Perpetual Limited — AGM Information 2003

Sep 3, 2003

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NOTICE OF ANNUAL GENERAL MEETING

The 40th annual general meeting of Perpetual Trustees Australia Limited ABN 86 000 431 827 (the Company) will be held in the Angel Place Conference Centre, Angel Place, 123 Pitt Street, Sydney, NSW on Monday 20 October 2003 commencing at 11:00am. Registration will open at 10:00am.

Notice of Meeting

Ordinary business

Statutory Accounts

1. To receive and consider the financial report of the Company for the year ended 30 June 2003 and the reports of the directors and auditors.

Re-election of non-executive directors

To elect directors by ordinary resolution:

• 1. Mr Stephen Chapman retires in accordance with article 15.3 (b) of the Company's constitution and being eligible, offers himself for re-election.
• 1. Mr John Curtis retires in accordance with article 15.3 (b) of the Company's constitution and being eligible, offers himself for re-election.

Information about the candidates for re-election appears in the explanatory memorandum accompanying this Notice of Meeting.

Special business

Approval of grant of options and shares to Managing Director under employee incentive plans

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

"For the purpose of Australian Stock Exchange Limited Listing Rule 10.14, that approval be given for the issue of ordinary shares in the Company and

options to subscribe for ordinary shares in the Company for three years after the date of this meeting to, or on behalf of, Mr David Deverall, the Company's Managing Director, in accordance with the provisions of the Company's Executive Share Plan and Executive Option Plan as summarised in the explanatory memorandum accompanying the notice convening this meeting."

Adoption of proportional takeover provisions in the constitution

1. To consider, and if thought fit, pass the following resolution as a special resolution:

"That the Company's constitution be altered by inserting a new article 9.7 and new schedule 2 relating to proportional takeover bids on the same terms as article 9.7 and schedule 2 of the constitution which applied until 17 October 2003, subject to all references in that article and schedule to 'Law' being replaced with 'Corporations Act 2001'."

Voting exclusions

Except as set out below, the Company must disregard any votes cast on resolution 4 by any director of the Company and any associates of a director. 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 the direction on the proxy form to vote as the proxy decides.

Proxies

A member entitled to attend and vote is entitled to appoint not more than two proxies. Where a member appoints more than one proxy, each proxy may be appointed to represent a specified proportion of the member's voting rights. Where a member appoints two proxies but does not specify the proportion of votes the two proxies are to exercise, each proxy may exercise half the votes of the member. A proxy is not required to be a member of the Company. Proxy voting instructions are provided on the proxy form which is enclosed with this notice.

If a member appoints the Chairman of the meeting as proxy and does not direct the Chairman how to vote on an item of business, then when the Chairman votes as proxy for that member on a poll, he will vote in favour of each of proposed resolutions 1, 2, 3, 4 and 5.

Proxies must be returned no later than 48 hours before the meeting to either the Company's share registry:

ASX Perpetual Registrars Limited Level 8, 580 George Street Sydney NSW 2000 Facsimile number: (02) 8280 7646

or to the Company's registered office:

Level 7, 39 Hunter Street Sydney NSW 2000

Pursuant to Regulation 7.11.37 of the Corporations Regulations 2001, the shareholding of each shareholder for the purposes of ascertaining voting entitlements at the annual general meeting will be the registered holders of the Company's shares at 11:00am on 18 October 2003.

Explanatory Memorandum

Please refer to the explanatory memorandum attached to this Notice of Meeting in relation to agenda items 1 to 5.

By order of the board.

I'm Hankning

Joanne Hawkins Company Secretary 4 September 2003

Explanatory Memorandum

Resolution 1: Statutory Accounts

As required by section 317 of the Corporations Act 2001, the financial report and the reports of the directors and auditors for the most recent financial year will be laid before the meeting.

Resolution 2: Re-election of Mr Stephen Chapman

Mr Stephen Chapman, BCom, MBA, ACA, (Age 47) - Mr Chapman's career as a merchant banker, initially as an international director of Morgan Grenfell and then as a founding principal of Baron Partners Limited, has given him wide experience of the strategic and financial issues affecting public companies and investment markets.

Mr Chapman serves as Perpetual's Deputy Chairman and he is a member of the Chairman's Committee, Investment Committee and Nominations Committee. He is also a director of Ascham Foundation Limited, Blackmores Limited, Hostworks Group Limited and Macquarie Radio Network Pty Limited.

Mr Chapman brings to Perpetual his professional experience in local and international corporate, capital and investment markets and his board experience as a nonexecutive director of companies in a range of industries.

Resolution 3: Re-election of Mr John Curtis

Mr Iohn Curtis, BA LLB (Hons) (Age 53) -Mr Curtis' executive career from 1977 to 1987 was with Wormald International Limited. during which time he became a main board director and was responsible as chief executive at various times for the group's operations in over 35 countries in Europe, Australia, Asia, North America and Middle East.

Mr Curtis is currently Chairman of Allianz Australia Limited and Caliburn Partnership Pty Limited and a director of St George Bank Limited and other companies. At Perpetual, Mr Curtis is Chairman of Perpetual's Human Resources and Remuneration Committee.

In addition to his experience as a former lawyer and business executive, Mr Curtis brings to the Perpetual board his considerable experience as a professional non-executive director across a wide range of industries together with experience in insurance and investment markets.

He is a director of Sydney Symphony Pty Limited and was awarded the Federal Republic of Germany Officers Cross of Merit 1st Class in 1996.

Resolution 4: Approval of grant of options and shares to Managing Director under employee incentive plans

Australian Stock Exchange Limited (ASX) Listing Rule 10.14 permits a director of the Company to acquire securities under an employee incentive scheme only if that director's participation has been approved by shareholders. At the date of this notice Mr David Deverall has agreed to accept an appointment as the Company's Managing Director and Chief Executive Officer. Mr Deverall will commence employment with the Company on 22 September 2003 and will be appointed Managing Director prior to the annual general meeting.

Resolution 4 if approved, will permit the board to issue shares and options to Mr Deverall under the Executive Share Plan and Executive Option Plan. Issues of shares and options to directors under these plans were last approved by shareholders in October 2002.

Under the executive service agreement between the Company and Mr Deverall (Service Agreement), subject to any necessary regulatory and shareholder approvals, the board proposes to issue to Mr Deverall:

• 23,584 shares in the Company to be issued under the Executive Share Plan, being the equivalent of \$875,000;
• a long term incentive equivalent to \$700,000 per annum over the term of the Service Agreement consisting of shares to be issued under the Executive Share Plan and options to be issued under the Executive Option Plan;
• an annual short term incentive payment, all or part of which may take the form of the issue of shares under the Executive Share Plan.

Initial share issue

In compensation for the benefits Mr Deverall will lose as a result of ceasing his previous employment, Mr Deverall will receive shares issued under the Executive Share Plan equivalent to \$875,000.

The number of shares to be issued to Mr Deverall is 23,584, calculated as \$875,000 divided by the weighted average price of the Company's shares traded in the five trading days prior to the announcement of Mr Deverall's appointment (which was \$37.10). These shares will be issued on or after 21 October 2003 and no later than 20 October 2004. The shares will vest in three equal tranches over the first three years of Mr Deverall's employment. If Mr Deverall resigns or his employment is terminated for poor performance or misconduct before the date on which a tranche of shares vests, Mr Deverall will forfeit any entitlements in respect of that tranche and any future tranches of shares.

Long term incentive (LTI)

The Service Agreement provides for a term of appointment until 30 June 2007 and an option for a further term of two years. Mr Deverall will be eligible to receive an LTI equivalent to \$700,000 per annum (or such greater amount as may be determined by the board from year to year) over the term of the Service Agreement. The LTI will be provided by way of shares and options to be issued under the Company's Executive Share Plan and Executive Option Plan.

The number of performance shares to be issued to Mr Deverall each year will be equal to half of the annual LTI amount divided by:

• the weighted average price of the Company's shares traded in the five trading days prior to the announcement of Mr Deverall's appointment for performance shares issued on or about the time of Mr Deverall's appointment (being \$37.10); and
• the weighted average price of the Company's shares traded in the five trading days prior to the first business day of that financial year for performance shares issued for the financial years beginning 1 July 2004 and subsequently.

The number of options to be issued to Mr Deverall each year will be four times the number of performance shares to be issued to him. The exercise price of the options will be calculated in the same manner as the issue price for the performance shares as described above.

The dates on which the Company will issue the shares and options over the next three years will be on or around 21 October 2003, 1 July 2004, 1 July 2005 and 1 July 2006. They will not be issued any later than 20 October 2006.

The performance shares and options will generally vest on the third anniversary of the date of issue subject to the achievement of performance hurdles. Performance shares and options issued in years close to the end of the term of the Service Agreement will vest on the second anniversary of the date of issue subject to the achievement of performance hurdles. The shares and options will not vest if Mr Deverall resigns or his employment is terminated for poor performance or misconduct before the date for vesting.

Two performance hurdles apply to the LTI in accordance with the Company's current policy. The LTI is divided in two equal portions with each portion being subject to a different hurdle. The hurdles are based on total shareholder return (TSR) and earnings per share (EPS).

TSR hurdle

The TSR hurdle requires that the growth in the Company's TSR must be at or above the median of the Company's comparator group, at which point the sliding vesting scale outlined below applies. The comparator group is the S&P/ASX 100 (excluding property trusts). Growth in TSR is defined as share price growth and dividends paid and reinvested on the ex-dividend date (adjusted for rights, bonus issues and any capital reconstructions) measured from the time of issue to the time of vesting.

Company's growth in TSR relative to the comparator group	Percent of portion that vests
Less than median	0
At the median	50%
Greater than median but less than the 75th percentile	2% for every 1% increase in the Company's relative position
At the 75th percentile and above	100%

EPS hurdle

The EPS hurdle requires that the Company's EPS growth for a given three year period must be greater than a target set by the board. The initial EPS hurdle for shares and options has been set at 10% per annum compound.

Growth in EPS is defined as basic earnings per share (after tax) before annual goodwill amortisation adjusted for:

• significant items (as noted in the Company's financial statements);
• goodwill write-offs which represent more than 5% of the Perpetual Group's pre-tax profit for the year; and
• material capital restructurings that have occurred over the relevant period, as determined by the board.

Vesting of shares and options subject to the EPS hurdle operates as follows:

Company's growth in EPS	Percent of portion that vests
EPS growth less than 10% per annum compound
EPS growth at or above 10% per annum compound	100%

Short term incentive (STI)

Mr Deverall will be eligible to receive an annual STI of up to \$1 million (or such other greater amount as may be determined by the board from year to year) over the term of the Service Agreement. The payment of the STI will generally be subject to:

• achievement by Mr Deverall of performance objectives determined by the board; and
• Mr Deverall remaining in employment with the Company.

Mr Deverall may apply all or part of any annual STI payment to acquire shares in the Company under the Executive Share Plan.

The maximum number of shares to be issued to Mr Deverall in respect of the annual STI under the Executive Share Plan will be equal to the STI payment divided by the issue price of the shares, which will be a price specified by the board.

The dates on which the Company will issue the shares in respect of the annual STI under the Executive Share Plan will be on or around 20 September 2004, 20 September 2005 and 20 September 2006. They will not be issued any later than 20 October 2006.

Details of shares and options issued

Details of shares and options to be issued under the Executive Share and Executive Option Plans will be published in each annual report of the Company which relates to the period in which the securities have been issued, with a statement that approval for the issue of

securities was obtained under ASX Listing Rule 10.14. Any additional directors who become entitled to participate in these employee incentive schemes after resolution 4 is approved and who are not named in the Notice of Meeting (other than Mr Michael Stefanovski, an alternate director of the Company, in respect of whom the ASX has granted a waiver from ASX Listing Rule 10.14) will not participate until approval is obtained under ASX Listing Rule 10.14.

Since the date of the last annual general meeting:

Mr Graham Bradley received 9,858 shares under the Executive Share Plan at a price of \$32.46 per share, 150 shares under the Employees Share Purchase Plan at a price of \$31.02 per share and 30 shares under the Employees Reward Share Plan at a price of S32.46 per share.

Ms Gai McGrath received 8,972 shares under the Executive Share Plan at a price of \$32.46 per share, 10,590 options under the Executive Option Plan issued at an exercise price of \$32.46 per option, 150 shares under the Employees Share Purchase Plan at a price of \$31.02 per share and 30 shares under the Employees Reward Share Plan at a price of \$32.46 per share.

Mr Michael Stefanovski received 11,783 shares under the Executive Share Plan at a price of \$32.46 per share, 150 shares under the Employees Share Purchase Plan at a price of \$31.02 per share and 30 shares under the Employees Reward Share Plan at a price of \$32.46 per share.

The directors who are or will be entitled to participate in the Executive Share Plan and Executive Option Plan are Mr David Deverall and Mr Michael Stefanovski.

Resolution 5: Adoption of proportional takeover provisions

At the annual general meeting of the Company held on 17 October 2000, shareholders approved article 9.7 and schedule 2 of the Company's constitution which provide that a proportional takeover bid for the Company's shares may only proceed after shareholder approval.

Under the Corporations Act 2001, these provisions must be renewed by shareholders every three years, or otherwise they will lapse and cease to apply. Accordingly, the proportional takeover approval provisions in the Company's constitution will cease to have effect on 17 October 2003. It is proposed to reinstate the proportional takeover approval provisions in article 9.7 and schedule 2 of the Company's constitution.

Effect of article 9.7 and schedule 2

If shareholders agree to adopt article 9.7 and schedule 2 and a proportional takeover bid is subsequently made for the Company's shares the following procedures will take place:

The Company will be required either to convene a general meeting of shareholders to vote on a resolution to approve the bid or conduct a postal ballot to vote on a resolution to approve the bid. The resolution must be voted on at least

14 days before the end of the bid period. The bidder and its associates will not be entitled to vote on the resolution.

• If a postal ballot is conducted, it must be conducted in accordance with the procedures set out in the proportional takeover provisions including the appointment of a returning officer (who conducts the ballot and who cannot be a director of the Company).
• If the resolution is not passed by a majority of the shares voted, then the offer will be deemed to be withdrawn. Registration of any transfer of shares resulting from the proportional takeover bid will be prohibited and the bidder will be required to return any acceptances to the relevant shareholders.
• If the resolution is approved, transfers of shares to the bidder will be registered provided they comply with the other provisions of the Company's constitution.
• If no resolution is voted on at least 14 days before the close of the bid then a resolution to approve the registration of transfers under the proportional takeover bid will be deemed to have been approved.
• The proposed article 9.7 and schedule 2 will expire three years after the date they are approved, unless renewed by shareholders at that time by special resolution.

Background

Part 6.5 Division 5 of the Corporations Act 2001 permits a company to include proportional takeover approval provisions in its constitution. A proportional takeover is a bid to buy a specified portion of each shareholder's shares. Without such provisions, a bidder under a proportional takeover bid may obtain control of the Company without shareholders having the opportunity to sell all of their shares.

The provisions set out in article 9.7 and schedule 2 will operate to provide shareholders with the opportunity to decide whether a proportional takeover bid should proceed. If the bid does proceed, shareholders may then separately decide whether to accept the bid for their shares.

No current acquisition proposals

As at the date on which this explanatory memorandum is prepared, none of the directors of the Company is aware of a proposal by a person to acquire, or to increase the extent of, a substantial interest in the Company.

Reasons for proposing resolution 5

The board is proposing the adoption of the proportional takeover provisions as the board believes those provisions provide shareholders with the benefits and advantages set out overleaf. The board believes that those advantages outweigh the potential disadvantages which are also discussed overleaf.

Advantages of the proposed potential takeover provisions for shareholders

The potential advantages for shareholders of the inclusion of the proportional takeover provisions in the Company's constitution are (and have in the past been):

• Shareholders may more effectively advise and guide the directors' response to a proportional takeover bid.
• The proportional takeover provisions may enable shareholders to avoid being coerced to accept a proportional takeover offer which they believe is inadequate, but nevertheless accept through concern that a significant number of shareholders will accept.
• If a proportional takeover bid is made, the proportional takeover provisions may encourage a bidder to set its offer price at a level that will be attractive to the shareholders who vote.
• The proportional takeover provisions may encourage a bidder to make a full bid for the whole shareholding of each shareholder, so that shareholders may have the opportunity of disposing of all their shares rather than only a proportion.

The potential advantages for shareholders of these provisions have applied since the proportional takeover provisions were first approved by shareholders in 1994. However, we note that no proportional takeover bid has been made for the Company's shares since that time.

Disadvantages of the proposed proportional takeover provisions to shareholders

The potential disadvantages for shareholders of the inclusion of the proportional takeover provisions are (and have in the past bccn):

• The existence of the proportional takeover provisions in the constitution of the Company may tend to discourage proportional takeover offers, thus reducing the opportunity for shareholders to sell a portion of their shareholding.
• An individual shareholder who wishes to accept a proportional takeover offer will be unable to sell to the bidder unless a majority of shareholders are in favour of the proportional takeover scheme.
• It is possible that the existence of the proportional takeover provisions might have an adverse effect on the market value of the Company's shares by making a proportional takeover offer less likely. Any element of takeover speculation in the share price may therefore be potentially reduced.
• If a proportional takeover offer is made, the Company will incur the cost of either calling a shareholders' meeting or conducting a postal ballot.

Advantages of the proposed proportional takeover provisions for the directors

The potential advantages for directors of the inclusion of the proportional takeover provisions are (and have in the past been):

• If the directors consider that a proportional takeover bid should be opposed, they will be assisted in preventing the bidder from securing control of the Company as the bidder needs a majority of the votes cast by the independent shareholders before the bidder can succeed.
• At present, it is only the directors who express any formal view on the adequacy or otherwise of a takeover bid, on behalf of the Company. Under the proportional takeover provisions the most effective view on a proportional takeover bid will become the view expressed by the vote of the shareholders themselves, at the meeting or through the postal ballot.
• The proportional takeover provisions may make it easier for the directors to discharge their fiduciary and statutory duties as directors in the event of a proportional takeover bid.

Disadvantages of the proposed proportional takeover provisions for the directors

The potential disadvantage for directors of the inclusion of the proportional takeover provisions is (and has in the past been):

If a proportional takeover offer is received, the directors must call a meeting or conduct a postal ballot to seek the shareholders' views. They must do so even if the directors believe that the offer should be accepted.

Copy of constitution

Shareholders may obtain a copy of the Company's constitution containing the existing proportional takeover provisions applicable to the Company by contacting the Company's share registry, ASX Perpetual Registrars Limited on telephone (02) 8280 7114 or facsimile number (02) 8280 7646. Shareholders may also view a copy of the Company's constitution at the office of ASX Perpetual Registrars, Level 8, 580 George Street, Sydney NSW 2000.

$\pm 0.001$ (is $\mathbb{Z}$ 推理 in 1999.
Ngjarje

Perpetual Trustees Australia Limited

ABN 86 000 431 827

APPOINTMENT OF PROXY

If you propose to attend and vote at the Annual General Meeting, please bring this form with you. This will assist in registering your attendance.

All Registry communications to: C/- ASX Perpetual Registrars Limited Level 8, 580 George Street, Sydney, NSW, 2000 Locked Bag A14, Sydney South, NSW, 1235 Telephone: (02) 8280 7111 Facsimile: (02) 8280 7646 ASX Code: PPT Email: registrars@asxperpetual.com.au Website: www.asxperpetual.com.au

X99999999999

I/We being a member(s) of Perpetual Trustees Australia Limited and entitled to attend and vote hereby appoint

the Chairman of the Meeting (mark box)

OR Write here the name of the person (excluding the registered securityholder) you are appointing if this person is someone other than the Chairman of the Meeting

or failing the person named, or if no person is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following instructions (or if no directions have been given, as the proxy sees fit) at the Annual General Meeting of the Company to be held at 11.00am on Monday, 20 October 2003 and at any adjournment of that meeting. Where more than one proxy is to be appointed or where voting intentions cannot be adequately expressed using this form an additional form of proxy is available on request from the share registry. Proxies will only be valid and accepted by the Company if they are signed and received in the Registrar's office no later than 48 hours before the meeting.

IMPORTANT: FOR ITEM 4 BELOW If the Chairman of the Meeting is to be your proxy and you have not directed your proxy how to vote on Item 4 below, please place a mark in this box. By marking this box you acknowledge that the Chairman of the Meeting may exercise your proxy even if he has an interest in the outcome of that item and that votes cast by him, other than as proxyholder, would 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 of the Meeting will not cast your votes on Item 4 and your votes will not be counted in computing the required majority if a poll is called on this Item. The

Chairman of the Meeting intends to vote undirected proxies in favour of Item 4.

Should you desire to direct your proxy how to vote on any resolution please insert $X$ in the appropriate box below.
		For	Against	Abstain*			For	Against	Abstain*
1.	Statutory Accounts				4.	Approval of grant of options and shares to Mr David Deverall
2.	Re-election of director. Mr Stephen Chapman				5.	Adoption of proportional takeover provisions in the constitution
3.	Re-election of director. Mr John Curtis
* If you mark the Abstain box for a particular Item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.
	B SIGNATURE OF SECURITYHOLDERS - THIS MUST BE COMPLETED
	Securityholder 1 (Individual)			Joint Securityholder 2 (Individual)		Joint Securityholder 3 (Individual)

Sole Director and Sole Company Secretary Director/Company Secretary (Delete one)

securityholder's constitution and the Corporations Act 2001 (Cwith).

is available on our website (www.asxperpetual.com.au).

Director

This form should be signed by the securityholder. If a joint holding, either securityholder may sign. If signed by the securityholder'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 ASX Perpetual Registrars Limited advises that Chapter 2C of the Corporations Act 2001 requires information about you as a securityholder (including your name, address and details of the securities you hold) to be included in the public register of the entity in which you hold securities. This information must continue to be included in the public register if you cease to be a securityholder. These statutory obligations are not altered by the Privacy Amendment (Private Sector) Act 2000. Information is collected to administer your security holding and if some or all of the information is not collected then it might not be possible to administer your security holding. Our privacy policy PPT PRX042

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