ORICA LIMITED — AGM Information 2017

Nov 14, 2017

Orica Limited ABN 24 004 145 868 Registered Office: Level 3, 1 Nicholson Street East Melbourne Vic 3002 Australia

Notice of Meeting

Notice is hereby given that the 2017 Annual General Meeting of Orica Limited will be held in the Ballroom, Park Hyatt Melbourne, 1 Parliament Square, East Melbourne, Victoria on Friday, 15 December 2017 at 10.30am.

Ordinary Business

1 Financial Report, Directors’ Report and Auditor’s Report

To receive and consider the financial report, directors’ report and auditor’s report for the year ended 30 September 2017.

2 Election of Directors

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

That Malcolm Broomhead, a Director who retires in accordance with Rule 58.3 of the Company’s Constitution, being eligible and offering himself for re-election, is reelected as a Director.

Details of the person seeking election are set out in the Explanatory Notes to this Notice of Meeting.

3 Adoption of Remuneration Report

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

To adopt the Remuneration Report for the year ended 30 September 2017.

The Remuneration Report is included in the Annual Report.

4 Grant of performance rights to Managing Director under the Long Term Incentive Plan

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

That approval be given for all purposes, including ASX Listing Rule 10.14, for the grant of performance rights to the Managing Director, Dr Alberto Calderon, under Orica’s Long Term Incentive Plan on the terms summarised in the Explanatory Notes.

Orica Limited Notice of Meeting 2017

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Voting exclusion statement (ASX Listing Rules and Corporations Act) applicable to resolutions 3 and 4:

No vote may be cast on resolution 3 by or on behalf of any of the Company’s key management personnel ( KMP ) (whose remuneration details are included in the Remuneration Report) or their closely related parties.

The Company will disregard any votes cast on resolution 4 by or on behalf of Dr Calderon (and any of his associates), regardless of the capacity in which the vote is cast.

Further, the Company will disregard any votes cast as a proxy on resolutions 3 and 4 by a person who is a member of the Company’s KMP (at the date of the meeting), or their closely related parties, unless the vote is cast as proxy for a person entitled to vote on resolutions 3 or 4:

• a) in accordance with a direction on the proxy form; or

• b) by the Chairman of the meeting pursuant to an express authorisation to exercise the proxy (even if the resolution is connected, directly or indirectly, with the remuneration of a KMP).

IMPORTANT: IF YOU APPOINT THE CHAIRMAN OF THE MEETING AS YOUR PROXY

If you appoint the Chairman of the AGM as your proxy or the Chairman is appointed by default and you do not direct your proxy how to vote on resolutions 3 or 4, you will be expressly authorising the Chairman of the AGM to exercise your proxy, even if the resolution is connected, directly or indirectly, with the remuneration of the KMP. The Chairman intends to vote undirected proxies in favour of resolutions 3 and 4.

By order of the Board Kirsten Gray

Company Secretary 3 October 2017

Voting Entitlement

The Board has determined that a shareholder’s voting entitlement at the meeting will be taken to be the entitlement of that person shown in the register of members as at 7.00pm on Wednesday, 13 December 2017.

As determined by the Chairman of the meeting, each resolution will be decided on a poll.

Orica Limited Notice of Meeting 2017

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Explanatory Notes to Shareholders

Item 1 – Financial Statements and Results

The Corporations Act 2001 (Cth) (“Corporations Act”) requires the financial report (which includes financial statements, notes to the financial statements and directors’ declaration), the directors’ report and the auditor’s report to be laid before the Annual General Meeting. The Constitution of Orica Limited (“Orica”) provides for these reports to be received and considered at the Meeting.

There is no requirement either in the Corporations Act or the Constitution for shareholders to approve the financial report, the directors’ report or the auditor’s report. Shareholders will, however, be given a reasonable opportunity to ask questions and make comments on these reports, and on the business, operations and management of Orica.

Item 2 – Election of Directors

The ASX Listing Rules require that an entity which has directors must hold an election of directors at each Annual General Meeting.

Under Rule 58.3 of the Company’s Constitution, where it is required that a director be submitted for election at the Annual General Meeting, if no director would otherwise be required by Rules 47 or 58.1 to submit for election or reelection, the director to retire at the Annual General Meeting is the director who has been longest in office since their last election or appointment. As between directors who were last elected or appointed on the same day, the one to retire must, unless they can agree among themselves, be decided by lot.

No Orica director is otherwise required to submit for election or re-election under Rules 47 or 58.1 of the Company’s Constitution, and it has been agreed between Mr Malcolm Broomhead and Mr Ian Cockerill, as the directors who have been longest in office since their last election or appointment, and who were both appointed on the same day, that Mr Broomhead is retiring and offering himself for re-election.

The Board has reviewed the performance of Mr Broomhead and the Nominations Committee has considered the skills, knowledge, experience and diversity represented on the Board as a whole.

The Board considers that Mr Broomhead, if re-elected, will be independent of executive management and free of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect his capacity to bring an independent judgment to bear on issues before the Board and to act in the best interests of Orica and its shareholders generally.

Accordingly, the Board supports the re-election of Mr Broomhead.

The profile of the candidate is set out below.

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Malcolm Broomhead BE, MBA

Malcolm Broomhead was appointed as an independent Non-executive Director of Orica Limited in December 2015 and Chairman as of 1 January 2016.

Mr Broomhead is a Director of BHP Billiton Ltd & Plc (2010 – present) and former Chairman of Asciano Limited.

Orica Limited Notice of Meeting 2017

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Mr Broomhead’s not-for-profit directorships include Director of the Walter & Eliza Hall Institute, Chairman of the Australia-China Belt & Road Advisory Board and Council Member of Opportunity International Australia.

Mr Broomhead is a highly experienced business leader with extensive experience in industrial and mining companies globally, including his leadership of Orica as its CEO from 2001 to 2005. Prior to this, he held a range of senior executive positions at North Limited, including Managing Director and Chief Executive Officer, Chief Financial Officer and Executive Director of Operations. He brings to the Board a deep understanding of both the mining and mining services sector, and an exceptional track record in creating shareholder value through every part of the resources cycle.

Mr Broomhead is regarded as one of Australia’s most experienced Chairmen and Non-executive Directors, with extensive board experience in major public companies with global operations.

Mr Broomhead is seeking re-election for a further three year term.

The Board recommends the re-election of Mr Broomhead.

Item 3 – Remuneration Report

Shareholders will be given the opportunity to comment on and ask questions about the Remuneration Report which is included in Orica’s Annual Report 2017.

The 2017 Remuneration Report highlights:

• a governance framework that underpins remuneration decision-making;

• the remuneration policy and structure adopted by the Board that encourages Orica’s performance-based culture by making a significant proportion of total target remuneration ‘at risk’ against performance;

• the strong link between Orica’s financial performance and the level of reward;

• the past and current performance conditions that must be met for executives to derive value from the ‘at risk’ components of their remuneration;

• changes to the executive remuneration framework for 2018; and

• the elements of remuneration of the Non-executive Directors, the Managing Director and those senior executives required to be disclosed for the 2017 financial year.

The vote on this item is advisory only and will not bind the Directors or Orica. However, the Board takes into account feedback from our shareholders in relation to our remuneration strategy, including the discussion and vote on this resolution, when considering the future remuneration arrangements of the Company.

The Board wishes to draw to the attention of shareholders that the result of the vote on this item may affect next year’s Annual General Meeting. Notwithstanding that this resolution only requires a 50% majority of those voting to be passed, if 25% or more of the votes cast on this resolution are “against”, and if this is repeated at the next meeting, then a resolution to spill the board will be put to shareholders as required by the Corporations Act. This is known generally as the “two strikes rule”.

The Board recommends that shareholders vote in favour of this non-binding ordinary resolution.

Orica Limited Notice of Meeting 2017

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Item 4 – Grant of performance rights to the Managing Director under the Long Term Incentive Plan (“LTIP”)

Under ASX Listing Rule 10.14, shareholder approval is required in order for a director to be issued securities under an employee incentive scheme. Accordingly, shareholders are asked to approve the grant of performance rights (Rights) to the Managing Director under the FY2018 LTIP offer.

The Board believes that it is in shareholders’ interests to provide the Managing Director with an equity-based long-term incentive to ensure there is alignment between satisfactory returns for shareholders and the rewards for the Managing Director by linking an appropriate part of the executive’s reward to the generation of long term returns for shareholders.

The long-term incentive is a key element in the Executive Remuneration Framework offered to the Managing Director. This Remuneration Framework is designed to attract, motivate, reward and retain executives through a remuneration approach that is globally relevant, competitive, aligns with shareholder interests and has a high perceived value.

The long-term incentive component of remuneration will take the form of an annual grant of Rights under the LTIP. Each annual grant is subject to shareholder approval.

For FY2018, the LTIP will have one metric, Return on Net Assets (RONA), measured on a three year average basis. The Board considers this metric is most closely aligned to the objectives of sustainable productivity improvement and efficient capital allocation, which in turn enable long-term shareholder value creation. In addition, an additional 2-year holding lock will be introduced on vested incentives under the plan to strengthen alignment with shareholders.

Further details of Dr Calderon’s remuneration package are set out in the Remuneration Report which is included in the Annual Report.

Date of grant	If shareholder approval is obtained, it is expected that the Rights
	will be granted shortly after the meeting (and, in any event, will be
	granted within 12 months).
Number of Rights	The face value of Dr Calderon’s annual long term incentive
	participation is determined by reference to a percentage (215%)
	of his fixed annual remuneration (FAR). Dr Calderon’s current FAR
	is $1,800,000.
	The actual number of Rights to be allocated will be determined by
	dividing Dr Calderon’s long term incentive participation value by the
	volume weighted average price (VWAP) of Orica shares during the
	5 trading days following the full year results announcement rounde
	down to the nearest whole number of Rights.
	By way of an example, if the VWAP of the Company’s ordinary
	shares over this period is $20, then Dr Calderon would be granted
	193,500 Rights.

The actual number of Rights to be allocated will be determined by dividing Dr Calderon’s long term incentive participation value by the volume weighted average price (VWAP) of Orica shares during the 5 trading days following the full year results announcement rounded down to the nearest whole number of Rights. By way of an example, if the VWAP of the Company’s ordinary shares over this period is $20, then Dr Calderon would be granted 193,500 Rights.

Orica Limited Notice of Meeting 2017

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Performance conditions (for vesting of Rights)

The Rights are subject to a RONA performance hurdle. RONA

Rights granted are subject to a hurdle based on average RONA performance.

Annual RONA is defined as Annual EBIT / Rolling 12 month Net Operating Assets

Where:

Annual EBIT = Earnings from Continuing Operations before interest, tax and individually material items.

Rolling 12 month Net Operating Assets = Net property plant and equipment, Intangibles, Investments (non-current) in associates, trade working capital, non-trade working capital and environment provisions (added back).

In order to determine average RONA for the performance period, Annual RONA is calculated for each of the years of the performance period, and then averaged.

The average RONA will be rounded to one decimal place with vesting according to the schedule below:

RONA performance (3 year average)	Percentage of Rights vesting subject to RONA
Below 13.6%	Nil
At 13.6%	30% of rights vest
Between 13.6% and 14.0%	Straight line vesting between 30% and 60%
At 14.0%	60% of rights vest
Between 14.0% and 14.7%	Straight line vesting between 60% and 100% of rights vest
At or above 14.7%	100% of rights vest

For example, average RONA of 13.8% will result in 45% of Rights vesting. Average RONA of 14.2% will result in 71.4% of Rights vesting. No Rights will vest should average RONA not equal or exceed 13.6% over the three year performance period.

The return range of 13.6% – 14.7% has been chosen as it reflects the Board’s expectations for returns through the current industry / market cycle, Orica’s corporate plan and transformation program and long-term growth expectations.

The Board has retained discretion to adjust RONA in exceptional circumstances for individually material items that may otherwise distort the average RONA outcome.

Orica Limited Notice of Meeting 2017

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Performance	The Rights are subject to a three year performance period
period and vesting	commencing from the start of FY2018 (i.e. 1 October 2017). Any
	Rights which do not vest following testing of the performance
	condition at the end of the performance period (expected to occur
	following the announcement of full-year financial results for FY2020)
	will lapse.
Allocation of	Following testing of the applicable performance condition and
Shares	determination of the vesting level of the Rights, one fully-paid
	ordinary share in Orica will be allocated for each Right which vests.
	In accordance with the terms of the LTIP, the Board also has
	discretion to settled vested Rights in cash.
Trading	Shares allocated on the vesting of Rights will be subject
Restrictions	to a restriction on trading for a two year period (from 1 October 2020
	to 30 September 2022) during which time the Managing Director will
	be restricted from dealing in those shares.
	At the end of the restriction period, trading restrictions will cease to
	apply and the Managing Director will be able to sell, or otherwise
	deal with those shares, subject to complying with Orica’s Securities
	Dealing Policy.
	We note that in certain exceptional circumstances, the Board may
	determine that applicable trading restrictions will cease to apply to
	all, or a portion of, the Managing Director’s shares prior to the end of
	the restriction period.
Cessation of	Cessation during the performance period
employment	If the Managing Director resigns from the Group or is terminated for
	cause prior to Rights vesting, in general, his Rights lapse and he will
	have no further interest in the Rights.
	Unless the Board determines otherwise, if employment ceases in
	other circumstances (e.g. retirement, mutual separation, ill-health
	etc.), the Managing Director would retain the Rights on a pro-rata
	basis with the performance condition being tested at the end of the
	performance period to determine the number of Rights which may
	vest at this time (if any).
	Shares allocated on the vesting of Rights will be subject to a
	restriction on trading for a two year period (from 1 October 2020 to
	30 September 2022) during which time the Managing Director will be
	restricted from dealing in those shares.
	Cessation during restriction period
	If the Managing Director ceases employment prior to the end of the
	restriction period, any shares held will continue to be subject to a
	restriction on trading for a two year period (from 1 October 2020 to
	30 September 2022) during which time the Managing Director will be
	restricted from dealing in those shares.

Orica Limited Notice of Meeting 2017

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Price payable for	No amount will be payable by the participant in respect of the grant,
the Rights	or for the shares allocated on the vesting of the Rights.
Application of	The terms of the LTIP contain the ability for the Board to apply
Malus Standard	Orica’s ‘Malus Standard’. This Standard provides the Board with the
	ability to reduce or deny granted but unvested awards in the case of:
	(a) a material misstatement in financial results;
	(b) behaviour that brings Orica into disrepute or has the potential
	to do so;
	(c) serious misconduct by any participant; or
	(d) any other circumstance, which the Board has determined in
	good faith.
Other required	The Managing Director is the only current Director of Orica entitled
information –	to participate in the LTIP.
ASX Listing Rules
	There is no loan scheme in relation to the grant of Rights under the
	LTIP.
	In accordance with the approval received from shareholders at the
	2016 Annual General Meeting, on 30 December 2016 the Company
	allocated 192,742 performance rights to the Managing Director, Dr
	Calderon, at an acquisition price of $16.81 per share.

The Board, other than the Managing Director, who has an interest in resolution 4, recommends that shareholders vote in favour of this resolution.

Orica Limited Notice of Meeting 2017

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ORICA Limited

ABN 24 004 145 868

LODGE YOUR VOTE

ONLINE  www.linkmarketservices.com.au

BY MAIL  ORICA Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia

 BY FAX +61 2 9287 0309

 BY HAND Link Market Services Limited 1A Homebush Bay Drive, Rhodes NSW 2138; or Level 12, 680 George Street, Sydney NSW 2000

ALL ENQUIRIES TO

 Telephone: +61 1300 301 253

PROXY FORM I/We being a member(s) of Orica Limited (the Company ) and entitled to attend and vote hereby appoint: APPOINT A PROXY OR if you are NOT appointing the Chairman of the Meeting the Chairman of the as your proxy, please write the name of the person or Meeting (mark box) body corporate you are appointing as your proxy or failing the person or body corporate named, or if no person or body corporate is named, the Chairman of the Meeting, as my/our proxy to act on my/our behalf (including to vote in accordance with the following directions or, if no directions have been given and to the extent permitted by the law, as the proxy sees fit) at the Annual General Meeting of the Company to be held at 10:30am on Friday, 15 December 2017 in the Ballroom, Park Hyatt Melbourne, 1 Parliament Square, East Melbourne, Victoria (the Meeting ) and at any postponement or adjournment of the Meeting. Important for Resolutions 3 and 4: If the Chairman of the Meeting is your proxy, either by appointment or by default, and you have not indicated your voting intention below, you expressly authorise the Chairman of the Meeting to exercise the proxy in respect of Resolutions 3 and 4, even though the Resolutions are connected directly or indirectly with the remuneration of a member of the Company’s Key Management Personnel (KMP). The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business. VOTING DIRECTIONS Proxies will only be valid and accepted by the Company if they are signed and received no later than 48 hours before the Meeting. Please read the voting instructions overleaf before marking any boxes with an T Resolutions For Against Abstain * 2 Re-election of Malcolm Broomhead as a Director 3 Adoption of the Remuneration Report

4 Grant of performance rights to Managing Director under the Long Term Incentive Plan

 * 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 yourvotes will not be counted in computing the required majority on a poll.

SIGNATURE OF SHAREHOLDERS – THIS MUST BE COMPLETED

Shareholder 1 (Individual) Joint Shareholder 2 (Individual) Joint Shareholder 3 (Individual) Sole Director and Sole Company Secretary Director/Company Secretary (Delete one) Director

This form should be signed by the shareholder. If a joint holding, either shareholder may sign. If signed by the shareholder’s attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the company’s constitution and the Corporations Act 2001 (Cth).

ORI PRX1701C

HOW TO COMPLETE THIS SHAREHOLDER PROXY FORM

YOUR NAME AND ADDRESS

LODGEMENT OF A PROXY FORM

This is your name and address as it appears on the Company’s share register. If this information is incorrect, please make the correction on the form. Shareholders sponsored by a broker should advise their broker of any changes. Please note: you cannot change ownership of your shares using this form.

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 10:30am on Wednesday, 13 December 2017, being not later than 48 hours before the commencement of the Meeting. Any Proxy Form received after that time will not be valid for the scheduled Meeting.

APPOINTMENT OF PROXY

Proxy Forms may be lodged using the reply paid envelope or:

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box in Step 1. If you wish to appoint someone other than the Chairman of the Meeting as your proxy, please write the name of that individual or body corporate in Step 1. A proxy need not be a shareholder of the Company.

ONLINE 

www.linkmarketservices.com.au

Login to the Link website using the holding details as shown on the Proxy Form. Select ‘Voting’ and follow the prompts to lodge your vote. To use the online lodgement facility, shareholders will need their “Holder Identifier” (Securityholder Reference Number (SRN), Holder Identification Number (HIN) or Employee ID as shown on the front of the Proxy Form).

DEFAULT TO CHAIRMAN OF THE MEETING

Any directed proxies that are not voted on a poll at the Meeting will default to the Chairman of the Meeting, who is required to vote those proxies as directed. Any undirected proxies that default to the Chairman of the Meeting will be voted according to the instructions set out in this Proxy BY MOBILE DEVICE Form, including where the Resolutions are connected directly or indirectly Our voting website is designed specifically with the remuneration of KMP. for voting online. You can now lodge VOTES ON ITEMS OF BUSINESS – PROXY APPOINTMENT your proxy by scanning the QR code adjacent or enter the voting link You may direct your proxy how to vote by placing a mark in one of the www.linkmarketservices.com.au boxes opposite each item of business. All your shares will be voted in your mobile device. Log in using the accordance with such a direction unless you indicate only a portion of Holder Identifier and postcode for your voting rights are to be voted on any item by inserting the percentage or shareholding. number of shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the items of business, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid. BY MAIL APPOINTMENT OF A SECOND PROXY  ORICA Limited You are entitled to appoint up to two persons as proxies to attend the C/- Link Market Services Limited Meeting and vote on a poll. If you wish to appoint a second proxy, an Locked Bag A14 additional Proxy Form may be obtained by telephoning the Company’s share registry or you may copy this form and return them both together. Sydney South NSW 1235 Australia To appoint a second proxy you must: (a) on each of the first Proxy Form and the second Proxy Form state the  BY FAX percentage of your voting rights or number of shares applicable to that +61 2 9287 0309 form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your  BY HAND votes. Fractions of votes will be disregarded; and delivering it to Link Market Services Limited (b) return both forms together. 1A Homebush Bay Drive Rhodes NSW 2138 SIGNING INSTRUCTIONS or You must sign this form as follows in the spaces provided: Level 12 Individual: where the holding is in one name, the holder must sign. 680 George Street Joint Holding: where the holding is in more than one name, either Sydney NSW 2000 shareholder may sign. Power of Attorney:* to sign under Power of Attorney, you must lodge the Power of Attorney with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

QR Code

Our voting website is designed specifically with the remuneration of KMP. for voting online. You can now lodge VOTES ON ITEMS OF BUSINESS – PROXY APPOINTMENT your proxy by scanning the QR code adjacent or enter the voting link You may direct your proxy how to vote by placing a mark in one of the www.linkmarketservices.com.au into boxes opposite each item of business. All your shares will be voted in your mobile device. Log in using the accordance with such a direction unless you indicate only a portion of Holder Identifier and postcode for your voting rights are to be voted on any item by inserting the percentage or shareholding. number of shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the items of business, your proxy may To scan the code you will need a QR code reader application vote as he or she chooses. If you mark more than one box on an item your which can be downloaded for free on your mobile device.

delivering it to Link Market Services Limited* 1A Homebush Bay Drive Rhodes NSW 2138

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001 ) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

CORPORATE REPRESENTATIVES

If a representative of the corporation is to attend the Meeting the appropriate “Certificate of Appointment of Corporate Representative” should be produced prior to admission in accordance with the Notice of Meeting. A form of the certificate may be obtained from the Company’s share registry or online at www.linkmarketservices.com.au.

• During business hours (Monday to Friday, 9:00am–5:00pm)

IF YOU WOULD LIKE TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING, PLEASE BRING THIS FORM WITH YOU. THIS WILL ASSIST IN REGISTERING YOUR ATTENDANCE.