement strategy and managing the procurement function. As part of the Group’s senior management team he also held co-responsibility for providing strategic direction to, and overseeing performance of the business units with reporting responsibilities to the Corporate division.

Mr Malhotra has also held executive roles at ABB, Bombardier Transportation, Adtranz and Continental AG in his 40-year career with responsibility for projects and operations in Europe, Asia and Australia. He holds a Master of Business Administration qualification from Delhi University.

Since January 2014 Mr Malhotra has been acting as an independent adviser to various corporate clients and businesses.

Mr Malhotra is not entitled to cast a vote in favour of this resolution. The Board recommends that shareholders vote in favour of Resolution 3.

ITEM 4: Re-election of Director – Mr Willie Andre Labuschagne (ordinary resolution)

Mr Labuschagne retired and was re-elected to the Board of the Company by shareholders as a Non-Executive Director at the AGM on 11 May 2016 in accordance with the provisions of clause 12.3(b)(iv) of the Company’s Constitution.

Under clause 12.3(a) of the Constitution, a director shall not retain office for a period in excess of 3 years or beyond the third annual general meeting following his election (whichever is the longer period), without submitting himself for re-election. As this meeting will be the third annual general meeting since Mr Labuschagne’s appointment as a director by shareholders, Mr Labuschagne will retire and stand for re-election at the meeting. Under clause 12.6 (a) of the Constitution, the resolution to appoint Mr Labuschagne is not required to be preceded by a shareholder nomination.

Straits Mine Management Pty Limited is not entitled to cast a vote in favour of this resolution. The Board recommends that shareholders vote in favour of Resolution 4.

ITEM 5: Issue of Performance Rights to Executive Chairman Mr Nicholas Andrews (ordinary resolution)

• a. A Performance Right is an effective option available to the holder to convert, to ordinary shares at the conversion date, part or all of the Performance Right depending upon the extent to which performance hurdle(s) as set by the Board have been satisfied.

• b. Performance Rights are issued to eligible executives participating in the incentive plan for the Magontec global management group.

• c. Such a plan was approved by shareholders by resolution 5 of the 2017 Notice of Annual General Meeting.

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NO TI C E OF A NN UAL G EN ER A L M E E TI NG Limited

• d. By resolutions 7 and 5 at the Company’s 2017 and 2018 AGMs respectively, shareholders approved the issue of Performance Rights to Mr Andrews and the current status of those approved issues is as per the table below.

Status of Performance Rights	Status of Performance Rights	Issued to Executive Chairman Mr Nicholas Andrews	Issued to Executive Chairman Mr Nicholas Andrews	Issued to Executive Chairman Mr Nicholas Andrews
			# of Perf
Issued	Cancelled	Performance Period	Rights	Authority
19-May-17		1 Jan 15 to 31 Dec 17	6,833,947	Resolution 7 2017 AGM
19-May-17		1 Jan 16 to 31 Dec 18	6,811,172	Resolution 7 2017 AGM
19-May-17		1 Jan 17 to 31 Dec 19	4,275,488	Resolution 7 2017 AGM
	31-Dec-17	1 Jan 15 to 31 Dec 17	(6,833,947)
10-May-18		1 Jan 18 to 31 Dec 20	4,500,000	Resolution 5 2018 AGM
	31-Dec-18	1 Jan 16 to 31 Dec 18	(6,811,172)
24-Jan-19		1 Jan 19 to 31 Dec 21	4,500,000	Resolution 5 2018 AGM
	Total on foot	at 24 Jan 2019	13,275,488

• e. Performance Rights in relation to the 1 January 2020 to 31 December 2022 LTI performance period will be issued to eligible executives on (or around) 1 January 2020.

• f. It is estimated that 3,272,727 Performance Rights in respect of the 2020-2022 performance period (as per the terms of the approval by shareholders of Resolution 7 of the 2017 Notice of Annual General Meeting and the calculation at step 4 in the table below) will be due to the Executive Chairman on (or around) 1 January 2020.

Step	Element in Formula
	3 Year LTI Performance Period	1 Jan 2020 to 31 Dec 2022
1	Salary atcommencementof3-year LTIperiod	$450,0001
2	30%*amount in step 1	$135,000
3	Share price at commencement of 3-year LTI period	$0.0552
4	Performance Rights issued at commencement of 3-year LTI period = Amount in step 2 / (75%*share price in step 3)	3,272,727
5	Date ofpossible conversion to ordinary shares	31 Dec2022
Note 1. Estimated salary at commencement date 2. Estimated starting share price to apply for the 2020-2022 LTI period.

• g. Should the actual salary and starting share price on 1 January 2020 differ to those assumed in the table at paragraph f of this item, the number of performance rights to which Mr Andrews is entitled will vary accordingly.

• h. Approval/confirmation is sought to issue, within 30 days after 1 January 2020 or, in any event, within 12 months of the date of this meeting, 3,272,727 Performance Rights to the Executive Chairman Mr Nicholas Andrews in relation to the LTI performance period 1 January 2020 to 31 December 2022.

• i. The Performance Rights will be issued on the basis of ASX Listing Rule 10.14 with the relevant disclosures as per ASX Listing Rule 10.15 (refer paragraph k. in this Item 5).

• j. The Board approved share price performance standards by which the Performance Rights the subject of this resolution may be converted into ordinary shares of the Company are as follows –

LTI Performance Period 1 January 2020 to 31 December 2022– Share Price performance standards Performance Level Share Price(1) % of Performance Rights vesting Belowthreshold Share price< $0.066 0.00% Threshold range Share price= $0.066 25.00% Share price > $0.066 25.00% plus 0.93% for each 0.01 cent share price is over $0.066 Share price< $0.093 Target range Share price= $0.093 50.00% Share price > $0.093 50.00% plus 1.67% for each 0.01 cent share price is over $0.093 Share price< $0.123 Stretch Share price>= $0.123 100.00%	LTI Performance Period 1 January 2020 to 31 December 2022– Share Price performance standards Performance Level Share Price(1) % of Performance Rights vesting Belowthreshold Share price< $0.066 0.00% Threshold range Share price= $0.066 25.00% Share price > $0.066 25.00% plus 0.93% for each 0.01 cent share price is over $0.066 Share price< $0.093 Target range Share price= $0.093 50.00% Share price > $0.093 50.00% plus 1.67% for each 0.01 cent share price is over $0.093 Share price< $0.123 Stretch Share price>= $0.123 100.00%	LTI Performance Period 1 January 2020 to 31 December 2022– Share Price performance standards Performance Level Share Price(1) % of Performance Rights vesting Belowthreshold Share price< $0.066 0.00% Threshold range Share price= $0.066 25.00% Share price > $0.066 25.00% plus 0.93% for each 0.01 cent share price is over $0.066 Share price< $0.093 Target range Share price= $0.093 50.00% Share price > $0.093 50.00% plus 1.67% for each 0.01 cent share price is over $0.093 Share price< $0.123 Stretch Share price>= $0.123 100.00%	LTI Performance Period 1 January 2020 to 31 December 2022– Share Price performance standards Performance Level Share Price(1) % of Performance Rights vesting Belowthreshold Share price< $0.066 0.00% Threshold range Share price= $0.066 25.00% Share price > $0.066 25.00% plus 0.93% for each 0.01 cent share price is over $0.066 Share price< $0.093 Target range Share price= $0.093 50.00% Share price > $0.093 50.00% plus 1.67% for each 0.01 cent share price is over $0.093 Share price< $0.123 Stretch Share price>= $0.123 100.00%
	Performance Level	Share Price(1)	% of Performance Rights vesting
	Belowthreshold	Share price< $0.066	0.00%
	Threshold range	Share price= $0.066	25.00%
		Share price > $0.066 Share price< $0.093	25.00% plus 0.93% for each 0.01 cent share price is over $0.066
	Target range	Share price= $0.093	50.00%
		Share price > $0.093 Share price< $0.123	50.00% plus 1.67% for each 0.01 cent share price is over $0.093
	Stretch	Share price>= $0.123	100.00%

Note 1: As measured by the 30-day volume weighted average price at the end of the LTI period

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NO TI C E OF A NN UAL G EN ER A L M E E TI NG Limited

• k. Data Requirement under ASX Listing Rule 10.15

ASX Listing Rule	Description	Description	Comment
10.15.1	If person is not a director, relationship to director		Not applicable–Mr Andrews is a director
10.15.2	Maximum number of securities that may be acquired by all persons for whom approval is required		3,272,727 performance rights
10.15.3	The priceatwhichsecuritiesareto beacquired		Nil
10.15.4	All persons referred to in rule 10.14 who have received securities under the scheme since last approval		Refer table at paragraph d of this item
10.15.4A	All persons referred to in rule 10.14 who ar scheme	e entitled to participate in the
	Participant MrNicholasAndrews	Current Position Executive Chairman
10.15.5	Voting exclusion statement	As per“Ordinary Business”section at Resolution 5 of this notice.
10.15.6	The terms of any loan	No loan
10.15.7	Date by which securities are to be issued	Within 30 days after 1 January 2020 or, in any event, within 12 months of the date of the 2019 Annual General Meeting.

• l. The Performance Rights issued under this resolution will be held on the terms and conditions as per paragraphs ii c to s in the “Governing Document for the Short and Long-Term Incentive Remuneration Plans for the Magontec Global Management Group” available on the - -

• Magontec website (http://magontec.com/investor centre/corporate governance/).

Mr Nicholas Andrews and Dewberri Pty Limited as trustee for Andrews Superannuation Fund or any of their associates are not entitled to cast a vote in favour of this resolution. The Board recommends that shareholders vote in favour of Resolution 5.

ITEM 6: Change of Rules to the Incentive plan for the Magontec global management group (ordinary resolution) in relation to ‘Eligible executives’

• a. The executives in the Company’s global management group eligible to participate in the Company’s incentive plan were listed at paragraph i k in the explanatory notes at Item 5 of the 2017 Notice of AGM and at i j in the “Governing Document for the Short and Long-Term Incentive -

• Remuneration Plans for the Magontec Global Management Group” available on the Magontec website (http://magontec.com/investor centre/corporate-governance/).

• b. Shareholder approval is sought to alter –

• a. paragraph i j in the “Governing Document for the Short and Long-Term Incentive Remuneration Plans for the Magontec Global Management Group” as follows –

  • “Eligible executives for the STI 2017 Shareholder Approved Plan mean –

    1. the following persons:

Participant Current Position i. Nicholas Andrews Executive Chairman ii. John Talbot Company Secretary and consultant iii. Derryn Chin Chief Financial Officer iv. Christoph Klein-Schmeink President Europe & Americas v. Xunyou Tong President Magontec Asia vi. Patrick Look Vice President Finance & Human Resources and 2. effective from 1 January 2019, other executives who – a. satisfy selection criteria agreed and applied by the Board at its discretion; and b. have been formally approved by the Board to participate in the LTI/STI scheme.”

• b. paragraph ii g in the “Governing Document for the Short and Long-Term Incentive Remuneration Plans for the Magontec Global Management Group” as follows –

“Eligible executives for the LTI 2017 Shareholder Approved Plan mean the same persons as those ~~listed~~ described at paragraph i.j.”

Mr Nicholas Andrews and Dewberri Pty Limited as trustee for Andrews Superannuation Fund or any of their associates, Mr John Talbot, Mr Derryn Chin, Mr Christoph Klein-Schmeink, and Mr Xunyou Tong and any of their associates are not entitled to cast a vote in favour of this resolution. The Board recommends that shareholders vote in favour of Resolution 6.

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NO TI C E OF A NN UAL G EN ER A L M E E TI NG Limited

By order of the board.

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J Talbot

Company Secretary 27 March 2019

Helpline: If you have any questions regarding the meeting or proxy voting, please do not hesitate to contact the Company’s share registrar Boardroom Pty Limited on 1300 737 760 for Australian shareholders or +61 2 9290 9600 for overseas shareholders.

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