MYSTATE LIMITED — AGM Information 2012

Sep 20, 2012

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TABLE OF CONTENTS

Location of the Annual General Meeting	2
Notice of Annual General Meeting	3
Items of Business	3
Questions from Shareholders	10
Explanatory Memorandum	11

This document is important and requires your immediate attention.

MyState Limited is a non-operating holding company with MyState Financial, The Rock Building Society and Tasmanian Perpetual Trustees as wholly owned subsidiaries.

Registered Office: 23 Paterson Street, Launceston, Tasmania, 7250.

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NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of the members of MyState Limited will be held at Hotel Grand Chancellor – Hobart, 1 Davey Street, Hobart on Tuesday 23 October 2012 commencing at 10.30 a.m. (Tasmanian summer time).

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MYSTATE LIMITED ABN 26 133 623 962

Registered Office: 23 Paterson Street, Launceston, Tasmania 7250 Tel: (03) 6348 1111 Fax: (03) 6348 1173

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of the members of MyState Limited will be held at Hotel Grand Chancellor - Hobart, 1 Davey Street, Hobart, on Tuesday 23 October 2012 commencing at 10.30 a.m. (Tasmanian summer time).

Business

1. FINANCIAL STATEMENTS AND REPORTS

To receive and consider the Financial Reports, the Directors’ Report and the Auditor’s report for the year ended 30 June 2012.

2. ELECTION OF DIRECTORS

To consider and, if thought fit, pass each of the following resolutions separately as ordinary resolutions:

• (a) “THAT Miles Hampton who retires from the office of Director by rotation in accordance with rule 62.6 of the Constitution, being eligible and offering himself for re-election, be re-elected as a Director of the Company.”

• (b) “THAT Stephen Lonie who retires from the office of Director by rotation in accordance with rule 61.2 of the Constitution, being eligible and offering himself for re-election, be re-elected as a Director of the Company.”

• (c) “THAT Ian Mansbridge who retires from the office of Director by rotation in accordance with rule 62.9 of the Constitution, being eligible and offering himself for re-election, be re-elected as a Director of the Company.”

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3. REMUNERATION REPORT

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“THAT the Remuneration Report of the Company for the year ended 30 June 2012 be adopted.”

Voting Exclusion

In accordance with Section 250R(4) of the Corporations Act, the Company will disregard any votes cast on this resolution by or on behalf of a member of the Company's key management personnel ( KMP ), details of whose remuneration are included in the Remuneration Report, or their closely related parties, whether as shareholder or proxy.

However, a vote may be cast by a KMP if:

• the vote is cast by the KMP as a proxy in accordance with a direction by the shareholder as to how the KMP is to vote on the resolution; and,

• the shareholder who directed the KMP how to vote is entitled to vote on the resolution (ie the shareholder is not a KMP or a closely related party of a KMP)

or

• the voter is the chair of the meeting and the appointment of the Chairman as proxy (by a shareholder who is entitled to vote on the resolution) does not specify the way the proxy is to vote on the resolution; and,

• the appointment expressly authorises the Chairman to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a KMP.

Shareholders who intend to appoint the Company's Chairman as proxy (including an appointment by default) should have regard to the important information below under the heading "Important information concerning proxy votes on Resolutions 3, 4, 5 and 6".

4. REMUNERATION OF NON-EXECUTIVE DIRECTORS

• To consider and, if thought fit, pass the following resolution as an ordinary resolution:

THAT pursuant to rule 65.1 of the Company’s Constitution and ASX Listing Rule 10.17, the maximum aggregate remuneration provided by MyState Limited to all the Non-Executive Directors for their services to the Company as Directors be increased by $200,000 to $950,000 in any year, such increase to be effective from the date of the meeting.

Voting Exclusion

In accordance with Section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on this resolution if:

• the proxy is either a:

• member of the Company's KMP; or

• closely related party of a KMP; and

• the appointment does not specify the way the proxy is to vote on the resolution.

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However, the above prohibition does not apply if:

• the proxy is the chair of the meeting; and

• the appointment expressly authorises the Chairman to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a KMP.

The Company will in accordance with ASX Listing Rule 14.11 disregard any votes cast in respect of this resolution by the Directors and any associates of those persons.

However, the Company need not disregard a vote on this resolution 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

• 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.

Shareholders who intend to appoint the Company's Chairman as proxy (including an appointment by default) should have regard to the important information below under the heading "Important information concerning proxy votes on Resolutions 3, 4, 5 and 6".

5. APPROVAL OF MANAGING DIRECTOR'S PARTICIPATION IN THE EXECUTIVE LONG TERM INCENTIVE PLAN (ELTIP)

To consider and, if thought fit, pass each of the following resolutions separately as an ordinary resolution:

• (a) “THAT the issue of up to 65,677 fully paid ordinary shares in the Company to or for the benefit of the Managing Director under the 2011 ELTIP be approved for the purposes of ASX Listing Rule 10.14 and Exception 9 in ASX Listing Rule 7.2 and for all other purposes."

• (b) “THAT the Company be authorised to offer the Managing Director participation in the 2012 ELTIP which may entitle the Managing Director to be issued a maximum number of fully paid ordinary shares in the Company to be calculated by dividing $325,000 by the weighted average price of the Company’s shares over the 20 trading days prior to the offer date. The Managing Director's entitlement to be issued shares under the 2012 ELTIP will be based on the Company's performance in the period 1 July 2012 – 30 June 2015.”

Voting Exclusion

In accordance with Section 250BD of the Corporations Act, a person appointed as a proxy must not vote, on the basis of that appointment, on these resolutions if:

• the proxy is either a:

• member of the Company's KMP; or

• closely related party of a KMP; and

• the appointment does not specify the way the proxy is to vote on the resolution.

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However, the above prohibition does not apply if:

• the proxy is the chair of the meeting; and

• the appointment expressly authorises the Chairman to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a KMP.

The Company will in accordance with ASX Listing Rule 14.11 disregard any votes cast in respect of these resolutions by the Directors and any associates of those persons.

However, the Company need not disregard a vote on these resolutions if they are cast by:

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

• 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.

Shareholders who intend to appoint the Company's Chairman as proxy (including an appointment by default) should have regard to the important information below under the heading "Important information concerning proxy votes on Resolutions 3, 4, 5 and 6".

6. APPROVAL OF TERMINATION BENEFITS

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“ THAT for the purposes of section 200B and 200E of the Corporations Act, the Company is authorised to give in respect of each of the persons described in the Explanatory Memorandum to this Notice of Meeting any of the benefits described in the Explanatory Memorandum in connection with that person’s retirement as an Executive Director from the Board or managerial or executive office in the Company ( Retiree ), or a related body corporate, arising from that Retiree’s participation in the Executive Long Term Incentive Plan or Short Term Incentive, or the unexpired portion of that Retiree’s employment contract, further details of which are set out in the Explanatory Memorandum.”

Voting Exclusion

The Company will disregard any votes on this resolution (in any capacity) cast by or on behalf of:

• any of the persons in respect of whom a termination benefit would be given, namely the Managing Director and the Executives (each a Retiree ); or

• any associate of the Retiree.

This restriction does not prevent the casting of a vote if it is cast by a person as a proxy appointed by writing that specifies how the proxy is to be vote on the resolution, and it is not cast on behalf of the Retiree or an associate of the Retiree.

Shareholders who intend to appoint the Company's Chairman as proxy (including an appointment by default) should have regard to the important information below under the heading "Important information concerning proxy votes on Resolutions 3, 4, 5 and 6".

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Explanatory memorandum

Shareholders are referred to the Explanatory Memorandum accompanying and forming part of this Notice of Meeting.

Entitlement To Vote

Snapshot time

It has been determined (in accordance with Corporations Regulations 7.11.37) that for the purposes of the Meeting, shares will be taken to be held by the persons who are the registered shareholders at 7.00 p.m. (Melbourne time) on Sunday 21 October 2012. Accordingly, share transfers registered after that time will be disregarded in determining entitlements to attend and vote at the meeting.

Important information concerning proxy for Resolutions 3, 4, 5 and 6

The Corporations Act now places certain restrictions on the ability of key management personnel and their closely related parties to vote on the advisory resolution to adopt the Company’s remuneration report and resolutions connected directly or indirectly with the remuneration of the Company’s key management personnel. Key management personnel of the Company are the directors of the Company and those other persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Members of key management personnel include directors (both executive and non-executive) and certain senior executives. The Remuneration Report identifies the Company’s key management personnel for the financial year ended 30 June 2012. Their closely related parties are defined in the Corporations Act, and include certain of their family members, dependants and companies they control.

For these reasons, shareholders who intend to vote by proxy should carefully consider the identity of their proxy and are encouraged to direct their proxy as to how to vote on all resolutions. In particular, shareholders who intend to appoint the Company’s Chairman as their proxy (including an appointment by default) are encouraged to direct the Chairman as to how to vote on all resolutions. The Chairman of the meeting intends to vote undirected proxies in favour of each of the Resolutions 3, 4, 5 and 6.

If you do appoint the Chairman as your proxy but you do not direct the Chairman how to vote in respect of Resolutions 3, 4, 5 and 6, then you must mark the box indicated on the proxy form if you wish the Chairman to exercise your proxy vote in respect of those resolutions. Marking this box will constitute an express authorisation by you directing the Chairman to vote your proxy in favour of all of Resolutions 3, 4, 5 and 6 (unless you have exercised your right to direct the Chairman otherwise in respect of a particular Resolution by marking the ‘against’ or 'abstain' column in respect of any of the relevant resolutions). This express authorisation acknowledges that the Chairman may vote your proxy even if he or she has an interest in the outcome of Resolutions 3, 4, 5 and 6 and even if the Resolutions are connected directly or indirectly with remuneration of a member of the key management personnel of the Company and that votes cast by the Chairman for those resolutions, other than as an authorised proxy holder, will be disregarded because of that interest.

If you do not mark this box and you have not directed your proxy how to vote, the Chairman will not cast your votes on Resolutions 3, 4, 5 and 6 and your votes will not be counted in calculating the required majority if a poll is called.

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Voting by Proxy

Sections 250BB and 250BC of the Corporations Act apply to voting by proxy. Shareholders and their proxies should be aware of the requirements under the Corporations Act, as they will apply to this meeting. Broadly:

• if proxy holders vote, they must cast all directed proxies as directed; and,

• any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

You should seek professional advice if you need any further information on this issue.

In accordance with section 249L of the Corporations Act, members are advised of the following:

• A shareholder entitled to attend and vote has a right to appoint a proxy to attend and vote instead of the shareholder. A proxy need not be a shareholder and can be either an individual or a representative of a body corporate.

• A proxy need not vote on a show of hands, however if a proxy does vote on a show of hands, the proxy must vote as directed.

• A shareholder that 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. If no proportion or number is specified, each proxy may exercise half of the shareholder’s votes. If a shareholder appoints two or more proxies that specify different ways to vote on a resolution, neither proxy may vote on a show of hands.

• If an appointed proxy is not also the Chairman of the meeting, the proxy need not vote on a poll, however if the proxy does vote on a poll the proxy must vote as directed by the shareholder. If a poll is conducted and the proxy holder does not vote, the proxy appointment defaults to the Chairman of the meeting to vote as directed. If the appointed proxy is the Chairman of the meeting, the proxy must vote on a poll in the manner directed by the shareholder.

A Proxy Form accompanies this Notice and to be effective must be received at least 48 hours before the appointed time of the meeting at the Company’s corporate registry:

By Post Computershare Investor Services Pty Limited GPO Box 242 Melbourne VIC 3001 By Hand Computershare Investor Services Pty Limited 452 Johnston Street Abbotsford VIC 3067

Online www.investorvote.com.au Fax (within Australia) 1800 783 447 Fax (outside Australia) +61 3 9473 2555

Custodian voting – For Intermediary Online subscribers only (custodians) please visit www.intermediaryonline.com to submit your voting intentions.

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Voting By Attorney

A member may appoint an attorney to vote on his or her behalf. For an appointment to be effective for the Meeting, the instrument effecting the appointment (or a certified copy of it) must be received by the Company at its registered office or at the Company’s corporate registry listed above, at least 48 hours before the Meeting.

Corporate Representatives

A body corporate which is a member, or which has been appointed as a proxy, may appoint an individual to act as its representative at the Meeting. The appointment must comply with the requirements of section 250D of the Corporations Act. The representative should bring to the Meeting evidence of his or her appointment, including any authority under which it is signed, unless it has previously been given to the Company.

Scrutineer

The Company’s external Auditor, Wise Lord & Ferguson will act as scrutineer for any polls that may be required at the meeting

By Order of the Board

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P K M Viney Company Secretary 20 September 2012 23 Paterson Street Launceston Tasmania 7250

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Questions from shareholders 2012 Annual General Meeting

Shareholders who are unable to attend the meeting or who may prefer to submit questions in advance concerning MyState Limited that they would like us to address at the Annual General Meeting are invited to do so.

For your convenience, you can submit your questions:

• By completing the AGM Question Form below and posting it to:

The Secretary MyState Limited 23 Paterson Street Launceston TAS 7250

• By faxing the Form to 03 63481173; or

• By emailing the Form or your questions to info@mystatelimited.com.au

We will attempt to respond to as many of the more frequently asked questions as possible in the Chairman’s and Managing Director’s addresses at the 2012 Annual General Meeting. However, if we receive a large number of shareholders’ questions, we may not be able to reply individually.

Shareholder questions must be received by 10.30 a.m. Friday 19 October 2012 (Tasmanian summer time).

Please complete the following details:

Shareholder name:

…………………………………………………………………………………………………..

Address:

…………………………………………………………………………………………………..

Question (s):

………………………………….……………………………………………………………….

…………………………………………………………………………………………………..

………………………………………….……………………………………………………….

…………………………………………………………………………………………………..

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MYSTATE LIMITED ANNUAL GENERAL MEETING

EXPLANATORY MEMORANDUM

INTRODUCTION

This Explanatory Memorandum forms part of this Notice of Meeting and has been prepared to provide shareholders with sufficient information to consider the resolutions contained in the accompanying Notice of Annual General Meeting of the Company to be held on Tuesday 23 October 2012 commencing at 10.30 a.m. (Tasmanian summer time) at the Hotel Grand Chancellor – Hobart, 1 Davey Street, Hobart Tasmania.

The Directors recommend that shareholders read this Explanatory Memorandum carefully before making any decision in relation to the resolutions.

Item 2 - Election of Directors

Number of Vacancies

Pursuant to rule 62.6 of the Constitution, retiring Director Miles Hampton being eligible to do so, has offered himself for re-election.

Pursuant to rule 61.2 of the Constitution, retiring Director Stephen Lonie being eligible to do so, has offered himself for re-election.

Pursuant to rule 62.9 of the Constitution, retiring Director Ian Mansbridge being eligible to do so, has offered himself for re-election.

The resolutions set out in Item 2 of the Notice of Meeting seek shareholder approval of the re-election of these candidates.

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Details of Candidates

Details on the candidates standing for re-election are as follows:

Miles L Hampton B Ec (Hons), FCIS, FCPA, FAICD

Independent non-executive Director Appointed 12 February 2009.

Mr Hampton has been a Director of Tasmanian Perpetual Trustees Limited since July 2006. He was appointed a Director of MyState Financial and subsidiary companies in September 2009 and was appointed a Director of The Rock Building Society Limited in December 2011. Mr Hampton is Chairman of MyState Limited Board’s Group Risk Committee and is a member of the Group Audit Committee. Mr Hampton was Managing Director of agribusiness and real estate public company, Roberts Limited from 1987 until 2006. He is currently a Director of Australian Pharmaceutical Industries Ltd, Forestry Tasmania, the Van Diemen’s Land Company, Tasman Farms Limited and is Chairman of the Tasmanian Water & Sewerage Corporations and the Mather Foundation. Mr Hampton has previously been a Director of public companies Ruralco Holdings Ltd, Wentworth Holdings Ltd, HMA Ltd and Gibsons Ltd and was a Director of Impact Fertilisers Pty Ltd.

Stephen E Lonie B Com, MBA, FCA, FFin, FAICD, FIMCA

Independent non-executive Director Appointed 12 December 2012.

Mr Lonie was a former partner of the international accounting and consulting firm KPMG and now practices as an independent management consultant. Currently, he is Chairman of Central Queensland mining group, Jellinbah Resources Pty Ltd and is a Non-Executive Director of Corporate Travel Management Ltd. Mr Lonie was formerly Chairman of The Rock Building Society Ltd and remains as a Non-Executive Director of the Company following the acquisition by MyState Limited. Mr Lonie is a member of MyState Limited Board’s Group Audit and Group Corporate Governance and Remuneration Committees.

Ian G Mansbridge CPA, FCIS, FCIM Independent non-executive Director Appointed 12 February 2009.

Mr Mansbridge’s career has included Managing Director of Sandhurst Trustees Ltd, Managing Director of National Mortgage Market Corporation, Managing Director of Elders Rural Bank (Rural Bank) and General Manager of Bendigo Bank. He has been National President of the Trustee Corporations of Australia, a Director of Tasmanian Banking Services and Chair of the National Stock Exchange of Australia Ltd. He is currently a Director of Australian Friendly Society, Sandhurst Trustees Ltd and Goulburn-Murray Water. He was appointed a Director of Tasmanian Perpetual Trustees Ltd in March 2004, and MyState Financial on 22 September 2009. He is a member of MyState Limited Board’s Group Risk and the Group Nomination Committees. Mr Mansbridge was appointed a Director of The Rock Building Society Limited in December 2011.

Re-election recommendation

The Directors (in each case excluding the retiring Director) recommend supporting the re-election of each Director standing for re-election. The Directors make this recommendation on the basis of their review of the performance of these Directors, which was carried out in accordance with the Board’s governance policies.

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Voting

To be successfully re-elected as a Director, a candidate must receive more votes ‘For’ than ‘Against’.

The Chairman of the meeting intends to vote undirected proxies in favour of the re-election of Miles Hampton, Stephen Lonie and Ian Mansbridge.

Item 3 – Remuneration Report

Shareholders are asked to adopt the Company’s Remuneration Report. The Remuneration Report is in the 2012 Annual Report and is also available on the Company’s website at www.mystatelimited.com.au. The Remuneration Report:

• Describes the policies behind and structure of, the remuneration arrangements of the Company and the link between the remuneration of employees and the Company’s performance;

• Sets out the remuneration arrangements in place for each Director and for specified Senior Executives of the Company; and

• Explains the differences between the bases for remunerating Non-Executive Directors and Executives, including any Executive Directors.

The Corporations Act requires the agenda for an Annual General Meeting to include a resolution that the Remuneration Report be put to the vote. Should 25% or more of the votes cast on this resolution (votes cast in person or by proxy) to approve the Remuneration Report be against approval of that report, then at the 2013 Annual General Meeting the resolution to approve next year's Remuneration Report must be approved by 75% or more of the votes cast to avoid a resolution being put to the 2013 Annual General Meeting to consider a spill of the Board.

A reasonable opportunity for discussion of, and comment on, the Remuneration Report will be provided by the Chairman at the Annual General Meeting.

Noting that each Director has a personal interest in their own remuneration from the Company as set out in the Remuneration report, the Directors recommend that shareholders vote in favour of the resolution to adopt the Remuneration Report.

Item 4 - Remuneration of Non-Executive Directors

Rule 65.1 of the Company’s Constitution provides that, as remuneration for their services as Directors, each Non-Executive Director shall be paid out of the funds of the Company a sum determined by the Board payable at the time and in the manner determined by the Board, on the basis that the aggregate remuneration paid to all Non-Executive Directors in any year may not exceed an amount fixed by the Company in general meeting.

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In September 2009, shareholders fixed at $750,000 the aggregate amount which may be provided as remuneration to all the Non-Executive Directors for their services as Directors of the Company. The total value of remuneration paid to Non-Executive Directors during the last financial year under the provisions of rule 65.1 was $719,788.

The Board of Directors seek approval to increase the aggregate amount from which all the Non-Executive Directors may be paid to $950,000. The proposed increase is supported by independent advice which reflects the following factors:

• the overall size, complexity and growth of the business;

• the demands on Directors of the wide-ranging requirements of corporate legislation, governance and regulatory authorities, introduced to further protect the interests of shareholders;

• the responsibilities of Directors under the increasingly complex statutory and regulatory requirements which apply specifically to trustee companies and companies operating in the financial services sector;

• the need to continue to be able attract candidates of the highest calibre and experience to the Board when the responsibilities of public company directors are more onerous and demanding than ever before; and

• scope for a short-term increase in the number of Non-Executive Directors in the future, in order to add to the balance of competencies, or to allow for orderly succession planning for the Board.

The proposed increase of $200,000 is the aggregate amount payable to all the NonExecutive Directors and is not intended to be fully utilised in the immediate future.

' Item 5 - Approval of Managing Director s participation in the Executive Long Term Incentive Plan (ELTIP)

Introduction

The Board considers the motivation of the Managing Director, Mr John Gilbert, vital to the Company’s long term performance.

Consistent with the approvals for participation already given in respect of the 2010 and 2011 ELTIP, in item 5(a) the Company now seeks the approval of shareholders for the purposes of Rule 10.14 and Exception 9 in Rule 7.2 of the ASX Listing Rules and for all other purposes, to the issue of up to 65,677 fully paid ordinary shares in the Company under the 2011 ELTIP, which would be allocated and vest for the benefit of Mr Gilbert should the performance criteria be achieved for the performance period 1 July 2011 – 30 June 2014.

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In item 5(b), the Company seeks approval for Mr Gilbert's participation in the ELTIP for 2012. This approval will authorise the Company to offer a yet to be determined maximum number of fully paid ordinary shares in the Company, to be calculated by dividing $325,000 by the weighted average price of the Company’s shares over the 20 trading days prior to the offer date. The Board currently proposes to make the offer in respect of Mr Gilbert on or about 1 November 2012. The performance period for the shares in respect of the 2012 ELTIP offer will be 1 July 2012 – 30 June 2015. The shares would be issued under this offer if approval for the purposes of Rule 10.14 and Exception 9 of Rule 7.1 of the ASX Listing Rules is subsequently given (at a future meeting of the Company's shareholders) and the shares would be allocated and vest for the benefit of Mr Gilbert should the performance criteria be achieved for the performance period 1 July 2012 – 30 June 2015.

General explanations of the Managing Director’s current remuneration arrangements were previously released to the Australian Securities Exchange.

The resolutions set out in Item 5 are in accordance with the Company's policies on total remuneration arrangements for the Managing Director, as described in the following section:

Basis of Employment of the Managing Director and Executives

To assist in achieving these objectives, the Group Corporate Governance and Remuneration Committee ( GCGRC ) links the nature and amount of the Managing Director’s and Executives’ emoluments to the Company’s financial and operational performance. The remuneration of the Managing Director and Executives is comprised of three components, being:

• fixed annual remuneration (inclusive of superannuation and fringe benefits) ( FAR );

• cash based short term incentive ( STI ); and,

• executive long term incentive plan ( ELTIP ).

i. Fixed Annual Remuneration

The FAR is paid by way of cash salary, superannuation and fringe benefits and is reviewed annually by the GCGRC. In addition, external consultants provide analysis and advice to ensure Executives’ remuneration is competitive in the marketplace. The total employment cost of any remuneration package, including fringe benefits tax, is taken into account in determining an employee’s FAR.

ii. Cash based short term incentive

The STI is calculated as a percentage of the FAR and is payable annually in respect of each financial year as cash and/or superannuation contributions. The following percentages are used:

• Managing Director - up to 30% and based upon Key Performance Indicators ( KPI’s ) to be agreed with the Board; and,

• other Executives - up to 15% and based upon KPI’s to be agreed between the Executive and the Managing Director with reference to those applicable to the Managing Director.

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These amounts will increase as follows as of 1 July 2012;

• Managing Director - up to 50% and based upon Key Performance Indicators (KPI’s) to be agreed with the Board; and,

• other Executives - up to 30% and based upon KPI’s to be agreed between the Executive and the Managing Director with reference to those applicable to the Managing Director.

Payment is conditional upon the achievement of strategic, financial, organisational, operational and individual performance criteria during the financial year under review and tailored to the respective role.

Each year the GCGRC sets the KPI’s for the Managing Director who, in turn, sets KPI’s for Executives. The GCGRC selects performance objectives which provide a robust link between Executive reward and the key drivers of long term shareholder value.

The KPI’s generally are measures relating to the Company and the individual and include financial, strategic, operational and customer/stakeholder measures. The measures are chosen and weighted to best align the individual’s reward to the KPI’s of the Company and its overall performance.

The financial performance objectives are profit before income tax and after income tax compared to budgeted amounts. The non-financial objectives vary with position and responsibility and include measures such as achieving strategic outcomes, compliance and support of the Company’s risk management policies and compliance culture, customer satisfaction and staff development.

After the end of the financial year, the Chairman assesses the actual performance of the Company and the Managing Director against the KPI’s set at the beginning of the financial year. Based upon that assessment, a recommendation is made to the GCGRC as to the STI payment.

After the end of the financial year, the Managing Director assesses the actual performance of the Company and the Executives against their KPI’s set at the beginning of the financial year. Based upon that assessment a recommendation is made to the GCGRC as to the STI payment.

The GCGRC recommends the STI payments to be made to the Managing Director and Executives for approval by the Board. Payment of an STI to the Managing Director or Executives is at the complete discretion of the Board and can be adjusted downwards, to zero if necessary to protect the financial soundness of the Company, i.e. to, at a minimum, ensure that no breach of capital adequacy or liquidity policy thresholds occurs.

The Board also has discretion to adjust the STI payment down (potentially to zero) in the event that the Managing Director or an Executive commits a serious breach of duty.

If the results on which any STI reward was based are subsequently found by the Board to have been the subject of deliberate management misstatement, the Board may require repayment of the relevant STI, in addition to any other disciplinary actions.

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iii. Executive long term incentive plan (ELTIP)

The ELTIP was established by the Board to encourage the executive management team, comprising the Managing Director, General Managers and Chief Financial Officer/Company Secretary, to have a greater involvement in the achievement of the Company’s objectives. To achieve this aim, the ELTIP provides for the issue to the executive management team of fully paid ordinary shares in the Company if performance criteria specified by the Board are satisfied in a set performance period.

Under the ELTIP an offer may be made to the members of the executive management team every year as determined by the Board. The maximum value of the offer is determined as a percentage of the FAR of each member of the executive management team.

The percentages used are as follows:

• for the Managing Director - 50%;and,

• for the General Managers and Chief Financial Officer/Company Secretary - 30%.

The value of the offer is converted into fully paid ordinary shares based upon the weighted average price of the Company’s shares over the twenty trading days prior to offer date.

In order for the shares to vest in each eligible member of the executive management team, certain performance criteria must be satisfied within a predetermined performance period. Both the performance criteria and the performance period are set by the Board at its absolute discretion. The Board has for the time being set the three financial years commencing with the year in which an offer is made under the plan as the relevant performance period. The performance criteria to apply over the performance period are as follows:

• 2009 and 2010 ELTIP offers made - growth in Earnings Per Share outcomes ( EPS ) and Total Shareholder Return ( TSR ) with the respective measures weighted equally; and,

• 2011 ELTIP offer made and 2012 offer yet to be made - growth in TSR.

ELTIP performance assessment will be measured against the performance of the companies sized by market capitalisation within the S&P/ASX 300 Index (the benchmark group).

Any reward payable to any member of the Executive Team under any ELTIP offer is subject to reassessment and possible forfeiture, if the results on which the ELTIP reward was based are subsequently found to have been the subject of deliberate management misstatement.

The ELTIP provides for an independent Trustee to acquire and hold shares. The Trustee is funded by the Company to acquire shares, as directed by the Board, either by way of purchase from other shareholders on market, or issue by the Company. Vesting of shares can occur after an assessment has been made after the performance period (currently 3 years) and once the Board resolves to notify the Trustee to issue entitlements under the relevant ELTIP Offer.

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Vesting of shares to the Managing Director or Executives is at the complete discretion of the Board and can be adjusted downwards, to zero if necessary, to protect the financial soundness of the Company, i.e. to, at a minimum ensure that no breach of capital adequacy or liquidity policy thresholds occurs.

The Trustee will allocate any shares to each member of the executive management team in accordance with their entitlement under the ELTIP. Any shares to be allocated to the Managing Director under this Plan require shareholder prior approval in accordance with ASX Listing Rules. The Trustee will hold the shares which have been allocated on behalf of the executive management team member.

The executive management team member cannot transfer or dispose of shares which have been allocated to them until the earlier of:

• the seventh anniversary of the original offer date of the grant;

• leaving the employment of the Company;

• the Board giving permission for a transfer or sale to occur; or,

• a specified event occurring (e.g. change in control of the Company).

Upon request, the Board will release vested shares to an Executive to the extent required to meet a taxation assessment directly related to the award of those shares.

On separation from the Company, shares will be released only if the separation is due to a Qualifying Reason or is at the initiation of the Company without cause. A 'Qualifying Reason' as defined by the ELTIP Plan Rules is death, total and permanent disability, retirement at normal retirement age, redundancy or other such reason as the Board in its absolute discretion may determine. If either of these occurs within the three year performance period, shares will be allocated on a pro-rata basis by bringing the qualifying date forward to the date of separation.

During the period that allocated shares are held by the Trustee, the Executive Management Team member is entitled to receive the income arising from dividend payments on those shares and to have the Trustee exercise the voting rights on those shares in accordance with their instructions.

On accepting an ELTIP offer made by MyState Limited, Executives are required to agree to not hedge their economic exposure to any entitlement. Failure to comply with this directive will constitute a breach of duty and as such will involve disciplinary action and the risk of dismissal under the terms of the Executive’s contract.

a) 2009 ELTIP offer and 2010 ELTIP offer

The 2009 ELTIP Offer applies to the three year performance period commencing 1 July 2009 and ending on 30 June 2012. At the time of preparation of this Notice of Meeting an assessment of performance of the period was not complete.

ELTIP performance assessment for the 2009 Offer will be measured against the performance of companies sized by market capitalisation within the S&P/ASX 300 Index (the 2009 benchmark group).

The 2010 ELTIP offer applies to the three year performance period commencing 1 July 2010 and ending on 30 June 2013.

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ELTIP performance assessment for the 2010 Offer will be measured against the performance of companies sized by market capitalisation within the S&P/ASX 300 Index (the 2010 benchmark group).

In respect of each of these respective ELTIP offers, any reward payable to any member of the Executive Team will be calculated as follows:

• 50% of the ELTIP reward for the performance period will be based upon, the comparison of the actual MyState Limited EPS growth achieved with that of the benchmark group will be payable on the following basis:

• Below the mid-point percentage EPS growth – 0% reward

• At the 50th percentile – 50% of the applicable reward

• Between the 50th percentile and the 75th percentile EPS growth – 2% for every 1 percentile above the 50th percentile

• Above the 75th percentile – 100% of the applicable reward

• No reward will be payable if EPS growth is negative irrespective of the benchmark group performance

• MyState Limited EPS baseline for calculation of the 2009 ELTIP offer is to be 23.32cps

• MyState Limited EPS baseline for calculation of the 2010 ELTIP offer is to be 27.46cps

• 50% of the ELTIP reward for the performance period will be based upon , the comparison of the actual MyState Limited TSR growth compared to the benchmark group will be payable on the following basis:

• Below the mid-point percentage TSR growth – 0% reward

• At the 50th percentile – 50% of the applicable reward

• Between the 50th percentile and the 75th percentile TSR growth – 2% for every 1 percentile above the 50th percentile

• Above the 75th percentile – 100% of the applicable reward

• No reward will be payable if TSR is negative irrespective of the benchmark group performance.

• MyState Limited share price baseline for TSR calculation for the 2009 ELTIP offer is $2.70

• MyState Limited share price baseline for TSR calculation for the 2010 ELTIP offer is $3.12

b) 2011 ELTIP offer

The 2011 ELTIP offer applies to the three year performance period commencing 1 July 2011 and ending on 30 July 2014.

ELTIP performance assessment for the 2011 Offer will be measured against the performance of companies sized by market capitalisation within the S&P/ASX 300 Index (the 2011 benchmark group).

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In respect of each of these respective ELTIP offers, any reward payable to any member of the Executive Team will be calculated as follows:

• 100% of the ELTIP reward for the performance period will be based upon the comparison of the actual MyState Limited TSR growth compared to the benchmark group and will be payable on the following basis:

• Below the mid-point percentage TSR growth – 0% reward

• At the 50th percentile – 50% of the applicable reward

• Between the 50th percentile and the 75th percentile TSR growth – 2% for every 1 percentile above the 50th percentile

• Above the 75th percentile – 100% of the applicable reward

• No reward will be payable if TSR is negative irrespective of the benchmark group performance

• MYS share price baseline for TSR calculation for the 2011 ELTIP offer is $3.55

The MYS Board has determined that 100% of any future ELTIP reward will be determined based totally upon TSR as was the case with 2011 offers. This differs from the 2009 and 2010 Offers, which provided for 50% of the ELTIP reward to be determined based upon 50% TSR weighting and 50% EPS. The Board resolved to move to the TSR only mechanism for 2011 and onwards (as reflected in the revised Remuneration Policy lodged with the ASX).

Details of offers made under the 2009 ELTIP are as follows:

	Managing Director	Other Executives
Date of offer (“Grant” date)	30 June 2010	30 June 2010
Performance period	1 July 2009 – 30 June 2012	11 January 2010 – 30 June 2012
Maximum number of shares that may be allocated under the offer	71,884	56,581
Value of the offer	$225,000	$177,098
Share price used in the calculations of the offer	$3.13	$3.13

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Details of offers made under the 2010 ELTIP are as follows:

	Managing Director	Other Executives
Date of offer (“Grant” date)	29 March 2011	29 March 2011
Performance period	1 July 2010 – 30 June 2013	1 July 2010 – 30 June 2013
Maximum number of shares that may be allocated under the offer	59,840	104,731
Value of the offer	$225,000	$393,789
Share price used in the calculations of the offer	$3.76	$3.76

Details of offers made under the 2011 ELTIP are as follows:

	Managing Director	Other Executives
Date of offer (“Grant” date)	2 November 2011	6 September 2011
Performance period	1 July 2011 - 30 June 2014	1 July 2011 - 30 June 2014
Maximum number of shares that may be allocated under the offer	65,677	88,403
Value of the offer	$235,125	$316,482
Share price used in the calculations of the offer	$3.58	$3.58

Disclosures for purposes of ASX Listing Rule 10.14 and Exception 9 in ASX Listing Rule 7.2 – Resolution 5(a)

Listing Rule 10.14 provides that a company must not permit a director of the company to acquire shares under an employee incentive scheme without the approval of holders of ordinary securities.

ASX Listing Rule 7.1 provides that (subject to certain exceptions) prior approval of shareholders is required for an issue of securities if the securities will, when aggregated with the securities issued by the Company during the previous 12 months, exceed 15% of the number of shares on issue at the commencement of that 12 month period. However, Exception 9 in Listing Rule 7.2 provides that this limitation does not apply in relation to securities issued under an employee incentive scheme that has been approved by shareholders.

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Whilst the number of shares proposed to be issued to Mr Gilbert is not of itself more than 15% of the number of shares on issue, the Company is seeking shareholder approval so that this share issue does not consume any part of the Company's capacity to issue shares without shareholder approval.

The Board considers that the award of the shares under the ELTIP is an important component of the overall remuneration arrangements designed to:

• a. retain the services of Mr Gilbert; and,

• b. encourage enhanced performance by Mr Gilbert for the future growth of the Company and thereby add value for shareholders.

The resolution set out in item 5(a) seeks approval to the issue of shares to or for the benefit of Mr Gilbert for the purposes of Rule 10.14 and Exception 9 in Rule 7.2 of the ASX Listing Rules. The offer in respect of Mr Gilbert's participation in the 2011 ELTIP has previously been approved by shareholders at the Company's 2011 AGM held in October 2011. Listing Rule 10.14 and Exception 9 in Rule 7.2 require the following information be provided to shareholders:

• The maximum number of shares that may be acquired by all persons for whom approval is required and the formula for calculating the number of shares to be issued:

A maximum of up to 65,677 fully paid ordinary shares in the Company under the 2011 ELTIP, which will be allocated and vest for the benefit of Mr Gilbert if the performance criteria are achieved for the performance period from 1 July 2011 to 30 June 2014 for nil issue price.

• The names of all persons referred to in ASX Listing Rule 10.14 who received shares under the scheme since the last approval:

No persons have previously been issued shares under the ELTIP since the formation of the Company.

• The name of every person referred to in ASX Listing Rule 10.14 entitled to participate in the scheme:

Mr Gilbert is the sole Director entitled to participate in the ELTIP.

•

The terms of any loan in relation to the allocation:

There are no loans applicable to the allocation of shares to Mr Gilbert under the Plan.

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• The Company confirms that details of any shares issued under the ELTIP will be published in each Annual Report of the Company relating to a period in which the securities have been issued and that approval for the issue has been obtained under Listing Rule 10.14. Any additional person (to whom an approval of an issue would be required under Listing Rule 10.14) who becomes entitled to participate in the ELTIP after resolution 5 is approved (if shareholders approve the resolution at the Annual General Meeting) and who were not named in the Notice of Meeting will not participate in the ELTIP until a further approval in respect of their participation is obtained under Listing Rule 10.14.

• The dates by which the Company will allocate the shares:

If Mr Gilbert becomes entitled to an allocation of shares under the 2011 ELTIP offer, the shares will be allocated to him as soon as practicable after the end of the specified performance period but no later than 3 months after the end of the relevant performance period (and in any event, no later than 3 years after the date of this Annual General Meeting

Resolution recommendations

The Directors (other than Mr Gilbert) support each of the resolutions in item 5, and recommend that shareholders vote in favour of the issue of shares under the 2011 ELTIP for the benefit of Mr Gilbert and the offer for Mr Gilbert's participation in the 2012 ELTIP.

Item 6 – Approval of Termination Benefits

Subject to a number of exempt benefits and benefits given in circumstances permitted by the Corporations Act, where shareholder approval is not required, shareholder approval is required to give a person a benefit in connection with a person's retirement from an office, or a position of employment in a company or a related body corporate where either:

• a. the office or position is a managerial or executive office; or,

b. the person retiring has at any time in the previous 3 years before his or her retirement held a managerial or executive office in the company or a related body corporate.

The term 'benefit' has a wide meaning and includes compensation for, or otherwise in connection with, a person's loss of an office or position.

Prior to the merger of MyState Financial and Tasmanian Perpetual Trustees which took effect in September 2009, the MyState Limited Board established a Human Resources and Remuneration Committee which established a broad framework for the remuneration of the Managing Director.

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Subsequent to the merger, to determine the most appropriate approach for the Company, the Committee (now renamed the Group Corporate Governance and Remuneration Committee) has reviewed:

• its Terms of Reference; and,

• remuneration arrangements of both pre-merger organisations applying to Executive Directors and Senior Executives,

The MyState Limited Remuneration Policy is based upon the long-term sustainable financial security of MyState Limited as evidenced by:

• Appropriately balanced measures of performance weighted towards longterm shareholder interests;

• Variable performance-based pay for Executives involving a long-term incentive plan subject to an extended period of performance assessment;

• Recognition and reward for strong performance;

• A considered balance between the capacity to pay and the need to pay to attract and retain capable staff at all levels;

• The exercise of Board discretion as an ultimate means to mitigate unintended consequences of variable pay and to preserve the interests of the shareholders; and,

• Short-term and long-term incentive performance criteria are structured within the overall risk management framework of the Company.

This item has been proposed to deal with the Company's current remuneration arrangements, insofar as they may provide for termination benefits the payment of which would require shareholder approval for the following persons:

• Mr Gilbert, the Managing Director; and,

• the following members of the Company's Executive Management Team (each of whom is an Executive ):

• Mr D E Benbow General Manager – Wealth Management and Trustee Services (appointed 11 January 2010)

• Mr T M Rutherford General Manager – Technology and Operations (appointed 11 January 2010)

• Mr P K M Viney Chief Financial Officer and Company Secretary (appointed 11 January 2010, previously Company Secretary from 8 October 2008).

• Mrs N Whish-Wilson Chief Risk Officer (appointed 27 October 2011, previously not a KMP).

The Company's remuneration arrangements are summarised under "Basis of Employment of the Managing Director and Executives" in item 5 above for Resolution 5 in this Explanatory Memorandum. This includes, for each of the Managing Director and the Executives:

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• (a) total fixed annual remuneration, inclusive of superannuation and fringe benefits;

• (b) annual cash based short-term incentives calculated as a percentage of FAR ( STI ); and,

• (c) allocations of shares in the Company under the Executive Long Term Incentive Plan ( ELTIP ).

An approval which is given by the shareholders for the purposes of this Resolution 6 will apply to the termination benefits described in the Schedule below given by any of the following persons (collectively, the Group ):

• the Company;

• any associate of the Company (other than a related body corporate); and,

• a prescribed superannuation fund in relation to the Company. This includes the Company or an associate giving a benefit to a superannuation fund, and a superannuation fund giving a benefit to another superannuation fund, where the benefit is given solely for the purpose of enabling or assisting the fund to give a benefit in connection with the retiring person's retirement from the office or position in the Company or its related bodies corporate.

The value of the proposed benefits cannot currently be stated in dollar terms, but will be determined in accordance with the relevant contracts as summarised in the Schedule.

Schedule - Termination benefits to Managing Director and Executives

Circumstances in which the benefit is given	Notice period	Total fixed remuneration1 Short term incentive (STI) and Executive Long Term Incentive Plan (ELTIP)2	Total fixed remuneration1 Short term incentive (STI) and Executive Long Term Incentive Plan (ELTIP)2
Managing Director
Ceases to hold	Immediate	Nil	STI -Payment of the Managing
office or	termination		Director's earned but unpaid STI from
employment with	by the		any previous 12 month performance
MyState Limited	Company		period.
due to serious breach of duty, grave misconduct or disability by reason of			ELTIP –Allocation and vesting of any Shares in respect of an offer or issue to the Managing Director under the ELTIP, where a relevant performance period has been completed.
becoming of
unsoundmind.

• 1 The total fixed annual remuneration payable to the Managing Director and each Executive is subject to ongoing annual market based review mechanisms. At 30 June 2012, the amounts payable are as stated in the Remuneration Report which is contained in the 2012 Annual Report and is also available on the Company’s website at www.mystatelimited.com.au.

• 2 Any reward payable to the Managing Director or any Executive under an offer in the Executive Long Term Incentive Plan (ELTIP) is subject to reassessment and possible forfeiture, at the election of the Board, if the results on which the ELTIP reward was based are subsequently found to have been the subject of deliberate management misstatement.

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Circumstances in which the benefit is given	Notice period	Total fixed remuneration1 Short term incentive (STI) and Executive Long Term Incentive Plan (ELTIP)2	Total fixed remuneration1 Short term incentive (STI) and Executive Long Term Incentive Plan (ELTIP)2	Total fixed remuneration1 Short term incentive (STI) and Executive Long Term Incentive Plan (ELTIP)2
Ceases or hold	60 days	6 months	STI	-Payment of the Managing
office or	notice by	total fixed	Director's earned but unpaid STI from
employment with	either party	remunerati	a previous 12 month performance
the MyState		on if	period.
Limited voluntarily, or because of the Managing Director's death, or for any reason other than specified in the previous row of this table (including	Immediate termination on death of Managing Director	termination takes effect before 14 December 2012 Or 6 months total fixed remunerati	For the current STI performance period at termination date, the Managing Director's STI entitlement based on normal assessment. ELTIP –Allocation and vesting of any Shares in respect of an offer or issue to the Managing Director under the ELTIP, where a relevant performance period has been completed.
disability by		on or	For	any performance period not
reason of		remunerati	completed at the termination date
accident, illness		on for the	(currently these periods are 3 years)
or any cause		balance of	where a number of Shares are held by
other than		the	the ELTIP trustee in respect of an
becoming of		contract	offer or issue to the Managing
unsound mind).		term, whichever	Director, allocation and vesting of a reduced number of Shares calculated
		is greater, if	on a pro-rata basis according to the number of days in each incomplete
		termination	performance period up to the date on
		takes	which the Managing Director's
		effect on or	termination takes effect.
		after 14 December 2012	If the Company does not offer the Managing Director a 2 year contract extension beyond 14 December 2012,
			the end date of any partially
			completed performance period as at
			14 December 2012 will be brought
			forward to that date, with accelerated
			vesting of entitlements to ELTIP
			issues under prior offers subject to an
			independent assessment of the
			Company's performance over the
			adjusted performance periods on the
			basis that in all likelihood had the
			performance periods run their
			scheduled full term, the original
			performance hurdles in any offer
			made would have been reached and
			hence triggered the appropriate level
			of reward.

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Circumstances in Notice Total fixed Short term incentive (STI) and which the benefit period remuneration[1] Executive Long Term Incentive is given Plan (ELTIP)[2] Each of the Executives Ceases to hold Immediate Nil STI - Payment of the Executive's office or termination earned but unpaid STI from any employment with by the previous 12 month performance MyState Limited Company period. due to serious ELTIP - Allocation and vesting of breach of duty, any Shares in respect of an offer grave or issue to the Executive under the misconduct or ELTIP, where a relevant disability by reason of performance period has been completed. becoming of unsound mind. Ceases or hold 60 days 12 months STI - Payment of the Executive's office or notice by total fixed earned but unpaid STI from a employment with either party remuneration. previous 12 month performance the MyState From January period. Limited 2013 this voluntarily, or Immediate reverts to 9 For the current STI performance because of the termination months total period at termination date, the on death of Executive's STI entitlement based Executive's fixed Executive on normal assessment. death, or for any remuneration. reason other ELTIP - Allocation and vesting of than specified in any Shares in respect of an offer the previous row or issue to the Executive under the of this table ELTIP, where a relevant (including performance period has been disability by completed. reason of accident, illness For any performance period not or any cause completed at the Executive's other than termination date (currently these becoming of periods are 3 years), where a unsound mind.) number of Shares are held by the ELTIP trustee in respect of an offer or issue to the Executive, allocation and vesting of a reduced number of Shares calculated on a pro-rata basis according to the number of days in each incomplete performance period up to the date on which the Executive's termination takes effect.

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Resolution recommendation

The Directors (other than Mr Gilbert who has an interest in the resolution) support this item.

The Directors (other than Mr Gilbert who has an interest in the resolution) do not make this recommendation on behalf of Mr Gilbert or on behalf of any of the Executives.

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